« AnteriorContinuar »
disclaims and disavows purpose and intent needs the same kind of assistance from to make any improper use of any informa- specialists in law, accounting, and mechantion that may be obtained.
ical and scientific matters, in the exercise Both sides base the right to relief on the of this right, as are requisite to an efficient state of the pleadings. The return admits investigation pertaining to his individual the right of inspection, denying only right business, and he is clearly entitled to whatto the assistance of an agent or attorney, ever he needs to make his investigation full, wherefore the relator says the writ must complete, and intelligent. issue if the law accords such right of as- Perceiving no error in the judgment, we sistance. On the other hand, it is said affirm it. admission of the improper motive or purpose arises from lack of a replication to the return, wherefore the writ must be denied. Replying to this contention, the
WASHINGTON SUPREME COURT. relator, not denying the sufficiency of im
(In Banc.) propriety of motive as an objection to the
WILLIAM BERG demand for inspection, claims the charge made in the return is not sufficiently
YAKIMA VALLEY CANAL COMPANY. pleaded, because of its generality and meagerness of inculpating facts.
(- Wash. -, 145 Pac. 619.) That the relator may suspect right in himself of a cause of action against the Water irrigation company privity corporation or some of its agents, and may
of lessee right to maintain action. find revelation thereof in the records or
1. One leasing land under a ditch condocuments inspection whereof is sought, is structed by a mutual irrigation ditch comnot inconsistent with his right of inspec- pany, by an instrument providing that he
pany, from a holder of shares in the comtion, because it does not relieve him from will accept as full water right for said land duty as a director, nor excuse nonperform- a definite fraction of the water right held ance thereof. As such, he is a trustee of by the lessor, is in such privity with the the property and interests of the corpora- ditch company as to enable him to maintain tion and entitled to full and complete in- an action against it for negligent failure formation as to its affairs, to the end that to maintain the ditch, in consequence of he may be able properly to execute his which he is deprived of the water to which trust. An interest hostile to the corpora
he is entitled, to his injury.
failure to tion does not bar a director's right of in. Irrigation ditch company
transfer stock effect on liability spection. People ex rel. Leach v. Central
for negligence. Fish Co. 117 App. Div. 77, 101 N. Y. Supp. 2. A mutual irrigation ditch company 1108.
cannot defeat an action for negligent failThe charge of purpose to obtain informa- ure to deliver water to one in possession tion for disclosure to rivals or competitors of land under the ditch, because the shares in the business in which the company is of stock representing the water to be used engaged is entirely too general and indefi- Note. – Right of stockholder in mutual nite. It is founded upon mere information
irrigation company to maintain acand belief, without a single specification of tion against the company for negli. fact. No interest in any rival concern is gent failure to furnish water. charged or shown, nor is any such concern
Research has disclosed little authority on specified, named, or suggested. The name the question indicated in the title to this of no alleged informant is given or indi- note. There are several cases in which cated. A legal right ought no more to stockholders of mutual irrigation ditch combe withheld, upon such an allegation, than panies have successfully prosecuted actions property should be seized under an attach- against the company for failure to supply inent issued upon an indefinite and general water, but their right to maintain the ac
tions does not seem to have been seriously charge of fraud, unless authorized by a
In O'Connor v. North Truckee Ditch Co. It remains only to inquire whether, in 17 Nev, 245, 30 Pac. 882, cited in BERG V. the exercise of his right of inspection, a YAKIMA VALLEY Canal Co., a water comdirector is entitled to the assistance of an pany organized for the purpose of owning agent or attorney, having no adverse inter and keeping in repair an irrigation ditch, ests or connections, rendering his employ. and for controlling and dividing the water ment therein improper. An affirmative an
therein among the stockholders according to
the amount of their stock, was held liable swer is given by the authorities. People ex for damages at the suit of a stockholder for rel. McInnes v. Columbia Paper Bag Co. failure properly to control and divide tho 103 App. Div. 208, 92 N. Y. Supp. 1084. water, whereby the plaintiff was deprived Reason accords with authority. A director of the water to which he was entitled. The on such land have not been transferred to Damages injury to crops. the property owner on its books; at least, 5. The damages to be allowed for injury if it has recognized the right by delivering to a crop by failure to furnish water from water to the one in possession.
