Full opinion text
JAMES M. CARTER, District Judge. Prior to the beginning of the trial in this action, now set for October 1, 1958, extensive pretrial has been conducted, various legal propositions and motions have been briefed and argued. The court now proposes to rule on the motions, to determine certain of the legal principles to be applied during the trial and set forth its reasons and the applicable authorities. A pretrial stipulation as to the facts not in controversy was executed by the major parties and approved by the court. It does not bind non-signatories, but a procedure has been devised so that in hearings before the court and the Master, the facts contained in the stipulation and pretrial order will be presented in summary form as evidence. Any party may offer evidence to controvert them. Unless controverted and disapproved, the court and the Master propose to find in accord with such facts in the pretrial order. I History of the Litigation The history of the litigation, commenced in 1951, appears in the following reported cases. United States v. Fallbrook Public Utility District, D.C.1951, 101 F.Supp. 298 (Complaint states a cause of action; State of California permitted to intervene) ; United States v. Fallbrook Public Utility District, D.C.1952, 108 F.Supp. 72 (Pretrial order and Rulings on legal proposition); United States v. Fallbrook Public Utility District, D.C.1952, 109 F.Supp. 28 (Decision after trial is to defendants, Santa Margarita Mutual Water Co. & State of California); United States v. Fallbrook Public Utility District, D.C.1953, 110 F.Supp. 767 (Findings, conclusions and judgment pursuant to decision in 109 F.Supp. 28); Fallbrook Public Utility District v. United States District Court, 9 Cir., 1953, 202 F.2d 942 (Mandamus proceeding in Circuit) ; People of State of California v. United States, 9 Cir., 1956, 235 F.2d 647. (Reversal of partial judgment shown in 110 F.Supp. 767). II The Stipulation of November 29, 1951 The following stipulation was entered into between the United States and the State of California on November 29, 1951. Note that it is “for the benefit of all the parties to this cause.” In the United States District Court In and for the Southern District of California Southern Division United States of America, Plaintiff, v. Fallbrook Public Utility District, a public service corporation of the State of California, et al., Defendants, People of the State of California, Defendants in Intervention. Civil No. 1247 Stipulation On the 15th day of August, 1951, the People of the State of California, in accordance with invitation of the United States of America, petitioned this Court to intervene in this litigation. On that date an Order was allowed and entered by this Court granting the Petition. For the clarification of the issues in this litigation, and for the benefit of all of the parties to this cause, it is hereby stipulated: I That in Paragraphs VIII and IX of plaintiff’s Complaint herein, and in Paragraphs 2 and 3 of the Prayer of said Complaint, the word “paramount” is used in the same sense in which that word is used in the second paragraph, on page 374 of the opinion of the Supreme Court of California in the case of Peabody v. City of Vallejo, 2 Cal.2d 351 (fourth paragraph on page 494, 40 P.2d 486). II That in this cause, the United States of America claims only such rights to the use of water as it acquired when it purchased the Rancho Santa Margarita, together with any rights to the use of water which it may have gained by prescription or use, or both, since its acquisition of the Rancho Santa Margarita. III That the United States of America claims by reason of its sovereign status no right to the use of a greater quantity of water than is stated in Paragraph II, hereof. IV That the rights of the United States of America to the use of water herein are to be measured in accordance with the laws of the State of California. V That the parties to this Stipulation will request the entry of a Pretrial Order by this Court defining the issues in this cause, in conformity with the statements contained in this Stipulation. VI That there will be a full, complete and mutual exchange of data and information as to the subject matter of this cause collected by the respective parties to this Stipulation, including data respecting the issuance of any permits or licenses issued by the State of California in connection with the rights to the use of water of the Santa Margarita River. Such exchange of information by the United States, will be subject to clearance by the Commanding Officer, Camp Joseph H. Pendleton, in respect to military security, as determined by said officer. Dated: November 29, 1951. Ernest A. Tolin, United States Attorney Betty Marshall Graydon Assistant United States Attorney Edmund G. Brown Edmund G. Brown, Attorney General of the State of California William H. Veeder, Special Assistant to the Attorney General of the United States Arvin B. Shaw, Jr. Arvin B. Shaw, Jr. Assistant Attorney General By B. Abbott Goldberg B. Abbott Goldberg, Deputy Attorney General William H. Veeder William H. Veeder Attorneys for the People of the State of California III The Court’s Interpretation of the Stipulation of 11/29/51 On January 6, 1958, during pretrial, the United States brought on for hearing a motion for an order declaring the stipulation binding as to the signatories, the United States and State of California, and that the court declare the “stipulation have ascribed to it the usual meaning of the terms set forth in it.” Prior to decision of the motion, the Fallbrook P. U. D. and the Santa Margarita Mutual Water Company, with the consent of the United States and the State of California, joined into the stipulation. The court granted the motion of the United States, declared the stipulation binding and set forth the meaning of the stipulation by written order dated February 11, 1958, which follows: In the United States District Court Southern District of California Southern Division United States of America, Plaintiff, v. Fallbrook Public Utility District, a public service corporation of the State of California; et al., Defendants, People of the State of California, Defendants in Intervention No. 1247-SD-C Order Respecting Binding Effect and Meaning of Stipulation Dated November 29, 1951, Originally Entered Between the United States and the State of California The United States having made a motion on January 6, 1958, for an order of this Court declaring (1) that the stipulation dated November 29, 1951, originally entered between the United States and the State of California, a copy of which is attached and by reference made a part of this order, is binding upon the parties thereto, and (2) that the stipulation should have ascribed to it the usual meaning of the terms set forth in it; and The Fallbrook Public Utility District and the Santa Margarita Mutual Water Company having on January 6, 1958, declared in open court their desire to be parties to the stipulation, and the United States and the State of California having on January 6, 1958, declared in open court their agreement to the Fallbrook Public Utility District and the Santa Margarita Mutual Water Company becoming parties thereto; and The State of California, the Fallbrook Public Utility District and the Santa Margarita Mutual Water Company having on January 6, 1958, expressed in open court their support of the motion of the United States, but having disagreed