that the river bed be also exempted, for | L. ed. 1116, 41 Sup. Ct. Rep. 540),-auas to it the United States prevailed. The thorizing the receiver, where any riverusual rule in such receiverships is to bed well was drilled and brought into charge the general expenses ratably production prior to the receivership, to against all the impounded funds, unless reimburse the operator for the actual there be special circumstances making it cost of that work out of the proceeds inequitable to do so. Here there are no from such well,-shall be enlarged so as circumstances calling for an exemption to permit the receiver, where the same of the flood-plain funds; but there are operator had drilled another river-bed circumstances making it equitable to well which proved unremunerative, to recharge against them a smaller proportion imburse him for the cost of the latter out of the general expenses than is charged of the proceeds of the remunerative well. against the river-bed funds. Taking the The United States objects to the change full period of the receivership, the work suggested, and we think it should not be and responsibility of the receiver's force made. All drilling for oil in the riverhave been perceptibly less in respect of bed area was without right and without the flood-plain wells than in respect of encouragement from the United States, those in the river bed. Fairly estimated, the owner of the soil. Apart from the we think the difference has been about trespass involved, the operator assumed one to two on each dollar impounded. the risk of the venture; and if the well But this difference in favor of the flood- proved unremunerative, it was his loss. plain wells applies only to such as have On no equitable principle can he ask to been operated by private claimants. The be reimbursed. The order referred to is exceptional ones operated by the receiver confined to wells which were utilized by are, in this particular, on substantially the receiver and enriched the estate in the same footing as the river-bed wells. his custody. Even in that form the We conclude that the general expenses order is one of marked liberality, conshould be spread over all the funds in sidering the entire absence of any right such way that the charge against each to drill in the river-bed area. The sitdollar impounded from river-bed wells, uation requires, we think, that each well or from flood-plain wells operated by the be regarded in this matter as a distinct receiver, in all of which the impound-venture. ing has covered the full proceeds, less [512] The fourth question is, Should special expenses, shall be double what is charged against each dollar impounded from flood-plain wells operated by private claimants,-where the impounding has covered only three sixteenths of the proceeds. As to the Texas owners and lessees, we perceive no ground for making one rather than the other bear the [511] charge for general expenses. The interests of both have been conserved, and the charge to be made against the total moneys going to both in any instance should be deducted ratably from what goes to each separately. The second question is, How shall the expense or loss incident to work done by the receiver on river-bed wells which proved unremunerative be distributed or cared for? The river-bed area is a single tract belonging to the United States. Others have no present interest in it. The United States concedes that the expense or loss indicated may be charged against funds derived from remunerative wells in that area. We think the concession is right and that effect should be given to it. The third question is whether the order of June 1, 1921 (256 U. S. 607, 65 the order just mentioned be changed so as to cover river-bed well No. 139, known as the Burk-Senator well? This well was expressly excepted from the order because there was a bitter controversy as to who drilled it and brought it into production. The well had been drilled and was producing oil when the receiver took possession. It is the only one of that class where the operator has not been reimbursed. We think the excepting clause should be eliminated from the order to the end that the receiver may effect an equitable adjustment of. the matter, if the contesting