Opinion
[Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] Bentley W. Warren, Howard Stockton, Jr., and Warren, Garfield, Whiteside & Lamson, all of Boston, Mass., Nathan P. Avery, James M. Healy, Avery, Gaylord, Healy & Button, all of Holyoke, Mass., and Samuel Williston, of Cambridge, Mass., for plaintiff. Russell L. Davenport, of Holyoke, Mass., and Choate, Hall & Stewart and Claude R. Branch, all of Boston, Mass., for defendant.
The master's report and supplemental reports referred to in the opinion follow:
The complainant seeks to enjoin the respondent from using water from the complainant's canals for any purpose other than the production of power on the water wheels of the respondent's mills, and also asks as damages the value of the water used for any other purposes for a period beginning 6 years before the bringing of this bill.
The hearings occupied some 20 days, including a view of the respondent's mills and equipment and of the canal system.
The complainant is, and for more than 70 years has been, the owner of a dam across the Connecticut river at Holyoke, and of a system of canals adjacent thereto upon which mills are located. The canals are built upon land which slopes down to the river below the dam. There are three canals on three levels, of which the first or upper level canal and the third or lower level canal is each about a mile long, and the second level canal about two miles in length. Water flows from the river pond made by the dam in quantities regulated by the complainant at headgates into the upper level canal, and thence flows for the most part through flumes located upon intervening mill sites, through an overflow operated by the complainant, down into the second level canal, some of which will similarly flow through flumes and one overflow into the river below the dam. The remaining portion of the water in the second level canal will flow through flumes on mill sites and two overflows into the third level canal, thence similarly through flumes on mill sites and one overflow into the river below the dam.
The dam and the canal system were built by the Hadley Falls Company under a charter granted in 1848, authorizing it so to do for the purpose of creating 'a water power, to be used by said corporation for manufacturing articles from cotton, wool, iron, wood, and other materials, and to be sold or leased, to other persons and corporations to be used for manufacturing or mechanical purposes. ' The complainant was chartered in 1859 with authority to acquire the property and rights of the Hadley Falls Company, which in that year it did.
The Hadley Falls Company granted certain mill sites upon the canals, with 'mill powers' as defined in said grants; and since the complainant succeeded to Hadley Falls Company it likewise has granted mill sites and mill powers. In 1899 the American Writing Paper Company of New Jersey purchased tweny-three of the mill sites so granted, of which the respondent now owns twenty-one, and such mills as had been built thereon together with all rights pertaining thereto. In 1927 the respondent, organized under the laws of Delaware, succeeded by purchase to this property and rights. The respondent or its predecessor, the New Jersey corporation, have organized the mills into operating units called 'divisions.' There are twelve principal divisions, some of which accordingly include more than one mill site. The mills so purchased by the New Jersey corporation in 1899 were being used as paper mills, and the New Jersey corporation and the respondent have so used them. Of the mill sites so acquired the earliest had been granted by the Hadley Falls Company to the Parsons Paper Company in 1855. Except for three other grants made by the Hadley Falls Company the other mill sites acquired by the respondent's predecessor in 1899 had been granted by the complainant. The last of the grants of the mill sites so acquired in 1899 had been made by the complainant to the Riverside Paper Company in 1892. Some of the respondent's mills are on the first level canal, some on the second, and one on the third.
On each of the mill sites on the canal system is a flume which connects with the canal on the lower side of which the mill site is located. At the point of connection is a headgate by the opening of which water in the canal will flow down into the flume upon the mill site, or by the closing of which may be excluded from the flume. This headgate is built, maintained, and operated by the owner of the mill site. There are water wheels in the flumes upon which the water flowing through the flumes produces power. There are gates built around the water wheels for controlling the amount of water which will flow through the water wheels, thus controlling the amount of power necessary to meet the requirements of the owner, who also operates these gates.
The complainant measures the amount of water so used by means of devices installed at the water wheels, which record on charts the extent of the openings of the gates of the water wheels, and so, taken in connection with the head of water in the wheel pit, form the basis of determining the number of cubic feet per second permitted by the grantees to flow through the water wheels. At each of the respondent's mills there are pipes leading from the flume into the mill at or above the water wheels, through which water can be drained before it passes through the water wheels. Some of these pipes, or similar ones, have probably been there ever since the mills were built; all, or similar ones, have been there for many years. They are used by the respondent, and for many years have been used by the predecessors of the respondent, for taking water from the flumes for use in the process of making paper, for boiler feed, in many of the mills for steam condensing engines, and in some of the mills for use in operating so-called Barber suctions, which are devices for extracting water out of the paper material by the creation of a vacuum by
the flow of the water taken from the flumes. Substantially all of the water so taken for the purposes above stated is returned to the raceway below the water wheel and there mingles with the water which has passed through the water wheel. The amount of water so used by the respondent has averaged for a 6-year period beginning in 1928 and ending in 1934 about 1,352 million cubic feet per annum. It is the use of this water which the complainant seeks to enjoin.
The respondent contends that it is entitled to this use either under the grant of 'mill powers' as made in the indentures to its predecessors; or, if not that, as an implied easement necessary to the beneficial use of the mill powers granted; or, if not that, by prescription, through use for more than 20 years. The respondent further contends that laches, estoppel, and account stated are defenses against the assertion of the right claimed by the complainant.
A 'mill power' as defined in the indentures, as hereinafter more particularly referred to, is the right to draw during a day from the canal upon which the mill is situated a specified number of cubic feet of water per second at a specified head. Until 1882 there was only one class of mill powers. At that time the complainant began to grant in addition what were known as nonpermanent mill powers. The definition of mill power as contained in these grants was the same as that defining the first class, which became known as permanent mill powers; but the right to draw nonpermanent mill powers was limited to such times as when in the opinion of the complainant there was sufficient water in the Connecticut river to supply the permanent mill powers theretofore granted, plus one and in some instances two or three additional specified quantities, plus 50 per cent. of the sum of the preceding quantities. In addition, the complainant has sold what are termed surplus mill powers, under terminable agreements or at prices which vary from time to time as fixed by the complainant. These surplus mill powers are inten<=ed to dispose of water power when available in excess of the amount sufficient to supply the permanent and nonpermanent mill powers. One of the respondent's mills has only nonpermanent mill powers; the others have permanent mill powers, and most of them have both. The respondent has also from time to time purchased surplus mill powers. Beginning in 1911 the complainant began to sell water for process or manufacturing purposes usable at times when there is in the opinion of the complainant an oversupply. These sales were made under grants, and the water so sold is referred to as indentured surplus water. These indentures provided that the grantees may even at times when there is no oversupply take such manufacturing water out of their permanent mill powers. Something less than one-half of all the mills on the canal system have purchased such indentured surplus water. The respondent, or its predecessor, never has.
