Summary
In Cove Irrigation District v. Yellowstone Ditch Co., 90 Mont. 323, 335, 336, 3 P.2d 280, 283, these same litigants were before us. The complaint in that case alleged that after Cove acquired the canal, the river changed its channel, requiring Cove to build a new headgate at a higher point on the river.
Summary of this case from Cove Irrigation Co. v. Yellowstone Ditch Co.Opinion
No. 6,762.
Submitted September 11, 1931.
Decided September 21, 1931.
Contracts — Construction — Waters — Transfer by Ditch Company of System to Irrigation District — Agreement to Furnish Stockholders of Company Water Without Expense Incident to Improvements — District not Entitled to Contribution from Stockholders of Seller Company for Share of Expense — Contract Controlling — Complaint — Insufficiency. Contracts — Construction as of Time When Made — Intention of Parties. 1. Under sections 10521 and 10520, Revised Codes 1921, a contract the provisions of which are called in question years after its making, must be construed in the light of the circumstances under which it was made, and the then intention of the parties must be pursued, if possible. Same — What not Excuse for Nonperformance. 2. The fact that compliance with a contract becomes more onerous than was contemplated at the time it was entered into does not excuse performance according to its terms. Same — Waters — Ditch Companies — Purchase of System by Irrigation District — Agreement to Furnish Stockholders of Seller Company Water Without Expense Incident to Enlargement of Ditch Binding on Buyer — Contribution — Right Nonexistent. 3. In 1906 a newly organized ditch company entered into a contract with a like long established company owning a complete irrigation system under which the former took over the plant of the latter, agreeing in consideration of the transfer to furnish the stockholders thereof the same amount of water they were then receiving from the ditch, barring unavoidable accident or low water, without additional cost to them due to any change made in the ditch by the new company. An irrigation district, successor in interest of the obligor company, at a large expense reconstructed the ditch, after which, a sand-bar having formed in the river interfering with the intake, it was required at more expense to change the location of the headgate to secure a sufficient water supply. Held, in an action by the district to compel the stockholders of the original company to contribute their shares of the expense incident to reconstructing the ditch, and to enjoin them from using more water than they could have obtained from the ditch as it was before reconstruction, that neither of the two contingencies — unavoidable accident or low water — having been pleaded, the complaint did not state a cause of action.
Appeal from District Court, Stillwater County; Benjamin E. Berg, Judge.
Messrs. Johnston, Coleman Jameson, for Appellant, submitted a brief; Mr. H.J. Coleman argued the cause orally.
Mr. George W. Pierson, for Respondents, submitted a brief and argued the cause orally.
If, as we contend, plaintiff was bound under its contract to deliver water at all times under the circumstances set forth in the complaint, it was not bound to construct the new ditch and headgate which are described in the complaint and when it did do that work it was under no obligation to share the fruits of its labors and expenditures with the defendants, and this fact we believe the authorities hereinafter referred to establish. Certainly from the agreement it cannot reasonably be contended that it was within the contemplation of the parties that water was to be furnished through any other headgate, ditch or canal than that specifically referred to therein; or that the entire construction of the headgate and nearly a mile of ditch should be changed and rebuilt at a very large expenditure as would have been necessary to enable it to continue to supply the water specified. In other words, the parties contracted upon the basis of the continuance of existence of the specific canal and headgate referred to as capable of carrying sufficient water to supply the defendants in accordance with the terms of the contract. The rule which we believe controls this case is set forth in 13 Corpus Juris, page 643, where it is said: "Where the contract relates to the use or possession or any dealing with specific things in which the performance necessarily depends on the existence of the particular thing, the condition is implied by law that the impossibility