FINCH, J.
The facts in this case have changed since it was last before us. Then it appeared that Brown had assigned his contract for the purchase of what is called the new mill lot to Smith, under whom the plaintiffs claim, and, therefore, that the deed of Hasbrouck to Smith was in fulfillment of that agreement, and the date of the sale to Smith was the date of the contract. Inasmuch as at that date the new mill was not in existence, and no water right was in any manner in use upon the lot, or appurtenant to it, the conclusion necessarily followed that such right did not pass by the deed to Smith, and the plaintiffs had failed to establish their claim. ( 47 N.Y. 3.)
Now, the proof of an assignment of this contract from Brown to Smith is omitted, and in addition it is shown that, prior to the conveyance of Hasbrouck to Smith, the contract in question was first assigned by Brown to Jonathan Hasbrouck, and then, the parties being dissatisfied with that arrangement, such assignment was canceled, and the contract thereupon extinguished, by an assignment from Brown to Jansen Hasbrouck, the vendor, who, being vested with the entire title, and freed from the equities of the contract, conveyed without reference to it, so that the date of the deed became the date of the sale, and the water-power, then in use for the mill, and visibly incident and appurtenant to it, passed by the deed to Smith.
The defendants, however, contend, and there is much that favors their position, that these new facts change only the form and not the substance of the transaction; that the deed was given in accordance with, and by reason of, Brown's equitable right; that the assignment of Brown to Hasbrouck, on its face, authorized the latter to convey to Smith; that the consideration in the deed was very nearly the contract price with its interest, and was totally unaffected by the large and valuable improvements put on the land by Brown; that the deed to Smith was in pursuance of an agreement between the two for the further security of the latter as a creditor of the former; that at the time of the conveyance nothing was said between vendor and vendee about the water-power; and that all the papers should be read together as constituting a single complete transaction.
In reply, the conceded fact of the assignment of the contract to Hasbrouck, and as a consequence its utter extinguishment, and the restoration of a full and unclouded title to him are pressed upon us. Why, if it was only meant that Hasbrouck should convey to Smith, as the assignee of Brown, was the ordinary mode of an assignment of the contract to the former, giving a right to a deed from Hasbrouck, departed from? Why, if the contract was to remain in force and retain vitality, adopt a process that legally annulled and destroyed it? The parties had the right to abandon the old contract. They did abandon it. They had the right to make a new arrangement. They did make it. The word "appurtenances" was not in the old contract. It is in the deed. The value of the mill lot, without the water right, is about $1,000; with the water right, $11,000. Would not Brown and Smith desire to secure it safely, so long as Hasbrouck was content?
These conflicting views were pressed upon us with great force and ability on each side, and with much more of detail than we need to repeat. The facts apparently admit of either construction, and the inquiry now presented is, which shall prevail?
It seems to us that the question which underlies the discussion is one of intent. If, notwithstanding the form of the transaction, the parties really intended nothing more than to carry out the old contract, then the sale must be referred back to the date of that, and the rule must be applied which governed our former decision. If, on the other hand, by the surrender of the contract to Hasbrouck, and his conveyance of the lot with the appurtenances, it was intended that the sale should bear that date, and the water-power pass as appurtenant a different result will be reached. ( Huttemeier v. Albro, 18 N.Y. 48; French v. Carhart, 1 id. 96.)
