Jessie S. Felsheim, Huckaba Ranch, Inc., Golden Sunlight Mines, Inc.
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V Montana Water Court PO Box 879 Bozeman, HI 59771-0879 1-800-624-3270 (In-state only) (406) 586-4364 IN THE WATER COURT OF THE STATE OF MONTANA UPPER MISSOURI DIVISION JEFFERSON RIVER BASIN (41G) ******************** IN THE MATTER OF THE ADJUDICATION OF THE EXISTING RIGHTS TO THE USE OF ALL THE WATER, BOTH SURFACE AND ) ) RIVER DRAINAGE AREA, INCLUDING ALL TRIBUTARIES OF THE JEFFERSON RIVER IN BROADWATER, GALLATIN, MADISON, JEFFERSON AND SILVER BOW COUNTIES, ) ) ) ) ) ) M0NTAHA- CASE 41G-3 41G-W-004096-00 > UNDERGROUND, WITHIN THE JEFFERSON CLAIMANT: Jessie S. pi IP gjrp 3 Q ^993 Montana Water Court Felsheim (former owner) Inc.(present owner) Huckaba Ranch, OBJECTOR: Golden Sunlight Mines, MASTER'S Inc. REPORT Procedural Background On June 25, 1980, Jessie Felsheim filed a Statement of Claim for an existing water right with the State of Montana. September 17, 1985, Golden Sunlight Mines objected to Felsheim's water right claim on the basis of ownership. On Mrs. Golden Sunlight later filed a similar objection to the claim to the use of the same water by Felsheim's successor-in-interest, Huckaba Ranch, Inc. On July 17, 1992, Golden Sunlight Mine filed a Motion for Summary Judgment asking this Court to »[d]isallow the water right claim of Motion. Huckaba Ranch, Inc." The court set a hearing on the Golden Sunlight failed to appear and the Court denied the Motion. The matter came on for an evidentiary hearing on April 16, 1993, before the Court, Michael J. L. Cusick, Water Master presiding. Dunn, Brian K. Gallik of the Bozeraan firm of Goetz, Madden & P.C. Fehlig, represented the Claimant, Huckaba Ranch, Inc. from the Whitehall firm of Jardine & Fehlig, the Objector, Golden Sunlight Mines, After evidence, the in the hearing, the Eric J. represented Inc. claimant introduced additional form of certified copies of recorded deeds the Jefferson County Clerk and Recorder. The claimant from requested the Court to take Judicial Notice of this additional evidence under Rule 201, this M.R.Evid. post-hearing parties' Golden Sunlight objected to the admission of evidence. arguments, After careful consideration of the the additional evidence is hereby admitted. The primary legal issues before the Court at hearing were (1) whether a private landowner may claim a right to the use of water originating and used on state lands that were not transferred to the State by the Montana Enabling Act and (2) whether a private landowner may claim a right to the use of water for the purpose of livestock watering as an appurtenance to private land when the water originates on state land and is not diverted from the state land and conveyed to the private property. The Master, being fully advised, now issues the following Findings of Fact, Conclusions of Law and Memorandum: FINDINGS 1. OF FACT The Claimant, Huckaba Ranch, Inc., is a cattle ranch located near Cardwell, Montana. Huckaba Ranch, 22 16, and 15 and leases sections -2- 17, 28 and Inc. owns sections 33 in Township 2 North, Range 3 West, of Huckaba Ranch, Jefferson County, water from Jessie S. Huckaba from Sheep Ranch, Rock dated Montana. June claimed a 25, Inc., Spring. NWKSWKSEM of Section 17, County, President Felsheim in 1980. claims The a stock spring Township 2 North, is use right located Range 3 West, in to the Jefferson This claim is based upon a Statement of Claim, 1980, stock water upon historic use, filed by Jessie Felsheim. right with a priority date for water originating Mrs. of Felsheim 1947, based from Sheep Rock Spring. The claimed places of use are in Sections 33. The Inc., Sonny Huckaba, purchased this property, and all associated rights, 2. Montana1. 17, 20, 21, 22, 28 and Pursuant to Rule 2.VIII. (5) (c) , Water Right Claim Examination Rules, the priority date was clarified to December 31, Huckaba Ranch, priority date 3. Inc. of June claim 19, is based on The Objector, Golden Sunlight Mines, mining southeast of Whitehall, County, located Montana. livestock purposes 4. Section 17, The in existing use The with a 1947. to in these findings as "Placer Amex," property an 1947. Township is a corporation engaged in Montana. 