Court Opinion

ID: 6907892
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:03:36.287605+00
Date Added: 2024-06-11T16:06:26.023154
License: Public Domain

*393Reversed on rehearing April 10, 1923,
On Rehearing.
(214 Pac. 348.)
Reversed. Rehearing and Motion to Retan Costs Denied..
For appellants there was a brief over the name of Messrs. Pachwood & Pachwood, with oral arguments by Mr. Irving Band and Mr. Won. H. Pachwood.
For respondents there was a brief over the name of Messrs. Nichols & Hallock, with ,an oral argument by Mr. James H. Nichols.
BURNETT, J
This suit was heard and determined by this court and a decree rendered June 27, 1922, affirming the decision of the Circuit Court dismissing the suit, Afterwards a rehearing was granted and the cause comes on now to be determined anew.
It substantially appears by the complaint that the defendant Sparta Irrigation Company is a corporation of this state organized for the purpose of holding and operating what is known as the Sparta ditch, conveying water from West Eagle Creek to the lands of the plaintiffs and other lands belonging to the stockholders of that company; and that the rights to the water carried in the ditch were held severally by the plaintiff Mary C. Harvey and other shareholders in that concern. On and prior to October 8, 1917, the defendant Campbell was the owner of 160 acres of land in section 25, township 8, south of range 43 east, Willamette Meridian, and other lands totaling 760 acres, and at that time was also a stockholder in the corporation and the owner of a right to .take and *394divert a quantity of water far in excess of 80 inches measured under six-inch pressure, and at all times since has been and now is the owner of the 760-acre tract, with the exception of the 160 acres first mentioned, and of the right to take water from the ditch, from which he has in fact taken and diverted water much greater in quantity than the eighty inches mentioned.
It is further alleged in the complaint and admitted by the answer that on October 8, 1917, the defendant Campbell and his wife made, executed and delivered to the plaintiff Mary C. Harvey a warranty deed, which, omitting from the covenants allusions to certain mortgages about which there is no dispute, reads as follows:
“This Indenture, "Witnesseth; that we, Floyd J. Campbell, and Minnie D. Campbell, his wife, of Portland, Oregon, for the consideration of the sum of five and no/100 dollars, to us in hand paid, the receipt whereof is hereby acknowledged, have bargained and sold, and by these presents do bargain, sell and convey unto Mary C. Harvey, all the following described premises, to wit:
“The west half (W. %) of the southeast quarter (SE. Vé) and the east half (E. %) of the southwest quarter (SW. %) of section 25, in township 8 south, range 43 E., W. M., in Baker County, Oregon, containing 160 acres of land; and also 80 inches of water measured under six-inch pressure of that certain water right taken out of what is known as the Sparta ditch in Baker County, Oregon, as such water right is defined and measured by the state water board of control of the State of Oreg’on, in its finding’s and adjudication in the matter of the adjudication of the rights of various claimants to the waters of Powder Eiver and its tributaries; also a pro raía interest in 250 inches of water allowed to the Sparta Irrigation Company under its appropriation through said ditch in the discretion of the water-*395master to cover seepage and loss of water in transit from the point of origin, to the point of delivery.
“To have and to hold the said premises with their appurtenances, unto the said Mary C. Harvey, her heirs and assigns, forever, and we, the said Floyd J. Campbell and Minnie D. Campbell, his wife, grantors herein, do hereby covenant to and with the said Mary C. Harvey that we are the owners in fee simple of said premises; that said premises are free and clear of all encumbrances save and except * * ; and subject to all the above encumbrances, the said grantors herein will warrant and defend the title to the property herein conveyed from all lawful claims whatsoever.
“In witness whereof, we have hereunto set our hands and seals this 8th day of October, 1917.
“Floyd J. Campbell. (Seal)
“Minnie D. Campbell, (Seal)
“Signed in the presence of:
“Mary E. Day.
“0. S. Hubbell.”
Further, the primary pleading avers in substance that the lands included in that conveyance are dry and arid and require artificial irrigation to make the same productive; that the eighty inches of water measured under six-inch pressure conveyed by the deed, was and is appurtenant to the land and so adjudicated by the findings of fact and order of determination of the State "Water Board of the State of Oregon filed in the office of the county clerk of Baker County, Oregon, April 1, 1916, and by the decree of the Circuit Court of Baker County, Oregon, rendered March 18, 1918; which findings, order of determination and decree were made in the matter of the adjudication of the rights of various claimants to the use of the waters of Powder River, and its tributaries; of which said Powder River, West Eagle Creek was and is an affluent.
*396The plaintiff Harvey alleges herself to be a stockholder in the Sparta Irrigation Company, defendant, ever since October 8, 1917, holding 53% shares of the capital stock thereof; that the plaintiff Wheeler is her lessee of the 160-acre tract mentioned, owning one half of the crops raised thereon. Since the conveyance to Mrs. Harvey, the plaintiffs have improved the lands, prepared them for irrigation, constructed ditches, and have the tract in cultivation in certain crops named; that at all times during the irrigation season of the year 1920 there has been flowing in the Sparta ditch at the point where the water has been diverted for the use of the plaintiffs upon the lands of the plaintiff Harvey and for the use of the defendant Campbell a quantity of water much greater than eighty inches, which was turned out by the irrigation company from the ditch for the use of plaintiffs upon their lands and for the use of Campbell upon his lands, a quantity at all times more than sufficient to> afford the plaintiffs the full and uninterrupted use of eighty inches thereof, which amount is requisite and necessary for the proper irrigation of their land. It is charged in the complaint that notwithstanding the terms and provisions of the deed, and without right or authority so to do, in violation of plaintiffs’ rights, the defendant Campbell during the irrigation season of 1920 has diverted from the waters turned out from the Sparta ditch for the use of plaintiffs all except about 35 inches thereof and has deprived the plaintiffs of the use of more water than that, which has been permitted and allowed by the defendant corporation, of which Campbell is president and in charge; and that they threaten and intend to do so in the future, unless restrained by the court. The complaint charges in substance that on account *397of the acts of the defendants the plaintiffs have been deprived of the nse of the water and have been unable to irrigate their premises properly; and that the crops growing thereon were to a large extent dried out and destroyed, all on account of the wrongful acts of the defendants.
The prayer is, in substance, that the plaintiff Mary C. Harvey be decreed to be the owner of the right to divert and use from the waters of the said Sparta ditch where the same enters upon her premises, said eig’hty inches of water; and that the defendants be restrained from disturbing or in any way interfering with her use of the full amount of eighty inches of water.
A demurrer to the complaint by both defendants was overruled. In practically identical answers the defendants admit the corporate character of the defendant company, the ownership by Campbell of 760 acres, and the right to divert from the Sparta ditch a quantity of water in excess of eighty inches; that Campbell and his wife made, executed and delivered to the plaintiff Mary C. Harvey the deed mentioned; and that the lands are dry and arid, requiring artificial irrigation to make them productive. The answers admit the plaintiff Harvey’s ownership of 53% shares of the capital stock of said corporation, the tenancy of "Wheeler, the cultivation and improvement of the premises and their preparation for irrigation, and that more than eighty inches of water have been turned out of the Sparta ditch for the use and benefit of the plaintiff Harvey upon her lands and for the use of the defendant Campbell upon his lands.
Affirmatively defending, the answers show that the corporation shortly after its organization in 1913, *398acquired by purchase what are known as the Sparta and Hogum ditches in Baker County, Oregon, and the water rights in connection therewith, and certain real property not involved in this suit; that the right to divert water through those ditches was initiated about the year 1870; that the capital stock of the company is divided into 500 shares of the par value of $45 each, amounting to $22,500, all of which stock has been subscribed, and of which the plaintiff Mrs. Harvey at present owns' 53% shares and the defendant Campbell owns 197% shares; that the stockholders of the corporation are the owners in the aggregate of 1,500 acres of land susceptible of irrigation by means of the Sparta ditch, of which land the plaintiff Mrs. Harvey is now, and ever since October 8, 1917, has been, the owner of 160 acres as described in her complaint. All of the 1,500 acres mentioned are in their natural state arid and require artificial irrigation.
