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(209 P.) protectory privilege was added to these. If the Co., 161 Mass. 212, 36 N. E. 797, 23 L. R. A. investments in the savings department should 313, and note. not suffice to pay the savings department depos- In the case of Re Assignment of Hamilton, itor in full, the unpaid balance of his deposit supra, involving an insolvent bank, for which was placed on a parity with all other deposits, a receiver had been appointed, Mr. Justice and entitled, on distribution, to share ratably in Moore, speaking for the court, said: the order prescribed by $ 3482."

“The rule appears to be well settled that an A statute of Michigan (Comp. Laws 1897, & equitable interest in an insolvent debtor's es6118) provides, in substance, that any bank tate is vested in a receiver by his appointment, combining the business of a savings bank and and that he takes the assets of the debtor as a commercial bank shall keep separate books a trust fund for the equal benefit of all the of each kind of business, and that all invest- creditors of the estate. The receiver can acments of the savings department shall be quire no greater interest than the debtor had kept entirely separate and apart from the in the estate, and hence choses in action pass other business of the bank, and that "the in- to the receiver subject to the equitable right of

set-off existing at the time of his appointment." vestments made with the funds deposited by savings depositors shall be held solely for the payment of the depositors of said funds."

Plaintiff Upham claims that insolvent sav. The court in the case of Peters v. Union ings banks are excepted from the rules estabTrust Co., supra, held that investments made lished by the foregoing authorities for the al. of funds deposited with the savings depart- lowance of offsets against insolvent estates. ment should be held solely for the benefit of Osborn v. Byrne, 43 Conn. 155, 21 Am. Rep. the depositors of savings funds, "and that, as 641; Lippitt v. Thames Loan & Trust Co., suto the excess of savings deposits over and pra; Stockton v. Mechanics' Bank, 32 N. J. above these securities, the depositors should Eq. 163; Bachrach v. Allen (Mass.) 131 N. E. sbare with the commercial creditors."

857. In all of these cases the savings bank The statute of Iowa (Code, & 1877) pro was conducted by the depositors upon the muvides that,

tual plan or by a corporation acting as their

agent or trustee. In each instance the deposUpon the insolvency of a bank, the auditor itors all had a common interest in the investmay by proper proceedings procure the appoint: ed savings funds, and each was entitled to ment of a "receiver for such bank, and its affairs shall be wound up under the direction of his proportionate share of the profits. In the the court, and the assets thereof ratably dis- case of the defunct bank, the affairs of which tributed among the creditors thereof, giving defendant is administering, the relation of preference in payment to depositors.”

debtor and creditor existed between the sav

ings depositors and the bank. Savings deIn the case of State y. Savings Bank, su- positors had no interest in the profits of the pra, the court affrmed the decision of the bank, and were not liable for its losses, and district court, "that under the statute the de- the rules relating to the set-off of mutual de positors in the insolvent bank are preferred mands upon insolvency apply. Williams v. creditors, who, after payment of costs and Johnson, 50 Mont. 7, 144 Pac. 768, Ann. Cas. expenses, are entitled to be first paid in full 1916D, 595. from the assets in the hands of the receiver, [4] Plaintiff Upham further contends that exclusive of the sum or amount realized from the recognition by this court of the trust fund the statutory assessment upon the stock doctrine as to the assets of an insolvent corholders, and that the proceeds of such assess-poration that has ceased to do business, and ment be ratably distributed to all creditors, the provisions of the statute purporting to including depositors.”

