COLLATERAL LITIGATION.

Bill of Complaint, Nathan E. Boyd v. Anson Mills.

In the District Court of the United States in and for the Western District of Texas, sitting El Paso, October term, A. D. 1918.

Now comes Nathan Boyd, hereinafter styled the plaintiff, complaining of Anson Mills, hereinafter styled the defendant, and complaining, says:

That plaintiff is a native-born citizen of the United States of America, with legal domicile in the State of New Mexico, and now temporarily residing in the city of El Paso, El Paso County, State of Texas, and has his residence in the city of Washington, D. C.;

That in the year 1893, a company known as the Rio Grande Dam & Irrigation Co. (hereinafter styled the Parent Company) was incorporated under and by virtue of the law of the Territory of New Mexico, with a capital stock of five million dollars ($5,000,000) divided in fifty thousand shares of one hundred dollars ($100) each, the said company being incorporated for the purpose of constructing storage dams, irrigating canals, and other irrigating works in and along the Rio Grande River in Sierra and Dona Ana Counties, N. Mex., and in the State of Texas and the Republic of Mexico;

That the franchise rights, undertakings, rights of way, and other special privileges and concessions of the said company were formally and officially approved and confirmed by the then Secretary of the Department of the Interior, acting under and in conformity with the several acts of Congress pertaining to irrigation in the arid States and Territories, so called;

That thereafter a company styled as the Rio Grande Irrigation & Land Co. (Ltd.) (hereinafter styled the English Company) was formed under and by virtue of the laws of the United Kingdom and Ireland, with a capital of five hundred thousand pounds sterling (£500,000) to finance the said Rio Grande Dam & Irrigation Co.;

That the said English Company leased the said Parent Company's franchise and undertaking and purchased the property and acquired control of the whole of the share capital of the Parent Company;

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That 100,000 shares of the par value of 1 pound sterling, for valuable consideration, was issued to the plaintiff herein, who is now the owner and holder of said 100,000 shares;

That under and by virtue of its charter of incorporation and by the official approval, confirmation, and consent of the said Secretary of the Interior, the Parent Company had acquired the right to impound and appropriate the unappropriated waters of the Rio Grande River for irrigation and other beneficial purposes in the Rio Grande Valley in Sierra and Dona Ana Counties aforesaid, in the Territory of New Mexico, and certain other exclusive rights of way and other privileges and special concessions, together with the right and title to certain public lands for reservoirs and other purposes;

That this defendant, one of the promoters of what was and is known as the International (El Paso) Dam scheme, a movement promoted with the objects of having the general Government of the United States build a dam across the Rio Grande at a point in the El Paso Canyon, just above the city of El Paso, Tex., recognizing that the said Parent Company's prior right to impound and appropriate the said waters of the said Rio Grande River in New Mexico 100 miles above the city of El Paso, Tex., thereby rendering the said International Dam scheme impracticable, by fraud and misrepresentation, instigated the institution, by order of the Attorney General of the United States, of an action to enjoin the said Parent Company and the said English Company from completing the proposed irrigation works, in the said counties of Sierra and Dona Ana, on the falsely alleged grounds that (1) the Rio Grande River is a navigated stream in New Mexico, which allegation defendant supported by a fraudulent and perjurious affidavit in which he falsely alleged that the Rio Grande River, at El Paso is a navigable stream, and that,

"At times periodically each year the volume of water is so great that steamboats could navigate it (the Rio Grande) for hundreds of miles both above and below El Paso."

In 1888 defendant had formerly reported:

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year the average

During two hundred and ninety days of the flow (of the Rio Grande at El Paso, Texas) is perhaps not over thirty yards wide and one yard deep and in the same recurring periods, in the interval between high tides, the river goes dry for months as it is at this time (December 10, 1888), or at least has not current, with not enough water in the pools to float a fish *. From personal observation I know that these seasons of flood and draught were of about the same character thirty years. ago (i. e., as far back as 1858. See p. 32, Exhibit B.)

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That said suit was instituted on the 24th day of May, 1897, and a temporary injunction was granted on May 25, 1897, restraining the company as follows:

"That you (the defendant) do absolutely desist and refrain from beginning, commencing, attempting building, constructing, creating, or maintaining any dam, breakwater, weir, structure, or other obstruction of any character whatsoever across the Rio Grande River on the waters thereof, in the Territory of New Mexico and especially at Elephant Butte or at any point thereon in said judicial district, or in any manner to begin the construction of, or to construct or create any structure or dam or other obstruction of any character whatsoever in such manner and to such extent as shall affect the navigable capacity of said Rio Grande River in said Territory of New Mexico, until the further order of this court." (Record p. 16.)

That the injunction was served on May 31, 1897; that on June 21, 1897, the Government filed an amended bill, by which English Company was made a party defendant, praying that a perpetual injunction be entered against the defendant; that the cause was thereafter heard on all the issues, and on July 30, 1897, an order of dismissal was entered by the court as follows:

"The Rio Grande in New Mexico is not a navigable river. Under treaties with Mexico each Republic reserved all rights within its territorial limits. This would have been so upon principles of international law. The soil of the United States is not burdened with a servitude in favor of Mexico in respect to any duty to so discharge the waters as to permit or preserve the navigability of the Rio Grande. The power to control and regulate the use of waters of nonnavigable streams is exercised by States and Territories and therefore the diversions of such waters is not a violation of any Act of Congress."