an irrigation ditch is the value of the crop Same liability for negligence.
at the time of the injury, to be determined 3. A mutual irrigation ditch company is by its value on the land at that time, or its liable to holders of its stock and their ten- value at maturity less the cost of perfecting ants for negligent failure to maintain the and marketing it. ditch in repair, so that water cannot be Appeal – evidence to justify disturbing delivered to them, to their injury.
judgment. Same time of cleaning ditch
6. That the evidence would have war
ranted a larger award of damages than was 4. Failure of an irrigation ditch company allowed by the trial court is no reason for to clean the ditch during the fall and win the appellate court disturbing the judgment. ter when the water is not needed, and their deliberate performance of the necessary
(Crow, Ch. J., and Chadwick, Fullerton, work in the spring, so that stockholders are
and Mount, JJ., dissent.) deprived of water when needed for their crops, is negligence.
(January 9, 1915.) plaintiff and others in an association own-1789, damages were recovered by a stocking an irrigating ditch had deeded their holder in a mutual ditch company for rights in the ditch to the company in con- wrongful diversion of water from an upper sideration of stock, and the court said that to a lower reservoir, from which the plain"the stated objects of the corporation, as tiff's land could not be irrigated. Regardexpressed in the certificate and the stipula- ing the duty of the company to the stocktions in the deed, clearly define the duties holder, the court said that “the defendant imposed upon the corporation. By the company, having been organized for the purterms and conditions thereof the corporation pose of supplying water to its stockholders is bound to keep the main ditch supplied by means of a ditch and reservoir system, with water, and to regulate and divide its assumed and was charged by law with the use among the several stockholders in ac- duty of exercising reasonable care and dilicordance with their respective interests; gence in procuring and storing the water, and it must necessarily follow that for any keeping its storage reservoirs in repair and neglect or failure to properly discharge its condition to retain the same, and making duty in this respect it would be liable to ratable distribution thereof; and, if plainthe stockholder who is injured thereby to tiff's land was so situated that it could be the extent of the damages suffered by him.” irrigated from certain reservoirs only, it
The contention was overruled in O'Connor was its duty, if practicable, by the exercise v. North Truckee Ditch Co. supra, that, as of reasonable care and diligence, and withthe testimony relating to the negligence of out prejudice to the other stockholders, to the company showed that some of the stock retain a sufficient amount of water in such holders above the plaintiff's land had placed reservoirs to irrigate those lands;" that it dams in the ditch, and diverted more water was the failure to perform this duty, and than they were entitled to, and that but the injury resulting to plaintiff, that was for such acts the plaintiff would not have charged in the complaint. been injured, the injuries complained of Seeley v. Huntington Canal & Agri. Asso. were occasioned by the wrongful acts of 27 Utah, 179, 75 Pac. 367, was an action other stockholders, and that the corporation by a stockholder against a water company was not guilty of negligence, and not liable for damages for failure to deliver water to for damages.
which the plaintiff claimed he was entitled, And in Rocky Ford Canal R. L. Loan & the only question considered, however, being T. Co. v. Simpson, 5 Colo. App. 30, 36 the legality of an assessment which the Pac. 638, an irrigation company organized plaintiff had failed to pay, such failure for the purpose
supplying water to its being set up as a defense to the action. stockholders exclusively was held liable to Among possibly other cases where stocka stockholder for breach of contract for holders have sought to enjoin irrigation failure to deliver her proportionate share companies from discrimination in the deof the water. In upholding the verdict livery of water, or from a wrongful diverfor the plaintiff, the court said that the sion thereof, see Richey v. East Redlands agreement of the company being to fur- Water Co. 141 Cal. 221, 74 Pac. 754, and nish water in proportion to the amount McDermont v. Anaheim Union Water Co. of stock, it devolved upon it, under the 124 Cal. 112, 56 Pac. 779. facts of the case, to explain its failure As to mandamus to enforce the right of so to do, and that the sufficiency of the a stockholder of a water company to water, explanation was for the jury; that the duty see note to Miller v. Imperial Water Co. 24 assumed by the company was to use rea- L.R.A. (N.S.) 372. sonable care and diligence in conveying the It is to be regretted in view of the novelty water, in keeping the means of conveyance and importance of the suggestions in the in repair, and making a ratable distribution. dissenting opinion in the BERG CASE, that
So, in Mountain Supply Ditch Co. v. | the majority did not make a more specific Lindekugel, 24 Colo. App. 100, 131 Pac. reply to them.
