Imperial Water Co. No. 4 v. Meserve

Plaintiff, a mutual water company incorporated under the laws of this state, brings this action against Lizzie H. Meserve and her two sons, Edwin A. Meserve and Harry W. Meserve, to recover the sum of $681.28 alleged to be due for “water sold and delivered” to defendants. Judgment for that sum was rendered against the three defendants, two of whom, Edwin A. and Harry W. Meserve, have taken this appeal.

In a complaint consisting of three counts plaintiff alleges : In the first count, that defendants “purchased from plaintiff” and the latter “sold and delivered to defendants,” for agricultural purposes, water to the amount and value of $681.28, which defendants promised to pay; in the second count, that the water was reasonably worth $681.28; and in the third, that the defendants are “indebted” to plaintiff in the sum of $681.28 for water so sold and delivered. Edwin A. Meserve and his mother joined in an answer wherein they deny practically all of the allegations of the complaint. Harry W. Meserve answered separately. Like his codefendants, he also denied substantially every allegation of the complaint. As a fur

Upon the trial of the case the following facts were shown: The articles of incorporation filed by plaintiff, a mutual water company, declare that “the purposes for which it is formed are to secure a supply of water from [here follow the names of certain companies from which plaintiff procured its water] ... to distribute the same at cost among its stockholders only for use upon lands owned by them.” The water mentioned in plaintiff’s complaint was furnished by plaintiff for the irrigation of part of a tract of 320 acres in Imperial County upon which A. R. Meserve, the father of appellants, had made a location under the United States land laws. A. R. Meserve died before the issuance of a patent but after he had made his final proof. Prior to the death of A. R. Meserve plaintiff had issued to him 320 shares of its capital stock. These shares represented a water right appurtenant to the particular tract of land upon which plaintiff furnished the water mentioned in its complaint. This tract of land, officially described as tract 156, will hereafter be referred to simply as the “ranch.” Plaintiff having levied an assessment upon its subscribed stock and the amount assessed against the 320 shares standing in the name of A. R. Meserve not having been paid, the shares were sold for the assessment to A. R. Meserve’s widow, the defendant Lizzie H. Meserve. She purchased the shares and became the owner thereof about January 4, 1913.

To make it possible for Edwin A. Meserve to supply his widowed mother with funds for her' support under such circumstances that she would be led to believe the money came from the profits of the ranch instead of from her son’s bounty, as well as to enable the mother to receive a patent to the ranch and have it issued to her in her name, the two sons, Edwin and Harry, with their mother’s knowledge and consent, entered into an arrangement pursuant to which it was agreed to farm the ranch on shares, the mother and her two sons each to receive one-third of the profits. Referring to this arrangement, or, as he very appropriately designated it, this “family affair,” Edwin A. Meserve, called as a witness for plaintiff, testified: “It was sort of a family affair and we we were trying to get

On July 27, 1912, E'dwin A. Meserve mailed to plaintiff a letter, duly signed by him addressed to plaintiff and reading as follows:

“Gentlemen: Mr. Harry W. Meserve, the tenant in possession of the 320 acres of land formerly belonging to my father, A. R. Meserve, but upon his death passing to my mother, is there now to represent both my mother, Lizzie H. Meserve, and myself. His lease on the 320 acres standing in father’s name carried with it a lease of the water stock and of all the water rights and water privileges, so that he is authorized and empowered to call for the water on that water stock, and has full authority over

the 320 acres. He also has charge, as my agent and representative, of the 320 acres formerly in the possession of Mr. Ashton S. Cooke, and full authority to order water on my water stock. You are therefore directed to receive his orders with full authority on the water belonging to either one of the two places, or the stock appurtenant to either. ’ ’

Harry W. Meserve, who farmed the ranch during all the time that plaintiff furnished the water for which it is seeking a recovery, testified that, as between his brother Edwin and himself, he was to pay for the water and that Edwin was to pay the water assessments—by which we presume the witness meant such easements as plaintiff might levy on its subscribed capital stock.

Appellant’s first point is that the court erred in sustaining the demurrer to the cross-complaint. We think the cross-complaint failed to state a cause of cross-action, and that, therefore, the general demurrer thereto was properly sustained. [1] A cross-complaint must allege not only all the facts necessary to constitute a cause of action, but also all facts essential to show that the demand is a proper subject for cross-complaint. [2] Here plaintiff’s cause of action, as alleged in its complaint, is one arising out of contract—a contract, express or implied, to pay for water sold and delivered. To entitle a defendant to affirmative relief by way of cross-action his cross-complaint must allege facts showing that the relief sought by him relates to or depends upon the contract or transaction upon which plaintiff’s action is brought, or that it affects the property to which plaintiff’s action relates. (Code Civ. Proe., see. 442.) Here the relief which cross-complainant seeks is based upon his alleged right to receive water, not by reason of any contract he ever made with plaintiff but in virtue of his lessors’ shares of stock in a mutual water company—the plaintiff in this action. But such a right to water has been held to be real property. (Stone v. Imperial Water Co., 173 Cal. 39 [ 159 Pac. 164 ].) Cross-complainant, therefore, is seeking to enforce a real property right and is not claiming damages for breach of any contract with plaintiff. It follows, therefore, that the relief sought by him does not relate to or depend upon “the contract or transaction upon which the action is brought.” Nor

