(70 N. H. 458)

STATE et al. SUNAPEE DAM CO. (Supreme Court of New Hampshire. Merrimack. March 15, 1901.)

WATERS AND WATER COURSES-PRIVATE USE OF PUBLIC WATERS-LEGISLATIVE AU

THORITY-INJUNCTION.

1. The legislature has authority to grant a private corporation the privilege of damming the outlet of a navigable lake so as to raise or lower the water level, even though the raising and lowering permitted interferes with the public rights of navigation and fishing.

2. Where a corporation was authorized by the legislature to erect a dam at the outlet of a lake, and draw down its waters to a certain point, such grant was a complete defense to a suit for an injunction to restrain the corporation from changing the water level of the lake, where it appeared that the water had at no time been drawn down to a point below that authorized.

3. Where a corporation, authorized to construct a dam at the outlet of a lake, agreed with a littoral proprietor as to the height to which the water should be raised, and for many years maintained the water at that point, but because of unusual and excessive rainfall during one season and the negligence or incompetence of the dam foreman it was so operated as to cause the water to rise above the stipulated point, there was such improbability of a recurrence of the injury that the littoral proprietors and others injured, while entitled to compensatory damages, were not entitled to an injunction restraining the corporation from making any change in the water level.

Original bill by the state and others against the Sunapee Dam Company for the ascertainment and enforcement of public and private rights in Sunapee Lake. Decree for respondent.

Sargent & Niles, Eastman & Hollis, George R. Brown, and Streeter, Walker & Hollis, for plaintiffs. Ira Colby and Albert S. Wait, for defendant.

BLODGETT, C. J. December 7, 1820, upon the petition of certain mill owners on Sugar river, which has its source in Sunapee Lake, one of the public waters of the state, the defendants were incorporated and made a body politic "to sink the outlet of said lake at the source of said Sugar river to the depth of ten feet below the low-water mark of said lake, and to erect and maintain a dam there with suitable gates and flumes to the height of said low-water mark, for the benefit of the mills and mill privileges aforesaid: provided said corporation shall make or tender reasonable, compensation for all damages which may accrue to individuals by the erection of said dam and works." The corporation was organized the following year, and soon after its organization built a dam at said outlet at a height which has remained unchanged, and by means of such dam has since controlled the outflow of the lake. The present proceeding is to restrain an alleged infringement of public and private rights in and to the waters of the lake through changes in the water level occasioned by the maintenance of the defendants' dam and works, and is instituted under

the general equity powers of the court, and particularly under section 3, c. 205, Pub. St., which provides that "any legal rights, public or private, infringed by a change in the water level of a natural lake or pond,

* may be ascertained and enforced in a constitutional manner on a bill in equity without prior ascertainment of the right by a suit at law; and rights of boating, fishing, and navigation may be enforced on a bill in equity brought by the attorney-general in the name of the state." The plaintiff the state of New Hampshire complains of an infringement of the public rights of navigation and fishing and of injury to its fish hatcheries. The plaintiff the Woodsum Steamboat Company complains of an infringement of the public right of navigation to its special damage, and of its rights as a littoral proprietor. The other plaintiffs are littoral proprietors upon the lake, and complain of an infringement of their rights as such. It being found that the defendants have not drawn down the waters of the lake to a point below that authorized by their charter without restrictions as to times or seasons when it might be done, all the plaintiffs are apparently remediless upon this branch of their case, if the legislature had authority to make the grant. While the question thus presented is both interesting and important, as well as one upon which there is more or less diversity of judicial opinion in different jurisdictions, extended discussion of it is not now deemed to be necessary in view of the recent decisions in Connecticut River Lumber Co. v. Olcott Falls Co., 65 N. H. 290, 21 Atl. 1090, 13 L. R. A. 826, and Manufacturing Co. v. Robertson, 66 N. H. 1, 25 Atl. 718, 18 L. R. A. 679, in both of which public, private, and chartered rights were exhaustively argued by counsel and carefully considered by the court. An examination of those cases will show that the doctrine enunciated in both of them, so far as it is directly applicable to the present inquiry, is that while in this state lakes, large natural ponds, and navigable rivers are owned by the people, and held in trust by the state in its sovereign capacity for their use and benefit, such use and benefit is not limited to navigation and fishery, but includes all useful and lawful purposes; and that the beneficiaries and the trustee, acting as a body politic and trustee, can authorize by their legislative agents even an extinguishment of the trust and an abandonment of the trust estate. Connecticut River Lumber Co. v. Olcott Falls Co., 65 N. H. 378, 384-388, 21 Atl. 1091, 1093, 1095, 13 L. R. A. 831, 834, 835, 836; Manufacturing Co. v. Robertson, 66 N. H. 6-8, 12, 19, 22, 25 Atl. 720, 721, 723, 727, 728, 18 L. R. A. 683, 684, 686, 689, 691. These decisions, in addition to the high source from which one of them came, commend themselves to our judgment by their intrinsic soundness; and we are accordingly constrained to hold that the defendants' char