R. E. H.
the Superior Court for Yakima County company to explain the failure. in plaintiff's favor in an action brought to Rocky Ford Canal R. Loan & T. Co. v. recover damages alleged to have been caused Simpson, 5 Colo. App. 30, 36 Pac. 638; by defendant's negligent failure properly to Dalton v. Selah Water Users' Asso. 67 maintain and keep in repair an irrigation Wash. 589, 122 Pac. 4. ditch; defendant appealing from a judg- The measure of damages in the case of ment in plaintiff's favor, and plaintiff ap- loss of growing crops or of fruit trees is pealing from the inadequacy of the amount the market value over the cost of producing allowed as damages. Affirmed.
and marketing The facts are stated in the opinion.
Shotwell v. Dodge, 8 Wash. 337, 36 Pac. Messrs. Thomas H. Wilson and Bogle, 254; Fuhrman v. Interior Warehouse Co. Graves, Merritt, & Bogle, for plaintiff: 64 Wash. 159, 37 L.R.A. (N.S.) 89, 116
It is the plain duty of the corporation, Pac. 666; Raywood Rice, Canal & Mill. Co. in the exercise of its corporate functions, v. Erp, 105 Tex. 161, 146 S. W. 155; Interto furnish water to the land, and it is national & G. N. R. Co. v. Pape, 73 Tex. liable for failure to perform that duty. 501, 11 S. W. 526; Lommeland v. St. Paul,
Miller v. Imperial Water Co. 156 Cal. M. & M. R. Co. 35 Minn. 412, 29 N. W. 119. 27, 24 L.R.A.(N.S.) 372, 103 Pac. 227; 3 The value of the trees as they stood hav. Kinney, Irrigation, 2d ed. § 1486; Rocky ing been shown, and the trees being a total Ford Canal R. L. Loan & T. Co. v. Simp loss, no deductions are to be made. son, 5 Colo. App. 30, 36 Pac. 638; O'Connor Fuhrman v. Interior Warehouse Co. 64 v. North Truckee Ditch Co. 17 Nev. 245, Wash. 163, 37 L.R.A.(N.S.) 89, 116 Pac. 30 Pac. 882; State v. Twin Falls Canal Co. 666; Hanes v. Idaho Irrig. Co. 21 Idaho, 21 Idaho, 410, 121 Pac. 1039; 10 Cyc. 965; 512, 122 Pac. 868. 4 Thomp. Neg. 2d ed. $ 4637.
Mr. A. L. Agatin, with Messrs. EngleThe water, or right to the use of the hart & Rigg, for defendant: water, became an appurtenance (not in- The true measure of damages for total separable) to the land, and so remains destruction of growing or standing crop is until severance by the act of the share the value of the crop in the condition in holder in the manner fixed by the articles which it was at the time and place of and by-laws of the corporation, and as destruction. regulated by law.
