Goodwin, J.
delivered the opinion of the court.
I have examined with much care the various questions presented by the case upon the pleadings and testimony and will proceed to state the conclusion at which I have arrived.
The principal questions are, 1. What is the construction of the instrument executed by complainant, granting the water power to Hurd, without the addition made to it ? 2. What with that addition? and, 3. If the addition varies the construction of the original instrument, is it, in respect to the defendant, a subsisting and valid part of it?
The defendant, Showerman, insists that, by the terms of the lease, the water granted to the lessee was to be measured', not by an aperture to be inserted in a gate at the race or dam, from which it was to be transferred to the iron works of the lessee, but that it should be measured, as stated in his answer, on the wheel; that the words in the lease, “as much water as will run through an aperture of two feet square, under a head of four feet from the top of said aperture,” contemplate the quantity of water, ascertainable by calculation, which will flow through an aperture of the size mentioned, under the pressure of the head mentioned, into open space, without the obstruction of any flume or channel conducting it to the machinery to be propelled by it; that he has the right to that definite quantity of water, to be applied on the wheels of the machinery ; — in other words, that he is entitled to a definite quantity of water, independent of the mode of taking [25]*25it. On the other hand, it is contended on the part of the complainant, that, by the terms of the lease, the water granted is to be drawn in a particular manner, through an aperture of the size mentioned, from under the given head in a gate at the race mentioned in the lease, or the dam from which the flume was made to the iron works; and that the defendant, by the true construction of the lease, is entitled only to the volume of water which will, in this mode, pass through the given aperture.
The first question which presents itself, is, which of these two constructions of the lease is the true one. The great end in construing instruments is to ascertain what was the actual intention of the parties, and it is the object of courts of law and equity to enforce them according to such intention. To ascertain the true meaning and intention of the parties, it has been long a well settled rule, that the whole instrument is to be examined, and every part taken into consideration. As was said by Chief Justice Hobart, in the case cited by Lord Ellenborough, in Howell v. Richards, 11 East, 643, “Every deed is to be construed according to the intention of the parties, and the intents ought to be adjudged of the several parts of the deed, as a general issue out of the evidence: and the intent ought to be picked out of every part, and not out of one word only.” This general principle is found in all cases on this subject, ancient and modern, and the soundness of the rule I think cannot be questioned.
It is also a further well settled rule, that in the construction of contracts, the situation of the parties, and the subject matter of their transactions to which the contract relates, may be taken into consideration in determining the meaning of any particular sentence or provision. Wilson v. Troup, 2 Cow. 228.
Let us apply these principles to the construction of the instrument under consideration. The complainant was in [26]*26possession, claiming title to, and recognized by the lessee as the owner of, a dam or water power on the river Huron, at Ypsilauti. He had erected a saw mill some seventy or eighty rods below, and was making a race from the dam, along the vicinity of the river, on the east side, to the saw mill. The lessee contemplated erecting, or was erecting, iron works, a little below the dam, between the race and the river. And in reference to these facts, all of which that are material, appear from the instrument, the lease is made, by which the lessor grants “ The right and privilege of drawing from the west side of a race now making by the party of the first part, in Ypsilanti aforesaid, and leading to his new saw mill, at any place within sixteen rods from the head gate of said race, as much water as will run through an aperture of two feet square, under a head of four feet from the top of said aperture.” If the grant had stopped here, and there were nothing more of it, probably the defendant’s construction would be the correct one; but it proceeds, “for the use of carrying machinery for iron works, provided, so much shall be needed by the party of the second part for stick use” Here, in the sentence specifying the thing granted, is one restriction, which would have been operative had iron ore been found to carry on the contemplated works. The instrument proceeds, and after providing for a rent of fifty dollars per annum, contains a further agreement, that in case two feet square of water should not be enough for the use of such iron works as the said party of the second part may hereafter erect near said race, that he shall have as much more as may be necessary therefor, at the same rate as for the two feet square aforesaid,” and further, that “ in case a sufficient quantity of ore cannot be conveniently procured for carrying on said iron works to advantage, that the said two feet square of water may be used for such other machinery,” &c. It seems to me that these provisions arc the descrip[27]*27tion of the grant by the lease, and mean a volume of two feet square, to emanate from the race, under the pressure of four feet head, and to be thence conducted to the iron works, and thus qualify the previous general words. This view certainly derives force from the fact that one of the clauses supposes that the quantity granted might not be sufficient for the proposed iron works.
When we take into consideration the quantity of water the defendant would have by his mode of interpreting the gz'ant, (one of the witnesses stating that it would take ten-sixteenths of the whole, and the others, genez'ally, that it would give enough to cany six or seven z'un of mill stones in a grist mill,) we can hardly presume the parties intended that such a quantity should be drawn from the side of complainant’s race, which he was making to conduct the water to his own mill. The whole language, howevez-, taken together, seems to me to indicate the other construction.
