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District Court of Appeal, Fourth District, California.


Civ. 2720.

Decided: January 27, 1942

Lowell Howe, of Chula Vista, and Charles C. Loosli, of San Diego, for appellant. Bacigalupi, Elkus & Salinger, of San Francisco, and Philip Storer Thacher, of El Cajon, for respondent.

This is an action for declaratory relief and injunction. Generally speaking, the facts are not in dispute. In June, 1868, one Pioche, as a common grantor, owned the Mexican grant known as the Rancho de la Nacion, which included the lower valley of the Sweetwater River in San Diego County, together with certain mesa lands adjacent to it on either side and now in part occupied by the cities of National City and Chula Vista. He entered into a contract to sell that grant to Frank Kimball and Warren Kimball upon installment payments. Under this contract the Kimballs were entitled even before completing their payments to Pioche, to resell at agreed prices per acre. Pioche agreed, when requested by them, to join in deeds to the purchasers. In May, 1869, the Kimballs organized a corporation known as the Kimball Brothers Water Company, and on June 9, 1869, executed to it a deed, undertaking to grant to it “all the water flowing in the stream called the Sweetwater River * * *” with the right to divert the same from its natural channel to, over and upon said lands for purposes connected with the handling of such water supply. This deed was not filed for record until October 9, 1869. Pioche did not join in it. Meanwhile, on October 6, 1869, Pioche and the Kimballs jointly conveyed to Norman Watkins 169 acres out of the said Rancho de la Nacion. This deed was filed for record on October 16, 1869. The property conveyed by it included the 15 acres or thereabouts affected by the present action. By a deed executed in 1882, as corrected by another made in 1884, Watkins conveyed the 15 acres to one Eratus Lake, by whom it was eventually conveyed to the present plaintiff, Lamb. The Kimballs having completed their payments, Pioche, on July 8, 1871, conveyed to them the Rancho de la Nacion, excepting the parcels, such as that deeded to Watkins, which Pioche had already conveyed to persons to whom the Kimballs had made sales.

In 1880 the Kimballs Brothers Water Company conveyed to one Pratt all of its property, and the following year that property was conveyed by Pratt to the San Diego Land & Town Company, a Kansas corporation, authorized by its charter to engage in the business of supplying water to the public. In November, 1886, this corporation commenced, and early in 1888 completed, the construction of what is known as the Sweetwater Dam for the purpose of impounding the waters of the Sweetwater River at a point some distance above the Lake land (the 15 acres here involved). At the same time it commenced constructing the water mains and distributing systems necessary to the devotion of the water so impounded to beneficial uses. About March 10, 1887, the San Diego Land & Town Company filed an action in the Superior Court of San Diego County against George Neale et al., to condemn a portion of lot G of Jamacha Rancho for use as reservoir and necessary margin lands for the Sweetwater Dam. Neither appellant nor his predecessors in interest, however, were parties to this action. This complaint recited that its corporate purposes were the construction and maintenance of dams, canals and water works for domestic, irrigation and manufacturing purposes.

Meanwhile, on February 15, 1888, and before the execution of the Lake agreement hereinafter referred to, in anticipation of sales of water service to the residents of National City, the San Diego Land & Town Company commenced receiving applications therefor. On February 29, 1888, the city of National City passed an ordinance authorizing the San Diego Land & Town Company to lay and maintain pipe lines on the streets of National City and to supply the inhabitants thereof with water, and on the same day passed an ordinance establishing the rates to be charged for such water service. These ordinances did not become effective until July 1, 1888. Up to May 29, 1888, the San Diego Land & Town Company received 212 applications for water. For a more complete history of the nature of the proceedings leading up to the construction of the dam and the establishing of the rates for the city of National City see Lanning v. Osborne, C.C., 76 F. 319. Meanwhile, however, certain differences which had previously arisen between Eratus Lake and the San Diego Land & Town Company regarding a pipe–line right of way and Lake's water rights were arbitrated in National City on April 17, 1888. On May 29, 1888, the agreement in controversy was executed “in confirmation and enlargement of the aforesaid agreement under the arbitration of April 17,” 1888. This agreement was recorded the following month. It provides, among other things, that “For and in consideration of a perpetual right to him and his assigns, said right to be appurtenant to and run with the land, to use all the water necessary for the irrigation at all times” of Lake's 15–acre tract at a rate not to exceed $3.50 per acre per annum, “* * * confirm a grant by him to the San Diego Land & Town Company of the right to lay and maintain its main water pipes and necessary taps over and upon said land forever,” and under certain restrictions granted to that corporation “the right to enter upon said land at all times for the purpose of inspecting and repairing its water pipes and taps upon said lands” and “expressly waiving all claims for other or further compensation or damage, which said tract of land or said Eratus Lake as the owner thereof, may have already sustained or which may hereafter be sustained by said tract of land or said (Eratus Lake) by reason of the diversion of the waters of said river by the said San Diego Land & Town Company,” or the construction and maintenance of the pipe line or the entry upon the lands for the inspection and repair thereof.

