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Yellowstone County History

Water Rights for the Big Ditch


Sunday, November 01, 2009


The basic tenet of Western water law is simple enough: First-come, first-served. In other words, the first person to divert water from a river or stream and put it to good use is entitled to that water regardless of subsequent claims.[1]  The system is known as "prior appropriation" and is guided by the principle of "first in time, first in right." The first person to stake a claim is considered the "senior appropriator," with the most senior water rights. Those who come later are considered "junior appropriators." Water appropriators can be farmers, cities, Indian tribes or federal agencies like the Forest Service. Water rights can be transferred, sold, even rented. The more senior the right the more valuable it is, and water rights can date back to statehood.

This is a uniquely Western tenet. (In the Eastern United States, water rights were determined by land ownership. Those who owned land next to a stream or lake had a water right. The Eastern system of riparian rights requires sharing among water users; water is considered communal property. So in times of drought, everybody cuts back.) This system would have been impossible in the arid West[2], where streams are few and far between.

In the West "first in time, first in right" takes precedence even during dry spells. "You have this situation in drought where some people with water rights get no water at all," {said Getches} "There are more water rights existing on a stream than there is water." When the river runs low, senior appropriators take their water. Anyone with subsequent rights might not be able to draw from the river until the senior appropriations needs are satisfied. 

A definitive “Water Rights” document or understanding was supposedly obtained by MMLIC (Rowley-Panton during its formation) in 1881 from the Department of Interior  (Washington City). The ditch itself was planned that year, along with a plat and scale model of Billings that was presented to Eastern Investors, and in 1882 construction started. At the time, it was routed across land owned by the MMLIC (purchased from NPR) and the adjoining Public Land. In any case, the builders of the new townsite, Billings, had the right to take water from the river for irrigation and other purposes in accordance with the above law. A separate filing with the Territory is not evident, and probably wasn’t required at that time since there were no state laws governing such actions. After Statehood, the Federal Government assigned water rights to the state, creating at that time a “Water Rights” ledger for recording the filings. The use of that book (ledger) was not consistently used for that purpose. As explained in some of the NPR-Congressional Documents below, NPR had virtually all rights within the Public Lands they traversed; and could sell their land, along with those rights. They simply were not filed as a separate entity.

Refer to the Federal Statutes concerning rights one has to take water as needed.

On 23 March 1882, the “Minnesota and Montana Land and Improvement Company” (MMLIC) was incorporated.[3] Owners were: Heman Clark, John Westbrook and Thomas Kurtz.

On 23 April 1883, NPR issued a Warranty Deed to the MMLIC, selling their land sections in Yellowstone Valley (Clark’s Fork Valley) along with all of their rights. A special mortgage was established between these two firms on January 1, 1881 for the explicit purpose of acquiring the land. Additionally, NPR reserved a right to take water from, over and through the premises for their (future) use and their successors and assigns.[4] All lands and rights were transferred with clear title. Accordingly, until Montana became a state, there were no apparent mandatory filing requirements for Water Rights. Even after statehood, most of the early rights were incorporated as part of the land transfer records. When homesteaders or others took title to a piece of land, all existing rights that were in place were exempted from the title.

On 2 November 1891, the Billings Realty Company was incorporated. Their purpose was to purchase and improve real estate and other purposes. Henry Rowley, Fred Foster and AL Babcock were the owners.  These partners started a series of Ditch activities.

The first real time account of the water rights filing, was by articles of incorporation of the High Line Ditch Company on 11 May 1895, which extracted water from the M&M Canal (Big Ditch). This automatically made the 1882 water extraction claim for the Big Ditch legal. [No separate water rights were filed on the Big Ditch, as it was a preemptive right. Later wastewater became a real issue as more landowners became involved.] At the end of the ditch, the water passed through the west edge of the town, down to Montana Avenue, where a ditch on the south side edge of the road carried it down towards the river. Essentially this filing, this created one ditch with two branches.

On 18 May 1900, the M&M Canal ceased to exist when the B ig Ditch Company was incorporated[5] to manage and control its assets. Re-identified were the water rights, head gate and canal routing across the farmlands. Managing Directors were: PB Moss, LA Nutting, ID O’Donnell, FW Schauer, WD Story, James Steele and Henry Struck.

On 12 October 1903, the Billings Land and Irrigation Company was incorporated in Washington State.[6] Owners were: John Schram, WT Clark, HW Rowley, PB Moss and ID O’Donnell. The purpose was to establish irrigation systems and canals in any state. As lands were sold, they provided separate Water Rights to each landowner for an annual set fee.