Now the referee has found as a fact in the case that "by the conveyance from Hasbrouck and wife to Smith, Hasbrouck intended to convey, and Smith believed he was receiving, a conveyance of the new mill lot and the water privilege and use of the reservoir, as the same were then and had been since the completion of the new mill in actual use in connection with it." If this finding is indeed a conclusion of fact, it would settle the question in this court; for, however debatable it might be, we could not at all say that it was unsupported by the evidence. In a case somewhat like this in one direction ( Curtis v. Ayrault, 47 N.Y. 81), we held that whether the vendee of the land contracted for it in reference to its condition relatively to the situation of the water and ditch at the time of the sale was a question of fact for the jury. In another case ( Voorhees v. Burchard, 55 N.Y. 104), while we ruled that the intent of one of the parties to a deed could not change its construction, yet the prevailing opinion quite plainly indicates that a finding by the referee of the mutual and concurring intent of both parties would go far to control the construction. And we affirm a judgment unless it appear that a rule of law has been violated, after assuming that the facts have been viewed in the most favorable light which the case will admit. ( Phelps v. McDonald, 26 N.Y. 82.) But whether regarded as a question of fact or of law, or of both, we are inclined to concur with the conclusion of the referee and of the General Term. The changed arrangement strongly indicated a change of purpose. The deed was phrased to pass appurtenances, while the contract was not. Hasbrouck was made in fact sole master of the situation, and could have confiscated all Brown's valuable improvements if he had so chosen. In all probability those improvements, which largely enhanced the value of the property, but were dependent upon a water-power to which Brown had no title, were put upon the land under some understanding with Hasbrouck, or at least with his tacit or inferred assent. It is difficult to believe that Brown would have built his mill to run by water, and freely spent his capital in that direction, and boldly utilized the reservoir without some sort of understanding. But in any event, Hasbrouck, as an honorable and just man, might very well feel, when he conveyed to Smith, that his power to ruin the property, and Brown also, by withholding the entire water right, was one that he ought not to exercise; and, having full legal liberty to act as he pleased, chose to recognize the moral or honorable duty which rested upon him, and so passed, and as the referee finds, intended to pass, the water-power as appurtenant to the land.
We feel, therefore, compelled to hold that the date of the delivery of the deed was the date of the sale, and that the water-power at that time existing as incident and necessary to the enjoyment of the mill lot passed to Smith and through him to the plaintiffs ( Lampman v. Milks, 21 N.Y. 505), unless certain other points raised by the defendants are well taken.
Founding their argument upon the language of the opinions in Nicholas v. Chamberlain (Cro. Jac. 121), cited by this court in its former decision, it is urged that something more than the mere unity of the legal title with the then present existence of its visible incidents is necessary to cause the appurtenances to pass by the deed, or to make them lawfully, and properly such: that in this case there must have been, at the date of Hasbrouck's deed to Smith, not only ownership in the grantor both of reservoir and lot, but also occupation, and use of them by him in connection with the water-power alleged to have been conveyed, and that no such occupation or use of the new mill lot with its incidents by Hasbrouck was proven. We do not think the case cited goes quite so far as claimed. The doctrine relied on was not essential to its decision, and certainly has not been recognized in our own reports. Closely examined, we think the case holds no more than this, that there must be knowledge by the owner of the existing incidents. "Not taking conusance of any such erection, nor using it," is the language of POPHAM, Chief Justice. Using the water-power would show knowledge of its existence as an incident of the property in the hands of the grantor. The same idea is indicated by our own rule that the incidents which pass as appurtenant must be "open and visible," from which fact the knowledge of their existence by the grantor is a natural inference. But such knowledge may be shown otherwise than by the grantor's actual use, and in this case most certainly existed. Indeed, the referee finds that "at the date of the deed to Smith the water privilege and reservoir were openly and visibly in use for the driving of the wheel of the new mill." It is true that this finding is qualified by an after finding, made upon defendant's request, that at this date Hasbrouck was not in the "actual" possession. But even the learned counsel for the appellants, in his strong and forcible argument, concedes that after Brown's surrender and cancellation of his contract, Hasbrouck was in the constructive possession of the property, so that the use of it, which the referee finds, was at least under the grantor and presumably by his authority. We do not, however, decide that actual use by the grantor of the incidents or appurtenances is essential to their passing by his deed. We prefer to adhere to our own authorities which have imposed no such condition.
It is further argued that under our own decisions, the appurtenances which pass must be such, and such only, as are "absolutely necessary to the enjoyment of the property conveyed," and that the mill in question having been fitted with steam-power for use when the water-supply was insufficient, it cannot be said that the use of the reservoir was absolutely necessary. The argument does not convince us. The full enjoyment of the property could not be had if the water-power was removed. One important force for driving its machinery would be cut off; and the water-power was, therefore, necessary to the enjoyment of the property. Indeed, it was so much so that the proof shows its value to be almost wholly dependent upon the right to use the water.
A large number of exceptions to the admission or rejection of evidence were taken on the trial. None of them were argued before us, and they do not require any special examination.
The judgment should be affirmed with costs.
All concur.
Judgment affirmed.
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