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PROJC00207
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PROJC00207
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Last modified
8/1/2013 11:33:57 AM
Creation date
10/6/2006 12:04:21 AM
Metadata
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Template:
Loan Projects
Contract/PO #
C153527
Contractor Name
Overland Ditch and Reservoir Company
Contract Type
Loan
Water District
40
County
Delta
Bill Number
SB 88-30
Loan Projects - Doc Type
Contract Documents
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<br />. <br /> <br />. <br /> <br />RECEIVID, <br /> <br />LAW OFf"lCES OF <br /> <br />SEP'l.3 'H8 <br /> <br />BROWN AND BROWN <br /> <br />550 PALMER <br /> <br />COLOAAD:.; I'I'ATJ:R <br />CONSERVATION <br />BOARD <br />AREA CODE 303 <br />TELEPHONE 874-4451 <br /> <br />P. O. BOX 43 <br />DELTA. COLORADO 81416-0043 <br /> <br />.... ALLEN BROWN 1190~-1983l <br /> <br />MICHAEL. R. SCHOTTELKOTTE <br />JAMES D. BROWN <br />ROBERT G. TWEEDELL <br /> <br />September 12, 1988 <br /> <br />Colorado Water Conservation Board <br />Department of Natural Resources <br />721 State Centennial Building <br />1313 Sherman Street <br />Denver, CO 80203 <br /> <br />Re: OVerland Ditch and Reservoir Company <br />Supplemental Opinion to Opinion Dated September 10, 1988 <br /> <br />VIA FEDERAL EXPRESS <br /> <br />Gentlemen: <br /> <br />This letter will confirm my telephone conversation with Keith Eberhart <br />earlier today and is intended to clarify our opinion of September 10, 1988 as <br />it relates to the pledge of the OVerland Reservoir and inlet and outlet <br />ditches and appurtenant structures as collateral for the loan. While it <br />remains our opinion that the Board of Directors of the Company has the power <br />to pledge company property rights as collateral for the repayment of the <br />loan, we wish to be clear that the Board does not have the power to convey <br />the real property interests of the shareholders in such collateral. Several <br />Colorado Appellate Court decisions have recognized that shareholders of a <br />mutual ditch company are the owners of specific real property interests in <br />the water rights and facilities. See, e.g. Jacobucci v. District Court in <br />and for Jefferson County, 189 Colo. 380, 541 P.2d 667 (1975). Any conveyance <br />of the shareholders' specific interests in the water rights and facilities <br />could only occur by a transfer or pledge of their corporate stock. Of <br />course, many of the stockholders have pledged their stock in conjunction with <br />mortgage loans on their farms and ranches. Obtaining a pledge of the <br />shareholders' recognized property rights would be completely infe~sible in <br />this circumstance. Nothing in our opinion of September 10, 1988 should be <br />construed to indicate that the conveyance of the Reservoir to you would be <br />effective as to the recognized real property interests of the individual <br />shareholders. <br /> <br />We would alBo point out that although the present contract calls for a <br />conveyance of the Reservoir by "deed of trust", the OVerland has furnished a <br />Special Warranty Deed in conformity with C.R.S. 37-60-120. It is our opinion <br />that such conveyance is effective as a mortgage or pledge of the <br />corporation's interest in the property. See Marshall v. Russell, 61 Colo. <br />417, 158 P. 141 (1916). <br /> <br />Should you have any questions concerning our opinion of September 10, <br />1988, as supplemented by this opinion, please feel free to contact us. <br /> <br />Very truly yours, <br /> <br />:--~II~ <br /> <br />es D. Brown <br /> <br />JDB/dly <br />cc: Overland Ditch and Reservoir Company <br />
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