It is conceded that the appellant's 15–acre tract was, when the Sweetwater Dam was built, riparian to the Sweetwater River. By mesne conveyances the Sweetwater Dam and the water system had become the property of the respondent California Water & Telephone Company. From May 29, 1888, to June 19, 1937, a period of 49 years, appellant and his predecessor received water service pursuant to the terms of the above–mentioned agreement. On June 19, 1937, respondent notified appellant by letter that it had completed the construction of a new water main through which he was being served across other properties than his; that respondent had abandoned the easement created by the grant from Lake, and that after July 1, 1937, service to him would be rendered pursuant to the company's applicable rules and regulations and to the company's rates applicable for such services on file with the Railroad Commission of the State of California. Thereupon, on August 7, 1937, appellant filed the present action for declaratory relief, seeking, as Lake's successor, a decree enjoining the respondent from repudiating the agreement between Lake and the San Diego Land & Town Company, and the adjudication of his perpetual right to receive, for the irrigation of his 15–acre tract, water from the respondent's system at the rate of $3.50 per acre per annum.

Respondent filed its answer, setting forth several defenses, most of which were either abandoned by respondent or ordered stricken by the court. The gist of the second defense, on which the discussion mainly hinges, was that immediately upon the completion of the dam and before the making of the Lake contract, the San Diego Land & Town Company dedicated to the public use all the water rights that it owned, and assumed the position of a public utility, and that having once so done, it could make no subsequent contracts affecting waters from the Sweetwater Dam, which would be immune from public regulations.

The ultimate question before the trial court was whether the rights of the respective parties continued to be governed by the Lake agreement, or, contrariwise, the respondent's obligation to render service to the appellant's 15–acre tract is merely that of a public utility corporation and subject as such to regulation by the Railroad Commission and to the rates from time to time established by it to be charged to the respondent's consumers generally.

The court found that “as respects that part of the water supply impounded by the Sweetwater Dam and controlled by the San Diego Land & Town Company, other and different from that destined for use within the City of National City, the company had, prior to the execution of the Lake contract, become a public utility”; that “when the Lake contract was made, the San Diego Land & Town Company was entitled, in the capacity of a public utility, to make use of all of the flow of the Sweetwater River effectively impounded by the dam”; that plaintiff is not “entitled to either injunctive relief or relief in the form of specific performance”; that “the Lake contract * * * providing for water from the defendant's system at the rate of $3.50 (per acre per annum) has not been cancelled by the nonuser of the pipeline easement, but remains a valid subsisting contract subject, however, to the regulation of the Railroad Commission of the State of California.”

Appellant complains and now argues that the court went outside of the pleadings and the theory upon which the case was tried, and decided the case upon the theory of “estoppel” when that defense was not even pleaded or argued; that the trial court decided adversely to the appellant on the theory that appellant's predecessor (quoting from the trial court's written opinion filed herein) “stood by and allowed the erection of a dam manifestly designed and intended by the San Diego Land & Town Company to accomplish the devotion to the use of a public utility of the whole flow of the stream susceptible of being effectively impounded by it”; and that, therefore, appellant cannot deny that the agreement now before the court is subject to public regulation, even though the effect of such a decision is to deprive appellant of his riparian rights; that it reached that result solely by charging appellant's predecessor in interest with knowledge of an allegation in the complaint filed by the San Diego Land & Town Company in the Neale case alleging the construction of the dam, etc., and “that said use is a public use.”

