Source: https://collections.lib.utah.edu/details?id=1130651
Timestamp: 2019-04-20 11:01:28+00:00

Document:
482 THE APPROPRIATIVE RIGHT Under the then prevailing water laws and the circumstances of the case cited below, it was held in South Dakota that: the water rights to which a mutual company succeeded vested in the original locators of the water rights and not in those who used the water; the shares of stock and water rights never became appurtenant to the irrigated land; and the shares and water rights were not included in a mortgage of the land.228 The Utah water rights statute provides that water rights shall be trans- ferred by deed "in substantially the same manner as real estate, except when they are represented by shares of stock in a corporation, in which case water shall not be deemed to be appurtenant to the land * * *."229 The effect of this statute, the supreme court held, was to establish a rebuttable presumption that a water right represented by corporate shares did not pass to the grantee as an appurtenance to the land on which the water was used.230 Mortgage of water right. -It is recognized in various decisions that a water right, being an interest in realty subject to alienation by the holder of the title, may be mortgaged to the same extent as other interests in real property.231 The practice of including the water rights in mortgages of irrigated lands and irrigation company systems is common. Such lands would be reduced in value and in many cases would have none, if deprived of the right to the use of water. An irrigation system without water rights would have little or no value for any purpose.232 A water right that is appurtenant to land, then, is subject to any mortgage of such land.233 But, just as a landowner may convey part of his land together with part of an appurtenant water right, he may include in or omit from the lien of a mortgage all or any part of the water rights appurtenant to the land concededly appurtenant." Woodstoone Marble & Tile Co. v. Dunsmore Canyon Water Co., 47 Cal. App. 72, 76-77, 190 Pac. 213 (1920). ™Butte County v.Lovinger, 64 S. Dak. 200, 209-212, 266 N. W. 127 (1936). 229UtahCode Ann. § 73-1-10 (1968). 230Hatch v. Adams, 7 Utah (2d) 73, 75, 318 Pac. (2d) 633 (\951);Brimm v. Cache Valley Banking Co., 2 Utah (2d) 93, 99-100, 269 Pac. (2d) 859 (1954). 231 The Kansas water rights statute provides that a water right passes as an appurtenance with a conveyance of the land by voluntary disposal, including "mortgage." Kans. Stat. Ann. § 82a-701(g)(1969). 232 In a study published in 1936, this author discussed the course which the creditor of a mutual irrigation company might pursue in realizing on the value of water rights on foreclosure of a mortgage of the company's physical assets and water rights, and the uncertainty as to whether in at least some jurisdictions the water may be diverted away from the service area by a foreclosing creditor in view of the beneficial interest which the former stockholders have in the water rights. Hutchins, Wells A., "Mutual Irrigation Companies in California and Utah," Farm Credit Admin. Coop. Bull. 8 at pp. 87-91 and 136-138 (1936). See the view of the Idaho Supreme Court on this as expressed in Hobbs v. Twin Falls Canal Co., 24 Idaho 380, 393, 133 Pac. 899 (1913). 233Reconstruction Finance Corp. v.Schmitt, 20 Fed. Supp. 816, 820 (D. Nev. 1937).

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