2 It North, Golden Sunlight also referred is the owner of real Range claims also 3 West, a water Jefferson right for from Sheep Rock Spring. land upon which Sheep Rock Spring is located, came into State ownership in 1924 when Wiley, May Ella, Irvine, and Inez Mountjoy quitclaimed their interest in Section 17, and other sections of adjacent property, The Mountjoys purchased this property R3W, to the State of Montana. from the Northern Pacific All subsequent references to Section locations are Jefferson County, Montana, unless otherwise noted. -3- in T2N, V Railroad in 1919. The Mountjoys then mortgaged their property to the State of Montana in return for a loan of $5,300. The mortgagee was the State of Montana Common School Permanent Fund. unable to repay the loan in time, interest ownership 1948, of the leased the Mountjoys quitclaimed their in the property to the State of Montana 5. From the State 1924 State to of the property 1985, Section Montana. classified the to various property real Boone. 33 as individuals in 1924. remained in the approximately "grazing or in land" companies, including George and who in and Grace Mike Quinn and Jessie Felsheim. 6. of 17 Beginning turn subleased the property to others, Elliott, Apparently In 1979, property Jessie Felsheim purchased various parcels located near Sheep Rock Springs from The purchase included portions of sections 10, and all of Section 15. At Thomas 14, the time of the purchase, became the sublessee of various state-owned properties, Section 17. Sunlight The Mine, State's then known lessee as of Placer these Amex, properties Inc. 22, she H. 28, also including was Mrs. Golden Felsheim immediately began grazing cattle in the area and using Sheep Rock Spring for stock watering purposes. 7. Jessie Felsheim expanded Sheep Rock Spring after she acquired her property from Thomas Boone and became the sublessee of the state lands. She applied for permission from the State of Montana to construct a pipeline system that distributed water from Sheep Rock Spring (located in Section 17) into Sections 20, and 28 where she located stock watering tanks. 21, 22, The purpose of the pipeline distribution system was to expand the place of use of the spring from Section 17 to include Sections 20, 21, 22 and 28. -4- This was a conservation measure designed to improve the use of grazing lands and benefit the cattle. The pipelines accomplished the latter by reducing the distance the cattle would be forced to walk for water, weight. because thus reducing stress and allowing them to maintain their The stock system cattle would not graze spring but would 8. first watering phase took in conservation located near the a much greater area. development place promoted as much in areas instead graze This also took 1979. place At in that two time, phases. Mrs. The Felsheim received permission from the State of Montana to place improvements on state lands. This phase of the project resulted location of stock watering tanks in Sections 17, in 20 and 21. the Placer Amex (Golden Sunlight) was aware of the development as evidenced by its signature on the permission form. was The cost of this development shared between the State of Montana, federal government. Placer Amex did not the construction of the project, benefit from the 9. Jessie Felsheim and the contribute any funds to and disclaimed any expectation of development. In 1980, second phase of distribution system Mrs. Felsheim received authorization for a the project--an extension of completed in 1979. the The stock watering extension of the project brought water to parcels of real property owned by Jessie Felsheim in sections expended substantial 22 and funds 28. to Once construct Amex, now known as Golden Sunlight Mines, funds to this Jessie project did not Felsheim and Placer contribute any the project. 10. necessary again, for As a cattle result to of walk the from -5- project, Mrs. it was no longer Felsheim's. property in sections 22 and 28 to Sheep Rock Spring in Section 17. Instead, the water was brought from Section 17 to cattle grazing in Sections 22 and 28. 