LUDLOW'S HEIRS v. KIDD, ET AL.

When the legal title is fraudulently obtained against a better equity and conveyed to an innocent purchaser without notice, the complainants are entitled to a decree for the value against him who thus obtained by fraud the legal title.

This cause was adjourned here for final decision, from the county of Hamilton. It is the same cause reported in vol. 2, p. 372, and vol. 3, p. 541, and now came up for final decision upon the merits of the original equity of the complainants. The facts are briefly these: In the month of January, 1789, the town of Cincinnati was laid out, by Matthias Denman, Robert Patterson, and Israel Ludlow. Afterwards Denman and Patterson sold out to Joel Williams and Samuel Freeman. John Cleves Symmes, was the original grantee of the government, for a large tract of land between the great and little Miami rivers: the patent having been issued to him, in trust for himself and his associates, in the month of September, 1794. The proprietors of the town of Cincinnati agreed that the title should remain with Symmes, who should make deeds for the lots to the purchasers, upon the certificate of any two of the proprietors. At the original laying out of the town, the proprietors cach selected a lot for themselves, which was not put into market. The complainants claimed that the lot in controversy was selected by their ancestor, who took possession, cleared off the timber, and enclosed it with a fence, and cultivated it.

John Kidd, under whom the defendants claim, in the month of July, 1799, rented the lot of Ludlow, and took a written lease for the term of eight years, and entered into possession under that lease, as Ludlow's tenant. In August, 1799, J. C. Symmes conveyed the lot to his nephew, Celadon Symmes, without any certificate from the proprietors directing such conveyances. In 1804, Ludlow deceased. Celadon Symmes conveyed the lot to Joel Williams, who was then the owner of Freeman's interest, in the town property. And, before the expiration of Ludlow's lease, Williams conveyed it to Kidd, who, at the expiration of his lease, retained possession upon his deed. The bill was originally brought against Williams and Kidd, to obtain from them the legal title, and in 1817, was dismissed upon a final hearing.

After this dismissal, Kidd sold part of the property, in fee, and leased a part of it, for ninety-nine years, renewable forever, reserving an annual rent. Af. terwards Kidd made his will, and directed that his executors expend the rents reserved, for the education of poor children. For a time the executors received and so applied the rents, and, at length, transferred their interest and trust to the Cincinnati College. The Bank of the United States became the owners of the lease, and, in this condition of things, the bill of review was filed. Upon the service of the process, on the bill of review, the bank ceased to pay the rents. The Court, having on the bill of review, reversed the decree of dismissal, the purchasers under Kidd, put in the plea that they were innocent purchasers, without notice, and this plea was ruled in their favor. The rents reserved, Kidd's lease, and the value of the lot, as against Kidd's estate, were all at was left for the complainants to obtain by a final decree, in their favor.

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This cause now came before the Court, upon questions of fact and law, involving the superior equity, as between the heirs of Ludlow, claiming under him, and the representatives of Kidd claiming under Symmes. The Court decided the facts to be in favor of the complainants, but considered it of no utility to report the evidence, so as to make the grounds of decision intelligible. The following decree was rendered in the cause:

"This day came the parties by their counsel, and the bill, answer, and exhibits being read, and understood, and the arguments of counsel thereon heard, the Court are of opinion that the complainants are in equity well entitled, as against the devisees of John Kidd, to the possession and legal title to the lot numbered four hundred and one, in the bill mentioned; and it having heretofore been adjudged and decreed in this cause, that the whole of said lot, except the annual rents of one thousand dollars per annum, reserved by John Kidd, upon his lease to John Smith and David Loring, for ninety-nine years, renewable forever, dated the 18th of August, 1818, of a part of said lot, had passed into the hands of innocent purchasers for a valuable consideration without notice, and, therefore, could not be affected by the equity of the complainants, the court can only extend relief to the complainants, as against the said John Kidd, and as against his devisees of the said rent reserved.

