Counts in a covenant and case may be joined in a declaration on a single cause of action.

CONTRACT CONSTRUCTION OF WRITTEN.

The legal construction of a written contract is the ascertainment of the fact of the parties' intention from competent evidence.

WATER AND WATER COURSES- MILL-PURPOSES NOT NECESSARY.

In a grant of a right to draw water from a pond after the grantor's grist-mill is supplied from the same pond, his right to continue to use the water power in the mill for a purpose not necessary for the operation of the mill is not implied. SAME DIVERSION - DAMAGES - LOSS OF PROFITS.

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In an action of a lessee of a mill against his lessor for a diversion of water, depriving the plaintiff of the demised water power, damages for loss of profits being claimed in the declaration, and loss of profits being a damage the parties could have reasonably anticipated, proof of the profits of the business done at the mill is admissible on the question of damages.

Covenant, on a lease by which the defendants let to the plaintiffs a lot of land in Colebrook, to be used in the manufacture of potato starch, for twenty years from February 9, 1874, at a yearly rent of $125, with the right to draw water from the grist-mill pond sufficient to carry and operate a starch-mill, said lessees to have the first use of the water after the grist-mill is supplied from said pond, provided the said lessees shall not draw the water out of the pond more than six inches below the top of the dam where the waste water runs over.

.. and the said lessors covenant with the said lessees that they may occupy said premises during said term, peaceably, without lawful interruption from any person or persons whatsoever." The alleged breach is that the defendants deprived the plaintiffs of the use of the water to which they were entitled, and neglected to furnish it. Plea, full performance. Verdict for the plaintiffs. After the trial had proceeded several days, the plaintiffs were allowed to amend the declaration by adding a count in case subject to exception.

At the date of the lease, the defendants owned and operated the grist-mill, which was situated on the west side of a road. To furnish it with power, water was drawn, through an artificial canal, from a pond on the east side of the road to a smaller pond on the west side. The grist-mill privilege was on the south side, and the starch-mill privilege was at the westerly end of the small pond. The latter privilege was leased to one Merrill in 1854, and was used and occupied by him thereafter up to and including the season of 1873. During the latter half of the term of Merrill's lease, the defendant C. E. Rolfe erected a carriage and sash and blind shop on the east side of the road, and constructed a flume and drew water from the main canal at a point between the two ponds. Both parties claimed and put in evidence to prove that Rolfe's flume was in the same condition at the trial as at the time of the waste and interruptions complained of by the plain

tiffs; and the jury saw it twice. The following evidence was admitted, subject to the defendant's exception: The plaintiff Crawford, who was an expert, testified that with the water saved which the defendants allowed to waste, and without interruptions by Rolfe, the plaintiffs' work of manufacturing in 1875 and 1876 could have been done in about half the time it was done; and that there was a good stream of water running through the Rolfe flume on the morning of the day he testified. Hicks, an expert, who had worked for Merrill before the Rolfe mill was built, testified that Merrill's wheel was much larger than the plaintiffs'; and took three times as much water; and that there was plenty of water before Rolfe built his mill. W. S. Rolfe, who was part owner of and operated the Rolfe mill at one time, testified that the plaintiffs' flume and Merrill's flume were on the same level, and that, while operating the Rolfe mill, in low water, he could draw the water away from either of the mills below. Gathercole, who had worked for Merrill before the Rolfe mill was built, testified that Merrill usually had water enough after the fall rains came, the few first years. The plaintiffs claimed that during all the years they operated the starch-mill, Rolfe used the water more or less to which they were entitled, whereby they suffered loss and damage. The defendants claimed that some years Rolfe did not use it at all, and that when he did, it was with plaintiffs' consent, or when it was running to waste over the dam, and therefore that he in no way wrongfully hindered or obstructed them in the prosecution of their business. The jury were instructed to decide which claim was true.