arising from the perishing or destruction of the thing, without default in the party, shall excuse the performance, because from the nature of the contract it is apparent that the parties contracted on the basis of the continued existence of the subject of the contract." (Sec. 718; see, also, sec. 717; Burch v. J.D. Bush Co., 181 N.C. 125, 106 S.E. 489; Mineral Park Land Co. v. Howard, 172 Cal. 289, L.R.A. 1916F, 1, 156 P. 458; Kirkpatrick Home for Childless Women v. Kenyon, 119 Misc. Rep. 349, 196 N.Y. Supp. 250; Cohen v. Morneault, 120 Me. 358, 114 A. 307; Crane v. School Dist. No. 14, 95 Or. 644, 188 P. 712; Piaggio v. Somerville, 119 Miss. 6, 80 So. 342.) That the courts have applied the rule referred to above to situations involving the obligation to furnish water under facts very similar to those presented in this case, is apparent from the following authorities: Dow v. Bryant, 28 Wyo. 508, 206 P. 1061; Acom v. Frye, 55 Colo. 56, 132 P. 55; Farmers' Merchants' Irr. Co. v. Brumbaugh, 81 Neb. 641, 116 N.W. 512; Fresno Milling Co. v. Fresno Canal Irr. Co., 126 Cal. 640, 59 P. 140; True v. Rocky Ford Canal etc. Co., 36 Colo. 43, 85 P. 842; Souther v. San Diego Flume Co., 112 Fed. 228; Id., 121 Fed. 347, 57 C.C.A. 561; Landers v. Garland Canal Co., 52 La. Ann. 1465, 27 So. 717; Wiel on Water Rights, 3d ed., sec. 538; Kinney on Irrigation Water Rights, 2d ed., sec. 1527.
If the conclusion reached by us as to the obligation of the Cove Ditch Company and its successor, the plaintiff herein, is correct, it necessarily follows that defendants were only entitled to water under their contract when the same could be carried through the canal reconstructed and maintained as specified and required in that agreement. If by reason of changes in the channel of the Yellowstone River it was impossible to get water into the canal after the high water stage which ordinarily terminated between July 1 and 15 of each year, plaintiff having complied with its contract, was under no obligation to deliver water after that time; and having by the expenditure of a large sum of money in the moving and reconstruction of the headgate and construction of nearly a mile of new ditch, made it possible to salvage and secure an additional amount of water during all stages of the river, without disturbing, invading, or interfering with defendants' rights in any way, we can conceive of no reason why the defendants, without contribution of money or effort, should participate therein. ( Pomona Land Water Co. v. San Antonio Water Co., 152 Cal. 618, 93 P. 881; True v. Rocky Ford etc. Co., supra; Mayberry v. Alhambra Addition Water Co., 125 Cal. 444, 54 P. 530 58 P. 68; Wiggins v. Muscupiabe Land Water Co., 113 Cal. 182, 54 Am. St. Rep. 337, 32 L.R.A. 667, 45 P. 160.)
Disregarding the plain terms of the agreement both for continued maintenance and service and the right to surrender the property on tiring of the burden, appellant cites authorities declaring the law applicable when the principal thing has been destroyed, rendering further service useless, and then argues because the means selected became burdensome it should be permitted to retain the compensation and relieved from further performance. It may be conceded that when persons contract in reference to a water supply to be obtained through the works of a third over which neither has control, failure of the means of conveying will excuse performance. But this is not the rule when either party is in direct charge. The authorities cited by appellant are to the effect that the paramount object of contracts, such as the one under consideration, is the delivery of the water, not the condition of the canal. Failure of supply may excuse, but failure to provide means of conveying will not.
The following authorities bear upon the question that the delivery of the water and not the maintenance of the ditch is the principal purpose: Shaber v. St. Paul Water Co., 30 Minn. 179, 14 N.W. 874; Evans v. Prosser Falls Land Water Co., 62 Wn. 178, Ann. Cas. 1912C, 1029, 113 P. 271. In Dow v. Bryant, 28 Wyo. 508, 206 P. 1061, cited by plaintiff, it is said: "The contract in the case at bar relates to the lease of water power. The injury to the dams and race was not a destruction of the power which continued to exist after the flood. * * * If the stream had, in consequence of drouth, failed to furnish the necessary amount of water to operate defendant's mills, this would have been a destruction of subject-matter of the contract and would have excused performance."
