edged by the local customs, laws, and the decisions of courts, the possessor and owners of such vested rights shall be maintained and protected in the same; and the right of way for the construction of ditches and canals for the purposes herein specified is acknowledged and confirmed; but whenever any person, in the construction of any ditch or canal, injures or damages the possession of any settler on the public domain, the party committing such injury or damage shall be liable to the party injured for such injury or damage. "Sec. 2340. All patents granted, or preemption or homesteads allowed, shall be subject to any vested and accrued waterrights, or rights to ditches and reservoirs used in connection with such water-rights, as may have been acquired under or recognized by the preceding section." By Sections 18 to 21, inclusive, of the Act of March 3, 1891,2 a right of way through the public lands and reservations was granted "to any canal or ditch company formed for the purpose of irrigation," to the extent of the ground occupied by the water of the reservoir and of the canal and its laterals and fifty feet on each side of the marginal limits. By the Acts of January 21, 1895, and May 14, 1896, the Secretary of the Interior was authorized and empowered to "permit" the use of the right of way. through public lands, tram-roads, canals and reservoirs to persons engaged in mining, or quarrying, or cutting timber; also for the purpose of generating, manufacturing, or distributing electric power; also "for purposes of a public nature." These two acts were amended by that of May 11, 1898, which provided in Section 2 that the right of way for ditches, canals, and reservoirs granted by the Act of 1891 "may be used for purposes of a public nature; and said rights of way may be used (2) 26 U. S. Stat., 1095. (3) 28 Stat., 635 and 29 Stat., 120, respectively. (4) 30 Stat., 404. for purposes of water transportation, for domestic purposes, or for the development of power, subsidiary to the main purpose of irrigation." On February 15, 1901, Congress passed a remarkable acts authorizing and empowering the Secretary of the Interior to "permit" the use of rights of way through the public lands, forest and other reservations. and three named national parks in Califor nia, for electrical plants, poles, for generation and distribution lines, for telephone and telegraph purposes, for canals, ditches, pipes, pine lines, flumes, tunnels, and other water conduits, and for water plants, dams, and reservoirs, but expressly provided "that any permission given by the Secretary of the Interior under the provisions of this act may be revoked by him or his successor in his discretion, and shall not be held to confer any right, or easement, or interest in, to, or over any public land, reservation or park." Several other acts have been passed on the same general subject, but some are unimportant for the purposes of this discussion. The Act of 1901, above quoted from, has been construed and administered by the various departments of the Government according to the narrow language used, namely, as not giving any right, title, or interest, and as being revocable within the discretion of the Secretary of the Interior issuing the permit or of any of his successors. For more than ten years after its passage, it was also construed as meaning that the permit ceased to exist ipso facto upon the allowance of any final homestead, or desert land, or other public land entry covering the same tract; so that designing and speculative persons could easily have frustrated large electrical development on any given portion of the public domain by locating scrip on land covered by approved permits. or by making some character of entry thereon. This was happily changed by regulations adopted in 1912, and which provided (5) 31 Stat., 790. that any entry made upon land covered by an approved permit was subject to that permit, and that upon the revocation thereof the right of way vested in the United States Government and not in the entryman. Both the Interior and the Agricultural Departments have during the past few years maintained that the Act of 1896 al than 10.000 pages of testimony was prepared, much of it given by expert witnesses brought by the company from distant points at great expense. As result the Acting Secretary of the Interior decided to revoke the permit. Had he done so the permittee would have been caused an immense financial loss, while various street railway, ir Eastern Washington and Northern Idaho would have been forced to curtail or even to cease entirely their operations. Fortunately the succeeding Acting Secretary of the Interior reversed and vacated this de cision and permitted the permit to remain intact. Here again, however, the unsatisfactory nature, and indeed the danger, of such a form of title was clearly demon lows the granting of rights of way for hy-rigation and mining companies operating in dro-electrical purposes