13 Cyc. 153; Teller V. Bay & River 2 Wiel, Water Rights, 2d ed. SS 1206, Dredging Co. 12 L.R.A.(N.S.) 267, note. 1269; 3 Kinney, Irrigation, 2d ed. S$ 1483, The obligation and duty arising out of 1484; 2 Kinney, Irrigation, 2d ed. § 1011; contract are due only to those with whom Miller v. Imperial Water Co. 156 Cal. 27, it is made; no action can be brought by 103 Pac. 227.
one not a party to the contract. While the water right remains appur- 9 Cyc. 373; Winterbottom v. Wright, 10 tenant, a lease of the land and water for Mees. & W. 109, 11 L. J. Exch. N. S. 415; a term creates the relation of landlord and Marvin Safe Co. v. Ward, 46 N. J. L. 19; tenant in regard to the same. The lessee Lovejoy v. Bessemer Waterworks Co. 146 succeeds to and is entitled to all the rights Ala. 374, 6 L.R.A.(N.S.) 429, 41 So. 76, and privileges of the lessor, through priv. 9 Ann. Cas. 1068, 20 Am. Neg. Rep. 1; ity of estate and contract touching the Britton v. Green Bay & Ft. H. Waterworks subject-matter, and may maintain an action Co. 81 Wis. 48, 29 Am. St. Rep. 856, 51 to redress injuries to such rights.
N. W. 84; House v. Houston Waterworks 2 Kinney, Irrigation, 2d ed. & 1025; Co. 88 Tex. 233, 28 L.R.A. 532, 31 S. W. Crook v. Hewitt, 4 Wash. 749, 31 Pac. 28; 179; Hone v. Presque Isle Water Co. 104 Wood, Land. & T. 88 212, 213; Black's Law Me. 217, 21 L.R.A. (N.S.) 1021, 71 Atl. Dict. Privity, p. 942; 2 Bouvier's Law Dict. 769; Lutz v. Tahlequah Water Co. 29 Okla. Privity, p. 465; Booth v. Chapman, 59 Cal. 171, 36 L.R.A. (N.S.) 568, 118 Pac. 128 ; 149; Pallett v. Murphy, 131 Cal. 192, 63 Howsmon v. Trenton Water Co. 119 Mo. Pac. 366; Equitable Securities Co. v. Mont- 24 's. W. 784; Buckley v. Gray, 110 Cal.
304, 23 L.R.A. 146, 41 Am. St. Rep. 654, rose & D. Canal Co. 20 Colo. App. 465, 79 339, 31 L.R.A. 862, 52 Am. St. Rep. 88, 42 Pac. 747.
Pac. 900; National Sav. Bank v. Ward, The evidence shows that defendant failed 100 U. Š. 195, 25 L. ed. 621; Roddy v. to furnish water in violation of its duty, Missouri P. R. Co. 104 Mo. 234, 12 L.R.A. and that plaintiff was damaged thereby. 746, 24 Am. St. Rep. 333, 15 S. W. 1112;
Hanes v. Idaho Irrig. Co. 21 Idaho, 512, Pittsfield Cottonwear Mfg. Co. v. Pittsfield 122 Pac. 859; O'Connor v. North Truckee Shoe Co. 71 N. H. 522, 60 L.R.A. 116, 53 Ditch Co. 17 Nev. 245, 30 Pac. 885. Atl. 807, 13 Am. Neg. Rep. 363; Nickerson
A failure to perform the duty of furnish-'v. Bridgeport Hydraulic Co. 46 Conn. 24, 33 Am. Rep. 1; 3 Jaggard, Torts, $ 260, ers of the corporate stock. By the amended p. 904; Ferris v. Carson Water Co. 16 Nev. articles of incorporation, the capital stock 44, 40 Am. Rep. 485.
of the corporation was $4,200, divided into The action cannot be maintained upon 4,200 shares of the par value of $1 per the theory that the obligation to supply share. No dividends were to be paid upon water by the canal company to Steward is this stock. The canal, after it was confor the benefit of plaintiff, although he is structed, was to be maintained and kept in not a party to the contract.
