§ 127, Carrier and Mutual Companies-Stock Representing Water.

§ 127. Carrier and Mutual Companies-Stock Representing Water.

Irrigation companies, organized for the purpose of "selling" (107) or "renting" (107) the water to persons along the line of their ditch or canal, which we designate as "carrier" or "common carrier" companies, are fundamentally different from those companies organized for the purpose of furnishing water to be beneficially used exclusively by the members of the company, and which we may designate as "mutual companies.' In the former, as we have seen, (108) the stock or shares carry no rights whatever to water, while in the latter the water carried by the ditch or canal is represented by the shares of stock. In other words, the shares of stock are made a convenient medium or method for dividing the water between those who build or pay for the ditch owned by the company, providing, of course, they actually use the water. The former carrier or company is a corporation for profit, while the latter is purely a mutual corporation for the sole purpose of conveying water to its shareholders. (109) Each share of stock in a mutual company in respect to the use of water to which it entitles its holder, is equal to every other share. (110) The holder is entitled to the proportion of water carried through the ditch or canal that the amount of his stock bears to the whole amount of the stock of the company (111) and the distribution of the water in this manner, when it is actually used for a beneficial purpose, does not seem to conflict with the "better right" of prior appropriators. (112) In these mutual companies the capital stock represents the interest of the party in the ditch, also his right to use the water; and a transfer of such stock is also

(107) Ante, $117.

(108) (109)

Ante, $125.

Murray v. Board Co. Com'rs Montrose Co., 28 Colo. 427, 65 P. 26 ('01).

(110) Rocky Ford C. Res. L. L. & Tr. Co. v. Simpson, 5 Colo. App. 30, 36 P. 638 ('94).

(111) Id.

(112) Oppenlander v. Left-Hand Ditch Co., 18 Colo. 142,

31 P. 854 ('92).

a transfer of both an interest in the ditch and a priority to the use of water where the water has actually been used for a beneficial purpose, to the amount of the stock so transferred, (113) but the transferee is not entitled to receive any of the water until the transfer is made on the books of the company. If he takes the water by force he will be liable as a trespasser, notwithstanding his ownership of stock. (114) When shares of stock representing the water right are transferred, as just mentioned, the transfer carries the water right, (115) if one has been initiated by the actual use of the water represented thereby and may operate to sever the water right from the land of the transferer. (116) Such shares of stock are not appurtenant to the land of the owner of the shares, and a conveyance of the land does not carry with it the shares of stock. (117) As was said by Mr. Justice Elliott in the case of Combs v. Agricultural Ditch Co.: (118)

"The ownership of a prior right to the use of water is essentially different from the ownership of stock in an irrigating company. The ownership of the stock, like the title to other property, may be acquired by descent or purchase; the ownership of the prior right can be acquired originally only by the actual beneficial use of the water. The very birth and life of a prior right to the use of water is actual

(113) Cache La Poudre Irr. Co. v. Larimer and Weld Irr. Co., 25 Colo. 144, 53 P. 318 ('98); Supply D. Co. v. Elliott, 10 Colo. 327, 15 P. 691 ('87); Spurgeon v. Santa Ana, etc., Co., 120 Cal. 71, 52 P. 140 ('98); George v. Robinson, 23 Utah 79, 63 P. 819 ('01).

(114) Supply Ditch Co. v. Elliott, 10 Colo. 327, 15 P. 691 ('87). As to injury caused by transfer of stock and use of water on other lands, see Cache La Poudre Irr. Co. v. Larimer and Weld Irr. Co., 25 Colo. 144, 53 P. 318 ('98). But see, also, Grand Valley Irr. Co. v. Lesher, 28 Colo. 273, 65 P. 44 ('01); Talcott v. Mastin, 20 Colo. App. 488, 79 P. 973 ('05).

(115) Post, $129.

(116) Oppenlander v. Left-Hand Ditch Co., 18 Colo. 142, 31 P. 854 ('92).

(117) Wells v. Price, 6 Ida. 490, 56 P. 266 ('99); StrubyEstabrook M. Co. v. Davis, 18 Colo. 93, 31 P. 495 ('92). See, also, Snyder v. Murdock, 20 Utah 419, 59 P. 91 ('99).

(118) 17 Colo. 146, 28 P. 966 ('92).

§ 127, Carrier and Mutual Companies-Stock Representing Water. user. A stockholder in an irrigating company who makes an actual application of water from the company's ditch to beneficial use may, by means of such use, acquire a prior right thereto; but his title to the stock without such use gives him no title to the priority. He may transfer his stock to whom he will, but he can only transfer his priority to some one who will continue to use the water."

