Kern River Co. v. United States

Background

The United States sued the Kern River Company and others over a long canal right-of-way across a public forest reserve in California. The company obtained Secretary of the Interior approval of canal maps in 1899 and 1905 under laws that allowed rights of way mainly for irrigation. The canal was built in 1902–1904 and has been used only to generate and sell electric power, never for irrigation. The Government asked the court to cancel the approvals for fraud or to enforce forfeiture because the grant required irrigation as the main use.

Reasoning

The Court examined the 1891 and 1898 statutes and the Secretary’s long-standing interpretation that irrigation must be the primary purpose, with power or other public uses only allowed as secondary. The grant was held to be a limited fee that reverts to the United States if the grantee stops using it for irrigation. The agreed facts showed the canal was never used for irrigation and that the company was effectively and permanently precluded from irrigating. The Court therefore concluded the condition was broken and impossible to perform and that the United States could enforce forfeiture in equity. The Court directed a decree enforcing forfeiture and enjoined continued use unless the holders obtained a lawful power permit.

Real world impact

Land or water rights granted under the irrigation-specific law can be lost when they are used solely for other purposes and irrigation is impossible. Companies relying on irrigation grants to run power businesses must obtain proper permits under the separate power statutes or risk losing their rights-of-way.