11. In Jessie Felsheim's Statement of Claim for stockwater from the Sheep Rock Spring the claimed places of use are Sections 17, stockwater 20, tanks development. upon the 21, 22, 28 that Mrs. are Felsheim historical and use of 33, based part of on the the location Sheep Rock claim a priority date of the Rock water from Sheep of the Spring 1947, based Spring by- former lessees of the State lands in question and her predecessors- in-interest Although on there historically from sections 1947 was to the 12. Notices and of 20. 33, spring, George that the a and water testimony in disrepair. Grace Elliot. trough was indicated that Between this time stock use of Sheep Rock Spring water was itself. 1981, the of testimony water and testimony the 1973, spring In 28 trough was Completion The concerned at the and prior to July 1, limited some located onward 22, Department Groundwater at trial originating from of State Lands Development established Sheep for that Rock filed sections both Spring. two 17 Notices Later, Certificates of Water Right were issued to the Department of State Lands for the spring developed in Section 17. as listed in the Certificates, These rights Certificates in the 13. Huckaba Ranch, were sources In of 1981, Inc. The places include Sections 20, issued subject to " [a]11 21, 22, prior of use, and 17. existing supply." Jessie Felsheim sold her Huckaba Ranch, Inc. the various parcels of state property. -6- real property to also became a sublessee to Mr. Huckaba testified that he continued to graze cattle on Sections In addition, Mr. 22 and 28 and on the leased state land. Huckaba continued to use and maintain the stock watering distribution system developed by Mrs. Felsheim. 14. In exchange with the Sunlight acquired Spring is tracts that of land 16 (that Mines Montana. portion In of Section Golden Sunlight State located. additional However, 1985, of In that were portion that Section addition, entered 17 owned property a land Golden Sheep Sunlight formerly of exchange, where Golden into by Rock acquired the transferred State. to the State by the Montana Enabling Act) remained in the ownership of the State, an with property. As transferred Sheep the Rock State part to reserving of Golden Spring as the land Sunlight the easement exchange, various point of for the water access State rights diversion. The of State right for the transfer Resources stockwater development, certificate and Conservation reimbursed the filed with (DNRC). as the water Department Sections 28 the 1987, State's Huckaba later sold of interest to cost Felsheim. portions of Since Golden Sunlight acquired ownership of Section maintenance have its the Inc. and surrounding properties, costs Ranch Natural Golden Sunlight share to Golden Sunlight Mines, and 33 16. 17, In rights issued to of of the stock water distribution system developed by Mrs. 15. list evidenced by a water Additionally, State of Montana for the that Montana which transferred included the two Certificates of Water Right the to of been Jesse the borne it has not made any contribution to stock water solely Felsheim. by Nor -7- distribution Huckaba has Ranch, Golden system. Those successor-in- Sunlight reimbursed Huckaba Ranch, Inc. 17. is a for the The evidence at the development. the hearing established that long and continuous history of water use cattle grazing specifically, state on nearby Sections 22, land (now owned establishes that 28 and 33 Section 17. that the Ranch and by Golden grazing of from Section private there 17 property, for more and also adjacent sections of Sunlight cattle Mines). in The Sections historically watered their cattle 17, from the record 20,. 21, spring in Witnesses from the Golden Sunlight Mine also testified water use almost sections 28 and 33, ranchers 22, cost of from Sheep Rock Spring has been put exclusively by the local cattle ranchers, its to beneficial i.e., Huckaba predecessors. 