As to the evidence tending to show the large quantity of water defendant’s interpz-etation would give, it is insisted by the counsel for defendant, that the fact is not averred in the bill and made the ground of relief, and that the evidence is therefore irrelevant. This position would undoubtedly be correct if it were made a ground of z-elief on the score of mistake, or other equitable consideration. But here it is introduced to show the situation of the subject matter to which the contract refers, and the consequent effect of one of the two different constructions contended for.
When the addition to the lease, — “it is further agreed that the water is to be measured at the head gates,” — is taken in connection with it, the construction above regarded as the correct one, is still more apparent; though, from the construction which appears to me to be the correct one of the original lease, this is unimportant. It is contended [28]
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Goodwin, J.
delivered the opinion of the court.
I have examined with much care the various questions presented by the case upon the pleadings and testimony and will proceed to state the conclusion at which I have arrived.
The principal questions are, 1. What is the construction of the instrument executed by complainant, granting the water power to Hurd, without the addition made to it ? 2. What with that addition? and, 3. If the addition varies the construction of the original instrument, is it, in respect to the defendant, a subsisting and valid part of it?
The defendant, Showerman, insists that, by the terms of the lease, the water granted to the lessee was to be measured', not by an aperture to be inserted in a gate at the race or dam, from which it was to be transferred to the iron works of the lessee, but that it should be measured, as stated in his answer, on the wheel; that the words in the lease, “as much water as will run through an aperture of two feet square, under a head of four feet from the top of said aperture,” contemplate the quantity of water, ascertainable by calculation, which will flow through an aperture of the size mentioned, under the pressure of the head mentioned, into open space, without the obstruction of any flume or channel conducting it to the machinery to be propelled by it; that he has the right to that definite quantity of water, to be applied on the wheels of the machinery ; — in other words, that he is entitled to a definite quantity of water, independent of the mode of taking [25]*25it. On the other hand, it is contended on the part of the complainant, that, by the terms of the lease, the water granted is to be drawn in a particular manner, through an aperture of the size mentioned, from under the given head in a gate at the race mentioned in the lease, or the dam from which the flume was made to the iron works; and that the defendant, by the true construction of the lease, is entitled only to the volume of water which will, in this mode, pass through the given aperture.
The first question which presents itself, is, which of these two constructions of the lease is the true one. The great end in construing instruments is to ascertain what was the actual intention of the parties, and it is the object of courts of law and equity to enforce them according to such intention. To ascertain the true meaning and intention of the parties, it has been long a well settled rule, that the whole instrument is to be examined, and every part taken into consideration. As was said by Chief Justice Hobart, in the case cited by Lord Ellenborough, in Howell v. Richards, 11 East, 643, “Every deed is to be construed according to the intention of the parties, and the intents ought to be adjudged of the several parts of the deed, as a general issue out of the evidence: and the intent ought to be picked out of every part, and not out of one word only.” This general principle is found in all cases on this subject, ancient and modern, and the soundness of the rule I think cannot be questioned.
It is also a further well settled rule, that in the construction of contracts, the situation of the parties, and the subject matter of their transactions to which the contract relates, may be taken into consideration in determining the meaning of any particular sentence or provision. Wilson v. Troup, 2 Cow. 228.
Let us apply these principles to the construction of the instrument under consideration. The complainant was in [26]*26possession, claiming title to, and recognized by the lessee as the owner of, a dam or water power on the river Huron, at Ypsilauti. He had erected a saw mill some seventy or eighty rods below, and was making a race from the dam, along the vicinity of the river, on the east side, to the saw mill. The lessee contemplated erecting, or was erecting, iron works, a little below the dam, between the race and the river. And in reference to these facts, all of which that are material, appear from the instrument, the lease is made, by which the lessor grants “ The right and privilege of drawing from the west side of a race now making by the party of the first part, in Ypsilanti aforesaid, and leading to his new saw mill, at any place within sixteen rods from the head gate of said race, as much water as will run through an aperture of two feet square, under a head of four feet from the top of said aperture.” If the grant had stopped here, and there were nothing more of it, probably the defendant’s construction would be the correct one; but it proceeds, “for the use of carrying machinery for iron works, provided, so much shall be needed by the party of the second part for stick use” Here, in the sentence specifying the thing granted, is one restriction, which would have been operative had iron ore been found to carry on the contemplated works. The instrument proceeds, and after providing for a rent of fifty dollars per annum, contains a further agreement, that in case two feet square of water should not be enough for the use of such iron works as the said party of the second part may hereafter erect near said race, that he shall have as much more as may be necessary therefor, at the same rate as for the two feet square aforesaid,” and further, that “ in case a sufficient quantity of ore cannot be conveniently procured for carrying on said iron works to advantage, that the said two feet square of water may be used for such other machinery,” &c. It seems to me that these provisions arc the descrip[27]*27tion of the grant by the lease, and mean a volume of two feet square, to emanate from the race, under the pressure of four feet head, and to be thence conducted to the iron works, and thus qualify the previous general words. This view certainly derives force from the fact that one of the clauses supposes that the quantity granted might not be sufficient for the proposed iron works.
