Source: https://collections.lib.utah.edu/details?id=1130734
Timestamp: 2019-04-23 22:32:29+00:00

Document:
ELEMENTS OF THE APPROPRIATIVE RIGHT 565 acquired by appropriation or otherwise by a mutual company for the service of its shareholders' lands, though held formally by the company, belong equitably to the stockholders.618 Incorporators who transfer their several water rights to the company in ex- change for shares of capital stock surrender to the corporation their right of control or regulation in use of the water; but no impairment of the original water right results therefrom, and no severance from the land to which it was appurten- ant.619 Nor is there any change in substance in the ownership of the right. It remains the subject of individual ownership after the transaction as well as before, the only distinction being that it is held and exercised by the corporation under a formally different title. The corporation becomes merely the agent of its share- holders for the purpose of serving their several interests.620 (5) A contract between the corporation that constructed the Twin Falls Carey Act project in Idaho and the mutual company that was eventually to operate the project provided, among other things, that each share of stock in the mutual company would represent a water right for a specified quantity of water per acre, plus a proportionate interest in the property which the construction company would hold in trust for the mutual company until the project should be transferred to the latter. But, said a Federal court: a water right can only exist when appropriated for and appurtenant to land upon which a beneficial use of the flow can be made. They [the shares] were, when issued, only indicia of a water right dedicated to a definite parcel of land. If sold and appurtenant to land, each share constitutes a proportionate interest in the works and water. Unsold, a share is of potential value only under peculiar conditions.621 (6) The Salt River Valley project, Arizona, is operated by the same mutual water users' association to which the project was transferred by the construction agency, the United States Bureau of Reclamation. One of the objects for which the association was organized is to furnish water for the irrigation of lands of holders of shares appurtenant to such lands. According to the Arizona Supreme Court, "The Association performs this function not as the owner of the irrigation water, because it cannot and does not own the water. It is a carrier of the water for its shareholders, who have delegated to it, subject of course to review by the courts, the power to determine in the first instance the source or sources from which each shareholder is entitled to have his irrigation water."622 618 Consolidated People's Ditch Co.\. Foothill Ditch Co., 205 Cal. 54, 62-63, 269 Pac. 915 (1928). '"Fuller v. Azusa Irrigating Co., 138 Cal. 204, 213-214, 71 Pac. 98 (1902); Turner v. Lowell Avenue Mutual Water Co., 104 Cal. App. (2d) 204, 209, 231 Pac. (2d) 115 (1951);/n re Thomas'Estate, 147 Cal. 236, 242, 81 Pac. 539 (1905). 620Locke v. Yorba In. Co., 35 Cal. (2d) 205, 209, 217 Pac. (2d) 425 (1950);Hildreth v. Montecito Creek Water Co., 139 Cal. 22, 29, 72 Pac. 395 (1903). 621 Twin Falls Land & Water Co. v. Twin Falls Canal Co., 7 Fed. Supp. 238, 246 (D. Idaho 1933). 673Adams v. Salt River Valley Water Users' Assn., 53 Ariz. 374, 382-383, 89 Pac. (2d) 1060(1939).

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