with the United States as to what meaning should be ascribed to the stipulation; and This Court (1) having considered written points and authorities and oral argument by the parties to the stipulation regarding the meaning thereof; (2) having taken judicial notice of the furor concerning the nature of the claims of the United States in this action which existed when this action was originally filed; and (3) having considered testimony by the Attorney General of the United States to Congressional committees after the stipulation was entered into, stating his interpretation thereof; Now, Therefore, It Is Ruled and Ordered as Follows: I The stipulation dated November 29, 1951, is binding upon the parties thereto, which are the United States, the State of California, the Fallbrook Public Utility District and the Santa Margarita Mutual Water Company. II The stipulation is unambiguous. III Paragraph I of the stipulation, the meaning of which is not in dispute among the parties, defines the word “paramount”, as used in the complaint in this action, as being used in the same sense as in the opinion in the case of Peabody v. City of Vallejo, 2 Cal.2d 351, 40 P.2d 486, and therefore as having no reference to the sovereign character of the United States. IV Paragraphs II, III and IV of the stipulation must be read together and when so read have the following meaning: A. Paragraph II of the stipulation lists and restricts the rights claimed in this action by the United States to be as follows: 1. The rights to the use of water which the United States acquired when it purchased the Rancho Santa Margarita. Such rights are the same rights, no more and no less, than the Rancho had, and hence the United States acquired the same rights as any private party who might have purchased the Rancho. 2. Any rights which the United States may have gained since its acquisition of the Rancho Santa Margarita by prescription or use or both. a. This excludes any claims to rights which the United States may believe it already owned prior to its acquisition of the Rancho, such as rights which the United States has asserted arise from its ownership of the public domain. Paragraphs III and IV of the stipulation reinforce the conclusion that claims of rights asserted to arise from the ownership of the public domain are excluded, since such claims would be based on the sovereign character of the United States and the laws of the United States rather than the laws of the State of California. b. The rights gained by “prescription” which the United States may claim under this Paragraph II, are only such rights as might have been acquired by acts adverse to rights belonging to others. c. Because the word “use” is a very broad term, the rights gained by “use”, which the United States may claim under this Paragraph II, include rights by “appropriation” as well as other kinds of rights that may arise by use, limited, however, because of Paragraph IV of the stipulation, to such rights by use as may be acquired under the laws of the State of California. Excluded, therefore, are claims by the United States of rights acquired by inverse condemnation, since the law by which such rights would be measured is federal law as set forth in decisions of federal courts involving inverse condemnation by the United States and not California law. B. Paragraph III of the stipulation is a disclaimer by the’ United States that by reason of its sovereign status it has rights to a greater quantity of water than a person not a sovereign would have, standing in the position of the United States. C. Paragraph IV of the stipulation means that the measure of the rights claimed by the United States in this action is all the laws of the State of California pertaining to water rights. Among them are the laws relating to riparian rights, to prescriptive rights, and to appropriative rights, including the method and procedure established by California law for the acquisition of appropriatiye rights. Dated: Feb. 11,1958 James M. Carter James M. Carter United States District Judge At the hearing, William H. Veeder, attorney in the Department of Justice, asserted the stipulation was not ambiguous, and offered no evidence to explain it. Nor did any other party contend it was ambiguous. The court therefore did not consider statements of officials of the United States to the Congress, made prior to the date of the stipulation — but did consider similar statements made after its execution. Such statements demonstrated that the Attorney General of the United States gave the same meaning to the stipulation, as ascribed to it by this court. Former Attorney General Brown-ell testifying before Congress in 1953 declared: “ * * * This is the stipulation [November 29, 1951] into which all the parties have entered, including the Attorney General and the State of California: “ ‘That in this cause the United States, of America claims only such rights to the use of water as it acquired when it purchased the ranch, together with any rights to the use of water which it may have gained by prescription or use by (sic) both since its acquisition. “ ‘(3) That the United States of America claims, by reason of its sovereign status, no rights to the use of a greater quantity of water than is stated in paragraph 2.’ “That is binding on the United States and we claim no other or further rights. The stipulation goes on to say: “ ‘That the rights of the United States to the use of water herein are to be measured in accordance with the laws of the State of California.’ ” (Supplemental Hearing on Staté, Justice, and Commerce Appropriations for 1954, Friday, May 15, 1953, page 20.) The foregoing quotation was set forth in the memorandum of the United States in support of its motion. David W. Agnew, Attorney for Bureau of Yards and Docks, U. S. Navy and one of the attorneys who signed the original complaint in this action, at a hearing before the Senate Committee on Interior and Insular Affairs in HR 5368 and S 2809 — on July 1 and 2, 1952, stated: “Mr. Agnew: My name is David W. Agnew. I am an attorney in the Bureau of Yards and Docks, the Department of the Navy. (p. 92) “The suit was instituted to quiet the Government’s title to such right as it acquired at the time it acquired the Rancho Santa Margarita. “We do not assert and never have that because those rights are owned by the United States that we are entitled to any greater rights in the use of water from that stream than our predecessor in title. (pp. 93-94) (Emphasis added.) * * “I am not contending, Mr. Engle, that we own a bit more water than we acquired when we purchased the Rancho Santa Margarita (p. 97)” * * * “Representative Poulson: Will the gentlemen yield? If you claim waters, on what basis are you going to claim your rights if you do not rely upon the State— “Mr. Agnew: We rely on the State law in this cáse, Mr. Poulson, entirely. I think the record in the suit is clear (p. 98). (Emphasis added.) “Mr. Agnew: Mr. Engle, we have said that as to the quantity of water to which the Government may be entitled, we come in strictly under the California law (p. gg) * * # > » In the memorandum filed 12/30/57 (supra) Mr. Veeder stated, concerning the stipulation: “Congress has been fully apprised of it; has made numerous references to it; at no time acted to refute it or deny the binding effect of it.” * * * When the parties, after the execution of an agreement, by their statements and conduct place a definite