Tulare Irrigation District v. Kaweah Canal & Irrigation Co.

HAYNES, C. This cause was tried by the court, and findings and judgment were for the defendant; and the plaintiff appeals from the judgment and an order denying its motion for a new trial.

The plaintiff is a corporation, organized under the act of the legislature known as the “Wright act,” for the purpose of supplying water for irrigating the lands within the district so organized. The defendant is a corporation organized [331]under the general statute, and owned certain water rights, dams, canals, ditches, real estate, etc., from which the Tulare irrigation district could be supplied with water for the purposes for which it was organized. Under these circumstances plaintiff and defendant entered into an agreement whereby the defendant sold and conveyed said property to the plaintiff in consideration of the sum of $150,000, payable in the bonds of the plaintiff at par. The deed executed by the defendant to the plaintiff, after describing certain lands, water rights, canals, etc., as to which there is no controversy, concluded the description of property and rights conveyed, as follows: “Also all right, title, and interest of the first party (the defendant) in and to all dams, headgates, and drops used or maintained in connection with the ditch or ditches of the first party, or any of them; also all tools, scrapers, plows, implements, and personal property of the first party, except its office furniture, books, and papers; also all franchises, rights, and privileges now owned or enjoyed by the first party, except its corporate franchise to exist and transact business as a corporation in accordance with its articles of incorporation. ’ ’

Prior to this sale the defendant purchased thirty-five shares of stock in its own corporation, at a sale thereof for a delinquent assessment, and which stock had been transferred to the defendant corporation upon its books, and had not been reissued. Twenty-five thousand dollars of the bonds received from the plaintiff were applied in part to the payment of an indebtedness to an individual, and in part as a commission for negotiating the sale. Another portion of the bonds was set aside to meet other "liabilities of the defendant, and the remainder of the bonds were distributed to its stockholders as a dividend, the amount of the dividend being $200 per share. This action was brought by the plaintiff to compel the delivery to it of said thirty-five shares of stock in the defendant corporation, and to recover the dividend thereon of $200 per share, payable in the bonds received from the plaintiff, together with the interest paid by the plaintiff thereon, claiming that said stock was personal property belonging to the defendant at the time of the sale, which was not excepted therefrom, and which, by the sale, passed to it under the general clause of the conveyance above quoted.