## Facts

- Beginning around 1865, miners built several ditches to divert water from Crow Creek near Radersburg, Montana, for placer mining.
- The ditch owners allowed Radersburg residents, with the owners’ consent, to place small boxes, flumes, and pipes in the ditches to take water to irrigate lawns and gardens and for limited domestic purposes.
- In exchange for receiving water, town residents either performed labor repairing and cleaning the ditches or paid an annual charge to the ditch owners.
- The ditches did not supply water to the town in winter; during winter months residents relied on wells located within the town.
- Residents initially obtained water from more than one ditch, but by around 1900 (or somewhat later) the town obtained summer water only from the “Swede Ditch.”
- Years after residents began taking water from the Swede Ditch, an action was brought to adjudicate Crow Creek water rights. A decree was entered in 1907 and, after appeal and remand (Smith v. Duff), a new decree was entered in 1910 as to certain rights.
- Plaintiffs (W.A. Sherlock and other successor ditch owners, now farmers) owned the Swede Ditch and used the Crow Creek water for crop irrigation under the earlier decree.
- Defendants (W.E. Greaves and other Radersburg residents) continued taking water from the Swede Ditch for lawn, garden, and domestic use.
- Plaintiffs sued in equity to enjoin defendants from diverting or using water in violation of plaintiffs’ rights under the earlier decree.
- Defendants asserted that they had rights superior to plaintiffs on five theories: (1) estoppel/irrevocable parol license, (2) adverse use, (3) executed parol contract to convey water rights, (4) appropriation, and (5) dedication to public use such that plaintiffs were operating a public utility.

## Issues

1. What effect, if any, did the prior Crow Creek adjudication decree (Smith v. Duff and the resulting decrees) have in this suit against defendants who were not parties to that adjudication?
2. Did defendants prove a superior or independent right to use Crow Creek water under any of their asserted theories (estoppel/irrevocable license, adverse use, executed parol contract, appropriation, or dedication/public utility)?

## Decision

- The Montana Supreme Court held the prior adjudication decree was competent evidence to establish the nature, extent, and priority of plaintiffs’ water rights.
- The decree was not conclusive against defendants merely because it existed; however, defendants could not defeat the decree where their claimed use was asserted under or through rights that were in fact adjudicated in the earlier action.
- The court affirmed the trial court’s rejection of defendants’ claims that their long-term town use created a right superior to plaintiffs’ decreed irrigation rights.
- Defendants’ use was shown to have begun and continued with permission and for consideration (labor or annual payments), defeating claims of hostile adverse use and weakening claims of estoppel, contract, and independent appropriation.
- The court rejected the argument that plaintiffs’ and their predecessors’ conduct amounted to a dedication of private water rights to public use or made plaintiffs a public utility obligated to continue furnishing water to the town.
- Disposition: remanded with directions to modify the judgment in certain particulars; as modified, the injunction in favor of plaintiffs was affirmed.

## Legal Principles

- A prior water-right adjudication decree is admissible to prove a party’s water right (including priority and amount), but it does not automatically bind nonparties unless the nonparty’s claim is made under or through rights actually adjudicated.
- Use of water taken from another’s ditch with the owner’s consent, and conditioned on payment or labor, is permissive use and does not by itself transfer ownership of a water right.
- A prescriptive (adverse) water right cannot arise from permissive use unless permission is clearly repudiated and the owner is put on notice of a hostile claim.
- A claimed parol agreement to convey a water right requires clear proof of a contract to transfer the right itself; ongoing paid permission to take water is not enough to show an executed transfer of the property interest.
- Taking water through another’s diversion works by permission generally constitutes use under the ditch owner’s appropriation, not an independent appropriation that can outrank decreed rights.
- Dedication of private water rights to public use requires clear intent and acceptance; allowing townspeople to take water on a seasonal, compensated, permission basis does not, without more, convert private irrigators into a public utility or impose a continuing public-service duty.

## Conclusion

Sherlock v. Greaves upheld farmers’ decreed Crow Creek irrigation rights against Radersburg residents who had long taken water from the Swede Ditch for household and garden needs, holding that decades of compensated, permission-based use did not create a superior right by estoppel, prescription, contract, independent appropriation, or dedication to public use, and affirming injunctive relief as modified on remand.


Sherlock v. Greaves, 76 P.2d 87 (1938)