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(45 S.Ct.)

3. Waters and water courses 222-Lien un-in an accompanying statement by their conder Carey Act extends only to acreage for sulting engineer. which adequate water supply furnished; "reclaimed."

Under Carey Act (Comp. St. § 4685), land is not "reclaimed" until ample supply of water is actually furnished for its irrigation and cultivation, and only when it is reclaimed can it be charged with lien for cost of water rights.

The board, after referring the proposal to the state engineer and receiving from him a favorable report, provisionally accepted the proposal and forwarded it to the Secretary of the Interior with a request that the 127,000 acres of public lands be segregated from other public lands and that a contract be Appeal from the United States Circuit made between the United States and the Court of Appeals for the Ninth Circuit. state binding the United States to donate, Suit by the Commonwealth Trust Com-grant, and patent the lands to the state, if pany of Pittsburg, as trustee, against Max and when the latter caused them to be reSmith and another. From a judgment of claimed. the Circuit Court of Appeals (273 F. 1), affirming a judgment for defendants, plaintiff appeals. Affirmed.

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*Messrs. Oliver O. Haga and James H. Richards, both of Boise, Idaho, for appellant.

The segregation was made, and on April 10, 1908, the United States and the state entered into such a contract. It provided, among other things, that the United States should patent to the state, or to its assigns, any particular tract or tracts whenever an ample supply of water to reclaim the same

Mr. Turner K. Hackman, of Twin Falls, was actually furnished in a substantial ditch Idaho, for appellees.

Mr. Justice VAN DEVANTER delivered the opinion of the Court.

This suit is an incident of the partial failure of an irrigation project in the state of Idaho, called the Salmon River project, which was undertaken in accordance with

the Carey Act, c. 301, § 4, 28 Stat. 422 (Comp. St. 4685), chapter 420, 29 Stat. 434, and chapter 853, § 3, 31 Stat. 1188 (Comp. St. 4687), and the legislation of the state accept

ing the conditions of that act and providing for their performance (section 2996 et seq., Comp. Stat. Idaho 1919). A statement of the situation leading to the suit will be helpful in understanding its nature and purpose.

or canal; that all persons acquiring rights to such lands from the state prior to the issue of patent by the United States should take and hold the same subject to the requirements of the Carey Act and the terms of the contract; that full compliance therewith should be a condition to obtaining a and that the work of reclamation should be right to a patent from the United States; completed within 10 years.

The state and the Twin Falls Salmon

River Land & Water Company, to which Sprague and his associates had transferred their interests in the project, then entered. into a contract by which that company bound itself to construct and complete the irrigation works within five years, to provide the requisite supply of water, and to sell to each settler a perpetual water right of one-hundredth of a cubic foot of water per second of time for each acre in his tract-the price

#156

The project comprehended (a) the donation by the United States to the state of 127,000 acres of arid public lands; (b) the reclamation of the lands through an agency of the state by means of extensive irrigation works drawing a supply of water from the Salmon river, and the disposal of the lands, with an acre, and the water right to include a suitable water rights, to settlers in tracts of not more than 160 acres to any one per-and in the water appropriation and franproportionate interest in the irrigation works son. Other lands. lying among the 127,000 acres, were included in the project, making a total of 150,000 acres.

In 1907 George F. Sprague and others, who had devised the project, submitted to the state land board a proposal to construct the necessary irrigation works and to provide the requisite supply of water.

In the proposal they represented that, if it was accepted, they would organize a corporation with capital sufficient to complete the works and to put the same in operation, so as to reach and reclaim all of the 150,000 acres, that the water supply intended to be utilized

*155

was ample for the purpose, and *that water rights would be sold to settlers at $40 per acre. The representation respecting the water supply was set forth with much detail

of the water right to be not more than $40

chises pertaining to them. Other provisions in the contract were to the effect that no

water rights should be sold in excess of the capacity of the works or of the available water supply; that the company should have a lien on each water right to secure payment of the purchase price; and that there should be no preference or priority among the holders of water rights, but all should be on the same plane, regardless of the order in which the rights were purchased. In still other provisions the state agreed to dispose of the lands to settlers at 50 cents an acre, and not to recognize any right in a settler unless and until he contracted with the company for a water right sufficient for the irrigation of the tract he was seeking. After completing the works

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

to a corporate agency of the settlers, who were to hold its shares in the same proportion that they held the water rights. The moneys accruing from the sale of water rights were to belong to the construction company, and it was not to be otherwise compensated for its outlay and efforts.

