Harvey v. Campbell

209 P. 107, 107 Or. 373, 1922 Ore. LEXIS 181

• Court: Oregon Supreme Court
• Decided: June 27, 1922
• Status: Published

Opinions

HARRIS, J.

The controversy arises out of the language referring to the water right in the deed from Campbell to Mary C. Harvey. The plaintiffs vigorously contend that the language found in the deed is plain and that it is manifest

“that the thing intended to be sold was eighty inches of water, to be measured under a six inch pressure, and to be taken out of the Sparta Ditch, and from the water right belonging to the grantor, Campbell.”

More than eighty inches of water have been coming to the 760 acres which Campbell alone once owned and of which Mary C. Harvey now owns 160 acres. We are informed by one of the printed briefs that if the first eighty inches coming to the 760 acres are awarded to the Mary C. Harvey farm, no land except the land now owned by Campbell will be affected.

Campbell contends that the language employed in the deed is descriptive of the water right there conveyed and

“admits of no other construction than that she was to receive the right to the use of 80 inches of water measured under six inch pressure taken out of the west fork of Eagle Creek through the Sparta Ditch when that amount of water was available, as her proportionate share of the water flowing in said ditch, and that the reference made to the findings and order of determination of the State Water Board, and set forth as a part of the description of this water right, establishes beyond question the fact that the term ‘80 inches,’ was merely descriptive of plaintiffs’ proportionate right in and to the waters of that stream, which right was by said findings and order, made appurtenant to the lands of the stockholders of Sparta Irrigation Company.”

In the construction of a deed, as in the construction of any other written instrument, the intention of the parties, is to be pursued, if possible: Section 716, Or. L. If the expressed meaning is plain on the face of the deed, such expressed meaning will control: 18 C. J. 257. The position taken by the plaintiffs is that the plainly expressed meaning of the deed is that Campbell conveys to her eighty inches of water measured under a six-inch pressure. If the deed contained nothing more than this then the position assumed by the plaintiffs might be secure. But the deed contains more; it conveys eighty inches of water of that certain water right taken out of what is known as the Sparta ditch and then, instead of defining or measuring the water right, the deed proceeds by referring for definition and measurement to certain findings and an adjudication made by the water board.

The deed, if taken by its four corners and read by itself without any information concerning the circumstances under which it was made, or of the situation of the subject of the conveyance or of the parties, is indefinite and uncertain. The instrument appears to be awkwardly worded; and yet this seeming awkwardness may be easily accounted for. The deed does not pretend to give complete information concerning the water. The instrument standing alone does not purport to give full information concerning the water right. The language found in the instrument obviously contemplates that the deed must be and that it will be always read in connection with the specified findings and adjudication of the water board, because attention is expressly and designedly directed to such findings and adjudication for not only the definition but also for the measurement of the water right. It becomes necessary then to inspect the findings and adjudication of the water board; and in order that the court may be placed in the situation of the parties and in order that we may know the surrounding circumstances so that we can properly construe the language under examination, it becomes necessary to relate the story as it is told by the record.

The Sparta ditch dates back to 1870; for in that year a notice was posted appropriating a specified quantity of water and the construction of a ditch was begun, and in the following year, 1871, “water was run through said ditch to the town of Sparta.” It appears that when the ditch was completed between 1,000 and 1,500 inches of water were diverted into the ditch, and about 800 miner’s inches delivered to the water users. Apparently in the beginning water diverted through the Sparta ditch was used principally if not entirely for mining purposes, but latterly it has been used exclusively for irrigation.