interpretation upon it, such interpretation binds them. “A construction given the contract by the acts and conduct of the parties with knowledge of its terms, before any controversy has arisen as to its meaning, is entitled to great weight and will, when reasonable, be adopted and enforced by the court,” Woodbine v. Van Horn, 29 Cal.2d 95, 104, 173 P.2d 17, 22; Barham v. Barham, 1949, 33 Cal.2d 416, 423, 202 P.2d 289; Gillespie v. City of Los Angeles, 1950, 36 Cal.2d 553, 561, 225 P.2d 522. IV The Supplemental Order of April 8, 1958 Thereafter, the question was raised as to the scope of the stipulation and particularly whether it applied to the lands included for the first time, in the government’s amended complaint, — (1) the Indian reservations, (2) the National forests, and (3) the public domain. The following supplemental order was made on April 8, 1958. In the United States District Court Southern District of California Southern Division United States of America, Plaintiff, v. Fallbrook Public Utility District, et al., Defendants, People of the State of California, Defendants in Intervention. No. 1247-SD-C Supplemental Order Respect-ting Binding Effect and Meaning of Stipulation Dated November 29, 1951, Entered into between the United States of America and the State of California There was entered by this Court on the 11th day of February, 1958, an order respecting the effect and meaning of the stipulation of November 29, 1951, between the United States of America and the State of California. Objections to that order and the interpretation of the stipulation contained in it were made and reserved by the United States of America. Moreover, a question having been raised as to the scope of the order referred to above, it is desirable to limit and define its application. Now, Therefore, It Is Hereby Ordered That: (a) The stipulation of November 29, 1951, referred to in this order and the order of February 11, 1958, is strictly limited to the approximately 133,000 acres of land in San Diego County, California, acquired by the United States of America from the Rancho Santa Margarita and which now constitute the sites for Camp Pendelton, the United States Naval Ammunition Depot and the United States Naval Hospital, and to the rights to the use of water acquired by the United States of America from the Rancho Santa Margarita, together with any rights to the use of water it may have gained by prescription or use or both since its acquisition of the Rancho Santa Margarita. (b) No other lands or rights to the use of water claimed by the United States of America in this litigation will be subject to or bound by the stipulation of November 29, 1951, and insofar as lands other than those referred to in paragraph (a) above are concerned, this cause will be tried as though neither the stipulation of November 29, 1951, had been entered into nor the order of February 11, 1958, entered by this Court. (c) The United States of America disclaims any right to augment its rights to the use of water claimed by it in connection with Camp Pendleton, the United States Naval Ammunition Depot and the United States Naval Hospital by reason of its rights to the use of water, claimed in connection with its other land in the watershed of the Santa Margarita River. (d) Prescriptive rights to the use of water claimed by the United States of America will be based upon and be determined pursuant to the laws of the State of California. The term “prescriptive rights” as used in this paragraph relates to the acquisition of rights by adverse possession as distinguished from any other means of acquiring rights such as by inverse condemnation. Dated. April 8, 1958 James M. Carter James M. Carter United States District Judge Y Motion to Reconsider Court’s Ruling of 2/11/58 on Meaning of the Stipulation of Nov. 29, 1951 By motion filed May 12, 1958, the United States moved the court to reconsider its ruling of February 11, 1958, on the stipulation and amend that order “to conform with the intention of the parties” and averred, “there must be full, complete and true disclosure respecting the circumstances, facts and intentions of the parties” at the time of the execution of the stipulation on November 29, 1951; and by a second motion filed the same day that the court take the testimony of B. Abbott Goldberg and Adolphus Moscovitz, Deputy Attorneys General of the State of California and on the basis of such testimony that the court reconsider its order of February 11th, and revise the order to comply with the intentions of the parties. In the motions, although not particularly stressed by Mr. Veeder in arguing the motion, was the following language: “ * * * it is evident that at the time of the execution of the stipulation the State of California well knew that the representative of the United States, did not, indeed could not stipulate away the ‘sovereign status’ of the United States” * * * [Emphasis added] and “the United States respectfully asserts as revealed by Goldberg’s statements set out in Exhibit A, that the representative of the United States did not, in fact was without power to stipulate in a manner which would require the United States of America to comply with California’s laws respecting the appropriation of rights to the use of water” * * * [Emphasis added] and “ * * the representative of the United States of America did not, indeed could not stipulate away the sovereign status of the National government” * * * [Emphasis added.] This problem we discuss later. The motion was heard by the court on May 22, 1958. The original stipulation of November 29, 1951, was signed for the State of California by Edmund G. Brown, Attorney General, Arvin B. Shaw, Jr., Assistant Attorney General and B. Abbott Goldberg, Deputy Attorney General and for the United States by William H. Veeder. (1) Evidence Presented on the Motion Veeder and Goldberg were present in the court room; Shaw was dead. Moscovitz, who was referred to in the motions as a prospective witness, was also present. The government did not call Veeder or Moscovitz to the stand but called only Goldberg. The court heard his testimony. A summary of the testimony is annexed hereto as Appendix A. At the hearing on the motion it was stipulated that a transcript of a proceeding before the District Court in this case on December 8, 1951 would be part of the record. (2) Transcript of the Court Hearing December S, 1951 On December 3, 1951, 5 days after the stipulation of November 29, 1951 was executed, a hearing was held before the Honorable Jacob Weinberger, U. S. District Judge on plaintiff’s motion for a separate trial as to issues in the case concerning Fallbrook and certain other of the major defendants. Present and participating were Mr. Veeder and Mr. Goldberg. Mr. Veeder’s and Mr. Goldberg’s statements at that time, as officers of the court, should be contrasted with the testimony of Mr. Goldberg and the position of Mr. Veeder on the motion. From reading the transcript of December 3, 1951, it is apparent that what was in the mind of Mr. Goldberg and Mr. Veeder five days after the stipulation was signed, was the question of what the United States might do with water after it reached the enclave, and whether the government’s jurisdiction over the enclave prevented the exercise of state regulations within the enclave. It is clear that California law was to measure the rights to use of water claimed by the United States. Extracts from that hearing