rates.

499, 133 Am. St. Rep. 637, 121 N. W. 570; Price v. Riverside Land & Irrigating Co. 56 Cal. 431; Jack v. Grangeville, 9 Idaho, 291, 74 Pac. 969; 3 Kinney, Irrigation, § 1381, p. 2499.

The enforcement of the order impairs the obligations of the contract between the ditch company and its customers, and deeral Supreme Court that notwithstanding the declaration in the Constitution of California that water appropriated for sale is appropriated to a public use, the water rights of an irrigation company acquired by prescription or by purchase should be included in the valuation of its property in determining whether the rates fixed by the board of supervisors would yield the 6 per cent return upon the value of the property to which the company was entitled under the California statute.

On a motion for a preliminary injunction in the above case, 163 Fed. 567, the rule was laid down that if a deduction is to be made from the value of the irrigation plant on account of deterioration, in fixing its value for the purpose of determining the rate, an allowance should be made for the deduction and added to the annual income so to enable the irrigation company to renew and reconstruct the plant and thereby preserve its integrity.

497.

The control of the canal has passed from the ditch company to its customers. App, 497, 42 Pac. 50; Blakely v. Ft. Lyon La Junta & L. Canal Co. v. Hess, 6 Colo. Canal Co. 31 Colo. 224, 73 Pac. 249; Wyatt v. Larimer & W. Irrig. Co. 18 Colo. 298, 36 Am. St. Rep. 280, 33 Pac. 144, 1 Colo. App. 480, 29 Pac. 906; 3 Kinney, Irrigation, 2d ed. § 1517, p. 2732; Windsor Reservoir & Canal Co. v. Lake Supply Ditch Co. '44 Colo. 214, 98 Pac. 729; Union Mill &

Nor can the irrigation company defend such an action on the ground that the complainant has contracted with it for a higher rate than that fixed by the board. Ibid.

In an action between the same parties for damages on account of the irrigation company's failure to supply water, it was held in Northern Colorado Irrig. Co. v. Pouppirt, 22 Colo. App. 563, 127 Pac. 125, that the order of the board, fixing the maximum water rate at $1 per acre, was not void for uncertainty in not prescribing the amount of water which the company should be required to furnish to any consumer, where the statute provided that persons who had purchased and used water for irrigation from any ditch, and who had not ceased to do so for the purpose of procuring water from some other source of supply, should have a right to continue to purchase water to the same amount on paying the rate fixed by the county commissioners, and the amount of water to which the plaintiff was entitled was determinable from previous contract and recognized usage.

Also in San Joaquin & K. River Canal & Irrig. Co. v. Stanislaus County, 191 Fed. 898, a motion for a preliminary injunction, in an action between the same parties involving other water rates, was denied.

An order of the board of county commissioners fixing the rate at which an irrigation company, a party to the proceeding, shall furnish water to consumers, cannot be collaterally attacked in a mandamus action brought by a consumer to compel the company to deliver water at the rate fixed. Northern Colorado Irrig. Co. v. Pouppirt, 47 Colo. 490, 108 Pac. 23.

tion company was required to carry and deliver water to the class of consumers named in the certificate of its incorporation for a reasonable maximum charge, to be fixed by the board of county commissioners, and that when such rate had been fixed it was binding upon the company until relief had been afforded in some appropriate proceedings; also that the company could not exact a bonus as a condition precedent of the right of a consumer to procure water.

Water rates to be charged by an irrigation company, fixed by a board of county commissioners, as provided by the Constitution of Colorado, cannot be attacked collaterally as unreasonable in an action by the company to recover an excess alleged to be due for a supply of water. McCracken v. Montezuma Water & Land Co. 25 Colo. App. 280, 137 Pac. 903.

Under the Constitution of Colorado neither the legislature nor any court has power

The regulation of a public service corporation is only to prevent it exacting unreasonable and unjust rates, not to better for it its unthrifty contracts.

Spring Valley Waterworks v. Schottler, 110 U. S. 347, 28 L. ed. 173, 4 Sup. Ct. Rep. 48; 4 McQuillin, Mun. Corp. § 1725, p. 3699; Adinolfi v. Hazlett, 242 Pa. 25, 48 L.R.A. (N.S.) 855, 88 Atl. 869; Elliott, Priv. Corp. 4th ed. § 91a, p. 97.

