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shares of capital stock in the Yakima Val- As sustaining the contention that Berg ley Canal Company's main canal."

cannot maintain the action, the authorities For what purpose was this provision cited by the defendant which most nearly placed in the lease? Steward desired the approach the question will here be considland leased planted in apple trees. Berg ered. They are Knowles v. Leggett, 7 Colo, agreed to plant the trees, tend, irrigate, and App. 265, 43 Pac. 154; Barstow Irrig. Co. care for the same during the period covered v. Cleghon, Tex. Civ. App.

- 93 S. W. by the lease. Berg had the right, for his 1023; First Nat. Bank v. Hastings, 7 Colo. own purposes, of planting the entire tract | App. 129, 42 Pac. 691; Oligarchy Ditch Co. to nursery stock, except that he should not v. Farm Invest. Co. 40 Colo. 291, 88 Pac. encroach upon the apple trees closer than 443; 3 Farnham, Waters, p. 2001; George 3 feet. The use of the water upon the v. Robison, 23 Utah, 79, 63 Pac. 819. land was absolutely essential to any prac- In both the Knowles and Barstow Cases, tical attempt to carry out the provisions of the courts were considering leases where the lease. Without the water the purpose the owner of land had undertaken to furcould not be accomplished. While the lan- nish the tenant with a certain amount of guage used is not as specific as it could water. In neither case was it attempted in have been, it is yet quite sufficient to make the lease to transfer the water right to the the intention of the parties evident. The lessee. There is an obvious distinction belease transferred to Berg the right to use tween a contract whereby the landlord unthe water as therein specified. The lease, dertakes to furnish water to his tenant, for the period of time covered by it, oper- and a contract whereby he attempts to ated as an assignment of the water right, transfer the right to the water itself to as therein provided. In 3 Kinney on Irri- the tenant, as in the present case. gation, 2d ed. § 1484, it is said: “So, In the First Nat. Bank and Oligarchy again, where a tract of land is conveyed, Ditch Co. Cases there will be found lan'with the water right appurtenant thereto,' guage sustaining the defendant's contenor a similar expression used in the deed, tion. But in neither case was it necessary, and the shares of stock representing the in deciding the cause then before the court, water right were not assigned to the pur- | to pass upon the question. In the Bank chaser, such a conveyance must be deemed Case there stood, in the name of one Dickin law an assignment, and the purchaser son, stock upon the books of the ditch can compel a transfer of the stock and company. The bank brought suit and atdelivery to him of all water which was tached the stock. Prior to this time the actually appurtenant to the land at the land on which the water represented by the time of the transfer.”

stock was used had been sold and trangThe water, as appurtenant to the land, ferred by Dickson to a third person. Conhaving passed to Berg by virtue of the struing a statute then in force in the state lease, established his privity, and, as a re- of Colorado, it was held that an attaching sult, his right to maintain the action. In creditor was not required to look beyond Booth v. Chapman, 59 Cal. 149, the defend the books of the corporation to determine ant had agreed to sell to the plaintiff 20 who owned the stock. In the Oligarchy acres of land with the water right appur. Ditch Co. Case there were two corporations, tenant. The water right had been pur. one known as Oligarchy Ditch Company, chased by Chapman from an incorporated which was the owner of a ditch with an irrigation ditch company. The plaintiff, appropriation of water attached thereto; not receiving the amount of water which the other was the Oligarchy Extension he claimed he was entitled to, brought an Ditch Company. The latter corporation action against his vendor. The court there owned no water right and was organized held that the action could not be main- solely as a conduit company. The stock tained, but should have been brought in the extension company did not represent against the corporation which controlled independent water rights, but only the right the water. It was said: “The contract to carry water obtained from the Oligarchy was delivered to the plaintiff, and by virtue Ditch Company. It was held that a deed of it he took and still retains possession of conveying the land, together with all the the land, and, as we construe the contract, rights to use water for irrigating the premhe became thereby invested with the water | ises, did not include stock in the extension right appurtenant to the land. If so, he company. This company owning no water must look to the corporation which con- right, but being only a carrying company, it trols the water for the pro rata share be- is plain that the right to have water carlonging to said lot. It does not anywhere ried, which the stock represented, would not appear in the record that the defendant pass as appurtenant to the land. There ever agreed to deliver any water to the would seem to be a distinction between stock plaintiff; and the court did not so find.” in a ditch company which represented the

right to the water which had been appro- dispute between them and him as to the priated and owned by the company, and amount of water to which he was entitled. stock in a corporation which owned no Had the officers of the company refused to water rights, and only carried water for its furnish him water until the stock had been members which they owned, evidenced by transferred upon the books of the company, certificates of stock in another corporation. a different question would be presented,