From Corpus Juris, section 712, we quote: "Where performance becomes impossible subsequent to the contract, the general rule is that the promisor is not therefor discharged." ( Summers v. Midland Co., 167 Minn. 453, 46 A.L.R. 816, 209 N.W. 323.)
But aside from the foregoing, the agreement attached to the complaint provides for a continuing benefit, with forfeitures on failure. "The duty to furnish water was not cast upon the defendant by law, but by its own contract, and such accidents were not guarded against. The contract, within certain limits, might be considered as a continuing one. The company might, with reasonable diligence, have repaired the dam, and thus supplied the water, if not at the time agreed, shortly after, but it does not appear any effort in that direction was made." ( Keystone Lumber Salt Mfg. Co. v. Dole, 43 Mich. 370, 5 N.W. 412.) "But it is an important part of that rule that the intervention of such inevitable accident will not excuse performance when the essential purposes of the contract are still capable of substantial accomplishment, although a literal performance has become physically impossible." ( Board of Education v. Townsend, 63 Ohio St. 514, 52 L.R.A. 868, 59 N.E. 223; see, also, Williams v. Vanderbilt, 28 N.Y. 217, 84 Am. Dec. 333; Booth v. Spuyten Duyvil Rolling Mill Co., 60 N.Y. 487.)
In the case of Western Drug Supply etc. Co. v. Board of Administration, 106 Kan. 256, 12 A.L.R. 1074, 187 P. 701, the rule is stated: "That if a party by his contract charge himself with an obligation possible to be performed, he must make it good, unless its performance is rendered impossible by the act of God, the law, or the other party. Unforeseen difficulties, however great, will not excuse him." It is said: "The mere impossibility of performance in fact will not be enough, but the contract must be obviously impossible upon its face before such a defense can be made." ( Elmira Lumber Co. v. Owen, 96 Or. 127, 188 P. 415.)
As bearing on the vagaries of the Yellowstone River and duty of plaintiff, attention is called to the following: "It does not appear that there was anything unusual for that season of the year in the rise of the waters referred to, and therefore that such rise was something which ordinary prudence might not have anticipated, and at the same time taken proper steps to guard against any delay by reason thereof; nor is it alleged that defendants could not have reached Hueneme by another route, or that it was impossible for them to communicate with Hueneme, and direct the delivery to be made by some other agent." ( Ryan v. Rogers, 96 Cal. 349, 31 P. 244; Wallner v. Barry, 207 Cal. 465, 279 P. 148; London Guarantee Accident Co. v. Industrial Acc. Com., (Cal.App.) 253 P. 323.)
Added expense is no excuse. ( Chase v. Clinton County, 241 Mich. 478, 217 N.W. 565; Western Industries Co. v. Mason Malt Whisky Distilling Co., 56 Cal.App. 355, 205 P. 466.)
A continual supply was promised in exchange for the ditch and right of way. Appellant cannot retain the consideration and refuse to perform. "Excuse for not performing, in the nature of things, cannot be performance." ( Davidson v. Gaskill, 32 Okla. 40, 38 L.R.A. (n.s.) 692, 121 P. 649.) "A defendant cannot be made to pay for the act of God preventing the plaintiff from rendering an equivalent for the money he seeks to recover." ( Remy v. Olds, 4 Cal. Unrep. 240, 21 L.R.A. 645, 34 P. 216; Sample v. Fresno Flume Irr. Co., 129 Cal. 222, 61 P. 1085; Sokoloff v. National City Bank, 239 N.Y. 158, 37 A.L.R. 712, 145 N.E. 917; Jones-Gray Const. Co. v. Stephens, 167 Ky. 765, 181 S.W. 659.)