The Court do, therefore, order, adjudge, and decree, that the Cincinnati college, by a proper deed of conveyance under their corporate seal, assign and transfer to the complainants, all the right, title, and interest, they may have ac. quired in and to the lease from the said John Kidd, deceased, to David Loring and John Smith, and to the rents thereon reserved; and that the said Joshua L. Wilson and Oliver M. Spencer, executors and trustees of the said John Kidd, deceased, by a proper deed, in writing, release to the complainants all the right, title, and interest that may remain in them, to the lease aforesaid, and the rents thereon and thereby reserved, both said conveyances to be made and executed on or before the first day of February, 1830, and in failure thereof, then that this decree fully invest the said complainants with all the right, title and interest of the said Cincinnati college, and of the said Joshua L. Wilson and Oliver M. Spencer, as executors and trustees of the said John Kidd, deceased, in and to the said lease and rents thereon reserved: and, in respect to the annual rents of one thousand dollars per annum, reserved upon said lease, which have accrued since the emanation of the process in this case, upon the bill of review and supplemental bill, to wit: since the first day of April, 1825, the Court are of opinion that the complainants are entitled to a decree for the same, and it appearing to the satisfaction of the Court that the said rents remain in the hands of the defendants, the President, Directors, and Company of the Bank of the United States, the Court do award, order, and decree, that the President, Directors and Company of the Bank of the United States account for, and pay over to the complainants the whole amount of the one thousand dollars per annum of annual rents, which have accrued since the first day of April, 1825, until the pronouncing of this decree.

And it further appearing to the court, that, at the time of filing the original bill in this case, to wit: on the 15th day of March, 1821, the said lot was improved and yielding rents, the court are of opinion that the complainants, as against the estate of the said John Kidd, and his executors, representing that estate, are entitled to an account for, and payment of the rents and profits justly

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accruing on said lot, deducting therefrom all proper charges for taxes paid, and improvements made. It is therefore decreed, that Samuel F. Hunt be, and he is hereby, appointed commissioner to take and state an account of all such rents nnd profits, from the 15th of March, 1821 to the time of taking such account, crediting upon said account the annual sum of one thousand dollars, from the first day of April, eighteen hundred and twenty five, already charged by this decree; said account to be taken upon equitable principles, and report thereof made to the next term of the Supreme Court in Hamilton county. The Court are further of opinion, that the complainants, as against the estate of John Kidd, are entitled to the present value of the said lot of ground, number four hundred and one, in the bill mentioned, except for the portion thereof which produces the annual rent of one thousand dollars per annum. is, therefore, ordered that the said commissioner estimate the present value of the said lot, number four hundred and one, deducting therefrom such part as produces the annual rent aforesaid, and report the same to the Supreme Court of Hamilton county, at their next term. As to the defendants, John Williams, Thomas Williams, Benjamin Williams, Joel Williams, and Eleanor Williams, the bill is dismissed. And the Court do award, order, and decree, that the complainants recover of the executors of John Kidd, deceased, to be levied upon his goods and chattels in their hands to be administered, their costs and charges in the prosecution of this suit expended; and it is ordered that the clerk of the Supreme Court for Franklin county send a certified copy of this decree to the clerk of the Supreme Court of Hamilton county, who is directed to enter the same on the Journal of the Court.

Garrard, for complainant. Fox, for defendant.

DECISIONS IN BANK.

JANUARY, 1831.

COOPER, ET AL. v. WILLIAMS.

The powers of the Canal Commissioners in controlling the waters of Mad river for canal purposes, and in selling water privileges.

This was a suit in Chancery to enjoin the defendant, one of the acting Canal Commissioners, from selling certain water privileges created by the location of the canal at Dayton, and was reserved from the county of Montgomery. The bill alledged, that the ancestor of the complainants was the owner of a large real estate in and adjoining the town of Dayton, that this real estate was so situated, as to give him the entire control of valuable water powers, by taking the water from Mad River, a mile or more above its mouth, and conducting it through his lands by races, and then discharging it into the Great Miami River either east of and above the town, or south of and below the town of Dayton. That in his life time he erected divers large and valuable mills, and in various other modes appropriated and used these water privileges; and to prevent future col.

lisions, he reserved to himself, his heirs, &c. the right of conducting water though most of the out-lots and lands sold by him, lying west of the road lead. ing from Dayton to Waynesville, and south of the town of Dayton. That by his last will and testament he directed his executors to sell certain out-lots and lands for the payment of his debts, but reserving the same privilege of conducting water through them, and that the complainants, his children and residuary legatees, are entitled to said real estate, with all water privileges, &c. That in 1827 the Board of Canal Commissioners located the canal, a basin and feeder, at Dayton. The canal was located on the east side of Dayton to Main Cross street; the basin from Main Cross street to First street; and the feeder was taken from Mad River, above the lands of the complainants, and upon the lands of James Findlay; and after passing southwardly and mostly through the lands of the complainants, discharged itself into the Main Canal a short distance below the saw-mill erected by the ancestor of the complainants. The canal, basin and feeder, were completed in 1828, agreeably to this location, and the bill avers that the feeder conveys an ample supply of water to the Main Canal for the purpose of navigation.