The answers go on to set up certain proceedings begun May 27, 1909, before the State Water Board, seeking an adjudication of the right of claimants to the waters of Powder Eiver and its tributaries including the west fork of Eagle Creek, which finally resulted as embodied in a final decree of the Circuit Court of Baker County in an allowance to the 1,500-acre tract of land of 750 inches of water to be delivered on the land, besides an additional allowance of 250 inches to compensate for seepage and evaporation.
The answers further aver that on September 23, 1916, the individuals then stockholders of the Sparta Irrigation Company adopted a certain instrument denominated a water right certificate, the blank form of which certificate is as follows:
*399“This is to certify that-, by virtue of his ownership of-shares of the (500) shares, Five Hundred shares of the capital stock of the Sparta Irrigation Company is also the owner of-/500 of the- waters of the Sparta ditch owned by said company and is entitled to the exclusive use and benefit of such -/500 of such waters of said ditch for the purpose of irrigating-acres of land in Tp.-South of Range-E., W. M., in Baker County, Oregon, as adjudicated in such lands by decree of the Circuit Court for Baker County, Oregon, and by the State Water Board subject however to the following provisions and conditions:
“I.
“Such lands may be sold or assigned and conveyed and in such case all rights and conditions of this certificate shall pass by cmy conveyance thereof as an appurtenant to said lands, unless the owner of this certificate shall expressly reserve this certificate from such conveyance, but in no case shall the right to use any water on or in connection with any other lands, other than those above described be permitted or allowed except by the express consent of this company.
“II.
“In case the ownership of said lands is changed by conveyance thereof in amounts less than the whole the rights under this certificate shall attach to each owner of such lands in the proportion as his interest therein may bear to the whole of said lands, and this certificate may be cancelled and new certificates issued in like tenor conveying the right to each owner in the proportion to which he be entitled.
“III.
“All expenses in the upkeep, extending or enlarging of said ditch or in the supervision of the distribution of the waters thereof together with all necessary expenses in the running of said company shall attach to said lands and in the right to use water out of the said Sparta ditch as evidenced by this certificate and be a lien thereon until paid in the *400same proportion as the number of acres of land above described bears to the whole of acres irrigated out of said ditch, and said lien may be foreclosed in the same manner as liens secured by mortgages on real property are now foreclosed, and in case of such foreclosure a lien for costs and reasonable attorneys’ fees shall also be allowed thereon. This remedy is in addition to any other remedy this company may provide in raising funds for the purpose aforesaid or for any other legitimate purpose.
“IV.
“The Grand Rapids Trust Company of Grand Rapids, Michigan, now has a trust deed or mortgage upon the said ditch or other lands in the sum of $22,500.00 due January 1st, 1925, with interest at six per cent per annum payable January 1st of each year, and the above described lands for which this water right is issued shall bear their share in discharging and satisfying said mortgage according to its terms, which proportion for said lands above described amounts to the sum of ($-) with interest, and in case of foreclosure costs and attorney fees.
“V.
“This certificate is granted subject to the laws of the state of Oregon and the rules and regulations now in force or which may hereafter be adopted for the government of this company.
“VI.
“This certificate shall be of no force or effect unless signed by the President and Secretary of the company and also accepted by the person to whom this certificate is issued by the signature of such person.
“In "Witness Whereof the President and Secretary of the said Sparta Irrigation Company have hereunto subscribed their names and affixed the seal of said company at Baker, Oregon, this - day of -, 1916.
“Sparta Irrigation Company.
“By - President.
“By - Secretary.
*401“I, to whom the above certificate was issued do hereby accept the same subject to the conditions thereof.

ee_>>

The defendants then narrate that on September 23, 1916, a water right certificate in this form was issued by the defendant company to F. W. Tallmadge and L. W. Tallmadge, who were the predecessors in interest of the plaintiff Mary C. Harvey in the lands owned by her, and other lands then owned by them, which certificate was accepted by the Tallmadges and thereafter recorded in the deed records of Baker County. Afterwards Campbell purchased out of the 1,500-acre tract of land 760 acres, being the identical tract owned by the Tallmadges and embracing the parcel .of 160 acres which Campbell sold to Mrs. Harvey, and soon afterwards employed the plaintiff Wheeler to manage the tract of 760 acres mentioned, and still later agreed to pay Wheeler a commission of $5 per acre, if the latter would secure a purchaser for any portion of the lands at $90 per acre. The answers aver that Wheeler induced the plaintiff Mrs. Harvey to inspect the premises, which she did, and thoroughly informed herself respecting them, the water supply available through said ditch for the irrigation thereof, the ditches and laterals through which it was supplied to the land, and generally about all of the hereditaments and appurtenances, particularly the water situation pertaining to the premises and the matter of the distribution of the water between the stockholders of the Sparta Irrigation Company. It is likewise averred that prior to the purchase of the lands, Mrs. Harvey was furnished with an abstract of title to the premises completed to the date of her purchase, setting forth a complete *402statement of the manner of the determination of the water right embodied in the decree of the Circuit Court, which abstract contained the water right certificate issued to her predecessors; and that at and prior to the purchase by her of the lands, the plaintiff Mrs. Harvey inspected the corporate records of the defendant company and was fully informed of the fact that in purchasing the land she would receive a proportionate interest in the stock of said Sparta Irrigation Company, defendant herein, and was fully informed of the obligation which she would assume as such stockholder, the responsibility to be assumed by her as such stockholder and the benefits she would receive therefrom.
It is charged in substance in the answers that the plaintiff Mrs. Harvey, by virtue of the decree of the court and the certificate of water right, is entitled to and has received only a proportional interest in the total amount of water diverted by the Sparta ditch.
The twelfth allegation of the answer of the defendant Campbell is as follows:
“That at the time of the purchase of said lands by said plaintiff Harvey it was thoroughly understood and agreed by and between said plaintiff and this defendant that defendant sold and conveyed to plaintiff and that plaintiff purchased from defendant, in connection with and as appurtenant to said lands 531/3 five hundredths of the water available for distribution through said Sparta Ditch and the stock certificate evidencing such interest and that no covenant or agreement was ever intended to be made by said defendant or received or purchased by plaintiff covering a definite amount of water other than as above stated. That said parties having so agreed intrusted the preparation of the necessary instrument of conveyance to a scrivener as a result of which the deed mentioned and described in plaintiff’s *403complaint was prepared and executed. That defendant is without negligence in said matter and that if said instrument so prepared and executed does not in fact express the said understanding and agreement had between said parties, then such failure to express said agreement is the result of a mutual mistake, between said parties and that said instrument should be reformed to express said agreement and understanding. ’ ’
That pleading concludes with the averment to the effect that shortly after she purchased the premises the plaintiff Harvey became a director of the defendant corporation and during the year 1918 was secretary thereof, had charge of its corporate records, was fully informed as to all of the matters and things set forth in the answer, and participated in the management, control and operation of the ditch and in the distribution of the waters diverted thereby.
For further and separate answer, Campbell reiterates all of the new matter hitherto set forth and avers that the plaintiff Harvey should be estopped from setting up her claim against the defendant Campbell as narrated in her complaint.
A demurrer to the separate answer of Campbell was overruled and a reply was filed, traversing the answer in all respects except as alleged by the plaintiffs. The reply further sets up the history of the transaction resulting in the deed together with its covenants, and claims that Campbell is estopped by his deed from asserting that he sold only a proportional part of the water, and from asserting that the plaintiff Harvey is not the owner of the full amount of eighty inches thereof.
The Circuit Court after hearing the testimony adduced by the parties made findings of fact and con*404elusions of law favorable to the defendants and dismissed tbe suit without allowing costs or disbursements to either party. The plaintiffs appealed.
 As a preliminary matter, it is proper to dispose of the intimated contention in the answer of Campbell respecting a possible mistake in the terms of the deed. The testimony in the shape of a copy of the conveyance to the defendant Campbell of the 760 acres from his immediate predecessor in title, is that its language except as to the acreage and the quantity of water conveyed, is identical with that employed by him in his conveyance to Mrs. Harvey. Respecting the form of his deed to the plaintiff Harvey, the defendant Campbell testified on cross-examination as follows:
“Q. Now, this deed, then, was drawn exactly as yon wanted it drawn?
“A. It was drawn just a copy of the others as I instructed Mr. Nichols.
