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, with interest, and, in case of foreclosure, costs and attorneys' fees." The Tallmadge certificate was recorded October 20, 1916. for 251 shares. In 1914 the Sparta Irriga- [ lands for which this water right is issued shall tion 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 1909 a petition was filed with the Board in its name. The object of transferring the of Control (now known as the State Water 1,500 acres to the Sparta Irrigation Com- Board) asking for a determination of the relpany was to enable the company to borrow | ative rights of all persons to the use of the 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 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, Or., 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." certificate is not to be confused with the ordinary stock certificate issued by all corpora- In the Powder river adjudication it was detions. The certificate of water right issued termined that the stockholders of the Sparta to F. W. and L. W. Tallmadge (predecessors Irrigation Company owned 1,500 acres of land in interest of Campbell) illustrates the pur- susceptible of irrigation through the Sparta pose of this form of certificate issued by the ditch, and that 750 inches or one-half inch per corporation to its stockholders. The docu-acre would be sufficient to irrigate the area; ment certifies that F. W. and L. W. Tall- but, in order to provide against seepage and madge own 251 shares of the capital stock to insure the delivery of 750 inches of water of the Sparta Irrigation Company and also upon the land, it was further provided that own 251/500 of the waters of the Sparta ditch | 250 inches should be allowed for seepage and for the purpose of irrigating 753 acres of loss, and that therefore the Sparta Irrigation land which is definitely described by legal | Company was entitled to divert 1,000 inches 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 canceled 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. * 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 40 acres each covering the lands now owned by Mary C. Harvey. It will be 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 "The Grand Rapids Trust Company, of Grand 760 acres.) In the decree of the circuit court Rapids, Mich., now has a trust deed or mortgage upon the said ditch and other lands in the rendered in the Powder river adjudication it sum of $22,500, due January 1, 1925, with in- is determined that F. W. and L. W. Tallterest at 6 per cent. per annum, payable Janu-madge, his wife, "of said stockholders (of the ary 1st of each year, and the above-described | Sparta Irrigation Company), are to have the (209 P.) use and enjoyment of 376% inches thereof, I change in conditions, there was not enough the same to be appurtenant to the following water to satisfy the wants of the Harvey land described lands." Then follows a description if the water available for use on the Campbell of the lands by legal subdivisions which, in and Harvey lands was prorated. If, on the the absence of a shortage, embrace 760 acres. other hand, the first 80 inches had been diIt will be observed that the allowance of verted to the Mary C. Harvey land, only a 3761⁄2 inches is at the rate of one-half inch small and insufficient quantity would have per acre for 753 acres. remained for use on the Campbell land. 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 there fore 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 Warnock, only a comparatively small portion of the 753 acres owned by Campbell had been prepared for water; but after the 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 with in which to enlarge the ditch and restore it to its original capacity. In 1917, when Mary C. 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 O. Harvey at all times in 1918, 1919, and 1920 exceeded 80 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 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 secretarytreasurer. 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, 1919, 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 80 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. 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. There is an irreconcilable conflict in the Campbell assigned from his holdings of said testimony. Mary C. Harvey says that she capital stock, and caused to be issued to said purchased solely on the faith of representa- | plaintiff Mary C. Harvey, in lieu thereof, 53% tions made by Campbell; but he claims that shares of said capital stock, same being the Wheeler induced her to buy. It is conceded number of shares to which she as such owner that Wheeler received from Campbell a com- of 160 acres of said land would be entitled unmission on the basis of $5 per acre for the der the system under which the waters flowing land sold to Mary C. Harvey as well as for in said ditch were to be distributed by said corporation. 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 Wheeler 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 the water. Campbell claims that Wheeler on the day of his arrival looked at the ditch and estimated that it was carry ing 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 53/500 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 "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 including the said plaintiff Mary C. Harvey and water continually to each of said stockholders, 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%/500 as owner of 53% shares of said capital stock, and said defendant received 197%/500 as owner of 197% 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 its 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 (209 P.) of the said status of the title and said rules and regulations under which said waters were distributed; 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 lessee continued to receive 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." STATE ex rel. BAYER v. FUNK, City Auditor. (Supreme Court of Oregon. June 27, 1922.) 1. Municipal corporations 244(1)—Offer of city to reimburse contractor for losses held not binding. Offer of city to reimburse a contractor for losses on condition that the contractor commence legal proceedings and obtain a judicial determination that the city council had authority to pay a moral obligation did not become a binding contract by reason of the passage of ordinances making an appropriation and the placing of a release in escrow by the contractor, where no judicial determination had been We also approve the following conclusions obtained as to the authority of the council to 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 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 bylaws 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 inch per acre should be delivered regardless of the quantity 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." pay a moral obligation. 