It is apparent that the trial court found in favor of appellant on all defenses except the one above mentioned. It is also apparent from the court's written opinion that the court recognized the rule stated in Allen v. Railroad Commission, 179 Cal. 68, 82, 175 P. 466, 472, 8 A.L.R. 249, wherein it was said: “a company having a single and undivided supply of water * * * may devote its properties and a part of those waters to public service and may retain a part for the advantages of private sale, and not become a public service corporation as to all by virtue of the dedication of a part.”

It becomes apparent that the court's determination that the whole capacity of the system had been dedicated to public use prior to the execution of the Lake contract was based partly on the filing of the suit in condemnation above mentioned.

Appellant, in analyzing the position assumed by the trial court, claims that it (a) extended the rule of “estoppel” by substituting imputed knowledge for actual knowledge; (b) charged Lake with knowledge of the contents of the complaint in the Neale case where there was no evidence in the record that Lake knew of the existence of the complaint, and the issues raised thereby were not finally determined until almost three years after the agreement now before the court had been consummated; (c) ignored the necessary element in the rule of estoppel requiring a change in position on the part of the public in reliance on the acquiescence of the riparian owner; and (d) ignored the fact that the estoppel had not been pleaded.

At the time the Sweetwater Dam was constructed by the San Diego Land & Town Company, appellant's predecessor in interest, Eratus Lake, was admittedly a lower riparian owner. The San Diego Land & Town Company could have condemned his riparian rights, but until it did so, Lake was entitled to the continuous flow of the Sweetwater River across his land. The parties entered into the agreement in controversy, the necessary effect of which was, in part, in the nature of an exchange. Lake gave up his right to receive at least a greater portion of his riparian waters from the Sweetwater River and received in return the right to receive his riparian waters from the pipe line and system of the San Diego Land & Town Company. The Supreme Court has held that where the riparian owner transfers his riparian rights to a company and simultaneously receives from the company a right to receive a quantity of water for the irrigation of his land, the water conveyed to him retains its riparian character, and the riparian right of the land is thereby preserved to it even though the land no longer borders on the stream. Copeland v. Fairview Land & Water Co., 1913, 165 Cal. 148, 131 P. 119. In the Copeland case the owner of the riparian land transferred to the company his riparian rights, receiving in return therefor, and as part of the same transaction, a perpetual right to receive a certain quantity of water from the company for the irrigation of his land.

The trial court, however, stated that as to the water which continued to flow past appellant's land notwithstanding the existence of the dam, “that his riparian rights have not been severed from the land and remain a part of it, but, as to the right here in controversy to a water supply from the dam * * * Lake in effect elected to substitute for his riparian rights a different status involving the taking of water from a public utility.” Regardless of the correctness of this statement, if the San Diego Land & Town Company, at the time the Lake contract was entered into, was a public utility and the waters had been dedicated to a public use, the Railroad Commission had the power and jurisdiction to fix the rates. Wallace Ranch Water Co. v. Foothill Ditch Co., 5 Cal.2d 103, 121, 53 P.2d 929, 938. It should also here be noted that counsel for appellant, in open court, in the presence of respondent's counsel and during the arguments on the merits of this appeal, stated in response to a question propounded by this court inquiring if the Railroad Commission had assumed jurisdiction of this controversy and fixed the rates applicable to appellant, that, “There was a proceeding to have this contract abrogated. The Railroad Commission denied that without prejudice.”

It was stated in Wallace Ranch Water Co. v. Foothill Ditch Co., supra, that if the Railroad Commission, with full knowledge of the claimed rights of appellant, fixed rates applicable to the consumers of respondent company, including appellant, “the trial court had no jurisdiction directly or indirectly to overrule an order of the Railroad Commission. The power to reverse, review, correct, or annul orders of that commission rests solely in the Supreme Court (section 67 of the Public Utilities Act [Stats.1915, p. 115, as amended]), and the superior court is without jurisdiction in the premises.”