At times when the flow, or the prospective flow, of the Connecticut river is low the complainant will place temporary restrictions upon the use of indentured surplus water (except as taken under permanent mill powers), and, if necessary, upon surplus mill powers, and, if necessary, upon nonpermanent mill powers, in order that a sufficient supply may be assured for all permanent mill powers. Rebates are then allowed on the nonpermanent mill powers, and surplus mill powers are paid for only when drawn. On very rare occasions it has been deemed necessary temporarily to limit the use of even permanent mill powers.
1. Construction of the Term 'Mill Power.'
Beginning with an indenture in September 1856, the Hadley Falls Company, and subsequently the complainant, incorporated in all indentures of mill sites and mill powers so-called 'proposals' (which, being printed on white paper have for the purpose of distinction from the form used for indentured surplus water, which is printed on blue paper, been commonly referred to as the 'white proposals '). The form of the white proposals has at all times, at least so far as it contains any provisions affecting the issues in this case, been the same.
Not only have mill powers, permanent and nonpermanent, been granted in the same indenture which granted a mill site, but in some instances additional mill powers have been granted for some of the sites by subsequent indentures, which also, however, incorporated the white proposals. The latest grant of such additional mill powers to any of the sites used by the respondent was in 1897. Copies of the indentures here involved, Exhibits 4-38 and MM-OO inclusive, are filed herewith and made a part of this report. Two of the indentures to the respondent's predecessors were made before the adoption of the form of white proposals. One of these made in 1855 to the Parsons Paper Company refers to the right to draw 'sufficient water when used under a head and fall of forty feet to give one hundred horse power,' and refers in several places to the grant being of 'water power.' The other, dated March 6, 1856, grants 'one mill power, the same being the right during sixteen hours per day to draw from the upper canal of the Hadley Falls Company twenty cubic feet of water per second under a head and fall of thirty-eight feet. ' The proposals, which are part of all subsequent indentures, provide in part as follows:
'Article I. The Holyoke Water Power Company propose to sell their mill powers situate at Holyoke, on the Connecticut River, on the following terms and conditions, to be varied as the parties may agree in the deed. For the price that may be agreed upon they will grant a parcel of land, to be described in the deed, with one or more mill powers of the quantity of water described below, and with the covenants of title and warranty as in the annexed deed.
'Article II. Each mill power at the respective falls is declared to be the right, during sixteen hours in a day, to draw from the nearest canal or water course of the grantors, and through the land to be granted, thirty-eight cubic feet of water per second at the upper fall, when the head and fall there is twenty feet-- or, a quantity inversely proportionate to the height, at the other falls; and in order to prevent disputes as to the power of each mill privilege in the variations of the height of the water from changes of the seasons or other causes, it is understood and declared that the quantity of water shall be varied in proportion to the variation of the height, one foot being allowed and deducted from the height of the actual head and fall, and also from that with which it is compared before computing the proportion between them; thus on a head and fall of thirty-two feet, the quantity of water to be used would be twenty-three cubic feet and nine thirty-first parts of a cubic foot per second. And the respective parties, where either has any lawful interest therein, may at all reasonable times, in a peaceable manner, and after due notice to the principal steward or agent then on duty at any mill, enter the raceway thereof, to measure and compare the quantity of water used with the quantity granted, and in the measurement all wastage shall be included-- and may also adopt and use such other mode of making or verifying the said measurement as the circumstances of each particular case may require.'
'Article VIII. The grantees are not to use more water than granted, nor waste it, nor permit it to be wasted for want of repairs, or through the deficiency of their works or otherwise; and if so wasted, or if more be used than is granted, the grantors may stop the water from entering the flumes, by closing the gates across them, or by any other method, until such waste or excessive use be sufficiently guarded against; and may also at the same time maintain their action at law for damages.'
The question whether the term 'mill power' as used in these proposals was to be considered as permitting the use of any of the water for other than the production of power was before the Supreme Judicial Court of Massachusetts in the case of Holyoke Water Power Company v. Whiting & Company, Inc., 276 Mass. 528, 177 N.E. 568. The court decided in the negative. I have been requested by both parties to rule upon this question, and upon other questions of law, subject to exception. I rule, particularly in view of the Whiting Case, that the grants of 'mill powers' in themselves gave the respondent's predecessors in title, and give the respondent no right to anything except power from the water head. It is true, as the respondent points out, that the Whiting Case was heard on demurrer and the court referred to facts pleaded which do not exist in this case. For instance, the court assumed that the water not used for power would be consumed on the premises and so would not be drawn 'through the land to be granted,' as called for by the proposals. In the present case I find the fact to be that all of the water, except an immaterial amount, used by the respondent for other than power on its water wheels, is returned to the raceway and so through the land granted to a lower level canal, or in the case of mills on the third level canal to the river. Also in the Whiting Case it was alleged that by established custom the meaning of the term 'mill power' is restricted to use of power, and the court refers to this (at page 539 of 276 Mass., 177 N.E. 568, 573) and also to the bearing of practical construction by the parties, 'if,' as the court says, 'the term 'mill power' be regarded as of doubtful signification. ' In the present case I find there is no custom giving the term 'mill power' any special meaning in this connection. Notwithstanding these considerations, I rule that the term 'mill power' is to be considered as referring only to the use of water for power. The fact, suggested by the respondent, that the indentures refer in places to the 'quantity of water,' does not go far toward meeting the fact that what the indentures in terms granted is 'power.' It was natural, if indeed not necessary, in parts of the indentures to refer to the quantity of water, for that, in connection with the rate of flow and the head, was the means of measuring the power supplied. I admitted, subjected to the exception of the complainant, some evidence of experts in the science and practice of hydraulics offered to show that the term 'mill power' as there understood included the right to take from the flow such amounts as might be required for manufacturing purposes. I am, however, unable to find upon the evidence that the term has or had in this connection any fixed or definite meaning generally recognized in the science of hydraulics. As to the conduct of the parties, as bearing upon the construction of the term, if such conduct be material, I find that certainly since the early 80's, and also at all times beginning with the first grant here in question, the predecessors in title of the respondent and the respondent have openly and to the knowledge of the complainant taken for process or manufacturing purposes such water from their flumes as they needed; that there is no evidence that the complainant or its predecessor prior to the bringing of this suit, has ever made any objection to this; and that the complainant or its predecessor has never prior to this suit made any charge or demanded any payment for the water so taken. The respondent, however, and its predecessors, apparently did not purport to take such water as something to which they were entitled as part of the 'mill powers'; but rather they purported to take it in addition to their mill powers, which they drew to the full extent for power, on all days when they so required it; and, moreover, in connection with some mills which had no permanent 24-hour mill powers, they drew water for process or nonpower purposes at times when they were not entitled to draw water for power. This conduct of the respondent so far from confirming its present contention that the term 'mill power' is to be construed as including a right to draw water for process purposes out of the amount granted seems inconsistent with such a contention.
Twelve of the indentures granting additional mill powers contain, in addition to the provisions above cited, a provision identical with or substantially similar to the following: 'the right to continue drawing and using the same quantity of water as herein defined for manufacturing purposes twenty-four hours in a day instead of sixteen hours in a day. ' I rule and find that this provision does not have the effect of changing the construction of the term 'mill power' as above referred to, or as giving the respondent any additional rights to the use of water for other than power.
