FOURTH DEPARTMENT, JULY TERM, 1896. 66 [Vol. 8. * * In the fourth and fifth subdivisions of the contracts is inserted the following language, giving options to the vendor, viz. : IV. It is expressly agreed that time is the essence of this contract, and in case default shall be made by the party of the second part, his heirs or assigns, in any of the conditions above stipulated to be performed by him, then and in that case this contract shall become void, and the party of the second part have forfeited his rights hereunder, and any payments that shall have been made shall become forfeited to the party of the first part, as well as all buildings or other improvements upon said premises, which said payments and improvements and buildings, it is hereby especially agreed, shall in that case be deemed as damages hereby liquidated for the non-performance of this contract by said second party. "V. Nothing herein shall be construed to entitle said second party to possession of said premises until the delivery of a deed therefor as herein provided." The evidence does not indicate that the defendant ever had possession of the lots in question, or that he ever derived any benefits from or under the contracts. The land was forest land covered with timber which was expressly reserved to the vendor by the insertion in the contract of the following language: "The party of the first part reserves all of the merchantable timber now standing upon said premises, with the right to enter upon said premises and cut and remove the same." The language is so broad that it does not seem to limit the time within which the removal shall be made. According to the testimony of the defendant his negotiation for the lots was with Aris and Ranger, who were connected with the corporation, and they represented to him that the "company owned this tract of land;" and the defendant did not learn that the title was in Wait until the contracts were made out and presented to him to sign, and then the officers of the company "explained that it was done in order to comply with the law, which prevented a corporation from owning lands there, and the title had to be vested in one person's name." He further testified: "There was a great deal said about the value of the property. They described the property to me as having been laid out into streets and cleared off, and a great many stores going up there already, and that it was quite a large town at that time and growing very rapidly, and the App Div.] FOURTH DEPARTMENT, JULY TERM, 1896. property was increasing in value. That there was a water power which was a valuable adjunct to the town, and that there were valuable mineral deposits near the town. They said that one of the main trunk line railroads run near Kettle Falls, and that arrangements had already been made with the road to run a branch into Kettle Falls. They said that a ferry was to be constructed across the river and that they were going to have a court house right away and a large school building was to be built, and that it would be a city in a very short time. All the public improvements, laying out the streets, putting in the ferry across the river and utilizing the water power there. They said they proposed to have electric lights in a short time, and that the streets would be paved. They said the schedule prices of the lots would not be any cheaper than they were at that time. Mr. Aris stated to me that the schedule prices would be increased.” * * * Harvey Hoag was called as a witness for the defendant, and he testified to the organization of what was known as the Northwestern Investment Company, composed of several of the directors of the plaintiff, and the referee refused to allow him to state how lots were selling prior to the organization of the investment company, and an exception was taken to the ruling. The witness stated that he had knowledge that lots were sold prior to the formation of the investment company, and he adds: "It was understood by the directors that the prices should be maintained." And he states that no lots were sold after the organization of the investment company. The witness stated further: "I think they were sold at all prices, without regard to schedule or anything." Upon motion of the plaintiff's counsel that was stricken out, however, and an exception was taken by the defendant. It appeared by the evidence that Aris occupied the position of general manager and treasurer of the plaintiff, and was one of its directors and trustees; and that he was a member of the first board of directors, and that he continued so throughout the year. It was shown by the evidence that Robinson, Aris and Morley belonged to the Northwestern Investment Company. That company purchased a large number of the lots "at a price far below the schedule prices." The evidence of the witness Roe on that subject, however, was, on APP. DIV.-VOL. VIII. 47 FOURTH DEPARTMENT, JULY TERM, 1896. [Vol. 8. motion of the plaintiff, stricken out, and an exception was taken by the defendant. It seems that all but two of the directors were members of the Northwestern Investment Company; that Wait became secretary of that company, and that it purchased from the plaintiff 350 lots at $150 per lot, and payment therefor was made by crediting it on the $105,000 mortgage. It was not an incorporated company. It was a partnership or "syndicate." All of its members were stockholders of the plaintiff, except one. Some evidence was given tending to show that there was an arrangement among the board of directors, prior to the organization of the investment company, by which special discounts were allowed to the directors. According to an entry made in the journal of the plaintiff, under date January 23, 1891, the sale of the 350 lots was authorized by a resolution adopted December 11, 1890, for $35,000. There appears an entry also in the journal of that date, viz.: "Mr. Morley represents a syndicate of buyers for which he acts as secretary. All the papers are only just being sent for record; the sale was consummated and lots selected Dec. 15th, 1890." On the following