That thereafter the Government perfected an appeal to the Supreme Court of New Mexico, and upon hearing the Supreme Court of New Mexico sustained the trial court, the court's opinion being in part as follows:

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"It is perfectly clear that the Rio Grande above El Paso has never been used as a navigable stream for commercial intercourse in any manner whatever, and that it is not capable of being so used. On the other hand, it has been from the earliest times of which we have any knowledge used as a source of water for irrigation. Indeed, it appears from the affidavits and reports presented in support of the bill in this case that the objection now raised to the construction of the defendant's dam grows out of the proposed construction of an international dam and reservoir at El Paso. That is to say, in order to render feasible the storage of water for irrigation at El Paso, it is essential to prohibit all similar structures along the river at points above.

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The work sought to be enjoined in this action is not a violation of any law of the United States or of any treaty.

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The action

of the lower court in dissolving the injunction and dismissing the bill of complaint is affirmed,"

and thereafter the Government appealed its case to the Supreme Court of the United States.

That on May 31, 1899, the Federal Supreme Court decided that the Rio Grande is not navigable in New Mexico and that the carrying out of the defendant's project would not be a violation of the said treaties between the United States and Mexico, but reversed the decision below and remanded the case with instructions for further inquiry as to the one question of fact, namely, whether the intended acts of the said defendant's company would diminish the navigability of the Rio Grande River within the limits of its present navigability (i. e., in the Gulf section of the stream); and if so, to enter a decree restraining those acts to the extent they would so diminish such navigability.

That on July 15, 1899, the Supreme Court of New Mexico transmitted such mandate to the district court and ordered that the said decree of dismissal be set aside; that the Government's bill be reinstated on the docket; and that the cause proceed in accordance with the terms of the said mandate of the Supreme Court of the United States.

That the case was restored to the docket of the trial court and at its second hearing the trial court again dismissed the bill and entered a similar decree as hereinbefore quoted.

That the Government from this second decree of dismissal again appealed to the Territorial supreme court, which again sustained the lower court.

That from the finding of said territorial supreme court the Government then again appealed to the Supreme Court of the United States, and that again the Supreme Court of the United States reversed the case, and remanded it for further hearing as to the one question of fact, hereinbefore mentioned, with leave for both sides. to adduce further testimony as to whether or not completion of the company's dam at Elephant Butte would substantially impair the alleged navigability of the Rio Grande in its Gulf section, more than a thousand miles below New Mexico southern boundary.

That in the Government's brief on its second appeal, through the instigation and influence of the defendant, it was charged that the trial judge and the associate justices of the Supreme Court of New Mexico had been improperly influenced.

That, thereafter, on the 7th day of April, 1903, the Department of Justice, through the willful misrepresentation and willful misrepresentation of facts by the defendant, made an ex-parte application for leave to file a supplementary bill praying that the said

English Company's and Parent Company's rights to build the Elephant Butte Dam be declared forfeited because the said storage dam had not been completed within five years, which application was granted the same day it was filed and without notice to the said defendants, the said English Company and said Parent Company, and that immediately thereafter the said supplemental bill was filed.

That several months thereafter, the English Company, having by accident ascertained that such decree of forfeiture had been entered. filed its motion to be relieved of its default in failing to oppose the Government's said motion filed April 7, 1903, and also for not appearing to oppose the filing of the said supplemental bill, which motion the court overruled, and from which the said defendant companies appealed. That on appeal the Supreme Court of New Mexico affirmed the decree of the lower court, so penalizing the defendant companies for not doing the very thing they had been enjoined not to do; from which decision an appeal was taken to the Supreme Court of the United States, which last mentioned court, on December 13, 1909, affirmed the actions of the courts below in declaring that the said defendant companies right to build the said Elephant Butte Dam had been forfeited because the dam had not been completed within five years.

That by reason of his fraudulent, malicious, and willful misrepresentations of facts and of his aforesaid perjury as to the navigability of the said Rio Grande, the defendant brought about the institution of the said injunction suit originating in the Territorial Court of New Mexico:

That the defendant maliciously, and for the purpose of depriving said English Company and its shareholders of the valuable rights acquired under the said charters fraudulently, willfully, and maliciously, and with the purpose and intention of injuring, defrauding, and damaging said companies, misrepresented and misinterpreted facts calculated to, and which did eventually, deprive said Parent and English Companies, of valuable rights acquired under their said franchises.

That the aforesaid action instigated by the defendant rendered it impossible to enforce the terms of certain contracts for further capital, and thereby and in other ways forced said English Company into liquidation; that the said one hundred thousand shares then and now owned and held by plaintiff, by reason of the said defendant's willful, fraudulent and malicious misrepresentations, and by his treasonable abuse of his official position and his misrepresentation of facts resulting in the final cancellation of the rights of said companies, and by reason of the failure of the government of the United States to pay compensation to the holders of the shares