2. Implied Grant.
The grants of mill sites contemplated the erection of mills thereon. For whatever form of manufacturing the mill so erected was to be used the requirement of a certain amount of water for nonpower purposes would naturally be foreseen. (The finding contained in the foregoing sentence is not based upon any evidence introduced in the case, but solely upon what I regard as a matter of common knowledge.) In the case of a paper mill substantially more would be required than in most other forms of manufacture. These facts, and approximately the amount of nonpower water that might reasonably be expected to be required by a paper mill in connection with the use of the mill powers granted, must have been known to the complainant and its predecessor at the time of the grants. Many of the grants of the mill sites were to paper companies in name. Thus the earliest grant of those here in question, made in 1855, was to the Parsons Paper Company; and the latest, in 1892, was to the Riverside Paper Company. As to some of the grants it would appear that the mill site was not used, or at any rate not used for paper manufacture, until a date considerably later than the grant; and as to these there is no evidence to show that the complainant had knowledge that the site was in fact going to be used for paper manufacture. The complainant, however, did have knowledge that the site would probably be used for some form of manufacture which would require some water for nonpower purposes, and that it well might be used for paper manufacture, that being from the earliest times one of the principal, if not the principal, industry carried on on the canals in Holyoke.
That the respondent's predecessors in title must have understood at the time of the grants that they were entitled to draw from their flumes located on their mill sites such amount of water as might reasonably be required for manufacturing purposes in connection with the use of the mill powers, including paper manufacture, is, I think, clear, and I so find. This finding is based upon the following considerations. An adequate supply of water for nonpower use from some source was, certainly in the case of a paper mill, vital; and yet almost without exception the grantees made their investment in mill sites and mills without in any way securing to themselves a supply from any source other than the flumes. And a supply from any other source was either speculative or dependent upon obtaining permission from the complainant or some one else. Moreover, the water in the flumes was right at hand, on the premises of the grantees, and was there in abundance. It was the natural source of supply. Any other source would have been at least inconvenient and comparatively unnatural. Also, as soon as paper manufacture was begun, the grantees took, and continued to take, such water for nonpower purposes as they required. There is no evidence to show that the complainant ever made any objection. Furthermore, all the grantees except the earliest doubtless made their investments with knowledge that water was being so taken, apparently without objection, under the same form of indenture which they were receiving.
The complainant points out one case where the indenture does provide for the right to obtain water for washing from a source other than the canals. This is an indenture to the Holyoke Paper Company made in 1857. It gives the grantee the right 'also to draw water for the purposes of washing from Dry Brook, so-called, or from springs north of their mill site if they do not obtain a sufficient quantity of a suitable quality on the premises herein granted'; but this single exception does not change my conclusion as applied to the other grants; and, even as confined to the instance itself, I find that the purpose was to obtain a quality of water more desirable than the canal water for making finer grades of paper, and that this provision in this indenture does not show an understanding that the grantee had no right to use water from its flume for washing or other purposes, if it so desired. The complainant also relies upon the fact that during the 1880's it granted to several of the respondent's predecessors rights to construct so-called wells in or under the canals, or in the river bank below the dam. These agreements were made long after the grantees had purchased the sites and erected their mills. The nominal rentals, which were in each case fixed, were charged merely for the purpose of preventing the acquisition of easements in the base of the canals or in the land owned by the complainant along the river. The purpose was to obtain canal or river water in a filtered or at any rate purer state than was obtainable by taking it from the flumes on the grantees' premises. These agreements do not affect my conclusion that the grantees understood at the time of the original grants, and at the time of these agreements, that in connection with their original grants they obtained the right, which they were then exercising, to use flume water for manufacturing purposes.
I find that the complainant also, and its predecessor, at the time of the grants of mill powers here in question, intended that the grantees should in connection with the use of the mill powers granted have the right to take water from their flumes for manufacturing purposes. This finding is based upon the following considerations: The general situation above referred to was known to the complainant as well as to the grantees. And, as before stated, although the use was at all times open and known to the complainant, there is no evidence to show that the complainant ever made any objection whatever, and I find that, prior to the bringing of this suit, the complainant never did anything to stop the use, or rendered any bills for or made any claim for compensation for the water so used. If the complainant had felt that the use was not rightful, it would certainly, I think, have required written evidence that the use was merely permissive, for, as appears from the well agreements above referred to, a matter of far less importance to the complainant, it has been meticulous in protecting itself against the acquisition of rights by prescription. Also, in a report published by the Hadley Falls Company in 1853 it is stated that the Messrs. Carew, owners of a mill situated on the South Hadley side of the river, had bored an artesian well on their premises from which they derived 'a supply of remarkably clear, pure water for their use in manufacturing,' and that the facility with which this is attained so near the margin of the river indicates that, 'should it be desired,' the same means could be resorted to in Holyoke to attain the same end.
The complainant argues that it ought not to be assumed that the complainant intended to give, or that the grantees should have expected to get, without compensation, the substantial amounts of nonpower water required by a paper mill. The answer to this is that at the time of the grants there was an abundance of river water available for all purposes. It was not until about 1881 that the complainant even attempted to make any measurement for the purpose of checking on the amount used for power purposes. It was not until 1911 that the complainant attempted to make the sale of process water a source of revenue. Although the amount of process water required by a paper mill is large as compared with some things, it could not at the time of the grants have been regarded as of much moment in view of the amount of water available, in view of prices charged for power water, or in view of the amount of water involved in the grants of the mill powers. It appears that the amount of water used by the respondent for other use than power on its water wheels does not exceed more than 2 per cent. of the amount involved in the grants of mill powers which it holds; and, if there be excluded the amount used in the so-called Barber suction devices, which, as hereinafter stated, I find to be used for power purposes, the percentage is only about one per cent.
Also as bearing upon the comparative insignificance of the amount required for nonpower purposes it is to be noted that even with the exercise of care and the use of modern methods the complainant is unable to measure the amount of water used for power at the water wheels without a variation of probably 5 per cent. of accuracy. And, as before stated, it was not until about 1881 that the complainant attempted to make any measurement at all. Furthermore, the parties might well have considered the fact that at some times the grantees would not require and would not use to the full extent the mill powers for which they were paying. Thus the respondent has probably in fact paid for an amount of power water which involves more water than the respondent has used, even including the water used for other than water wheel purposes. Moreover, it would seem that for whatever purpose a mill was used at least some water would naturally be required for nonpower purposes, and that, if used for other than a paper mill, the amount would have been regarded as inconsiderable. If it were the intent of the parties that such an amount might be used in connection with other forms of manufacture, it was no less their intent in connection with the manufacture of paper. (In fairness to the complainant it should perhaps be stated that I do not intend by what I have said to give the impression that I find the amount of water used by the respondent for other than power on its water wheels to be inconsiderable as compared with many things. As before stated, it amounts to about 1,352 million cubic feet per annum. Compared to many things, this is a large amount of water. As before found, however, it is but a small percentage of the amount involved in the mill powers held by the respondent.)