18. The Court adopts as fact which are included in the findings of fact any matters of Conclusions of Law below. CONCLUSIONS OF LAW I To incorporate they are the extent Conclusions of that the Law or the incorporated herein as foregoing Findings application of Conclusions of of law to Fact fact, Law. II The Montana Water Court has jurisdiction to review all objections to temporary preliminary decrees pursuant to § 233, MCA. 85-2- The Court has jurisdiction over matters relating to the determination of existing water rights. An "existing right" is a right to the use of water which would be protected under the law as it existed prior also Article IX, to § July 3, 1, Mont. 1973. Const. -8- Section If the 85-2-102(9), right MCA, see to beneficially use water was not perfected by an appropriator before July 1, the use is subject to the permit requirements of Title 85, 2, Part 3, 1973, Chapter MCA. Ill Generally, appurtenant to a that water right used on a tract of land is land: When a water right is acquired by appropriation and used for a beneficial and necessary purpose in connection with a given tract of land, it is an appurtenance thereto and, as such, passes with the conveyance of the land, unless expressly reserved from the * grant. Maclay v. P.2d Missoula 286, 290 Irrigation Dist., (1931); see et § also al., 90 Mont. 344, 85-2-403(1), 353, MCA. 3 The determination of whether water is appurtenant to the land is one of fact. Department of State Lands v. 702 P.2d. 948 Investors. Denniff, 216 Mont. (1985); Yellowstone Valley Co. v. Inc., 24 Pettibone, 88 Mont. Mont. 20, 73, 29, 60 84, 398 P. 290 P. 361, 372, Associated Mortgage 255 (1930), Smith (1900). As will be discussed in the accompanying Memorandum, is clear from the record and the existing water right December 31, that date remained location State, is now Felsheim in had could because the be appurtenant section no to 17. the This immediate land, Sunlight existing the right since vicinity of the formerly owned by the Mines. to times the As use such, of the claimant water of and therefore had no rights in Sheep Rock Spring transferred water it to Sheep Rock Spring with a priority date of owned by Golden Sheep Rock Spring, that law that 1947 claimed by Jesse Felsheim has at all spring Jesse applicable v. right to Huckaba claimed -9- by Ranch, Inc. Felsheim is Furthermore, appurtenant to section 17, the objector Golden Sunlight Mines is the actual owner of the 1947 water right rather than Felsheim's successor, Ranch, Huckaba Inc. IV For purposes of adjudicating water rights, a claim of existing right filed in accordance with the statute or an amended claim of existing content until MCA. Thus, the right constitutes issuance of a prima final facie decree. proof Section of its 85-2-227, the burden of proof falls on the objector to overcome the presumption that a claim of existing right is valid and correct as filed. In this case the objector's have met their burden. V Based on the foregoing Findings of Fact and Conclusions of Law, the point of diversion, place of use and current ownership record of this water right claim is incorrect. The DNRC's records should be corrected to show ownership of water right claim 41G-W004096-00 by Golden Sunlight claim should be decreed as Mines, Inc. The elements of this follows: WATER RIGHT NUMBER 41G-W-004096-00 PRIORITY DATE: DECEMBER FLOW RATE: NO FLOW RATE HAS BEEN DECREED BECAUSE THIS USE CONSISTS FROM VOLUME: 30 31, THE 194 7 OF STOCK DRINKING DIRECTLY SOURCE GALLONS PER DAY PER ANIMAL UNIT NO VOLUME HAS BEEN DECREED BECAUSE THE USE CONSISTS OF STOCK DRINKING DIRECTLY FROM THE SOURCE. THE RIGHT INCLUDES THE AMOUNT OF WATER CONSUMPTIVELY USED FOR STOCKWATERING PURPOSES AT THE RATE OF 3 0 GALLONS PER DAY PER ANIMAL UNIT. ANIMAL UNITS SHALL BE BASED ON THE REASONABLE CARRYING CAPACITY AND HISTORIC USE OF THE AREA SERVICED BY THIS WATER SOURCE. -10- SOURCE: SPRING, TRIBUTARY OF JEFFERSON SLOUGH ALSO KNOWN AS SHEEP ROCK SPRING PURPOSE (USE): STOCK PERIOD OF USE: APRIL 15 TO NOV 19 POINTS OF DIVERSION AND MEANS OF DIVERSION: LOT USE LOT SEC TWP RGE COUNTY 17 02N 03W JEFFERSON OTRSEC SEC TWP RGE COUNTY NWSWSE OF OTRSEC NWSWSE PLACE BLK 17 02N 03W JEFFERSON FOR BLK STOCK: MEMORANDUM I. Introduction Golden Sunlight argues that as lessees of state land, the predecessors of Huckaba Ranch, Inc. were legally incapable of establishing a use right to the waters of Sheep Rock Spring under Department of State Lands v. (1985). Pettibone. 