Cole v. Richards Irr. Co. in Little Cottonwood creek was to drain the lakes in a few days by drawing therefrom large quantities of water, which from time immemorial had gradually, during the hot summer months, when most needed, found its way into the main channel of the creek. The effect of the course thus pursued by plaintiffs was to diminish, rather than increase, the supply of water in this creek. The court found the issues in favor of the defendants, and plaintiffs appealed. MCCARTY, J., after stating the facts, delivered the opinion of the court. 1 It is settled in this arid region by abundant authority that when the waters of a natural stream have been appropriated according to law, and put to a beneficial use, the rights thus acquired carry with them an interest in the stream from the points where the waters are diverted from the natural channel to the source from which the supply is obtained, and any interference with the stream by a party having no interest therein that materially deteriorates the water in quantity or quality previously appropriated, to the damage of those entitled to its use, is unlawful and actionable. Kinney on Irrigation, 249; Bear River & Auburn Water & Min. Co. v. N. Y. Min. Co., 8 Cal. 327, 68 Am. Dec. 325; Hill v. King et al., 8 Cal. 337; Butte Canal & Ditch Co. v. Vaughn, 11 Cal. 143, 70 Am. Dec. 769; Phoenix Water Co. v. Fletcher, 23 Cal. 482; Natoma Water & Min. Co. v. McCoy et al., 23 Cal. 491; Stein Canal Co. v. Kern Island Irr. Co., 53 Cal. 563; Lobdell v. Simpson, 2 Nev. 274, 90 Am. Dec. 537. Section 1, art. 17, Const. Utah, provides that "all existing rights to the use of any of the waters of this State for any useful or beneficial purpose, are hereby recognized and confirmed." It will thus be observed that the organic law of this State has put it beyond the power of any party to lawfully go upon a stream of water in which he has acquired no right, and interfere with existing rights, or to destroy or cut off the source 2 27 Utah 14 Cole v. Richards Irr. Co. of supply of such stream because it happens to be a pond or lake. It is a matter of common knowledge that some of the most valuable and permanent sources of water supply in this State are its numerous lakes, which bodies of water vary in size from a few square rods to several townships of land in extent, and sections 1265, 1266, Revised Statutes 1898, recognize the rights that have been acquired by appropriation of the waters of the lakes as well as other natural sources of supply within the State. 3 It is conceded that respondents are, and for many years have been, the owners of and entitled to the use of all the normal flow or primary waters of Little Cottonwood creek. Therefore, in the light of the foregoing principles, the only question for our determination is, do the natural waters of the lakes under consideration form a part of the source of supply of Little Cottonwood creek? If they do, then the judgment of the district court must be affirmed. The great preponderance of the evidence not only shows that the lakes in question form a part of the source of supply of this creek, but, with the exception of the upper lake, they form a part of the natural channel of one of its tributaries; hence it necessarily follows that respondents have the same usufructuary rights to the waters which naturally flow and collect in these lakes, which eventually find their way into the main channel, as they have to the balance of the natural flow of the creek. Malad Val. Irr. Co. v. Campbell (Idaho), 18 Pac. 52. While it is the policy of the State to encourage enterprises which tend to increase the available supply of water in the State, yet parties engaged in these laudable undertakings must respect the vested rights of others to the streams and other sources of water supply throughout the State accrued to them by prior appropriation. The judgment is affirmed; the costs of this appeal to be taxed against appellants. BASKIN, C. J., and BARTCH, J., concur. Western Loan & Sav. Co. v. Garff. THE WESTERN LOAN & SAVINGS COMPANY, a Corporation, Respondent, v. LOUIS GARFF and AMELIA SINGLETON GARFF, Appellants. No. 1493. (75 Pac. 375.) Building and Loan Associations: Members: Right: Where a party subscribed for stock in a building association, which he pledged to secure a loan, and thereafter made payments on the stock, and the loan association took no steps to foreclose its lien thereon for nonpayment of the loan, or in any way to apply the stock to the payment thereof, it was not entitled to contend that the issuance of the stock was a mere device to obscure the real transaction, and that the subscriber was not a member of the association.1 2. Same: Pleading: Counterclaim: Failure to Reply. Where, in an action to foreclose a real estate mortgage by a building