The complainant further argues that to impute to it an intent to permit the use of water for nonpower purposes is inconsistent with provisions of article XIV of the white proposals which provides, after reserving the right to change subsequent proposals not affecting the grantee, that 'except that a rent at least equal to the above shall be reserved from every mill power hereafter sold. ' But this provision seems inapplicable because it applies only to the rent reserved for a 'mill power.' Moreover, the complainant's argument seems inconsistent with its having for years acquiesced in the use of nonpower water without making any charge therefor.
Passing from the question of the intent of the parties, the next question is whether there existed at the time of the grants a reasonable necessity for the use of canal water for nonpower purposes. The complainant argues that, although such use of the canal water may well have been regarded as convenient and advantageous to the grantees, there was no necessity for such use, because the grantees might have obtained the water which they required for nonpower purposes from some other source than from the flumes. Thus the complainant suggests that the grantees might have driven wells upon the mill sites. But I find that the obtaining of a supply from such a source, either adequate in quantity or usable in quality, was speculative. The fact, relied upon by the complainant, that in a report published in 1853, and before referred to, by the Hadley Falls Company, it is stated that 'The Messrs. Carew,' who owned a mill in South Hadley, on the opposite side of the river from Holyoke, had bored an artesian well on their premises from which they derive 'a supply' of 'remarkably clear, pure water' for their use in manufacturing and that the facility with which this is obtained 'so near the margin' of the river 'indicates' that should it be desired, the same means could be resorted to in Holyoke to attain the same end, does not show that the obtaining through artesian wells of a complete and adequate supply to satisfy the requirements of a paper mill located upon the complainant's canal system in Holyoke was, or could reasonably have been, regarded as other than speculative.
The mere possibility, or even probability, that an adequate and usable supply might be obtained in that way does not remove the necessity of having another source of supply in case of failure. Attempts have been made in years past by some of the grantees to obtain water from wells on their mill sites. The purpose was to obtain water of a better quality for manufacturing some grades of paper. The water obtained was not adequate in quantity nor usable in quality, and such attempts were long since abandoned. The complainant next suggests that the grantees might have pumped water from the river below the dam. But this could have or can be done only by obtaining consent from the complainant to lay pipes across its land which separates the mill sites from the river; and, in the case of mill sites not close to the river, probably the consent of other landowners as well. Very likely at the time of the grants such consent, at least from the complainant, could have been cheaply acquired; but that does not make the grantees' necessity, lacking such consent, any less real. It is also somewhat argued by the complainant that water might have been obtained from the municipal reservoir, which has existed since 1873, or before that from a private reservoir. But at any rate before 1873, and perhaps afterwards, such supply would depend upon obtaining consent from the complainant or others to the laying of pipes. Moreover, it appears that this suggested source of supply has at all times been entirely inadequate to take care of the needs of any considerable number of paper mills.
The complainant contends that the implication of an easement to use any water from the flumes for nonpower purposes is excluded by article VIII of the proposals, above quoted, and which provides that the grantees should not use 'more water than granted.' But, according to the construction of the proposals by the Massachusetts Court in the Whiting Case, the words 'more water than granted' must mean 'more power than granted,' because under the terms of the indenture no 'water' was granted. Nor has the water here in question been 'wasted' within the terms of the proposals. Article VIII therefore is not equivalent to an express provision that no water shall be used for process or nonpower purposes. I find and rule that it does not prevent the implication of a right to use water for such purposes. I find that at the time of the grants it was the intention and understanding of both parties that the grantees should have the right to take from their flumes for manufacturing or nonpower purposes such amounts of water as might reasonably be expected to be required for such purposes in connection with the manufacture to be carried on in the mills, including paper manufacture. I find that the respondent is not taking, and has not been taking, more water than might reasonably have been expected would be required for such purposes as incidental to the efficient and proper use of the mill sites and the mill powers purchased. I find that the right to take and use such water as the respondent is and has been using was reasonably necessary for the beneficial enjoyment of the mill sites and mill powers purchased. I find and rule that a right so to take and use water from the flumes of the grantees was implied as incidental to the grants.
3. Prescription.
For periods of more than 20 years occurring prior to this suit the respondent or its predecessors have continuously drawn from their flumes upon the mill sites water for use for manufacture or nonpower purposes. This has been done openly and with the full knowledge of the complainant and under a claim of right so to do. The complainant has never physically interrupted this usage by closing the gates at the entrances of the flumes, as it had a right to do under article VIII of the proposals if the use were wrongful, or in any other way.
There is no evidence that the complainant has ever until the bringing of this suit notified the respondent or its predecessors that it objected to such use or considered it wrongful; nor has it ever billed the respondent or its predecessors for the water so used. Rights to such use, if not otherwise acquired, have been acquired by the respondent or its predecessors by prescription, unless certain notices served by the complainant upon the respondent or its predecessors and purporting to be served under the statute, now G.L. (Ter.Ed.) c. 187, §§ 3, 4 (Public Statutes, c. 122, §§ 3, 4) amount as a matter of law to an interruption of the user. Section 3 of the statute provides that, if a person apprehends that 'a right of way or other easement in or over his land' may be acquired by use, he may give notice of his intention to prevent the acquisition of such easement by serving notice as in the statute provided; and section 4 provides that a notice so given shall be a disturbance of the easement entitling the person claiming the easement to an action for the purpose of trying his rights. As to each of the mill sites here in question certain notices were duly served in accordance with the requirements for service contained in the statute upon the predecessors of the New Jersey corporation and later upon it, first in 1891, and again in 1904 and 1918, and duly recorded in the registry of deeds. The respondent as well as the complainant agrees that the right contended for by the respondent on this issue of the case is an easement; but the respondent contends that it is not an easement 'in or over * * * land' within the meaning of those words as used in the statute; and that therefore the notices did not amount to a disturbance of the easements here claimed. Although the water drawn by the respondent for nonpower purposes is drawn from the flumes which are owned by the respondent, yet essentially the right claimed by the respondent is a right to draw water for such purposes into its flumes from the canals, which are land owned by the complainant. Although apparently it is not necessary for the respondent to go upon any land of the complainant in order to draw water from the canals, yet I think the right to draw water from the canals for nonpower purposes constituted an easement in the land of the complainant within the intent and meaning of the statute, and I so rule.
