said as far south as the gate entering L. Chase's orchard, and will thereafter prosecute their said business with reasonable diligence and without unnecessary delay until it is brought upon and ready for sale and distribution in the Cajon Valley, as aforesaid, and thereafter continue their said works so as to bring the surplus of the water so impounded and secured to and upon the mission land aforesaid and to said City of San Diego for distribution therein." Upon the execution of this agreement Robinson and his associates organized a corporation known as the "San Diego Flume Company," with a capitalization of a million dollars, to which they transferred all of their rights acquired under said appropriation and also said agreement, receiving as the consideration there for capital stock of the said corporation to the amount of $450,000 par value. The original articles of incorporation of the San Diego Flume Company stated "that the purposes for which it is formed are to appropriate, divert and take water from the San Diego River and other streams in the county of San Diego, California, and convey and sell the same for irrigation, domestic use, mechanical purposes and use by the city of San Diego and other cities and towns in said county; to build and maintain dams, reservoirs, and any kind of aqueduct or flume; to reclaim and improve by supplying with water, dry lands in said county, and to that end to acquire, hold and convey real estate." The San Diego Flume Company at once upon its organization reposted and recorded its own notices of appropriation of the waters of the San Diego River, in which notices of appropriation it was provided that "said water is appropriated, claimed and intended for irrigation, domestic and mechanical purposes. The places where it is intended to use said water are the City of San Diego, Ex-Mission Ranch, rancho El Cajon." The company at once proceeded with the development of its water system. During the year 1886 the corporation acquired by purchase 3,145 acres of land in what is known as the Rancho Ex-Mission, lying to the westward of the El Cajon Valley and between its lands and the city of San Diego, and caused said lands to be surveyed and platted so that one thousand acres thereof was subdivided into one hundred tracts of ten acres each, two hundred acres thereof into villa lots of smaller dimensions, and

eighty acres thereof into town lots, each of an area of fifty by one hundred feet. The corporation then proceeded to sell off this tract of land, as thus subdivided, under a form of contract by which, through the medium of certain trustees, the corporation agreed to give to each purchaser of one of said ten-acre tracts one of said town lots and also agreed to convey to each owner of a ten-acre tract a perpetual water right to one miner's inch of water at an annual rental of three dollars per acre. The contract for the sale of these lands upon said terms stipulated that the water company was to extend its aqueduct into the city of San Diego, and this being done, to supply water to the holders of town lots for use thereon at city rates. The owners of the larger or ten-acre tracts were, however, to be first supplied with water before supplying any other lands or lots therewith. While the San Diego Flume Company was thus developing its water system for use upon its own lands it was also, beginning with the year 1886 and continuing down to the year 1910, engaged in making water right contracts with the various owners of land in the El Cajon Valley and also in the Ex-Mission Rancho aforesaid outside of its own holdings therein. The first of these contracts and in fact the first water right contract executed by said corporation appears in the terms and conditions of a deed made by one Hawley to said corporation, conveying to it an undivided one-half interest in certain lands in El Cajon Valley, wherein one of the conditions subsequent to the grant was stated to be that "the said Flume Company is within three years to build a flume or other aqueduct across or adjacent to said tract of land carrying water for irrigation according to the purposes of said company's incorporation and shall grant to the grantor, his heirs, representatives or assigns, a right to the use of water from said flume or aqueduct at the legal rates and to the amount of one inch, measured under a four-inch pressure for each ten acres of arable land in such portion as may be assigned to grantor in partitioning. Such water right is to be perpetual and without further compensation except the legal rates aforesaid, and subject only to the act of God, of the law, or public enemy." The amount of water to be supplied under this contract was seventy inches. A second water right contract was made with Hawley a few weeks after the date of said deed by