2. Accord and satisfaction 17-Accord not followed by satisfaction revocable at will. An accord is not a bar to an action on the original liability unless it has been followed by satisfaction, being revocable at will by either party. 3. Accord and satisfaction 19-Promise may be accepted as full satisfaction of original obligation. Where the agreement is that the promise, and not the performance of the promise, is accepted as full satisfaction and extinction of the original obligation, there is an accord and satisfaction, and the promisee has a right of action against the promisor for his failure to perform. 4. Compromise and settlement 8(1)-Good faith and fairness necessary. The very basis for the enforcement of a that the parties should have acted in good faith, contract, compromising a disputed claim, is and that the transaction should be fair. 5. Accord and satisfaction -Compromise and settlement 8(1)-Minds of parties must meet. In all contracts, whether of accord and satisfaction or the compromise and settlement of a disputed claim or otherwise, it is essential to the validity of the contract that the minds of the parties have met in agreement with each other. 6. Action 6-Courts will not pass upon abstract propositions. Courts pass upon concrete cases, and not abstract propositions of law. 7. Stipulations 17 (3)-Courts pass upon facts, and cannot be limited by stipulation. Courts pass upon facts appearing before them, and their jurisdiction cannot be limited by the stipulation of parties, so as to deprive the court of its power to pronounce judgment upon all of the material facts in the case; nor can a stipulation of the parties or counsel enlarge the power or affect the duty of the court. The decree is affirmed, but without costs to 8. Municipal corporations 244(2)-City not any party in either court. RAND, J., took no part in the consideration of this case. bound by contracts in absence of compliance with charter. Compliance with a provision of a charter providing that the city shall not be bound by For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes 209 P.-8 any contract unless authorized by ordinances, 9. Constitutional law 92-City cannot de- 10. Mandamus ≈3(2)—Not issued where ade- Mandamus will not be issued in any case where there is a plain, speedy, and adequate remedy in the ordinary course of the law. 11. Municipal corporations 1015-City council may repeal ordinance allowing claim. There is no reason which would prevent the city council, after the passage of an ordinance which allows a claim and directs its payment, from repealing such ordinance at any time before the payment has been made. 12. Municipal corporations 897-Duty of auditor to satisfy himself that money is legally due before drawing warrant. Under its charter, it is the duty of the auditor of the city of Portland before paying any demand against the city to satisfy himself that the money is legally due and its payment is authorized by law, and until so satisfied he has no authority to draw a warrant, even though the city council has ordered a warrant drawn. 13. Municipal corporations 58-City charter is a grant, not limitation of power. The municipal charter of the city of Portland is a grant, and not a limitation of power. 14. Contracts 76-Moral obligation is not a sufficient consideration in support of an executory express promise. A moral obligation is not a sufficient consideration to support an executory express promise unless there has been an antecedent legal liability, which has become suspended or barred by operation of some positive rule of law, which extinguished the remedy, but not the debt, or where the promisee has suffered some detriment in reliance upon the promise, or where the promisor has received an actual pecuniary or material benefit for which he subsequently expressly promised to pay. 15. Municipal corporations 878-City of Portland has no authority to pay out money except upon legal obligations. The council of the city of Portland, under its charter provisions, has no power or authority to pay out the public moneys of the city in payment of any obligations except the legal obligations of the city. 16. Mandamus is legally defined. Mandamus is an extraordinary remedy, and is not a writ of right, and is issued only where the duty sought to be enforced is one legally defined. In Banc. 10-Issued only where duty Proceeding in mandamus by the State, on the relation of J. C. Bayer, Trustee, against George H. Funk, as Auditor of the City of Portland, to issue a warrant. Demurrer to answer overruled. Martin L. Pipes, of Portland (John M. Pipes and George A. Pipes, both of Portland, on the brief), for plaintiff. Frank S. Grant and L. E. Latourette, both of Portland, for defendant. RAND, J. As heretofore stated in State ex rel. Bayer v. Funk, City Auditor. (Or.) 199 Pac. 592, these proceedings were brought on the relation of J. C. Bayer, trustee, against the defendant, as auditor of the city of Portland, to compel defendant, as auditor, to issue to the relator a warrant for $36,702.84. This controversy grows out of a contract for the construction of the Auditorium Building, in the city of Portland, entered into by the city with Hans Pederson on March 22, 1916. Pederson, after commencing the construction of the building, becoming involved, on May 3, 1917, joined with his creditors and the sureties upon his bond to the city in entering into a contract with J. C. Bayer, the relator, as trustee, wherein, with the consent of the city, it was agreed that the relator, as trustee for Pederson and for his bondsmen and creditors, should carry out Pederson's contract with the city, and should receive and disburse all moneys to be paid by the city upon the Pederson contract. It now appears that the contract between Pederson and the city has been completely performed by Pederson and the relator on the one side, and by the city on the other; that the city took no part in the construction of the building, other than to completely perform the contract on its part; that the city has paid all sums it contracted to pay; that, in addition thereto, it has already paid to the relator, as trustee, the sum of $21,525, which sum was paid to reimburse Pederson for an error which he claimed to have made in computing the bid upon which he was awarded the contract; that the city has also allowed and paid, over and above the contract price, $11 per thousand for the brick entering into the construction of the building; and that other considerations of value, which the city was not required to make, were made by the city in favor of relator and Pederson. It also appears that a final settlement was made by the city with Pederson and the relator, and that a final receipt was given, and that a full and complete release to the city was executed and delivered by the relator and by Pederson, discharging the city from all liability to the relator or to Pederson upon or in connection with said contract. In our former opinion we overruled a demurrer to the answer to the first alternative writ of mandamus, and allowed the defend For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |