## Facts

- Panhandle Development Company (Panhandle) sought to appropriate water from Switzer Creek and West Sand (also called West Sand or Mill/Mill Creek) for power development.
- Panhandle located the waterway on its property and posted and recorded a notice of intention to appropriate water under Idaho’s Act of February 25, 1899.
- Panhandle posted its notice on December 16, 1902, and claimed a specified quantity of water.
- The 1899 statute required an appropriator to begin construction within 60 days after posting/recording notice and to continue the work with reasonable diligence.
- Within the 60-day period, Panhandle began work connected to the planned diversion project, including cutting a trail up the canyon and surveying lines for flumes and ditches.
- Panhandle continued work after commencement, keeping workers on the project and building improvements and diversion-related structures in difficult mountain conditions with heavy winter snowfall.
- During the same general period, Sand Point Water and Light Company (Sand Point) was actively diverting water from the same source for power-generation and municipal-related purposes.
- Sand Point claimed rights under a later statute approved March 11, 1903, and asserted that Panhandle’s efforts were not sufficiently diligent under the 1899 statute to preserve priority.
- Sand Point sued to enjoin Panhandle from diverting the waters and from interfering with Sand Point’s use.
- The trial court entered judgment for Sand Point and issued injunctive relief; Panhandle appealed to the Idaho Supreme Court.

## Issues

1. Whether an appropriator who posts and records a notice under Idaho’s 1899 statute, timely begins work, and continues with reasonable diligence obtains a priority that relates back to the date of posting the notice.
2. Whether Panhandle’s work constituted “reasonable diligence” under the 1899 statute such that its priority was earlier than Sand Point’s later-acquired statutory rights and actual diversion.
3. Whether Sand Point could defeat Panhandle’s claimed priority based on alleged acquiescence or estoppel arising from Panhandle’s failure to stop Sand Point’s construction and use.

## Decision

- The Idaho Supreme Court reversed the judgment for Sand Point and remanded with instructions.
- The court held that Panhandle’s appropriation, if pursued under the 1899 statute with timely commencement and reasonable diligence, dated from the posting of its notice (December 16, 1902).
- The court concluded that Panhandle’s construction efforts satisfied the statute’s “reasonable diligence” requirement in light of the work performed and the conditions under which the work occurred.
- Because Panhandle’s priority related back to its notice date and was earlier than Sand Point’s later claim, the injunction entered for Sand Point could not stand.

## Legal Principles

- Under Idaho’s 1899 water-appropriation statute, posting and recording a notice initiates an inchoate appropriation right that can mature into a completed appropriation upon completion of the diversion and delivery of water to the intended use.
- If the appropriator follows the statutory steps, begins work within the statutory time, and continues the work with reasonable diligence, the completed appropriation relates back to the date of posting the notice for purposes of priority.
- Water may be appropriated either (a) by actual diversion and application to beneficial use, or (b) through the statutory notice-and-construction method; when the statutory method is properly carried out, priority is determined from the notice date rather than from the later completion date.
- “Reasonable diligence” is a practical standard assessed on the facts, including the type of project, the work actually performed, expenditures, continuity of effort, and physical conditions affecting construction (such as mountainous terrain and severe winters).
- A prior statutory appropriator is not required to protect priority by confrontation or immediate interference with a later user’s construction when the prior appropriator is timely and diligently prosecuting its own project; priority turns on compliance with the statute, not on “force or arms.”

## Conclusion

Sand Point Water and Light Co. v. Panhandle Development Co. held that a party who posts and records a notice under Idaho’s 1899 appropriation statute and then timely begins and continues construction with reasonable diligence secures a priority that relates back to the notice date. On the record, Panhandle’s efforts met the diligence requirement, so its December 16, 1902 priority was superior to Sand Point’s later rights under the 1903 statute and its ongoing use; the trial court’s injunction for Sand Point was therefore reversed and the case remanded.


Sand Point Water and Light Co. v. Panhandle Development Co., 83 P.347 (1905)