Doland v. Grand Valley Irr. Co.

• Decision Date: 17 December 1900
• Citation: 28 Colo. 150,63 P. 300
• Parties: DOLAND v. GRAND VALLEY IRR. CO.
• Court: Colorado Supreme Court

63 P. 300

28 Colo. 150

DOLAND v. GRAND VALLEY IRR. CO.

Supreme Court of Colorado

December 17, 1900

Appeal from district court, Mesa county.

Action by Henry P. Doland against the Grand Valley Irrigation Company. From a judgment in favor of defendant, plaintiff appeals. Affirmed.

The Grand River Ditch Company was a corporation organized under the laws of this state to make a diversion of water from the Grand river, and to supply the same for irrigation purposes to owners of lands lying under its Grand river ditch, through which the water thus diverted was carried. With these owners it entered into contracts for the sale of water rights, by whose provisions specified quantities of water were to be delivered by the corporation to the water consumers at the head gates of their respective ditches leading from its main canal, upon certain terms which the written instruments prescribed. The plaintiff became the owner, by purchase, or one of these water rights. In his complaint he alleges that the defendant, the Grand Valley Irrigation Company, a corporation, assumting to have obtained title at a foreclosure sale of the Grand River ditch, entered upon and took possession of, and is now operating and managing, the same; that it refuses, without right, to deliver water to the plaintiff in accordance with the terms of his contract with the ditch company, and also threatens to shut down and close the head gate through which he has hitherto been accustomed to receive, and is still entitled to receive, the water. He therefore asked for a permanent injunction restraining the defendant from interfering with or preventing him from getting water from the main ditch for the irrigation of his land. The answer contains three separate defenses, the first two of which, however, were abandoned by defendant at the trial. The third defense, in substance, alleges that the Grand River Ditch Company, the first owner of the canal in question, on account of its insolvency became unable to carry out its contracts with its various water consumers, and as a result of its inability to discharge certain of its obligations, which were evidenced by outstanding bonds secured by a trust deed upon its property, proceedings by its secured creditors to foreclose the trust deed were instituted, and a receiver was appointed to take possession of and operate the property pending the foreclosure. During the pendency of this suit the various water consumers, for the purpose of avoiding further litigation and expense, and to indemnity themselves against further loss on account of their unfortunate investment, formulated a scheme for relief. In substance, the plan was that there should be formed a new corporation to acquire the property and franchises of the old, and that the water-right consumers who participated in it should, in lieu of whatever interests in the old concern their so-called water-right contracts gave them, have of the capital stock of the new company such shares as their former interests equitably entitled them to receive. To perfect the plan, certain of the water consumers signed a writing authorizing a committee composed of a number of persons therein named to conduct negotiations for the acquisition of title from the old company. It was further alleged in this defense that plaintiff joined other water consumers in this endeavor, and that in pursuance of the authority conferred upon the committee the new corporation (the defendant) was incorporated, and duly acquired title to the property and franchises of the old ditch company, and ever since its acquisition of title has been in possession of and operating the canal, and that it stands ready to deliver to the plaintiff at the head gate of his lateral ditch the quantity of water to which he is entitled under the terms of the reorganization. There was a replication to this defense substantially putting in issue its material averments. The trial court, upon conflicting evidence, at the close of the trial found that, prior to the purchase by the defendant of the irrigation system in question, the committee having in charge the foregoing scheme was duly authorize by sundry water-right owners, including ...