only when those purposes are subservient to the main purpose of irrigation; and that rights of way for the main purpose of developing electric power, either for public or private uses cannot be secured, but that in place thereof a mere temporary permit, revocable within the discretion of any Secretary of the Interior, may be granted or refused by the Department at its discretion. The Agricultural Department has gone a step even further than this, requiring that for all such revocable permits across forest reservations an annual license fee termed a "conservation charge" shall be paid by the permittee. strated. In either instances suits have been brought by the United States Government against hydro-electric companies operating within forest reservations, both with and without such permits, but without agreement for payment of the conservation charge. While none of these cases have been finally de Necessarily this gives a most insecure tenure of title, if, indeed, it can be called "title" at all. The Government depart-termined, their institution has resulted in financial difficulties for the companies affected, and in at least one instance, contri ments maintain that the clause of revocability would be exercised only in extreme cases, and therefore, it need not be serious-buted materially to the throwing of the ly regarded. It has happened, however, company into a receivership. that one Secretary of the Interior less than five years ago, and within two days of the expiration of his term of office, summarily and arbitrarily revoked all the permits involving lands within national forests upon which an agreement for the conservation charge had not been executed. This action was without any previous notice whatever to the permittees, or any chance to be heard. While it was revoked or suspended by that Secretary's successor in office. it demonstrates the dangers adhering to such a form of tenure. The contention is made by the Government in the pending cases that the Act of 1866, does not grant any right of way for electric power purposes because the use of hydro-electric energy was not known at the time of the passage of that act, and consequently, that nothing can be secured except the revocable permit supplied by the Act of 1901; also that the construction placed upon the acts by the Department should be followed by the courts. This contention seems not well founded, since the Act of 1866 provides broadly for rights of way "for mining, agricultural, manufacturing, or other purposes, and this In another instance charges were preferred against a company operating under a permit in the states of Idaho and Wash-broad language evidently referred to purington, and as a result thereof, a lengthy hearing was held at which a record of more poses which might arise from the future needs and the future development of the great western country. The law was a basic statute upon which the mining and other industries of the great West were to be built up, and should, therefore, be construed as has been the Constitution of the United States, namely, according to the rule laid down by Chief Justice Marshall in the famous Dartmouth College Case," to-wit: "It is not enough to say, that this particular case was not in the mind of the convention, when the article was framed, nor of the American people, when it was adopted. It is necessary to go further, and to say that, had this particular case been suggested, the language would have been so varied, as to exclude it, or it would have been made a special exception. The case being within the words of the rule, must be within its operation likewise, unless there be something in the literal construction so obviously absurd, or mischevious, or repugnant to the general spirit of the instrument, as to justify those who expound the Constitution in making it an exception." This Act of 1866 was described by the late Justice Brewer in the following luminous language:" "Finally, it must be observed that this legislation was enacted by Congress more than thirty years ago. It has been acted upon as valid through all the mining regions of the country. Property rights have been built up on the faith of it. To now strike it down would unsettle countless titles and work manifold injury to the great mining interests of the Far West. While, of course, consequences may not determine a decision, yet in a doubtful case the court may well pause before thereby it unsettles interests so many and so vast-interests which have been built up on the faith not merely of Congressional action, but also of judicial decisions of many state courts sustaining it, and of a frequent recognition of its validity by this court. Whatever doubts might exist if this matter was wholly res integra, we have no hesitation in holding (6) 4 Wheat., 518, 644. (7) Butte City Water Company v. Baker, 196 U. S. 127. that the question must be considered as settled by prior adjudications and cannot now be reopened." This language can