repair by assessments each year made upon Buckley v. Gray, 110 Cal. 339, 31 L.R.A. the stockholders. The certificates of stock 862, 52 Am. St. Rep. 88, 42 Pac. 900; which were issued provided that the owner Simson v. Brown, 68 N. Y, 355; Burton v. of the shares therein specified, in accordLarkin, 36 Kan. 246, 59 Am. Rep. 541, 13 ance with the articles of incorporation and Pac. 398; Greenwood v. Sheldon, 31 Minn. the by-laws, was entitled for every share 254, 17 N. W. 478; Ferris v. Carson Water of stock to 14200 part of the volume of Co. 16 Nev. 44, 40 Am. Rep. 485; Second water carried by the canal, so long as the Nat. Bank v. Grand Lodge, F. A. M. 98 water should be used upon the land deU. S. 123, 25 L. ed. 75; Britton v. Green scribed upon the back of the ertificate. Bay & Ft. H. Waterworks Co. 81 Wis. 48, On March 31, 1909, one William Steward 29 Am. St. Rep. 856, 51 N. W. 84; Styles became the owner, by purchase from E. B. v. F. R. Long Co. 70 N. J. L. 301, 57 Atl. Preble, of certain lands which were under 448; Beach, Contr. $ 200; House v. Hous- the ditch. The certificates of stock which ton Waterworks Co. 88 Tex. 233, 28 L.R.A. entitled Preble to water to be used upon 532, 31 S. W. 179; Wright v. Terry, 23 this land were on this date assigned to Fla. 169, 2 So. 6.
Steward, but were not transferred upon the The "water right” represented by stock | books of the corporation until February follows the stock, and is not an “appur. 21, 1911. On the 27th day of November, tenance” to land in the sense of being capa- 1909, Steward leased for a period of two ble of passing as an "appurtenance" with years 100 acres of the land above mentioned any lease or deed of the land.
to William Berg, the plaintiff. This lease First Nat. Bank v. Hastings, 7 Colo. App. provided that Berg would plant the land 129, 42 Pac. 691; George v. Robison, 23 leased in apple trees of specified varieties, Utah, 79, 63 Pac. 819; 3 Farnham, Waters, and would cultivate and care for the same p. 2001; 17 Am. Eng. Enc. Law, 527; 40 during the period covered by the lease, in Cyc. 833; Oligarchy Ditch Co. v. Farm a good and husband-like manner. During Invest. Co. 40 Colo. 291, 88 Pac. 443; Op- the time covered by the lease, Berg had the penlander v. Left Hand Ditch Co. 18 Colo. right to plant the entire tract to nursery 142, 31 Pac. 854,
stock, provided he should not plant any
nursery stock or any other crops nearer Main, J., delivered the opinion of the than 3 feet distant from the apple trees. court:
The lease also provided that Berg should The purpose of this action was to recover have the right to use a specified portion of damages alleged to be due to the negligence the water from the Yakima Valley Canal of the defendant in failing to properly Company, which was then owned by Stewmaintain and keep in repair an irrigation ard and covered by the certificates which ditch. The cause was tried to the court had been assigned and delivered to him by sitting without a jury. Judgment was en- Preble. Berg was a nurseryman, and imtered for the plaintiff in the sum of $18, mediately entered into possession of the 500. The defendant appeals.
land for the purpose of engaging in the The facts are substantially as follows: nursery business somewhat extensively. The defendant, Yakima Valley Canal Com During the spring of the year 1910 he pany, is a corporation organized and ex. planted approximately 70 acres of land in isting under the laws of the state of nursery stock. For this purpose he emWashington. The object for which this cor- ployed about twenty-five men. Berg claims poration was formed, as set out in its arti- that the defendant company was negligent cles, was to construct, maintain, and operate in failing to properly maintain and take a canal to carry water for irrigation and do- care of the irrigation ditch during the premestic purposes from the Naches river in vious fall and winter, and for that reason the county of Yakima to the lands owned he did not receive sufficient water during by its stockholders situated in that county, the spring of 1910 to grow the nursery and in township 13, range 18, E. W. M. stock which he had planted. By reason of The water was to be furnished at cost to the shortage of water, Berg claims damthe owners of lands upon the line of the ages in the sum of $73,150. canal or lateral branches, who should share At the conclusion of the trial the court, in the cost of construction, or become own-'at the request of one party and with the
consent of the other, in company with a whether, on a sale of the land, the water representative of each, examined the land. right passes as appurtenance. A sale of Other facts will be mentioned as they may the certificate may be made separate from become pertinent in connection with the the land for use on other land, and will consideration of the points urged for a re transfer the water right, where the change versal.