operators are so disposed. Two phases of another matter connected with that well should be disposed of at this time. Under a contract with one of the contesting operators Tom Testerman participated in drilling the well. Some equipment belonging to him and used in that work came into the possession of the receiver, and afterwards was sold by the receiver. Testerman asks that the receiver be authorized to pay over to him the money received for the property. That authority should be given. Testerman also asserts that the Bass Petroleum Company, another of the contesting operators, forcibly took pos June 9, 1924. wells south of the interstate boundary the production tax prescribed by the laws of that state, it is ordered that [515] the receiver be authorized, out of the impounded proceeds from every such well, to pay such tax in respect of such impounded proceeds, and to charge the same against such well as an expense specially pertaining to it. But before making any such payment, the receiver shall request the attorney general of the state of Texas, and the parties interested in the fund from which the payment is to be made, to submit to him definite statements showing the amount of the tax and whether it has been otherwise paid. If, in any instance, the receiver is in doubt respecting the propriety of the payment, he shall withhold it, and report the matter to this court for further instructions. 5. The receiver is instructed to distribute pro rata over the impounded funds 1. The motion of the defendant, the in his custody all interest received on state of Texas, for leave to file an receivership moneys, all discounts colamended counterclaim relating to the in- lected, and all other similar items of terstate boundary along the one hun-profit arising from the general operations dredth meridian, is granted; and the com- or business of the receivership, and not plainant, the state of Oklahoma, and the from particular wells. intervener, the United States of Amer- 6. The receiver is authorized to take ica, are severally given until and includ- all proper steps to obtain payment of ing the first Monday of October next all accounts and claims that may be due within which to answer such amended or owing to him as such receiver, and counterclaim. 2. On consideration of the response made by J. H. Duhon and H. J. Kebideaux to the order to show cause issued against them on May 5, 1924, such response is found insufficient, and it is ordered that an injunction be issued, directing that they dismiss the action brought by them against the receiver in this cause in the district court of Wichita county, Texas, and that they refrain from taking any other proceeding or step in that action. 3. The report of the boundary commissioners of the survey and platting of the medial line of Red river, in the vicinity of the river-bed wells, pursuant to the order of June 4, 1923 (262 U. S. 505, 67 L. ed. 1094, 43 Sup. Ct. Rep. 701), is approved and adopted. The report of such commissioners of the time employed and expense incurred in that work is also approved, and the receiver is directed to pay the sums specified in such report, and to charge the same against the impounded funds derived from the riverbed wells. 4. On consideration of the motion of the state of Texas that the receiver pay out of the proceeds of the receivership to report to the court at its next term all of such accounts and claims as then may remain unpaid, with his recommendations respecting the measures to be taken to enforce payment. 7. The receiver is directed to publish a final notice to all persons asserting or holding claims against him or the receivership arising out of matters accruing since the claims notice of June 1, 1921, to present such claims within forty days after the first publication of such notice; in default of which the claims will be barred. 8. The receiver is instructed to make no reimbursement, under the order of June 1, 1921 (256 U. S. 607, 65 L. ed. 1116, 41 Sup. Ct. Rep. 540), on otherwise, to any operator or driller, for work done on any river-bed well prior to the receivership, where the well has proved to be a dry hole or unproductive; and all [516] applications and suggestions that reimbursement be made for such work are overruled. 