The Sparta Irrigation Company was organized in 1913 with 500 shares of capital stock. The company was organized by the persons who owned the 1,500 acres of land and for the purpose of acquiring the Sparta ditch and water rights. Each of such owners subscribed for shares of stock in proportion to the land owned by him. F. W. Tallmadge, the then owner of the 760 acres subsequently acquired by Warnock, subscribed for 251 shares. In 1911 the Sparta. Irrigation Company acquired the Sparta ditch and water rights; and in the same year the several owners of the 1,500 acres transferred their respective portions of such 1,500 acres to the Sparta Irrigation Company. This corporation then borrowed $22,500 from the Grand Rapids Trust Company on its bonds secured by a mortgage on property, including the 1,500 acres, the title to which stood in its name. The object of transferring the 1,500 acres to the Sparta Irrigation Company was to enable the company to borrow money; and so when that object was accomplished, the lands were promptly reconveyed to the real owners, burdened of course with the mortgage.

On September 23, 1916, the stockholders of the Sparta Irrigation Company prepared, adopted and caused to be issued to each stockholder a certificate headed: “Certificate of Water Right issued by the Sparta Irrigation Company.” It is said that this form of certificate was designed for the purpose of providing for the equitable distribution of the Waters to be diverted through the Sparta ditch. It should be explained also that the certificate is not to be confused with the ordinary stock certificate issued by all corporations. The certificate of water right issued to F. W. and L. W. Tallmadge (predecessors in interest of Campbell) illustrates the purpose of this form of certificate issued by the corporation to its stockholders. The document certifies that F. W. and L. W. Tallmadge own 251 shares of the capital stock of the Sparta Irrigation Company and also own 251/500 of the waters of the Sparta ditch for the purpose of irrigating 753 acres of land which is definitely described by legal subdivisions, including the land purchased by Mary C. Harvey. The document also recites the following:

“In case the ownership of said lands is changed by conveyances thereof in amounts less than the whole, then 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, covering the right to each owner in the proportion to which he be entitled.

“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 land, and to 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 same proportion as the number of acres of land above described bears to the whole number of acres irrigated out of said ditch. * *

“The Grand Rapids Trust Company, of Grand Rapids, Michigan, now has a trust deed or mortgage upon the said ditch and other lands in the sum of $22,500.00, due Jan. 1, 1925, with interest at 6% 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 $11,295.00 with interest, and in case of foreclosure, costs and attorney’s fees.”

The Tallmadge certificate was recorded October 20, 1916.

In 1909, a petition was filed with the Board of Control (now known as the State Water Board) asking for a determination of the relative rights of all persons to the use of the waters of Powder River and its tributaries. The board acted upon the petition and subsequently on April 1, 1916, the board, in the language of the findings made by the trial court,

“filed in the office of the County Clerk of Baker County, Oregon, its Findings of Facts and Order of Determination in the matter of the determination of the relative rights of the waters of Powder River, and that final decree in said matter was thereafter, on the 18th day of March, 1918, entered in this court, and that said findings are the findings and adjudication referred to in said deed in its description of the conveyed water right therein mentioned.”

In the Powder River adjudication it was determined that the stockholders of the Sparta Irrigation Company owned 1,500 acres of land susceptible of irrigation through the Sparta ditch, and that 750 inches or one-half inch per acre would be sufficient to irrigate the area; but in order to provide against seepage and to insure the delivery of 750 inches of water upon the land, it was further provided that 250 inches should be allowed for seepage and loss, and that therefore the Sparta Irrigation Company was entitled to divert 1,000 inches of water from the public stream and into its ditch. It appeared at the time of the adjudication that only a portion of the 1,500 acres was ready for irrigation, and therefore time was granted to prepare for changing the use of water “from sale for domestic, mining, power and irrigation use, to an irrigation use”; and “the lands to be irrigated in making such change shall be tabulated herein under the head of inchoate rights.”

In this tabulation appear four subdivisions of forty acres each covering the lands now owned by Mary C. Harvey. It will foe recalled that in the certificate of water right issued by the Sparta Irrigation Company to F. ~W. and L. W. Tallmadge it is recited that they own 251/500 of the waters of Sparta ditch and are entitled to 251/500 of such water for the purpose of irrigating 753 acres of land in certain described premises. (The premises are described by legal subdivisions which, in the absence of shortage, embrace 760 acres.) In the decree of the Circuit Court rendered .in the Powder River adjudication it is determined that P. W. and L. W. Tallmadge, his wife, “of said stockholders (of the Sparta Irrigation Company) are to have the use and enjoyment of 376% inches thereof, the same to be appurtenant to the following described lands.” Then follows a description of the lands by legal subdivisions which, in the absence of a shortage, embrace 760 acres. It will be observed that the allowance of 376% inches is at the rate of one-half inch per acre for 753 acres.