give to savings depositors an "exclusive prior [3] The right of defendant to allow a de- lien" upon the savings assets and to all de positor to set off his deposit against his in-positors a "tirst and prior lien" upon the asdebtedness to the bank is supported by the sets of the corporation, prevent the operation great weight of authority. 3 R. C. L. 647; | in this state of the rules governing offsets. 14 R. C. L. 655; 14a O. J. 1034; 1 Michie, Here all of the assets of the corporation are Banks & Banking, 634, 635; 1 Morse on Banks within the control of the circuit court, and and Banking (3d Ed.) 553; Re Assignment of are being administered as a trust fund for Hamilton, 26 Or. 579, 38 Pac. 1088; Scott v. the benefit of the creditors, exclusive of Armstrong, 146 U. S. 499, 13 Sup. Ct. 148, 36 stockholders; no suggestion is made of diL. Ed. 1059 ; Yardley v. Clothier, 51 Fed. 506, verted or concealed assets that should be cov2 C. C. A. 349, 17 L. R. A. 462; Van Wagon-ered into the fund. The trust fund doctrine er v. Paterson Gaslight Co., 23 N. J. Law, 283; alluded to has no application in such a case. State v. Brobston, 94 Ga. 95, 21 S. E. 146, 47 | Its principal office is to preserve the assets of Am. St. Rep. 138; Citizens' Bank v. Kretsch- a corporation as a fund for the payment of mar, 91 Miss. 608, 44 South. 930; Williams v. the corporate debts, when such assets or Johnson, 50 Mont. 7, 144 Pac. 768, Ann. Cas. some part thereof have been wrongfully di1916D, 595, and note; Williams v. Burgess, verted by the officers and agents of the cor74 W. Va. 623, 82 S. E. 507, Ann. Cas. 1917C, poration. 1185, and note; Merrill v. Cape Ann Granite [5] The statute does not create a lien in favor of depositors in the sense that it gives taking such proceedings as are necessary to a vested right or interest in such assets, but enable that court to determine a claim to an rather provides rules of distribution and pri- allowance of costs and counsel fees out of ority among creditors respecting the assets of the fund. insolvent banks. Sixpenny Savings Bank v.

"When a fund is brought into court through Stuyvesant Bank, 22 Fed. Cas. 264, No. 12,- | the service of an attorney, or where his serv. 919. The rules governing set-off apply to pre- ices have added to or preserved or increased ferred creditors as well as those not prefer the amount being administered, the court of red. In re Excelsior Mfg. Co. Assignment, primary jurisdiction may properly allow a rea164 Mo. 316, 329, 64 S. W. 133.

sonable compensation for his services to be [6] That a depositor cannot sue the defend paid from the fund.” Ford v. Gilbert, 44 Or. ant or the defunct bank, both being under the 259, 262, 75 Pac. 138, 139. supervision of the court, and obtain a sever

The court denied the claim for counsel fees, al judgment upon his claim (section 74, Or. and observed: L.), is urged by plaintiff Upham as a further reason why the rules of set-off do not apply for the common benefit of the creditors, or add

“They (the attorneys) did not recover a fund to the defunct bank. There is no merit in to the assets now being administered by the the contention. Where the claim of such a

court." depositor is allowed by defendant, with the approval of the court, such allowance is [8] In order to authorize an allowance for equivalent to judgment. Rockwell v. Port-counsel fees and costs out of a fund, the servland Savings Bank, 31 Or. 431, 50 Pac. 566; ices rendered must have been necessary. 15 Baker v. Williams Banking Co., 42 Or. 213, C. J. 105; 7 R. C. L. 786. 70 Pac. 711. Action upon a rejected claim In 15 C. J. 105, it is stated: is authorized by statute. Section 6223, Or. "Nevertheless to authorize the allowance the L. In any event, a depositor who possesses services rendered must have been necessary; a valid claim against an insolvent bank, also all the parties must have a common interwhich claim has been rejected, has the right est in the property or fund involved, and the to commence an action for the recovery of costs incurred must have been for the profit of judgment upon his claim, subject to the for-all having such interest." mality of obtaining an order from the court

To sustain the claim made for the allowpermitting him to institute the action.

ance of counsel fees and costs from the fund [7] Plaintiff Steelhammer prosecutes a in the hands of defendant, plaintiff cites nucross-appeal because of the failure of the cir

merous cases, among them the following: cuit court to award plaintiff a reasonable Trustees v. Greenough, 105 U. S. 527, 26 L. counsel fee for instituting and prosecuting Ed. 1157; Central R. R. Co. v. Pettus, 113 her suit. Plaintiff alleged in her complaint U. S. 122, 5 Sup. Ct. 387, 28 L. Ed. 915; Harthat there were over 7,500 savings depositors rison v. Perea, 168 U. S. 311, 18 Sup. Ct. 129, of the bank, representing a total of more 42 L. Ed. 478. than $1,000,000 in savings deposits; that it

