Imperial Valley press., 1912-05-27

issued STOCK IN trust Tor actual settler
who should become stockholders of tn
company had no authority to make
CONTRACT with the complainant, where
by it transferred to the complainant
without consideration, the right t
squeeze out Of the stock all there wa
of value in it before delivering it t
the settlers.
There is a covenant contained in tn
supplemental agreement between tn
complainant and the defendant to b
noticed in this connection. 1t is pre-
vided that no stock in the defendan
company should be issued or sold il
he future except upon there being pai
into the treasury of the defendant a
the time of such issue 81 in none
for each share of stock so issued o
sold. 1t is sufficient to say with re
spect to this covenant that it was no
the consideration for the covenan
granting to the complainant the eX
elusive right to sell the entire unis
sued shares of the capital stock of th'
defendant company, which at that tim,
| the complainant had fixed at $40 PEE
share and the sales of which were t.
be for complainant's sole use ant
benefit.
This leaves us to find the consider
alton in the so-called water righ
which the complainant claims to have
acquired by the delivery through thu
Mexican company of the water re
qured to irrigate the lands to be set
tied upon by the stockholders of the
defendant corporation.
Is this consideration that the Law
will recognize? We think not. In this
case the land to be irrigated was moi
| occupied, and the water right did mo-
attach. When that time should arrive
the water right would attach to thu
land by operation of law, and not by
virtue of the contract entered into be
tween the complainant and the defend
ant
The complainant would have no wat
er right to convey. There was, there
| fore. no consideration for the contract
We are fully advised as to the fact
| that voluntary contracts for the pur
chase of water rights from canal com
panies whose works had been com
pleted and were in operation. have
been sustained by the courts in this
state. but such cases must be careful
ly considered in the light of the facts
of the particular case. The law Of
water rights applicable to the cOndi
tions prevailing in the western states
is being rapidly developed by legisla
ton. by the courts, and by text writer's,
but it has progressed far enough to
furnish finger posts for all the by
ways of water litigation. unless we con,
stantly bear in mind certain we'll es-
tablished general principles. among
others, that il is the purpose OF the
law in regulating water rights in the
western states to avoid monOpolies. As
said by the supreme court of California
in Merrill VS. Southside Irrigation com
pany, 112 Cal, 426, 433:
The evident intent of the trainers
OF our constitution was TO strike a
blow at the monopolies which had
grown up out of the sale, rental and
distribution of water, and by declaring
such a use of public use to bring it
within the control of the local authori-
ties in municipalities where the bur-
dens of the system were most oner-
GUS"
An onerouS condition growing out of
monopoly and imposed by public ser
vice corporation engaged in distribut-
ing water before such distribution
could be made cannot, therefore, be
considered sufficient consideration
teed by law, even though the transac-
ton is voluntary, But we do not look
upon the contract in this case as a
voluntary contract in the sense in
which that term Is used In the cases
where such contracts have been up
held. 1t is true that no one is COM
PEELED TO settle upon the lands in I'm
perial valley, but the right to settle
upon such lands. is free and open to
all and the complainant had no right,
as a public service corporation, to es-
tablish a monopoly of all the water
available for the irrigation of the lands
in Imperial valley in advance of settle
ment, and then by means of a contract
between itself and it's agents burden
it's public service in manner not con-
templated by law. Such a contract Is
not a voluntary contract on the part
of those for whose benefit the water
has been dedicated by law.
1t will not be necessary to review the
cases where the question of water
rights has been discussed. In this
court it's last expression is found in
Boise City Irrigation & Land company
VS.. Clarke, 131 Fed, 415. That case
arose in the state of Idaho, whose con.
stitution provides substantially as does
the constitution of the state of Cali
fornia, that the use of the waters OF
the state appropriated for sale, rental
or distribution is a public use, and the
right to collect compensation therefor
is a franchise, which cannot be exer-
cised except by authority of and in the
manner prescribed by law. Judge Rose,
speaking for the court, and following
his decision in the San Diego Land &
Town company VS.. City of National
City, "A Fed, 79, and the case of
Stanislaus county VS.. San Joaquin &,
King River c. & !. company, 1872, U.
S., POI, held that an irrigation company