pages of the journal "are the numbers and designation of the lots sold to the syndicate." It appears in the evidence that the plaintiff brought an action against the investment company, claiming some $100,000 for fraud in the sale to the investment company. That suit, however, was subsequently discontinued, and the appeal book does not indicate very clearly how it was disposed of. In the complaint in the action brought by this plaintiff against the syndicate is found an allegation: "That when it became generally known that such a syndicate existed the public faith in this plaintiff and its said enterprise was greatly impaired, and the value of said real estate depreciated, and this plaintiff was greatly damaged in consequence." From the facts and circumstances which we have already quoted, as well as others appearing in the case, we are of the opinion that the learned referee fell into an error when he reached the conclusion that, according to the principles of equity, a proper case was made out for the enforcement of the contracts. (Stokes v. Stokes, 148 N. Y. 708.) It is contended, however, by the learned counsel for the respondent that "the propriety of specific performance is a matter for the discretion of the trial court, unreviewable on appeal," and he calls our App. Div.] FOURTH DEPARTMENT, JULY TERM, 1896. attention to Kelso v. Lorillard (85 N. Y. 184), where the remark was made, in the course of the opinion by MILLER, J., viz.: “It may also be remarked that this was a matter within the province of the court below to determine, and the exercise of its discretion in this respect should not be disturbed unless clearly wrong." We think that that does not militate against the discretionary right of this court to review the discretion of the trial court. Attention is also called to Dunckel v. Dunckel (141 N. Y. 434). In the course of the opinion there delivered it was said: "There is a further rule that the specific performance of contracts rests largely in the discretion of the equity courts-not wholly, but in a discretion to be governed by rules which have become established for the guidance of such courts. That, again, is a rule to be generally administered in the equity courts. So far as they exercise their discretion, violating no fixed rules of equity, such discretion is not reviewable here." That case falls far short of the position claimed by the respondent in the case in hand. We think some of the rulings made by the learned referee, which have been incidentally referred to, were somewhat doubtful. However, as the views which we have already expressed lead to a reversal, we need not protract this opinion to discuss them. All concurrred. Judgment reversed and a new trial ordered, with costs to abide the event. JEROME R. PETRIE, Appellant, v. THE TRUSTEES OF HAMILTON COLLEGE, Respondent. Watercourses — construction of a grant thereof. In an action brought by the owner of a farm to prevent the defendant from diverting the waters of a stream, it appeared that the defendant claimed under an instrument executed by the plaintiff, which granted to the defendant "the right, privilege and easement to take from and divert the water of Kirkland Glen brook which runs over my land in the town of Kirkland, Oneida, N. Y., sufficient to supply the Hamilton College water works about to be constructed.” The referee who had been appointed in the case found that two small brooks had for some years flowed across the farm in question, the sources of which FOURTH DEPARTMENT, JULY TERM, 1896. [Vol. 8. were springs over 500 feet apart, upon the lands of other parties; that the brooks flowed separately across the land of the plaintiff at a distance from each other of over 500 feet, and continued thus to flow for a distance of about three-quarters of a mile from their sources; that they then united below the land of the plaintiff, and flowed in one stream for about two miles to the Oriskany creek. He also found that, until the time of the making of the grant in question, this stream had no name, and was designated in the grant as Kirkland Glen brook, and that neither of the brooks flowing across the plaintiff's land had any known name. He did not find specifically just what was covered by the instrument executed by the plaintiff, but he dismissed the complaint. Held, that the decision was erroneous; That the expression "waters of Kirkland Glen brook," was descriptive of one brook only, and consequently that was all that the instrument conveyed to the grantee, who was, therefore, entitled to restrain the defendant from appropriating the water of both the brooks. APPEAL by the plaintiff, Jerome R. Petrie, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Oneida on the 13th day of January, 1896, upon the report of a referee dismissing the plaintiff's complaint. The complaint in this action alleged, among other things, that the plaintiff, Jerome R. Petrie, was the owner of certain real premises situate in the town of Kirkland, Oneida county, N. Y., consisting of a farm of about fifty-six acres of land. That two brooks or living streams of water, with well-defined channels and banks, known and designated as the Kirkland Glen brook, and the South brook, flow, and from time immemorial have flowed, across the farm herein before referred to. That the source of Kirkland Glen brook, so called, is two springs, one situate on the farm of James I. Scollard, in said town of Kirkland, Oneida county, N. Y., and one on the farm of Elmer Waters, in said town, county and State, and said brook flows from said springs across the farms of said Scollard, one Charles Ward, and this plaintiff, in a distinct and defined channel near the highway leading from Clinton to Vernon Centre, in said town, county and State. That the source of the South brook, so called, is another and third spring situate on said Scollard's farm in said town, county and State, the same being located about thirty rods southeasterly from the two springs which are the source of Kirkland Glen brook, and is in no way connected with the same, being separated from the first two |