association, defendant filed a counterclaim for the value of his stock in the association, which he had pledged to secure the loan, and alleged that it was agreed between plaintiff and defendant that by the time the principal note should mature the stock so subscribed and paid for would be worth par, and would be as cash, and the note paid out of the proceeds, and any balance paid to defendant, and plaintiff's reply did not deny such allegations, and the plaintiff retained the stock and the accumulations as its own under a claim that defendant never owned or had any rights in the same, defendant was entitled to recover the difference between the principal of the note and the value of the stock and its accumulations. (Decided February 5, 1904.) Appeal from the Fourth District Court, Utah County.Hon. J. E. Booth, Judge. 'Howells v. Pacific States Saving Co., 21 Utah 45, 60 Pac. 1025, distinguished. Western Loan & Sav. Co. v. Garff. Action to foreclose a trust deed on real estate. From a judgment in favor of the plaintiff, the defendants appealed. REVERSED. J. W. N. Whitecotton, Esq., for appellants. Messrs. Price & McCrea and William H. King, Esq., for respondent. BASKIN, C. J.-The following facts were found by the trial judge, and are not controverted by either of the parties, viz.: On the twenty-first day of July, 1892, the defendant Louis Garff executed and delivered to the plaintiff his promissory note for $1,600, payable on the sixteenth day of July, 1899, with interest thereon, payable monthly from date, at the rate of $12.50 per month; and on the same day, for the purpose of securing the payment of said note and interest, the said Louis Garff and his codefendant executed and delivered to plaintiff a deed of trust on certain real estate; that on or about the eleventh day of July, 1892, the defendant Louis Garff subscribed for and bought of the plaintiff twenty-four shares of Class A general stock of said plaintiff, as evidenced by certificate No. 260, in accordance with the rules, by-laws, and regulations of said plaintiff, at the agreed and guaranteed maximum cost and price of $50.40 per share to be paid for by said Louis Garff at the rate of 60 cents a month per share, for the period of eighty-four months; that afterwards the said Garff, as required by the terms of said purchase, paid in monthly installments to the plaintiff $1,209.60, and that the amount so paid was the full purchase price of the twenty-four shares of stock; that the stock, at the time the note was given, was, upon the demand of the plaintiff, assigned to it by the said Louis Garff as collateral security for the payment of the note and interest; that the said Garff paid all the interest on Western Loan & Sav. Co. v. Garff. the note as it became due, up to and including July 21, 1899; that at the maturity of the note, the plaintiff applied the $1,209.60 paid for the stock as part payment of the principal ($1,600) due upon the note, but the said Garff never authorized the sum paid as the purchase price of the stock to be so applied; that on the 1st day of July, 1899, the twenty-four shares of stock, with the accumulated earnings thereon, were, as shown by the books of the plaintiff, worth $1,719.78; that the plaintiff has taken no steps to foreclose its lien upon the stock, or in any way to apply the stock to the payment of the said Garff's indebtedness. The plaintiff, on the 1st day of May, 1902, instituted this action to foreclose the trust deed and obtain a decree directing the sale of the real estate described in the trust deed, or so much thereof as necessary to satisfy the judgment for $558.10 rendered against the defendant on the note secured by the trust deed after the payment of costs and an attorneys' fee of $50. The contention of the respondent, as stated in its brief, is as follows: "Garff assigned and transferred absolutely to respondent the twenty-four shares of 1 stock he subscribed for, and, as this court has held that the stock was a mere device to obscure the real transaction, and issued simply to induce the appellant Garff to believe that by subscribing for the stock he would derive a benefit other than the advancement of the loan, there was nothing in which Garff had any interest which respondent could exhaust. Then, too, Garff was not a stockholder, did not own the stock, and it would be a mere play upon time to compel the respondent to go through the form of selling stock in which Garff had no interest." In view of the wellsettled rule of law that no one is permitted to take advantage of his own wrong, this statement is remarkable. The case of Howells v. Pacific States Savings, etc., Co., 21 Utah 45, 60 Pac. 1025, 81 Am. St. Rep. 659, is cited as supporting the respondent's contention. In that case the defendant was, in terms, required, when all of the |