ter was such a one as the legislature had the power to grant. If this be so, our duty is simply to construe the charter, not to rejudge it. It is for the legislature alone, "as the sole depository of the sovereignty of the state, * * to judge of the public interests and welfare in the disposition and use of its public waters." As was well said by Mr. Justice Story in Charles River Bridge v. Warren Bridge, 11 Pet. 420, 605, 9 L. Ed. 773: "Whether the grant of a franchise is or is not, on the whole, promotive of public interests, is a question of fact and judgment, upon which different minds may entertain different opinions. It is not to be judicially assumed to be injurious, and then the grant to be reasoned down. It is a matter exclusively confided to the sober consideration of the legislature, which is invested with full discretion, and possesses ample means to decide it. For myself, meaning to speak with all due deference for others, I know of no power or authority confided to the judicial department to rejudge the decisions of the legislature upon such a subject. It has an exclusive right to make the grant, and to decide whether it be or be not for the public interests. It is to be presumed, if the grant is made, that it is made from a high sense of public duty, to promote the public welfare, and to establish the public prosperity." Such being the respective rights of the legislature and the court, the defendants' charter can be annulled or modified, if at all, not by a court of equity, but only by the authority by which it was granted. It follows from these conclusions that the mere lowering of the lake by the defendants to the charter point can afford the state and public no well-founded ground of complaint, if done in a reasonable manner; and, a fortiori, much less can the lowering of it only about 22 feet, which is the extent of the defendants' acts in that regard, so far as appears. And certainly the littoral proprietors, as such, can have no better ground of complaint, because, as is well understood, in public waters there is no private ownership in the soil below ordinary high-water mark. The primary ground of their grievance, and the one from which all the others follow, is the uncovering of a portion of the land underlying the water between the high and low-water marks. "But," as is said by the defendants' counsel, "the state, and not these individual plaintiffs, is the owner of the lake and of the soil to high-water mark, and had a right to confer its use and enjoyment upon its grantee. If this affords some inconvenience to the plaintiffs in reaching the water, or lessens the enjoyment of residences upon or near the lake shores, there is no legal ground of complaint; it is purely damnum absque injuria." See Fay v. Aqueduct Co., 111 Mass. 27, 28, 29, and authorities cited. But, while the plaintiffs have no well-founded ground of complaint occasioned merely by the lowering of the lake within

So.