In all of the cases cited by plaintiff, the was impossible for all savings depositors to party seeking an allowance of counsel fees join in the suit, but that the decree to be ob: and costs had at his own expense either retained therein would inure to their special covered and brought in the court a fund or benefit, and such depositors would receive the

property that otherwise would have been full amount of their respective claims, where lost to the creditors, or had instituted and as if the defendant carried out his declared

prosecuted proper proceedings to save a trust intention to confine the claims of savings de fund already in court from destruction, and positors to savings assets until the commercial to restore it to the purposes of the trust, depositors were paid in full from the other none of which conditions are present in the assets of the bank, savings depositors would

instant case. receive not to exceed 75 per cent. of their re

[9] When the suit was commenced, the de. spective claims. Plaintiff prayed for the fendant had not declared any dividend or dissum of $5,000 as costs, disbursements, and tributed or paid to creditors any of the funds counsel fees, to be allowed out of the assets of the defunct bank; defendant had merely of the savings department of the bank. Be- declared that he intended to distribute the fore the court was authorized to allow the funds in a certain way. The court had given counsel fees prayed for, it was necessary for no decision and had expressed no opinion conplaintiff to introduce some evidence to es

cerning the matter. The statute requires tablish the extent of the advantage, if any, thataccruing to savings depositors as the result of the services rendered, together with evi

The superintendent of banks shall proceed dence of the reasonable value of such serv- to liquidate the affairs of an insolvent bank ices. The record does not show that any such court in and for the judicial district in and for

under the order and direction of the circuit evidence was introduced or any offer made to which the office of such bank was located, and introduce the same. This court, however, that he "may, out of the funds remaining in has power, in a proper case, to remand the his hands after the payment of expenses, decause to the circuit court for the purpose of clare one or more dividends, and after the ex(209 P.) piration of one year from the first publication of Control of the State of Oregon, in its findof notice to creditors, he may declare a finalings and adjudication" of rights of various dividend-such dividends to be paid to such per- claimants of the waters of Powder river, and sons and in such amounts and upon such no- also a pro rata interest of 250 inches of water tice as may be directed by the circuit court. allowed to a named irrigation company, under Section 6223, Or. L.

its appropriation through such ditch, in the dis

cretion of the water master, to cover seepage The court had not made, and had not been and transit loss, held indefinite and uncertain, requested to make, any order concerning the and must be read in connection with the findings dividends to be declared, distributed, and and adjudication of the Water Board when conpaid to depositors from the assets in the struing it. hands of the defendant. It is not to be as- 3. Waters and water courses Cw156(6)—Deed sumed that the court, either upon its own

construed not to require delivery of one-half motion or upon the suggestion of defendant,

inch of water regardless of quantity in ditch or would have authorized a distribution of the available and of capital stock held by different assets contrary to the requirements of the stockholders. statute. The court promptly ordered distri- Parties' voluntary acts held to evidence bution of the assets in accordance with such a meaning that deed cannot be construed plaintiff's contention, when application was as granting the full or maximum quantity of made to it.

one-half inch per acre to be delivered, regardNo controversy taking the form of litiga- less of the quantity flowing in the ditch or tion existed between savings depositors and quantity available or of the number of shares

held by the different stockholders. other depositors of the bank. Plaintiff might have filed a petition in the suit brought by 4. Waters and water courses 156(6)-Deed the defendant upon taking possession of the to irrigated land held to provide for diverting bank, and thereby readily and in a summary

of maximum quantity when the ditches should

have been perfected, and not to require granmanner secured an order upon the defendant,

tor to furnish water from his private ditches. directing him to distribute the assets as

