ERROR to the Circuit Court for Indiana.
The State of Indiana, owning a certain canal and its adjacent lands, made two leases of its surplus water; the first being made, February, 1839, to one Yandes and a certain Sheets (this Sheets being the appellant in this case), and the other made January, 1840, to Sheets alone. Each lease was for the term of thirty years. Certain rents, payable semi-annually, on the first of May and November, were reserved; it being provided, that if any rent 'should remain unpaid for one month from the time it shall become due,' 'all the rights and privileges' of the lessees 'shall cease and determine, and any authorized agent of the State, or lessee under the State, shall have power to enter upon and take possession of the premises,' &c. The leases contained a further provision, that the lessees should not be deprived of the use of the water by any act of the State, or its agents, or by the inadequacy of the supply of water, for more than one month in the aggregate in one year; and that if, for the purposes of repairing the canal, preventing breaches, or making improvements to the canal, or the works connected with it, or the inadequacy of the supply of water, the lessees should be deprived of the use of any portion of the water-power leased, such deduction should be made from the rent accruing on such portions of the power as the lessees should be prevented from using, as would bear the same proportion to the yearly rent thereof as the time during which the lessees might have been deprived of its use bears to eleven months. In October, 1840, Sheets became owner of Yandes's interest in the lease of 1839.
The State subsequently sold so much of the canal, land, and water-power as was embraced by the two leases; and one Selden and others, on the 2d of October, 1857, became owners under this sale.
Afterwards (Sheets being in possession, under the leases, and having refused for several years to pay rent), the purchasers formally demanded, on the premises, rents falling due on the first day of May, 1860. The lessee failing to pay them, the purchasers brought, in June, 1860, an ejectment in the Circuit Court for Indiana (in which State the action of ejectment is regulated by statute, and has the same conclusiveness as common law judgments in other cases), to recover the possession of the property, as for forfeiture from non-payment of the rents reserved in the two leases. Verdict and judgment were given in their favor.
After five years had elapsed since the commencement of the ejectment, the lessee now filed a bill in equity (the suit below) to enjoin the issuing of a habere facias on the judgment in ejectment, and for a redemption of the lands from the forfeiture incurred for non-payment of rent.
The bill alleged that while the ejectment was pending, the lessees tendered to the purchasers $400, as in full for the particular rents, for the non-payment of which the forfeitures were declared, and as in full for interest thereon, and the costs of suit up to that time, and that the same was now brought into court for the purchasers if they would accept it and waive the forfeiture; but it tendered nothing for rents subsequently or previously accrued. It sought to avoid such a tender by asserting an equity to set off against all rents a demand for damages on account of alleged breaches of covenants, contained in the leases. As for—
1. Inadequacy in the supply of water, when by the use of proper efforts, an adequate supply might have been furnished.
1. Inadequacy of supply, owing to the culpable negligence and gross carelessness of the purchasers in failing to repair breaches in the canal banks, and to remove obstructions created by the growth of grass in the bottom and sides of the canal, &c., setting up the expense of repairs alleged to have been made by the lessee to render the supply adequate.
3. Not prohibiting lessees under subsequent leases from drawing off needed water from the mill of the original lessee to supply their own.
The claim of reductions of the rents owing to failure of water were from the 2d October, 1852, when the title of the purchasers accrued, to the 1st May, 1865, when the last instalment of rents before the filing of the bill came due, and amounted to $2649. The rents during the same term amounted to $4500.
The lessee alleged as an excuse for not paying the rents on one of the leases, that he had abandoned that lease, and that the purchaser under the State acquiesced, and that the title so became vested in them by reverter, and declined to redeem that lease from forfeiture. While thus declining to redeem that lease, his bill sought to enjoin the whole judgment.