"Wheeler worked for Campbell for wages for only a few weeks. When Mary C. Harvey purchased her land she at once leased it to Wheeler, and at the same time Wheeler rented from Campbell the remaining land owned by him. Campbell also sold some land to Mrs. Dunne; and Wheeler also had control of that land. During the season of 1918 Wheeler had control of the distribution of all the water available for use on the lands then owned by Campbell, Mrs. Dunne and Mary C. Harvey; and he was in a position therefore to rotate the use of the water. A son of Wheeler leased the Campbell land in 1919, but during that season, just as during the season of 1918, Wheeler controlled the distribution of the water; so that there was no friction or clashing of interests during the irrigating seasons of 1918 and 1919, although it does appear in the record that Wheeler claimed that Campbell made some objection to the manner in which Wheeler was using the water. However, in 1920, the situation changed; for Campbell leased his land to William Long. The plaintiffs commenced this suit on August 27, 1920.

In 1917 when Campbell purchased from Wamock only a comparatively small portion of the- 753 acres owned by Campbell had been prepared for water; but after delivery of the deed to Campbell more land was each year prepared and made ready for irrigation, so that in 1920 a much larger area, was in a condition to be irrigated than in 1917. In the Powder River adjudication notice was taken of the fact that the capacity of the ditch had been reduced and that it would be necessary to enlarge the ditch before it could carry one half an inch per acre for the 1,500 acres entitled to water; and consequently a period of five years was allowed as time within which to enlarge the ditch and restore it to its original capacity. In 1917 when Mary Cl Harvey purchased from Campbell, the ditch had not yet been enlarged. The capacity of the ditch in 1917 was only about 375 inches. In other words, the ditch could supply only 375 inches for the 1,500 acres. These 375 inches were prorated among the owners of the 1,500 acres. The proportion which was available for use on the 753 acres owned by Campbell, Mrs. Dunne and Mary C. Harvey at all times in 1918, 1919 and 1920 exceeded eighty inches, but at no time did it equal one-half inch per acre. Apparently Wheeler was able to distribute the water with satisfactory results in 1918 and 1919; but in 1920 because of the increase of land prepared for irrigation and because of the change in conditions there was not enough water to satisfy the wants of the Harvey land if the water available for use on the Campbell and Harvey lands was prorated. If on the other hand the first eighty inches had been diverted to the Mary C. Harvey land only a small and insufficient quantity would have remained for use on the Campbell land.

When Campbell purchased from Warnock he also received with the deed a transfer of the 251 shares of stock in the Sparta Irrigation Company which the Tallmadges had owned; and when Campbell conveyed 160 acres to Mary C. Harvey he also transferred to her 53% shares of such stock as her proportionate interest in the ditch and water right. Mary C. Harvey knew before she purchased the land that she would receive this stock together with a deed for the land. She attended the regular annual meeting of the stockholders of the company held on February 4, 1918, and was elected a director; and at the meeting of the directors, held on the same day, she was elected secretary-treasurer, and as such officer kept the minutes of the meeting. She also attended the annual meeting of the stockholders held on February 4, 1919; and the minutes of that meeting were written by Mary C. Harvey as secretary-treasurer.