216 Mont. 361, 702 P.2d 948 Golden Sunlight further contends that because the lands at issue were state school trust lands at the time the claimed water rights were perfected, Sunlight, and were eventually transferred to Golden under Pettibone title to any water rights perfected on these state school trust lands first vested with the State and was later transferred as an appurtenance to Golden Sunlight Mines. II. A. State Lands v. School Discussion Trust Lands Pettibone, supra, concerned lands granted to the State of Montana These by state the Federal lands are Government "school in trust" -11- the Montana lands and Enabling were Act. expressly granted to the States for the support of public schools. The origin of school trust lands in Montana was explained in Pettibone: The lands upon which these water rights lie are those that were granted to the State of Montana by the Federal Government in the Montana Enabling Act. Act of February 22 1889, ch.180, 25 Stat. 676. Originally, these lands were set aside in the Montana Territory Organic Act, Act of May 26, 1864, ch.95, 13 Stat. 85, which provided that said lands were "reserved for the purpose of being applied to schools" ch.95, section 14, 13 Stat. 91 in the Montana Territory. The Enabling Act granted these lands to the state on the following terms: Section 10. That upon the admission of each of said States into the Union sections numbered sixteen and thirty-six in every township of said proposed States, and where such sections, or any parts thereof, have been sold or otherwise disposed of by or under the authority of any act of Congress, other lands equivalent thereto, in legal subdivisions of not less than one-quarter section, and as contiguous as may be to the section in lieu of which the same is taken, are hereby granted to said States schools. for the support of common The 1889 Montana Constitution accepted these lands and provided that they would be held in trust consonant with the terms of the Enabling Act, Montana Constitution of 1889, art. XVII, section 1. continued section 11, MCA (school support Pettibone, The these of . l. 1972 terms. lands Montana Mont. Constitution . art. X, for the See also Section 77-1-202,' held education). in trust 702 P.2d at 950-51, 216 Mont, at 366. These lands were withdrawn from the public domain, and were specifically designated to be administered for the purpose of the school trust. Pettibone held that the title to the water appurtenant to such lands vests in the State of Montana. The Court saw the lessees of school trust lands as acting on behalf of the State, and under the terms of the -12- lease, the lessee was simply entitled to the use of the water appurtenant to the school trust land. Pettibong. 216 Mont, at 368. The court expressly distinguished school trust lands from other public lands, stating that [s] chool trust lands are subject to a different set of rules than other Dublin l,,Hg . Mont, at 372 Pettibone. 216 (emphasis added). The property at issue here, Section 17, was not set aside by the Montana Territory Organic Act, but came into state ownership through a quit claim deed based upon the State's foreclosure of private property. Although at one time state land, these lands are not the same as the school trust lands at Because Pettibone was limited to school issue in Pettibone. trust lands, Golden Sunlight cannot assert an existing right to Sheep Rock Spring water simply on the rule of Pettibone. B. Appurtenance to Section 17 If the rule of Pettibone regarding state school trust lands does not apply, what is the applicable law in this case? Claimant urges the Court to apply the rule of law recognizing that the right to use water may be owned without regard to the title to the lands upon which the water is to be used. See, e.g. Toohev v. Campbell, 24 Mont. 13, 60 P. 396 (1900) : Smith v. De.nni f f, 20, 60 P. (1904). 398 (1900); Under this Haves v. rule, Rii*^H Huckaba Ranch prerequisites for its claim to be valid: allow that claimant's predecessors, 31 Mont. as (1) must 74, 24 Mont. 77 P. 423 establish two First, the law must sublessee of non-school trust state lands, could make a valid appropriation of stockwater on those leased state lands and (2) second, the law must provide that such an appropriation can become appurtenant to some land--13- whether state land or privately owned--so that the right would eventually be conveyed by deed to Jesse Felsheim and later to Huckaba Ranch. If Huckaba Ranch can satisfy both prerequisites, their claim to an existing right to Sheep Rock Spring as of 194 7 is valid, although the claimed place of