The respondent further contends that the notice did not specify the user objected to with clearness sufficient to inform the respondent or its predecessors that a disturbance of the user herein question was intended. At the times when all of these notices were served, an important use of water in paper mills was in cooking and washing and preparing the stock for paper making purposes. A very considerable portion of the above use was for washing and bleaching. There were, however, other large uses, such as for suction devices, steam condensing, boiler feed, and use in the paper machines. The notices of 1891 and 1904 were in the same form of which the following is an example: 'To the Beebe and Holbrook Company,
'You are hereby notified that the Holyoke Water Power Company intends to prevent the acquisition by you of any right or easement to discharge any waste water or sewage into the Canals of this Company, from your premises, situated in said Holyoke (being a portion of the premises, conveyed to Erastus B. Bigelow by deed of the Hadley Falls Company, dated September 15, 1856) or to draw or take wash water or water for any purpose from the First Level Canal or any other Canal of the said Holyoke Water Power Company in excess of the rights, granted in and by the deed aforesaid.
'It being the purpose of this notice to prevent the acquisition by you of any right or easement in, to or upon the canals of said Company not granted in and by the deed aforesaid.'
The following is an example of the form or notice of 1918:
'To American Writing Paper Company, Holyoke, Mass. 'You are hereby notified that the Holyoke Water Power Company intends to prevent the acquisition by you, of any right or easement to discharge or to permit the flowage of any water, sewage or substance into any of the canals of this Company or water courses connected therewith, from your premises, situated in Holyoke, in the County of Hampden and Commonwealth of Massachusetts (being the premises conveyed to George R. Dickinson by deed of said Holyoke Water Power Company, dated January 14th 1882 and recorded in Hampden County Registry of Deeds, in Book 387 Page 216) and also the acquisition of any right or easement to draw or take water for any use or for any purpose from any of said canals or from any other water course whatsoever, in excess of the rights granted in and by the deed aforesaid, and in and by an Indenture between said Holyoke Water Power Company and the George R. Dickinson Paper Company, dated March 1st, 1895 and recorded in said Registry, in Book 603, Page 55. It being the purpose of this notice to prevent the acquisition or enjoyment by you of any right or easement in, to or upon any of said canals and water courses or lands of said Company, or in connection with the water flowing or which may flow therein or therefrom not granted in and by the deeds aforesaid.'
I agree with the respondent's contention. The notices appear to be little more specific than a notice that the complainant intended to prevent the acquisition by prescription of any easement. They placed upon the respondent and its predecessors the burden of determining as a matter of law the exact extent of their right under the indentures. Moreover, the conduct of the complainant, as before set forth herein, had been for years, was at the time when the notices were served, and was subsequently such as to lead the respondent or its predecessors on whom the notices were served to believe that the complainant did not contend that the grantees under the indentures had no right to use any water whatever except for power on the water wheels. Under the circumstances, if that were the complainant's contention, it should have stated it. It would have been easy to do so. In the absence of such a statement, the respondent and its predecessors were under the existing circumstances entirely justified in assuming that no such sweeping contention was intended to be raised by the notices. The respondent or its predecessors could not fairly be called upon to bring a suit to settle some dispute which they did not know, and had no reason to know, existed. I find and rule that the notices did not constitute a disturbance of the easements here in question within the terms of the statute, or otherwise. I find and rule that the respondent, as to each mill site, has acquired by prescription, if not otherwise, the right to use water for nonpower purposes in the manner and in substantially the quantity in which it has been drawn and used on such mill site during such 20-year periods of continuous use.
As to the amount of water used by each of the respondent's mills for a period of more than 20 years for purposes other than the production of power on water wheels, I find the following facts: Each of the mills has been built since the 1880's or before, with the exception of the so-called Norman, Linden, and Riverside divisions, which were built in the early 1890's. Each has been operated with substantial continuity as a paper mill from the time of its erection to the date of this suit, with the exception that the Norman and Holyoke divisions as paper mills have been idle since June, 1927, the Dickinson division since September, 1928, and the Albion division since August, 1931. The respondent's answer to interrogatory 28 gives an estimate of the amount of water used other than for the production of power on water wheels by each division for the years 1927 to 1934, inclusive, so far as such divisions operated. I find the amounts as there stated to be approximately correct. I also find upon the evidence that, except as hereinafter stated, a fair average of these amounts as to each mill is no more, and is probably in some instances a good deal less, than the average yearly use for prior years, and for a period of at least 20 years occurring at some time prior to this suit. I find the following named divisions have acquired by prescription, if not otherwise, a right to the annual use of approximately the following amounts of water for purposes other than the production of power on water wheels: Albion division, 98.5 million cubic feet; B. & H. Wauregan, 188 million cubic feet; Crocker, 88.87 million cubic feet; Dickinson, 234 million cubic feet; Gill, 62.75 million cubic feet; Linden, 90.75 million cubic feet; Nonotuck, 310 million cubic feet; Parsons, 142.25 million cubic feet; Riverside, 59.12 million cubic feet. Part of the water used in the Mt. Tom and Norman divisions for the years 1927 to 1934 was for steam condensing, and, since I cannot find that such use has existed in these mills for a period of 20 years, I have made allowance for that, and find the amounts acquired by prescription to Mt. Tom 126.5 million cubic feet; Norman, 99.7 million cubic feet. As to the Holyoke division, I find that it acquired by prescription, if not otherwise, the right to use a substantial amount of process water, but I am unable to further determine the amount.
The annual amounts above referred to as used in each division have been used in part for filtration or paper processing, for boiler feed, for steam condensing in those mills which had steam condensing engines during the 20-year period involved, and for Barber suctions in six of the mills which had such devices during said period. All of said uses have been in connection with paper manufacturing. The complainant has requested me to break up the total into the above-mentioned uses, apparently upon the theory that any right acquired by prescription is limited to such particular use, that is to say that, if a certain amount of water has been adversely used at a given mill for a period of 20 years for boiler feed, no right has been acquired to use it in some other way in connection with paper manufacturing, as for instance for filtration purposes. I do not agree with this contention, and I rule to the contrary. However, in the even that I be wrong in so ruling, and also because I have found that the use of water for the Barber suctions is a use for power, to which the respondent is entitled under its mill powers, I find the uses as to each mill site during said 20-year periods to have been approximately in the following amounts or proportions; expressed in thousand cubic feet:
Boiler
Steam
Suction
Filtration
Division
Feed
Condensing
Devices
Albion
769.5
--
--
97.993
B. & H. Wauregan
872.5
5461.75
104,500
77.304
Crocker
1300.5
9329.
--
78113.375
Dickinson
560
1220.
172,000
60560.
Gill
1026
6211.
--
55577.
Holyoke
170
--
--
--
Linden
1118.125
28903.75
--
60684.75
Mt. Tom
676
7830
152,500
63765.75
Nonotuck
982.625
2020.5
259,300
48666.5
Norman
336
1137
103,700
--
Platnerand
Porter Parsons
438.5
--
81,900
58218.
Riverside
770.25
6706.
--
51582.125
The complainant has asked me to assume that the use here in question originally was and continued to be under permission expressly given by the complainant or its predecessor to the grantees or their successors. This I cannot do. The use was begun and continued by many different grantees under grants made from 1855 to 1892. If such use had been understood to depend upon the will of the complainant, the complainant would certainly have demanded and obtained written evidence of this fact, as it did in the case of the well agreements above referred to. Nor would the grantees or their successors have made their investments in their property or in equipment adapted to the use of canal water if they had understood that such use depended upon the will of the complainant. An adequate supply from some source was vital to them. They would certainly have taken some measures to secure it, if they had not assumed that it was already secured.