Farnham on Waters, supra, states the upon which we now express no opinion. doctrine broadly that water represented by II. It is argued that a corporation orshares of stock cannot be said to be appur- ganized for the purpose of furnishing tenant to land. In support of this state water to its stockholders is not liable even ment the case of George v. Robison, supra, to the stockholders on the ground of negonly is cited. An examination of that case ligence, and therefore it would not be liable will disclose that it does not support the at the suit of a tenant. It must be admitdeclaration of the text writer. There the ted that, if the corporation would not be question arose between the vendor and liable to its stockholders, a tenant of a the vendee of land. The vendee claimed the stockholder would stand in no more advanright to water as appurtenant under the tageous relation. Little space need be decovenant of warranty. Nowhere in the deed voted to the discussion of this question. was there any express reference to water One of the purposes of the corporation set rights or water for irrigation or other pur- out in its articles was “to construct, mainposes. It was held that the right to the tain, and operate a canal to carry water water did not pass under the warranty. for irrigation and domestic purposes Had the right to the water been expressly to lands owned by its stockholders.” By mentioned or referred to in the deed, as it the by-laws it was provided that one of the was in the Berg lease, the court there recog. purposes for which the annual water rental nized that the rule would have been differ- was charged was to meet the maintenance ent, when it said: “From an examination and operation of the canal. The rule is of the evidence, the conclusion is irre. that, where a corporation is organized for sistible that the water rights in question the purpose of supplying water to its stockwere treated by the owners as personal holders, it is its duty to exercise reasonable property, constituted no part of the realty, care in maintaining the ditch in proper and, not being expressly mentioned or re. repair and to see that each stockholder referred to in the deed, were not conveyed ceives his proportionate share of the water. with the land, and that there is no proof Failing in this duty, the corporation is that warranted the court in finding that guilty of negligence, and may be compelled the water was appurtenant to the land, or to respond in damages at the suit of a that the water rights were included in the stockholder. O'Connor v. North Truckee warranty."

Ditch Co. 17 Nev. 245, 30 Pac. 882; Rocky But even if it were conceded that the Ford Canal R. L. Loan & T. Co. v. Simpson, authorities just received do support the de- 5 Colo. App. 30, 36 Pac. 638. In the O'Confendant's contention, we yet think the nor Case, speaking upon this question, it rule stated by Wiel, supra, is founded upon was said: “The stated objects of the corthe better reason, and in its practical oper- poration, as expressed in the certificate ations would be more just and equitable. and the stipulations in the deed, clearly To cause arid lands to become valuable for define the duties imposed upon the corpoagricultural purposes, water is absolutely ration. By the terms and conditions there. essential. The doctrine which makes it a of the corporation is bound to keep the question of fact whether the water right is main ditch supplied with water, and to appurtenant to the land, and whether it regulate and divide its use among the sevpasses by a lease or other conveyance, eral stockholders in accordance with their seems to us sound.

respective interests; and it must necessarily Some claim is made that the corporation follow that, for any neglect or failure to cannot be held liable because the stock still properly discharge its duty in this respect, stood upon its books in the name of Preble. it would be liable to the stockholder who But this objection is not well founded. is injured thereby, to the extent of the Prior to the time of the lease from Stew- damages suffered by him.” ard to Berg, the company had recognized III. It is next claimed that the evidence the right of Steward in furnishing him does not show negligence. The trial court water which was represented by the cer- found that the defendant was chargeable tificates. As to Berg, the officers and rep. with negligence in two respects : First, resentatives of the corporation at no time that it failed to properly care for its canal refused to furnish him water because the during the fall of 1909 and the following stock had not been transferred upon the winter and spring; that this negligence books of the corporation. There was no consisted in omitting to clean the canal so


that it would carry the quantity of water, of tilling, harvesting, and marketing. Shotthat it was intended to carry; and that, by well v. Dodge, 8 Wash. 337, 36 Pac. 254; reason of this negligence, the plaintiff did Fuhrman v. Interior Warehouse Co. 64 not receive the water as early in the spring Wash. 159, 37 L.R.A. (N.S.) 89, 116 Pac. as it was needed, and as it was the duty 666. of the defendant to furnish and, second, The defendant offered evidence tending that the defendant did not supply the to show the inadaptability of the land for plaintiff with his proportionate share of the purpose of producing nursery stock. the water that came down the ditch, but The trial court, after the conclusion of the permitted other stockholders occupying trial, as already stated, viewed the land. lands further up the ditch, to take a The plaintiff is prosecuting a cross appeal, greater portion of the water than they claiming that the court erred in not making were entitled to; that by reason of this the award of damages sufficiently large. negligence the plaintiff lost a large portion It is true that the evidence in the record of his nursery stock.