use would be incorrect. If it can only satisfy the first prerequisite, neither Huckaba Ranch nor Golden Sunlight can claim an existing water right with a priority date. Finally, 1947 if Huckaba Ranch cannot satisfy either prerequisite, then Golden Sunlight Mine is the proper owner of this claimed right. It acquire water is well established that private appropriators may rights on the public domain, without regard to ownership: The legal title to the land upon which a water right acquired by appropriation made on the public domain is used or intended to be used in no wise affects the appropriator's title to the water right, for the bona fide intention which is required for an appropriator to apply the water to some useful purpose may comprehend a use upon lands and possessions other that those for which the right was originally appropriated. Smith, supra, 24 Mont, at 29, quoted in Haves, supra. 31 Mont, at 81. The rule set forth in this line of cases was also argued to the Pettibone court. In both Smith and Haves the court noted that where the appropriator is merely possessed of the lands upon which the appropriation is used, i.e., is not the fee owner of the lands, the water right is not appurtenant to the lands. It can only become an appurtenance to such lands upon a grant of title to such lands from the government. Smith. 24 Mont, at 26-28. Applying this rule to this case, each successive tenant appropriator would acquire a right to the use of the spring at the start of his or her -14- tenancy and, absent a transfer by instrument in writing, keep that right in his or her possession upon giving up possession of the property. Thus, the Elliots would have perfected a 1947 stockwater right, but retained it upon vacating the premises. The earliest priority date that Jesse Felsheim could claim under this rule is 1979, the year she took possession of section 17 under the sublease from Placer Amex. Although Pettibone dealt specifically with school trust lands, the result outlined above was nevertheless specifically rejected in Pettibone: "It does not make sense for each succeeding tenant to walk off with one water right after another." 216 Mont, because Pettibone at 372. they Moreover, did Court not in distinguishing Smith and Haves involve specifically Pettibone. state noted school that trust those appropriations perfected on the public domain. lands, cases the involved Smith dealt with "water appropriations made by squatters on the federal lands who diverted water for use on the public domain." at 3 72; construing involved was Smith, used by a supra. lessee on In the Pettibone. 216 Mont, Haves, the lessor's water land, right but the original appropriation "arose on public domain land" prior to the existence of the lease. Haves. Pettibone, 216 Mont, at 372; construing supra. In this case, the original appropriators of the 1947 water right claimed by Jesse Felsheim were neither "squatters" nor was the right perfected on the public domain: The terms are "public lands" synonymous. and Although "public domain" the term is sometimes used in varying senses, depending largely on the special circumstances or the legislation in which, or in respect in which, it is used, the term "public lands" usually -15- signifies such government are open to public or state lands as sale or other disposition under general laws, and are not held back or reserved for any governmental or pubi -i r. purpose. The term does not include all lands that are owned by the United States or the states. Land to which any claims or rights of others havp attached does not fall within t-.hi.g designation^..] ~~ " 63A Am.Jur.2d Public Lands §1 (1984), p. 486. (Emphasis added.) At all times relevant to this matter, Huckaba Ranch and its alleged predecessors-in-interest to this water right were utilizing the water from Sheep Rock Spring as sublessees of state land designated for grazing purposes. set aside by the Although such land was not school trust land Organic Act, it was nevertheless managed as grazing land as part of the Common School Permanent Fund. The claimant has not established that its predecessors-in-interest made a valid appropriation on these subleased state lands (prerequisite no. 1, this discussed earlier). first prerequisite, And even if claimant could establish the claim would still fail, because according to the authorities relied upon, such rights were personal to the appropriators and never became appurtenant to section 17 (prerequisite no. 2.) Implicit See Smith and Haves,2 supra. in this analysis is a general rule regarding water rights perfected on state lands by a lessee or sublessee, regardless of school trust appurtenant to the land, 11 n M status: the water right becomes inuring to the benefit of the lessor, in is questionable whether the rule set forth in Smith v *nd*aVeB v- Buzzard is still good law. In Cook v. Hudson! 