•158

and putting them in operation the company | celing settler's entries amounting to 13,000 was to transfer their ownership and control acres and declining to allow further entries or to approve further sales of water rights, thereby in effect requiring that the water supply be applied to not exceeding 60,000 acres. In 1918 the board, on further con*sideration, concluded that the available supply was not sufficient to irrigate more than 35,000 acres, and made an order that it be distributed over and made appurtenant to that number of irrigable acres and no more, and that the outstanding contracts for water rights in excess of that acreage be canceled.

The contracts by which the water rights

were sold to settlers were all of the same tenor. Besides declaring that they were made in virtue of the contract between the state and the company and that the rights of the parties were to be governed thereby, these contracts showed that the settler was

The shortage of water and the proceedings resulting therefrom led to many controversies between the construction company and the settlers and to a general failure on the part of the latter to pay the deferred in

to have a right to receive during each irrigation season one-hundredth of a cubic foot of water per second of time for each acre installments of the purchase price for the wathe tract which he was seeking to acquire from the state, and also a proportionate interest in the irrigation works, etc.-such interest to conform to the proportional relation between the number of acres covered by

*157

ter rights. The settlers insisted, and some of them satisfied a court to which they resorted, that the available water was not sufficient to irrigate more than 25,000 acres.

Such was the situation when this suit was brought. The plaintiff is a trustee in a deed of trust given by the construction company to secure payment of a large issue of its bonds, and under that deed holds as collateral the company's rights under the contracts with the settlers and all liens to which it may be entitled under them and the legislation on which they are based. The defendants are two settlers holding contracts for water rights on which the deferred installments of the purchase price have not been paid. The plaintiff has elect

his water right and the *total acreage covered by all water rights sold "in accordance with" the contract between the company and the state. The price to the settler was a definite sum calculated at the rate of $40 per acre and payable in stated installments spread over a period of 11 years. To secure payment the company was to have a lien on the water right and the land, and, if it so requested, was to be given a mortgage on the land when the settler received the legal title. If default was made in the pay-ed to declare the full amount remaining unment of any installment, the company was to be at liberty to declare the entire amount then unpaid immediately due and payable, and to proceed to collect the same and to enforce such lien as it might have on the water right and land.

The contracts between the United States and the state, between the state and the company, and between the company and the several settlers, all expressly recognized the laws under which they were made as parts of

them.

paid due at once and to enforce payment ac-
cordingly. By its bill it asserts a lien on
the water rights and the lands for which
they were purchased, seeks a foreclosure of
the lien, and asks a judgment for any defi-
ciency. Other features of the bill will be
In their answer the de-
noticed later on.
fendants admit some of the plaintiff's al-
legations, deny others, and assert a right
to counter relief.

On the defendants' motion the District

Court ruled that the other holders of water

*159

plaintiff refused, and the bill was dismissed. The Circuit Court of Appeals affirmed the decree (273 F. 1), and the plaintiff appealed to this court under section 241 of the Judicial Code (Comp. St. § 1218).

After the irrigation works had been part-ordered that the plaintiff bring them in. The right contracts were necessary parties and ly constructed and the lands opened to entry and many water-right contracts made, it was found that the available water supply was not only short of what was required to irrigate 150,000 acres, but short of what was required to satisfy the water-right contracts already made, which aggregated 73,000 acres. In 1915 some of the settlers obtained, in a suit against the company, an interlocutory decree declaring that the outstanding waterright contracts were in excess of the available water supply and prohibiting the sale of further rights. Caldwell v. Twin Falls Salmon River Land & Water Co. (D. C.) 225 F. 584; Id., 242 F. 177, 155 C. C. A. 17; Id. (C. C. A.) 272 F. 356. In 1916 the state land board dealt with the shortage by can

[1] In the briefs there is much discussion of questions which might arise if the case were here on the merits. But, as the bill was dismissed because of the refusal to bring in additional parties, the only question open here is whether the parties indicated were necessary parties. Of course they were, if they had such an interest in the matter in controversy that it could not be determined without either affecting that interest or leaving the interests of those who

(45 S.Ct.)

were before the court in a situation that might be embarrassing and inconsistent with equity. Shields v. Barrow, 17 How. 130, 139, 15 L. Ed. 158.

ties.