On 15 December 1903, the Billings Realty Company granted a Right of Way to the Billings Land & Irrigation Company (BLI-Seattle Corporation – Henry Rowley President) who in turn gave perpetual water rights to the Billings Realty Company in exchange for building a canal. The canal had a 100-foot right of way easement across all lands. (2-miles SE of Laurel)

In July 1906, a commission was established to examine the water rights issue in Montana. The commission prepared a report and issued it to Montana Governor, Hon. Jos. K. Toole.

On 2 November 1911, the Billings Realty Company terminated its existence and the corporation was dissolved.

Some NPR Filing Notes:

By an act of congress of July 2, 1864, (chapter 217,) entitled 'An act granting lands to aid in the construction of a railroad and telegraph line from Lake Superior to Puget's sound on the [152 U.S. 59, 60] Pacific coast by the northern route,' the Northern Pacific Railroad Company was incorporated, and authorized to construct and maintain a railroad 'beginning at a point on Lake Superior, in the state of Minnesota or Wisconsin, thence westerly by the most eligible railroad route as shall be determined by said company, within the territory of the United States, on a line north of the forty-fifth degree of latitude, to some point on Puget's sound;' and, for the purpose of aiding in the construction of the railroad and of a telegraph line to the Pacific coast, there was granted to the company 'the right of way through the public lands' to the extent of 200 feet in width on either side of the railroad, as well as every alternate section of the public lands on either side of the line; and it was authorized to take lands within the 200 feet, 'and also any lands or premises that may be necessary and proper for turnouts, standing places for cars, depots, station houses, or any other structures required in the construction and working of said road;' and it was provided that the railroad should 'be a post route, and a military road, subject to the use of the United States, for postal, military, naval and all other government service, and also subject to such regulations as congress may impose, restricting the charges for such government transportation;' that the acceptance of the terms and conditions of the act should be signified by the company in writing to the president of the United States within two years after its passage; and that, 'the better to accomplish the object of this act, namely, to promote the public interest and welfare by the construction of said railroad and telegraph line, and keeping the same in working order, and to secure to the government at all times, but particularly in time of war, the use and benefits of the same for postal, military and other purposes,' congress might at any time, having due regard to the rights of the company, add to, alter, amend, or repeal this act.[13 Stat. 365].[7]

SEC. 2 . And be it further enacted, That the right of way through the public lands be, and the same is hereby, granted to said company for the construction of said railroad and telegraph line; and the right, power, and authority is hereby given to said company to take from the public lands adjacent to the line of said road, earth, stone, timber, and other materials for the construction thereof; said right of way is granted to said railroad to the extent of’ two hundred feet in width on each side of said railroad, where it may pass over the public lands, including all necessary grounds for stations, buildings, workshops and depots, machine shops, switches, side tracks, turn-tables, and water stations. The United States shall extinguish as rapidly as may be, the Indian titles to all lands falling under the operation of this act, and required for the said right of way and grants hereinafter made.

SEC. 3 . And be it further enacted, That there be, and is hereby, granted to the said company, for the purpose of aiding in the construction of said railroad and telegraph line, and to secure the safe and speedy, transportation of the mails, troops, munitions of war, and public stores thereon, every alternate section of public land, designated by odd numbers, {Changed to ten by Sec. 4, 1864 , and grant to twenty miles.} to the amount of five alternate sections per mile on each side of said railroad, on the line thereof, and within the limits of ten miles on each side of said road, not sold, reserved, or otherwise disposed of by the United States, and to which a preemption or homestead claim may not have attached, at the time the line of said road is definitely fixed: {Minerals and timbers. Sec. 4, 1864 .} Provided, That all mineral lands shall be excepted from the operation of this act; but where the same shall contain timber, the timber thereon is hereby granted to said company. And all such lands so granted by this section which shall not be sold or disposed of by said company within three years after the entire road shall have been completed, shall be subject to settlement and pre-emption like other lands, at a price not exceeding one dollar and twenty-five cents per acre, to be paid to said company.