“Q. Just exactly as you wanted it drawn?
“A. Just as I instructed it drawn.
“Q. Because you wanted it drawn that way?
“A. Because I wanted it just a copy of the preceding deeds. That was the idea in mind.
“Q. And it wasn’t drawn any different from what you intended it to be drawn, was it?
“A. I don’t think so, because of the reasons I have told you. ’ ’
It is not charged in the answer of the defendant Campbell that the mistake was mutual, or that Mrs. Harvey was guilty of any fraud which brought about the frame of the deed as expressed in that document. The allegation respecting the mistake is hypothetical and not positive. Neither the pleading nor the testimony is sufficient to raise the question of mistake. *405The document, therefore, must be construed according to its legal effect, to be drawn from a proper construction of its terms.
The dispute here is about the division between Mrs. Harvey and Campbell of the water allotted to the 760 acres of land which Campbell purchased from 'Warnock, his immediate predecessor, and of which he sold 160 acres to Mrs. Harvey. The other stockholders of the defendant company are not concerned in the dispute between the parties to this case, as to the division of the water which Campbell held in severalty.
Having these features in mind, it is proper to review the testimony showing the situation of the parties and the subject matter of the deed. Campbell purchased the land from Warnock in the latter part of July, 1917, and took possession of the 760 acres on the first .day of August of that year. He engaged the plaintiff Wheeler, who was experienced in irrigation, to take charge of the whole 760 acres and superintend the management thereof, at the same time employing the wife of Wheeler to cook for the hired men on the ranch. The Wheelers arrived there on August 13, 1917, and immediately took up the duties of their employment. Mrs. Harvey and Mrs. Wheeler are sisters. The former at that time was residing at Pendleton with another sister, Mrs. Dunne. After the Wrheelers had been on the place about a month, with the permission of Campbell, Mrs. Wheeler invited her sisters to visit her. Meanwhile Campbell had employed Wheeler to find a purchaser for any portion of the land, promising him $5 per acre as compensation. Thus far there is no dispute about the facts.
*406Mrs. Harvey as a witness in her own behalf testifies in substance that soon after their arrival at the Campbell ranch for the purpose of visiting with the Wheelers, Campbell began to talk to them about purchasing’ part of the land. The 160-acre tract after-wards conveyed to Mrs. Harvey was partly in cultivation, set to alfalfa with a nurse crop of grain. There was another 160-acre tract adjoining, which was yet in virgin sagebrush. The alfalfa tract was under -irrigation, but there was no water on the sagebrush tract. Mrs. Harvey testifies that Campbell took the Wheelers, Mrs. Dunne and herself to the dam on the race where the water was diverted to the Campbell ranch and showed them the ditch leading to the Boyd place, one to Campbell’s home place where his house was situated and another ditch to the 160-acre tract which she afterwards purchased. Later he took all of them, including Wheeler, about six miles.from his residence up to a point where the ditch ran under a bridge in the road at the top of the hill near Sparta. On viewing the ditch at that place she remarked that she didn’t think it looked like there was enough water to irrigate the 1,500 acres he had been telling about, and he declared that there was plenty of water, and that as the irrigation season was nearly over part of the water had been turned off above the bridge. Mrs. Harvey says when questioned particularly about the water and the ditch, that:
“He (Campbell) said that the ditch was one of the oldest in the state, that there was the best water right in the ditch of any in the state; that the court had decreed 750 inches of water to the 1600 acres of land; and that would be a half inch per acre for all of the irrigable land; that this water was to be delivered on the land; that there was plenty of water; *407lie said there would be no difficulty about the water or the water-right, that it was sufficient for the land and it would be delivered on the land.”
Speaking of the transaction when the deed was drawn, she narrates that Campbell and herself, accompanied by the Wheelers and Mrs. Dunne, went to Baker to the office of Nichols & Hallock, attorneys, who appear for the defendants in the suit, and applied to Nichols to draw the deed. She says both Campbell and Nichols concurred in the explanation that eighty inches meant just the same as the half inch per acre, and that meant every year for the irrigation season. She says she did not receive the deed at that timé, because it had to be sent to Portland for Mrs. Campbell’s signature. The deed was dated October 8, 1917, and she received it in December of that year, after it had been recorded. She testified that Wheeler heard what Campbell said when they visited the place where the road crosses the ditch near Sparta, and that Wheeler remarked, “If there is plenty of water as Mr. Campbell says, and I have no reason to doubt his word, I can raise a good crop on this land.” The Wheelers, both husband and wife, and Mrs. Dunne and Mrs. Harvey all say that this was the first time any of them had been as far up the ditch as the road crossing near Sparta.
Mrs. Harvey declares that she never saw an abstract or had one in her possession prior to the making of the purchase; that the water certificate set out in the answers was not mentioned; and that she knew nothing about such a certificate. She imputes to Campbell the statement that the only other cost besides the $90 per acre which she paid for the land would be to pay for the upkeep of the ditch, which would include *408the work necessary to keep it open, in slumming it and cleaning it out occasionally, and he estimated the cost as $85 per year for the 160 acres. Campbell denies that he, made any estimate about the cost of maintaining the ditch. Speaking of the shares of stock, she testifies that she understood she was to receive 53% shares of stock but that was for the upkeep of the ditch, just so she would have a voice in the upkeep of the ditch. Mrs. Dunne as a witness for the plaintiffs, tells substantially the same story as Mrs. Harvey concerning the view of the ditches from the diversion dam and about the quantity of water and the maintenance expense. Speaking of Campbell, she testifies:
“He said there was plenty of water, there was no question but what there was plenty of water, and I asked him, ‘Now, Mr. Campbell, are you sure there is plenty of water for this land?’ ‘Mrs. Dunne,’ he says, ‘There is worlds of -water.’ That is the expression he used. * * He said there was plenty of water, but part of the water had been turned out above because the irrigating season was so near over. ’ ’
Referring to the transaction of drawing the deed in the law office, Mrs. Wheeler testified substantially thus:
“They spoke of it being a good ditch and that there would be plenty of water, sure to be plenty of water * * and he says, ‘I will give you a good deed, * * assure you of a half inch of water to the acre on the land.’ And when they had made out the deed and Mri Nichols read it over he read it over rather swiftly and some of .it we didn’t quite understand, and he read it more slowly, and Mrs. Harvey says, ‘Now, does that, I didn’t quite understand about that there was a half inch of water to the land to the *409acre, ’ and Mr. Nichols turned the paper around and says, ‘Oh, yes, here it is, eighty inches of water to the hundred and sixty acres,’ he says, ‘That is just the same.’ And she turned it around so she could see it and read it. * * And she says, ‘Now that much, that much for the year?’ He says, ‘For the irrigation season.’ That meant as long, what I understood it, was as long as they were irrigating each season.”
She likewise imputes to Campbell the statement at the bridge that some of the water had been turned off above, and she says she knew at the time they were not doing so much irrigating. On cross-examination she said:
“Mr. Campbell said if they got any more water all they had to do was to turn it in, but he said there would be no more expense to the land, just taking some more out there, there was no more expense to it except to clean the ditch and pay the ditch walker to walk the ditch during the irrigation season.”
Wheeler testified to this effect:
“Well, he told her there was a good water, the best water right in all of the state, the oldest water right, and it was good land and had a half inch of water to the acre, which.was plenty for this kind of land, which I agreed with him all the way through. She inquired about that and he said there was plenty of water in the ditch and the ditch was on the place and if they wanted any more water to turn it on.”
Wheeler claimed that he knew nothing about whether the ditch was large enough to carry 750 inches of water or not, but took Campbell’s word for it. He testified that he had “never seen the ditch only the one place at Sparta, and that will carry twice the amount of water coming any time.” He *410says he was never above Sparta until the next year, and that he never heard anything about enlarging the ditch until the next fall, “never dreamed of it.”
The defendants opened their case by introducing a sheriff’s deed dated July 11, 1914, whereby that officer conveyed to the defendant Sparta Irrigation Company certain real property and “also that certain ditch and water right known as the Sparta canal or Sparta ditch, and the Hogum ditch, being a feeder to the Sparta canal or ditch, and all the lateral ditches, feeders or water rights to said Sparta canal or ditch and to the Hogum ditch, and all ditches, water rights, easements, and franchises appendant and appurtenant or thereunto appertaining to said ditches and water rights aforesaid; and also all reservoirs used in connection with said ditches and water rights, together with all improvements, tools, pipe line and all other equipment belonging thereto.”