A deed to land including water rights conplaintiff claimed they should be distributed and as the statute requires. Wilde v. Ore. Board referred to disclosing that the irrigation

strued with the findings of the State Water Trust & Savings Bank, 59 Or. 551, 553, 117 company's rights were inchoate, held to grant Pac. 807; Hafer v. Medford C. L. R. Co., 60 a right to divert from the named ditch a maxi. Or. 354, 358, 117 Pac. 1122, 119 Pac. 337. mum quantity of 80 inches when said system

It does not appear that expensive litigation shall have been perfected and said ditch rewas necessary to secure a correct order of paired and improved, and does not mean that distribution, and of course nothing was add- such quantity is to be furnished by grantor ed to the funds and assets which were being from his private ditches. administered under the direction of the court. We do not think this case comes within the

In Banc. rule established by the cited cases.

Appeal from Circuit Court, Baker County; The decree of the circuit court in each of Gustav Anderson, Judge. the cases is affirmed.

Suit by Mary C. Harvey and another

against Floyd J. Campbell and another. BURNETT, O. J., took no part in the con- From a decree dismissing the suit without sideration or decision of this case.

costs, plaintiffs appeal. Decree affirmed, without costs to any party in either court.

This is a suit brought by Mary C. Har

vey and S. $. Wheeler against Floyd J. HARVEY et al. V. CAMPBELL et al.

Campbell and a corporation known as the

Sparta Irrigation Company. The controver(Supreme Court of Oregon. June 27, 1922.) sy relates to the use of water for irrigation. 1. Deeds am 93—Intention of parties plainly tween the parties in the construction placed

The dispute results from a difference beexpressed will control construction.

In construing a deed, the intention of the upon a deed executed and delivered by Floyd parties is to be pursued, if possible (Or. L. & J. Campbell to Mary C. Harvey. Å ditch 716), and, if the expressed meaning is plain on from the west fork of Eagle creek, a tribu

known as the Sparta ditch carried water the face of the deed, it will control. 2. Waters and water courses Emo 156(2)-Deed 30 miles to some arid lands aggregating

tary of Powder river, for a distance of about to water right was defined and measured by about 1,500 acres and owned by five or six State Water Board" to be construed in connection with findings and adjudication of different persons. On July 30, 1917, Robert Water Board.

N. Warnock owned approximately 700 acres A deed conveying land and also 80 inches of of this body of 1,500 acres of arid land. water measured under 6-inch pressure of a The land held by Warnock was conveyed acnamed water right, “as such water right is de- cording to legal subdivisions, and, if the subfined and measured by the State Water Board | divisions included the exact acreage of a

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

perfect subdivision, then Warnock owned ex. y ries; also a pro rata interest in 250 inches of actly 760 acres. At any rate on July 30, water allowed to the Sparta Irrigation (Com1917, Warnock conveyed to Floyd J. Camp- pany] under its appropriation through said bell all the land owned by him, and "also ditch in the discretion of the water master to that certain water right to the amount of cover seepage and loss of water in trans37642 miner's inches of water, measured un- it from the point of origin to the point of deder 6-inch pressure, taken out of what is livery." known as the Sparta ditch in Baker county, In this deed Campbell covenants that he is Or., as such water right is measured and the owner in fee simple of the premises, and defined by the State Water Board of the that they are free from all incumbrances, exState of Oregon on the 17th day of Novem-cept a mortgage executed by the Sparta Irri. ber, 1915, in its findings of fact and adju- gation Company to the Grand Rapids Trust dication of the rights of the various claim- Company on October 3, 1914, and a suppleants to the waters of Powder river, and mental mortgage “between the same parties, also a pro rata share of not to exceed 250 of date October 3, 1916," which mortgages miner's inches of water allowed in said de- the grantee "assumes and agrees to pay her cree in the discretion of the water master pro rata share thereof, hereby fixed and for and on account of seepage, all in the agreed to be the sum of $2,400, with intercounty of Baker and state of Oregon." est."