would have sustained a larger verdict had The trial judge filed in the case a writ- the cause been tried to a jury and such a ten opinion. Speaking on the question of ver returned. This, however, would not negligence he therein said: “The testimony be a reason for our disturbing the judg. of the officers in charge of the company ment of the trial court. during the spring of 1910 shows a clear Both parties having appealed, and neither case of negligence of a very pronounced having prevailed, no costs will be allowed kind. Very little effort was made to clean in this court. out any part of the ditch during the fall The judgment will be affirmed. of 1909 after the time when it had a right to shut off the water for the purpose of

Ellis, Gose, Morris, and Parker, JJ., cleaning out and making repairs. No repair work seems to have been done during Chadwick, J., dissenting: the winter. It was all put off until the I dissent from the holding of the maspring, and then the directors seem to have jority. Lack of time, owing to the change taken their time about everything. They to be made in the personnel of this court turned the water on when it suited their within the next few days, prevents me pleasure, and shut it off to make repairs from elaborating my views or going into which might have been made before, show- the authorities. It will be enough to say ing an utter disregard for the rights of that this action is brought against a muthe patrons of the company. No shortage tual ditch company not organized for of water is claimed;. no serious breaks in profits, of which Steward was a member. the ditch, causing unavoidable delays; in Upon the theory of the majority, he is as fact, no substantial reason is shown why guilty of negligence as any other member water should not have been delivered by of the company, and could not maintain the first of April, and delivered with rea- an action in his own behalf. Berg stands sonable continuity throughout the entire in his shoes and can claim no greater right season sufficient to have prevented the loss against the company than Steward could sustained by the plaintiff.”

claim. Furthermore, a mutual ditch comThe views of the trial judge, as expressed pany should not be held to answer for the in the findings of fact and in the written torts of one or more of its members. To opinion, are abundantly sustained by the do so would charge the innocent as well as evidence. It would unnecessarily prolong the guilty, and put upon the innocent the this opinion and serve no useful purpose burden of keeping a private contract made to review the testimony upon this question. by one of the co-owners, and in which they

IV. The defendant in its brief proclaims had no interest whatever. vigorously against the amount of the judg

In consultation I asked the majority to ment. But this invective overlooks the evi- tell me, or to state in the opinion, how the dence in the record. The plaintiff's evi. judgment in this case could be executed. dence shows the value of the nursery stock The question was not answered, nor has it in its condition at the time of its loss by been answered in the opinion. The answer reason of the failure to receive water. The to that question furnishes the key to the

As it defendant offered no directly controverting whole superstructure of this case. evidence. The proper measure of damages now stands, plaintiff has a judgment which, for the loss of a growing crop is the value in my opinion, is a paper judgment which of the crop at the time of the loss. This cannot be enforced by taking the property value may be arrived at either by evidence or money of the unoffending members. showing the reasonable value of the crop They owed Berg no contract duty and no upon the land at the time, or the market implied duty, and the water, which they value at the time of maturity, less the cost I had bought and paid for, is as essential to the tillage of their land as it was to ! the sale of stock in a corporation may be the land leased by Steward to Berg. Sure had at the suit of the seller, if it is made ly no court will ever hold that the judg. to appear that such stock is not for sale ment can be executed by a sale of the ditch in the general market and is of uncertain property. If it should, then may the prop: for damages is inadequate.

value, since in such case an action at law erty of the innocent and unoffending be

Evidence value of corporate stock. taken at will, and justice will be a name

2. Proof that stock in the same corporawithout substance.

tion was sold by the individual holders

thereof, about the time the sale in question Crow, Ch. J., and Fullerton and Mount. was to have been consummated, at widely JJ., concur in what is said by Chadwick, J variant prices, is evidence of its uncertain

value. Petition for rehearing denied.

(December 15, 1914.)




PPEAL by plaintiff from a decree of the WEST VIRGINIA SUPREME COURT Circuit Court for Harrison County disOF APPEALS.

m sing his bill filed to compel specific per

formance of an alleged contraot of sale of HAZE MORGAN, Appt.,

stock in a corporation. Reversed.

The facts are stated in the opinion.

Messrs. W. M. Conaway and J. 0. T. (- W. Va. - 83 S. E. 1001.)

