It appears from the record in this case that a suit was brought by the bondholders of the San Diego Land & Town Company of Kansas, a corporation, and Charles D. Lanning, receiver of that company, to foreclose a trust deed securing the payment of its bonds; that the trust deed was foreclosed, and the property sold to appellant herein. Pending the proceedings, James M. Sharp, appellee herein, was permitted to intervene for the purpose of protecting his rights to water from the San Diego Land & Town Company of Kansas. The circuit court rendered a decree confirming appellee’s right to the perpetual use of water from the water system of appellant, and granted an injunction to prevent appellant from shutting off the water from the land owned by appellee, as it contended it had the right to do. Mandell v. Town Co. (C. C.) 89 Fed. 295 . The Kansas corporation, under the constitution and laws of California, had acquired certain waters and water rights for sale and distribution, and had constructed a costly reservoir and extensive distributing system of pipes for the purpose of supplying water for irrigation and domestic uses to the inhabitants of National City and adjacent territory within the county of San Diego. A large portion of this territory was owned by the corporation. It subdivided and sold a portion of its land, and furnished purchasers thereof with water for the purposes aforesaid, through and by means of its pipe system. It also furnished water for similar purposes to the owners of neighboring lands not owned or sold by the corporation. Appellee owned 15 acres of land situate below and within 1,400 feet of one of the company’s mains. On March 26, 1892, he entered into a written contract with the company, which reads as follows:

At the time this contract was made the regular rates of the company for furnishing water to consumers for irrigation purposes was $3.50 an acre per annum. This rate continued up to' January t, 1896, and was then raised to $7 per acre per annum. The contract, by its terms, expired March 26, 1897, but the company supplied appellee with water up to April 9, 1897. On May 12, 1897, Sharp delivered to the company a written communication, as follows:

The company and the receiver refused the said tender of money, and in reply -to Sharp’s communication, on May 15, 1897, among ether things, said:

Sharp declined to extend the contract, and claims that he- is entitled to the continuance of the supply of water, under the constitution and laws of California, on paying the rates prescribed by law. The personal conversations' had between Sharp and the agents of the water company with reference to procuring the water, in the first instance, should be considered as having reference only to the period'of time expressed in the contract. Sharp com *397 plied with the terms of the contract during its existence. He waived the provisions of the statute, and paid the full amount he agreed to pay for the water up to April 1, 1897, which was a few days beyond the period of time mentioned in the contract. It will be noticed that the contract does not contain any covenant or agreement between the parties as to what rate he should pay for the water after the expiration of the contract, or whether he should or should not be entitled to the water after that time. It cannot, therefore, consistently be said that Sharp acted in bad faith in endeavoring to procure the water at the regular established rates thereafter. This he had the unquestioned right to do. The fact that, at the time of the execution of the contract, he expected to procure water from other sources, and had the option, by the terms of the contract, to make such change, does not in any manner affect the legal status of the parties. He did not avail himself of this option. The objection urged, that Sharp made no regalar application for the water, as required by the rules of the company, is purely technical. He did make a written demand for the water, and agreed to pay the highest uniform rate established therefor, which, under the facts in this case, should be considered as the equivalent of a regular application filled out on the company’s blanks. Moreover, the written communication of the agent of the receiver was in effect a denial of his right to the water except upon rates specified in the contract.

There is a controversy between the parties as to whether or not the land of appellee is within or outside of appellant’s water system or irrigation field, and also as to whether the same could be irrigated without loss to the company and detriment to other consumers, and as to whether there is sufficient water to irrigate the lands admitted to be within the system. The court below found— and there is ample evidence to sustain it — that the land of appellee is within the territory covered by the company’s distributing system. The record shows, as stated by the court, that:

