Smith owned five acres of land in Wilton, New York, on which were two springs of

mineral water and machinery to bottle the mineral water. Smith sold the real property to

Brown for $300,000, representing that the water

was natural mineral water and could

be bottled or sold as it flowed from the ground.

Smith also represented to Brown that

the daily natural flow of water from

the two springs was 4,200 gallons

. Brown entered

into possession and purchased and installed modern machinery for the bottling and

distribution of the mineral water. He soon discovered that

the water was not natural

mineral water, but fresh water to which certain chemicals had been added

. He also

discovered

that the daily flow did not exceed 160 gallons

. By the time he discovered

these facts,

Brown had expended $75,000 for the installation of new machinery

.