Among the acts complained of by the plaintiffs as negligent or wanton infraction of their right was the use of a belt running from the elevator shaft in the grist-mill to operate a pump by which water was forced from a spring under the mill to the house of the defendant Rolfe and another, where it was used for domestic purposes. The pump had been used before the lease as it was afterward. Its existence was known to the defendants, and was not known to the plaintiffs when the lease was executed; and by reason of its location, it was not open to ordinary observation. The defendants requested the court to instruct the jury that the words of the lease, "after the grist-mill is supplied from said pond," are to be construed in reference to the state of things. existing at the time the instrument was executed; that the right of the lessees was subject to a supply for the grist-mill as it was then used; and that this fairly includes the trifling burden then attached to one of the grist-mill wheels, operating the force pump to supply Rolfe's house for domestic purposes. The instructions given on this point were, that if by the use of the grist-mill power to drive the force pump, the plaintiffs were deprived of any water belonging to them which they wanted to use, there was a violation of the lease. The defendants excepted to the refusal to give the instruction requested in relation to the pump.

Parsons and Johnson, Ray, Drew, Jordan and Carpenter, Ladd & Fletcher, for defendants. Aldrich & Renick, for plaintiffs. DoE, Ch. J. Counts in contract and tort may be joined in a declasingle cause of action. It does not appear that the counts

ration on a

were not on the same cause of action, or that the amendment was necessary, or had any effect upon the trial or the verdict.

The construction of the written contract is the ascertainment of the fact of the parties' intention from competent evidence. Houghton v. Pattee, 58 N. H. 326; Morse v. Morse, id. 391. The dam was not leased to the plaintiffs, and the lease does not prove an understanding that the dam was to be kept in repair by them, either for their own benefit or that of the defendants. On the contrary, the limitations of the water right granted to the plaintiffs, and the title, possession, control and use of the dam retained by the defendants, show an understanding that the defendants were at least to exercise ordinary care in the work of so maintaining the dam as to give the plaintiffs the power demised to them. Whether the true construction is more favorable to the plaintiffs than that, the questions tried, the instructions given to the jury and the verdict, render it unnecessary to inquire.

The defendants have not argued the questions raised by the evidence relating to the use of water at Rolfe's mill, and do not claim that Rolfe could continue to use the water at that mill as he had used it before the starch mill privilege was leased to the plaintiffs. They put this part of their case on the ground that for his use, at his mill of any water when it was not running to waste over the dam, he had the plaintiffs' consent. The use of the force pump to transport water to a house for domestic purposes, not being necessary for the grist-mill, the defendant's retention of the right of such use is not implied. Smith v. Smith, Grafton, June, 1882; Adams v. Marshall, 138 Mass. 228, 236; S. C., 52 Am. Rep. 271.

The jury found the defendants' negligent or wanton waste and diversion of the water compelled the plaintiffs, acting with reasonable discretion, to discontinue the business for which the lease stipulated the leased premises were to be used. The loss of profits being a damage alleged in the declaration, proof of the amount of such loss was competent. Taylor v. Dustin, 43 N. H. 493. The manufacture of starch being the business to which the lease restricted the plaintiffs, and profits being presumably the object of the business, the loss of profit could be reasonably anticipated by both parties as a damage likely to be caused by such a waste and diversion of the water as would extinguish the business. It seems to be admitted that the measure of damages was not less than the difference between the rental value of the premises with, and their rental value without the waste and diversion; and the profit of the business was a large, if not the only element of rental value. Remote and speculative damages were excluded by the instructions given on this point. Judgment on the verdict.

BLODGETT and BINGHAM, JJ., did not sit; the others concurred.

ING - JURISDICTION OF PROBATE COURT — BONDS PURCHASED AT PREMIUM INCOME CAPITAL.

The probate court has jurisdiction to determine upon the accounting of a testamentary trustee, whether a sum of money held by such trustee should be treated as capital or the income of the trust fund; and an appeal in such case may be taken to this court.

Where a trust fund, the income of which is to go to the life tenant and the principal to the remainderman, has been invested by the trustee in bank stock, it is not the duty of the trustee to sell the stock, should it appreciate in value, and pay over to the life tenant the increased value thereof. If it become necessary to sell such shares of stock in the proper administration of the trust estate, the gain or loss is that of the capital of the estate and the sum received constitutes a new principal.

It is the duty of a trustee to manage the funds in his hands with a view of their safe and permanent investment, and not for the purpose of speculation. It is not necessary that investments should be made in public securities, but a loan at a fixed rate of interest, even if secured by the stock of a manufacturing or other business corporation, if proper security is taken against fluctuations, is not necessarily injudicious.