apply just as well to the hydro-electric uses sanctioned by the act as to those for mining purposes. Such uses have been held a beneficial use in most of the Western states. As to the construction placed upon the Act of 1901 by the Interior Department, it is to be noted that not until 1909 was there a reported decision holding that no rights could be secured for electric power purposes under the Act of 1866. During the eight years elapsing between the passage of the act and said decision the Interior Department had in numerous decisions recognized the Act of 1866 as being still in force and as a part of the general land laws of the United States.10 The last decision referred to a company incorporated both for irrigation and electric power purposes and made no distinction between these purposes in referring to the company's possible vested rights under the Act of 1866. Furthermore, in its various regulations issued under the acts of 1898 and 1901 the Departinent nowhere declared that the Act of 1866 had been repealed by said later acts. Consequently, the Department did not contemporaneously construe the law as the Government now contends. This contention of the Government has heen denied by Judge Marshall of the United States District Court for the District of Utah in his decision rendered on March 31st last in the case of the United States v. the Utah Power & Light Company, now on appeal before the United States Circuit (8) Salt Lake City v. Electrical Power Company, 25 Utah 450, 71 Pac. 1071; Washington Water Power Company v. Waters, 19 Idaho 595, 116 Pac. 682; Lambron v. Bell, 18 Colo. 346, 32 Pac. 989. (9) Kern River Power Company, 38 Land Decisions, 309. (10) John G. Brady, 26 L. D. 309; Opinion of Assistant Attorney-General Van Devanter, 28 L D. 474; Santa Fe Pacific Railway Company, 29 L. D. 213; Lincoln County Water Supply & Land Company v. Big Sandy Reservoir Company, 32 L. D. 463; Silver Lake Power & Irrigation Company v. City of Los Angeles, 37 L. D. 152. Court of Appeals for the Eighth Circuit. Therein it was held that rights for hydroelectric purposes could be, and were, secured under the Act of 1866, and that said statute was not repealed by the Act of Febuary 15, 1901. It will be noted that the electric power companies stand alone in respect to rights en the public domain. Railroad companies can secure rights of way by either filing maps in the Interior Department or by actual construction under the Act of March 3, 1875," while irrigation companies have the same rights under the Act of March 3, 1891.12 Development of electricity goes hand in hand with the construction of railroads and the building of irrigation ditches. Yet the one industry is crippled, while the others are encouraged by legislation of the kind above set forth. In a recent address by President Vanderlip of the National City Bank of New York at an electrical convention (Association Island, New York, September 5, 1913), it was stated as a conservative estimate from the facts and figures from development of the past ten years that in the development of the whole broad field of the electrical industry in the United States during the next five years there could be profitably used four hundred million dollars a year of fresh capital. That the proportion of this amount which should go to the far Western states and communities, cannot be secured under the present state of the law, or the present construction of the law, is manifest. However, it is encouraging to note that the new Administration at Washington has announced its intention of remedying this situation, and it is to be hoped that either the pernicious Act of 1901 will be wiped from the statute books or that the courts will render an authoritative ruling upon the proper construction of the previous statutes on this subject. CHAS. E. George. ACTION BY DEPOSITOR FOR WRONGFUL DISHONOR OF CHECK. I. Introductory: Relation Between Bank and Depositor.-The relation between a general depositor and a bank is usually said to be that of debtor and creditor. While, for most purposes, it is accurate enough to so designate the relation, it would seem that it is not an adequate characterization of the relation when the question arises between the depositor and the bank in conection with the wrongful dishonor of a depositor's check. The relation is peculiar in this, that when a bank receives a general deposit there is an obligation implied by law, upon the part of the bank, to pay promptly all checks of the depositor, properly indorsed and presented, so long as the drawer's funds are sufficient therefor. It has been said that this implied obligation is "different from and in addition to the relation existing between an or dinary debtor and creditor." II. Rule Where Depositor is a Merchant or Trader.