Effect of the 1911 California Statute declaring water the "property of the people"
In 1911, (Calif. Stats. April 8, 1911, pg. 821.) the California State Legislature declared that "all water or use of water within the state of California is the property of the people of the state of California." This declaration was made on the basis of unappropriated "surplus" waters existing as of that date based upon riparian interests in lands owned by the people of the State.
The statute and declaration were held to apply only to "surplus water" - water available for use over and above that which was already private property vested as a private riparian right (or previously vested appropriative right,) or as a federally "reserved" riparian right. These surplus waters were held to be "public waters," the use of which was to be granted by revocable license and subject to regulation by the State as a privilege.
In 1921, San Bernardino v. Riverside (186 Calif. 7, 29-30, 198 Pac. 784,) the court specifically stated that the 1911 amendment did not apply to private water use rights already vested:
"Taken literally, this would include all the water in the state privately owned and that pertaining to the lands of the United States, as well as that owned by the state. It should not require discussion or authority to demonstrate that the state cannot in this manner take private property for public use...The constitution expressly forbids it..."
In 1914 Palmer v. Railroad Commission, 167 Calif. 138, 163, 168, 170-173, 138 Pac. 997, the Court again ruled that this Amendment was not and could not be retroactive and could not operate to divest private property rights already vested at the time it was enacted. The only effect it could have would be as a dedication to the general public use of any riparian rights which the State at the time it was enacted might still have retained by virtue of its ownership of lands bordering upon a stream.
Effect of the 1914 Water Commissions Act -1914
It was not until December 19, 1914, the California Water Commissions Act (Calif. Water Code 2774) to regulate "surplus waters" became law. The Act stated that all new appropriations of surface water required either a certificate of registration (for small scale domestic use,) or a permit (leading to a license.) The Act was held not to be a "reservation" of riparian rights of State lands, as it conferred the State's riparian right on those appropriating water in a manner prescribed by the code. .)
Appropriative water rights subsequent to enactment of the California Water Commissions Act on December 19, 1914 were acquired by authority of the State of California through a permitting and licensing of those riparian rights that the "State may have retained by virtue of its ownership of lands bordering upon a stream" which were dedicated to public use under the 1911 statute. As such, they may be regulated by the State as a privilege and are not subject to just compensation for "property takings".
In 1939 Meridian v. San Francisco (13 Calif.-2d-424, 445, 449, 90 Pac.-2d-537,) the court clarified the assertion of State control over allocation of surplus or public waters of the State under the 1914 Water Commissions Act stating:
"There are waters in the rivers and the streams of the state to which the riparian right first attaches. The rights of other lawful users on the stream also rightfully attach. In addition there are in many of the rivers and the streams of the state great volumes of water which pass on unused to the sea or to an inland drainage basin. In a real sense the excess water is a great natural resource available for the benefit of this and future generations, as the occasion for its use may arise. These excess waters constitute the public waters of the state to be used, regulated and controlled by the state or under its direction." ]
The California Court in Lux v. Haggin, 69 Calif. 225, 255, 338-339, 417-419, 4 Pac. 919, 1984; 10 Pac. 674, (1886), held that the water rights of the State of California as riparian owner of state lands were not reserved to it by Civil Code section 1422, stating: "because the provisions of the code confer the state's right to the flow on those appropriating water in a manner prescribed by the code."
The Court ruled in Acton v. United States, 401 F.2d 896 (9th Cir. 1968), cert. denied, 395 U.S. 945 (1969) that no property rights accrued to a licensee upon revocation which are compensable in condemnation.
CALIFORNIA CONSTITUTION ARICLE XIV
The California Constitution article XIV, sec. 1 states: "The use of water now appropriated, or hereafter to be appropriated, for sale, rental, or distribution, is hereby declared to be a public use, and subject to the regulation and control of the State, in the manner to be prescribed by law." (Emphasis mine.) This article placed all appropriation of water for commercial sale or rental under the regulation of the State.
In Hidreth v. Montecito Creek Water Co. (139 Calif. 22, 29, 72 Pac 395, (1903), the court clarified that:
"...it cannot be held that the meaning of the constitutional provision should be broadened as to cover the proposition that all water which is distributed among a number of persons is, from that fact alone, to be considered as devoted to public use. Where a number of persons owning land are each entitled to take water from a common stream, or source, for use upon their respective tracts of land, either by virtue of an appropriation under the Civil Code or by prescription, or as riparian owners, the water right of each is individual and several, and must be considered as private property and not the subject of public use, although the persons so owning interests in the stream are very numerous and their lands include a large neighborhood."
Whether the owners of such water rights make a single diversion and use a common conduit made with common funds without formal organization, or whether they form a corporation for such purpose, their water rights remain several and remain private property.
CALIFORNIA WATER COMMISSIONS ACT OF
CALIFORNIA CIVIL CODE, SECTION 1007
Section 1007 of the Civil Code established that a title by prescription, good against all owners of private property, could be acquired by adverse occupancy or possession for the period of 5 continuous years (statute of limitations.) This was ruled applicable to water diversions. (See also Rice v. Meiners 138 Calif. 292, 293, 68 Pac. 817, (1902); Turner v. East Side Canal & Irr. Co. 169 Calif. 652, 655-658, 147 Pac. 579 (1915); San Bernardino v. Riverside 186 Calif. 7, 13-14, 198 Pac. 784, (1921).
On August 4, 1943, the California Water Code went into effect. Section 1201 states:
"All water flowing in any natural channel, except so far as it has been or is being applied to useful and beneficial purposes upon, or in so far as it may be reasonably needed for useful and beneficial purposes upon land riparian thereto, or otherwise appropriated, is hereby declared to be public water of the State and subject to appropriation in accordance with the provisions of this code