Mr. C. E. Eldred, for appellee:

The power given the Railway Commission to "regulate" rates includes the "fixing" of rates.

State ex rel. Hamilton County v. Ream, 16 Neb. 681, 21 N. W. 398; Higgins v. Mitchell County, 6 Kan. App. 314, 51 Pac. 72; Dougherty v. Austin, 94 Cal. 601, 16 L.R.A. 161, 28 Pac. 834, 29 Pac. 1092; | to fix a maximum rate to be charged by an irrigation company for the delivery of water; but such power is vested in the boards of county commissioners, to be exercised on the petition of an interested party. Ibid.

Under the Constitution and statutes of Idaho, declaring that the use of all waters appropriated for sale or distribution is a public use, subject to the control and regu lation of the state, that the right to collect tolls for compensation for the use of water supplied to any county or its inhabitants is a franchise and cannot be exercised except in the manner prescribed by law, and authorizing the county commissioners to prescribe maximum rates for water delivered for irrigation purposes, an irrigation com. pany cannot obtain a decree canceling a rate fixed by the commissioners, on the ground that it is too low and does not yield it just compensation, unless the rate would be too low as applied to the total number of acres irrigated in other words, it cannot supply part of its consumers with water free or at an inadequate rate under contract, and secure the cancelation of the prescribed rate on the ground that, if such rate is applied to the balance of the irrigable land, its total income will not be just compensation. Boise City Irrig. & Land Co. v. Clarke, 65 C. C. A. 399, 131 Fed. 415.

It was held in Boise City Irrig. & Land Co. v. Clarke, supra, that although the year for which the board of county commissioners had fixed a water rate had expired, the court would entertain and decide an appeal from a decree upholding the rate, partly because a rate once fixed continued in force until changed as provided by law, and partly because of the necessity or propriety of deciding questions of law presented which might serve to guide the board when again called upon to act in the matter of fixing the rates.

The State Railway Commission had jurisdiction and authority to regulate and fix the rates. The fixing and regulation of water rates is a governmental function, one of the police powers of the state, and is not suspended, except by express provision of the law. At the time the contracts were entered into the parties joining in the contracts were bound to know that the rates were subject to legislative control.

White v. Farmers' Highline Canal & Reservoir Co. 22 Colo. 191, 31 L.R.A. 828, 43 Pac. 1028; Brummitt v. Ogden Waterworks Co. 33 Utah, 289, 93 Pac. 828; Omaha Water Co. v. Omaha, 12 L.R.A. (N.S.) 736, 77 C. C. A. 267, 147 Fed. 1; Stanislaus County v. San Joaquin & K. River Canal & Irrig. Co. 192 U. S. 201, 48 L. ed. 406, 24 Sup. Ct. Rep. 241; Owensboro

And the court in Boise City Irrig. & Land Co. v. Clarke, supra, approved the rule that if the irrigation plant was built for a larger area than it found itself able to supply, or if as yet it did not have the customers contemplated, it was not necessary to fix the rate so high that a reasonable return would be paid upon the entire investment.

A consumer, it was held in Jackson v. Indian Creek Reservoir Ditch & Irrig. Co. 16 Idaho, 430, 101 Pac. 814, may make a valid contract as to the amount of maintenance charge to be paid an irrigation company, under the Constitution of Idaho, providing that the legislature shall designate the manner in which reasonable maximum rates may be established for the use of water sold or distributed for any useful or beneficial purpose, and a statute providing that any person who may contract to deliver a certain quantity of water to any party shall deliver that same, and that the amount to be paid for such delivery, "which amount may be fixed by contract, or may be as provided by law," is a first lien upon the land irrigated. And the court said that even if the legislature had not expressly provided that the amount to be paid for water might be fixed by contract, the right so to contract existed, there being no constitutional or statutory inhibition against such contracts.

And it was held also in Jackson v. Indian Creek Reservoir Ditch & Irrig. Co. supra, that the consumer was not deprived of the right to contract as to water rates by reason of the fact that the legislature had provided a manner by which the rate to be charged for the use of water might be established upon application to the board of county commissioners.

R. E. H.

allowed to squander or dissipate any sum realized from the increase in rates in excess of that actually expended each year for the maintenance of the ditch. Its books are subject to inspection, and if it should prove when further repairs have been made to the canal, or a more specific and detailed system of bookkeeping used, that the rate now fixed is excessive, it can be reduced upon proper application being made to that body.

