Supply Ditch Co. v. Elliott

• Decision Date: 31 October 1887
• Citation: 15 P. 691,10 Colo. 327
• Parties: SUPPLY DITCH CO. v. ELLIOTT and another.
• Court: Colorado Supreme Court

15 P. 691

10 Colo. 327

SUPPLY DITCH CO. v. ELLIOTT and another.

Supreme Court of Colorado

October 31, 1887

Commissioners' decision. Error to district court, Boulder county.

Dolloff & Rittenhouse, for plaintiff in error.

B L. Carr, for defendant in error.

MACON C.

From the admissions of the pleadings in this case, the following facts appear: During and prior to the year 1883, plaintiff in error was an incorporated ditch company, owning an irrigating ditch, and having its capital stock divided into shares, each of which entitled the holder thereof to take from said company ditch 10 inches of water for irrigating purposes upon the condition that he applied for such water before or by the twentieth day of May of the year in which he desired to use the water, and pay or secure to the company the sum of one dollar per inch for all water which he might use. In 1879 one Moyer owned two shares of the stock of plaintiff in error, and pledged the same to one I. M. Phillips in trust to secure the payment of a debt due from him to one John Phillips. When this pledge of stock was made, the certificates thereof had not been issued by the company, but the company was advised of the nature of the transaction between Moyer and Phillips and recognized the right of Moyer to the stock by allowing him to use water and vote at meetings of the company. It seems that no certificates for these shares were issued by the company until the twenty-eighth day of September, 1882, when the company, without the consent of Moyer, issued two certificates for his stock to I. M. Phillips, numbered respectively 385 and 386. Before the issuance of the certificates to I. M. Phillips, and on the eighteenth day of September, 1882, Moyer assigned absolutely these two shares of stock to defendant in error Elliott; but no notice of such assignment was given to the company by Elliott, or any other person, until some time in June, 1883.

In January, 1883, one Yates sued I. M. Phillips, and in the statutory way attached these two shares of stock; and on the eighth day of February, 1883, the same were sold by the sheriff of Boulder county, under the judgment obtained by said Yates against said I. M. Phillips; and one C.J. Buck became the purchaser thereof, who, on the next day, left with the secretary of the company a copy of the certificate of sale issued to him by the sheriff, which was by said secretary placed on file in the proper book of the company. When Yates brought his suit, and when the sale was made to Buck of these shares, both Yates and Buck had notice of the extent and character of I. M. Phillips' interest in said shares of stock.

On the nineteenth day of May, 1883, defendant in error Elliott applied to plaintiff in error for 20 inches of water, in addition to 30 inches to which he was entitled under three shares of stock in the plaintiff company, but did not inform it of his ownership or claim of right to the Moyer shares, and left the company in ignorance of his claim thereto, and tendered $20 for the additional water demanded, which demand and tender were refused by plaintiff in error. Again, about the first of June following, Elliott produced to the plaintiff in error an order in writing from said Moyer, directing the company to transfer on its books to him (Elliott) the said two shares of stock, and about the same time both I. M. and John Phillips, in writing, directed the company to make such transfer to said Elliott, and release to him all their interest and right in and to said stock. Upon the presentation of these orders to the company, Elliott demanded the transfer of the stock to him on the company books, but made no demand for water; nor did he tender payment or security to the company for the 20 inches of additional water demanded on May 19th.

When this demand was made by Elliott for the transfer of the said stock, the two certificates numbered 385 [10 Colo. 330] and 386, before that time issued to I. M. Phillips, were still in the possession of said Phillips, and were not produced to the company by either Elliott or Phillips, and no offer was made to surrender such certificates at that time, nor until about the thirteenth day of July following. The company refused to make such transfer to Elliott; and, after the refusal of the company to transfer this stock to Elliott, (but at what date does not appear,) defendants in error took forcibly, and against the will of the company, 20 inches of water under Elliott's claim of right to the said Moyer stock; for the taking of which this action was brought.

Defendants answered, and set up four distinct defenses: First, that they did not take the water unlawfully; second, that plaintiff was not damaged, as alleged in the complaint; third, admitting the taking of the water, but justifying under a claim of five shares of stock in the plaintiff company, two of which were the said Moyer shares; and, fourth, setting out all the facts on which said Elliott's right to the stock was based, and the other facts which have already been stated in this opinion, and brought into court the sum of $20 as the price and value of the water taken and used by them, and for which this action was brought. Plaintiff replied to the third defense, admitting said Elliott's ownership to three shares of stock, as alleged by him in said defense, but denied his ownership to more than the three shares, and to the fourth defense filed its demurrer. The court overruled the demurrer, and plaintiff electing to stand thereby, the court rendered judgment for defendants, that the suit be dismissed, and that they be allowed to take out of court the $20 which they had tendered.

In defending the action, defendants relied upon Elliott's ownership of the Moyer stock, and the right to 20 inches of water thereunder, as a contract right, growing out of the relation of said Elliott to the plaintiff company as a stockholder therein. He relied upon his right as a contract right, by virtue of the stock, and a compliance with the regulations of the plaintiff set up in his fourth defense. If Elliott had been the owner of the stock, and the company had accepted the tender of $20 made to it by him on the nineteenth of May, 1883, he would have been entitled to water, upon proper application or proceeding therefor; and the defense rests upon the assumption that he was such owner, and that the tender made was equivalent to payment of the water dues. Having used the water after tender, and brought the money into court, they acknowledged that they were indebted to the company to that extent, and the duty of payment.

It is evident that in its judgment the court sustained defendant's defense, recognizing his contract rights, and held the tender equivalent to payment, and that by the tender the defendants were the owners of so much water, which they had taken from the ditch of plaintiff and used. The legal effect of a plea of tender is an irrebuttable presumption of indebtedness to the extent of the tender, and when the tender is brought into court for the use of plaintiff, that amount is considered as stricken from the complaint; and if more is claimed by plaintiff, he proceeds for the excess of his demand above the tender only. Bank v. Southerland, 3 Cow 336; Spalding v. Vandercook, 2 Wend. 431; Johnston v. Insurance Co., 7 Johns. 315; Hubbard v. Knous, 7 Cush. 556. After a plea of tender, a plaintiff may be nonsuited in proceeding to recover beyond the tender. Jenkins, v. Cutchens, 2 Miles, 65; McCredy v. Fey, 7 Watts, 499. From this position, it follows inevitably that, if the court were right in finding the defense made out, it erred in adjudging the money brought into court in support of the tender of May 19th to defendants. The effect of the judgment, in such case, was to give to defendants under the contract both the water and the money, which, by their fourth defense, they confess the payment or security of was a condition precedent to their right to use the water. But, as we shall hereafter see, defendant wholly failed to sustain his alleged defense.

The first assignment of error--'That the court erred in overruling the plaintiff's demurrer to the further and separate answer and defense contained in defendants' answer'--presents a question that will be best disposed of by first referring to a few rules and principles of pleading, and to some of the settled rules of the law of corporations.

As to the rules of pleading which it is necessary to examine here it may be said that it is elementary that a demurrer admits all the material facts well pleaded in the pleading to which the demurrer applies, and all the necessary...