It has been heretofore determined that where a riparian owner has allowed, without protest, the construction of a large irrigation dam and a public use of his water has intervened, such a riparian owner has no right to an injunction against an invasion of his riparian rights, but can merely sue for damages. Crescent Canal Co. v. Montgomery, 143 Cal. 248, 76 P. 1032, 65 L.R.A. 940; Barton v. Riverside Water Co., 155 Cal. 509, 101 P. 790, 23 L.R.A.,N.S., 331; Collier v. Merced Irrigation District, 213 Cal. 554, 2 P.2d 790; Reed v. Oakdale Irrigation District, 46 Cal.App. 139, 188 P. 832. It was the ultimate theory of the trial court that as there was no dispute that the appellant's predecessor, Lake, as the owner of the lands here involved, was originally a riparian appropriator downstream from the dam, his right to the use of the stream as it was accustomed, prior to the erection of the dam, to flow past his lands, could only be held to have been modified or abridged on the theory of estoppel based on his having stood by and allowed the erection of a dam manifestly designed and intended by the San Diego Land & Town Company to accomplish the devotion to the use of a public utility of the whole flow of the stream susceptible of being effectively impounded by it. Such a devotion to public use is recognized in several cases. In Conaway v. Yolo Water & Power Co., 204 Cal. 125, 266 P. 944, 58 A.L.R. 674, it was held that (quoting from syllabus):

(1) “While not even a corporation possessing the power of eminent domain may under the constitution (Art. 1, sec. 14) take or damage private property without first making adequate compensation, this right may be waived by the owner and in order to prevent the obstruction of progress he must be held to diligence in ascertaining his right as against a concern administering a public use; and if he allows his property right to be invaded and either taken or damaged for a public use and the public right has so far intervened as to justify the belief that objection has been waived, in law the property right so taken or damaged is to that extent dedicated to the public use.”

And paragraph (5) of syllabus: “The private owner who stands by in such a case inactive, hesitating or half consenting, until the burden to his land becomes a part of the public use must content himself with legal as distinguished from equitable remedies for relief.”

See, also, Collier v. Merced Irrigation District, supra.

In Williamson v. Railroad Commission, 193 Cal. 22, at page 29, 222 P. 803 at page 806, it was stated: “While it is true that purposes avowed in articles of incorporation do not fix the character of the corporation in its future activities as being a public service corporation, as stated in Allen v. Railroad Commission, supra, and that the additional act of dedication is necessary to the creation of a public use, it is also true that when the original appropriators of water from a stream, having declared by broad terms that its purposes are to secure the commodity for a consumption or use which cannot be otherwise than to supply a general public use, organize a corporation which in its articles of incorporation declare its purposes to be that of utilizing the water thus acquired for sale, for manufacturing, mining, mechanical, chemical, agricultural, and for general domestic purposes, to be conducted by means of canals, flumes, aqueducts, reservoirs, pipes, and other necessary conduits to a vast area of gold–bearing regions, agricultural lands, and to inhabited districts and communities widely separated from each other, and to all other places lying adjacent to the route of its main system and its lateral branches, and when such corporation proceeds under such declared purposes and does establish a distributing system, and actually furnishes water for mining, irrigation and domestic purposes in large quantities through a period of many years to thousands of consumers indiscriminately, and without refusal to any one who made application or request for the use of its water for any purposes whatsoever, at rates adjusted to the uses to be made of the water, and has apparently held itself in readiness to comply with its declaration of purposes as rapidly as the growth of the communities to which it extends would permit or has required, it must be held that substantial evidence of such a carrying into effect of the originally declared purposes of the original appropriators of such water and of the corporation formed by them has been presented as would suffice, in the absence of countervailing facts, to justify a finding that the water thus acquired and utilized by such corporation had from its inception been dedicated to a public use and that such corporation was a public utility.” (Italics added.)

In that case, in consideration of a conveyance of a right to the water company to construct a canal upon petitioner's property, by written agreement, the water company agreed to perpetually furnish such waters as petitioner might thereafter require at a price not to exceed $5.00 per calendar year per acre. It was held that the water company was a public utility and that the Railroad Commission had jurisdiction over the rate to be charged notwithstanding the agreement. To like effect is Miller & Lux v. Enterprise Canal, etc., Co., 169 Cal. 415, 147 P. 567.

In Limoneira Co. v. Railroad Commission, 174 Cal. 232, 162 P. 1033, it was held that (quoting from syllabus): “A contract, made subsequent to the adoption of the constitution of 1879, whereby a public utility undertook to furnish water for a certain period to a mutual water company, is subject to the power of the state, vested in the railroad commission, to modify and practically to annul it in so far as the prescribed rate is concerned in the regulation of the public use.” See, also, Leavitt v. Lassen Irrigation Co., 157 Cal. 82, 106 P. 404, 29 L.R.A.,N.S., 213.