2. It is strongly insisted that the evidence shows that all the available water which could be furnished has been disposed of under existing water-right contracts; that for that reason the consumers own the canal, and the complainant as a stock corporation has no interest in the property. This question involves the ownership of the property, and is one which the Railway Commission has no jurisdiction to hear or determine. If the facts warrant, proper relief may be afforded by appropriate proceedings in a court of equity.

3. Respondents insist that if the existing rate is unsatisfactory to the company, it cannot complain because it was competent, and under no restriction when it fixed the rate, and that regulation can only apply on the complaint of water users when they show the agreed rate is unreasonable. This involves the constitutional questions raised.

The crucial question is whether the rate of $1 per acre per year fixed in the contract is a property right with which the state, in the exercise of its regulatory power, cannot interfere. At the time the canal was built the practice of irrigation in this state was in its infancy; but from the very first the legislature recognized the public interest in the use of water from the streams of the state for irrigation purposes. It placed canal companies in the same class as railways and other common carriers, and it has uniformly been considered that their rates were subject to regulation and control. Cummings v. Hyatt, 54 Neb. 35, 74 N. W. 411; Castle Rock Irrig. Canal & Water Power Co. v. Jurisch, 67 Neb. 377, 93 N. W. 690; Farmers' Canal Co. v. Frank, 72 Neb. 136, 100 N. W. 286; Fenton v. TriState Land Co. 89 Neb. 479, 492, 131 N. W. 1038. At first no tribunal was provided which had the power to fix and establish rates, and the only remedy the consumer had was to apply to the courts to restrain unjust exactions or unreasonable charges; but afterwards by constitutional amendment and statute the State Railway Commission was vested with full power and authority to regulate and fix rates and charges so that they would be fair and equitable both to the consumer and to the corporation supplying

the water. Const. art. 5, § 19a, Rev. Stat. 1913, §§ 3382-3384.

The question involved is an important one, and one as to which there has been some difference of opinion; but we believe the larger and broader view, that most consistent with the spirit in which the law of irrigation should be administered, and that to which courts are more and more tending, is that any contracts entered into between the irrigation company and consumers under the ditch, with reference to the annual rates which should be charged for the use of water, were entered into with the law forming a part of the contract, and were subject to legislative control. Tampa Waterworks Co. v. Tampa, 199 US 241, 50 L. ed. 170, 26 Sup. Ct. Rep. 23; Spring Valley Waterworks Co. v. Schottler, 110 U. S. 347, 28 L. ed. 173, 4 Sup. Ct. Rep. 48; Manitowoc v. Manitowoc & N. Traction Co. 145 Wis. 13, 140 Am. St. Rep. 1056, 129 N. W. 925; Stanislaus County v. San Joaquin & K. River Canal & Irrig. Co. 192 U. S. 201, 48 L. ed. 406, 24 Sup. Ct. Rep. 241; White v. Farmers' Highline Canal & Reservoir Co. 22 Colo. 191, 31 L.R.A. 828, 43 Pac. 1028. An interesting discussion of this topic with cases cited may be found in 2 Wiel, Water Rights, 3d ed. §§ 1315-1321.

If the canal company cannot receive sufficient money to keep the canal intact, the water supply must fail. The consumers will be direct sufferers from such a condition of affairs, but the state, which has granted the franchise to cross the lands of others, and has allowed the appropriation of public waters for the advancement of agriculture and the building up of prosperous agricultural communities, would also be injuriously affected by the failure of the enterprise. It is also worthy of consideration that if these contract holders are entitled to be supplied at the rate of $1 per acre, subsequent purchasers of water rights, if any, may be compelled to pay excessive rates in order to provide the necessary funds for maintenance. If the company should attempt to exact such rates, the question might arise whether such discriminatory charges could be upheld.

Osborne v. San Diego Land & Town Co. 178 U. S. 22, 44 L. ed. 961, 20 Sup. Ct. Rep. 860, was a case brought by an irrigation company to settle the question whether it had authority to increase its water rates. The case was tried in United States circuit court and appealed to the Supreme Court of the United States. The contract provided that the annual rate should be fixed by the company "as allowed by law." The company had for many years collected $3.50 per acre, and was now seeking to raise the 'rate to $7. The defendants claimed that