When we take into consideration the quantity of water the defendant would have by his mode of interpreting the gz'ant, (one of the witnesses stating that it would take ten-sixteenths of the whole, and the others, genez'ally, that it would give enough to cany six or seven z'un of mill stones in a grist mill,) we can hardly presume the parties intended that such a quantity should be drawn from the side of complainant’s race, which he was making to conduct the water to his own mill. The whole language, howevez-, taken together, seems to me to indicate the other construction.
As to the evidence tending to show the large quantity of water defendant’s interpz-etation would give, it is insisted by the counsel for defendant, that the fact is not averred in the bill and made the ground of relief, and that the evidence is therefore irrelevant. This position would undoubtedly be correct if it were made a ground of z-elief on the score of mistake, or other equitable consideration. But here it is introduced to show the situation of the subject matter to which the contract refers, and the consequent effect of one of the two different constructions contended for.
When the addition to the lease, — “it is further agreed that the water is to be measured at the head gates,” — is taken in connection with it, the construction above regarded as the correct one, is still more apparent; though, from the construction which appears to me to be the correct one of the original lease, this is unimportant. It is contended [28]*28that the addition to the lease was made after the purchase by Sage, and Edmunds and Godard, and that they had no notice of any modification of the agreement at the time of their purchase. As to the time when the addition was made, the evidence is somewhat conflicting. The chancellor, in his decision, deems this immaterial, on the ground that neither having the legal title, the older equity should prevail. This is doubtless a correct principle, and applicable, unless the earlier agreement, that with Sage, were void under the statute of frauds. The agreement with Sage does not appear, from the evidence, to have been reduced to writing at the time it was made, or until a bond was given in February, 1834. That with Edmunds and Godard, it appears, was; but, it was made and signed on the part of Hurd, by his father, as his agent, though, whether his authority was in writing does not appear. It appears from the evidence of A. M. Hurd and Philo Hurd, that soon after the making of the original lease, and as early as in the fall of 1832, a further verbal agreement was made, modifying the original lease, by which the water was to be taken from the pond instead of the race, and that it was then agreed that the water should be measured at the head gates, and that this should be added to the lease. Whether this latter addition was to be made in consequence of a supposed ambiguity, or an omission, does not distinctly appear, though Hurd states that it was the original understanding that the water should be measured where it was drawn from the race. Under this modification, a flume was constructed, conducting the water from the dam to the iron works, which flume continued until after Hurd’s sale and transfer, and indeed ever since, — the premises having been in this manner occupied and enjoyed by all the successive assignees, the defendant included, down to the time of filing the bill. Here, then, was a parol agreement, undoubtedly after the original lease was made, part[29]*29ly executed; and so far executed, it appears to me, as to take it out of the statute of frauds. And the part of the agreement relative to the change of location yet rests in parol. The defendants do not, it is worthy of remark, seek to avoid this part of it, but acquiesce in the change of location which the complainant sets up, while they seek to avoid that part which was afterwards added to the lease. When Hurd’s assignees purchased of him, there was the possession under the modification of the lease, which was notice to them of the modification; for, in equity, that is notice of a fact, which is sufficient to put a party on inquiry. And here, when Hurd’s assignees purchased, finding the location variant from the lease, and upon Norris’ premises, drawing the water from his pond, upon inquiry of him, they would have learned the agreement under which the change was made, and if the place of measurement were an alteration, of course they would have heard of that also. Notice of a part of the agreement under which Hurd held and occupied, must be deemed notice of the whole of it. It may be remarked, also, that it appears from A. M. Hurd’s testimony, that Sage, at the time of the agreement with him for a sale, had actual notice. If, then, the addition to the lease made a change of its terms as to the measurement of the water, and varied the proper construction and effect of the original lease, I could not, I think, avoid coming to the conclusion that, at the time of the purchase, by the defendant’s assignors, of Hurd, the agreement, having been thus far performed, was valid in equity; that they, even if they had, at the time of their purchase, acquired a full assignment, should be deemed purchasers with notice; and that the modification of the agreement was obligatory upon them; and, consequently, that even if the construction which I give to the original lease, be not the true one, yet, that with the addition em[30]*30braced, it is so; and that the conclusion of the chancellor is therefore correct.
It is said that the chancellor should, by his decree, have enjoined the defendant from using an excess of water, instead of directing the gates and aperture guaged and inserted. But I think the decree in this respect unobjectionable, and sanctioned by the case of Arthur v. Case, 1 Paige, 448, on the authority of Martin v. Sherman, Mosely, 144.
The defendant’s counsel also complains that, by the decree, the gates and aperture, &c. are required to be put in at the defendant’s expense. I see nothing wrong in this. Me, under the agreement, must draw the water from the pond, for his own benefit, and of course at his own expense. He was requested to put in gates and take only the water that was his under it. According to the construction we deem the true one, he was taking more. He should have complied with the request. That it should be done under the direction of a master was rendered necessary by bis course.
The case is of a novel character in our courts, and has been argued with much zeal and ability. After full and careful consideration of the questions presented, I have come to the conclusion that the decree of the chancellor must be affirmed. And such is the opinion of the court.
Decree affirmed.