the charter limit, the defendants, notwithstanding their charter, were bound to exercise the right so obtained in a reasonable manner, not only as to the plaintiffs, but as to all others having rightful interests upon the shores or in the waters of the lake, and are justly subject to liability for failure to do Nevertheless, we think the rights expressly conferred by the charter must be regarded as paramount to, and as necessarily impairing to some extent, such other interests; and therefore, while the defendants' management of their dam in respect of low water in 1880 or 1881 may properly have been open to the adverse criticism bestowed upon it by the referee, still, in view of the limited extent to which the defendants have exercised their right to lower the lake, and their 60 years' user of it without objection, and in the absence of any finding that the water has ever been drawn below what was necessary for the beneficial operation of the machinery on the river, or that the defendants have made an intentional misuse of the water, or have intended in any way to cause unnecessary annoyance and damage to the plaintiffs, we are of opinion that no case is established by the reported facts which entitles the plaintiffs, or any of them, to equitable relief. In respect to the raising of the water to an unusual height, another and quite a different case is presented. The defendants' charter authorizes the erection of a dam to low-water mark only, whereas the height to which they originally constructed and have since maintained it is the natural high-water mark; or, in other words, two feet above the point authorized by the charter. This maintenance, however, so far as appears, caused no injury to the shore owners or to the public up to 1851, when, as is found by the referee, in order to enable them to draw the water to a lower depth, the defendants sunk the channel of the river below the dam to the depth of 22 feet or more, reconstructed the dam, removed obstacles to the flow of the water from the channel above it, and by means of these changes and the addition of flashboards to the dam created a higher level of the water, which caused injury to the shore owners upon the lake by the flowage of their lands. Some of them subsequently brought suits therefor, and received compensation through an adjustment made with them by the defendants involving the "acknowledgment of liability, determination, and satisfaction of damages." One of the suits so adjusted was that of John Pike, which, in addition to the payment of damages, resulted in an agreement, made in 1855 between him and the defendants, that the water should not thereafter be raised to a higher level than is now indicated by the figures 10 upon a gauge at the dam. Upon the reasonable construction which the Pike agreement is entitled to receive, no violation of it by the defendants appears until 1897. During the spring and summer of that year,

especially in May and June, it is found by the referee that "an exceptionally large quantity of rain fell, and the waters of Lake Sunapee were extremely high, and before or during this period of high water the level of the lake was further raised by putting additional plank upon the dam." He further finds that "the evidence did not clearly indicate by whom such additional plank were placed upon the dam, but Mr. Abbott, who at the time had charge of the dam, knew they were on, and permitted them to remain until June 12th, thus continuing the level of the water to an unusual height for an unreasonable length of time. The directors of the defendant corporation did not direct Mr. Abbott to put those additional plank upon the dam, or to continue them upon it; and upon the complaint of parties whose property and rights were affected by the high water, the directors, on June 12, 1897, ordered Mr. Abbott to draw off and lower the water." It is further found that: "Although the high water of May and June, 1897, rendered it much more difficult to regulate the water, and secure an even and uniform flow or level, thereby subserving the interests of the shore owners and those interested in navigation, as well as the proprietors of mill privileges on Sugar river, yet, had one of the directors, at least, given his personal attention to it, or had the dam been managed by Mr. Abbott as it had been by Mr. Flanders [the former manager], much, if not all, of the injury complained of would have been either avoided or diminished;" and that "the effect of the management of the dam was to raise the water of the lake to such an extent as to submerge the wharves of the steamboats as well as those of others, to inJure and destroy some of those wharves, flood some cellars upon the shores, and wash and injure beaches upon the properties, respectively, of the plaintiffs Quackenbos and Hay, and injuriously affect the state's fish hatchery on the shore of the lake." And, in addition to the foregoing findings, the referee also finds there was no evidence of any claim by the defendants, since 1855, of a right to raise the water above the point agreed upon with Pike, and that during May and until June 12, 1897, "the use of the waters of the lake by the defendant corporation was not a reasonable use of such waters." Whatever the legal rights of the defendants may be in Sunapee Lake, they are, as before stated, bound to exercise them in a reasonable manner, for in this state the law of public waters is what justice and reason require (Manufacturing Co. v. Robertson, 66 N. H. 22, 25 Atl. 728, 18 L. R. A. 691); and, while the foregoing findings leave no room for doubt that the right to an assessment of compensatory damages in favor of those of the plaintiffs who may be legally entitled thereto is established in the particular instance referred to, yet, in view of the eircumstances attending it, as detailed by the

referee, the improbability of its repetition, and the unquestioned ability of the defendants to respond in damages, we do not think a case is made which at this time calls for the restraining power of equity by way of injunction. Case discharged.