4. Laches, Estoppel.
I have found and ruled that the prescription notices previously referred to were not under the circumstances sufficiently specific to constitute notice that the complainant claimed that the user now complained of was wrongful. Unless these notices sufficiently evidenced such a claim, there is no evidence that the complainant ever made it prior to this suit. During all these years, beginning as far back as 1855, the complainant and its predecessor sold mill sites and mill powers which, at least in connection with one another, were transferable and were from time to time being transferred. In 1899 the American Writing Paper Company of New Jersey made a large investment in purchasing various mills. In 1927 the present respondent purchased through receivership. Use of water for nonpower purposes was at all times being made by the grantees and their transferees. It was being made openly and through equipment especially installed for that very purpose. The complainant well understood that such use must be considered by its grantees and their transferees as, if not vital, at least of very great importance; and that none of them would be making their investment except upon the assumption that he would be entitled to and would not be deprived of such use. If the complainant entertained any claim, such as it now makes, that such use was wrongful, it would have been only a matter of fairness to the purchasers to have made that claim known. It would have been very easy to do so once for all. It seems to me that a court of equity should not aid the complainant in seeking to raise its claim for the first time at this late date. I find and rule, if I am right in my finding as to the effect of the prescription notices, as requested by the respondent, that the complainant is guilty of laches and that in equity it is estopped from asserting its present claim.
If I am wrong in my finding as to the effect of the prescription notices above referred to, and if it be held that they were sufficient to notify a reasonable person that the complainant claimed that the owners of mill sites had no right to use any water whatever except for power on the water wheels, then the defendant did give notice of its position as early as 1891, and I should then find that the complainant is not guilty of laches and is not estopped from maintaining this bill.
5. Balancing of Canals and Other Allegations of Special Damage.
The complainant alleges that the use of water for nonpower purposes seriously interferes with the balancing of the canals, by which it means keeping sufficient water in the canal on each level to meet the requirements of the mills on such canal. I find that the use as made by the respondent causes no special or serious difficulty in balancing the canals. The difficulty, if any, has existed for years; and yet the complainant has never before, so far as appears, made any complaint of it. Moreover, the difficulty is not so great as to prevent the complainant from selling, as it does, process water to such of the mills as it desires to sell to and which will purchase it upon the complainant's terms. Further, there is no regularity either in the time of drawing or amounts of water drawn by the mills even under their mill powers. They draw, and are entitled to draw, only when and as they need the power. Accordingly, the amount of water drawn from one canal and discharged into another is constantly varying, and consequently, even so far as the use is confined to power on the water wheels, the balancing of the canals by the complainant by the use of the overflows emptying from their upper level canals into lower is necessarily a continuous process. This operation is not necessitated nor made appreciably more difficult by the use as made by the respondent of water for nonpower purposes. I find also that there is no appreciable pollution of water used by the respondent and discharged into lower level canals or into the river.
I find also that the complainant has not been threatened with suit by other grantees or by riparian owners because of use of water by the respondent here complained of, nor is there any likelihood of any such suit.
The complainant has offered evidence to show that periods of restrictions on the use of mill powers by all its grantees, which occasionally it imposes in times of special drought or low flow of the Connecticut river, have been somewhat prolonged by the use of the respondent of water for nonpower purposes. These restrictions are imposed in view of the prospective flow of the river rather than upon the actual supply of water in the pond so called made by the dam. The amount of water used at these times by the respondent for nonpower purposes is so very small as compared with the supply in the pond made by the dam, or as compared with the quantity involved in all the mill powers affected, that I am unable to find that it has or can have any effect upon the judgment of the complainant in determining when restrictions shall be imposed or when lifted. The conditions which lead the complainant to impose and lift restrictions cannot be weighed with such nicety.
6. Barber Suction Devices.
In the 80's, suction devices known as 'Barber Suctions' were installed in some of the mills. These devices through suction caused, as the application for the patent states, 'by the fall of a large body of water' are used to extricate the water contained in the paper material as it passes over wire screens in the mills. This device is in substance a water motor. The water used in operating it is used to produce power. As operated by the respondent and its predecessors, the water is drawn from the flumes before it reaches the water wheel and passes through pipes and is discharged in the raceway below the water wheels, whence it flows into the canal below, or, in the case of the mills, on the lower level into the river. The water flows without interruption through the pipe and is at all times confined to the pipe. As requested by the respondent, I find that the water is used for power purposes. I rule that the respondent is entitled so to use it under the indentures granting mill powers. There seems to be nothing in the indentures which confines the use of power to a use upon water wheels located in the flumes. The respondent is not limited to the use of such power water as may be measured at the water wheels. The complainant at one time undertook the measurement of water in the raceways below the water wheels. In 1908 the complainant made a survey for the purpose of determining the amount of water used by the Barber suction devices. The amount of water used by the respondent in the Barber suction devices is about one-half of all the water used by it which is not used upon the water wheels.
7. Damages.
In addition to seeking an injunction, the complainant asks damages based on the value to the respondent of the water used for purposes other than power on the water wheels for the 6 years preceding this suit.
I find and rule that whether or not the complainant be entitled to an injunction it is entitled to no damages for the water used during this period. I find that the water was used with the knowledge of the complainant and without any intention on the part of the complainant to make any charge for it; and that the respondent had every reason to understand, and did understand, from the conduct of the complainant, that this was so. The complainant has for years continuously been rendering bills for the mill powers and for surplus water to the respondent or its predecessors, an has granted rebates when due on account of restrictions upon the use of mill powers, yet it has never prior to the bringing of this suit rendered any bill or given any notice that it expected compensation for the use of the water here in question. The complainant itself asks me to find that the water was used with its permission. After the water has been used, the complainant cannot change its mind and make the respondent pay for it. The respondent asks me to rule that the rendering of bills for water as measured at the water wheels during this period and the payment of the same by the respondent without any bills being rendered for the water used for nonpower purposes constitutes an 'account stated.' I do not so rule unless that term be applicable under the finding which I have made. I do find and rule, however, as above stated, that the complainant is not entitled to damages.
The complainant contends that its damages, based on the fair value of the water used, amount to $180,029.10, for the period June 5, 1928, to June 4, 1934, or $193,803.16 for the period to December 31, 1934. This is based on a value of $500 per cubic second foot per year, or $23.20 per million cubic feet. This valuation purports to be an estimate of what it should have cost the respondent to obtain a right to draw continuously an amount equal to the maximum draft as drawn by the respondent at any time during the period covered. The maximum draft for the period occurred in 1928, and was 80 cubic feet per second. The complainant filed in October, 1934, in the United States District Court a proof of claim in the reorganization proceedings of the respondent for the value of the water used for nonpower purposes from June 5, 1928, to June 25, 1934, in the amount of $93,520.29. This claim was based upon a use of 96.59 cubic feet per second figured at $160 per year. The sales of water for nonpower purposes which the complainant has made, that is, the sales of indentured surplus water so called, the latest of which, with the exception of one made in 1932 to the Whiting Company at $160 per cubic foot per second, was in 1923, were at an annual rate of about $40 per cubic foot per second. These indentures entitled the grantee to such use in addition to permanent mill powers only when there is surplus water available. That, however, is most of the time.
