CO Code § 7-42-107 (2021)
2021 Colorado Code|Title 7 - Corporations and Associations|Article 42 - Ditch and Reservoir Companies|§ 7-42-107. Shall Furnish Water to Whom - Rate

 Any corporation constructing a ditch under the provisions of law shall furnish water to the class of persons using the water in the way named in the articles of incorporation, in the way the water is designated to be used, whether to miners, millmen, farmers, or for domestic use, whenever it has water in its ditch unsold, and it shall at all times give the preference to use of the water in said ditch to the class named in the articles. The rates at which water shall be furnished are to be fixed by the board of county commissioners as soon as the ditch is completed and prepared to furnish water.   History. Source: G.L. § 277. G.S. § 311. R.S. 08: § 992. C.L. § 2359. CSA: C. 41, § 147. CRS 53: § 31-14-7 . C.R.S. 1963: § 31-14-7 . L. 2008: Entire section amended, p. 22, § 13, effective August 5.    Cross references:   For the duty of county commissioners to fix rates for water, see Colo. Const., art. XVI, § 8; for the right to continue purchasing water, see § 37-85-102 et seq.   ANNOTATION   Analysis     I. GENERAL CONSIDERATION.    II. DUTY TO FURNISH WATER.    III. COUNTY COMMISSIONERS FIX RATES.     I. GENERAL CONSIDERATION.   Law reviews. For article, “Curative Statutes of Colorado Respecting Titles to Real Estate”, see 26 Dicta 321 (1949).   Purpose. Mutual ditch companies were formed expressly for the purpose of furnishing water to shareholders, not for profit or hire. Jacobucci v. District Court, 189 Colo. 380 , 541 P.2d 667 (1975).   Mutual ditches and carrier ditches distinguished. Nelson v. Lake Canal Co., 644 P.2d 55 (Colo. App. 1981).   Carrier ditches carry water for sale to consumers who have contracted with the company. Nelson v. Lake Canal Co., 644 P.2d 55 (Colo. App. 1981).   Carrier ditch owns title to decreed appropriation of water. A carrier ditch owns the legal title to a decreed appropriation of water from a natural stream. Nelson v. Lake Canal Co., 644 P.2d 55 (Colo. App. 1981).   A duality of effort exists between the mutual ditch corporation and its shareholders, unlike a trust. Jacobucci v. District Court, 189 Colo. 380 , 541 P.2d 667 (1975).   II. DUTY TO FURNISH WATER.   Distinguishing rights of corporation and shareholders. The right of the mutual ditch corporation to hold title to the water rights and other property, and to manage the affairs of the corporation, should be distinguished from the right of the shareholders to use the water on their lands. Jacobucci v. District Court, 189 Colo. 380 , 541 P.2d 667 (1975).   Appropriation of water to an actual beneficial use, and not mere ownership of stock, entitles a shareholder to his water rights. Jacobucci v. District Court, 189 Colo. 380 , 541 P.2d 667 (1975).   Pro rata water rights. The benefit derived from the ownership of stock in a mutual ditch corporation is the right to the exclusive use of the water it represents, the water being divided pro rata according to the number of shares of stock held by each shareholder. Jacobucci v. District Court, 189 Colo. 380 , 541 P.2d 667 (1975).   Shareholders in a mutual ditch corporation have the right to change the place of the use of water if other users are not injured thereby. Jacobucci v. District Court, 189 Colo. 380 , 541 P.2d 667 (1975).   Ditch companies, having unsold water in their canals, shall furnish the same to the class of persons using it, in the manner named by the articles of incorporation upon payment of the established rate. Wheeler v. Northern Colo. Irrigation Co., 10 Colo. 582 , 17 P. 487 (1887).   And consumer is entitled to mandamus where refused. Upon tender of the rate fixed and compliance with reasonable regulations established, if the carrier has water undisposed of, the consumer is entitled to its use, and so mandamus lies where his demand is refused. Wheeler v. Northern Colo. Irrigation Co., 10 Colo. 582 , 17 P. 487 (1887).   This section does not impliedly recognize any preferential right of a contract consumer over the rights of owners of the company with respect to reallocation of water previously used by other contract consumers. City of Westminster v. City of Broomfield, 769 P.2d 490 (Colo. 1989).   