Campbell had not had any experience with It was understood that, if Mary C. Harvey Irrigated land, and he made this fact known purchased, Wheeler would lease the land to Wheeler, who had had much experience in purchased by her, and that Campbell would irrigation, with the result that an agreement also rent the remainder of his land to Wheelwas made whereby Wheeler and his wife were er; and accordingly Wheeler did lease the to move upon the land, and Wheeler was to Mary C. Harvey land and also the remainder act as overseer for a fixed monthly sum; and of the land owned by Campbell, and as such accordingly, on August 13, 1917, Wheeler lessee Wheeler had control of all the lands and his wife moved upon the premises. Aft- and of the water used thereon during the er Wheeler and his wife had been there "a season of 1918. Wheeler continued as lescouple of weeks,” Mrs. Wheeler wrote to see of the Harvey land until the time of the her sisters Mary C. Harvey and Mrs. Fora trial, and hence his interest in the Mary Dunne, and invited them to come and visit o. Harvey premises is only that of a lessee. with her and her husband; and in response The Campbell lands were farmed by a son to the invitation the two sisters came to visit of Wheeler's in 1919; and during the irriwith the Wheelers, arriving at the Camp- gating season of that year plaintiff Wheeler bell ranch in September.

managed the distribution of the water availCampbell had made it known to Wheeler able for the Campbell and Mary C. Harvey that he wished to sell some of the land, and lands. But in the fall of 1919 Campbell Campbell had told Wheeler that he would made it known that he would not lease his give him a commission of $5 per acre if land to Wheeler for another year; and acWheeler would assist in selling a portion of cordingly Campbell rented his farm to Wilthe land. Wheeler told Campbell that he liam Long for the year 1920. In 1918 and in had in mind certain persons as prospective 1919, when Wheeler bad charge of the dispurchasers, and thought that he could in- tribution of the water available for use on terest them in the land, but after some cor- the 760 acres, he was able so to control the respondence with those persons Wheeler as- water that he could use all of it first on the certained that they were not interested. Campbell lands and then on the Harvey After the arrival of Mary C. Harvey and lands, so that there was no friction or clash Mrs. Dunne they became interested, and of interests in the use of the water. Mary C. Harvey purchased a tract of 160 However, in the season of 1920 there was acres, and it is appropriate to explain also a clash of interests, because the Harvey land that Mrs. Dunne purchased a portion of the was farmed by Wheeler, and the Campbell Campbell land. The deed from Campbell land by Long. The Sparta ditch did not carand wife to Mary C. Harvey was dated Oc- ry enough water fully to supply the wants of tober 8, 1917, and it conveyed to the grantee both the Campbell and the Harvey lands. 160 acres of land, described as the W. 12 of Campbell and his agents caused the water the S. E. 44 and the E. 12 of the S. W. 14 to be divided so that each farm would re-. of a specified section, and "also 80 inches of ceive its pro rata share of the quantity bewater measured under 6-inch pressure of longing to the 760 acres owned by Campbell, that certain water right out of what is Mary C. Harvey, and Mrs. Dunne. Claiming known as the Sparta ditch, in Baker county, that by force of the terms in her deed she Or., as such water right is defined and meas- was entitled, as against Campbell, to receive ured by the State Water Board of Control 80 inches of water before any water could be of the State of Oregon, in its findings and applied on the Campbell land, and that she adjudication in the matter of the adjudica- was not obliged to prorate the water with tion of the rights of various claimants to Campbell, Mary C. Harvey, together with the waters of Powder river and its tributa- her tenant, Wheeler, commenced this suit (209 P.) and prayed for a decree that Mary C. Har- sing of the deed is that Campbell conveys to vey be adjudged to be the owner of the right her 80 inches of water measured under a to divert and use from the waters of the 6-inch pressure. If the deed contained nothSparta ditch 80 inches of water measured ing more than this, then the position asunder a 6-inch pressure at all times during sumed by the plaintiffs might be secure. the irrigating season of each year, and that But the deed contains more; it conveys 80 defendants be restrained from interfering inches of water of that certain water right with the plaintiffs in their use of the full taken out of what is known as the Sparta amount of 80 inches of water measured un- ditch, and then instead of defining or measder a 6-inch pressure.