-When the bank breaches this implied obligation by wrongfully refusing to pay a depositor's check the depositor has a cause of action against the bank. As the law presumes that substantial injury to a merchant or trader results from the wrongful dishonor of his check, the depositor, being a merchant or trader, may recover substantial general damages, without pleading or proving any particular actual damages.2 On this point the Supreme Court of Illinois said. "To return a check marked 'refused for want of funds' to the holder, especially through a clearing house, certain (1) Siminoff v. Goodman Co. Bank, 18 Cal. App. 5, 121 Pac. 939. (2) Svendson v. Bank, 64 Minn. 40, 65 N. W. 1086, 31 L. R. A. 552, 58 Am. St. Rep. 522; J. M. James Co. v. Bank, 105 Tenn. 1, 58 S. W. 261, 51 L. R. A. 255. 80 Am. St. Rep. 857; Schaffner v. Ehrman, 139 Ill. 109, 28 N. E. 917, 15 L. R. A. 134, 32 Am. St. Rep. 192; Mt. Sterling N. Bank v. Greene, 99 Ky. 262, 35 S. W. 911, 32 L. R. A. 568; Weller v. Bank, 18 Okla. 478. 90 Pac. 877; Wiley v. Bank, 183 Mass. 495, 67 N. E. 655; Reeves v. Bank (Cal.), 129 Pac. 800; Patterson v. Marine N. Bank, 130 Pa. 419, 18 Atl. 632, 17 Am. St. Rep. 778. ly tends to bring the drawer of that check into disrepute as a person engaged in mercantile business; and it needs no argument to show that a single refusal of that kind might often, and frequently does, bring ruin upon a business man, and yet it is no more possible . to prove special or actual damages than it is for one charged with the commission of a crime to show specially in what manner he has been injured." A. the proper limitation of the action, the California court held that it was governed by the section of the statute pertaining to actions "upon contract obligation or liability not founded upon a written instrument"; but it has been subsequently held, in the same jurisdiction, that the measure of damages is not governed by a statute providing that, "The detriment caused by the breach of an obligation to pay money only is deemed to be the amount due by the terms of the obligation, with interst thereon." inal nor to what are called actual or special Nature of the Cause of Action.— Though the cause of action arises out of contract in the sense that it could never have arisen but for the original implied conB. Measure of Damages. It is well settled that the plaintiff is not limited to nomtract between the depositor and the bank that the latter should promptly honor the damages; but there is apparently some confusion among the cases as to what is the depositor's checks, so long as it had sufficient available funds of his, the action is proper measure of damages, or, rather, as to what the damages should be termednevertheless considered and treated as a for the confusion is of terminology rather tort action in so far as the measure of damthan of substance. It has been said that ages is concerned. It is analogous to an the plaintiff is entitled to "general compenaction for slander of one in the way of his business. It has also been suggested, to satory" damages;10 and, again, that he is keep more in view the breach of implied entitled to "general" damages." In the leadcontract theory, that the action is analogous ing case the jury were told that they should give the plaintiff such "temperate” to "the cases, so common, arising in breaches of contract for the transportation of pas-sonable compensation for the dishonor of the damages as in their mind would be a reasengers by railroad, where the damages are recoverable for the wrongful acts of the defendant committed in violation of its contract." Again, the bank's liability has been placed upon the basis that a bank is of a quasi-public character, and that public policy demands that a bank should not be allowed to wrongfully dishonor checks with impunity." In a case in which the question was as to (3) Schaffner v. Ehrman, 139 Ill. 109, 28 N. E. 917, 15 L. R. A. 134, 32 Am. St. Rep. 192. (4) American N. Bank v. Morey, 113 Ky. 857, 69 S. W. 759, 58 L. R. A. 956, 101 Am. St. Rep. 379; J. M. James Co. v. Bank, 105 Tenn. 1, 58 S. W. 261, 51 L. R. A. 255, 80 Am. St. Rep. 857; Svendsen v. Bank, 64 Minn. 40, 65 N. W. 1086, 31 L. R. A. 552, 58 Am. St. Rep. 522. (5) Schaffner v. Eheman, 139 Ill. 109, 28 N. E. 917, 15 L. R. A. 134, 32 Am. St. Rep. 192; Third N. Bank v. Ober, 102 C. C. A. 178, 178 Fed. 678; Svendsen v. Bank, 64 Minn. 40, 65 N. W. 1086. 31 L. R. A. 552, 58 Am. St. Rep. 522. (6) Siminoff v. Bank, 18 Cal. App. 5, 121 Pac. 939. (7) Patterson v. Bank, 130 Pa. 419, 18 Atl. 632, 17 Am. St. Rep. 778. check; and the word "temperate" has been (8) Smith's Cash Store v. Bank, 149 Cal. 32. 84 Pac. 663, 5 L. R. A. (N. S.) 870. (9) Siminoff v. Bank, 18 Cal. App. 5, 121 Pac. 939. (10) O'Grady v. Bank (Mo.), 80 S. W. 696; Svendsen v. Bank, 64 Minn. 40, 65 N. W. 1086, 31 L. R. A. 552, 58 Am. St. Rep. 522. (11) First N. Bank v. Railsback (Neb.), 78 N. W. 512. (12) Rolin v. Steward (Eng.), 14 C. B. 595. (13) Hilton v. Jessup, 128 Ga. 30, 57 S. E. 78, 11 L. R. A. (N. S.) 224, 10 Ann. Cas. 987. (14) J. M. James Co. v. Bank, 105 Tenn. 1, 58 S. W. 261, 51 L. R. A. 255, 80 Am. St. Rep. 857. |