are attached hereto as Appendix B. (3) Statements to the Congress before the execution of the Stipulation of November 29th, 1951. At the time the court made its ruling of February 11, 1958, interpreting the stipulation, the court did not take into account statements by Assistant Attorney General, A. Devitt Vanesh and William H. Veeder, before the House Judiciary Committee on June 25, 1951, [Cong. Record, July 9, 1951, pp. A-4371 — A-4372]. Emphasis has been added. “Mr. Vanesh: This particular complaint which has been filed is to determine what the United States acquired by purchase and not because it is the United States Government. As the Government, we are only asking to have determined what it purchased. ****** “If there is not sufficient water there to take care of all the needs on that stream, that is something else. Of course, if the Federal Government needs more water than it purchased it would have to pay for it. “The only thing this complaint and suit is designed for is to determine just what rights were secured when the Government purchased, the same as anyone here would do who made a purchase on that stream. * * * “Mr. Veeder: We claim that the measure of our rights are the rights to which we succeeded from Rancho Santa Margarita. “Mr. Walter: And nothing more; and without regard to the needs of the Marine Corps at Pendleton?” “Mr. Veeder: That is correct sir. “Mr. Fellows: Do you claim only that the state law applies? “Mr. Veeder: Yes, sir. The measure of our rights, the measure of the state law governs entirely our demand upon the Santa Margarita River. In other words, we certainly cannot claim more than we acquired from the Rancho Santa Margarita. “Mr. Fellows: And you claim no more? “Mr. Veeder: That is correct.” Mr. Vanesh again testified before the Senate Judiciary Committee on September 22, 1951. “Mr. Vanesh: About a year ago the Navy Department came to the Department of Justice and advised us that the water was being taken from the river and that they were being placed on a very dangerous position. They wanted to know what relief could be had. “Now, we acquired what rights the Rancho Santa Margarita had, no more or less. * * * “Mr. Vanesh: Mr. Veeder, when he testified before the court when he was handling the case in San Diego, made the statement in open court of record, that the Government would be very glad to stipulate so as to clarify what is meant by ‘paramount rights,’ and I have so told the State of California. “We are claiming under California law. We have no sleeper in here that is trying to in any way change, the water law of the West. This is just a suit on one little river, and that is all we are interested in. * * * “Senator Nixon: What does the term ‘Sovereignty’ mean? In other words, what did it mean in the complaint? That is what we want to know. “Mr. Vanesh: Senator, in this complaint it has nothing to do with having our rights adjudicated except as to what we are entitled to. We are only claiming what any other person would claim if you or I had purchased the same property. * * * ■ “When you buy a piece of property in California, under California law you are entitled to so much water. What we want is what we bought and paid for, and that is all. We want no more. * * “Senator Watkins: May I pursue that just a little further, Mr. Chairman. The previous purchaser subjects himself to State law. Now are you going to accept the same limitation? “Mr. Vanesh: We are governed by the State law, Senator. I mean that we make our claims under State law, the same as we are doing in this case here.” * * # (4) Ruling on Motion to Reconsider The court granted the motion to take testimony concerning the surrounding circumstances and the intentions of the parties at the time the stipulation of November 29, 1951 was entered into. The court now denies the motion to reconsider its rulings of February 11, 1958, as amended by its order of April 8, 1958 on the following grounds: 1. The stipulation is not ambiguous, and no recourse to matters of intention are necessary; 2. The stipulation is in line with the statements made to the Committees of the Congress by the Assistant Attorney General, and Mr. Veeder prior to the execution of the stipulation; 3. The stipulation is in line with the statements made by Mr. Veeder and Mr. Goldberg to open court on December 3, 1951, five days after the execution of the stipulation. 4. The stipulation is in line with the statements made to the Committees of the Congress of the United States by the Attorney General of the United States, after its execution. 5. The testimony of Mr. Goldberg standing alone and also as contrasted with his statements made on December 3, 1951, is entirely unsatisfactory, and affords no basis for reconsideration of the court’s decision; 6. The government’s motion and in fact the government’s various contentions made from time to time since the case was assigned to the particular judge now handling it, have been a series of afterthoughts attempting to bolster the government’s position, as one contention after another has been held invalid. One portion of the Order of February 11, 1958, concerning the court’s interpretation of the stipulation of November 29, 1951, gives concern. In paragraph IV A, 2c of the Order of February 11, 1958, which appears on page 4 thereof, there was an interpretation of the word “use” and the following was stated by the court: “Excluded, therefore, are claims by the United States of rights acquired by inverse condemnation, since the law by which such rights would be measured is federal law as set forth in decisions of federal courts involving inverse condemnation by the United States and not California law.” As discussed elsewhere in this memorandum under the subject of Inverse Condemnation, it is apparent that California law is in accord with federal law in recognizing inverse condemnation. Since the word “use” is a very broad word, and since inverse condemnation could arise under the word “use”, the •court is now of the opinion that if the United States should be able to claim rights by inverse condemnation under •California law, they should be entitled to do so under the provisions of the stipulation. The quoted language will be stricken from the order of February 11, 1958. The matter is utterly immaterial, since we hold elsewhere in this memorandum, that the United States, as the last downstream user was not legally able to effect a “taking” of upstream rights sufficient to constitute inverse condemnation under either state or federal law. VI Mr. Veeder Had Authority to Enter into the Stipulation of Nov. 29, 1951 and the Government Is Bound by It. As previously noted, Mr. Veeder’s motion to reconsider raises the contention that he, as an attorney in the Department of Justice, had no power to bind the government, or as he puts it, to “stipulate away the sovereign status rights of the United States.” It is a general rule that an estoppel will not run against the government, and also a general rule that the authority of United States Attorneys, attorneys in the Department of Justice and other governmental officials are limited and ordinarily they do not have authority to bind the government in financial matters or to dispose of government property. A necessary exception to this general rule of limited authority, is a stipulation made by an attorney for the government in the course of handling an action. Law suits involving the government could not operate if