There was evidence to the effect that an irrigation district had been organized; and that it was expected by the stockholders of the company that the district wished if possible to acquire the right to use the company’s ditch. It is claimed by the defendants that this subject was discussed at the February 4, 1919, meeting of the stockholders of the company and that the stockholders were advised that they ought without delay to enlarge the ditch because the time allowed by the water board for enlargement was about to -expire. There was evidence to the effect that it was suggested at the meeting that possibly arrangements could be made whereby the district in consideration for the right to use the ditch would agree to pay all the expense of enlargement and would enlarge the ditch sufficiently to carry water for both the district and the stockholders of the company and thus save the stockholders from paying for any of the work, but that if any right to the ditch should be transferred to the district care ought to be used so as to preserve for the company the right to 750 inches of water without regard to the past or present carrying capacity of the ditch. This evidence offered in behalf of the defendants is to some extent corroborated by the minutes of the stockholders ’ meeting held on February 4, 1919.

On September 15, 1,919, an attempt was made to hold, a special stockholders’ meeting at the Campbell ranch with a view of taking necessary steps for enlarging the ditch. Mary C. Harvey and Mrs. Dunne refused to sign waivers of notice, and the former made it known that in her deed she claimed the right to eighty inches of water without any liability to pay any expense incurred in enlarging the ditch, although she did state that she was liable for her proportionate share of the expense of upkeep.

There is an irreconcilable conflict in the testimony. Mary C. Harvey says that she purchased solely on the faith of representations made by Campbell; but he claims that Wheeler induced her to buy. It is conceded that Wheeler received from Campbell a commission on the basis of $5 per acre for the land sold to Mary C. Harvey as well as for the land sold to Mrs. Dunne; and it is likewise admitted by Mary C. Harvey and Mrs. Dunne that they did not know prior to the purchase that Wrheeler was to receive any commission; nor did they know until long after they purchased that he had received a commission. It is claimed by the plaintiffs that prior to the sale to Mary C. Harvey, Campbell represented that there was plenty of water in the ditch so that the land would receive one-half inch per acre, and that they were given to understand that the ditch was carrying 750 inches of water; that Campbell said nothing to Mary C. Harvey about the necessity of enlarging the ditch until September 15, 1919, when an attempt was made to hold a special meeting of the stockholders; and that nothing was said prior to the sale about prorating tbe water. Campbell claims that Wheeler on the day of his arrival looked at the ditch and estimated that it was carrying only about 500 inches; that Mary C. Harvey knew that it would be necessary to enlarge the ditch before it could carry 750 inches, and that if she purchased she would receive with the deed 53% shares of stock of the Sparta Irrigation Company entitling her to 53% five hundredths of the water coming from the ditch; that she examined an abstract containing a transcript of the certificates of water right issued to the Tallmadges, and that she knew of all the provisions in the certificate; that she was aware of all the facts relating to the water right, including the fact that by purchasing the land she would acquire the right only to her. proportionate share of 750 inches of water or her proportionate share of whatever less quantity was delivered by the ditch.

An attempt to reconcile the testimony would be to attempt a hopeless task. Obviously the trial judge who saw and heard the witnesses was on that account in a better position to determine the facts than we can possibly be when examining a mere paper record. It is our conclusion, after a careful investigation of the entire record, that we are not warranted in disturbing the findings made by the trial judge who found among other facts the following:

“That at the time of delivery of the aforementioned deed said Sparta ditch was not in such condition as to carry the full quantity of 750 inches, and that said parties knew thereof and knew the status of the title to said ditch and water right, and the method of distribution of said waters among said stockholders as heretofore stated. That simultaneously with the delivery of said deed the said defendant Floyd J. Campbell assigned from his holdings of said capital stock, and caused to be issued to said plaintiff Mary C. Harvey, in lieu thereof 53 and % shares of said capital stock, same being the number of shares to which she as such owner of 160 acres of said land would be entitled under the system under which the waters flowing in said ditch were to be distributed by said corporation.