We have next to inquire whether the evidence shows and supports the finding that on or before the completion of the Sweetwater Dam in February of 1888, the San Diego Land & Town Company definitely indicated the intention to devote all of the flow of the river to be effectively impounded by it to public use, as distinguished from private use or private sale, and, if it did, whether the evidence shows such purpose to have been so manifested as to charge Lake as a lower riparian owner, with the notice of such intention essential to invoke the so–called doctrine of estoppel against him. In doing this, we assume, without holding, that such dedication to public use before the date of the Lake contract must appear before the judgment can be affirmed. It is, of course, not to the point in this inquiry that the defendant California Water & Telephone Company may now be a public service corporation and nothing else (except to the extent that it is, if indeed it be, serving Lake in a different capacity). Neither is it to the point that the defendant's predecessor, the San Diego Land & Town Company, has in many decisions been recognized as an out and out public utility, insofar, at least, as these decisions are based on its conduct at times subsequent to the Lake contract. What concerns us now is what the situation was and appeared to be when the Lake contract was made.

Under article XIV, section 1 of the State Constitution it was provided that “The use of all water now appropriated, or that may hereafter 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 * * *.”

Under the Statutes of 1881, chapter LII, section 1, page 54, and Statutes of 1885, chapter CXV, sections 1 and 2, page 95, the board of supervisors or legislative body of the city was authorized to annually fix the rates to be charged by any company for water furnished to any such county or city respectively.

With these principles above mentioned and with these laws in mind, we will analyze the evidence. Under the San Diego Land & Town Company's articles of incorporation it was authorized to act as a public utility. While not conclusive, this fact may be considered in the determination of the ultimate question. Brewer v. Railroad Commission, 190 Cal. 60, 79, 210 P. 511; Del Mar Water, etc., Co. v. Eshleman, 167 Cal. 666, 140 P. 591, 948.

There is no dispute about the fact that the construction of the Sweetwater Dam was commenced in 1886 and completed early in 1888. The evidence shows that on February 29, 1888, the San Diego Land & Town Company was authorized by ordinance of the city of National City to “lay and maintain water pipes in and upon any or all of the streets of National City, for the purpose of supplying water to the said city and the inhabitants thereof for domestic, irrigating and mechanical purposes for the term of 50 years from and after the passage of this ordinance, and to charge and collect therefor such fees or rates as may be established by the board of trustees or common council of said city.” On the same day, by another ordinance, the board of trustees of said city proceeded to fix the rates which, on and after the first day of July following, it should be lawful “for any person or association of persons or water company supplying water to the inhabitants of the city of National City or to any corporation, company or persons doing business or using water therein to charge, collect and receive therefor.” It appears that the San Diego Land & Town Company provided a form of application for water service which was in general used by it, one of which is in evidence and is dated February 15, 1888, and made by Frank A. Kimball as applicant. This application was dated at National City and was apparently intended to apply to premises therein. However, there appears as a printed foot–note on the bottom of the application, the following: “(This contract shall remain in force until the first day of next January, when it may be terminated at the request of either party, but in case no such request is made, then the same shall continue in force for one year thereafter, and so on from year to year, until such request is made; which request, when made, shall be to terminate this contract on the then following January 1st.)” The records of the San Diego Land & Town Company show that prior to May 29, 1888, some 212 such applications had been made to it. By the condemnation complaint entitled The San Diego Land & Town Company, plaintiff, v. George Neale, et al., defendants, and verified on March 10, 1887, the defendant's predecessors set up that one of its corporate purposes was “the construction and maintenance of dams, canals, and water works, for domestic, irrigation, and manufacturing purposes”; that it “has constructed upon land of its own, to wit, the Rancho de la Nacion, a dam across the valley of the stream called the Sweetwater River, in said county and across said stream, for the purpose of collecting and holding and distributing the water thereof for the use of the inhabitants of the said Sweetwater Valley, the said Rancho de la Nacion, the Mission Rancho, National City, and a portion of the city of San Diego, and the lands adjacent thereto, in said county, for domestic, farming, irrigating, manufacturing, and all other purposes to which water may lawfully be applied.” It was also in this complaint alleged “that said use is a public use, and that plaintiff is in charge of the same.” Insofar as the city of National City is concerned, the courts have fully recognized as a fact that the San Diego Land & Town Company is and was, at least subsequent to the date of the Lake agreement if not before, a public utility and that the rates to be charged were subject to regulation and control in the manner prescribed by law. Osborne v. San Diego Land & Town Co., 1899, 178 U.S. 22, 20 S.Ct. 860, 44 L.Ed. 961; Lanning v. Osborne, supra, 1896; San Diego Land & Town Co. v. City of National City, C.C.1896, 74 F. 79; San Diego Land & Town Co. v. City of National City, 1899, 174 U.S. 739, 19 S.Ct. 804, 43 L.Ed. 1154.

