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Show 478 THE APPROPRIATIVE RIGHT irrigation system from which his supply of water is obtained.215 But this share of the capital stock also represents the right to service of water from the company's system. A shareholder pays for this service in the form of stock assessments or toll charges, or both. Dividends on the capital stock are paid to the shareholders in water service, rather than in money.216 Some discussion of appurtenance of water rights to land appears under the immediately preceding title. Questions in the area of mutual company water rights vis-a-vis shares of capital stock have been litigated in a considerable number of cases in the Western States, many of which involve organizational and operation matters. Some points related to the instant subtopic may be briefly noted. (2) General observations. Title to water rights exercised by a mutual company may be vested in the irrigation organization or in individual shareholders, depending upon State law or upon the action taken in acquiring the rights. If the mutual company makes the appropriation in its own name, it of course holds the formal title. If farmers who hold individual rights organize a company and transfer their rights to it, again the company holds formal title. Or the farmers may organize the company without making any transfer of their rights. As a rule, mutual company shareholders are considered holders of the water rights, or at least as the beneficial owners. Shares of stock of a mutual company may or may not be attached to specific tracts of land. Attachment to land may result either by way of "location" on specific tracts-resulting from contract between company and shareholders evidenced by articles of incorporation, bylaws, and stock certificates-or by representing the right to receive water considered appurten- ant to such tracts. If not attached to specific tracts, they are known as "floating" shares. These floating shares may pass freely from one holder to another and may be used for irrigation of any tract that can be served from the irrigation system as normally operated. Restrictions are sometimes imposed by the management upon transfer of water from one lateral to another, based upon capacities and operation requirements. This is a matter of expedience in 215 The stock certificate in a mutual irrigation company "is really a certificate showing an undivided part ownership in a certain water supply." Genola v.Santaquin, 96 Utah 88, 101-102, 80 Pac. (2d) 930 (1938). 216 For detailed studies of the organization, financing, and operation of these enterprises, including specifically matters relating to shares of capital stock, see Hutchins, Wells A., Selby, H.E., and Voelker, Stanley W., "Irrigation-Enterprise Organizations," U. S. Dept. Agr. Cir. 934 (1953); Hutchins, Wells A.: "Mutual Irrigation Companies in California and Utah," U.S. Farm Credit Admin., Coop. Div. Bui. 8 (1936), and "Mutual Irrigation Companies," U. S. Dept. Agr. Tech. Bui. 82 (1929). For comments relating particularly to legal features, see Bennett, J. S., "Mutual Water Companies in California," 2 Southwestern Law Rev. 12 (1917); Wiel, S. C, "Water Rights in the Western States," 3d ed., vol. 2, § § 1266-1271 (1911); Kinney, C. S., "A Treatise on the Law of Irrigation and Water Rights," 2d ed., vol. 3, § § 1449-1489 (1912). |