Liability and obligation. The mutual ditch corporation is not only obligated to furnish a proper proportion of water to each of its shareholders, but it is liable in damages for the failure to do so. Jacobucci v. District Court, 189 Colo. 380 , 541 P.2d 667 (1975); Nelson v. Lake Canal Co., 644 P.2d 55 (Colo. App. 1981).   Proceedings under this section to compel delivery of water must necessarily be somewhat summary in their nature, for to be effective the relief must be immediate; and to this end trial courts should be liberal in matters of pleading and practice lest, for example, the crops of a farmer burn while counsel contend over legal technicalities. Townsend v. Fulton Irrigating Ditch Co., 17 Colo. 142 , 29 P. 453 (1891).   Corporation is not the only proper representative of shareholders' interests. Inasmuch as the right to “use water” vests solely in the shareholders, and the mutual ditch corporation neither administers nor participates in this actual use, the corporation cannot be deemed the trustee and only proper representative of the shareholders' interests in this matter. Jacobucci v. District Court, 189 Colo. 380 , 541 P.2d 667 (1975).   Individual shareholders of a mutual ditch company are indispensable parties in an action to condemn the shareholders' decreed water priorities. Jacobucci v. District Court, 189 Colo. 380 , 541 P.2d 667 (1975).   A carrier is entitled to compensation for carriage, but it cannot charge for the right to use water from its canal, nor can it exact in advance a part or all of its transportation charge for the remaining years of its corporate life as a condition precedent to use for the current irrigating season. Wheeler v. Northern Colo. Irrigation Co., 10 Colo. 582 , 17 P. 487 (1887).   Moreover, a carrier does not have the rate-making power, and if the carrier assumes and exercises such power, its acts would be subject to a review and change by the county commissioners upon a proper showing. Montezuma Water & Land Co. v. McCracken, 62 Colo. 394 , 163 P. 286 (1917); Northern Colo. Irrigation Co. v. Bd. of Comm'rs, 95 Colo. 555 , 38 P.2d 889 (1934).   There mere failure of the owner of a water right to go to the irrigation company each season and pay the stipulated price for carrying his water does not entitle any other person to enter into a contract with the company for carrying such water and to thereby become the owner of the water right. Cooper v. Shannon, 36 Colo. 98 , 85 P. 175 (1906).   However, this section does not apply to a proceeding between individuals in which no ditch company is a party, as where the question to be determined is whether a sheriff's deed includes a water right. Cooper v. Shannon, 36 Colo. 98 , 85 P. 175 (1906).   III. COUNTY COMMISSIONERS FIX RATES.   Commissioners prescribe rates. This section provides that the county commissioners, when an irrigating ditch is completed and prepared to furnish water, are to prescribe the rates at which water shall be furnished. Northern Colo. Irrigation Co. v. Bd. of Comm'rs, 95 Colo. 555 , 38 P.2d 889 (1934).   But if a carrier has a rate of its own with which the consumer is satisfied, he is not required to apply to the commissioners to fix a maximum rate. Wheeler v. Northern Colo. Irrigation Co., 10 Colo. 582 , 17 P. 487 (1887).   The rates fixed by the board of county commissioners are subject to judicial control. Wheeler v. Northern Colo. Irrigation Co., 10 Colo. 582 , 17 P. 487 (1887); Montezuma Water & Land Co. v. McCracken, 62 Colo. 394 , 163 P. 286 (1917).   And where a rate of charge fixed by the board has been judicially declared unreasonable and confiscatory, the board will not be permitted to evade the effect of such judgment by declaring and establishing the same rate of charge upon the same evidence. Montezuma Water & Land Co. v. McCracken, 62 Colo. 394 , 163 P. 286 (1917).   However, a new reasonable maximum rate may be set. Where a rate prescribed by the board has been adjudged unreasonable and its enforcement enjoined, it is no violation of an injunction for the board to immediately prescribe a reasonable maximum rate. Montezuma Water & Land Co. v. McCracken, 62 Colo. 394 , 163 P. 286 (1917).