In other words, the court held that the ownership of stock in an irrigating company does not per se carry the right to use water. This right must be acquired by beneficial use.

PART VI.

PROPERTY AND TITLE, CONTRACTS, SALES AND CONVEYANCES.

CHAPTER 24.

PROPERTY AND TITLE.

§ 128. Property Values in Water.

Throughout the arid and semi-arid West the water in the various streams acquires a value unknown in moister climates. (1) Instead of being a mere incident to the soil, it rises, when appropriated, to the dignity of a distinct usufructuary estate or right of property. (2) These property rights are as important, as valuable and as extensive as the uses to which they are applied, and consist as well in the priority of appropriation as in the amount. (3) In fact, in so far as irrigation in the arid states is concerned, the water furnishes by far the greater part of the value of the land. Without it, these broad acres, now fertile and productive, would be but barren wastes, to be saved, if at all, by the scientific system of "dry farming" that is gaining favor in long-neglected areas of the West.

§ 129. Water Right Defined-Property in Water

Rights.

A water right has been defined as a "legal right to use water." (4) The Colorado supreme court has

(1) Ante, $40.

(2) Coffin v. Left-Hand Ditch Co., 6 Colo. 443 ('82); City of Denver v. Mayer, 7 Colo. 113, 2 P. 6 ('83); Rominger v. Squires, 9 Colo. 327, 12 P. 213 ('86); Wheeler v. Northern Colo. Irr. Co., 10 Colo. 582, 17 P. 487 ('87); Armstrong v. Larimer Co. D. Co., 1 Colo. App. 49, 27 P. 235 ('91); Cash v. Thornton, 3 Colo. App. 475, 34 P. 268 ('93).

(3) Nichols v. McIntosh, 19 Colo. 22, 34 P. 278 ('93). (4) Smith v. Denniff, 24 Mont. 20, 60 P. 398 ('00). In City of Helena v. Rogan, 26 Mont. 452, 68 P. 798 ('02), the court, speaking of the definition given in Smith v. Denniff, said: "This

§ 129, Water Right Defined-Property in Water Rights. defined a water right acquired through the use of water carried by an irrigation company, as a right to have a certain quantity of water flow through the irrigation company's ditch. as "an easement in the ditch.' It is a right annexed to realty, and being a perpetual right, is an incorporeal hereditament descendible by inheritance to its owner's heirs, and hence is a freehold estate. (5)

A water right is property within the constitutional provision that private property shall not be taken or damaged for a public or private use without just compensation. (6) Running water, so long as it continues to flow in its natural course, cannot be the subject of private ownership, (7) except in those states and territories where the doctrine of riparian rights prevails, where it is regarded as a part of the land by or through which it flows. (8) There can be no distinct and separate ownership in the corpus of the water. (9) But the supreme court of California conceded without discussion, in the case of Parks Canal and Min. Co. v. Hoyt, (10) that water which the appropriator has taken from its natural channel and confined in his diverting works may be personal property.

may be modified to mean, in this case, the right to use water appropriated according to law from the streams of the state for any useful or beneficial purpose.' See, also, Hill v. Newman, 5 Cal. 445; La Junta & Lamar C. Co. v. Hess, 6 Colo. App. 497, 506, 42 P. 50 ('95).

(5) Wyatt v. Larimer and Weld Irr. Co., 18 Colo. 298, 307, 33 P. 144 (93).

(6) Armstrong v. Larimer Co. D. Co., 1 Colo. App. 49, 27 P. 235 (91); Fisher v. Bountiful City, 21 Utah 29, 59 P. 520 ('99). Post, 88159-162.

(7) Dalton v. Bowker, 8 Nev. 190 ('73); Wheeler v. Northern Colo. Irr. Co., 10 Colo. 582, 17 P. 487 ('87).

(8) Ante, §§16, 20.

(9) Kidd v. Laird, 15 Cal. 161 ('60); Wheeler v. Northern Colo. Irr. Co., 10 Colo. 582, 17 P. 487 ('87); Bear Lake, etc., Co. v. Ogden City, 8 Utah 494, 33 P. 135 ('93); Norman v. Corbley, 32 Mont. 195, 79 P. 1059 ('05).

(10) 57 Cal. 44 ('80). In Colorado the supreme court says: "We shall presently see that after appropriation the title to this water, save, perhaps, as to the limited quantity that may be actually flowing in the consumer's ditch or lateral, remains in the general public; while the paramount right to its use, unless forfeited, continues in the appropriator."--Wheeler v. Northern Colo. Irr. Co., 10 Colo. 582, 587-8 ('87), 17 P. 487.