payer that the taxes are regarded as illegal | tional quantity be granted, and that a suitable and that suit will be instituted to compel the gauge to embrace the whole quantity (inclusive refunding of them. of 200 inches now leased) be prepared and The court also charged the jury that if they placed at the proper point, and that a lease be found for the plaintiff they might add interest.executed for such additional quantity of water This was not contested upon the argument, and power upon the usual terms, on payment of a we think it clearly correct. The ground for the bonus of $5 per inch for such additional quanrefusal to allow interest is the presumption tity of water power." that the government is always ready and will- The resolution was duly agreed to by the aping to pay its ordinary debts. Where an ille-pellee, and the officers of the company required gal tax has been collected, the citizen who has him to accept and agree to the terms of said paid it, and has been obliged to bring suit resolution in writing, in order that there might against the collector, is, we think, entitled to be no room for controversy thereafter. interest in the event of recovery, from the time The acceptance and agreement of the appelof the illegal exaction. lee was as follows:

The judgment of the Circuit Court is affirmed.

"Washington, May 21st, 1866.

I hereby agree to take and pay for the additional quantity of water requisite for my

THE CHESAPEAKE AND OHIO CANAL mill, according to the terms and conditions of

COMPANY, Appt.,

v.

GEORGE HILL, JR.

(See S. C. 15 Wall. 94-105.)

the resolution of the board of the Chesapeake
& Ohio Canal Company, passed on the 10th inst.
(Signed)
Geo. Hill, Jr."

June 1, 1866, the board passed another resolution as follows:

Intent of parties, rule for construction of contracts surrounding circumstances — grant "Ordered, That the engineer and general suto take water from canal-quantity of. perintendent of the canal be directed to ascertain, as soon †1. To ascertain the intent of the parties, is the as practicable, the additional fundamental rule in the construction of agree- quantity of water required at the mill of Geo. ments. When the substantial thing which they Hill, Jr., and that a suitable gauge for such adhave in view can be gathered from the whole in-ditional quantity, inclusive of 200 inches now strument, it will control mere formal provisions which are intended only as a means of attaining

the substance.

2. The state of things and surrounding circumstances in which an agreement is made, will be looked at as a means of throwing light upon its meaning, especially for the purpose of ascertaining what is its true subject-matter.

3. A grant of a right to draw from a canal so much water as will pass through an aperture of given size and given position in the side of the canal, is substantially a grant of a right to take a certain quantity of water in bulk or weight. What that quantity is, may be ascertained from the character and depth of the canal, the circumstances under which the water is to be drawn, and the state of things existing at the time the grant was made. 4. The grantee will be entitled to draw this quantity, even though it may be necessary to have the aperture enlarged, if it can be done without injury to the grantor.

The bill in this case was filed in the court below by the appellee, for an injunction restraining any interference with his use of water from the Chesapeake & Ohio Canal.

He had a contract (fully described in the opinion of the court) with the appellant, for the use of water from said canal. Finding the quantity obtained insufficient, he applied to the appellant for more water, and it thereupon passed the following resolution May 10, 1866, viz.:

"Resolved, That the engineer and general superintendent of the canal be directed to ascertain, as early as practicable, the quantity of water required at the mill of George Hill, Jr. and when ascertained, if the allowance of said quantity can be permitted without detriment to the navigation of the canal, that such addi

+Headnotes by Mr. Justice BRADLEY.

under lease, be placed at the proper point, and when such additional quantity be ascertained, that said Hill be required at once to pay the bonus of $5 per inch; otherwise that the water be reduced to the original 200 inches."

lee's foreman experimented to ascertain the The engineer of the company and the appelquantity of water necessary for the mill. They claimed that the stream of water was received already, of the full width of the fore-bay, and that the only method of ascertaining the volume required was gradually to raise the slide until a sufficient quantity to propel the mill flowed through. This was done, and it was thus ascertained that, by this arrangement, the requisite quantity was as much as would flow through an aperture of 700 inches, or 500 inches more than the aperture originally agreed upon.