9. The receiver is instructed to spread the general expense of the receivership over all the impounded funds in his custody in such a way that each dollar in the funds derived from river-bed wells, and in those derived from flood-plain as the representative of the United wells which have remained in the opera- States, at the time of the surrender tion of the receiver, will bear twice as named in the last paragraph, the office much of such expense as each dollar in buildings, equipment, and supplies bethe funds derived from flood-plain wells longing to the receivership, and intended which have been operated by private for use in its oil and gas operations,claimants will bear. The spreading shall the delivery to be at a valuation agreed be made evenly over all moneys in the upon between the Secretary of the Infunds bearing the lesser share of the ex- terior and the receiver. The agreed penses, and evenly over all moneys in price chall be charged to the United the funds bearing the larger share. No States, and credited to the receiver as a distinction shall be made between moneys partial payment to the former of the going to owners of flood-plain wells and money inuring to it as proceeds of rivermoneys going to lessees of such wells. bed wells. Neither shall be exempted, and the spreading over the two shall be on a pro rata basis. 10. All expense and losses incident to work done by the receiver on river-bed wells which proved unremunerative shall be charged against the funds derived from remunerative wells in the river bed. 16. The receiver is authorized to pay over to the Secretary of the Interior, as the representative of the United States, at the time of the surrender and delivery named in the last two paragraphs, approximately two thirds of the net impounded funds derived from the riverbed wells. 17. The receiver is authorized to sur11. The receiver is authorized to pay render to the several owners or lessees Tom Testermann the sum received by the entitled thereto, as soon as arrangements receiver on the sale by him of equipment therefor satisfactorily can be made, the belonging to Mr. Testermann, which had possession of the flood-plain wells which come into the possession of the receiver. he is now operating, together with the 12. The petition of Tom Testermann, pipe lines and fixtures pertaining to them. asking that he be reimbursed out of If there be controversy or doubt as to funds inuring to the Bass Petroleum who is entitled to any particular well, Company, its successor or assign, for the conversion by such company, prior to the receivership, of property claimed by Mr. Testermann, is denied. 13. Notwithstanding the exception of well No. 139, known as the Burk-Senator well, from the order of June 1, 1921 (256 U. S. 607, 65 L. ed. 1116, 41 Sup. Ct. Rep. 540), the receiver is authorized, in his discretion, to reimburse the operators who drilled that well prior to the receivership for the cost of that work, [517] if the operators who participated therein are disposed to adjust the differences between them, and to accept a reimbursement which is satisfactory to the receiver. 14. The receiver is authorized to surrender to the Secretary of the Interior, as the representative of the United States, the possession of all of the south half of the river bed, now in the receivership, with all oil wells, pipe lines, and other property pertaining to such river bed, the surrender to be made at the close of business on the 30th of June, 1924, or as soon thereafter as the Secretary of the Interior is prepared to take over the property. 15. The receiver is authorized to deliver to the Secretary of the Interior, the receiver shall withhold its surrender [518] for the time being, and pur sue the course indicated in the next paragraph of this order. 18. The receiver is instructed to publish notice to all claimants to funds in his custody derived from flood-plain wells (meaning wells south of the interstate boundary as now established) to present their claims to such funds within forty days after the first publication of such notice,-the presentation to be in the form of a definite statement of what is claimed and of the claimant's title. After the expiration of twenty days more, the receiver shall be authorized, where there are no conflicting claims, to pay the proceeds from any well or wells, less expense and charges, to the proper claimant or claimants. If there be controversy or doubt as to who is entitled to the proceeds from any well, the receiver shall withhold action as to such proceeds and report the matter to this court at its next term for further instructions. 