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and therefore no equitable right enforceable in such courts under their general equity powers independent of the bankruptcy law. And the consequence is that the majority opinion departs from and goes contrary to the idea expressed by Lord Eldon that creditors have a right to object to an equitable claim, not cognizable and not enforceable either at law or in equity, and accords to a creditor wife a right and a status not recognized by the state law, a right and a status not enforceable in the federal courts of equity under their general equity powers, and one with which they could have nothing to do, independent of the bankruptcy law and bankruptcy proceedings.
Under our distribution of governmental functions between the federal and state governments, and especially in view of the recognition by the federal government of the power of the state (under certain limited and expressly defined constitutional restrictions not material here) to establish and regulate rules of property within its jurisdiction, it results clearly and necessarily that the legal and equitable status of property rights of married women in a given state is regulated by local law; that is to say, by the old common law modified and enlarged by such judicial innovations and such legal and equitable statutory reforms as it has seen fit to adopt, and by such, if any, of the modernideas and expanded rules of common law and equity adopted in other jurisdictions as the Legislature and the courts of the state in question have seen fit to recognize and declare.
While a state may not, by statutory enactment or otherwise, place any restrictions upon federal equity practice and procedure, which is uniform throughout the United States, or impede or impair its jurisdiction, which is likewise uniform, it may regulate property rights with in its jurisdiction, and the laws of the state regulating such rights are regarded by federal courts as rules of decision in respect to property rights so regulated by the local law. And, as said by Woods, Circuit Judge, in Mitchell v. Lippincott, 17 Fed. Cas. 503, 506 (Fed. Cas. No. 9,665), which was an equity proceeding:
"If the rule is ever to be applied to any case, it seems to me the construction of the married women's law is a proper case for its application."
The Supreme Court, in affirming the decision of Judge Woods, 94 U. S. 767. 770, 24 L. Ed. 315, in referring to the state law, and the state decisions, said:
"This construction is a rule of property of the state, and we are as much bound by it as if it were a part of the statute. It is our duty to apply the law of the state as if we were sitting there as a local court, and this case were before us as such a tribunal."
Again, referring to the local statute:
"Where the intent to exclude the marital rights of the husband is doubtful or equivocal, or rests on speculation, the statute intervenes and fixes the character of the estate."
Mr. Justice Curtis, in Neves v. Scott, 13 How. 268, 271, 14 L. Ed. 140, while holding that the Supreme Court, upon general questions of equity, would not be bound by the decisions of the Supreme Court of Georgia, in the absence of a statute, a custom, or a local law, in effect recognized the idea of the right of a state to regulate legal and equitable property rights by local statutory law.
While the leading aspect of the principle that the federal courts regard as rules of decision the decisions of state courts has reference to the construction of statutes and decisions affecting titles to real property, the rule is by no means limited to such subjects; for it includes as well the exposition of the local common law of a state by its highest courts, like preferences between creditors, as in Parker v. Phetteplace, 2 Cliff. 70, Fed. Cas. No. 10,746, like questions of possession of personal property, as in Allen v. Massey, 17 Wall. 351, 21 L. Ed. 542, like questions relating to executions, as in United States v. Morrison, 4 Pet. 124, 7 L. Ed. 804, the construction of wills, as in Smith v. Shriver, 3 Wall. Jr. 219, Fed. Cas. No. 13,108, the equitable rights of married women, as in Mitchell v. Lippincott, 1 Cent. Law J. 265, the validity of a mortgage not truly describing the debt intended to be secured, as in Townsend v. Todd, 91 U. S. 452, 23 L. Ed. 413, the power of a corporation to issue bonds, as in Thomas v. County of Scotland, 3 Dill. 7, Fed. Cas. No. 13,909, as to the time when a corporation was formed, as in Stone v. Wisconsin, 94 U. S. 181, 24 L. Ed. 102, and in respect to many other subjects relating to property rights within a state. See, also, 1 Bates on Federal Equity, §§ 6-10; Bump's Federal Procedure, pp. 416-120.
Nothing could be more disturbing or hurtful to a community than the existence within its domain of two sets of law or two measures of equity respecting property rights; and this would be especially so with respect to a system which undertakes to regulate the social, domestic, and property status between the sexes, and the rights of a married woman as between her husband and creditors, who, in reliance upon the local law regulating the rights of property, deal with him in the ordinary course of business within the bounds of the state which creates and maintains its own local system of law and jurisprudence.