Under the contract the reasonable diligence rule required plaintiff to put the water in the ditch if it was in the stream and it had reason to anticipate or had sufficient notice of the condition. ( Pawnee Land Canal Co. v. Jenkins, 1 Colo. App. 425, 29 P. 381; Evans v. Prosser Falls Land Power Co., supra.)
If appellant wishes to avoid continual delivery of the water, it should reconvey the ditch to respondents. (Secs. 6870, 7404, Rev. Codes 1921.) A demand for reconveyance is not necessary, but the duty devolves on failure to perform the condition. ( Liebrand v. Otto, 56 Cal. 242, 247.) The amount expended by the appellant or its predecessor does not relieve it from the reversion. ( Farmers' Pawnee Canal Co. v. Pawnee Water Storage Co., 47 Colo. 239, 107 P. 286; Hall v. Webb, 66 Cal.App. 416, 226 P. 403.) Other cases to the point of condition subsequent are: Smith v. Hoffman, 56 Mont. 299, 184 P. 842; Pettit v. Stuttgart Normal Institute, 67 Ark. 430, 55 S.W. 485; Eastern Advertising Co. v. McGaw, 89 Md. 72, 42 A. 923; Swaine v. Teutonia Fire Ins. Co., 222 Mass. 108, 109 N.E. 825; Moller v. Niagara Fire Ins. Co., 54 Wn. 439, 132 Am. St. Rep. 1115, 24 L.R.A. (n.s.) 807, 103 P. 449.
The appellant succeeded to the rights and obligations of the Cove Ditch Company and is therefore bound to deliver the water. ( Telander v. Tuyunga Water Power Co., 43 Cal.App. 492, 185 P. 504; Bolles v. Pecos Irr. Co., 23 N.M. 32, 167 P. 280; Newell v. Redondo Water Co., 55 Cal.App. 86, 202 P. 914.) The plaintiff could not deprive defendants of such use, regardless of how it may have extended or changed the ditch. ( Beck v. Pasadena Lake Vineyard Land Water Co., 6 Cal. Unrep. 363, 59 P. 387; Ruhnke v. Aubert, 58 Or. 6, 113 P. 38.)
In this action a general demurrer to the complaint was sustained. Plaintiff, declining to amend its complaint, suffered judgment of dismissal to be entered, from which it appealed.
From the complaint it appears that the Yellowstone Ditch Company was organized as a corporation in 1893; that in 1906 it was the owner of and operating an irrigation canal diverting waters from the north bank of the Yellowstone River in Stillwater county for irrigating lands situated easterly from the point of diversion; that the individual defendants are stockholders of the Yellowstone Ditch Company and the owners of land aggregating 3,100 acres irrigated by means of the canal, each stockholder being entitled to that proportion of all the water carried in the canal which his stock bore to the total outstanding stock; that in 1905 the Cove Ditch Company was incorporated for the purpose of appropriating, transporting and selling the waters of Yellowstone River for beneficial uses to its stockholders owning lands north of the Yellowstone River and east of the lands owned by the individual defendants; that on January 25, 1906, the Yellowstone Ditch Company conveyed to the Cove Ditch Company its irrigation ditch or canal to enable the latter company, by the enlargement and extension of the canal, to conduct the water needed for its stockholders through it, reserving the right in the Yellowstone Ditch Company to the use of the waters under the terms and conditions of a written contract attached to and made a part of the complaint; that under the contract the Cove Ditch Company agreed to maintain the canal; that acting under the agreement the Cove Ditch Company enlarged the canal and extended it eastward twenty miles to irrigate the lands of its stockholders; that thereafter a bar and islands were formed in the channel of the Yellowstone River by a gradual deposit of sand and gravel at the point of intake of said canal, and the main current of the river flowed on the south side of the islands or bar; that by the flowing of the river on the south side of the islands and bar, over a period of years, it cut and deepened its bed so that the portion of the river tapped by the canal became a high-water channel, capable of furnishing water for the canal only during the high-water period, which usually terminated between the first and fifteenth days of July, resulting in damage and injury to the crops of the stockholders of the Cove Ditch Company and the Yellowstone Ditch Company; that to insure an adequate supply of water in the canal during the entire irrigating season it became necessary to change the location of the headgate to a point about one-quarter of a mile west of the existing headgate and to construct approximately 4,300 feet of new ditch; that in 1922 the stockholders of the Cove Ditch Company organized and created the plaintiff Cove Irrigation District, embracing within the district the lands owned by the stockholders of the Cove Ditch Company, but not those owned by the stockholders of the Yellowstone Ditch Company; that by conveyance plaintiff has succeeded to the rights of the Cove Ditch Company in the canal and irrigation system; that in 1923 plaintiff constructed a new headgate about one-quarter of a mile up the river and constructed about 4,300 feet of new ditch at a cost of about $45,000; that this expenditure has made an adequate supply of water available for the full irrigation season which was made use of each year by the individual defendants, and that the defendants have failed and refused to contribute any part of the cost of the work.
