construction thereof the pumping plant proved to be inadequate to supply the ditch with water and the work was abandoned, and the principal officers of the mortgagor company organized another company and with their own money, and without using any of the mortgagor's money for the purpose, constructed another ditch at great cost to conduct water to the mortgagor's ditch and through it to water the lands intended to be watered by mortgagor's ditch, and with the intention of deeding the last ditch, when completed, to the mortgagor, the mortgagor company had neither a legal nor an equitable interest in the ditch constructed by the new company, and the mortgage lien did not extend to such ditch, and the fact that the officers of the mortgagor company were also officers of the new company did not estop the new company from acquiring a separate and distinct appropriation of water from that of the mortgagor company." Farm I. Co., et al. v. Alta L. & W. Co., 28 Colo. 408-409, 65 Pac. 22.

Syl. "Where apt words are used in a mortgage, property acquired by the mortgagor subsequent to its execution may become subject to the mortgage, but property standing in the name of some person other than the mortgagor, cannot become subject to the lien of the mortgage unless the mortgagor has a legal or equitable interest therein." Id. 408.

"The court was right in decreeing that the subsequently acquired lands came within the provisions of the first mortgage. ***The facts are that the stockholders of the original company, becoming satisfied that their investment could not be made profitable without buying additional lands, one of them * * * surrendered a portion of (his) *** stock to the * ** trustee under the first mortgage, which, it is claimed, purchased this land, and took title to the same in the *** (mortgagor)." The stockholder who held the equitable right to the subsequently acquired land did not complain, and it was held that a subsequent purchaser of all the property could not complain. Lamar L. & C. Co. v. Belknap Savings Bank, 28 Colo. 344-347, 64 Pac.

b. Release-Partial.

Syl. "Where a mortgage provides for a release therefrom of certain parts of the property upon certain conditions, releases can be made only in strict conformity with the terms of the mortgage." Id. 345.

c. Statements in application for loan.

Statements, in an unrecorded application for a loan, in regard to water rights, will not bind a subsequent mortgagee, provided said rights were afterwards acquired. Crippen v. Comstock, 17 Colo. App. 89, 66 Pac. 1074.

d. Conspiracy by directors of a company in regard to mortgage.

Syl. Where a canal company sold water rights * * * and by a decree of court the canal was conveyed to a new company organized by said water right owners for the purpose of managing and operating the property, and the directors of the new company conspired and operated with the holder of a mortgage on the canal system executed by the old company after it had sold the entire capacity of its canal to water right owners, to enable said mortgagee to enforce its invalid mortgage, the water right owners were proper parties to bring an action to cancel said mortgage and to restrain said directors and mortgagee from further attempting to obtain payment thereof from the property of the canal system. New La Junta & L. C. Co. v. Kreybill, 17 Colo. App. 26-27, 67 Pac. 1026; Henry v. Travelers' Ins. Co., 16 Colo. 179-186, 26 Pac. 318.

Sec. 128. Mutual ditch company.

a. Conveyance of stock conveys water.

"But where * *** the water rights, and the ditch through which they are enjoyed, are owned by the same persons as tenants in common, and for their mutual convenience they organize a corporation and convey to it the ditch

and water rights, and the corporation issues to the consumers its capital stock, which represents and stands for, not only the rights of the parties in the ditch, but, by a mutual arrangement, also represents the right to the use of water, or the priority right, then this stock (while not, of course, constituting the ditch or priority to the use of water) does represent both the ditch and that priority, and a transfer of the stock operates as a transfer of both kinds of property." Cache la Poudre I. Co. v. Larimer & Weld R. Co., 25 Colo. 144-147, 53 Pac. 318, sustaining 8 Colo. App. 237, 45 Pac. 525.

b. Conveyance of part of water right.