I cannot conceive, aside from diverse citizenship or a federal statute expressly creating a right, that the federal courts are, or ought to be, charged with any responsibility in the adjustment of property rights, equitable or otherwise, within a state between its citizens. The idea that such a right or responsibility exists contravenes a fundamental theory as to the distribution of power between the federal and state governments. It is a strained, startling, and subversive construction that carries a bankrupt law, intended only to distribute the assets of a bankrupt estate between local creditors, according to the right or equity as existing independent of the bankrupt law, to the point of creating a substantive, enforceable, federal right, which shall override the positive law and the public policy of a state with respect to the legal and equitable status of married women in property situations, domestic affairs, and business conditions relating to property rights within a
It must be always borne in mind, of course, that the issue here is not one alone between the married woman and her husband, but involves as well the equitable rights of creditors. This element distinguishes this case from equitable proceedings to protect the separate estate of the wife as against the husband.
The Massachusetts statute and the Massachusetts cases have established a local rule of property which the federal courts are bound to
recognize and enforce. It is said in Walker v. Walker, 9 Wall. 743, 754, 19 L. Ed. 814:
"The Circuit Courts of the United States, with full equity powers, have jurisdiction over executors and administrators, where the parties are citizens of different states, and will enforce the same rules in the adjustment of claims against them that the local courts administer in favor of their own citizens." And in Ewing v. City of St. Louis, 5 Wall. 413, 419, 18 L. Ed. 657, which was an equity proceeding, it is said:
"The complainant can ask no greater relief in the courts of the United States than he could obtain were he to resort to the state courts. If in the latter courts equity would afford no relief, neither will it in the former."
I agree with the reasoning of Judge Lowell in Re Talbot (D. C.) 110 Fed. 924, which he adopted as the ground for disallowing the claim in question.
BOISE CITY IRR. & LAND CO. v. CLARK et al., County Com'rs.
(Circuit Court of Appeals, Ninth Circuit. May 31, 1904.)
1. APPEAL-DECISIONS REVIEWABLE-DECREE ADJUDICATING PRINCIPLE.
2. IRRIGATION COMPANIES-STATE REGULATION OF CHARGES-CONSTITUTIONALITY OF MAXIMUM RATES.
Under the Constitution of Idaho, which declares the use of all waters appropriated for sale, rental, or distribution to be a public use, and the right to collect compensation therefor a franchise, which cannot be exercised except by authority of, and in the manner prescribed by, law, and which authorizes the Legislature to provide, as it has done, for the fixing of maximum rates to be charged for water so sold, an irrigation company appropriating water for sale has no authority to make a distinction between its consumers, and, while supplying some with water under private contracts at low rates, attack the validity of maximum rates fixed by the county commissioners under the statute, on the ground that, as applied to its other consumers, they will not yield a reasonable return on its investment, but will amount to a taking of its property without compensation. In determining the reasonableness of such rates, they must be considered as applicable to all its consumers.
A maximum rate to be charged by an irrigation company for water furnished to consumers, fixed by county commissioners as provided by statute, is not unconstitutional, as depriving the company of its property without compensation, because it will not produce sufficient revenue above expenses and fixed charges to pay a reasonable income on the money invested by the company, where its plant was constructed on a larger scale and at a greater expense than necessary to supply its present customers, and was intended to supply a greater number than it has as yet obtained.
Appeal from the Circuit Court of the United States for the Central Division of the District of Idaho.
Fremont Wood and Edgar Wilson, for appellant.
Alfred A. Fraser, for appellees.
Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.
ROSS, Circuit Judge. The appellant is a New Jersey corporation, and brought the present suit in the court below against the county commissioners of Ada county, Idaho, sitting as a board of water commissioners, to obtain a decree annulling an order made by the commission fixing a maximum rate to be charged by the complainant for water delivered from its canal system to consumers thereof for the irrigating season of the year 1901. The provisions of the Constitution and statutes of the state of Idaho bearing upon the question are as follows: Section 1 of article 15 of the state Constitution declares:
"The use of all waters now appropriated, or that may hereafter be appropriated for sale, rental, or distribution; also of all waters originally appropriated for private use, but which after such appropriation has heretofore been, or may hereafter be sold, rented, or distributed, is hereby declared to be a public use, and subject to the regulation and control of the state in the manner prescribed by law."
Section 2 of the same article of the Constitution provides that:
"The right to collect tolls for compensation for the use of water supplied to any county, city, or town, or water district, or the inhabitants thereof, is a franchise, and cannot be exercised except by the authority of or in the manner prescribed by law."
Section 6 of the same article declares that:
"The Legislature shall provide by law the manner in which reasonable maximum rates may be established, to be charged for the use of water sold, rented, or distributed for any useful or beneficial purpose."
In pursuance of those provisions of the Constitution of the state, its Legislature enacted, in its Civil Code, as follows:
"Sec. 2579. Standard of Measurement of Water. A cubic foot of water per second of time shall be the legal standard for the measurement of water in this state."