19. The receiver is directed to have all of his accounts audited as of the close of business on June 30, 1924, by an expert public accountant, designated by the Chief Justice. prohibiting sale of forfeited 3. An irrigation company operating under the Carey Act may be enjoined from reselling water rights which have been purchased by it upon foreclosure of the rights of original purchasers where the available water supply has been exhausted. Waters effect of acquisition before lis pendens filed. 4. That an irrigation company has acquired water rights which have become appurtenant to lands in its improvement under the Carey Act by foreclosure of the rights of purchasers before the filing of lis pendens in a proceeding to enjoin further sales because the water supply has been exhausted does not prevent the injunction from attaching to such rights. [Nos. 324 and 336.] Argued April 11 and 14, 1924. June 9, 1924. an irrigation project under the Carey See same case below, 285 Fed, 453. Mr. Gordon M. Buck argued the cause, and, with Mr. Reymond J. Scully, filed a brief for the Idaho Irrigation Company: The water rights issued by the company should be construed so as to make them accord with the Carey Act; and if construed as entitling holders thereof to more than a pro rata amount of the entire water supply, they conflict with the act and are void as to the excess. Hobbs v. McLean, 117 U. S. 567, 576, 29 L. ed. 940, 943, 6 Sup. Ct. Rep. 870; Delaware, L. & W. R. Co. v. Kutter, 77 C. C. A. 315, 147 Fed. 62, certiorari denied in 203 Ú. S. 588, 51 L. ed. 330, 27 Sup. Ct. Rep. 776; Cooper v. Northern P. R. Co. 212 Fed. 536; Re John B. Rose Co. 275 Fed. 415; Border Nat. Bank v. American Nat. Bank, 282 Fed. 78; American Sugar Ref. Co. v. Newman Grocery Co. 284 Fed. 836; Lorillard v. Clyde, 86 N. Y. 387; People ex rel. New York C. & H. R. R. Co. v. Walsh, 211 N. Y. 100, 105 N. E. 136; McKinney v. Big Horn Basin Development Co. 93 C. C. A. 258, 167 Fed. 777; Adams v. Twin Falls-Oakley Land & Water Co. 29 Idaho, 357, 161 Pac. 327; State v. Twin Falls Canal Co. 21 Idaho, 410, L.R.A. 1916F, 236, 121 Pac. 1050; Twin Falls Salmon River Land & Water Co. v. Caldwell, 155 C. C. A. 17, 242 Fed. 190; Idaho Irrig. Co. v. Lincoln County, 28 Idaho, 98, 152 Pac. 1061; Gibson v. Chouteau, 13 Wall. 92, 99, 20 L. ed. 534, 536. Neither the state nor its commissioner of reclamation can reapportion the water supply to a smaller acreage than the Secretary of the Interior has determined that it was ample to irrigate. Evans v. Swendsen, 34 Idaho, 290, 200 Pac. 137; Furbee v. Alexander, 31 Idaho, 738, 176 Pac. 98. table relief, because they neither have The plaintiffs are not entitled to equiclean hands nor offer to do equity. Twin Falls Salmon River Land & Water Co. v. Alexander, 260 Fed. 274; Decided Brown, B. & Co. v. Lake Superior Iron Co. 134 U. S. 530, 33 L. ed. 1021, 10 Sup. Ct. Rep. 604; Manhattan Medicine CROSS APPEALS from a decree of Co. V. Wood, 108 U. S. 218, 27 L. ed. the United States Circuit Court of 706, 2 Sup. Ct. Rep. 436; United States Appeals for the Ninth Circuit, revers- v. Osage County, 166 C. C. A. 128, 254 ing in part a decree of the District Court Fed. 570; United States v. Debell, 142 for the District of Idaho in proceeding C. C. A. 295, 227 Fed. 771; Iowa v. Carr, to enjoin the sale of further rights in 112 C. C. A. 477, 191 Fed. 257; United States v. Detroit Timber & Lumber Co. 67 C. C. A. 1, 131 Fed. 668; United States v. Stimson, 60 C. C. A. 615, 125 Fed. 907; Michigan v. Jackson, L. & S. R. Co. 16 C. C. A. 345, 37 U. S. App. 220. 