The evidence in the case at bar makes it entirely clear that, as respects such portions of its water supply as the San Diego Land & Town Company intended for distribution within the city of National City and to the inhabitants thereof, the said company was, by every test, a public utility, at least some months before it entered into the Lake contract.

As it has been held that a water company may be a public utility as to a portion of the supply controlled by it, but not as to the rest, the next question presented is the sufficiency of the evidence to support the court's finding as respects that part of the water supply impounded by the Sweetwater Dam and controlled by the San Diego Land & Town Company, other and different from that destined for use within the city of National City, viz., that the company had, prior to the execution of the Lake contract, become a public utility. There is no dispute that the San Diego Land & Town Company had already begun actual service of water to areas under the flow of its pipes outside of the city of National City, including principally that part of the Sweetwater Valley below its dam and the mesa now occupied by the city of Chula Vista. It is not claimed that any application to the Board of Supervisors was made to fix rates for service in the region outside the city of National City until a subsequent time. This, however, in nowise militates against the contention that the company was already supplying this water in the capacity of a public utility. Public utilities were, at the time, authorized in unincorporated areas, to fix and collect rates for water supplied by them even in the absence of supervisorial action on the subject. Stats.1885, chap. CXV, page 95 et seq.

There is no dispute that the company used condemnation to acquire portions of its reservoir lands. It is, of course, only in the public interest that condemnation lies and, as has been already observed, the complaint in the Neale case distinctly alleges the company's character as a public utility. That is a declaration of its then present status, made by it at a time long anterior to the Lake contract. It may perhaps be assumed that a corporation acting in respect of part of the water supply controlled by it as a public utility might not in all circumstances be disqualified to maintain a condemnation suit even in case, as to the other parts of such supply, it were not so acting. The nature of this condemnation suit, however, hardly admits of that construction. That which was condemned was not anything, in the use of which any differentiation could be made between the company's public functions and any private functions that it might claim to be performing. The company had built the dam on its own land. What it sought was more land for a reservoir, and “for the necessary margin and protection thereof for the uses and purposes aforesaid.” Such uses and purposes were specified as being not only the use of water in National City but also over the whole of the general region which has since been supplied by the system, and it is with respect to all of this that there is used in the complaint the above–quoted language that “said use is a public use.” This seems to be explicit. In thus availing itself of the right of eminent domain and for that purpose making use in its complaint of the most sweeping language in respect of the whole use stated as in contemplation, there seems to be no reservation whatever. Nothing was suggested about any intention to confine the public character of the use to the municipality of National City and to act as a mere retailer of water at private sales elsewhere. On the contrary, all the use of water contemplated is expressly placed in the same category of a “public use” and on that representation the company condemned the Neale lands, portions of which would appear, from the language of its complaint, to be on the marginal of the reservoir site and, as may be inferred, to be flooded only when the reservoir should be filled to its utmost capacity. There is a plain inference that the company intended to represent and did represent that the entire capacity of the reservoir, that is, all of the water effectively to be impounded, was to be devoted to the public use. When this declaration was made the dam was nearly finished and, therefore, its capacity to impound largely if not entirely complete.

Correlating all of these facts and circumstances, the trial court was justified in finding that there was a dedication of the whole capacity of the system to public use, insofar, at least, as it was within the capacity of the San Diego Land & Town Company to so dedicate it. In Byington v. Sacramento Valley, etc., Co., 170 Cal. 124, 132, 148 P. 791, 794, it was said that: “At the trial it was proven that the Sacramento Valley West Side Canal Company in developing the system of irrigation canals and ditches had prosecuted suits in eminent domain. This shows that it was a public service corporation.” See, also, Knox v. Roehl, 153 Wis. 239, 140 N.W. 1121; State ex rel. Wood v. Consumers' Gas Trust Co., 157 Ind. 345, 61 N.E. 674, 55 L.R.A. 245. It also should be noted here that the San Diego Land & Town Company had laid and maintained its main water pipes over and upon the tract of land owned by Lake. It was from these facilities that Lake made use of the water from the dam. In 1937 respondent constructed a new water main which was apparently not constructed upon appellant's land but through which facilities he was to be served such water as he cared to take from the water system under the contract.