The officers of the company, at the next quarter day, required him to pay the bonus and a quarter's rent upon the additional 500 inches, which he refused to do. They were then about to shut off the water, when this bill was filed for an injunction. A temporary injunction was granted.

An order was made appointing W. R. Hutton, a special commissioner, to inquire and make report to this court upon the following questions, viz.:

1. What volume of water is ordinarily received into the fore-bay of complainant's mill when the same is in operation from the Chesapeake & Ohio Canal, and through how many quare inches of aperture?

2. What quantity of water is discharged from said mill in any given time, through its tailrace, and especially in comparison with other mills at Georgetown?

3. How many square inches of aperture situated at the distance of two feet from the bottom

NOTE.-Intent as an element in offer and accept.of the canal, and of the width of complainant's fore-bay, would furnish a flow of water equiva

anco-see note to Orr v. Brown, 16 C. C. A. 197.

lent in power and effect to the additional wa- seven hundred square inches, without loss of ter received by the complainant under the reso-power and effect. lutions of May and June, 1866, exhibited in this cause, over and above his original grant? 4. Also, to report upon any other matter calculated in his judgment to throw light upon the subject of this controversy.

His report was as follows:

To question 1. Twenty-three cubic feet of water per second, through an aperture of 1008 inches, the gate being entirely removed.

To question 2. Twenty-three cubic feet per second, besides a small quantity received from the Potomac Water Works, which could not be measured. The other mills discharge through their tail-races about six and two thirds cubic feet per second for each one hundred inches of aperture, varying somewhat with the circumstances of each mill.

To question 3. The question is indeterminate. It is first necessary to ascertain how much water was originally granted, and this is a matter of interpretation of the contract, and to be decided by the court.

1. Either the complainant is entitled to as much water as will pass through the aperture formed and situated as described, under any circumstances; or,

2. To only as much as will pass through it under the conditions of this particular case. Answers are given on both suppositions.

When water flows through an opening and discharges freely in the air a greater quantity passes than when it is impeded by a greater or less height of backwater.

Overshot wheels, as are most of those in the Georgetown mills, require the water to come in on them with a free fall and, therefore, when the gauge is placed at the wheels, the miller has the benefit of the whole head and fall from the canal to the river, and the canal loses no more water than it agrees to furnish. In the complainant's mill turbines are used, placed thirty feet lower than canal surface, and arranged to do their work under that head. Any diminution of head causes a loss of velocity and of power.

4. As information that may be useful, the whole quantity of water taken from the canal to run complainant's mill, at its ordinary capacity, is equal to three hundred forty-five square inches of aperture, as measured on the overshot wheel, if said aperture is made the full width of the complainants fore-bay, and three hundred fifty-two inches if made the width of the present gate in his fore-bay.

The final decree was that the injunction heretofore issued in this cause be and the same is hereby made perpetual for the period of complainant's lease as to so much of the water drawn from the canal of the defendants by the complainant as will pass through an aperture of seven hundred square inches into the forebay at present in use by said complainant, and so long as said complainant retains his present machinery and shall make no change therein, whereby the quantity of said water shall be increased; provided, that said complainant shall forthwith pay to said defendants the sum of $1,085 as a bonus upon two hundred seventeen additional square inches, and the sum of $1,688.72 as the arrears of rent due said defendants on four hundred seventeen square inches, to Dec. 31, last, and shall continue to pay said rent quarterly on said two hundred seventeen inches, according to the terms of his original lease.

Thereupon, the respondents took an appeal to this court.

Mr. Walter S. Cox for appellant: The error assigned in this decree is, that it makes an entirely new contract for the parties.

The theory of the original bill was, that the Canal Company had stipulated to furnish a certain quantity of water; that the plaintiff (appellee) was entitled to draw off from the canal two hundred inches of water, whereas, in consequence of loss by friction, the actual quantity received by him at the point where it begins to be useful, to wit, at the wheels of his mill, three hundred fifty or four hundred feet distant from the canal, was only one hundred eight inches.

As to the claim that the rents were to be proportioned to the quantity of water received, the lease expressly contradicts it, and the oral testimony also.

It is not possible, while his works are arranged as at present, for complainant to receive through any given aperture as much water as is received by an overshot wheel through the same. 1. If he is entitled to as much water as would The lease gives not so many inches of water, be received at the other mills in Georgetown but so much water as will pass through an through the same aperture. The quantity au- aperture of two hundred square inches. It is thorized by the resolutions of May and June re-obvious that the quantity that will pass through ferred to, is nine cubic feet per second, which will require an aperture, as described in the 3d interrogatory, of one hundred thirty-five square inches. But the whole quantity of twenty-three cubic feet will require an opening of three dred forty-five square inches.

such an aperture will vary with different conditions. In the amended bill, he admits that the new arrangement was merely an enlargement of his original grant, and that the rule of hun-measurement is the same as prescribed in the original contract. He simply claims that in as2. In case he is entitled to draw only so much certaining the quantity of water or the size of as will pass through an aperture of two hun aperture necessary, the company's officers ought dred square inches, in the particular circum- to have enlarged the aperture horizontally stances of his mill, then an aperture of two more than perpendicularly, on the principle hundred square inches will supply eleven cubic that the greater pressure at the lower depth feet at a very much diminished head, and the would have made a smaller number of additionadditional quantity of twelve cubic feet will re-al inches sufficient for a given work than would quire an opening of two hundred seventeen square inches; but, owing to the narrowness of the fore-bay and the necessity to keep up the head, the whole quantity required cannot be obtained through an opening less than about

have to be added perpendicularly.

And this, be it observed, is the sole answer given on the record, to the proof that the appellee was bound to pay according to the number of inches of aperture.

The answer to this pretension is complete. I per square inch for water drawn through an It was the appellee's own act that made the opening placed two feet from the canal bottom, mode of measurement adopted the only one or under a four-foot head. The rent is accordpracticable. The fore-bay was of his own con- ing to an assumed supply of water under a cerstruction. The appellee had made his fore-bay tain head, delivered at the canal bank; and conof solid stone, and in his lease stipulated that ceding that the water, when delivered, is at the it should not be enlarged without the written risk of the lessee and he must utilize it as best consent of the company. he can, still, the head under which the water is delivered is the main element in respect to rent, for the head fixes the quantity delivered. Is it not, then, absurd to say, that when a four-foothead is a uniform provision or term in such leases, it is according to the "usual terms" to charge at the same rate for water drawn under a less head, or under next to no head at all? If these conditions are borne in mind, the extension of the words "on the usual terms," beyond the terms of payment, only strengthens

Now, it is plain that the mode of measurement which he says ought to have been adopt ed, viz., by lateral instead of vertical extension of the aperture, could not have been adopted without enlarging the fore-bay, which he had no right to do, which he could not do without considerable expense, and without changing his machinery, which he never sought nor desired to do.

Mr. W. D. Davidge for appellee: The construction of the contract by the de- the construction of the court below. The leases cree was right.

had established a certain ratio between water In Nash v. Towne, 5 Wall. 689, 18 L. ed. 527, drawn on certain conditions and rent, and the this court says: "Courts, in the construction parties intended by the above word that this of contracts, look to the language employed, ratio should be extended to the new grant. As the subject-matter and the surrounding circum-water drawn under a four-foot head was paid stances. They are never shut out from the for at a certain ratio, so water drawn under a same light which the parties enjoyed when the lesser head should be paid for in the same ratio. contract was executed, and in that view they Of course the lessee will pay less per square are entitled to place themselves in the same inch in the latter case, for the simple reason situation as the parties who made the contract, that he receives less water. But the ratio or so as to view the circumstances as they viewed proportion of rent to water is maintained; and them, and to judge of the meaning of the words that, it is submitted, was the manifest design and of the correct application of the language of the parties. to the things described."

