Butte Cty. Water Users' Ass'n v. R.R. Comm'n

This is an application by an association of those consumers of the Sutter Butte Canal Company, who were consumers prior to 1920, to annul an order of the Railroad Commission that, beginning with the year 1920, that company serve with water some fourteen thousand four hundred acres of land not theretofore served by it. The company was organized as, and has always been, a public utility company supplying water for irrigation, and its articles of incorporation empower it to sell and distribute water in the counties of Butte and Sutter. It takes its water from the Feather River near Oroville, in Butte County, and its water rights, which are appropriation rights, are all for water for public sale and distribution. From a comparatively small beginning the system of the company was extended and enlarged gradually as the market for its water grew until in 1919 it was supplying some fifty-five thousand, or slightly more, acres of land, mostly in Butte County. In September of that year the company contracted with the owners of fourteen thousand four hundred acres of land in Sutter County that it would extend its system to supply their lands, and pursuant to this contract the company made…

If the petitioners had shown that the water company had originally, by its declarations to proposed consumers, or by acts evincing to them an intention to that effect, held out that it proposed to use its water supply, so far as was necessary, for irrigation and other uses upon a definite area or district of farming land, embracing the lands of such consumers, including the petitioners, and that in pursuance of this purpose it had constructed a system of canals extending to said lands and no further, and had obtained consumers in that district on the faith of such purpose, and thereafter supplied them with water through said canals, I think it is clear, both from the Civil Code (sec. 552), from our decisions on the subject, and from considerations of sound public policy and justice, that such consumers would have a right to insist on the continuance of the supply to their lands, that such right would be paramount to that of consumers in any newly formed district to which the water company might afterward undertake to supply water, and that such new users would be *236 entitled to receive water only from the surplus of the company’s water after the users in the first mentioned…