The next instrument introduced by the defendants was a deed dated July 30, 1917, from Robert M. Warnock and his wife to the defendant Floyd J. Campbell, of the 760 acres heretofore mentioned, which deed after describing the land by legal subdivisions contains in the descriptive part the following:
“Also that certain water right to the amount of 376% miner’s inches of water measured under six-inch pressure, taken out of what is known as the Sparta ditch in Baker County, Oregon, as such water right is measured and defined by -the state water board of the state of Oregon on the 17th day of November, 1915, in its findings of fact and adjudication of the rights of the various claimants to the waters of Powder River, and also a pro rata share of not to exceed 250 miners inches of water allowed in said decree in the discretion of the water master for *411and on account of seepage, all in Baker County, and state of Oregon.”
After reciting certain mortgages concerning -which there is no dispute, the Warnock deed to Campbell contained the following:
“And the grantors do covenant to and with the grantee that they will and their heirs, executors, and administrators shall warrant and forever defend the above granted premises and water rights, and every part and parcel thereof, against the lawful claims and demands of all persons whomsoever,”
excepting the mortgages mentioned, which the grantee assumed and agreed to pay.
The defendants also introduced the findings of the water board and the decree of the Circuit Court in pursuance thereof in the adjudication of the rights of the claimants to the waters of Powder River and its tributaries. One of these affluents is Eagle Creek, from which the Sparta ditch derives its water. The findings and decree are to the effect that the contestee, the predecessor in interest of the defendant Sparta Irrigation Company, should take all of the waters awarded in these proceedings, from the west fork of Eagle Creek, and the natural tributaries thereof flowing into said stream above the head of what is known as the Sparta ditch, and any and all of the feeders of the said Sparta ditch heretofore and now feeding said ditch.
“And it appearing that the contestee is the successor in interest and owner of the water right used in connection with the Sparta and Hogum ditches, that in 1863, water was appropriated and thereafter used through the Hogum ditch; and that in November, 1870, William H. Packwood and Alex Stewart posted a notice on Eagle creek appropriating 3,000 *412inches of water for what is known now as the Sparta ditch; that thereafter the Sparta ditch was surveyed and on the 11th day of May, 1871, construction of said ditch was begun and water was run through said ditch to the town of Sparta, Oregon, on the 14th day of October, 1871; that said appropriation was for domestic, mechanical, mining and irrigation purposes; that upon the completion of said ditch there was at one time 800 miner’s inches of water delivered to the water users out of said ditch, and the diversion of said water into said ditch, at the time same was used to full capacity was between 1,000 and 1,500 inches; that in 1871, the Hogum ditch was extended to empty its waters into the Sparta ditch, and was purchased by the owners of said Sparta ditch at said time; that from the building of said ditch until 1914, the water of said Sparta ditch was sold each year by the owners thereof, for the purposes of domestic, mining, power and irrigation use; that beginning with the year 1915 the owners of said ditch proposed to apply the water from said ditch partly upon the lands described in the tabulation hereinafter, amounting to 1500 acres; that 750 miner’s inches of water delivered on the land is sufficient to irrigate the lands proposed to be irrigated; that the change of use of water from sale for domestic, mining, power and irrigation use, to an irrigation use, does not infringe upon the rights of any other water user from Eagle Creek, and in making said change said George Grant, trustee, and the water users from said Sparta ditch have the right to use a reasonable time for making said change without losing their date of priority; that five years is such a reasonable time, and the lands to be irrigated in making such change shall be tabulated herein under the head of Inchoate Eights.”
The findings and decree also incorporate as part thereof the determination of the court in litigation related to the Hogum ditch, whereby part thereof was awarded to Cranston and Ingle and the remainder to *413the Sparta Irrigation Company, reciting that the decree found that:
“750 miner’s inches of water under six-inch pressure diverted to the place of use was sufficient water to irrigate the lands of the stockholders of said Sparta ditch company; that said Sparta ditch is thirty miles in length; that the seepage in said ditch would be great; that a reasonable seepage to be allowed for the Sparta ditch would be about 250 miner’s inches; and that the water master of the district shall allow for seepage in the distribution of water such an amount as such seepage aggregates, not to exceed 250 miner’s inches.”
The 1,500 acres of land mentioned were tabulated in the decree as stated.
Over the objection of the plaintiffs that it was irrelevant, incompetent and immaterial and that it was not binding in any way upon the plaintiffs in this case or either of them, the defendants offered a certificate of water right issued to F. W. Tallmadge and L. W. Tallmadge, the predecessors in interest of the defendant Campbell in the ownership of the 760 acres of land which he purchased from Warnock; which certificate is on the form heretofore set out. The defendants further offered in evidence an abstract of title covering the 760-acre tract, showing title in Robert N. Warnock as of date July 17, 1917, which the defendant Campbell claims, and the plaintiff Mrs. •Harvey denies, was shown to and examined by her prior to the purchase of the land. Also the defendants read in evidence an opinion of Charles A. Johns on the validity of the water right appurtenant to the 760-acre tract, which opinion, Campbell testifies and Mrs. Harvey denies, was exhibited to her prior to the purchase. Campbell then testified in his own behalf *414to the effect that after Wheeler had arrived on the place he told the latter that he, Campbell, had been up the ditch and:
“We figured there was 500 inches of water coming through the ditch at that time, but that the land according to the decree was entitled to 750 inches when the ditch was improved to carry it. I told him we were entitled to a little more than half of it. He said that it was sufficient to water it, if we would have gone at it, if it was handled properly. I told him each one of the different ones interested in the land and the ditch were to receive their proportionate share of the water coming through the ditch at any time. ’ ’
As throwing some light on the situation at that time, it appears in testimony by Arthur Boyd, a witness for the defendant Campbell, that at that time there were close to 300 acres under cultivation out of the 760. Mrs. Wheeler puts it at 304 acres.
Campbell testifies that he agreed to give Wheeler $5 per acre, if he would sell all or any part of the land at $90 per acre. He also testifies that he discussed the purchase of the land with Mrs. Harvey at the house on the place at different times, but was never over the land to show it to her or the Wheelers himself. He says he showed her the Warnock abstract, that she had it and perused it, and asked him a few questions about it for three or four days. He also says he gave her the Johns opinion respecting* the title to the land and right to the water, and that after her deed was recorded he gave her a separate abstract. He says he told her she would receive with her deed 53% shares of stock, which would represent her interest in the Sparta Irrigation Company and which would entitle her to 53% five hun*415dredtlis of the property of the ditch company and 53% five hundredths of the water coming through the ditch at any time. He testified about the trip to the diversion dam and showing the various ditches diverting water there, and explained that they estimated 500 inches of water were coming down. He narrates the trip to the Sparta bridge and says he told them he had measured the water on August 11th and 12th at 500 inches, and testified thus: “and Mr. Wheeler said right at that time that it was enough water to water the land, if they never got any more, if it was judiciously handled. ’ ’ He declarés he told Wheeler at the time they were up there that “we estimated the ditch could be enlarged for $4,000.” Speaking of the plaintiff Mrs. Harvey, he says:
“That was discussed at the house and up on the ditch the day we went to the division dam. * # That there was the 500 inches coming now down the ditch and that by making this enlargement there could be 750 more inches upon the land for the 1,500 acres and that there was a thousand inches allowed at the head of the stream, 250 inches being allowed for seepage and evaporation and if it didn’t seep or evaporate that we would be entitled to that much more. That they understood distinctly.”
He testified further that upon going to Baker to have the deed prepared he referred Mrs. Harvey to Mr. Nichols as knowing all about the decree and water right, and told Nichols “to draw the deed the same as the one Warnock gave me, and Nichols went to the courthouse and got an exact copy.” The deed was dated October 8, 1917.