When there is no surplus water available, the grantees are entitled to take nonpower water out of permanent mill powers. It is true, as the complainant points out, that these manufacturing water indentures contain agreements as to other matters, and are more or less a matter of bargaining. That is true also of the indenture to the Whiting Company, which had been in litigation with the complainant. The respondent produced testimony that a fair value for the water used by the respondent during the period in question would be not more than $65 per cubic foot per second. I believe that this is as much as a buyer, not already the owner of a mill on the canals, and not under any compulsion to buy, would feel inclined to pay, and that during the period in question the complainant would have been willing to sell to such a buyer the amount of water used at that price. Most of the time the complainant had more water available than there was any demand for. The average amount of water used by the respondent yearly during the 6 years preceding this was 1,352 million cubic feet. Assuming 300 working days, this makes a draft at an average rate of about 52 cubic feet per second. Figured at an annual rate of $65 per cubic foot per second, this makes a total for the 6-year period of $18,720. The respondent requests me to find that this figure $18,720 represents a fair value of the water used for the purpose of determining the complainant's damages; if the complainant be entitled to damages, I so find. The amount of water used in the Barber suctions for the 6 years preceding suit averages 735.7 million cubic feet per annum. If I am right in my finding that this was a use for power, and in my ruling that the respondent was entitled to make this use under its mill powers, the amount of damages should be reduced in the proportion that 735.7 bears to 1,352.
The complainant also contends that the use for water other than on water wheels made by the respondent has caused the complainant a loss of $5,335.51 from June 5, 1928, to December 31, 1934, resulting from rebates which such use has caused the complainant to pay on account of restrictions upon the use of permanent and non-permanent mill powers. The connection between the imposition or continuance of the restrictions and the use by the respondent does not appear to me to be established with sufficient clarity to enable me to find the damage here contended for by the complainant.
8. Requests for Findings and Rulings.
Both parties have requested me to make certain findings of fact and rulings of law, copies of which, at the request of the parties, I file herewith and make part of this report. Of the complainant's requests for findings all are waived except those numbered as follows: 2, 4, 9, 13, 14, 15, 16, 17, 20, 25, 27, 28, 29, 30, 31, 36, 37, 39, 40.
Of the complainant's requests for rulings all are waived except the following: 1, 2, 6, 12, 13, 14, 15, 16, 17, 18-24, 33, 37, 38, 39, 40, 46, 47, 48, 50, 51, 52, 57, 58, 59, 63, 68, 73, 75, 76, 77, 78, 79, 80, 82.
Of the respondent's requests for findings all are waived except the following: 10, 13, 17, 18, 19, 20, 21, 24, 25, 34a, 42, 48, 62, 63.
Of the respondent's requests for rulings all are waived except the following: 1, 2, 10, 11, 13, 14.
I grant complainant's requests for findings numbered 2, 4, 27, 31, 40 (with the qualification as stated in the report as to the conditions of obtaining it), and deny those numbered 9, 13, 14, 15, 16, 17, 20, 25, 28, 29, 30, 36 (except to the extent elsewhere given), 37 (except to the extent elsewhere given), 39 (except to the extent elsewhere given).
I grant complainant's requests for rulings numbered 12, 16, 19-24, 33, 46, 47, 48, 50, 51, 57 (solely in connection with 58), 58, 68, 73, 75, 76, 77, 78, 79, 80, 82; and deny the following: 1, 2, 6, 13, 14, 15, 17, 18, 37, 38, 39, 40, 52, 59, 60 (I construe this request as meaning that the user acquired would be limited to the minimum used on any one day in the twenty year period).
I grant respondent's requests for findings numbered 10, 13, 17, 18, 19, 24, 25, 34a, 42, 48 (I assume that the words 'plaintiff's answers' are intended to mean 'defendant's answers'), 62, 63.
I deny respondent's requests for findings numbered 20, 21.
I grant respondent's requests for rulings numbered 13, 14.
I deny respondent's requests for rulings numbered 1, 2, 10 (except to the extent given), 11 (except to the extent given).
Supplemental Report.
The complainant has filed in this case a motion for report of certain evidence, in which motion it is stated that the complainant has filed exceptions to 'certain of the findings of fact contained in' the special master's report and that 'it does not clearly appear in the said report that such evidence as upon which said findings therein appear to be based is the entire evidence which was before the said special master relative to such findings'; and therefore prays that the master be ordered as to the certain findings specified in the motion to report all the evidence relative thereto, or to state that all of the evidence relative thereto is set forth in the report.
The above motion was referred to me, the master, for my consideration by the court, McLELLAN, District Judge, as I am informed by counsel, without making any order thereon.
I decline to pass specifically on the matters set forth in the complainant's motion for the report of evidence, unless ordered so to do by the court.
I do not feel that any amplification of the report is needed. However, in view of the complainant's motion, and in order that its rights in the premises may be protected, I hereby supplement the report with the following statement:
The men who were officers of the complainant and its predcessor at the time of the grants here in question are now dead. The findings which I have made in my report, under the heading 'Implied Grants,' as to their knowledge and intention at the time of the grants, are based solely upon inferences; inferences, however, which it appears to me clearly ought to be drawn. I have attempted to indicate in my report the facts from which I have drawn such inferences. I hereby supplement that statement.
The finding that any kind of a manufacturing mill would naturally be expected to require at least some water for nonpower purposes is, as stated in my report, based solely upon what I regard as common knowledge. There was evidence that the method of manufacturing paper has since before the first grant here involved been essentially the same, that it has at all times required a substantial amount of nonpower water, and I so find. The finding that most other forms of manufacture require less process water is based solely upon what I regard as common knowledge. I infer that the complainant and its predecessor at all times knew these facts. This inference is based upon considerations stated in my report and upon the following considerations: The men who planned and built the canal system at Holyoke must have been businessmen of intelligence and foresight. The indentures granting mill sites and mill powers and the elaborate proposals annexed thereto show that the grantors gave careful thought to the kinds of manufacture to be conducted upon their canal system and recognized the fact that the nature of the manufacture in many ways bore a relation to the operation of the system. It appears to me inconceivable that they did not have or obtain at least an elemental knowledge of the nature of the manufacture to be carried on and carried on upon the system, including paper manufacture. If they did have even an elemental knowledge of paper manufacture, they knew that it required a large amount of process water. Moreover, the report of Hadley Falls Company made in 1853, and introduced in evidence by the complainant, and referred to in my report on page 885 of 17 F.Supp., shows that that company not only purported to have knowledge that the prospective grantees of its mill sites would require some manufacturing water, but also some knowledge as to the amount which they might require.