does not injure other existing water users The questions to be determined are: by the new place of use (who alone, howFirst, the right of the plaintiff to maintain ever, can raise the objection that they are this action. Second, is the defendant com injured); the transfer being complete when pany liable in damages for negligently fail. (and not until) entered on the books of the ing to properly maintain and keep in re- company. On the other hand, in the abpair the irrigation ditch? Third, does the sence of any separate sale of the certificate evidence sustain the charge of negligence? or of any other evidence of any express And, fourth, the amount of the damages. intention to make a severance, a 'sale of the
I. In order to reach the real question in land on which the water is used will carry the case without unnecessary preliminary the water right and right to the certificate discussion, it will be admitted, for the pur- as an appurtenance." poses of this opinion: (a) That the Yaki- In the present case the water right, as ma Valley Canal Company is what is evidenced by the certificate, was appurteknown as a mutual ditch company (that nant to the land. is, that the company was formed for the The amended articles of incorporation purpose of supplying water to its stock specify that "each share of stock of this holders only, and not to the public gener- corporation shall constitute a water right ally); (b) that the action must be founded for 1 acre of land, and shall, when duly either in tort or contract; (c) that the issued and delivered, vest in the lawful present action is not one sounding in tort; owner thereof, his heirs and assigns, title (d) that an action based upon a contract to one forty-two hundredth (74200) part of must be brought by one who is either a the water at any time actually carried by party or stands in a relation of privity; said canal. and (e) that Berg was not a party to the The by-laws of the corporation adopted contract. If, therefore, the present action by the stockholders specify the form of the can be maintained by Berg, it is upon the certificate. The certificate provides that ground of privity. Whether that relation the owner of each certificate of stock shall existed between Berg and the canal com- be entitled to "one forty-two hundredth pany depends upon whether, when Berg part of the volume of water carried by the took his lease, a right to the water passed canal of said corporation for each share of to him as an appurtenance to the land. It stock represented by this certificate, so long will hardly be denied that, if the water as he shall use said water upon the land right passed as an appurtenance to the described in the certificate upon the back land, this right to maintain the action is hereof, and no longer, provided, however, well founded.
that no water can be taken from said canal In a mutual company the stock certifi- by virtue of the ownership of said stock cate represents the water right. A trans- until the certificate upon the back hereof fer or sale of the certificate may be made has been filled out, signed, and sea led by separate from the land for use on other the secretary of this corporation." land, and will transfer the water right. The land formerly owned by Preble and But where it has not been thus sold or transferred to Steward was described upon transferred, the question whether the water the back of the certificates as issued to right is appurtenant to the stockholder's Preble, and assigned and delivered to Stewland is generally a question of fact, as is ard at the time of the purchase of the land also whether, on a sale or transfer of the by him. Considering the respective proviland, the water right passes as an appur- sions of the articles of incorporation, the tenance. In 2 Wiel, Water Rights in the by-laws, and the stock certificate, it is Western States, 3d ed. § 1269, speaking plain that it was the intention to make the upon this question, the author states the water right represented by the stock aprule as follows: "So long as the company purtenant to the land. remains purely a mutual one, the certifi- But it is contended that, even if the cate of stock represents the water right. water is appurtenant to the land, it did A transfer or sale of the certificate is gov- not pass to Berg under the terms of the erned by much the same rules as those lease, in which it was provided: “That he elsewhere considered regarding transfers of [Berg] will accept as the full water right water rights. Whether the water right is for said land one half of the water right appurtenant to the stockholder's land is a now owned and held by said first party question of fact in each case, as is also '[Steward), to wit, one half of one hundred