110 Mont. 263 278, 103 P.2d 137 (1940), the Court stated that [t]here are textwnters who lay down the rule that a water right taken out to irrigate public lands is not appurtenant to such lands except where and until the appropriator brings the land to patent but lapses with the sale or release of the squatter's right the rule is to the contrary in this jurisdiction " -16- ' but this case the State, and absent a specific severance, appurtenant, following title. remains See Pettibone, 216 Mont, at 372; see also A. Stone, 1988 Supplement Montana Water Law: Pecent rh^ngp.Q and Current Trends Supplementing Montana Water T.aw For the pp. 6-8 (1988 supp). While on its facts Pettibone applied only to school trust lands, the result must be the same. Thus, Pettibone does not apply to the lands in this case by virtue of school trust status; rather, Pettibone applies because the lands involve water rights perfected by a tenant on leased state land as opposed to a squatter on the public domain. The Pettibone court specifically rejected any other result as an absurdity with respect to leased state lands. c-= Pettibone. 216 Mont, at 372. Appurtenance to Non-riparian Lands Claimant also asserts a right to the use of Sheep Rock Spring that is appurtenant to the sections adjacent to section 17 that were not formerly owned by the State--namely section 22 owned by Huckaba Ranch and sections 28 and 33 transferred by Huckaba Ranch to Golden Sunlight. The evidence established that the water from Sheep Rock Spring has long been used to water cattle and some of the cattle so-watered graze on Section 22, as well as sections 28 and 33. Additionally, from Sheep Rock Spring, one-half of there was testimony that without water it is not possible to graze on at least Section 22. Generally, when water originates on state land, put to beneficial use on private property, appurtenant to the private property landowner, not the State of Montana. is but the use of the water owned by the private Where water from State land is appurtenant to both private property and state property, -17- is the water right from the single source is split between the private land owner and the State. Furthermore, diversion where (such as a Pettibone. 216 Mont, at 368, 372, 376. stockwater right the post-1973 consists of a man-made pipeline and stockwater tank development in this case) the corresponding water right can become appurtenant to outlying sections of land delivered and consumed by the cattle. of Alamogordo v. McNew, § 85-2-403(1), MCA. N.M. Combining where water is See e^., First State Ran> , 269 P. 57 these that (1928); see also, principles, system located on both state and private land a stockwater (such as the one installed by Jesse Felsheim) would be appurtenant to both and would be split according to the location of and amount of water used at each tank or trough. In this case, while 1947 Sheep Rock Spring water did become appurtenant to the location of the spring in section 17, it did not become appurtenant to the outlying sections of privately owned land. A non-diverted stockwater right, where the livestock drink directly from the source (whether it be a reach of stream, the shore of a lake or pond, or a spring as a single point source, as is the case here) is essentially a riparian right. This principle is recognized by the Supreme Court's Water Right Claim Examination Rules.3 Such an appropriation depends largely on the 3Rule 4 of the Water Right Claim Examination Rules provides in pertinent part: Rule 4.II. ^ POINT OF DIVERSION (P.P.P.) (2) For direct instream surface water stock use, the legal land description of the P.O.D. will be the same