Waterford I. Dist. v. County of Stanislaus

In Waterford I. Dist. v. County of Stanislaus (1951) 102 Cal.App.2d 839, a county sought to tax an irrigation district's right to divert water from a river. As a municipal corporation, the district was protected by the exemption noted above except insofar as the right fell within the exception for lands and improvements outside its borders. The district contended that "the water right, being an appropriative right and not riparian to nor appurtenant to any land, does not constitute land nor improvement on land within the meaning of those terms as used in the constitutional provisions." (Id. at p. 842.) The court agreed that the origin of the rights at issue distinguished CCSF, the holding in which "was primarily based upon the stipulated fact that the water rights there taxed were riparian in origin; and the holding that they were embraced within the meaning of the word 'land' as used in the Constitution was arrived at by considering the original nature of those rights as having been part and parcel of the riparian lands." (Id. at pp. 843-844.) It concluded, however, that despite this distinction, the rights before it also remained taxable. It quoted at length from a treatise declaring that appropriative water rights are themselves a species of real property: "'A water-right of appropriation is real estate, independent of the ditch for carrying the water, and independent of ownership or possession of any land and independent of place of use or mode of enjoyment, whereby the appropriator is granted by the government the exclusive use of the water anywhere so long as he applies it to any beneficial purpose ... .'" (Id. at p. 844.), quoting 1 Wiel, Water Rights in the Western States (3d ed. 1911) 288, p. 304.) The same author cited authorities holding that "'The right to the flow and use of water, being a right in a natural resource, is real estate. . ... The statute of frauds, concerning conveyances of real estate, applies to it, and transfers must be by deed. . The statute of limitations concerning land applies to it. . So do the recording statutes, as between successive conveyances. . The right to have water flow from a river into a ditch is real property. . ... The right to take water from a river and conduct it to a tract of land is realty. . The right to have water flow through a pipe from a reservoir to and upon a tract of land is an appurtenance to the land. . An undivided interest in a ditch and in the right to water flowing therein is real property. . And where one person has a right to the flow of water and another has the right to have a part of such water flow to his land for its irrigation, the right of the latter is real property. . Ditches and water-rights may be sold on execution as real property. . ... And an action to settle rights is one to quiet title to realty. . ... That the usufructuary right to the flow and use of a natural stream by appropriation is real property is fully recognized. ...'" (Waterford, supra, at pp. 844-845, quoting 1 Wiel, supra, 283, pp. 298-300.) The author had further declared that "'a water-right by appropriation is not only real estate, but has all the dignity of and is an estate of fee simple, or a freehold.'" (Waterford, supra, at p. 845, quoting 1 Wiel, supra, 285, p. 301.) The court explained that these passages were presented not as dispositive in themselves, but as evidence of "the common concept as to the nature of appropriative water rights" when the 1914 amendment was adopted. (Waterford, supra, at p. 845.)