Campbell went on to testify that the cost of enlarging the ditch and the matter of allowing an irriga*416tion district to take it over were discussed in Mrs. Harvey’s presence at the meeting of the stockholders of the corporation in February, 1919, and it was said at that meeting that the ditch was carrying less than 500 inches of water. He declared that Wheeler cultivated the lands of Mrs. Harvey, Mrs. Dunne and Wheeler during the year 1918, and was allowed to rotate the water on all three tracts, and that Mrs. Harvey first complained to him about the lack of water in the fall of 1919. He testified:
“She says that she was entitled to 80 inches all the time regardless of what her proportionate share on the basis of her shares in the ditch company.”
On cross-examination he was interrogated about some conversation he had with some men named Lasco and Forsea, with whom he had negotiations about purchasing the 160 acres he afterwards sold to Mrs. Harvey. He said he “couldn’t say as to whether he told them or whether they asked” how much it would cost to get the water from year to year. He said he “didn’t believe” he told them the maintenance of the ditch would not exceed $75 per year for their share. He said he “wouldn’t say” anything about whether Mrs. Harvey mentioned the water to him particularly and wanted to be sure that there was that water, but he said he told her that she was getting about two-thirds of the amount of the water to which the land was entitled and that she would get her 53% five hundredths of the water that was coming through the ditch; also, “I think I told her we had estimated four thousand dollars to enlarge the ditch.” He testified:
“I told her this land had been allotted a half inch of water, in answer to one of her questions, by the *417state water board, and it had been decreed to the land by this court and it was her share of the water when the ditch carried that much; and that the right to the ditch I thought would never be questioned because of it having been stipulated; that this was all in answer to questions. * * I told her she was buying the land subject-to the allotment of the state of a half inch of water, that she was going to get certificates of stock in the ditch to the amount of 53% shares which would entitle her to 53% five hundredths of the water that came down or through the ditch at any time.”
The witness closed his testimony with the questions and answers already quoted, respecting the frame of the deed which he delivered to Mrs. Harvey.
Arthur Boyd, a witness for defendants, testified to having a conversation with the plaintiff Wheeler prior to October, 1917, soon after he came to Baker County, and declared:
“I told him I thought we had one of the best water rights in the country when we enlarged our ditch so that we could get more water, get the water the state allowed us, and he said that if we would use our water properly at that time that he believed we had plenty to raise good crops with.”
On cross-examination he testified he was irrigating about 100 acres at the time and had water to cover his entire 160 acres; that Campbell had close to 300 acres under irrigation, with a water right for 760 acres, about half the land for which there was a water right.
Ray Boyd testified that in the latter part of September, 1917, he told Wheeler “what a good water right we have, and although we were not getting one half inch of water as we were entitled to, and wouldn ’t until we enlarged our ditch, and he said that if we *418■would use the water properly, that he believed, we could irrigate all of the land under the ditch at that time with the present head of water.” The witness also narrated the transaction at the February, 1919, meeting of the stockholders of the defendant corporation, concerning the subject of the proposal of the irrigation district to take over the ditch, and that Mrs. Harvey made no objection.
Mr. Nichols, the attorney who drew the deed in question, was called as a witness for the defendants, and after stating his familiarity with the litigation resulting in the adjudication and decree respecting the users of water from Powder River and its tributaries, including the stockholders of the defendant company, speaking of the visit of the parties to his office, testified as follows:
“Mr. Campbell, Mrs. Wheeler, Mr. Wheeler and Mrs. Harvey came to my office and advised me of the fact that they had made a deal for a tract of one hundred and sixty acres of land under the Sparta Ditch. It is my best recollection that Mr. Campbell told Mrs. Harvey in my presence of my knowledge and in a general way of my experience with the affairs of Sparta Irrigation Company and with the Sparta Ditch. Mrs. Harvey interrogated me with respect to that water right. She didn’t seem to be concerned with the question of the title to the land, but she was concerned with the history of the Sparta Ditch and of that water right, and she asked me a great many questions, and so did her brother-in-law and so did Mr. Campbell respecting the history of that ditch and that water right, and we discussed it there at length and I answered a great many questions for Mrs. Harvey that day, the details of all of which I am unable to recall, but I know I did the best I could to give her all the information I possessed regarding that ditch and water right.”
*419This witness identified the abstract already mentioned, showing title in "Warnock, said he had examined it on October 31, 1916, and went on to say:
“With respect to this abstract, my recollection is, and in fact, I am confident that this is true, that Mrs. Harvey had examined this abstract and that she had also examined my written opinion of title which accompanied it at that time and the opinion of title to the land and also to the water right furnished to Mr. Campbell by Charles A. Johns. I recall that particularly because of the fact that Mrs. Harvey expressed to me in that conversation her satisfaction with the title to the land, and that came about as I recall it, at least I got the impression from Mrs. Harvey that that was purely by reason of the fact that she had examined this abstract and the opinions of title to which I have referred.’ In the course of our conversation that day in the office and in connection with Mrs. Harvey’s questions to me concerning the water right, reference was made to the certificate of water right which is set forth in this abstract on pages 2 and 3 of the first continuation thereof. I do not recall whether Mrs. Harvey brought this matter to my attention or whether Mr. Campbell spoke of it or whether I took it up and called it to the attention of Mrs. Harvey, but it is my best recollection that this certificate of water right was discussed and particularly that the provision of this certificate which recites that each of the shares of stock in the Sparta Irrigation Company, a corporation, entitled the holder to a proportionate interest in the water available in the Sparta ditch.”
He says concerning the Johns opinions:
“I know that both of these documents were exhibited to me at that time and were available there, and, in addition, my own written opinion on the title of this land was also there at the time, and those instruments were the subject of discussion between us. * * Now, I recall one feature of that *420discussion particularly. There was nothing in these abstracts, or in the opinions of title or in any of the conveyances, as I recall it, that said anything about the Hoguin ditch, and the fact that it had been conveyed to Phillips and Ingle, and I explained that transaction. There may have been some reference to it in Mr. Johns’ opinion of title to the ditch, but I know that I explained the fact that the Sparta Irrigation Company had parted with some of its property right in that ditch and that at that time and in Mrs. Harvey’s presence I gave them a general history of that ditch and explained to her my understanding and interpretation of the findings and order of determination of the state water board and of the decree of the Circuit Court based on that order of determination with particular reference to the fact that certain work must be prosecuted on that ditch within the period of five years from the date of the order of determination, and I not only did it with Mrs. Harvey at that time but as she well knows, I did it at every subsequent meeting of the Sparta Irrigation Company from that time down to the time this work was actually undertaken and prosecuted, and I urged with great insistence in Mrs. Harvey’s presence at those meetings that this work be completed, commenced and prosecuted to completion to the end that that right be preserved. I recall that I advised Mrs. Harvey regarding the date of the appropriation of the Sparta Irrigation Company, the date of the initiation of the Sparta Irrigation Company’s water right. I think I commented on the fact that it was an old right, one of the oldest in the county, and in a general way I explained to her the conditions as I knew them to exist on the Sparta ditch at that time.”
It will be noted that in the testimony above quoted there is no declaration of the witness that he gave any particular legal effect to the transactions in his interview with Mrs. Harvey, which he describes. His *421testimony as to the conversation does not disclose that anything was said about eighty inches being construed as a mere proportional part of an unknown and potential flow of water.
Further the witness said:
“When the question of the preparation of a deed came up Mr. Campbell instructed me to prepare that deed in the same manner as the deed which he had received was prepared with particular reference to the water right as described in that deed and the manner of its description, and I went to the county records here in the court house, took my note book in order to be sure about it and made a transcript of the deed which Mr. E. N. Warnock had given to Mr. Campbell with particular reference to the manner in which the water right was described.”