By way of conclusion the complaint avers that the expense of reconstruction of the canal and headgate was not contemplated by the written agreement with the Cove Ditch Company and that defendants are entitled to take such water only as it was possible to get into the canal by means of the headgate as originally constructed, but that they claim the right to take advantage of the reconstruction and make use of water during the entire irrigation season of each year. It is further alleged that the canal as reconstructed will carry sufficient water for the needs of all the individual defendants as well as for all persons owning lands within the Cove Irrigation District, and plaintiff by its complaint offers to permit the defendants to use water from the canal during the entire irrigation season upon the condition that they contribute their proportionate shares of the expense of the reconstruction work.
The prayer is that it be decreed that defendants are entitled to water only at such periods of the irrigation season each year when it would have been possible to divert water into the canal as originally constructed and maintained, and that they be enjoined from using water at any other time.
The sufficiency of the complaint and the propriety of the judgment appealed from depend upon the terms of the written contract between the Cove Ditch Company and the Yellowstone Ditch Company.
So far as bearing upon the questions here involved, the contract of January 25, 1906, contains these provisions:
"That the party of the second part [Cove Ditch Company] shall * * * furnish to the party of the first part [Yellowstone Ditch Company] or to its several stockholders in proportion to their respective interest in the stock of said company such an amount of water as the said canal now carries, the amount of said water to be determined by a measurement hereafter to be made and in the manner hereinafter stated: provided, however, that nothing herein contained shall be construed as a conveyance of the water right of the party of the first part; and provided, further, that the said party of the second part shall only be required to furnish such water during the irrigating season of each and every year hereafter; and provided also, that nothing herein contained shall be considered as requiring the party of the second part to furnish the party of the first part the full amount of water herein contracted to be delivered to it when on account of extreme low water in the river it is impossible to carry the requisite amount of water therefor in said canal or when on account of unavoidable accident it is impossible to operate said ditch for the time being. The party of the second part, however, is to use all proper diligence and reasonable care to keep the requisite amount of water flowing in said canal to provide the party of the first part with water at all times and to repair any and all breaks or damages which may be done to said ditch by unavoidable accident or otherwise. The party of the second part is to enlarge said canal and the headgate thereof at its own proper expense during such season of the year as will not in any manner interfere with the use of the water thereof by the party of the first part at any time during the irrigating season, and further agrees at all times to do and perform all necessary work and furnish all necessary material in the repair of said ditch from year to year.
"It is further understood and agreed between the parties that the party of the second part shall, subject to the conditions of this agreement, have at all times the full and complete control of said canal after it shall have enlarged the same and shall at its own expense keep a ditch walker on said ditch whose duty it shall be to see that the water agreed to be furnished to the party of the first part shall be turned out to the stockholders thereof in such quantities as the said stockholders shall be entitled respectively, and according to their respective shares of stock in the party of the first part. The said party of the second part also agrees to so reconstruct and to operate said canal that the level of the water therein shall at its normal height rise to the same elevation in said canal as it rises at the present time and so that it will flow through the headgates of the stockholders of the party of the first part as now located or as they may be located at any time prior to the time the party of the second part may commence the enlargement of said ditch or as may at any time hereafter be constructed by the mutual consent of the parties hereto."