government attorneys were not authorized to stipulate. They stipulate as to a waiver of jury, as to the testimony of witnesses, who cannot personally be called before the court, as to the facts in pretrial stipulations and as to the issues and contentions of the government for the purpose of pretrial. Here, Mr. Veeder has not in any sense of the word, transferred, abandoned or given away any rights of the government, if it had any, in this particular situation. He has merely delineated the claim of the government in the nature of stipulating to the issue to be tried. He has further stipulated that state law shall control. When a government lawyer prepares a complaint, he delineates the claim of the government. Whether or not he may be permitted to later amend and widen that claim, is not a matter of right. (Rule 4(h) F.R.Civ.P., 28 U.S. C.A.), but depends on rules of law and court action. When a government lawyer participates in a pretrial hearing, he delineates or limits the claim of the government by his statements and by the pretrial stipulation executed and the order thereon. The government like any other litigant may only be relieved by a showing of “manifest injustice” (Rule 16, F.R.Civ.P.) and court determination. There is no essential difference between what here occurred and the situations above. The government placed limits on its claim. It agreed California state law should measure its rights. The court has acted on the stipulation. The United States is bound thereby. Title 5 U.S.C.A. § 310 — “Conduct of legal proceedings” sets forth the authority of the Attorney General and officers of the Department of Justice to conduct legal proceedings. This authority must necessarily include litigation required to establish the rights of the government. Mr. Veeder is an attorney in the Department of Justice. The statements of the Attorney General and Assistant Attorney General of the United States referred to in this memorandum decision, clearly show Veeder’s acts were authorized and ratified. The following cases bolster our position, Tucker v. Alexander, 1927, 275 U.S. 228, 48 S.Ct. 45, 72 L.Ed. 253; Judson v. United States, 2 Cir., 1903, 120 F. 637; Daitz Flying Corporation v. United States, D.C.N.Y.1945, 4 F.R.D. 372. Finally, we1 believe that the stipulation accords with the law in the matter (1) as to the rights claimed by the United States and (2) that state law controls. The stipulation recognized well-established law — that when the United States contracts or acquires property within a state, the law of that state controls what rights in the United States arise therefrom (United States v. Burnison, 1950, 339 U.S. 87, 90, 70 S.Ct. 503, 94 L.Ed. 675; Reading Steel Casting Co. v. United States, 1925, 268 U.S. 186, 188, 45 S.Ct. 469, 69 L.Ed. 907; United States v. Fox, 1876, 94 U.S. 315, 320, 24 L.Ed. 192; United States v. Nebo Oil Co., 5 Cir., 1951, 190 F.2d 1003, 1010; United States v. Williams, 5 Cir., 1947, 164 F.2d 989, 993; Los Angeles & Salt Lake R. Co. v. United States, 9 Cir., 1944, 140 F.2d 436, 437, certiorari denied 1944, 322 U. S. 757, 64 S.Ct. 1264, 88 L.Ed. 1586; Werner v. United States, D.C.S.D.Cal. 1950, 10 F.R.D. 245, 247). All that Mr. Veeder has done is to stipulate in accordance with applicable law. VII Pretrial Rulings There were heretofore submitted to counsel for their consideration and briefing, various propositions of law applicable to the trial of this action. The court heard argument, announced some tentative rulings, but made no formal rulings, since the pretrial stipulation of facts had not at that time,, been executed and approved. As to these questions of law presented' upon pretrial with respect to which the, parties seek an order in advance of trial,, the court will rule upon the trial, in the-absence of controlling precedents to the contrary, and subject to modification at. the trial to prevent manifest injustice, as set forth hereafter; it being understood of course that none but the major parties to this action have participated: in the briefing and arguments, and that the court is open to all litigants to contest the validity of these rulings. VII-A Effect of the Circuit Court Decision*, in People of State of California v. United States, 9 Cir., 235 F.2d 647 The holding in that case is that it was. error for the trial court to enter a separate judgment in the case as to less than all the defendants, and the case was remanded, with directions to hear the case- and to enter but one judgment adjudicating the right of all defendants to the •water of the river. However, the language and reasoning of the decision is persuasive, and was intended for the guidance of the trial court, and in the absence of authority to the contrary, will generally be followed by the court in its rulings at the trial. The Circuit decision was rendered in an appeal from a judgment below, in which the only parties were the United States, the State of California and the Santa Margarita Mutual Water Company. The decision is obviously not binding, or the law of the case, as to any of the parties except those participating in that appeal. VII-B The Extent of the Rights of the United States of America as a Riparian Owner to Use Water Outside the Water Shed The United States in its memorandum, states: “There is no claim made by the United States of America as a riparian owner to use water outside of the water shed” and “a claim to use riparian water upon non-riparian land would be contrary to the law respecting rights of that nature.” In view of the continually changing position of the government, we are in no doubt as to the extent of the government’s disclaimer. The United States may contend (1) since it has rights to the use of water as a riparian owner, (2) that when those waters arrive within the enclave, (3) since the United States possesses exclusive jurisdiction over the enclave, and (4) since there are no users downstream from the United States, the United States may use the water which it was entitled to have flow into the enclave by reason of its riparian rights, anywhere within the enclave, and ■outside of the watershed. We think such a position foreclosed by California law and we set forth the law of California on the issue of riparian rights. Diversion of water to, and use on, non-riparian land constitute an appropriation of water and is not within the riparian right, Montecito Valley Water Co. v. City of Santa Barbara, 1907, 151 Cal. 377, 378, 90 P. 935; Duckworth v. Watsonville Water & Light Co., 1907, 150 Cal. 520, 526, 532, 89 P. 338; Bathgate v. Irvine, 1899, 126 Cal. 135, 141-144, 58 P. 442; Boehmer v. Big Rock Irrigation Dist., 1897, 117 Cal. 19, 26-27, 48 P. 908; Chauvet v. Hill, 1892, 93 Cal. 407, 410, 28 P. 1066; Gould v. Stafford, 1888, 77 Cal. 66, 68, 18 P. 879. Land outside the watershed of the stream from which the diversion is made is non-riparian land; Rancho Santa Margarita v. Vail, 1938, 11 Cal.2d 501, 529, 81 P.2d 533; Anaheim Union Water Co. v. Fuller, 1907, 150 Cal. 327, 330, 88 P. 978, 11 L.R.A.,N.S., 1062. The Circuit Court of Appeals so stated in its opinion on the appeal in this case; “The government, as regards all claimants to water outside the enclave, is * * * in the position of a lower riparian which is compelled to make beneficial use within the water shed and for other than proper riparian uses must show an appropriation according to law.” 235 F.2d at page 656. VII-C. D. and E. Riparian Uses The Extent of the Rights of the United States as a Riparian Owner to Use Water Within the Watershed The court posed the following issues of law: “(c) The extent of the rights of the United States as a riparian owner to use water within the water shed; “(d) Whether the use by the United States of water for military purposes is a beneficial use; “(e) Whether the use by the United States of water for military purposes on its riparian land is a proper riparian use.” They will be considered together. (1) Basie Principles The memorandum of the State of California contains an excellent summary which we adopt. 