The same thing is true as respects the elimination of contracts made in contravention of the provision in the contract between the state and the company that water rights should not be sold in excess of the available water supply.

tracts are outstanding, and yet is adequate for the reclamation of a smaller acreage, as is asserted on one side, it is evident that some of the contracts must be eliminated [2] The plaintiff takes the position that before any of the lands can be said to be the suit is simply one to foreclose a distinct reclaimed, or be adjudged subject to such a lien on particular water rights and lands, lien. Of course, an ascertainment or desigin which the other holders of water-right | nation of the contracts which must fall and contracts have no interest, and that a final those which are to stand cannot be had in decree determining the issues in the plain- a suit to which their holders are not partiff's favor and granting the relief sought can neither affect the other holders of such contracts nor work any embarrassment or inequity to the defendants. In our opinion | that position is not tenable. The suit is much more than one for a simple foreclosure. The bill sets forth the controversy respecting the water supply and does so for the purpose of having it determined. The controversy is not peculiar to the contracts sued on but reaches and affects all that are outstanding. The contracts, while several in form, are interdependent in substance and operation. All are effectively tied together by the contract between the state and the company, in virtue of which they were made, and by what they purport to do, which is to entitle their holders to participate on equal terms in the use of a common supply of water and to invest them with proportionate interests in the works by

which the water is collected and conducted

to the places of use. As was well said by

the District Judge:

*160

"In a very substantial sense all the settlers are parties to one general contract, in the subject-matter of which all are interested, and by virtue of which all have rights so interdependent, whether they be regarded as joint or several, that the interest of one cannot be defined and adjudicated without affecting the interests of all others."

The bill practically disregards the stipulations fixing the price of water rights at $40 an acre and proceeds on the theory that the amount of the lien intended by the Carey Act is to be determined by distributing the total actual outlay for irrigation works, etc., with reasonable interest thereon, over all of the reclaimed lands on an acreage basis. Applying that theory, the bill alleges that if the supply of water is found to be adequate for 60,000 acres and no more, the amount due is to be computed at $60 an acre, and if the supply is found to be adequate only for a smaller acreage a correspondingly higher rate is to be used in the computation. This

161

theory involves a determination of the total outlay and of the total area reclaimed. In view of what is comprehended in these questions they should be determined once for all. Every contract holder has an interest in them and will be affected by their determination, however made. It is of concern to him, not merely whether his tract is held to have been reclaimed and to be chargeable with part of the general outlay, but also whether and to what extent other lands are

Other considerations leading to the same in the same situation. In this and other result will be briefly stated.

[3] According to the Carey Act, a tract is not reclaimed until "an ample supply of water is actually furnished" for its irrigation and cultivation, and only when it is reclaimed can it be charged with a lien for the cost of water rights. If, therefore, the supply of water is not adequate for the reclamation of the acreage for which water-right con

respects what is determined in respect of
other holders is of direct concern to him.
In short, the interests of the contract holders
are so related that an effective and just de-
termination of the questions can only be had
in a proceeding to which all are parties.
What we have said requires that the de-
cree be
Affirmed.

(266 U. S. 217)

Appellant, following this arrangement, conSAVAGE ARMS CORPORATION v. UNITED tinued to deliver magazines until May, 1919,

STATES.

at which time there had been delivered 298,

(Argued Oct. 6, 1924. Decided Nov. 17, 1924.) 000, leaving undelivered 142,000, under the

No. 13.