Again, it is laid down in Noonan v. Bradley, 9 Wall. 394, 19 L. ed. 757: "When an instrument is susceptible of two constructions, the one working injustice and the other consistent with the right of the case, that one should be favored which standeth with the right." It is submitted that these rules, applied to the present contract, will leave no shadow of doubt as to its proper construction.

Here is a miller, a water lessee, without water enough under his lease to turn his mill. He applies to his landlord for more, and it is agreed that he shall have the requisite quantity. So far there is no dispute. But the agreement goes on to provide:

1. That a suitable gauge to embrace the old and new grants shall be prepared and placed at the proper point; and 2. That a lease be executed for the additional quantity of water power on the usual terms; on payment of a bonus of $5 per inch for such additional quantity of water power.

The answer, however, to the whole argument is to be found in the fact that what the resolution granted and the lessee agreed to pay for, was water power. The leases had, in substance, established a fixed rent for water power. Water flowing under a certain head means water power. The rent of this water, however, had been fixed, and the same rent was to be paid for the new water power. This is what the contract declares on its face. But the claim of the appellant is to charge, irrespective of water power or benefit received.

The language of the resolution is to be taken most strongly against the party using it, contra proferentem, and so as to avoid wrong and injury. 2 Pars. Cont. 504.

There appears in the decree a clerical error. The rent which the lessee is required to pay is, it appears, for 217 inches, instead of 417 inches. In fact bonus and rent have been paid on the latter quantity, and the proper correction is agreed to.

Mr. Justice Bradley delivered the opinion of the court:

The bill in this case was filed by the appellee against the appellants, for an injunction to restrain them from interrupting the supply of water from their canal to his paper mill in Georgetown. A decree was rendered in the appellee's favor, and this appeal was brought to reverse it.

An ingenious argument made below is, however, repeated in this court. The conclusion of that argument is that the appellee, getting but 217 inches of water power according to the conditions of the canal lease, ought to pay the bonus and rent on 500 inches of water. Such a conclusion would seem, of itself, to dispose of the argument. The process by which the conclusion is reached is as follows: the resolution of May 10 calls for the execution of the lease The appellants are the proprietors of the "on the usual terms;" and, inasmuch as one of Chesapeake & Ohio Canal, which, at its termithe provisions in such leases is, that the lessee nus in Georgetown, is much higher than the is charged at the rate of $2.50 per square inch, Potomac River, furnishing by its surplus water according to the aperture; therefore, it follows a considerable water power. This power, the that here the appellee must be charged accord-appellants have for many years been in the ing to square inches, and not according to what he bargained for, water power.

It is conceded that the uniform rent is $2.50

habit of leasing out to the proprietors of various mills. The general form of lease used is that of a grant of the right for a certain term of years

at a certain rent and under certain restrictions, uses of navigation (which was declared to be to draw from the canal so much water as will the primary purpose of the canal) the supply pass through an aperture of specified size stat-to the lessee's mill might be diminished or ed in square inches, in an iron plate fixed in the stopped, as might be requisite for meeting the side of the canal. From this aperture the wa-deficiency. The lease contained other stipulater is carried, in a trunk or fore-bay, to the tions not necessary to be noticed.. premises of the lessee, and discharged upon his water-wheel. The rent usually charged has been $2.50 or $3 per annum for every square inch contained in the aperture agreed upon.