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which he agreed to buy water from the San Diego Flume Company for use on certain other described lands in San Diego County, the contract containing the same provision as that above quoted from the former one. Still later in the same year a third contract was made with Hawley in substantially the same form as the two prior agreements and wherein it was repeated that said Hawley was to have his designated "right of water from said flume or aqueduct at the legal rates." About the time of the making of these contracts with Hawley the San Diego Flume Company entered into a contract with Wendell Easton, George W. Frink and Frank B. Wilde, owners of a tract of land in El Cajon Valley, known as "S" or "Jarvis tract," by the terms of which certain rights of way for its aqueducts, flumes and other waterways were granted by the latter to the corporation, which, in turn, granted to said Easton, Frink and Wilde, "the right to purchase for the sum of $10.00 an acre, any portion of two hundred water rights to be taken from the flume line to any point or points on said line that the said parties or their assigns may select. Each of said water rights is to be one miner's inch under a four-inch pressure to each fifteen acres of land to be designated as hereafter provided and at the legal rates as fixed by the supervisors of said county, in addition to the price of said water right. . . . Said water right is to be perpetual and without further compensation except the legal rates aforesaid." During the years 1887 and 1889, inclusive, six other agreements for water rights were entered into between the corporation and the following water users, viz. Terralta Land and Water Company, F. J. Wramplemeier, El Cajon Vineyard Company, C. F. Francisco, El Cajon Valley Company and Uri Hill. Each of these six agreements was in substantially the same form as the others and each provided for the annual payment of a fixed water rate for each inch of water supplied to the lands of these respective water users and each also contained the proviso that "if said land is hereafter included within the limits of any incorporated city or town, said company may demand city rates etc." It seems to be conceded that the provisions of the several contracts above referred to as having been made by the San Diego Flume Company between the years 1885 and 1889 have reference

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to the rate-fixing powers of the board of supervisors of the counties under statutes then in effect, and applying generally to water companies. On February 24, 1891, on petition of a number of inhabitants within the region then being supplied with water by said corporation, the board of supervisors of the county of San Diego, purporting to act under the then existing statutes (Stats. 1885, p. 95), adopted an ordinance fixing a maximum water rate to be charged by said corporation at one hundred and twenty dollars per miner's inch per annum. It appears, however, that the San Diego Flume Company at the time was not charging any of the persons to whom it was then supplying water under its outstanding agreements a rate equal to that fixed by said ordinance as the maximum rate it would be entitled to charge; and it also appears that in its subsequent agreements for the supplying of water to its customers during the period that said ordinance remained in force it never provided for a charge equal to said maximum rate. Between the years 1889 and 1909 the San Diego Flume Company, as its business and water system expanded, made a large number of contracts with various persons and corporations for the sale of its water. Some of these were with land owners directly; some were with other water companies purchasing water in quantity for distribution among their own customers upon their own terms; some were with persons or corporations using the water for other purposes than either irrigation or domestic uses. Some of these agreements provided for such water rates as might be fixed by law. Others provided for flat rates, omitting any such provision. It may be pertinent to note at this point that after the board of supervisors of said county had assumed jurisdiction to regulate the water rates to be charged by the San Diego Flume Company through its ordinance, above referred to, the said water company undertook to secure, and did, in fact, secure, the modification of its foregoing agreements with Hawley, with Easton, Frink and Wilde, and with other land owners in the El Cajon Valley, by the terms of which new agreements the clause in each of the said original agreements "at rates fixed by law" was eliminated. It may be also noted that as to certain of the agreements by the corporation for the sale of water to new subdivisions or districts opened up for water consumption

after the date of the said ordinance and outside of El Cajon Valley, the provision for the sale of water subject to "legal rates" was expressly retained. The significance of both these states of facts will be later commented upon. In the year 1910 the San Diego Flume Company sold and conveyed all of its property and rights in and to its aforesaid water system and all outstanding agreements relating thereto to one James A. Murray, who shortly thereafter formed a partnership with one E. Fletcher, under the firm name of Cuyamaca Water Company. Subsequently W. G. Henshaw became a member of this firm. Said copartnership has since been operating said water properties and system under said name. By the terms of the transfer by the corporation to the copartnership the latter became obligated to perform the terms and conditions of all outstanding water contracts to be theretofore performed by said corporation. On June 25, 1912, the individuals comprising the copartnership of the Cuyamaca Water Company filed an application before the Railroad Commission for an order authorizing said applicants to increase the water rates then being charged their consumers in the county of San Diego. Notice of the hearing upon said application was ordered to be given by publication in four newspapers within the region covered by the water distributing system of said applicants and such notice was so published according to the terms of said order. A considerable number of the customers of the applicants appeared upon the hearing of said application, the domestic consumers and certain consumers taking water for irrigation purposes being separately represented by counsel and opposing the application upon different grounds. As to just who or what number of persons was represented by the counsel who appeared for the consumers taking water for irrigation purposes does not very clearly appear, the record merely showing that Haines & Haines and D. G. Gordon appeared for certain protestants of this class without identification by name, Mr. Gordon, who was himself a land owner in the "S" tract, stating that he appeared "for the water users on the main flume," while Mr. Haines stated that he represented the holders of water rights contracts to 428 inches of water, a list of the names of whom had been furnished by the applicants to the commission. Upon the hearing all of the water rights contracts of the San Diego