Where the trust funds have been invested in bonds purchased at a premium, and which mature at a fixed time in the future, the trustee may reserve from the life tenant some portion of the interest as it becomes due, sufficient to efface the premium and restore the capital at the maturity of the bonds.*

Appeal from a decree affirming a decree of the probate court. The case involved an accounting made by a testamentary trustee. By the conditions of the trust the income of the estate was to be paid to a life tenant and the principal to the remainderman; and the principal question was, whether the trustee was authorized to deduct from the income of certain bonds in which the trust estate had been invested and which were purchased at a premium, a sufficient amount to efface the premium and res tore the capital at the maturity of the bonds.

J. L. Stackpole, for appellant. J. H. Benton, Jr., for appellee.

DEVENS, J. This is an appeal from a decree affirming a decree of the probate court, by which the account of the New England Trust Company, a trustee holding a fund, the income of which was payable to a tenant for life, with remainder over, was disallowed. The system which had been pursued by the trustees, with reference to the investments which they had made in bonds and other promises to pay of the United States government, or of municipal or railroad corporations, due on a day certain, for which premiums had been paid, was to ascertain by tables in use among bankers and brokers what was in fact, the net income arising from these promises, considering the premium actually paid by the investing trustee, which would not be repaid at the maturity of the bond, the rate of interest, the date of payment of the security, and to pay over this net income to the life tenant, the difference between * See 31 Moak Eng. Rep. 328, note; Heighe v. Littig, 63Md. 391; S. C., 32 Alb. L. J. 430.

this net income and the actual rate of interest as received, going to a fund which at the date of the maturity of the promise would leave the original capital intact. The decree appealed from directed the trustee to pay to the life tenant, as income, the sums thus reserved for the purpose of being returned to capital.

Whether the question presented may be heard and adjudicated by the probate court and thus by this court, on appeal, has been doubted. The New England Trust Company is a testamentary trustee, compelled by statute to render its accounts, at least once a year, to the probate court, of the hearing on which the fullest notice must be given, and the question is one immediately connected with the administration of the trust. The probate court has full power to see and provide that every interest shall be fully represented, and it is to be observed that this court has also, concurrently with the supreme judicial court, full jurisdiction to hear and determine in equity all matters in relation to trusts created by will. Pub. Stat., chaps. 141, 142, 143. It had the right to determine whether, upon the account rendered by the trustee, it was its duty to account for the sums it had set aside as a part of the capital of the estate or as its income, and to hold or pay them over accordingly.

Without discussing those cases in which it has been held that in settling the accounts of the executors of a will the relative rights of legatees under a will, and other questions arising under the will in réference thereto, cannot be decided, all of which are not, perhaps, fully reconcilable, they do not affect the question of jurisdiction here involved. Granger v. Bassett, 98 Mass. 462; Cowdin v. Perry, 11 Pick. 512; Burbank v. Whitney, 24 id. 151, first paragraph. Even if we should hold that it was intended that in the administration of an estate the probate court should not pass upon the difficult questions of construction often arising out of wills, but should determine simply the amount of property subject to distribution, it could not affect the present inquiry. The specific object of requiring trustees to render annual accounts is to ascertain whether the trustee has properly dealt with the trust property. In such a case as the one at bar, the trustee necessarily includes in his account the payments he has made, and describes the investments in which he holds the trust property. If he has paid over to the tenant for life that to which the tenant was not entitled, he should not be allowed therefor, and if, on the other hand, he has transferred to the corpus of the fund that which he should not, this should be corrected. Upon the hearing in the probate court and in this court upon the account of trustees, questions, similar to the principal one in the case at bar, have heretofore been determined. In Harvard College v. Amory, 9 Pick. 446, it was determined whether a sum received by the trustees of an estate was rightfully paid to the widow of a testator, instead of being reinvested by the trustees as a part of the capital of the trust funds. In Heard v. Eldredge, 109 Mass. 258; S. C., 12 Am. Rep. 687, upon the appeal by the life tenant from the decree of the probate court allowing an account by which a certain sum was treated as capital and not as the income of a trust fund, the decree of the probate court was affirmed. To the same effect