uring the water right, the deed proceeds by A trial terminated in a decree dismissing referring for definition and measurement to the suit without costs. The plaintiffs ap- certain findings and an adjudication made pealed.

by the Water Board. W. H. Packwood, of Baker (Packwood &

[2] The deed, if taken by its four corners Packwood, of Baker, on the brief), for appel- and read by itself without any information lants.

concerning the circumstances under which it Blaine Hallock, of Baker (Nichols & Hal- was made, or of the situation of the subject lock, of Baker, on the brief), for respondents. of the conveyance or of the parties, is in

detinite and uncertain. The instrument apHARRIS, J. (after stating the facts as

pears to be awkwardly worded; and yet this above). The controversy arises out of the ed for. The deed does not pretend to give

seeming awkwardness may be easily accountlanguage referring to the water right in the deed from Campbell to Mary C. Harvey. The The instrument, standing alone, does not pur

complete information concerning the water. plaintiffs vigorously contend:

port to give full information concerning the That the language found in the deed is plain, water right. The language found in the inand that it is manifest "that the thing intended strument obviously contemplates that the deed to be sold was 80 inches of water, to be meas- must be, and that it will be, always read in ured under a 6-inch pressure, and to be taken connection with the specified findings and adout of the Sparta ditch, and from the water right belonging to the grantor, Campbell."

judication of the Water Board, because at

tention is expressly and designedly directed More than 80 inches of water have been to such findings and adjudication for not coming to the 760 acres which Cambell alone only the definition, but also for the measureonce owned and of which Mary C. Harvey ment of the water right. It becomes necesnow owns 160 acres. We are informed by sary then to inspect the findings and adone of the printed briefs that, if the first judication of the Water Board; and, in oro0 inches coming to the 760 acres are award. der that the court may be placed in the sited to the Mary C. Harvey farm, no land ex- uation of the parties and in order that we cept the land now owned by Campbell will may know the surrounding circumstances so be affected.

that we can properly construe the language Campbell contends:

under examination, it becomes necessary to That the language employed in the deed is relate the story as it is told by the record. descriptive of the 'water right there conveyed,

[3, 4] The Sparta ditch dates back to 1870; and "admits of no other construction than that for in that year a notice was posted approshe was to receive the right to the use of 80 priating a specified quantity of water and inches of water measured under 6-inch pressure the construction of a ditch was begun, and taken out of the west fork of Eagle creek in the following year, 1871, "water was run through the Sparta ditch when that amount of through said ditch to the town of Sparta.” water was available, as her proportionate share it appears that when the ditch was comof the water flowing in said ditch, and that the reference made to the findings and order of de- pleted between 1,000 and 1,500 inches of water termination of the State Water Board, and set were diverted into the ditch, and about 800 forth as a part of the description of this water miner's inches delivered to the water users. right, establishes beyond question the fact that Apparently in the beginning water diverted the term '80 inches, was merely descriptive of through the Sparta ditch was used principalplaintiffs' proportionate right in and to the ly, if not entirely, for mining purposes, but waters of that stream, which right was by said latterly it has been used exclusively for irfindings and order made appurtenant to the

rigation. lands of the stockholders of Sparta Irrigation Company."

The Sparta Irrigation Company was or

ganized in 1913 with 500 shares of capital [1] In the construction of a deed, as in stock. The company was organized by the the construction of any other written instru- persons who owned the 1,500 acres of land ment, the intention of the parties is to be and for the purpose of acquiring the Sparta pursued, if possible. Section 716 Or. L. If ditch and water rights. Each of such ownthe expressed meaning is plain on the face of ers subscribed for shares of stock in proporthe deed, such expressed meaning will control. tion to the land owned by him. F. W. Tall18 C. J. 257. The position taken by the madge, the then owner of the 760 acres subplaintiff's is that the plainly expressed mean-sequently acquired by Warnock, subscribed

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