Opinion of the Court-Sullivan, J. purpose of ousting said Neitzels, McReynolds and Toole from the office of directors of said company and to have the offices of president, vice-president, secretary and treasurer declared vacant, and to have a certain mortgage executed by said corporation in favor of H. R. Neitzel declared void and for other · relief, and for the appointment of a receiver to take charge of the property of said corporation. The answer put in issue many of the material allegations of the complaint. This action was based upon the ownership of 2,000 shares of the capital stock of the defendant corporation by said Childs and not upon a contract for a water right. Upon the trial of the case the lower court granted Childs certain relief prayed for by him and an accounting, but before the findings in the case were filed, Childs waived an accounting, owing to the insolvency of the corporation and the refusal of certain intervenors to assume the major part of the expense of an accounting before a referee. Childs did not appeal from the judgment entered and is only a nominal party in this court, and it appears from the record that the rights of appellant H. R. Neitzel are alone before this court for consideration, so far as appellants are concerned. A complaint and an amended complaint in intervention were filed in said action, and it is alleged in the amended complaint that the intervenors are holders of certain contracts for water rights under the said Murphy Land & Irrigation Company project, and are the owners and in the possession of more than 3,500 acres of land under said project, which lands intervenors have settled upon and improved at great expense and labor and upon which they and their families are dependent for support. A copy of said water contracts is attached to said complaint in intervention and made a part thereof. The contracts, so far as the covenants and agreements contained therein are concerned, are all the same. The defendant corporation entered into such agreements with the intervenors and divers other persons, wherein it contracted to construct a certain irrigation system in Owyhee county known as the Murphy project, and to sell to said intervenors and such other persons shares of water appro Opinion of the Court-Sullivan, J. priated and impounded by it, also certain rights in and to the irrigation system itself. Among other things said contracts. contain the following stipulation: "Each of such shares [of water] shall represent a carrying capacity in said canal sufficient to deliver water at the rate of one-eightieth of one cubic foot of water, per acre, per second of time, or in lieu thereof, in event the company shall hereafter elect to distribute the waters flowing and to flow in its canals by a system of rotation, then the company agrees to deliver to second party under such rotation system a quantity of water equivalent thereto in service." The contract also provides that all dams, reservoirs, headgates, conduits, canals, laterals and other works for the diversion of water shall, at the discretion of the defendant corporation, be and remain its sole property until such time as the said irrigation system shall have been fully completed, and all waters to be diverted and beneficially applied under the said system shall have been sold by it. The corporation also agreed that within one year after the final completion. of the whole project and within five years from December 31, 1906, it would turn over the entire project to its water users under its water contracts. The contract also contains the following provision: "The water to be furnished under this contract may not be available to the purchaser prior to May 15, 1908, and if for any reason the canal shall not be completed so as to enable the company to furnish water through the same by said date, the date of maturity of each and every deferred payment shall be advanced one year, with a waiver of interest upon all such payments for a like period of one year." The contract also provides that the purchase price of water rights is $35 per acre except in certain cases, and that the purchase price should be paid in ten annual instalments, the first in cash and the second on December 1, 1908, and the remaining eight instalments on December 1st of each succeeding year. Deferred payments were to draw interest at the rate of 6% per annum. The corporation was authorized to collect annually from its water users a maintenance of sixty Opinion of the Court-Sullivan, J. cents an acre on the entire tract covered by their contracts whether water was used on the whole of said land or not. The last provision of said contract is as follows: "It is agreed that the stipulations, covenants and agreements in this contract shall be mutually binding upon the parties hereto, their and each of their heirs, executors, administrators, successors and assigns." The contracts had the following indorsement printed thereon: "I hereby consent to the assignment of the within contract," which consent was signed by the intervenors and all other purchasers of water rights. This contract is the basis of the intervenors' cause of action. The intervenors allege in their amended complaint, among other things, substantially as follows: That the defendant corporation had never completed said. irrigation project and had refused and neglected to do so, and had never delivered and was unable to deliver to the intervenors and the holders of contracts for water rights the amount of water which it had agreed to deliver to them, and that it would be unable to deliver the same until the said irrigation system