"If one consumer did not need, or use all that his stock entitled him to; or if, by sale of a portion of his lands, his necessity was less or *** if he owned more water than land, he might lawfully sell the excess of water, or lease it, or permit his co-tenants to use it, before any subsequent appropriation attached thereto and of this, junior appropriators may not complain." Cache la Poudre I. Co. v. Larimer & Weld R. Co., 25 Colo. 144-150, 53 Pac. 318.

Sec. 129. Notice of easment-perpetual right.

Contract-"This is to certify that

is entitled to and is the owner of .... water rights of in .... ditch, and the same is free from all dues and assessments and transferable only on the books of the company on the surrender of this certificate. In Witness Whereof, etc." Grand Valley I. Co. v Lesher, et al., 28 Colo. 273-276, 65 Pac. 44.

......

"The company by this certificate acknowledges an obligation to deliver water through ...... ditch. Such an acknowledgment in writing is a conveyance in writing of an easement in the

Id. 287.

ditch."

If at the time of purchase, a deed of trust, under which the purchase was made, reserved certain perpetual rights, and

the articles of incorporation, which were recorded, provided for such perpetual rights, and that certificates for said perpetual rights had been issued, and that said rights had been conveyed, and lateral ditches and headgates and cultivated lands thereunder existed and were known, it is sufficient to put the vendee upon inquiry. Id. 289.

Sec. 130. Notice of sale of excess rights.

If the contracts of purchase disclose that the vendor can only sell rights within the estimated capacity of a canal, then the vendee or purchaser is put upon inquiry as to whether or not more than the estimated capacity of the canal has has been previously sold. Blakely v. Ft. Lyon C. Co., 31 Colo. 224-235, 73 Pac. 249.

Sec. 131. Notice to purchaser.

"The open and notorious possession and user of water from an irrigation canal through lateral ditches is constructive notice to a purchaser of the rights of a party so in possession and using the water." Park v. Park, Ex., 45 Colo. 347-355, 101 Pac. 403;McClure v. Keon, 25 Colo. 284, 53 Pac. 1058.

Sec. 132. Oral contract to convey water.

See Canal Companies, Sec. 95.

"Oral agreements concerning priorities and title to water rights followed with its change of possession and application by the claimant have heretofore been held valid by this court, also that part performance will take it out of the statute of frauds and equity will enforce the right thus acquired." Park v. Park, Ex., 45 Colo. 347-356, 101 Pac. 403; Schilling, et al. v. Rominger, 4 Colo. 100-104; McLure v. Keon, 25 Colo. 284, 53 Pac. 1058.

"The transfer of water, in order to avoid the statute of frauds, should be in writing, signed by the party making it; but a stranger to such an agreement can not object that

it was not so evidenced. That question is purely personal, and can not be raised by those who were neither parties nor privies to the agreement." Daum, et al. v. Conley, et al., 27 Colo. 56-64, 59 Pac. 753.

Sec. 133. Riparian owner-Domestic purposes.

A riparian owner can not convey water for domestic purposes separate and apart from land. Broadmoor S. Co. v. Brookside W. Co., 24 Colo. 541, 52 Pac. 792; Sterling v Pawnee D. E. Co., 42 Colo. 421-428, 94 Pac. 339.

Sec. 134. Unpaid balance for water under contract-Sale of land-Agent,

Syl. "The owner of a tract of land gave to the agent of the party who subsequently purchased it a written option to purchase in the name of the agent at a certain price. The owner had contracted with the water company to supply the land with water for irrigation, on installments, part of which had been paid, but no mention of the water right was made in the option to purchase. The sale was made, and the land conveyed direct to the purchaser without an assignment of the water right, or any contract in regard to it. Under such circumstances the presumption is that the future payments on the water rights were to be made by the purchaser.

"In no event could the agent maintain an action against the grantor for recovery of the unpaid installments. Having obtained merely an option to purchase he acquired thereby no right individually to the water, separated from the land, and even if there had been a covenant for and conveyance of the water right, the agent could not recover the amount of the unpaid installments, as neither land nor water was conveyed to him." Chamberlain v. Auster, 1 Colo App. 13, 27 Pac. 87.