1. United States 108-Claimant held not entitled to recover prospective profits from government on contract canceled.

Where one contracting to manufacture magazines for government not only acceded to their elimination from obligations of contract, but made persistent efforts to secure from Ordnance Office change in original suspension notice, expressly agreeing that if this were done it would abandon and settle all claims, and gov: ernment accepted this proposal, recovery of prospective profits could not be had from government on account of refusal to receive magazines, though subsequently it attempted to reserve its right to profits. 2. Contracts

terms of the original contract. Appellant thereafter neither requested to be allowed to furnish nor attempted to furnish this remaining number.

In addition to the contract for the magazines, appellant had a large number of other contracts with the government for furnishing various sorts of munitions and supplies, and had numerous accounts relating thereto. It was therefore anxious to close this contract on its books, and especially so because there was some discussion going on among the ordnance officials in respect of the suspension request, and a possibility that the change agreed upon between the board (which was without authority) and the appellant might be challenged, and the magazines in excess of 142,000 charged against appellant as having been improvidently accepted and paid for. Appellant, accordingly, wrote to the secretary of the claims board, *asking him to immediately arrange with the proper officer at Washington for a revised suspension request to terminate the contract in reSuit by the Savage Arms Corporation spect of the 142,000 undelivered magazines against the United States. Judgment for only, and expressly promising that, upon rethe United States (57 Ct. Cl. 71), and plain-ceipt of such request, appellant would "imtiff appeals. Affirmed.

255-Parties may release themselves in whole or in part from obligations, so far as they remain executory.

Parties under contract may release themselves in whole or in part from its obligations, so far as they remain executory, by mutual agreement, without fresh consideration.

Appeal from the Court of Claims.

*219

mediately accept it, without making claim

Mr. Jesse C. Adkins, of Washington, D. for any portion of the 142,000 magazines C., for appellant. so suspended."

Mr. Blackburn Esterline, Sp. Asst. Atty. Gen., for the United States.

Appellant thereafter persistently and repeatedly urged that the officials of the Ordnance Office revise the suspension request by

Mr. Justice SUTHERLAND delivered the an order authorizing the delivery of the 298,opinion of the Court.

*218

000 magazines. Finally, on August 20, 1919, appellant again wrote, and, after referring to the fact that 142,000 magazines remained undelivered under the contract, said:

"As we have received and accepted no suspension request for this number, it will be appreciated if you will have forthcoming suspension request for our acceptance in termination of this contract.

"Some time ago we received verbal instruction of the Rochester district office to discontinue the manufacture of these magazines, as they were not wanted. So that there will be no misunderstanding, we are anxious to receive and accept suspension request; otherwise the contract will remain open on our books."

On April 30, 1918, appellant entered into a contract with the United States by which, among other things, it agreed to make and deliver 440,000 magazines for Lewis machine guns, for which the United States agreed to pay $4.24 each. After 24,247 of the magazines had been delivered, the Chief of Ordnance requested appellant in the public interest immediately to suspend operations under the contract to the extent of 298,000 magazines. Written notice containing this request was sent to the Rochester district claims board for delivery to appellant, to whom its purport was communicated by the board. Thereupon appellant entered into Following this letter, a verbal understandverbal negotiations with an official of the ing was reached between appellant and an board, with the result that an understand- officer representing the government, by which ing was arrived at between them to the effect appellant agreed to abandon and settle all that the requested suspension should operate claims, controversies, and disputed points to the extent of 142,000 magazines, instead growing out of contract 48-A if the officer of 298,000, as stated in the notice. The ne- would secure a revision of the suspension regotiations were exclusively with the claims quest, so as to allow the delivery of 298,000 board. No reply was made by appellant to magazines, instead of 142,000. Thereupon the Chief of Ordnance, and it does not ap- a new suspension request was issued by dipear that the Ordnance Office was informed rection of the Chief of Ordnance, in consumof the arrangement until long afterwards. I mation of this last agreement. Subsequent

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

*220

(45 S. Ct.)

ly appellant acknowledged receipt of the re- ment's acceptance of appellant's proposal. vised request, saying that it had suspended The attempted reservation came too late. work in accordance therewith, "reserving, Either it was a mere afterthought, or there was a concealment of purpose, on the part of appellant during the negotiations, amounting to bad faith. Whether the agreement was made reluctantly, or appellant got the worst of the bargain, are matters unnecessary to be considered. without fraud or coercion, it did agree. It is enough that, Affirmed.

however, all its rights *against the United
States government * * for failure *
to perform all the provisions of the contract
known as No. C.M.G. 48-A and especially
its right to recover all the profits which it
would have made had it been permitted to
complete said contract."