was fully completed; that the lands included in the contracts were arid in character and required the amount of water bargained for in said contracts in order to grow crops thereon, and that water was not available from any other source for the irrigation of said lands; that the defendant corporation had never turned over said project to its water users; that the defendant had made contracts for the irrigation of about 6,000 acres of land; that there were about $100,000 remaining unpaid on the purchase price of said water rights, all of which would have to be expended in order to complete said system and deliver to the water users the amount of water sold to them; that the defendant threatened to sell other water rights although it had failed to comply with the laws of 1909 (Sess. Laws, p. 335), providing for the regulation and control of the sale of water rights, etc.; that. said contracts for water rights had been assigned by the defendant corporation to the defendant H. R. Neitzel to secure an alleged indebtedness of $150,000 for money advanced by the defendant H. R. Neitzel to the Murphy company for the Opinion of the Court-Sullivan, J. purpose of constructing said system, together with interest thereon at the rate of 12% per annum, interest payable semiannually; that said corporation was unable to pay its debts or meet its current obligations as they accrued and was insolvent in law and in fact; that the intervenors had failed and refused to pay the 1912 instalment of principal and interest due on their said water contracts because of the said default of the defendant corporation in the completion of said system and in the delivery of water and its insolvency, and because of the mortgage given to the appellant Neitzel on the irrigation system and the said assignment of said contracts to the defendant H. R. Neitzel, and the intention of appellants to apply the payments made on the unpaid purchase price of water rights to the payment of said alleged indebtedness to H. R. Neitzel with interest thereon at the rate of 12% per annum; that the intervenors were jointly interested in, and were joint owners with, the other water users of said irrigation system, and that they and the other water users were entitled to have the proceeds received by the defendant corporation from said contracts as principal, interest and maintenance applied to the completion, maintenance and repair of said irrigation system, and to have all other terms and conditions of said contracts kept and performed by the defendant corporation. The defendant corporation admitted that the form of the contract attached to the complaint in intervention was a copy of those issued to all purchasers of water rights; denied that the system had never been completed or that it was unable to deliver to the water users the amount of water contracted to be delivered to them; denied that it threatened to sell other water rights or that it was insolvent or in default, or that it never offered to turn over said irrigation project to the water users. Upon the issues thus presented, after a trial the court made findings of fact to the following effect: That the contracts of the form attached to the complaint in intervention. had been issued for water for the irrigation of about 6,000 acres of land and that said contracts were in full force and Opinion of the Court-Sullivan, J. effect; that the defendant corporation had not completed the said irrigation project, and that it had never delivered and was unable to deliver the amount of water sold to the water users under said contracts, and would not be able to keep its contracts in that respect until the irrigation system had been completed; that the lands covered by said contract were arid in character and required the amount of water for their irrigation that the appellant corporation had agreed to deliver for that purpose, and that water was not available from any other source for the irrigation of said lands; that on the 1st day of December, 1912, there became due from the intervenors, with the exception of two of them who held paid-up contracts, one instalment of principal and interest; that the defendant corporation had never turned over the project to its water users or offered to turn it over to them; that the interest on the $150,000 loaned to said corporation by the said H. R. Neitzel at the rate of 12% per annum, if collected, would have the effect of exhausting the proceeds of principal, interest and maintenance fund due and unpaid on the said contracts, and that appellants threatened to collect interest thereon at said rate and to compel the water users to pay the sum of $150,000 with interest thereon at said rate before turning over said system to them; that the said holders of contracts had paid the defendant corporation the sum of about $122,000, exclusive of maintenance dues, on the purchase of said water rights; that the defendant corporation threatened to issue other contracts for water rights although it had failed to comply with the laws of 1909 providing for the regulation and control of the sale of water rights, etc.; that the holders of water contracts had refused to pay the defendant corporation and the defendant H. R. Neitzel the instalment of principal and interest on deferred payments which became payable by the terms of said contracts on the 1st day of December, 1912; that otherwise they had fully performed their contract in all things to be kept and performed by them; that said intervenors based such refusal on the insolvency of the defendant corporation and its default and the threat of appellants to apply all payments on |