On cross-examination, when called upon to state at what meeting of the stockholders of the irrigation company it was shown by the records, when any suggestion was made respecting enlargement of the ditch, he said:
“It appears in the minutes of the annual meeting of February 4, 1919,”
and then read from the record as follows:
“ ‘The matter of the status of the water right through the company ditch after the establishment of the proposed irrigation district in vicinity of Sparta under which proposed district the use of the Sparta canal is contemplated by said district was discussed, and the company’s attorney advised that an effort should be made to have the irrigation district, as a part of the consideration for the use of the company ditch, by it, concede after enlargement the prior right of the company to the use of the waters therein to the extent of the amount awarded to said company by the Circuit Court of Baker County, *422Oregon, without regard to the present or past carrying capacity of said ditch, and that a committee be appointed to put that matter before the representatives of said district.’ And in parenthesis: ‘(to 750 of West Fork of Eagle Creek at the point of delivery) ’. That much of it was omitted from the sentence. ’ ’
In rebuttal, Mrs. Harvey denied ever having examined any abstract, or the Johns opinions, or that she ever saw the Nichols opinion or heard any reference to any water right certificate before she purchased the land. She admitted that Campbell told her he had such an opinion, but she never saw or examined it. She said that there was an agreement that Campbell would furnish her an abstract, and she received it in the latter part of December, 1917, and with it the recorded deed to the property. The abstract which she mentioned was introduced in evidence, and it is dated December 6, 1917. Respecting the stock, she testified, referring’ to Campbell:
“He said that with the land I would get 53% shares of stock. He says, ‘I am not selling you this stock. It just goes with the land. I can’t sell the stock because it just goes with the land. This stock is just, — the reason we have it is just so you will have a voice in the upkeep of the ditch or the necessity for it.’ ”
She declares that the first time she saw the stock was in June, 1918. She says she found it then in the stock-book of the Sparta Irrigation Company; that it had been disconnected from that; that the book had been turned over to her in February, 1918, but she had not seen the inside of it; and that it had been left in Mr. Nichols ’ office all that time.
*423The stock certificate she described, was read into the record as follows:
“Incorporated under the laws of the state of Oregon. No. 14. Shares, 53%. Sparta Irrigation Company. Capital stock, $22,500.00. This certifies that Mary C. Harvey is the owner of 53% shares of the capital stock of Sparta Irrigation Company, transferable only on the books of the corporation by the holder hereof in person or by attorney by the surrender of this certificate properly indorsed. In witness whereof, the said corporation has caused this certificate to be signed by its duly authorized officers and to be sealed with the seal of the corporation this -day of Oct., A. D. 1917. P. T. Wyatt, President; R. L. Boyd, Secretary.”'
Mrs. Harvey disclaimed all knowledge of any proportional water certificate, as stated in the answer, and said:
“No certificate was handed to me to read or to see, and none was offered to me to sign. I never saw the certificate until I saw the record of the one in the record book after February, 1918, and I read, through the abstract after I received it in December, 1917. ”
She testified that the minutes of the meeting of the stockholders of the company of February, 1918, were made from notes by Mr. Nichols and some by herself in a private note-book, after she was elected secretary, and that they were written into the record book the following June by herself, and included all of Nichols’ notes. She says that at the February, 1918, meeting, they were considering- the proposition of allowing the irrigation district to enlarge the ditch, to carry water to other lands, with the consideration that the company be allowed its full 750 inches of water and the Sparta Irrigation District be required *424to maintain the ditch from that time on, and that there was no direction to enlarge the ditch in order to carry 750 inches of water. She said she first heard in September, 1919, at the ranch, that there was any necessity for enlarging the ditch to secure 750 inches of water. She testified that Campbell said on that date, “I have just learned that we have ascertain time to enlarge the ditch.”
The opinion of Charles A. Johns’respecting the water rights was addressed to Floyd J. Campbell, under date of July 27, 1917. He says in that paper that, having examined the abstract dated July 21, 1917, concerning the water rights of the Sparta Irrigation Company and Robert N. Warnock, he is of the opinion, based upon such abstract:
“That on the 21st day of July, 1917, the said Robert N. Warnock was the sole and exclusive owner of a 276% inch water right from and out of the west fork of Eagle creek to and upon the following described lands, to-wit: * * ”
Then follows a description of the 760-acre tract. Further, the opinion goes on to state:
“That such water right and the amount thereof on the 17th day of November, 1915, was finally and legally adjudicated by the state water board of the state of Oreg’on, after a full and complete hearing thereon, in and to which all the persons interested were made parties, and after their respective claims were filed and the testimony was taken, contests were heard and determined, and it is my opinion that the adjudication of such water rights by the state water board is now final and conclusive.
“That in and by such findings and the decree of said board the said lands were awarded and decreed the right to the use of 376% miner’s inches of water under an appropriation for irrigation, mining and *425power dating from 1870, and that in and by such findings the Sparta Irrigation Company has until the 1st day of January, 1921, in which to complete the application of all of such waters and to put them to a beneficial use on the said lands, and that it was found and determined by the said decree rendered by the state water board that the Sparta Irrigation Company, through its stockholders, had the right to irrigate 1542 acres of land and ‘that 750 miner’s inches of water under a 6-inch pressure delivered at the place of use was sufficient water to irrigate the lands of the stockholders of the said Sparta Ditch Company,’ and that the appropriation right dated from 1870.”
Further on in that document it is said:
“The findings of fact and decree of the state water board contemplate and provide that the amount of 750 miner’s inches of water shall be actually delivered to and upon the land of the stockholders of the Sparta Irrigation Company, and makes an allowance of seepage or loss in the transmission from the head of the ditch to the lands of not to exceed 250 miner’s inches, and directs that the water master shall make an allowance for seepage in the distribution of the water not to exceed 250 miner’s inches. In legal effect this would increase the amount of the appropriation at the head of the ditch for the use and benefit of the lands from 750 miner’s inches to 1000 miner’s inches if the water master should ascertain and determine that there would be a loss of 250 miner’s inches through transmission or seepage of the waters to and upon the lands.”
.The opinion concludes with this language:
“I have not seen the stock book or corporate records of the Sparta Irrigation Company, but I am advised that Robert N. Warnock is the owner and holder of 51/100 of any and all of the capital stock of the said Sparta Irrigation Company, and in the event *426that he is the owner and holder of such stock it is my opinion that he has a good and valid water right to 376% inches of the waters of the west fork of Eagle creek dating from the year 1870, delivered to and upon the said lands, together with a right to irrigate said lands with the said water.”
We recur now to the language of the deed from Campbell and his wife to Mrs. Harvey, respecting the water right, reading thus:
“And also 80 inches of water measured under six-inch pressure of that certain water right taken out of what is known as the Sparta ditch in Baker County, Oregon, as such water right is defined and measured by the state water board of control of the state of Oregon, in its findings and adjudication in the matter of the adjudication of the rights of various claimants to the waters of Powder river and its tributaries; also a pro rata interest in 250 inches of water allowed to the Sparta Irrigation [Company] under its appropriation through said ditch in the discretion of the water master, to cover seepage and loss of water in transit from the point of origin to the point of delivery. ’ ’
The habendum clause and warranty follow:
“To have and to hold the said premises with their appurtenances, unto the said Mary C. Harvey, her heirs and assigns, forever, and we, the said Floyd J. Campbell and Minnie D. Campbell, his wife, grantors, herein, do hereby covenant to and with the said Mary C. Harvey that we are the owners in fee simple of said premises; that said premises are free and clear of all encumbrances [except mortgages which are not in question]. * * And subject to the above encumbrances, the said grantors herein will warrant and defend the title to the property herein conveyed from all lawful claims whatsoever.”
Section 717, Or. L., reads thus:
*427“For the proper construction of an instrument, the circumstances under which it was made, including the situation of the subject of the instrument and of the parties to it, may also be shown, so that the judge be placed in the position of those whose language he is to interpret.”
It is said in Christensen v. Pacific Coast Borax. Co., 26 Or. 302 (38 Pac. 127):
“While a court, in construing a contract, may take into consideration the situation of the parties, the object they must have had in view, and all the surrounding circumstances, still the language of the instrument must determine to what the -parties have bound themselves. ’ ’
In Salem King’s Co. v. Ramp, 100 Or. 329, 356 (196 Pac. 401), it is said:
“Where the language of the contract is ambiguous, equivocal or reasonably susceptible of two or more conflicting constructions, it is competent to resort to parol testimony concerning the circumstances under which the agreement was made or to which it relates, including the situation of the subject of the instrument and of the parties to it, in order, not to add to or detract from or otherwise vary the terms of the instrument, but to enable the court to ascertain what the meaning of the parties really is.”