Tidler, for appellant: Specific performance

Plaintiff's only full, complete, and adsale of corpo

equate remedy was by suit in equity for the rate stock. 1. Specific performance of a contract for specific performance of the contract.

Hogg v. McGuffin, 67 W. Va. 456, 31 Headnotes by WILLIAMS, J.

L.R.A.(N.S.) 491, 68 S. E. 41; Bumgardner Note. Specific performance of rop v. Columbia Collieries Co. 70 W. Va. tract for sale of stock in corporation. 58, 73 S. E. 299. The present note supplements the notes

In the above case it appeared that the to Ryan v. McLane, 50 L.R.A. 501, and party demanding the transfer of the stock Hogg v. McGuffin, 31 L.R.A.(N.S.) 491.

and bonds was also seeking to obtain the As to specific performance of stock-pool which issued the stock and bonds, and it

title to the property of the corporation ing agreement, see note to Gleason v. Earles, 51 L.R.A. (N.S.) 785.

was held that they were of peculiar value

to him as they were really muniments of Jurisdiction-remedy at law.

title; and as they could not be obtained in

the market the court said that the usual Supplementing notes in 50 L.R.A. 501, reason against allowing specific performand 31 L.R.A. (N.S.) 492.

ance in relation to stock and bonds cannot A contract for the purchase of shares of apply under such circumstances. Ibid. stock may be specifically enforced at the A court of equity will specifically enforce instance of the seller, where the difficulty a contract for the sale of stock upon dein ascertaining the value of the stock is ferred payments, which provided that the such that his remedy by action at law to stock should be deposited in a bank, to be recover damages for breach of the contract delivered to the purchaser in amounts equal is inedaquate. First Nat. Bank v. Corpora- to the payments made from time to time, tion Securities Co. - Minn, -, 150 N. W. since such contract did not amount to a 1084. To the same effect, see MORGAN v. sale in præsenti, but was only an execuBARTLETT, above reported.

tory contract for the future sale of the As to the jurisdiction of equity to spe stock, and with the stock held by the bank cificially enforce a contract for the sale of in escrow, the seller could not, in an action corporate stock it said in First Nat. Bank for the purchase price, truthfully allege a v. Corporation Securities Co. supra, that sale and delivery of the stock, and was not "in administering the remedy, current au- in a position of making a tender upon dethority regards the jurisdiction as flexible, manding payment of the amount due, and depending largely upon the facts of each was without an adequate legal remedy for individual case, and not bound by hard and being deprived of the amount of the purfast rules, a reasonable discretion being al. chase money due by the terms of the conlowed in awarding relief, and in determin- tract. David v. McRae, 183 Fed. 812. ing the right thereto the situation involved In Gilfallan v. Gilfallan, Cal. 141 should be considered from a practical, rath- Pac. 623, it was held that one who had coner than a theoretical, view point."

tracted for the purchase of stock in an oil Equity will compel the specific perform- company was entitled to have specific perance of a contract for the transfer of stock formance on the part of the seller upon and bonds when they have a peculiar value showing that the corporation had no propto the party demanding the transfer. Lath. erty except 40 acres of land upon which