1. The riparian proprietor does not own the water of a stream; he owns only a usufructuary right, which is the right in common with all the other riparians on the stream of reasonable use of water on his riparian land when he needs it (Prather v. Ho-berg, 1944, 24 Cal.2d 549, 560, 150 P. 2d 405; Rancho Santa Margarita v. Vail, 1938, 11 Cal.2d 501, 555, 81 P.2d 533; Anaheim Union Water Co. v. Fuller, 1907, 150 Cal. 327, 335, 88 P. 978, 11 L.R.A.,N.S., 1062. 2. The riparian right extends to “all the water of the stream, and * * * that includes both surface and sub-surface flow, and likewise includes water in the underground basins” (Rancho Santa Margarita v. Vail, 1938, 11 Cal.2d 501, 556, 81 P.2d 533, 561) but only as such water flows or is present naturally (Seneca Consol. Gold Mines Co. v. Great Western Power Co., 1930, 209 Cal. 206, 215, 287 P. 93, 70 A.L.R. 210). 3. All rights to the use of water, including the riparian right, are limited to such water as is reasonably required for the beneficial use to be served; they do not extend to the waste, unreasonable use, or unreasonable method of diversion of water (West’s Ann. Calif.Const. Art. XIV, sec. 3; Peabody v. City of Vallejo, 1935, 2 Cal.2d 351, 367-368, 40 P.2d 486.) 4. Subject to the limitations of the preceding paragraph, the riparian right is prior and superior to rights based on appropriation, and a riparian owner is entitled to an injunction against an appropriator’s interference with present riparian uses (Peabody v. City of Vallejo, 1935, 2 Cal.2d 351, 367-368, 40 P.2d 486; Meridian, Ltd. v. City and County of San Francisco, 1939, 13 Cal. 2d 424, 445, 90 P.2d 537, 91 P.2d 105). 5. The riparian right is not based on use and is not lost by non-use; however, to the extent that water is not presently being used by riparian proprietors under their riparian right it is subject to appropriation and beneficial use by others, the riparian owners being entitled to a declaration of their superior right to make reasonable beneficial use of the water in the future but not entitled to enjoin storage or use of water by an appropriator which does not conflict with their own present reasonable beneficial use (Meridian, Ltd. v. City and County of San Francisco, 1939, 13 Cal.2d 424, 445, 447, 458, 90 P.2d 537, 91 P.2d 105; Gin S. Chow v. City of Santa Barbara, 1933, 217 Cal. 673, 683-691, 22 P.2d 5.) (2) Military Use The United States, the State of California and Fallbrook have briefed this issue and all agree that a military use is a beneficial use. Fallbrook states— “There can be no doubt that the use of water for military purposes by the United States is a beneficial use.” California states— “The State of California does not contest that military use of water by the United States when made on riparian land owned by the United States may be a beneficial use within the riparian right.” The real question is the reasonableness of the use. This is a question of fact. Whether the military use is reasonable depends on the circumstances of the case. Tulare Irr. Dist. v. Lindsay-Strathmore Irr. Dist., 3 Cal. 2d 489, 45 P.2d 972. The court does not propose to rule on this issue until the trial of this case delineates through the evidence precisely what the military use consists of. Certain principles of law will be pertinent to that decision. Riparian rights may be exercised “for the purposes for which such lands are, or may be made adaptable * * * Nothing herein contained shall be construed as depriving any riparian owner of the reasonable use of water of the stream to which his land is riparian under reasonable methods of diversion and use,” West’s Ann. Constitution of State of California, Article XIV, Sec. 3 [Emphasis added]. Waste of water, unreasonable uses and unreasonable diversion are not protected. Peabody v. City of Vallejo, supra. Taking a disproportionate share of the water to the detriment of other riparian owners would not be a reasonable use. VII-F Is Artificial Storage of Water on the Surface or Underground for Future Use a Proper Exercise of the Riparian Right The court posed the following issue of law. “The right of the United States to partially impound, regulate and spread its riparian water for the purpose of irrigating the vegetative cover and enriching the soil of the alluvial basin situate within Camp Pendleton and thereby in the process of irrigating the vegetative cover recharge the alluvial basin.” On reflection, the court regrets the form in which the issue was posed. It obviously combines the question of the right to irrigate and the right to store water. Irrigation The right to use riparian water to irrigate lands riparian to the stream is clearly recognized. The question in this case will be whether the United States on a military reservation can claim this use. The purpose and manner of the irrigation contemplated may be important. For example, spreading water in a wet period, under the guise of irrigation might well run afoul of the West’s Ann. Cal.Constitutional Amendment, Art. XIV, Sec. 3. If through legitimate irrigation, water fed the underground basin, the result might well be the reverse. These questions must await the trial and the determination of the facts. Storage of Water The California memorandum succintly states the law. We paraphrase briefly from it. One of the fundamental characteristics of the riparian right is that it is a right to use water as the water is naturally available. But the artificial storage of water for future use, whether cyclic or seasonal, is not a proper exercise of the riparian right, but instead constitutes an appropriation of water (Moore v. California Oregon Power Co., 1943, 22 Cal.2d 725, 731, 140 P.2d 798; City of Lodi v. East Bay Municipal Utility Dist., 1936, 7 Cal.2d 316, 335, 60 P.2d 439; Colorado Power Co. v. Pacific Gas & Electric Co., 1933, 218 Cal. 559, 564, 24 P.2d 495; Seneca Consol. Gold Mines Co. v. Great Western Power Co., 1930, 209 Cal. 206, 216, 287 P. 93, 70 A.L.R. 210; Herminghaus v. Southern California Edison Co., 1926, 200 Cal. 81, 109-111, 252 P. 607, which “may be exercised only pursuant to appropriations lawfully made”, Meridian, Ltd. v. City and County of San Francisco, 1939, 13 Cal.2d 424, 450, 90 P.2d 537, 549, 91 P.2d 105. Temporary impoundment of water for the purpose of providing a head for generation of power is permitted under the riparian right, Seneca Consol. Gold Mines Co. v. Great Western Power Co., 1930, 209 Cal. 206, 219, 287 P. 93, 70 A.L.R. 210. Recharging the Underground Basin —Intrusion of Salt Water This problem also is in the case. It has not been briefed and must await the trial. Judge Hall in Rank v. (Krug) United States, D.C.So.Cal.1956, 142 F.Supp. 1, at page 106, states in footnote 54, “Neither the Constitutional amendment nor subsequent cases have changed the doctrine that the full natural or ordinary flow of a river includes