On'its face, the language of the deed describing the water right is ambiguous to the extent that it refers to the adjudication of the rights of various claimants to the waters of Powder River and its tributaries. To that decree, therefore, we are remitted for an explanation of the situation. On examination we find that the decree was dealing with water rights in actual enjoyment, not potential or prospective in their nature, but those which were being used and *428operated by tbe owners of tbe ditch at that time. It declares that the ditch at full capacity, contained between 1,000 and 1,500 inches of water and that 800 miner’s inches were delivered to water users out of the ditch; that the original declared use of the ditch was for domestic, mechanical, mining and irrigation purposes, which continued until the beginning of the year 1915, when the owners proposed to apply the water partly upon the lands described in the tabulation, amounting to 1,500 acres. The decree declared that 750 miner’s inches of water delivered on the land was a sufficient supply for the irrigation thereof, and allowed 250 additional inches to make up for the loss by seepage and evaporation. The only potential feature about the matter, and which alone caused the lands to be listed in the tabulation under “inchoate rights,” was the matter of changing the water from previous uses to that of irrigating the 1,500 acres of land. The amount of water present for application to the new project and the capacity of the ditch were actualities as declared in the decree.
We recur again to the language of the deed, where it refers to the water right as “defined and measured by the state water board of control of the state of Oregon.” The water must have then been in present use, else it could not have been measured. There is no hint in the decree about abandonment of the original right initiated in 1870. No suggestion is made that the canal had lost its capacity. If at the time of the adjudication the water was not employed and the original right had depreciated, so that it was not in actual use, either wholly or in part, the board would have found accordingly and limited the decree to the lesser quantity then in use. It is a well-*429established principle that water must' be put to an actual beneficial use or there can be no appropriation. Waste and absence of beneficial use are anathema in irrigation. Hence we must conclude that the ditch was there and the water was there for the court to act upon by its decree as real entities and not as mere potentialities yet to be worked out to realization.
Another feature is noticeable in the deed. The plain language is, eighty inches of water. There is no proportional or relative value given to that term. It is fixed, and this is all the more conspicuous because in the following clause there is mentioned a pro rata interest in an additional 250 inches allowed for seepage and evaporation. It is scarcely credible that if the grantor intended to convey only a proportional interest, he would have used the term “pro rata” in .one instance and not in the other.
Adapting ourselves to the situation of the parties as disclosed by the testimony and the pleadings, we find that the defendant Campbell was at the time of the execution of the deed in constant receipt upon his land of a quantity of water largely in excess of eighty inches. This is admitted in the pleadings. It was his property and he had a right to sell it. As it was appurtenant to the whole 760 acres, he could use it wherever on that tract he chose to use it, limited only by the principle that the use must not be wasteful. It may be said that in this instance he could not use more than one-half miner’s inch to the acre, that being the adjudicated limit. Up to that amount, at least, he had the right to sell any specified portion of his allowance of water with any designated part of the land to which this allowance was apportioned. As expressed in the deed which he testified *430was drawn just as he directed it to he drawn, this is just what he did. Under the guise of placing ourselves in the position of the parties thereto, we cannot contradict the avowed language of the instrument. Where it states a fixed and exact quantity of water, we cannot say that as between the parties to it, it means a proportional quantity, variable as extraneous circumstances may change. In respect to the place where a water user may employ the water on a tract of land to which it is appurtenant, it is said in Santa Paula Waterworks v. Peralta, 113 Cal. 38 (45 Pac. 168), that it was erroneous to limit the defendant’s use of one half an inch of water to the place where his house was located, the water being available for use on any portion of the defendant’s lands. In Winter v. Simmons, 27 Or. 1- (39 Pac. 6, 50 Am. St. Rep. 685), it was held that an appropriator may change the place of the use of water. In Whited v. Cavin, 55 Or. 98 (105 Pac. 396), it was ruled that while not necessarily confined to the same specific tracts upon which the water has heretofore been applied, the appropriators are restricted to acreage upon which the appropriation was perfected at the time of the inspection of the water rights of the answering defendants. In Williams v. Altnow, 51 Or. 275 (95 Pac. 200, 97 Pac. 539), it was held that a prior appropriator of water for a beneficial use from a stream or other natural source of supply may change the point of diversion or the place of use, so long as he does not prejudice the rights or use of subsequent claimants.
In Nevada Ditch Co. v. Bennett, 30 Or. 59 (45 Pac. 472, 60 Am. St. Rep. 777), the rule is laid down thus:
“A sale or transfer of the whole or part of a completed appropriation of water may be made, either *431in connection with or separate and apart from the land in connection with which the water was originally used.”
Booth v. Trager, 44 Colo. 409 (99 Pac. 60), is an example of giving to every small tract its proportion of water coming in the main irrigating ditch when a larger tract is subdivided and nothing more is said in the deed with regard to the small tract than “with the appurtenances,” or, as in that instance, “together with all water and ditch rights and privileges thereunto belonging.” But in Davis v. Randall, 44 Colo. 488 (99 Pac. 322), the same court and the same judge writing the opinion, Mr. Justice Campbell, treating of a subdivision of a larger tract with a specified amount of water in inches included in such conveyance, said:
“The grantee, therefore, only takes such water rights as are by the express terms of the contract of conveyance described.”
It is but a quibble to undertake to distinguish between water and the use of water. Indeed, all that anyone acquires in regard to water, at least in irrigation, is the use of it. The very essence of appropriation is the diversion of water to a beneficial use. All else is outside the pale of appropriation. So, when we speak of a given quantity of water in inches, we mean the use of that amount of water in continuous flow to be applied to the subject of the appropriation.
We note also in the deed that the defendant Campbell and his wife “do hereby covenant to and with the said Mary C. Harvey that we are the owners in fee simple of said premises.” It is said in Steinhardt v. Burt, 27 Misc. Rep. 782 (57 N. Y. Supp. 751):
*432“The term ‘premises’ is used to signify the land with its appurtenances, hut its usual and appropriate meaning in conveyances is the thing demised or granted by the deed.”
“ ‘Premises’ in a popular phrase is sometimes used for land, but ‘the premises’ in the connection in which it is used here means that which is conveyed”: Holbrook v. Debo, 99 Ill. 372, 381. In that instance the language was, “all such right, estate, title and demand whatsoever as I have.” It was there held that the language did not purport to convey the lots themselves, but merely the right of the grantor thereto. Deavitt v. Washington, 75 Vt. 156 (53 Atl. 563), was a case where the deed to a house and lot conveyed to the grantee an easement consisting of the right to use the dooryard in common with the occupant of an adjoining lot. It was held that the word “premises” in the habendum clause of the deed included the easement and that the easement ran with the land. The language of the covenant here involved means that the grantors are the owners of that amount of actual water for use upon the land described.
Again, Campbell and his wife stated in their deed that “the said grantors herein will warrant and defend the title to the property herein conveyed from all lawful claims whatsoever.” In Huyck v. Andrews, 113 N. Y. 81 (20 N. E. 581, 10 Am. St. Rep. 432, 3 L. R. A. 789), it is held that “covenants in a deed protect the grantee against every adverse right, interest or domain over the land, whether he had notice of such adverse interest or not.” So here, where the grantor conveyed, as he did, a specified quantity of water, covenanting that he was the owner thereof and likewise that he would warrant and defend the title *433to the property from all lawful claims whatsoever, he erected an insuperable barrier in favor of the grantee against all claims and especially those of the grantor himself that would lessen the quantity of water thus warranted. It is said in Wilson v. McEwan, 7 Or. 87, that a grantor and his privies are estopped from denying title to which they have given general warranty. In construing a mortgage in Meier v. Kelly, 20 Or. 86, 93 (25 Pac. 73), the court, speaking by Mr. Justice Robert Bean, said:
“But in our construction of the mortgage we are confined to the intention of the parties as gathered from its contents. As a matter of construction we cannot change or vary the description actually contained in the mortgage, although it may be plain that it is not the description intended to be inserted therein. Wliere the terms used in the description contained in a deed or mortgage are clear and intelligible, the court will not put a construction on the terms, and parol evidence is not admissible to control the legal effect of such description.”