The land of appellee is upon higher ground than some of the others, and, if the supply of water diminishes, it may be that the company might not be able, if compelled to supply such land with water, to furnish others of later date, on lower ground, with a sufficient supply of water to irrigate their lands. The record does not show that appellee ever made any application for water upon his lands, or that the water was ever supplied to him, otherwise than under the terms of the contract, except as hereinbefore stated. The contention of appellant is that, under the constitution and laws of California, a water company can legally contract to supply any one owning land within its system, at a point difficult to supply water for the irrigation of such lands, for a limited time, without attaching to the land a perpetual right to the use of water thereon, *398 as provided for by section 552 .of the Civil Code, and that this must be true in a case like the present, where the appellee at the time of ,making the contract expressly waived all claims that he might otherwise have to the provisions of said section. The contention of the appellee is that, after the expiration of the contract, he could not be compelled to make any extension of it as a condition precedent to having the water again turned on; that by the use of the water during the period of the contract, and for a few days thereafter, he, as one of the public, became entitled to share in the supply of water devoted by the company to the public use, upon the same terms and conditions as all other consumers under the system, without reference to any provision contained in the expired contract.

Section 552 of the Civil Code of California reads as follows:

In construing this section of the Code, the court, in Merrill v. Irrigation Co., 112 Cal. 426, 435 , 44 Pac. 720 , said:

It is unnecessary to quote the various provisions of the constitution of California, or of the statute of 1885, relied upon by appellee. It is enough to say in regard thereto that the supreme court of California, in construing the same, has uniformly held that the various provisions with reference to water and water rights for distribution and sale must be read together, and given a practical, common-sense construction, and be considered with reference to the prior state of the law, and the mischiefs intended to be remedied by the change in the organic law in relation thereto ; that the use of all water theretofore or thereafter appropriated for sale, rental, or distribution is, by the constitution, expressly declared to be a public use, subject to the regulation and control of the state, subject to certain provisions in respect to the rates or compensation to be collected (which has no application to water furnished by municipalities); that the constitution expressly declares that such rates or compensation shall be fixed in a certain specified manner, at a certain time, and by a certain body; that *399 the right to collect the rates or compensation so established is declared to be a franchise, and cannot be exercised, except by authority and in the manuer prescribed by the statute. People v. Stephens, 62 Cal. 209, 231-237 ; McCrary v. Beaudry, 67 Cal. 120 , 7 Pac. 264 ; Fresno v. Irrigation Co., 98 Cal. 179, 183 , 32 Pac. 943 ; Merrill v. Irrigation Co., supra. It necessarily follows from the principles announced in these decisions that when water from any system is designated, set apart, and devoted to purpose of sale, rental, or distribution, it is appropriated to public uses, and becomes subject to the public use declared by the constitution, without reference to the mode of its acquisition by either party. The right of appellee to the continued use of the water does not, therefore, depend upon any of the covenants expressed in the written contract, and it is wholly immaterial whether that contract was void or valid. If void for any reason, it was without force, and might have been abrogated and annulled at any time. If valid, it could only be of binding force and vitality during its life. Such is the natural construction to be given to the contract. The contract has expired. It is functus officio. All its covenants expired with it.

In Ditch Co. v. Marfell, 15 Colo. 302 -307, 25 Pac. 504 , the court had under consideration a contract by which the water company agreed to furnish the consumer with water, “year after year, so long as he shall pay the annual rental therefor.” The court held that this provision was a mere option, which might be terminated by the consumer at the end of any year; and further held that the provision in the contract that upon failure to pay the annual rental the consumer “forfeits and relinquishes all rights and claims whatsoever, both against the said company, and in and to the use of said water from said ditch,” applied only to the rights given by the contract, and did not waive the consumer’s statutory right to obtain water from the company’s ditch under an order of the county commissioners. In the course of the opinion the court said:

From the facts contained in the record, it is manifest that appellee had acquired a public use to the water necessary to irrigate his lands, and he was and is entitled to avail himself of the privileges and rights guarantied to him by the constitution, laws, and decisions of the courts of the state of California. The company *400 was not justified in shutting off the water, or in demanding from appellee a renewal of the former contract as a condition precedent to his right to a continued use of the water upon paying the legal rate fixed for supplying it. The fact that the lands of appellee are upon a higher level than other lands supplied by the company cannot be urged as a reason for not supplying water to him unless he pays a higher rate than others taking water from the same system. We agree with the views expressed by the circuit court, that:

The decree of the circuit court is affirmed, with costs.