PIKE, J., did not sit. The others concurred.

(70 N. H. 602)

ROSS et al. v. LEAVITT et al. (Supreme Court of New Hampshire. Coos. March 15, 1901.) MORTGAGES FORECLOSURE

INTO

-ENTRY POSSESSION-WAIVER OF SAME-RIGHT TO REDEEM-ESTOPPEL. 1. Gen. Laws, c. 136, § 14, cl. 2, provides that a mortgage may be foreclosed by entry and possession for one year. A mortgagee, who entered into possession for the purpose of foreclosing, accepted, eight months thereafter, a payment of part of the mortgage debt from the mortgagor's co-tenant, and agreed to quitclaim his interest acquired by the foreclosure proceedings, and to account for all timber taken from the land during his occupancy, and until the further stipulated payments were made. Held, that the agreement was not a sale of the land, the title to which was to be acquired by completion of the foreclosure, but was a transfer of the mortgagee's present interest, and hence the payment operated as a waiver of the foreclosing possession, so as to permit a junior mortgagee to redeem.

2. Where the right to redeem has not been cut off by foreclosure, no laches or delay short of the statutes of limitations can defeat the

same.

3. Where a mortgagee in possession for the purpose of foreclosing conveyed his interest and his grantees made conveyances which were recorded subsequently to complainants' grantor's mortgage, the recording did not operate as constructive notice to the complainants' grantor, and hence complainants will not be estopped from redeeming, the mortgage not having been foreclosed, and the publication of the notice of possession for foreclosure being only constructive notice of the commencement, and not the accomplishment, of such proceedings.

Original bill by one Ross and others against one Leavitt and others to redeem from a mortgage. Heard on the referee's report. Plaintiffs considered entitled to redeem, and case discharged.

The plaintiffs claimed to redeem as owners of a mortgage made by Dudley Leavitt to Jacob Benton of a one-third interest in the township of Odell, excepting certain lands therein sold to one Thompson and one Jackson, and also from a mortgage made by Leavitt to one Holyoke of the whole township, which antedated the plaintiffs' mortgage. The main question was whether Holyoke's mortgage was foreclosed by him by peaceable entry and possession for one year. Whether there was such a foreclosure was submitted as a question of law by the referee, at the request of the parties, upon facts found which appear in the opinion.

George H. Bingham, Chamberlin & Rich, and Henry C. Ide, for plaintiffs. Drew, Jor

PARSONS, J. The plaintiffs, as mortgagees of Leavitt's one-third interest in the land, had the right to redeem from the prior mortgage under which the defendants claim. Moore v. Beasom, 44 N. H. 215; Thompson v. Paris, 63 N. H. 421, 425. They can now redeem unless such right has been destroyed since their mortgage title was acquired from Leavitt. The defendant the Weston Lumber Company claims the premises in fee by sundry conveyances resting upon a quitclaim deed from Holyoke, the owner of the mortgage from which the plaintiffs seek to redeem, to the defendant Libby, dated August 20, 1886, in which the estate conveyed is described by Holyoke as "all right, title, and interest in and to" the premises embraced in the mortgage, "intending hereby to convey all the interest which" Holyoke "acquired by said mortgage, and including all rights and interest acquired by proceedings to foreclose the same, instituted or commenced on the 13th day of May, A. D. 1885; said mortgage being hereby assigned and transferred to the said Libbys, together with the notes secured thereby, so far as the amounts thereof remain due and unpaid." It is not found that in making this conveyance the parties intended to open the foreclosure if one had been made. The legal purpose and effect of the deed was to transfer to the Libbys such title as Holyoke had. The Libbys, as grantors of the Weston Lumber Company, the present owner, did not obtain title in fee unless there was a valid foreclosure of the Holyoke mortgage. Holyoke, at that time the owner of the mortgage, entered upon the mortgaged premises on May 30, 1885, for the purpose of foreclosure by taking and maintaining peaceable possession for condition broken for the space of one year. Gen. Laws, c. 136, § 14, cl. 2. At this time the state of the title was as follows: Holyoke held a mortgage from Leavitt, dated April 7, 1880, covering the whole township. Sumner Thompson owned 10,000 acres in it. Andrew Jackson owned Columbia Gore, also part of the township. Of the remainder, one-third was owned by Leavitt and twothirds by the Libbys, in common and undivided. Thompson, Jackson, and the Libbys held by conveyances from Leavitt of later date than the Holyoke mortgage. Jacob Benton had a mortgage from Leavitt, now held by the plaintiffs, of a common third of the township, excepting the lands sold Thompson and Jackson, which was dated November 13, 1883. Assuming that the entry made and the possession taken and retained was otherwise sufficient to foreclose the mortgage upon the land owned in common by Leavitt and the Libbys, we think Holyoke's subsequent action and purpose during the year, as found by the referee, inconsistent with an intention to hold the land for that purpose.