As said in King v. Holbrook, 38 Or. 452, 461 (63 Pac. 651):
“It would be the height of injustice to alter a contract on the ground of mistake, where the mistake arises from misconception by one of the parties in consequence of his imperfect explanation of his intentions. ’ ’
In Taggart v. Risley, 4 Or. 235, according to the syllabus, it is the rule that “if the seisin or possession of a particular estate is affirmed in a deed, either in express terms or by necessary implication, the grantor and all persons in privity with him will be estopped from ever afterwards denying such seisin or *434possession.” Again, it is said in Gardner v. Wright, 49 Or. 609, 624 (91 Pac. 286), a case dealing with conveyances of water rights, that:
“The general rule is recognized to be that, when a person assumes to convey property by deed, he will not be heard for the purpose of defeating the title of the grantee, to say that at the time of the conveyance he had no title and that none passed by the deed. Nor can he deny to the deed its full operation and effect as a conveyance.”
"We thus have a case where the grantor, Campbell, was possessed of a quantity of water, or the use thereof, greatly in excess of eighty inches, which was appurtenant to the tract of 760 acres of land.' He himself had the right to use that water, at least to the limit prescribed by the decree, namely, one half an inch to the acre, on any part of that land. That same right he could and did sell to Mrs. Harvey. He was not required to apply a proportional part over the whole estate. He could sell any part of his acreage with enough water to give it' the full appropriation alluded to by the decree. If the consideration paid to him, which the evidence shows to have been $90 per acre, was sufficiently tempting, he could sell all or a part of both land and water.
The question of the duty of the plaintiff Harvey to pay for such enlargement or repair of the ditch as may be ordered by the corporation is not before the court. That may or may not be a question between that concern and her in some future litigation, but it is not here. Neither is it a question of what recourse Mrs. Harvey would have against the defendant Campbell on his warranty in the deed, if she should be compelled to help enlarge the ditch so as to *435acquire some greater amount' of water. Nor is there presented to us in this suit the matter of distinguishing between mere upkeep of the canal and an enlargement thereof. All those things merely cloud the issue. The only question is this: What did Campbell convey to Mrs. Harvey by his deed? And shall he be allowed, or not, to violate his covenant by lessening the amount of water which he conveyed to her?
It is of but little moment whether Mrs. Harvey saw the abstract and the Johns opinion, or not. Campbell says and she denies that she saw them. But if she did, what would she find in the opinion? One fact was, that on July 21, 1917, Warnock was the sole and exclusive owner of a 376% inch water right from out of the west fork of Eagle Creek, appurtenant to the land here involved; further, that it was the opinion of the writer thereof that the adjudication of such water right by the State Water Board “is now final and conclusive”; that the findings of fact and the decree of the State Water Board contemplate and provide that the amount of 750 miner’s inches of water shall be actually delivered to and upon the lands of the stockholders of the Sparta Irrigation Company; and finally, the opinion is that Warnock “has a good and valid water right to 376% inches of the waters of the west fork of Eagle Creek, dating from the year 1870, delivered to and upon the said lands, together with a right to irrigate said lands with the said water.” All this Warnock conveyed to Campbell with full warranty. What impression could anyone gain from such an opinion based upon the abstract, other than that the owner of that right was not proportioned in common with anyone else? The deeds involved explicitly *436describe warranted estates in severalty as to the water conveyed.
The defendant Campbell seeks to overcome the testimony on belialf of the plaintiffs by quoting Wheeler’s statements that the water was sufficient for irrigation if handled properly. Some considerations of that testimony are apropos. In the first place, at that time Wheeler was the agent of Campbell to effect a sale of the lands and their appurtenances. Under such circumstances, Wheeler’s declarations were the declarations of Campbell himself, for they were made during and as part of the negotiations culminating in the sale. Wheeler makes the statement conditional on what Campbell had said, that there was plenty of water and the apportionment was one half an inch per acre. Wheeler had never seen any part of the ditch at that time, except what was then before him at the place near Sparta. The testimony is that Campbell there declared that part of the water had then been turned off above, owing to the close of the irrigation season. Campbell does not dispute this statement imputed to him. Wheeler, speaking of the ditch at that point, says it was large enough to carry double the amount of water then flowing through it, which Campbell said measured 500 inches after some had been turned off above.
It is not necessary to attempt to reconcile all these various and varying accounts of the oral negotiations leading np to the execution and delivery of the deed, for they are all merged in that document (Section 713, Or. L.). Especially is this true where the grantor avows under oath that the conveyance is couched in the exact terms he directed to be used. The decree adjusting tlie distribution of the water, the opinions of his counsel and the deed from his immediate *437grantor, all of which he claims to have brought to the attention of Mrs. Harvey, lead inescapably to the conclusion that he had an estate in severalty in 376% miner’s inches of water of continuous flow to be taken from the Sparta ditch and delivered on the land. By his warranty deed, framed exactly as he directed, he has conveyed eighty inches of his estate in that allowance to Mrs. Harvey and is bound by the legal effect of his deed.
In respect to the water certificate: not even Campbell himself says anything about a “water certificate,” but speaks continually of shares of stock. The only thing like shares of stock appearing in the testimony affecting Mrs. Harvey is the certificate which she found in the stock book, not detached but dated “the - day of October, 1917,” and signed by the then officers of the company, and it does not say anything whatever about proportional interests in water. There is no pretense in the testimony that any such water certificate was ever presented to Mrs. Harvey for her signature or acceptance [and consequently by its terms it did not and could not bind anyone who did not sign it].
Again, by the pleadings it is stated that this so-called water certificate was a creation of the stockholders and not of the directors of the defendant corporation. It is said in Section 6867, Or. L.:
“From the first meeting of the directors, the powers of the corporation are exercised by them or by their officers or agents under their direction, except as otherwise specially provided in this chapter. ’ ’
Under this rule it was held that the directors and not the stockholders must exercise the authority of the corporation: Guillaume v. K. S. D. Land Co., 48 Or. 400 (86 Pac. 883, 88 Pac. 586); Baillie v. Columbia *438Gold Mining Co., 86 Or. 1 (166 Pac. 965, 167 Pac. 1167). Here was the holding company, possessed of the title to the ditch and water rights; true enough, for the benefit ultimately of its stockholders. But the authority to control the water within its corporate powers was vested in the directors and not in the stockholders; hence, the deduction under the precedents is, that the action of the stockholders is without authority.
And above all, the question is not here between either Campbell or Mrs. Harvey and the other stockholders, who hold'lands other than the 760-acre tract. A quantity of water in excess of eighty inches was separated from that mass and delivered to that tract of land in severalty while in the ownership of Campbell. It was his, to do with as he pleased, and he has sold a specific part of it, not an undivided proportional interest. The question is, whether he shall be permitted repeatedly to violate his own covenant. It is true .that the corporation of which he is a member and stockholder is not a party to the deed; but as he can be restrained from violating his covenant, so also may the company be prevented from doing the same act whenever it undertakes to assist him in such wrongdoing. By its answer, evidently framed at his dictation, it avows the right to do what he is doing; and having launched itself thus with a wrongdoer, it is within the power of the court to enjoin it so far as it is acting in furtherance of his designs. The acts of Campbell in diminishing the quantity of water which he warranted to Mrs. Harvey, indorsed as they are by the company, amount to repeated and continued trespasses the perpetration of which equity will enjoin under such precedents as Chapman v. Dean, 58 Or. 475 (115 Pac. 154); Stotts v. Dichdel, *43970 Or. 86 (139 Pac. 932); Central Oregon Irrigation Co. v. Whited, 76 Or. 255 (142 Pac. 779, 146 Pac. 815); Balbot v. Joseph, 79 Or. 308 (155 Pac. 184); Barnes v. Esch, 87 Or. 1, (169 Pac. 512); and Boulevard Drainage System v. Gordon, 91 Or. 240 (177 Pac. 956, 178 Pac. 796).
It is not by tbe mark to contend that we should be piling adjudication upon adjudication in declaring the effect of the deed from Campbell to Mrs. Harvey and awarding her eighty inches of-water. She was a party to the former adjudication, and that decree did not contemplate a subdivision of the part awarded to Campbell’s land which is here involved. The decree that the plaintiff Mrs. Harvey is the owner of the water right to the amount of eighty inches would be one settling the rights of Campbell and herself as defined in the deed. The decree of the Circuit Court should be reversed and one here entered according to the prayer of the complaint.
Mr. Justice Rand did not participate in the hearing or decision of this case.
Reversed and Decree Entered. Rehearing Denied. Motion to Retas Costs Denied.