Thereafter appellant several times inquired of the Chief of Ordnance as to the inten

(266 U. S. 187)

tion of the government respecting the de- MISSOURI PAC. R. CO. et al. v. WESTERN livery of the remaining 142,000 magazines, or the payment of prospective profits on account of its refusal to receive them, to which

CRAWFORD ROAD IMPROVE-
MENT DIST.

1924.) No. 67.

that officer replied that the government (Submitted Oct. 10, 1924. Decided Nov. 17, would not accept delivery, and that he was not authorized to pay anticipated profits. Thereupon appellant brought this suit to recover its anticipated profits.

The Court of Claims rendered judgment in favor of the United States and dismissed the petition.

[1, 2] The bare recital of the facts practically disposes of the case. From them it appears that appellant not only acceded to the elimination of 142,000 magazines from the obligations of the contract, but made persistent and repeated efforts to secure from the Ordnance Office a change in the origiInal notice, so as to include that number, instead of 298,000, expressly agreeing that if this were done it would abandon and settle all claims, controversies, and disputed points growing out of the contract. The government, through its authorized officials, accepted this proposal and the arrangement became fixed and binding. A good deal is said by appellant to the effect that this agreement was without consideration, but we need not stop to review the contention. It is enough to say that the parties to a contract

may release themselves, in whole or in part, from its obligations, so far as they remain executory, by mutal agreement, without fresh consideration. The release of one is sufficient consideration for the release of the other. If authority for a rule so elementary be required, see, for example, Hanson v. Wit

#221

ten*berg, 205 Mass. 319, 326, 91 N. E. 383;
Collyer v. Moulton, 9 R. I. 90, 92, 98 Am.
Dec. 370; McCreery et al. v. Day et al., 119
N. Y. 1, 7, 23 N. E. 198, 6 L. R. A. 503, 16
Am. St. Rep. 793; Dreifus, Block & Co. v.
Salvage Co., 194 Pa. 475, 486, 45 A. 370, 75
Am. St. Rep. 704.

1. Highways 121-State may bear cost of constructing highway in whole or in part by means of special assessment or by general taxation.

State may bear cost of constructing highway in whole or in part by means of special assessment on property benefited thereby, but is not obliged to do so, and may pay cost by general taxation.

2. Constitutional law

290(1)-Due process clause not violated by paying cost of preliminary inquiry into desirability of constructing road in district.

Due process clause of Const. U. S. Amend. 14, is not violated by levying cost of preliminary inquiry into whether road improvement should be made in certain district on property therein according to its value, though such tax would exceed any benefits that would have been received by making of improvement, and though road project is abandoned. law 283-Due 3. Constitutional process clause affords protection only for purely arbitrary exercise of taxing power.

There must be flagrant abuse or purely arbitrary exercise of taxing power by state authorities before it will be held that due process of law clause of Const. U. S. Amend. 14, is violated.

In Error to the Supreme Court of Arkansas.

Suit by the Missouri Pacific Railroad Company and others against the Western Crawford Road Improvement District. Judgment for defendant (157 Ark. 304, 248 S. W. 563), and plaintiffs bring error. Affirmed.

Messrs. Harry P. Warner and Thomas B. Pryor, both of Ft. Smith, Ark., and W. F. Evans and Edward J. White, both of St. Louis, Mo., for plaintiffs in error.

Mr. E. L. Matlock, of Van Buren, Ark., for defendant in error.

It is true that, after receiving the revised notice, appellant assumed to reserve its right "to recover all profits which it would have made if it had been permitted to complete said contract." The rescission of the contract in so far as it was executory-that is, Mr. Justice BRANDEIS delivered the opinin respect of the 142,000 magazines-how-ion of the Court.

ever, had been consummated by the govern- In 1920 Arkansas created the Western

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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