SEC. 4. And be it further enacted, {On completion of 40 miles (changed to twenty by Sec. 6, 1864 ) U. S. Commissioners to examine.} That whenever said company shall have completed forty consecutive miles of any portion of said railroad or telegraph line ready for the service contemplated by this act, and supplied with all necessary drains, culverts, viaducts, crossings, sidings, bridges, turnouts, watering places, depots, equipments, furniture, and all other appurtenances of a first-class railroad —the rails and all the other iron used in the construction and equipment of said road to be American manufacture of the best quality, the President of the United States shall appoint three commissioners to examine the same and report to him in relation thereto; and if it shall appear to him that forty consecutive miles of said railroad and telegraph line have been completed and equipped in all respects as required by this act, then, upon certificate of said commissioners to that effect, {And patents of land to issue.} patents shall issue conveying the right and title to said lands to said company, on each side of the road, as far as the same is completed, to the amount aforesaid; and patents shall in like manner issue as each forty miles of said railroad and telegraph line are completed, upon certificate of said commissioners. {Vacancy in Commissioners. See Sec. 8, act of 1864 .} Any vacancies occurring in said board of commissioners by death, resignation, or otherwise, shall be filled by the President of the United States: Provided, however, That no such commissioners shall be appointed by the President of the United States unless there shall be presented to him a statement, verified on oath by the president of said company, that such forty miles have been completed in the manner required by this act, and setting forth with certainty the points where such forty miles begin and where the same end; which oath shall be taken before a judge of a court of record.

SEC. 5. And be it further enacted, {Government bonds, See sec. 8, act 1864 , also sec. 10 .} That for the purposes herein mentioned, the Secretary of the Treasury shall, upon the certificate in writing of said commissioners of the completion and equipment of {Now 20 miles. Sec. 10, 1864 .} forty consecutive miles of said railroad and telegraph, in accordance with the provisions of this act, issue to said company bonds of the United States of one thousand dollars each, payable in thirty years after date, bearing six per centum per annum interest (said interest payable semi-annually), which interest may be paid in United States treasury notes or any other money or currency which the United States have or shall declare lawful money and a legal-tender, to the amount of { See sec. 11 of this act for $32,000 and $48,000 per mile.} sixteen of said bonds per mile for such section of forty miles; and to secure the repayment to the United States, as hereinafter provided, of the amount of said bonds so issued and delivered to said company, together with all interest thereon which shall have been paid by the United States {Lien of U.S. bonds made subordinate. See sec. 10, act of 1864 .}, the issue of said bonds and delivery to the company shall ipso facto constitute a first mortgage on the whole line of the railroad and telegraph, together with the rolling-stock, fixtures, and property of every kind and description, and in consideration of which said bonds may be issued; and on refusal or failure of said company to redeem said bonds or any part of them, when required to do so by the Secretary of the Treasury, in accordance with the provisions of this act, { See sec. 10, act 1864 .} the said road, with all the rights, functions, immunities, and appurtenances thereunto belonging, and also all lands granted to the said company by the United States, which, at the time of said default, shall remain in the ownership of the said company, may be taken possession of by the Secretary of the Treasury for the use and benefit of the United States: {Modified. See sec. 5, act of 1864.}Provided, This section shall not apply to that part of any road now constructed.

The bill alleged that after the passage of the act, and before March 9, 1865, the company determined upon and selected the general line of its main road from Lake Superior to Puget [152 U.S. 59, 61] Sound; that on March 9, 1865, it duly signified to the president of the United States its acceptance of the act, and therewith presented and filed with the secretary of the interior a map showing the general route of its main line; that the general route so selected and designated was by way of the Columbia River to Puget sound, and north of the forty-fifth degree of latitude, and was 'the most eligible railroad route for the main line of said railroad and telegraph line from Lake Superior to Puget Sound, and was, at the time aforesaid, selected and determined upon as such;' and that many years before November 11, 1889, and while the state of Washington was still a territory, the plaintiff constructed and fully completed, and had since continuously maintained, its railroad from the city of Portland, in the state of Oregon, to the city of Tacoma, in the state of Washington. The bill further alleged that the plaintiff was the owner of the lands next the inner boundary of the right of way aforesaid; 'that the plaintiff is also the owner of the littoral and riparian rights, rights of access to deep water [152 U.S. 59, 62]

In 1904, the Texas Supreme Court ruled that a Houston railroad, which drilled wells to pump groundwater for its steam locomotives, was not required to pay compensation to a neighboring landowner in northeast Texas, W.A. East. East had argued that he was entitled to damages because the pumping by the railroad caused his well to go dry. The court said the railroad had a right to extract water from the land, ruling that the origin, movement and course of groundwater was "so secret, occult and concealed" that any legal rules governing groundwater "would be involved in hopeless uncertainty, and would, therefore, be practically impossible." [8]

