OCR Text |
Show 552 THE APPROPRIATIVE RIGHT (3) Incorporated water company. Included in this classification are (a) mutual irrigation companies and (b) commercial irrigation companies. These companies are organized and they operate under the general corporation laws of the State. The capital stock of mutual irrigation companies-which are nonprofit enterprises-is held by the owners of lands served with water by the company. Except in isolated instances, that of commercial companies is held by outsiders whose investments were made for the purpose of gain, as in case of other businesses. Other profit and nonprofit distinctions are noted below. Appropriation of water is initiated and carried through the administrative process by the corporation, which thus holds formal title to the appropriative right; questions as to actual ownership of the right are noted under the ensuing discussion of relations between organization and consumers. (4) Public agency. Included are irrigation districts and water districts of various types, water authorities, municipalities, other political subdivisions, and agencies of the State and of the United States. Profit and Nonprofit Enterprises Private nonprofit irrigation enterprises.-These comprise mutual or coopera- tive irrigation companies organized for the purpose of providing irrigation water at cost, primarily for the use of their members. The larger mutual companies are incorporated. Unincorporated mutual irrigation enterprises are divided into (1) those that were never incorporated, and (2) those that were once incorporated but lost their corporate status and continued to function with the form but without the powers of a corporation. In California, where public rate regulation of water utilities attained importance, the supreme court held that a mutual irrigation or water company, devoting the water which it diverts exclusively to the use of its own shareholders, and not to the general public, "is not engaged in public service and is not a public utility."570 The Public Utilities Code declares that a company that supplies water to its own shareholders at cost is not a public utility and is not subject to the jurisdiction of the Public Utilities Commis- sion.571 In early cases, it was held that persons who hold water rights individually and who form a corporation and delegate thereto the function of handling the diversion and distribution facilities, reserving to themselves their water rights, do not thereby dedicate or appropriate to public use the water thus reserved and used by themselves.572 Furthermore, even if the holders do convey their water rights to the company for the mere purpose of convenient management and distribution of the water to the users according to their respective rights, there is no severance of the right from the land to which it was appurtenant.573 S7V. M. Howell Co. v. Corning In. Co., 177 Cal. 513, 519, 171 Pac. 100 (1918). 571 Cal. Pub. Util. Code § 2705 (Supp. 1970). 51iHildreth v. Montecito Creek Water Co., 139 Cal. 22, 29, 72 Pac. 395 (1903). S73/« re Thomas' Estate, 147 Cal. 236, 242, 81 Pac. 539 (1905). |