as the legal land description of the P.O.U. -18- actions of the cattle. If the right is established by use, notice to other appropriators of such right is provided by the fact that cattle are pastured next to the source, i.e. on riparian lands. subsequent appropriator can conclude from a physical A inspection that the right is put to beneficial use on the riparian lands where and when the livestock actually drink the water. The same conclusion cannot be made for non-riparian lands not serviced by a diversion and conveyance system. The right cannot become an appurtenance to such lands. To hold otherwise would confusion lead to absurd results and cause transfer of property and water rights. much adjoining tracts, the This can be demonstrated with a simple, yet common, factual situation. several in If A, the owner of one of which borders a stream, grazes cattle on these tracts, by claimant's argument A's right to the use of the water for livestock watering would become appurtenant to all the lands where cattle graze. The distance of these lands to the source of supply would be immaterial, the sole inquiry would be whether cattle from these outlying lands utilize the stream for water. no If A then sells the tract adjoining the stream to B, specific reference retain that portion of to the water right the water right riparian land still owned by A. in the deed, appurtenant to with A would the non- In other words, A's portion of the original right would be for watering A's livestock on B's riparian Rule 4.III. PLACE OF USE (P.O.U.) (1) The place of use for stock purposes will identified and described by the nearest reasonable and concise legal land description. The P.O.U. is the actual place where the stock drink the water. -19- be property, easement and would require some by necessity--for A to type trail of easement--perhaps his livestock across an B's property to the stream in order for A to exercise his water right. This scenario has never been recognized in law or custom and clearly would lead to uncertainty and confusion. Without a man-made diversion or a specific reservation in the deed, the new owner would have little or no notice that the seller intended to reserve a right to water his stock with water originating on the transferred property. Accordingly, the 1947 water right to Sheep Rock Spring only became appurtenant to the immediate vicinity of the spring in section 17. Absent an actual man-made diversion of this water prior to July 1, 1973, the place of use of this claim of existing source right utilized by livestock is identical to the point drinking directly of diversion, i.e. from the the spring itself. III. "One appurtenant to who certain are appurtenances, prior asserts appropriator. " that lands and must Conclusion has a water right and ditch the burden of proving that are they connect himself with the title of the Smith. 24 Mont, at 29. Claimant has not presented evidence connecting it to the title to the water right on section 17 of the prior appropriators, in this case the 1947 right perfected by the Elliots on behalf of the State. Objector Golden Sunlight Mines, on the other hand, has met its burden of connecting itself to the title of the prior appropriator, State of Montana as lessor of the property. in this case the Water right claim 41G- W-004096-00 should be decreed in the name of Golden Sunlight Mines, Inc., and the point of diversion -20- and place of use changed to -yr correspond to the location of Sheep Rock Spring. DATED this 2.0ilh day of J)^jrfx^Z& ¬/1 1993 T Michael tf. /L. fflusick W/ter Master / CERTIFICATE I, Janet Water Court, above MASTER'S Fulcher, hereby SERVICE Deputy Clerk of that and certify REPORT, OF FINDINGS a OF ~ true FACT, Court of correct CONCLUSIONS the copy OF Montana of the LAW was duly served upon the persons listed below by depositing the same, postage prepaid, in the United States mail. Huckaba Ranch, Inc. 26 Hiway 359 Cardwell, MT 59721 Brian K. 35 Gallik, Attorney North Grand Bozeman, MT 59715 Golden Sunlight Mines, P. 0. Box Whitehall, Eric Box MT Fehlig, 59759 Attorney 488 Whitehall, DATED this ^0 Inc. 678 MT 59759 day of/'^jpfjP^uJjfj^^ 1993. 7 Janet c ' '' Fulcher /' Deputy Clerk of Court -21-
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