"The Northern Pacific Railroad was chartered in 1864. By act of Congress of July 2nd of that year it was given the right of way through the public domain, and the right to take from the public lands material for construction, and was given an immense area of public lands in Montana, Idaho and other sections of the Northwest.”[9] This right gave NPR permission to take water from one place and make it available to another place. Normally, the train engines required water every 10-12 miles. NPR generally created stops every 6-8 miles so as to better accommodate the local farmers (once they were settled.) Sometimes ditches were created to divert water from a stream directly into or near the station stop. It appears that when NPR sold the Clark’s Fork Valley land (odd sections) to the MMLIC, all of their rights went along with the land sale. As a result there was no re-filing of a special use water right. When NPR needed wood, coal or water from the Public Domain Lands, they simply took it. No additional claim forms were needed. After Montana became a state, additional state laws were incorporated that separately identified various documents that need to be recorded. Water was then placed under control of the state, but subject to prior claims of early ownerships. In looking in the Water Rights Book, very few filings exist for water taken from streams before statehood. Some of examples of local water appropriation filings are:

James H Harper, on February 11, 1886 recorded his right to 50 miner inches of water from McKenzie Creek, and transported it to his place by a 12x12 inch ditch.[10] He also held the right to enlarge the ditch.

The United States appropriated 750 cubic feet/sec from the Yellowstone River on October 25, 1905 to irrigate Huntley. They constructed a large ditch to carry the water from S34, T2N, R27E. This carried all rights to build dams, etc as needed.[11] This later became the Huntley Irrigation Project. Later, the Government (Under Act of Congress August 9, 1912) took out a Patent on the lands held there and they reserved all rights for themselves.[12]

William Blair received his Final Receipt for 80 acres of land in S32, T1N, R 26E, on September 27, 1882. When he was issued his Patent it contained the wording “Subject to any vested and accrued water rights and rights to ditches and reservoirs used in connection with such water rights, as may be recognized by local custom.”[13] The same was issued to Hezekiah James and on the same dates.

When Perry McAdow had his sawmill operating in Coulson, he accepted a large contract from NPR to supply timbers for their use. From the memoirs of those who cut the wood, it seems that much (it not all) of it came from Public Lands and the Crow Reservation. There were no permits for such action located.

Water for the M&M Canal was taken from the river at what is now Lot #3, Section 12, Township 3 South, Range 21 East in 1882. [This property, which had a head gate and ditch on It before surveying, was later homesteaded by the Holdens, and later still was filed on for a land patent by his widow, Lydia Holden, who eventually received title on 30 January, 1892. George Watt came along and married Lydia, after her first husband had died. George and Lydia resided on the land homesteaded by the Holden’s. He then wondered about the water rights for the ditch that was on his land, and found nothing was filed.] He later became the maintenance manager for that section of the ditch and the headgate; essentially establishing acknowledgement of the M&M ditch company’s right to transport water from and across his land.

When Billings was being planned (1880-1881) the need for water was a basic consideration[14]. There were three originally planned ditches established to extract water from the Yellowstone River: 1) water for the town’s need for electrical power, 2) water for irrigating the bottom land near the river, and 3) water to irrigate the upper sections of land throughout the major portion of the Clark’s Fork Valley and the town itself.  The first was obtained from Perry McAdow, who allowed the ditch to be created on his land. The second was taken near to Laurel, and the third was extracted from the north channel of an island some 30 miles to the west. This later one was the M&M Canal, and was referred to as the Big Ditch. The High Line Ditch is basically an expansion of the M&M Canal. In a memoir note, Henry Rowley noted that after the original contemplated map for Billings was created by Panton, and presented to the bankers and backers in the east, as a plan to establish a city from nothing, he stated he went to Washington City (Washington DC) circa January 1881 to file the transfer with the Department of Interior. The railroad, Northern Pacific Railway, had clear title to the land they agreed to file upon. Excluded were certain mineral rights, but coal was not one of them. Two resources from the land were required to make the railroad a real entity: fuel (wood and coal), and water. In establishing written proof of the water rights, the first link of its actual existence was presented in William H. Clanton’s mortgage agreement with the Middlesex Banking Company, in Middletown, C T, on July 12, 1905.

On September 4, 1887 Clanton purchased 160.28 acres[15] from the Minnesota and Montana Land & Improvement Company for $1,282.24. The Warranty Deed included all appurtenances[16]. The following year they took a 4-year mortgage for $900 from the MMLIC. On December 23, 1891 the note was paid[17]. Between then and 1905 many legal entanglements occurred over the property ownership. Prior to 1909, the city of Billings had established a water service that extended a considerable distance throughout the area. The Billings Polytechnic Institute had procured land for their classrooms, and was under construction; but they had no access to water from the city as the Clanton property was between them and the water supply reservoir. A proposed routing for a water pipe across the Clanton property was created, but was unable to gain free access. Thus a suit ensued.[18] The land where the pipe would cross was condemned, with CH Newman, CM Chaffee and Ed O’Donnell as commissioners[19]. This was eventually settled.