The large investment of capital made by the appellee in sole reliance on the water power which the lease secures, with the full knowledge which the appellants had of this reliance and In January, 1864, the appellee, proposing to intended investment,renders it necessary that we build a paper-mill to be run by water from the should look carefully to the substance of this eanal, procured from the appellants a lease by *agreement, of January, 1864, as contra- [*100 which they granted and agreed that he should distinguished from its mere form, in order that have full right for the term of twenty years we may give it a fair and just construction, and from the first of July, 1864 (with privilege of ascertain the substantial intent of the parties, renewal indefinitely), to draw off from the which is the fundamental rule in the construcChesapeake & Ohio Canal at Georgetown, to tion of all agreements. It is not to be prebe used at his property at the corner of Poto-sumed that they intended to provide for a cermac and Water streets (from the level between tain aperture in the canal without respect to the locks Nos. 4 and 5), so much water as would pass amount of water it would discharge and the through an aperture of two hundred square purpose which that water was to accomplish. inches in an iron plate not exceeding half an inch What the appellee sought was water power to in thickness, to be used solely for propelling drive the machinery of an expensive mill. The the machinery of a paper-mill and appurtenant appellants knew this to be his object, and the works, but on certain conditions,, viz.: the ap-thing leased or granted was intended to be, and erture was to be of such height and length in in fact was, water, as the means of creating the clear as to make just two hundred square such power. It was not only water, but a cerinches (which probably means that it was to be tain quantity of water, namely (in the words of rectangular); its lower edge not to be nearer to the lease): "so much water as will pass through canal bottom than two feet; it was to be plain an aperture of two hundred square inches," and square through the plate, with no attach- under certain conditions specified. The parties ment or contrivance to increase the quantity of clearly had in view a fixed quantity of water to water to be drawn, and to have a sliding gate be received in a given time. In ascertaining in front, so that the water power granted might their mutual rights under the lease, it is imbe totally or partially stopped, as the provisions portant to know how much this quantity was. of the contract might require. The fore-bay When we know that, we know the substance of or trunk for conducting the water through the the agreement. canal bank from the aperture was to be covered or bridged; and said fore-bay, aperture and gate were to be so constructed as not to interfere with the navigation of the canal or use of the tow-path and to be of good and substantial construction, so as not to occasion any leakage; and to be constructed at the cost of the lessee under the direction and superintendence, and subject to the approval of the proper officer of the company; and at like cost, and under like superintendence, to be altered from time to time as might be considered necessary by the company or its proper officers, to prevent or lessen the inconvenience to the navigation of the canal and use of the tow-path. It was also stipulated that the officers and servants of the company should at all times have free access to the appellee's premises, to examine and repair the embankments of the canal and the appellee's fixtures and works connected with drawing off the water, for the purpose of seeing whether the water was wasted by leakage, or whether more water was drawn off than was granted. The appellee agreed to pay for the use of the water leased, an annual rent of $500 for the first ten years, and $600 for the last ten; and it was made a condition, that if the rent should not be paid, or if the other stipulations should The amount of water which will be disnot be complied with, or if the lessee should charged through an aperture of a given size alter or enlarge the fore-bay or trunk or aper-will depend upon the form of the aperture, the ture, or apply the water to other uses, without head under which the water is drawn, and the the consent of the company, they might cut off freedom from obstruction with which it is perthe water until he should make amends or satis-mitted to flow away.

Now, in speaking of a certain quantity of water, we always have reference to its cubical contents, its bulk or weight. We mean so many gallons, or hogsheads, or cubic feet of water. We have no reference to surface or sectional measurement. A square foot, or a square inch of water, expresses no quantity at all. But when we speak of the quantity which will pass through a square foot, or square inch of aperture, in a certain time, then our words have meaning. The size and position of the aperture so carefully prescribed in the lease were intended merely as a means of measurement of the real thing granted, namely: that certain quantity of water per second, or per hour, which the parties had in mind, and about which they were dealing. If we can ascertain this, we can easily adjust the mutual rights of the parties. Can it be ascertained from the terms of the lease, aided by the light derived from the evidence in the cause? We think it can. And in making this inquiry we have a right to examine into the state of things existing at the time

and the circumstances in which the [*101 lease was made. This kind of evidence is especially pertinent when the inquiry is as to the subject-matter of the agreement.

faction. It was also agreed that if the water In this case the lessee is not restricted as to should at any time be found deficient for the the form of the aperture except, perhaps, that