the seasonal and cyclic flood flows. See United States v. Gerlach Livestock Co., 339 U.S. 725, 70 S.Ct. 955, 94 L.Ed. 1231, and cases cited in footnote 50, page 99” (Should read page 96). In note 50, Judge Hall cites various cases and in particular the following decided after the Constitutional Amendment of 1928: —Collier v. Merced Irr. Dist., 1931, 213 Cal. 554, 558, 2 P.2d 790; Chowchilla Farms, Inc., v. Mortin, 1933, 219 Cal. 1, 33, 25 P.2d 435; Tulare Irr. Dist. v. Lindsay-Strathmore Irr. Dist., 1935, 3 Cal.2d 489, 569-570, 45 P.2d 972. Is there a distinction between a natural and an artificial recharging of the basin? Suppose the underground flow was largely responsible for recharging the basin? Suppose the basin was being depleted by an unreasonable and excessive use by the United States? Suppose that only a reasonable use was being made of the water by the United States and still the basin was being depleted. These questions must await the trial and briefing by Counsel. VII-G The Claimed Prescriptive Rights of the United States. The Downstream User May Not Acquire Prescriptive Rights against the Upstream Owner. Adverse use is, of course, one of the prerequisites to the establishment of a prescriptive right. As stated in City of San Diego v. Cuyamaca Water Co., 1930, 209 Cal. 105, 132, 287 P. 475, 488: “The nature of the right claimed to have been acquired in the waters of a flowing stream by prescription rests as a prime essential upon an adverse use thereof by the claimant •>:• * * which has, to the extent thereof and for the required term of years, been acquiesced in by the person or persons otherwise entitled to the ownership and enjoyment of the waters thus adversely abstracted from such stream and to enforce those rights by appropriate action.” [Emphasis supplied.] In the absence of adverse use, the only kind of right that could be gained by use would be an appropriative right. We discuss in VII-H the problem of acquiring rights by appropriation. An avalanche of California cases supports the proposition that, by its very nature, use of water by the lowermost user on a stream cannot possibly be adverse to anyone else. “A right can be gained by prescription only by acts which operate as an invasion of the rights of the person against whom the right is sought and which afford a ground of action by such party against such claimant, and it is a rule of law so well settled by decisions in this and other states as to scarcely need any citation to support it that a lower use, since it interferes in no way with the flow above constitutes no invasion of the upper riparian owner’s right, and cannot, therefore, afford any basis for a prescriptive right,” Pabst v. Finmand, 1922, 190 Cal. 124, 128, 211 P. 11, 12. In accord are the following decisions: Cory v. Smith, 1929, 206 Cal. 508, 511, 274 P. 969; San Joaquin & Kings River Canal & Irrigation Co. v. Worswick, 1922, 187 Cal. 674, 683-685, 203 P. 999; Holmes v. Nay, 1921, 186 Cal. 231, 234, 199 P. 325; Perry v. Calkins, 1911, 159 Cal. 175, 177-178, 113 P. 136; Hudson v. Dailey, 1909, 156 Cal. 617, 627, 105 P. 748; Walker v. Lillingston, 1902, 137 Cal. 401, 404, 70 P. 282; Cave v. Tyler, 1901, 133 Cal. 566, 567-568, 65 P. 1089; Bathgate v. Irvine, 1899, 126 Cal. 135, 140-141, 58 P. 442; Hargrave v. Cook, 1895, 108 Cal. 72, 77-79, 41 P. 18, 30 L.R.A. 390. The cases cited above are all directly in point because they involved the diversion of water downstream from the owner of the prior right against which the prescriptive claim was asserted. Likewise, Camp Pendleton, where the diversions or extractions of water assertedly have been made, is downstream from any other claimant to the water. The United States relies upon three cases. They are not in point. In Hudson v. West, 1957, 47 Cal.2d 823, 306 P.2d 807, plaintiffs claimed as riparian owners and failed to support their claim. Our problem is not discussed. Larsen v. Apollonio, 1936, 5 Cal.2d 440, 55 P.2d 196, upheld a prescriptive right. The statement of facts, in the opinion, described the plaintiff’s diversion as downstream from defendant’s land. The only case cited in Larsen in support of the prescriptive claim was Smith v. Gaylord, 179 Cal. 106, 108-109, 175 P. 449. There the prescriptive claim was held good because the claimant had trespassed on the land of the owner of the prior right and made his diversion there. The State of California has submitted excerpts from the record in Larsen v. Apollonio before the Supreme Court, and these excerpts show that the situation in that case was identical to the situation in the Smith v. Gaylord, supra. That is, the actual diversion was instituted, and during the entire prescriptive period was carried on from a diversion point on part of a larger tract held in one ownership, which included the upstream land against which the Larsen case held the prescriptive right had accrued. After the end of the prescriptive period, but before the Larsen suit was instituted, the upstream portion of the tract was conveyed to the defendant. Obviously the conveyance could not cut off the prescriptive right which had arisen by the trespass over the land. Dykzeul v. Mansur, 1944, 65 Cal.App. 2d 503, 150 P.2d 958 is the third case. Here the defendant user prevailed. The diversion point was on plaintiff’s upstream land and the ditch ran through plaintiff’s land. Accordingly the adverse user of plaintiff’s land for the purpose of the diversion, resulted in the prescriptive right to a downstream user. We conclude that the law in California is clear that a downstream user may not ipso facto acquire prescriptive rights against an upstream owner of water rights except in those instances where the downstream user has acquired rights over the other parties’ land for the purpose of the diversion. The United States claims a variety of prescriptive rights. “(1) As successor to the Rancho Santa Margarita; “(2) Resulting from its uses after 1942; “(3) Resulting from a combination of uses by its predecessor before 1942 and the United States thereafter; “(4) Prescriptive rights claimed by the United States outside the Santa Margarita River watershed; “(5) Prescriptive rights to the use of water claimed by the United States in connection with Lake O’Neill." Actually these claims break themselves naturally into two categories, (A) ^Prescriptive rights claimed to have been acquired by the Rancho and therefore passing to the United States on its acquisition of the Rancho, and (B) Prescriptive rights claimed to have been acquired by the United States since 1942. As to both classes of claims, since prescription does not run upstream, it is obvious that neither the Rancho Santa Margarita nor the United States could acquire prescriptive rights against upstream owners. The Rancho, the last downstream user, never acquired prescriptive rights by uses on the Rancho, and thus had neither vested prescriptive rights to convey to the United States nor incipient prescriptive rights to which the United States could tack uses of its own. The uses of United States itself, as the lowermost user since 1942, similarly lacked the quality of hostility or adversity necessary to create a prescriptive right. And this is true whether what is asserted is the right to store water in Lake O’Neill for later use within the watershed or the right to make direct diversions or extractions for use outside the watershed of the Santa Margarita River. These rights could not arise by