236 P. 502 | Or. | 1924
Lead Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *293 IN BANC.
This is a suit to enjoin the defendant from collecting an alleged excessive assessment on its stockholders by withholding water for irrigation purposes. For a statement of the facts out of which the suit has grown, see In re Matter of theDetermination of the Relative Rights to the Waters of WillowCreek, decided this day. Also same case,
The management of the defendant corporation was transferred from the Moline Farms Company, the successor in interest of the Willow River Land and Irrigation Company, in 1919, to the stockholders of the defendant corporation. The defendant corporation was awarded a decree by the Circuit Court. The plaintiffs appeal, basing their appeal on three separate grounds, to wit: (1) It is claimed by appellants that the system was not completed as required by the contract between the Orchards Water Company and the Willow River Land and Irrigation Company, entered into in 1910, at the time of said transfer. (2) That the defendant should not be permitted to withhold water from its stockholders because of alleged delinquent assessments. (3) That the plaintiffs are entitled to two acre-feet of water for every acre of land described in their contracts with the defendant, notwithstanding the fact that less than the *294 entire acreage described therein was given a water right of the State Water Board.
All of these claims on the part of the plaintiffs are contested by the defendant.
AFFIRMED.
The assessments complained of by the plaintiffs were legally levied by the directors of the defendant corporation. The articles of incorporation and its by-laws authorize the corporation to levy the assessments for the maintenance of the irrigation system. By the laws of this state the management of a corporation is fixed in the board of directors: Or. L., § 6867. This is also the general law: 14-A C.J. 354, § 2216. The directors of the defendant corporation accepted the transfer of the irrigation system in 1919. Thereafter, at a meeting of the stockholders thereof, regularly called and held, this action of the directors was confirmed. The plaintiffs, as stockholders of the defendant corporation, are, therefore, bound by the action of the board of directors and the ratification thereof by the stockholders. The issues framed by the plaintiffs in this suit do not include allegations sufficient to warrant the court inquiring into the legality or validity of the act of the defendant corporation in accepting the transfer of the irrigation system:Baillie v. Columbia Gold Mining Co.,
The Circuit Court correctly refused to decide the question of whether or not the irrigation system was completed in 1919 when the transfer was made. The original contract between the Willow River Land and Irrigation Company and the Orchards Water Company provided that the system should be completed before it should be transferred to the defendant corporation. In order for the court, however, to take cognizance of that question, as well as the act of the corporation accepting the transfer, it should be presented directly by a suit instituted for that purpose, since the plaintiffs are bound by it: 14-A C.J. 83, 84, § 1843;Budd v. Multnomah Street Ry. Co.,
By the terms of the contract between the plaintiffs and the defendant corporation, the latter may withhold the supply of water until the maintenance charge shall have been paid. In this suit the plaintiffs claim that a part of the assessment was for prior indebtedness of the plaintiffs to the defendant. Plaintiffs admit the authority of the defendant to levy assessments for the maintenance of the irrigation system and the right of the defendant to withhold water until current assessments are paid, but denies the right of the defendant to withhold water for past indebtedness. In this contention the appellants are supported by respectable authority: Shelby *296
v. Farmers' Ditch Co.,
We have held in the Willow Creek case, this day decided, that the plaintiffs are entitled to have made appurtenant to the several tracts of land two acre-feet of water by the defendant corporation for every acre described in their contracts, whether or not the entire acreage was reclaimed prior to January 1, 1918. The reason for this decision is fully stated in our opinion in the Willow Creek case. The Moline Farms Company had no right to divert to its own land any of the water adjudicated to the Willow River Land and Irrigation Company until it had fully supplied the quantity of water sold to the purchasers of the Irrigation Company. By unlawfully diverting to its own land large quantities of the limited supply of water prior to 1918, the Moline Farms Company prevented the plaintiffs, and others similarly situated, from reclaiming the entire acreage sold to them by the Irrigation Company or its successors, with water rights appurtenant. To hold now that the plaintiffs are not entitled to the water because it was not utilized prior to January 1, 1918, *298 is to award to the Moline Farms Company and its successors water sold by it and its predecessors in interest to the appellants. The effect of such a decision would be to permit the Moline Farms Company to take advantage of its own wrong. This equity will not permit.
But we did not intend to authorize any person to change a water right from one tract of land to another not contiguous. The law forbids that: Or. L., §§ 5744, 5754; Squaw Creek Irr. Dist.
v. Mamero et al.,
Courts of equity will be diligent to protect the rights of minority stockholders when a suit has been properly instituted for that purpose: 14-A C.J. 694; 6 Fletcher, Cyc. Corp., §§ 3998, 4053, pp. 6872-6873; *299 Rights of Minority Stockholders, Harvey, pp. 63, 74, 78, 79. But this suit was not instituted for that purpose, nor prays for that result.
Finding no error in the decree appealed from, it is affirmed.
AFFIRMED.
Mr. Justice BELT, not having heard the argument, took no part in this decision.
Addendum
Mr. George E. Davis and Mr. H.M. Cake, contra. The appellants have objected to the cost bill of the defendant Orchards Water Company. No objection is made to any particular item but to the entire cost bill. The contention of the appellants is that no costs or disbursements should be allowed to the respondents because it is inequitable to do so. Section 567, Oregon Laws, provides that the costs shall follow the event of the suit, unless the court directs otherwise. The respondent was, therefore, justified in filing its bill of costs and disbursements. We think it is entitled to recover from the appellants the amount claimed in its cost bill, and it is so ordered. COSTS TAXED. *300