[3] Nor may cross-complainant’s demand be regarded as a proper subject of counterclaim. It cannot be regarded as a proper subject of counterclaim under subdivision 1 of section 438 of the Code of Civil Procedure, for no facts are averred showing that the alleged cause of cross-action arose out of the transaction set forth in the complaint as the foundation of plaintiff’s claim, or that it is connected with the subject of the action. True, the cross-complaint contains the bald assertion that it “is of and concerning the subject matter of plaintiff’s complaint, and this cause of [cross] action arises out of the same transaction”; but this is the allegation of a mere conclusion of law and is not justified by any of the facts specifically averred in the cross-complaint. Nor is there any allegation in the cross-complaint which would make cross-complainant’s demand a proper subject of counterclaim under subdivision 2 of section 438. Though plaintiff’s cause of action arises upon contract, the alleged cause of cross-action, as we have shown, is based not upon contract but upon the ownership of real property—the water rights owned by cross-complainant’s lessors in virtue of their ownership of shares of plaintiff’s capital stock. [4] The ownership of each of such water rights, it is true, like the ownership of any other species of real property acquired through sale, doubtless had its genesis in contract; but cross-complainant is seek

Since the cross-complaint clearly was subject to the general demurrer which plaintiff interposed to that pleading, it is not necessary to consider appellant’s technical criticisms respecting the sufficiency of plaintiff’s special demurrer.

[5] Appellants earnestly urge that respondent, under its articles of incorporation, had no right to “sell” water —that it possessed only the right to distribute water among its stockholders at cost, and that respondent’s claim, according to the ease stated in its complaint, is based upon a “sale” of water to defendants and not upon a distribution of water to its stockholders at cost. Appellants are not in a position to make such defense. It sufficiently appears from the testimony of Edwin A. Meserve and his letter to plaintiff that he and his brother Harry and their mother entered into a “family arrangement” whereby its was understood that the two sons should participate in farming the land, each of them, with the mother, receiving one-third of the crops—Edwin agreeing to contribute toward some of the expense and Harry agreeing to contribute his services. The latter admitted that, as between his brother and himself, he was to pay for the water used on the ranch. From all the evidence in the case we think that the trial court was warranted in finding that, as between the company and the three defendants, the water must be held to have been furnished or “sold” to all of the latter jointly, and that the three were jointly, or jointly and severally, liable therefor. Having thus dealt with the company, appellants are estopped from setting up as a defense that the act of the corporation in “selling” the water to them was ultra vires. (Bay City etc. Assn. v. Broad, 136 Cal. 525 [ 69 Pac. 225 ].) [6] Moreover, though the complaint may have alleged a “sale,” the evidence shows that the water was in fact delivered in virtue of the shares of stock owned by the mother, and that it was furnished to defendants1 at cost. Witnesses for respondent testified that the charges which were made by plaintiff for the water which it fur

"Upon the occasions when plaintiff delivered water to the ranch measurements were made by its zanjeros, who filled out and filed with the company their “report sheets.” These documents or memoranda give the name of the owner of the land, the dates when the water was ordered, the name of the person giving the order for the water, the amounts of water delivered and the sums charged. If from the aggregate of the sums shown as charges on these “report sheets” there be deducted, as credits, the payments which are disclosed by the company’s books, there will be left a balance of $681.28, the amount for which plaintiff recovered judgment. One D. L. Smith, a witness for the plaintiff, testified that at one time he leased and farmed a part of the ranch. "Wherefore appellants contend that some of the deliveries of water shown by the zanjeros’ report sheets may have been used to irrigate that part of the ranch which Smith farmed, and that if this were the case the balance, if any, which might be due to plaintiff would be a sum less than $681.28. There is no merit in the claim. Smith testified that he farmed the land in 1912, and that from and including 1913 to the fall of 1916 he did not farm any part of the ranch. The “report sheets” show that the deliveries referred to therein were made from and including February 13, 1913, to and including September

[7] The remaining points raised in appellants’ brief are either destitute of any merit whatever or are instances of harmless error, or are points presented in such a desultory manner that we do not feel called upon to consider them. The following is a fair sample of the manner in which many of appellants’ points, if “points” they may be called, have been presented to us. “H. W. Meserve was called for plaintiff. The first questions propounded to this witness involved in Errors No. 1, No. 2 and No. 3 [Tr. fols. 77 to 81], speak for themselves, and we submit need no other argument to show their error than the argument presented in the very statement of the objections. Certainly it was not competent, particularly as against Edwin A. and Lizzie H. Meserve, to prove that the defendant was a corporation in the manner attempted and to thus prove the power of the corporation. To argue these objections would be but to quote what is stated in the transcript and to reprint the same.” Again: “We submit that the objections embodied in errors No. 4, No. 5 and No. 6 [Tr. fols. 81 and 84]; speak for themselves.” The purpose of a brief is to enlighten the court. This can best be accomplished when each point is separately stated under an appropriate heading, thus showing the precise nature of the question of law intended to be presented. The method of presentation pursued here by appellants is not calculated to aid the court. Take, for example, that part of their brief from which we have just quoted, wherein we are told that the first questions propounded to Harry W. Meserve involved errors I, 2, and 3'. By these questions the witness was asked if he knew of an organization known as Imperial Water Company No. 4, if he was not a director of that institution and what was the character of its business. The questions were objected to upon the ground that this was not the way to prove a corporation. The objections were overruled. But later in the trial, as our own independent search of the record reveals, plaintiff put in evidence the articles of incorporation and thus cured the “error” complained of in the questions to ivhich counsel make reference when thejr refer us to the so-called “Errors No. 1, No. 2 and No. 3.” If, instead of making a general reference to a particular

The judgment is affirmed.

Works, J., and Craig, J., concurred.