prescription. As to the rights claimed to have been acquired by the United States itself since 1942, a second reason, renders it impossible for the United States to have acquired prescriptive rights. Since the United States is immune from suit except by consent and since it had exclusive jurisdiction within the enclave, there was no means by which a person adversely affected by the government user downstream (assuming such impossible situation), could have taken any action by self help or through court suit, against the United States to prevent such adverse use. The Circuit in the prior appeal concluded that, irrespective of the ability of a lowermost user, other than the United States to acquire prescriptive rights, the United States could not acquire such rights, because of its -sovereignty over the military enclave. The Circuit Court reasoned that the same element of adversity, which the California cases point out is lacking in downstream use generally, is lacking when the United States uses water which has found its way onto the military enclave: “The doctrine of prescription envisions a party, whose rights are being openly and notoriously violated by another, and who has the power to intervene and prevent the violation from becoming an adverse property right by self-help or by bringing an action or obtaining an injunction before the period of prescription runs. But, when the United States was in possession as sovereign, the water which came into the enclave could be used without let or hindrance in any way which the agents of the government chose” (235 F.2d at page 661). The United States, for this additional reason, could not have acquired any prescriptive rights to store water or use water outside the watershed by its own uses within the Camp Pendleton military enclave since 1942. VII-H Appropriative Rights. Must the United States Comply with State Procedures for the Acquisition of Appropriative Rights?' The court posed this issue: — The extent of the appropriative rights claimed by the United States in connection with Lake O’Neill, Stuart Mesa, South Coast Mesa, “and all other uses for which appropriative claims are asserted by it; must the United States comply with State procedures for the acquisition of appropriative rights.” We do not here consider or pass upon the validity of alleged appropriations of water, made by the Santa Margarita Rancho prior to December 19, 1914, the date of the Water Commission Act, West’s Ann.CalWater Code, § 100 et seq. If the Rancho owned such rights they passed to the United States. The discussion and rulings which follow are limited to matters arising after December 19, 1914. 1. The Contentions of the United States The government’s contentions in this, case have been fascinating. They have shifted from hearing to hearing, dependent only upon the imagination and ingenuity of William H. Veeder, representing the United States. With reference to unappropriated water they presently seem to be as follows: (1) The Self Help Theory That by merely diverting the water and putting it to beneficial use outside the watershed of the Santa Margarita River, the United States has acquired valid appropriative rights under California law, on the theory that diversion and application of water to a beneficial use coupled with the intent to appropriate are sufficient under California law to create an appropriative right in any water user even if he has failed to comply with the application and permit procedures required by state statutes. (2) State Police Regulation Theory That California’s statutory application and permit procedures for the acquisition of an appropriative water right are police regulations which are inapplicable to the United States, with the result that, even if all other water users must comply with such procedures in order to acquire a valid appropriative right, the United States can obtain the right merely by taking and using the water. (3) Government , Ownership of Water Theory Incorporeal Hereditament That even before it first diverted and used the water on Camp Pendleton, the United States possessed the right to do so, by virtue of its ownership of the public domain; hence, when it began diverting and using the water the United States merely exercised a right already residing in it. (4) Reserved Land Theory That the United States, in connection with reserved lands, may use all the unappropriated water it needs; that this right in some manner arises as soon as a reservation (here Camp Pendleton) was created. (5) Priority in Time of Filing Theory That priority in time of filing applications for unappropriated water by the United States creates a right in the United States; and that Fallbrook’s applications have been so changed and amended that they are now junior to that of the United States; and that this court should determine priorities accordingly. (6) Direct and Inverse Condemnation Theory That the United States acquired rights to use the water (within and outside the watershed) through the exercise of the power of eminent domain either (a) by its direct condemnation of the Rancho Santa Margarita or (b) by subsequent inverse condemnation assertedly resulting from its use of the water outside the watershed. (7) Bucket at the End of Stream Theory Water from Public Lands Upstream On October 21, 1957, the government advanced a new contention, namely that at the time the United States, in 1942, began diverting water from the river for use in Camp Pendleton and outside the watershed, the United States was exercising its rights which it already owned; that since the Treaty of Guadalupe Hidalgo, West’s Ann.Cal.Const. Vol. 3, p. 727 et seq., the United States had been the owner of the public lands now held as public domain, National Forests, and Indian Reservations, and hence the United States was the owner of all rights to the unappropriated waters arising from said lands; that the United States might require these waters to flow to the enclave, and there take and use the water. Hence the title given this theory by the court — “Bucket at the end of the stream.” Obviously, the contention flies in the face of the stipulation of November 29, 1951, that the government claims only the rights it acquired when it purchased Santa Margarita Rancho and such rights as it thereafter “gained” by “prescription or use or both.” That the United States has rights pertaining to the National Forests, the Public Domain Lands and the Indian Reservations, as set forth in the amended complaint, we have no doubt. But these rights are rights limited to the lands in question and to express the matter in the vernacular sense, the United States has no right to catch in a bucket at Camp Pendleton, water which it claims a right, to in connection with the lands upstream above mentioned. The United States has since disclaimed any right to augment its water rights, at Camp Pendleton by virtue of the three types of public lands upstream, and this, concession by the government was incorporated by the court into its order of April 8, 1958, referred to above, wherein it is stated, “The United States disclaims any right to augment its rights to the use of water claimed by it in connection with Camp Pendleton, the United States Navy Ammunition Depot, and the United States Naval Hospital by reason of its rights to use of water claimed in connection with its other land in the watershed and the Santa Margarita River.” Certain of the remaining theories and contentions ar