“That said parties to the aforesaid deed knew of said certificate and of the rules and regulations under which said Sparta Irrigation Company was obligated to distribute the waters flowing in said Sparta ditch; and that said plaintiff accepted and retained the said shares of capital stock so delivered and assigned to her, and became one of the directors of said corporation, and served as its secretary and participated in its meetings and availed herself of the benefits accruing to her by virtue of being such stockholder, and that ever since said plaintiff became such stockholder she has, like the other stockholders, received and accepted from said corporation the same proportion of the total flow of water in said Sparta ditch as the number of shares of capital stock held by her bears to the total issue, all in conformity with said rules and regulations and as in said certificate provided; and that said- corporation distributed said water continually to each of said stockholders, including the said plaintiff Mary C. Harvey, and said defendant Floyd J. Campbell, pro rata according to the number of shares held by each stockholder respectively, and under which system the said plaintiff received 53 and 1/3 five hundredths as owner of 53 and 1/3 shares of said capital stock, and said defendant received 197 and 2/3 five hundredths as owner of 197 and 2/3 shares of said capital stock.

“That by reason of said Sparta ditch not being in its present condition capable of carrying the full quantity of 750 inches of water, which quantity said corporation had the decreed right to divert, there was never available from said ditch the full quantity of one-half inch per acre to the lands of said stockholders, and that for said reason, and not otherwise, neither said plaintiff nor said defendant, nor any other stockholder, received at any time the full quantity of one-half inch per acre of said water; and that said quantity cannot be had until said Sparta ditch shall have been so improved and repaired; and that with a view to carry out the said purposes of the organization under its articles and by-laws the said corporation has undertaken to provide the plans and means to carry into effect the said necessary improvements.

“That prior to the execution of said deed the said plaintiff S. S. Wheeler occupied said lands of said Floyd J. Campbell as lessee, and since the execution of said deed occupied also the said lands so conveyed to said Mary C. Harvey as lessee; that said plaintiff S. S. Wheeler was thoroughly experienced and familiar with the quantity of water flowing and available through said Sparta ditch and with the use thereof for irrigation of said lands, and knew of the said status of the title and said rules and regulations under which said waters were distributed; and that in the negotiations between the said parties to said deed the said S. S. Wheeler acted as agent between them, and received compensation by way of commission for his services as such agent; and that after the execution, the same as theretofore, the said lessees continued to recéive and accept, under said system and regulations so adopted, for the use upon said lands so conveyed as well as upon the lands still owned by said grantor, the water as so distributed by said corporation in accordance with the said respective shareholdings, and not otherwise, so long as he remained such lessee of said grantor.”

We also approve the following conclusions reached by the trial court:

“Since no reference to any capital stock in said corporation is mentioned in said deed, and since nevertheless said grantor assigned and delivered to said grantee 53 and 1/3 shares of said capital stock out of the shares theretofore held by said grantor, and since said grantee accepted and retained said shares and availed herself of the benefits thereof in conformity with the by-laws and rules and regulations under which said corporation managed said affairs and distributed said water, under which system and regulations, and as known to both of said parties, the waters were so distributed to such stockholders pro rata according to the number of shares held by each respectively, said facts and said voluntary acts evidenced the meaning with which each read and understood said deed and their said transactions, and that said deed cannot be construed to mean that the full or maximum quantity of one-half quántity flowing in said ditch or quantity available and regardless of the number of shares of said capital stock held by such stockholders.

“Since the findings of said State Water Board disclose that the water right of said Sparta Irrigation Company was an inchoate right, and since said corporation was by said adjudication and findings allowed time to perfect its appropriation and to then divert as a maximum quantity, not to exceed 750 inches, and 250 inches allowed for seepage and loss; and since it is established by the evidence herein that said maximum quantity had not been diverted and could not be carried in said ditch until said system was completed and said ditch repaired and improved, which facts were well'known to the parties to said deed, the description of said granted water right-mentioned in said deed means a water right of like or similar character, i. e., -a right to divert from said ditch a maximum quantity of 80 inches when said system shall have been perfected and said ditch so improved and repaired; and that same does not mean that said quantity is to be furnished by said grantor from his private ditches.”

The decree is affirmed but without costs to any party in either court. Affirmed.

Mr. Justice Rand took no part in the consideration of this case.