69 Fed. 116; 39 Cyc. 773, 774; T. B. Harms & Francis, Day & Hunter v. Stern, 145 C. C. A. 531, 231 Fed. 645; Ridge v. Healy, 164 C. C. A. 32, 251 Fed. 798; Hodge v. Sloan, 107 N. Y. 244, 1 Am. St. Rep. 816, 17 N. E. 335; Smith v. Emery, 106 Me. 258, 76 Atl. 686; Stowell v. Tucker, 7 Idaho, 312, 62 Pac. 1034; Lewis v. Holdrege, 56 Neb. 379, 76 N. W. 891; Wilson v. Pannell, 149 Ark. 81, 232 S. W. 32; Chapman v. Hicks, 41 Cal. App. 158, 182 Pac. 339; Burns v. Hiatt, 149 Cal. 617, 117 Am. St. Rep. 157, 87 Pac. 196; Tracy v. Wheeler, 15 N. D. 248, 6 L.R,A. (N.S.) 516, 107 N. W. 68; Keller v. Souther, 26 N. D. 358, L.R.A.1916B, 1218, 144 N. W. 671; Aveline v. Ridenbaugh, 2 Idaho, 168, 9 Pac. 601; Harton v. Lyons, 97 Tenn. 180, 36 S. W. 851; Whitney v. Union R. Co. 11 Gray, 364, 71 Am. Dec. 715; 2 Pom. Eq. Jur. 4th ed. §§ 688, 689; Jones v. Pettingill, 157 C. C. A. 461, 245 Fed. 269, certiorari denied in 245 U. S. 663, 62 L. ed. 536, 38 Sup. Ct. Rep. 61; Primeau v. Granfield, 114 C. C. A. 549, 193 Fed. 911, certiorari denied in 225 U. S. 708, 56 L. ed. 1267, 32 Sup. Ct. Rep. 839; Ellis v. Frawley, 165 Wis. 381, 161 N. W. 364; Massachusetts Nat. Bank v. Shinn, 163 N. Y. 360, 57 N. E. 611; Doucet v. Massachusetts Bonding & Ins. Co. 180 App. Div. 599, 167 N. Y. Supp. 892; Crichfield v. Bermudez Asphalt Paving Co. 174 Ill. 466, 42 L.R.A. 347, 51 N. E. 552; Lewy v. Standard Plunger Elevator Co. 218 Ill. App. 306; Kreamer v. Earl, 91 Cal. 112, 27 Pac. 735; Cullison v. Downing, 42 Or. 377, 71 Pac. 70; Heaton v. Dennis, 103 Tenn. 155, 52 S. W. 175; Camp v. Bruce, 96 Va. 521, 43 L.R.A. 146, 70 Am. St. Rep. 873, 31 S. E. 901. Mr. W. G. Bissell argued the cause, and, with Messrs. Branch Bird and Karl Paine, filed a brief for Fred W. Gooding et al.: Where a Carey Act construction company, organized under the provisions of the Carey Acts, contracts to sell more water than is available under its appropriations, and in a proper action the trial court enjoins such company from selling or disposing of any further water contracts, this injunction operates against all such water contracts which the company contemplated issuing, but which have not in faet been issued, and it also operates against such contracts as it or its trustees may have sold and reacquired prior to such action, where the net contracts remaining in the hands of bona fide settlers, exclusive of said reacquired contracts, require more than the total available appropriated water. State V. Twin Falls-Salmon River Land & Water Co. 30 Idaho, 41 166 Pac. 228; State v. Twin Falls Land & Water Co. 37 Idaho, 73, 217 Pac. 252; Boley v. Twin Falls Canal Co. 37 Idaho, 318, 217 Pac. 258; Gerber v. Nampa & M. Irrig. Dist. 16 Idaho, 1, 100 Pac. 86. Although, in reacquiring the water rights, defendants may have also acquired the land in some of the cases, and although the statute provides that such wa ter rights attach to and become appurtenant to the land as soon as title passes from the United States to the state, and although defendants may have the right to sell and dispose of the bare lands so reacquired, nevertheless it was and is proper to enjoin them from disposing of said reacquired water rights. Bennett v. Twin Falls North Side Land & Water Co. 27 Idaho, 643, 150 Pac. 340; Sanderson v. Salmon River Canal Co. 34 Idaho, 145, 199 Pac. 1003; Childs v. Neitzel, 26 Idaho, 116, 141 Pac. 83; Commonwealth Trust Co. v. Smith, 273 Fed. 10; Twin Falls Salmon River Land & Water Co. v. Davis, 267 Fed. 382. When a Carey Act construction company has sold all of its appropriated available water supply, the purchasers then own the entire system as tenants in common, bound, of course, by the terms of their agreement, to have the system administered through the agency of the operating company. Boley v. Twin Falls Canal Co. 37 Idaho, 318, 217 Pac. 262; Adams v. Twin Falls Oakley Land & Water Co. 29 Idaho, 357, 161 Pac. 324; State v. Twin FallsSalmon River Land & Water Co. 30 Idaho, 41, 166 Pac. 225; Sanderson v. Salmon River Canal Co. 34 Idaho, 145, 199 Pac. 1002; 26 R. C. L. p. 1214; 39 Cyc. p. 1616. Mr. Harrison Tweed argued the cause and filed a brief for the Equitable Trust Company et al.: The mortgage trustees should not be restrained from selling the water rights held by them throughout, from the commencement of the suit to the time of the trial. as Twin Falls Salmon River Land & Water Co. v. Caldwell, 155 C. C. A. 17, 242 Fed. 194; Furbee v. Alexander, 31 Idaho, 738, 176 Pac. 97; Evans v. Swendsen, 34 Idaho, 290, 200 Pac. 136; San |