abandonment of the foreclosing possession, or a waiver after its completion, are questions of fact determinable, in the absence of express evidence, by proof of acts or purposes on the part of the mortgagee inconsistent with a purpose to complete or insist upon the foreclosure. Couch v. Stevens, 37 N. H. 169; 2 Jones, Mortg. §§ 1265, 1268, 1270. The referee, at the request of the parties, has not found the fact, and the case would of necessity be recommitted to him, unless some facts are found which, as matter of law, are inconsistent with the existence of a valid foreclosure. It is well settled that the acceptance by the mortgagee of payment in whole or in part of the mortgage debt is a waiver of any foreclosure, complete or in process, because such acceptance is inconsistent with an intention to rely upon the security for payment. The mortgagee cannot have both the land and the debt. Scott v. Childs, 64 N. H. 566, 568, 15 Atl. 206; Moore v. Beasom, 44 N. H. 215; Gould v. White, 26 N. H. 178, 190; McNeil v. Call, 19 N. H. 403, 414, 416, 51 Am. Dec. 188; Deming v. Comings, 11 N. H. 474, 483; Batchelder v. Robinson, 6 N. H. 12. February 23, 1886, one of the Libbys, with knowledge of the foreclosure proceedings commenced May 30, 1885, paid to the mortgagee upon the mortgage debt $7,041.91. The acceptance of this sum, considered merely as a payment, operated as a waiver or relinquishment of the foreclosure proceedings as to the Libbys, who made the payment, as to Leavitt, who was tenant in common with them, and as to Benton, Leavitt's mortgagee. All the payments that had been made on the Holyoke mortgage were made from "stumpage," and the payment of February 23, 1886, was made from this account. It is not distinctly stated, but we infer, from other statements in the report and papers referred to, that this means that permits were given various persons to cut lumber in the township upon payment of a fixed price per 1,000 feet, which payments were applied on the mortgage debt, so that all that had been applied in reduction of the mortgage debt had come out of the property. It does not appear whether this stumpage came from that portion of the township covered by Benton's mortgage. If it did, it was as much a payment by Benton as by the Libbys, as it came from this security. The force of this receipt of payment as a waiver of foreclosure is claimed to have been nullified by the fact that it was made in pursuance of an oral agreement, which was reduced to writing April 26th, which both parties understood in February would be made, and in contemplation of which the payment was made. The most favorable view that can be taken of this explanation of the payment of February 23d is to consider the written agreement as if executed on that date, when it was made orally. Upon this agreement is founded the deed of August 20th, un