On January 20, 1904 the Clantons provided a Right of way Deed to The Billings Land & Irrigation Company (Incorporated in Washington State) for a 100-foot wide strip of land encompassing some 6.07 acres for the ditch. Two flumes were to be constructed, along with a bridge[20].

Although the county has separate record books for various transactions, the water rights owned by the Clantons were sold as part of their land warrant and not as a separate water right on August 5, 1910 to WH Hopkins[21]. “Warranty Deed of the real estate (which still had a $5,000 mortgage) together with 40 shares of capital stock in the Big Ditch, and all other water rights, ditches, flumes and laterals used in connection with the land an rights of ways.”

William H. Clanton died intestate four days later on August 9th, and his wife filed for letters of administration to complete probate and sale of the estate. Hopkins transferred the land back to the estate of William Clanton on August 22nd. A legal mess ensued. After three years of court hearings, Judge George W Pierson ruled that the estate be divided up between the family heirs, and that 30 shares of capital stock in the Big Ditch Company, along with everything else was okay to continue with the sale to W Lee Mains (Highland Homes Company). This satisfied the letter of the law. However, at the time of William’s death he owned 40 shares of stock in the Big Ditch. Thirty shares were used with the land under question, and 10 shares on 40 acres of other land conveyed by William to his wife. At time of William’s death, the secretary of the Big Ditch made out a new certificate assigned to the Estate of William Clanton, which was promptly lost or never issued. This also took three years to clarify and get a clear land title for transfer of the water rights[22].

In Ramsey County, Minnesota, (October 17, 1917) Northern Pacific President, July M Hannaford signed over the full rights belonging to them as part of the 1864 congressional land detail agreements to the Minnesota and Montana Land and Improvement Company, which they had originally delivered on April 23, 1883. Specifically he addressed the land owned by the Clantons, although more persons were involved. All of the fractional Section 31 “the use and right and title to the use, of such surface ground as may be necessary for mining operations, and the right to access to such reserved and excepted mineral lands, including lands containing coal or iron for the purposes of exploring, developing and working the same, and reserving and excepting a right of way for the main line for railroad …… and for its branch lines, which reservation for right of way” was released. Prior to this, there was uncertainty of authorities taken.

An agreement[23] was reached between the Billings Bench Water Association and the Big Ditch Company on November 8, 1916 as to how the wastewater from the Big Ditch was to be treated as it passes over the Bench canal. In doing so, it was discovered that NPR still had an open right of way across all lands that had to be cleared. Additional concerns about the ditches and their drainages continued until 1922, with no disposition as to how drainage (wastewater) was to be considered.






[1] “Water fight - Old laws have West wrangling over natural resource in time of drought” Article Published by PAULINE ARRILLAGA Associated Press. The Missoulan.

[2] David Getches, a water law professor at the University of Colorado.

[3] Filed March 26, 1896 with Secretary of the State of Minnesota; Book G, pages 111-113 (Alternate filing: Montana Territory, Book E of Incorporations, page 208.)

[4] Commissioner of Deeds, New York for Territory of Montana; filed Oct 6, 1873.

[5] Filed June 16, 1900 at the Yellowstone County Courthouse. Incorporation File #112.

[6] Articles of Incorporation, filed Jan 8, 1904. Filed with Secretary of the State of Washington.

[7]; describes in depth the railroad’s charter. (Sample attached Sec 2-3-4-5.)

[8] “The Law of the Biggest Pump.”

[9] “How the Railroad got Timber…”

[10] Book 1, page 8 (S32, T1N, R26E.)

[11] Misc Book, page 106, Document 1054.

[12] Book 80, page 363 (example)

[13] Recorded Volume H, page 16

[14] Land for the City was acquired January 1, 1881 for $40,000 and was filed with the Secretary of the Interior in Washington City. (Washington DC)

[15] NW1/4 Sec31, Tp 1N and Lots 1 & 2.

[16] Book B, page 484, Yellowstone County

[17] Book A page 319 and 599.

[18] Complaint Case 234-1, December 3, 1909.

[19] DC Order Book 2, page 534, Dec 20, 1909.

[20] Book 41, page 347. Not filed until February 28, 1912.

[21] WD Book 38, page 168

[22] Probate Book 3, Pages 186-187, August 4, 1914.

[23] Misc Book A, page 194.

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Katy Hestand
Yellowstone County Coordinator

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