One of the earliest deeds was to the Parsons Paper Company in 1855. There was also a deed to the Holyoke Paper Company made in 1857; this gives the grantee the right also to draw water for 'washing' from Dry Brook, so called, or from springs north of their mill site, if they do not obtain a sufficient quantity of a suitable quality on the premises granted. This certainly shows that the grantor understood that some water was required for paper manufacture, and also I infer that the rights referred to would not have been granted without some understanding on the part of the grantor as to the amount of water that might be expected to be required.
There is also evidence, and I find, that paper manufacture had begun upon some of the mill sites as early as 1858. With the two exceptions above referred to, all of the grants here in question were subsequent to that date. I find from the view which I took of the mills and from the evidence that the fact that a substantial amount of process water is used in paper manufacture is and always has been apparent to any one who made even a casual inspection of a paper mill. From the relations at all times existing between the complainant and the mills located upon its canal system, I infer that the complainant would know, and would also be interested in knowing, not only that the paper mills on its system were using water for process purposes, but approximately the amount of water that they were so using.
That the complainant and its predecessor desired to sell mill sites and mill powers on its canal system is indisputable. That a supply of nonpower water for such prospective purchasers would enhance, and indeed was vital to the salability of the mill sites and mill powers, is also indisputable. The report of 1853 previously referred to shows that the Hadley Falls Company recognized this fact, as I infer in any event that it must have. I infer that the Hadley Falls Company and the complainant must have been interested in keeping themselves informed as to the conditions affecting such supply. I infer that they knew the facts which I have found relating to the possible sources of such supply. I infer from this that they must have known that their prospective grantees looked to the water in the flumes as at least a certain source, and as the only certain source, of such supply. Moreover, I have found that over a long period of years the various grantees have taken such water as they required for nonpower purposes from their flumes, that it has been taken openly, and from my view of the canal system and from the evidence I find that it has been so taken with the knowledge of the complainant. The complainant itself requested me to find that the water was taken with its permission, and introduced no evidence to show that it ever objected. I infer from the considerations above stated and from those stated in my report that the complainant fully understood at the time of the grants that the grantees expected and intended to take water from their flumes, if required, to meet their manufacturing needs, including the needs of paper manufacture, and that the complainant intended that they should.
Second Supplemental Report.
The complainant urges me to file with and make part of my report an exhibit (Plaintiff's Exhibit 95) referred to in my report, viz., a pamphlet published in 1853 by the Hadley Falls Company. I am reluctant to select from the many exhibits in the case this particular piece of evidence for presentation to the court. It is only because the complainant strenuously argues to me that this exhibit is inconsistent with and negatives the inferences which I have drawn as to the complainant's intention at the times when the grants were made as to the use of canal water for manufacturing purposes incidental to the use of the mill powers, and because the complainant considers that the presentation of this piece of evidence to the court is essential to the proper preservation of its rights, that I make this exhibit a part of the report, which I do by annexing it hereto.
By stipulation, exhibit was omitted.
This exhibit was admitted by me, subject to the respondent's exception, only so far as it might throw light upon the question of the knowledge of the Hadley Falls Company at that time of the sources of supply of water for manufacturing purposes at Holyoke and of its probable intention at that time as to the source from which its grantees, and particularly those engaged in paper manufacture, could obtain such a supply. The admission of the exhibit was expressly limited to this issue, and, except as it may bear upon this issue, the exhibit cannot be used.
As bearing upon the issue referred to, I find nothing in the exhibit which negatives or outweighs the inferences which I have drawn. The reference on page 13 of the exhibit to the reservoir contains no suggestion that the Hadley Falls Company regarded it as a source of supply for paper manufacture. If the Hadley Company had so regarded it, it would naturally have said so, for it was purporting to set forth its advantages, and the only advantages mentioned are the security against loss by fire afforded by the head of the water in the reservoir and the comfort and convenience of the residents of Holyoke. Moreover, the capacity of the reservoir as stated was entirely inadequate to take care of the manufacturing needs of any number of paper mills in addition to the uses which were referred to. The only reference to a source of manufacturing water for a paper mill appears on page 21 of the exhibit, to which I have referred in my report. It is there stated that there is an indication that, 'should it be desired,' artesian wells 'could be resorted to' in Holyoke as a source of clear pure water. Since a source of water for paper manufacture was essential, the clear implication from the above reference seems to me to be that in any event the canals afforded such a source. But, however this may be, I can draw no inference from the exhibit here in question which in any respect outweighs in my mind the inferences which I have stated in my report and supplemental report that I have drawn from the facts there referred to. It is further to be noted that most of the indentures here involved were made many years later than the date of the annexed exhibit. It may be added that there was no evidence that a copy of said exhibit ever came to the notice of the respondent or its predecessors.
Third Supplemental Report.
My attention has been called to an ambiguity in the second sentence of the first paragraph beginning on page 21 of my report, which reads as follows: 'Each of the mills has been built since the 1880's or before, with the exception of the so-called Norman, Linden and Riverside divisions, which were built in the early 1890's. ' What I meant was that each of the mills with the exception of the three referred to has been standing since the 1880's or before. Accordingly I amend the report by striking out the sentence above referred to and substituting therefor the following: 'Each of the mills was built not later than the 1880's, with the exception of the so-called Norman, Linden and Riverside divisions, which were built in the early 1890's.'
McLELLAN, District Judge.
This equity suit was heard on June 18, 1936, upon the exceptions of each of the parties to the master's report, which consists of the original report and three supplemental reports, and upon the matter of a final decree.
The complainant seeks an injunction against the use by the defendant of water for processing and other nonpower purposes, and damages represented by the value of water used for such purposes for the six years prior to the filing of the bill of complaint.
Little difficulty is presented so far as the complainant's right to recover damages is concerned. The complainant virtually conceded at the oral argument that no tort was involved in the use of water by the respondent, and that the master's report furnishes no basis for finding an express or implied contract on the respondent's part to pay for processing water. On the contrary, the complainant knew that the water was being used by the respondent for processing purposes, and no charge or claim therefor was presented or contemplated, and no intent, secret or disclosed, on the part of the complainant to charge therefor existed.
The question whether the plaintiff is entitled to an injunction presents greater difficulty. The facts bearing upon both the right to an injunction and the right to damages are as set forth in the master's report and supplemental reports. In the light of Equity Rule 70 1/2, 28 U.S.C.A. following section 723, the master's findings of fact are adopted and are incorporated herein by reference. These findings include, of course, not only such as appear at length in the reports, but also such other requested findings of fact as were granted by the master.
The complainant's exceptions and the respondent's exceptions to the master's report are overruled, and the master's report is confirmed. A decree to this effect is to be entered. Accordingly, a decree dismissing the bill of complaint is also to be entered.