v. Leavitt, 35 W. Va. 194, 12 L.R.A. 776, 13 | 667, 101 Pac. 568; Southern Exp. Co. v. S. E. 67; Sherman v. Herr, 220 Pa. 420, 69 Western North Carolina R. Co. 99 U. S. Atl. 899; Butler v. Wright, 186 N. Y. 259, 191, 200, 25 L. ed. 319, 321; Wood v. 78 N. E. 1002; Baumhoff v. St. Louis & K. Kansas City Home Teleph. Co. 223 Mo. 537, R. Co. 205 Mo. 248, 120 Am. St. Rep. 745, 123 S. W. 6; Nease v. Ætna Ins. Co. 32 W. 104 S. W. 5; Jennings v. Southern Carbon Va. 283, 9 S. E. 233; Carney v. Barnes. 56 Co. W. Va. —, 80 S. E. 368; Hall v. Phil. W. Va. 581, 49 S. E. 423. adelphia Co. 72 W. Va. 573, 78 S. E. 755 ; Messrs. Carter & Sheets and B. B. Tucker v. Farmers' Mut. Fire Asso. 71 W. Jarvis, for appellee: Va. 690, 77 S. E. 279; Safford v. Barber, 74 Plaintiff was not entitled to specific perN. J. Eq. 352, 70 Atl. 371; Wright v. Bell, formance of the contract. 5 Price, 325; Frue v. Houghton, 6 Colo. 318; Hissan v. Parrish, 41 W. Va. 686, 56 Am. Omaha Lumber Co. v. Co-Operative Invest. St. Rep. 892, 24 S. E. 600; Hogg v. McGuffCo. 55 Colo. 271, 133 Pac. 1112; McCullough in, 67 W. Va. 456, 31 L.R.A.(N.S.) 491, 68 V. Sutherland, 153 Fed. 418; Henry L. S. E. 41; 26 Am. & Eng. Enc. Law, 2d ed. 122; Doherty & Co. v. Rice, 186 Fed. 204; Tur. Taylor, Corp. 790; Watkins v. Robertson, ley v. Thomas, 31 Nev. 181, 135 Am. St. 105 Va. 269, 5 L.R.A. (N.S.) 1194, 115 Am. Rep. 667, 101 Pac. 568; Altoona Electrical St. Rep. 880, 54 S. E. 33; Donnally v. ParkEngineering & Supply Co. v. Kittanning & er, 5 W. Va. 301; Grizzle v. Sutherland, 88 F. C. Street R. Co. 126 Fed. 559; Beheret v. Va. 584, 14 S. E. 332; Gibbon v. Jameson, Myers, 240 Mo. 58, 144 S. W. 824; Orange 5 Call (Va.) 294; McCully v. McLean, 48 & A. R. Co. v. Fulvey, 17 Gratt. 366; | W. Va. 625, 37 S. E. 559. Schmidt v. Pritchard, 135 Iowa, 240, 112 N. W. 801; Rau v. Seidenberg, 53 Misc. 386, Williams, J., delivered the opinion of the 104 N. Y. Supp. 798; Dennison v. Keasby, court: 200 Mo. 408, 98 S. W. 546; Turley v. Plaintiff filed his bill praying to have Thomas, 31 Nev. 181, 135 Am. St. Rep. I specific performance of an alleged contract oil had not been discovered, and the value , to an action to enforce a trust as to perwas speculative, so that the stock had no sonal property, citing Johnson v. Brooks, market value, but its value could be ascer- 93 N. Y. 337; Cowles v. Whitman, 10 Conn. tained only on the discovery of oil in the 121, 25Am. Dec. 60; Kimball v. Morton, land and that adjacent thereto, and that the 5 N. J. Eq. 26, 43 Am. Dec. 621; and Krohn stock was owned by but a few persons, and v. Williamson, 62 Fed. 869, affirmed in 13 none of it was for sale.

C. C. A. 668, 31 U. S. App. 325, 66 Fed. But specific performance of a contract 655, which are set out in the note in 50 for the transfer of corporate stock was de. L.R.A. 505, and quoting with approval from nied, in Eckley v. Daniel, 193 Fed. 279, the opinion of Judge Taft in 62 Fed. 869, upon the ground that the bill failed to show to the effect that “the court, as a court of want of an adequate remedy at law, where equity, acquired jurisdiction of the action, it was not averred that the stock could not not because damages at law would be inbe purchased in the market, or that its adequate, but because it is an action to enpecuniary value was not readily ascertain force a trust, and, having jurisdiction on able, or that it had a peculiar value to the this ground, may give such full relief as complainant.

the nature of the case requires."

-trust involved.

-mutuality of remedy. Supplementing notes in 50 L.R.A. 505, and 31 L.R.A. (N.S.) 495.

Supplementing notes in 50 L.R.A. 506, One who subscribed in his name for cor- and 31 L.R.A.(N.S.) 496. porate stock and bonds, on behalf of an- Equity will specifically enforce a contract other who paid the consideration thereof, made by a corporation to purchase its stock became a trustee for such other person upon from a shareholder in consideration that the issuance of such stock and bonds, and the latter refrain from opposing the measmay be obliged to transfer them to the ures proposed by the other shareholders and beneficial owner by a court of equity, with that he withdraw from the corporation, out the necessity of a showing that the rem- where it appeared that, in fulfilment of the edy at law is inadequate. Bacon v. Grosse, contract, he withdrew from participation in 165 Cal. 481, 132 Pac. 1027. The court the management of the affairs of the corsaid that "undoubtedly it is the general poration and allowed a policy which he oprule that equity will not compel the deliv- posed to be pursued, and it also appeared ery of specific personal property wrongfully that the stock of the corporation could not withheld, nor enforce the specific perform be procured on the market and had no mar. ance of a contract to sell chattels, unless it ket price. Cole v. Cole Realty Co. 169 Mich. is shown that money damages for the breach 347, 135 N. W. 329. The court pointed out of the obligation would not afford adequate that under the facts the defendant corporarelief," but that the rule is not applicable I tion would have been entitled to specific per

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