"Sec. 2595. Duty of Owner of Canal to Keep Flow of Water. Every person, company or corporation owning or controlling any ditch, canal or conduit for the purpose of irrigation shall, during the time from April 1st to the 1st day of November of each year keep a flow of water therein, sufficient to the requirements of such persons as are properly entitled to the use of water therefrom: provided, however, that when the public streams or other natural water sources from which the water is obtained are too low and inadequate for that purpose, then such ditch, canal or conduit shall be kept with as full a flow of water therein as may be practicable, subject, however, to the rights of priority from the streams or other natural sources, as provided by law.
"Sec. 2596. Owner of Canal must Have Same Ready to Deliver, When. The owners or persons in control of any ditch, canal or conduit used for irrigation purposes shall maintain the same in good order and repair, ready to deliver water by the first of April in each year, and shall construct the necessary outlets in the banks of the ditches, canals or conduits for a proper delivery of water to persons having rights to the use of the water.
"Sec. 2597. Appointment of Water Master-His Duty. It shall be the duty of those owning or controlling any ditch, canal or conduit to appoint a superintendent, or water master, whose duty it shall be to measure the water from such ditch, canal or conduit through the outlets of those entitled thereto, according to his pro rata share, and no account or demand for the use of such
water during any time such superintendent or water master is not so employed is valid or collectible.
"Sec. 2598. Liability for Failure to Deliver Water. Any superintendent or any person having control or charge of the said ditch, canal or conduit, who shall willfully neglect or refuse to deliver water as in this chapter provided, and the owner or owners of such ditch, canal or conduit, shall be liable in damages to the person or persons deprived of the use of water to which he or they was or were entitled as herein provided.
"Sec. 2599. Water must be Furnished upon Demand. Any person, company or corporation owning or controlling any canal or irrigation works for the distribution of water under a sale or rental thereof, shall furnish water to any person or persons owning or controlling any land under such canal or irrigation works for the purpose of irrigating such land or for domestic purposes, upon a proper demand being made and reasonable security being given for the payment thereof: provided, that no person, company or corporation shall contract to deliver more water than such person, company or corporation has a title to by reason of having complied with the laws in regard to the appropriation of the public waters of this state.
"Sec. 2600. Manner of Distribution-Amount to be Used. Any person or persons owning or controlling land which has or has not been irrigated from any such canal, shall on or before January 1st of any year, inform the owner or person in control of such canal whether or not he desires the water from said canal for the irrigation of land during the succeeding season, stating also the quantity of water needed. In distributing water from any such canal, ditch or conduit during any season, preference shall be given to those applications for water for land irrigated from said canal the preceding season, and a surplus of water, if any there be, shall be distributed to the lands in the numerical order of the applications for it. But no demand for the purchase of a socalled 'perpetual water right,' or any contract fixing the annual charges or the quantity of waters to be used per acre shall be imposed as a condition precedent to the delivery of water annually, as provided in this chapter; but the consumer of water shall be the judge of the amount and the duty of the water required for the irrigation of his land, and the annual charges to be made and to be fixed under the further provisions of this chapter, shall hereafter be based upon the quantity of water delivered to consumers, and shall not in any case depend upon the number of acres irrigated by means of such amount of water delivered."
"Sec. 2605. Boards of Water Commissioners. The boards of county commissioners of the respective counties of this state are hereby created boards of water commissioners, with power to enforce the provisions of this chapter, and for the better discharge of their duties they shall have authority to make such other regulations to secure the equal and fair distribution of water in accordance with the rights of priority of appropriation as may in their judgment be needed in their respective counties: provided, such regulations shall not be in violation of any part of this chapter, or other laws of the state, but merely supplementary to and necessary to enforce the provisions of this chapter and general laws on the subject of irrigation."
"Sec. 2608. County Commissioners to Hear Applications. The county commissioners of each county now organized, and of each county to be hereafter organized in this state shall, at their regular session in January of each year and at such other sessions as they, in their discretion may deem proper, hear and consider all applications which may be made to them by any party or parties interested in either furnishing or delivering for compensation, or by any person or persons using or consuming water for irrigation or other beneficial purpose or purposes from any ditch, canal or conduit, the whole or any part of which shall be in such county, which application shall be supported by such affidavit as the applicant or applicants may present, showing reasonable cause for such board of county commissioners to proceed to fix a maximum rate of compensation for water thereafter delivered from such ditch, canal or conduit within such county: provided, that when any ditch, canal or conduit shall extend into two or more counties, the county commissioners of each of such counties shall fix the maximum rate for water used in that county."