In Wallace Ranch Water Co. v. Foothill Ditch Co., supra, the court held that the plaintiff had a perpetual easement in the ditch to convey its water to its properties, but subject to regulation by the Railroad Commission. In that case plaintiff's easement and right to one–third of the waters flowing in defendant's ditch was created at a time when neither owner was a public utility. The interests of defendant's predecessor were subsequently transferred to defendant, a public utility corporation. Plaintiff company was not charged for its proportionate share of the use of the ditch through which plaintiff had the easement to divert its agreed and established share of the water. The Railroad Commission determined it had jurisdiction over the question of rates and so fixed them, contrary to and different from that determined by the trial court. The Railroad Commission's order was sustained for reasons therein expressed. However, at page 120 thereof in 5 Cal.2d, 53 P.2d 929, the Supreme Court points out that there was an order of the Railroad Commission discussed in the briefs to which the court referred. It reads in part as follows: “ ‘In the Matter of the Application of Foothill Ditch Company, a Corporation, to Increase Rates for Water Supply.’ * * * This opinion recites in detail the controversy over the ownership of the Foothill Ditch and over plaintiff's claims therein, and specifically holds that that question should not be decided by the commission but by the courts. The opinion holds, however, that since the evidence in that proceeding shows (as does the evidence in the present case) that the utility is furnishing plaintiff a service, the commission has the power to fix rates for that service, whether plaintiff owns a part of the ditch or an easement therein or not. The commission thereupon fixed a rate applicable to the consumers of defendant, including plaintiff * * *.”

In the instant case the appellant must make use of the facilities of the respondent corporation, a public utility, in securing water from the dam for his lands. If the above–quoted interpretation is to be given effect and applied here, the Railroad Commission, notwithstanding the other question presented, would have the power to fix rates for that service.

From our understanding of the evidence and the question in dispute, respondent has not, and appellant does not contend that the respondent has refused to deliver water under the contract. The only dispute about the contract is over the price or rate to be charged. The judgment specifically declares that “the Lake contract * * * providing for water from the defendant's system at the rate of three and 50/100 dollars ($3.50) per acre per annum, has not been cancelled by the nonuser of the pipe line easement, but remains a valid, subsisting contract, subject, however, to the regulation and control of the Railroad Commission of the State of California” and that “plaintiff is not entitled to either injunctive relief or relief in the form of specific performance.” This conclusion is amply supported.

Appellant lays particular stress in his brief on the fact that estoppel was not pleaded as one of the defenses and he was not afforded an opportunity to show, in rebuttal thereto, that the San Diego Land & Town Company issued “water right certificates” purporting to entitle the holders thereof to a perpetual right to water at a specific rate. The so–called “certificates” were fully described, discussed, and considered in Osborne v. San Diego Land & Town Co., supra, and held not to be determinative of a like issue there presented.

Whether the so-called rule of estoppel invoked by the trial court should have been pleaded will therefore be considered. Respondent's contention that all waters of the Sweetwater Dam were dedicated to public use is plainly set forth in the second defense of respondent's answer. The manner in which it was dedicated was a matter of proof. The finding that it was dedicated to public use would suffice. The reasoning expressed by the trial court in its written opinion, no matter how well expressed, does not constitute a part of the record on appeal. Since an opinion is not part of the record, it must be carefully distinguished from a finding and from a decision. If the appellate court finds that upon any ground or for any reason the action of the court below was correct, its action will be affirmed regardless of the reason which the court may have given for it. White v. Merrill, 82 Cal. 14, 22 P. 1129.

The case of Conaway v. Yolo Water & Power Co., supra, involved a property right taken under the theory of laches, and to that extent dedicated to public use. In their answer the defendants did not plead laches as a defense, but did plead the “intervention of a public use.” This was held sufficient. There is no merit to this argument. From the trend of the reported decisions and the ultimate finding of the trial court, the judgment must be affirmed.

Judgment affirmed.

GRIFFIN, Justice.

BARNARD, P. J., and MARKS, J., concurred.