The contract conveys a right of way for the canal sixty-six feet in width, after which appears the following: "Nothing in this conveyance shall be construed as a transfer of the water right and appropriation of the waters of the Yellowstone River as heretofore acquired by the party of the first part."
The contract expressly reserved "at all times and perpetually the right of the party of the first part and of its stockholders to receive from said canal the amount of water belonging to them as hereinbefore stated in this conveyance whenever they shall need or require the same during the irrigating season." It also provided that "the consideration hereof is the continual supply from year to year to the party of the first part by the party of the second part of the amount of water hereinbefore mentioned, and that this conveyance shall be valid only so long as the party of the second part shall substantially comply with its agreement and with the conditions of this conveyance. And upon the failure of the party of the second part to supply said amount of water herein provided for at the time and in the manner provided for herein, the property hereby granted in whatever condition the same may be at the time of such failure as aforesaid shall, together with all the additions, accretions and improvements then revert to and become the property of the party of the first part or its successors and assigns."
This contract, like any other, must be construed in the light [1, 2] of the circumstances under which it was made (sec. 10521, Rev. Codes 1921), and the intention of the parties is to be pursued, if possible. (Sec. 10520, Id.) So viewing the contract, it required plaintiff's predecessor in interest to furnish to defendants during the irrigating season the amount of water the canal carried at the time the contract was made, excepting in case of extreme low water in the river or on account of unavoidable accident it became impossible to do so. Neither of these exceptions appears here. There was no unavoidable accident alleged, and the complaint is not grounded upon a claim of extreme low water in the river.
At the time the contract was made the Yellowstone Ditch Company, as appears from the contract, was particularly interested in reserving its water right and in imposing the duty of furnishing the water upon the Cove Ditch Company, without cost to the Yellowstone Ditch Company, as the consideration for the conveyance of the right of way. Stipulations in the contract disclose that the rights of the Yellowstone Ditch Company would be satisfied only by furnishing water during the full irrigation season, excepting when it would be impossible to do so because of extreme low water in the river, or because of unavoidable accident. Also, the contract required the Cove Ditch Company "to use all proper diligence and reasonable care to keep the requisite amount of water flowing in said canal."
While the complaint alleges the conclusion that this was done and that the shortage of water was not due to the failure of the Cove Ditch Company to comply with the terms of its contract, it further alleges that the bar and islands were formed in the bed or channel of the river by the gradual deposit of sand and gravel, causing the current to gradually change over a period of years. There is no allegation of facts tending to show that the Cove Ditch Company, in the exercise of the proper diligence and care, could not have prevented the change in the river channel. If the obligation of the Cove Ditch Company to supply water to defendants became burdensome it had the option of permitting the property conveyed to it by the Yellowstone Ditch Company to revert. Plaintiff, as the successor in interest of the Cove Ditch Company, had the same right. Instead of so doing, plaintiff chose the alternative of changing the point of diversion upstream so as to receive the same water at a higher point. Having done this, rather than permitting the property to revert, we think under the contract defendants are entitled to the benefit of the waters for the full irrigation season, bearing in mind that the contract imposed the duty upon the Cove Ditch Company of performing all necessary work and furnishing all necessary materials in the repair of the [3] ditch. The fact that compliance with the contract became more onerous than was contemplated at the time it was entered into does not excuse performance according to its terms. ( City of Scottsville v. Hewitt, 234 Ky. 656, 28 S.W.2d 984.)
The court properly sustained the demurrer to the complaint. The judgment is affirmed.
MR. CHIEF JUSTICE CALLAWAY and ASSOCIATE JUSTICES GALEN, FORD and MATTHEWS concur.