The bill further alleges, that at the time the canal, basin and feeder were located, the Canal Commissioners agreed that a cut should be made from the head race of the complainants' saw-mill to the basin, at or near its head, and the water thus turned, might be used by the complainants for the purpose of propelling machinery; that this agreement has been carried into effect on the part of the complainants, and the cut made and privilege leased to one Richards, who is erecting a valuable cotton factory upon the cut. It is also charged, that an agreement was made with the Canal Commissioners to raise the complainants' saw-mill wheel, to save the expense of a culvert, which has also been complied with by the complainants.

It is further alleged, that the complainants, without materially injuring their water privileges, can furnish a constant and ample supply of water for the canal and that the Commissioners by their dam across Mad River can always control a sufficient quantity of water by the feeder as located and finished. The complainants also charge, that the defendant, in conjunction with others, and for private speculation, caused a new feeder and basin to be excavated; and that the defendant is about to divert the water from the old feeder to create a water power, and to sell the same for the benefit of the state, to the great detriment of the complainants. It is also alleged, that a much greater quantity of water is taken from Mad River, by the feeder, than is necessary to supply the canal, and thereby the property and water works of the complainants are essentially injured.

The bill prays for an injunction to prohibit the diversion of water from the old feeder, and the sale of a water power which would be created by such diversion; and also to prevent more water, than is necessary to supply the canal, from being taken into the feeder.

The defendant, in his answer, admits the location of the canal, basin and feeder at Dayton, as set forth in the bill, and that the dam across Mad river will amply supply the canal through the feeder. He denies that any contract was ever made by him or any other of the canal commissioners, that a cut should be made from the head race of the saw-mill to the basin; but says that

at the time the basin was located, an objection was made by the guardians of the complainants and by others, that so large a body of water might endanger the health of the neighborhood, unless a current should be let into and pass through it; to this objection it was replied, that such an evil might be avoided by making a cut and introducing a small wheel for light machinery. In this way, and to obviate said objection, and not to confer any peculiar benefit upon the complainants, the officers of the state permitted said cut to be made. Defendant admits, that the complainants raised the saw-mill wheel twelve or eighteen inches, but denies that any agreement was entered into by which the state are bound to permit the water to pass through the mills into the canal, and alleges that the deposits of saw-dust, &c. in the canal, below the mill, have induced a belief, that it may be necessary to abandon the present mode of admitting water from the mill. The defendant is unable to say whether the canal can be supplied by water from the mills or races of the complainants, but alleges that it has been determined by the proper officers under the law, that for obvious reasons, it is not prudent to rely upon private individuals for a supply of water. He is also unable to say whether the complainants have been injured by withdrawing from Mad river the water necessary for the canal, but believes, with ecomomy, the complainants would have sufficient water for their mills, &c., which were erected at the time of the commencement of this suit.

The defendant denies that he ever intended to change the location of the old feeder, or establish a new one, or that he ever authorized the excavation of a feeder to connect said basin with the canal, or established another basin or race, but alleges that said basin and race are the works of individuals, and managed at their own will and discretion.

The defendant admits, that he was about to sell, for the benefit of the state, about two thousand cubic feet per minute, of the water passing through the feeder, to be used for hydraulic purposes, and to be returned into the canal through the basin, race and side cut, made by said individuals, leaving one thousand or fifteen hundred cubic feet per minute to pass into the canal through the first feeder, and insists he has a right so to do under the law. The defendant further alleges, that the state have purchased about one and a half acres of ground, at the point, where it is proposed to take the water from the feeder, for hydraulic purposes. This purchase was made by order of the canal board, in the form prescribed by law, and for the purpose of using the water from the feeder for hydraulic purposes.

The defendant denies that he ever caused, or ordered more water to be thrown into the canal through the feeder than was necessary for the purposes of navigation, nor did he ever propose to sell water to such an amount as would increase the quantity necessary to be drawn through the feeder from Mad river, nor would the sale of two thousand cubic feet per minute, at the point owned by the state, produce that effect.

To this answer the complainants replied generally:

The complainants took the depositions of cleven witnesses. Isaac Pioneer, James Clymer, David Reid, Wm. M. Smith, Elisha Brabham, Amos A. Richards, John Sharter, John W. Vancleve, Alex. Grimes, Samuel Farrer, and T. Clegg.

The defendant took the deposition of James H. Mitchell.