der which the Weston Lumber Company now claims to own the fee. The mortgage having been reduced to $16,000, Holyoke agreed "to sell and convey, quitclaim and assign, to said Libbys, their heirs and assigns, all his right, title, and interest in and to" the mortgaged premises "by appropriate deeds of quitclaim or assignment, including all rights acquired by said foreclosure proceedings: provided they, the said Libbys, their heirs or assigns, shall pay him, the said Holyoke, the sum of sixteen thousand dollars, with interest annually, to be compounded if not paid promptly, as follows: Four thousand dollars on or before the first day of June, 1887, and four thousand dollars each year from and after that date until the whole sum and interest is fully paid. Said Libbys and their heirs to have the right to pay the whole or any part of said sums larger than the sums so specified at any time earlier than aforesaid, and no forfeiture is to be incurred by any failure to pay any of said sums at maturity: provided, the same be paid within thirty days after such maturity, with interest. * * And the said Libbys, in consideration of the premises, do hereby agree to become purchasers of said property on the terms aforesaid, and to pay therefor the sum specified at the times and on the terms and conditions herein before set forth." It is found that the primary intention on the part of the Libbys was to extend the time of redeeming said mortgage, and of Holyoke to reduce his indebtedness, and continue the balance of his claim at interest. This agreement was reduced to writing April 26, 1886. It exactly carried out the intention of the parties as found. It extended the time of redemption, waiving the effect of the payments made, from May 30, 1886, for the last $4,000 of the debt, as late as July 1, 1890, and gave Holyoke a chance to keep a portion of his claim on interest to that time. The agreement, though reduced to writing and signed April 26th (more than a month before the year of foreclosure expired on May 30th), recites that the mortgage had been foreclosed. This statement was untrue. The transaction, therefore, was not a sale of the land, but was an agreement for the transfer of Holyoke's interest, whatever it might be, and provides for an assignment as well as a quitclaim deed. If the transaction were merely a payment as against Leavitt and Benton, the mortgage would be upheld for the protection of the Libbys, who paid; but the defendants claim more than this,-that the right of redemption has been extinguished. The agreement at least extended the time of payment in accordance with its terms. Within that time it was performed by the Libbys, and the interest of Holyoke transferred to them. The question, therefore, is, what was the character of Holyoke's

title? Had he perfected his foreclosure? It is clear that he had not. He did not hold the possession taken for condition broken, for one year, for the purpose of foreclosure. Although there was no physical interruption of the constructive possession of the land acquired by the entry, his holding after the payment and agreement of February 23d was not under the foreclosure, but under the agreement. Under it he agreed to account for all stumpage for logs which he should cut himself or permit others to cut at an agreed rate per 1,000, upon the balance of the indebtedness. Such an agreement, made before the completion of the foreclosure, was an agreement to hold the land for payment of the debt from the profits, and not to hold it for foreclosure. Whatever reduction of the debt should be made from the land of which Benton had a mortgage would be as much a payment by him as by the Libbys. The agreement provides for a continuance of the course by which former payments were made. In substance, Holyoke agreed, instead of holding the land for foreclosure, to hold it for the purpose of taking payment out of it. It does not appear, as above noted, whether the stumpage paid came from the land covered by Benton's mortgage, or from the Thompson and Jackson tracts; but the agreement made no distinction. Under it the. whole debt could be paid from Benton's security. An agreement to hold the land for such purpose is inconsistent with a holding for foreclosure, and, being entered into prior to the expiration of the year, prevented its completion. As the right to redeem is not cut off by foreclosure, pó laches or delay in bringing the application short of the period of the statute of limitations can defeat it. There is no estoppel. The publication of the notice was constructive notice to Benton of commencement of the foreclosure. Howard v. Handy, 35 N. H. 315. It was not notice of the continuance of the possession for the 11 months thereafter necessary to complete the foreclosure. It is not found that he had any knowledge of the conveyances to the Libbys, Harold Weston, and the Weston Lumber Company. The record of these conveyances subsequent to the date and record of his mortgage was not even constructive notice to him. Bates v. Norcross, 14 Pick. 224, 231. The Weston Lumber Company had notice from the record that its title depended upon a foreclosure which was invalid unless the necessary possession had been held for the statutory period. This fact was not shown by the record, but was open for determination whenever controversy should arise. Bartlett v. Sanborn, 64 N. H. 70, 6 Atl. 486; Ray v. Scripture, 67 N. H. 260, 29 Atl. 454. The conclusion is that the plaintiffs are entitled to redeem.

Case discharged. All concur.