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He and Malone both testified that in buying and selling they were to receive a commission of one-fourth of 1 per cent., and that this they divided with the plaintiffs. It is true that Malone did not testify whether the original order from Chase was given to Hogan or himself. Upon the subject of where the order to buy and sell was to be placed or filled, this occurred in the cross-examination of the witness by the counsel for Chase:
"Q. In this transaction, did you have any understanding with him, or any agreement as to where the orders would be placed or filled ? A. Mr. Chase would have to state where he wanted the order filled, or we could not fill it. That goes without saying. We were following his instructions. Q. You had instructions to fill it in New York? A. We had certainly had instructions to fill in New York. That goes without saying. We were following his instructions."
The same witness stated that on May 8th and 9th there was a great flurry in Northern Pacific stock, and that on the 8th, after close of New York market for the day, he called upon Chase to make some settlement, and that he said he "would arrange it the next morning, and would either make delivery or put up sufficient money to guaranty us against loss.” This he says he did not do, and that he could not be found the next day, on which day the stock went up as high as 1,000, and whereupon plaintiffs called upon them to put up $20,000 immediately. They being unable to find Chase, they wired plaintiffs to pay as high as $350 for 25 shares, and that plaintiffs obtained the necessary shares at $325. That it is not made clear whether Malone was speaking from his own knowledge of Chase's original order to sell given to Hogan & Co., or from entries on the books of that concern, or from his knowledge of the usual course of their business, may be conceded. His examination, and above all his cross-examination, does not seem to have been so shaped as to clear this up.
It may therefore be conceded that the case for the plaintiffs as to Chase's original direction to Hogan & Co., was weak. The matter was somewhat strengthened by the evidence as to what occurred on May 8th, when he was called upon to make a settlement. Then he promised to either deliver the stock, or make a deposit to guaranty Schloss, Miller & Malone against loss. From this, in the absence of other or more credible evidence, it might be inferred by the jury that the sale theretofore made on the New York market had been originally authorized by him. If the jury should infer from all of the evidence that he had directed a sale of 25 shares of Northern Pacific stock to be made on his account in New York, they might also infer that such sale was to be made under the rules and regulations of the stock market of that city, in which case the contract would be a New York contract, and not a Tennessee contract. If the sale was to be made in New York, and the contract was valid under the law of New York, plaintiffs' action would be governed by the law of that state, and not the law of Tennessee where the original order was given. So, too, if the transaction was of a character usually and customarily executed through New York stockbrokers and this was understood by Chase, Schloss, Miller & Malone would impliedly be authorized to make the trade through stockbrokers selected by them in New York.
Under the well-settled law governing such transactions when intended for execution in New York, a contract for future delivery of an article which the seller has not at the time is perfectly valid unless nothing but the difference between the contract and market price was intended to be paid by the parties. To make it a mere wagering contract it is not enough that one of the parties intended instead of delivery to pay the difference between the selling price and the market price when delivery was demandable. Both parties must join in the intention that there shall be no delivery of the specific thing. Clews v. Jamieson, 182 U. S. 462, 21 Sup. Ct. 845, 45 L. Ed. 1183; Irwin v. Williar, 110 U. S. 499, 508, 4 Sup. Ct. 160, 28 L. Ed. 225; Pearce v. Rice, 142 U. S: 28, 12 Sup. Ct. 130, 35 L. Ed. 925; Bibb v. Allen, 149 U. S. 481, 489, 13 Sup. Ct. 950, 37 L. Ed. 819.
The question as to whether the assignee, Darwent, is a real or fictitious person, and whether if he be a real person he is not acting in behalf of Schloss, Miller & Malone as the real plaintiff, is not so clear as to justify at this stage of the case a dismissal of the suit as one not really between citizens of different states. Upon another hearing the matter may be looked deeper into, and if it appear then that Schloss, Miller & Malone are the real plaintiffs, and the assignment a mere device to give the federal courts jurisdiction, the court should then dismiss the suit as one not within its jurisdiction.
Judgment reversed, and new trial awarded.
LINDEKE et al. v. ASSOCIATES REALTY CO.
No. 2,419. 1. LANDLORD AND TENANT-CONSTRUCTION OF LEASE-FORFEITURE FOR BREACH OF COVENANT.
A lease for the term of 50 years of real estate in the business district of a rapidly growing city, after stipulating for the payment of rent, taxes, etc., by the lessee, provided that in case of default for 60 days "in the payment of any of said rent, taxes, or assessments
* or in the performance of any of the covenants or agreements on the part of the said second party to be performed,” the lessor should have the right on notice to forfeit and terminate the lease and re-enter. Following were covenants to keep the sidewalks and alleys in repair, to insure, to observe a partywall agreement, and to remove the old buildings and build and complete within 5 years a 5-story business building covering the entire lot, from plans to be approved by the lessor. The lease was subject to a mortgage for $50,000, which the lessor agreed to pay, and time was made of the essence of the contract. Held, that construing the lease in the light of the circumstances surrounding the parties, the length of the term, and the nature and condition of the property, the lessor's right of forfeiture was not limited to the case of default in the payment of rent or taxes, but extended to a default in the performance of any of the covenants and especially that to build, which was evidently one of the principal objects of the lease.
[Ed. Note.—For cases in point, see vol. 32, Cent. Dig. Landlord and
Tenant, $ 331.] 2. CONTRACTS-RULES OF CONSTRUCTION-RULE OF EJUSDEM GENERIS.
Although a general term follows specific words in a contract, it will not be restricted by them under the rule of ejusdem generis where it is ap
parent from the entire contract that a larger object was in the minds of the parties, to which the general phrase can distinctly apply when given its ordinary meaning.
[Ed. Note. For cases in point, see vol. 11, Cent. Dig. Contracts, $ 737.] 3. LANDLORD AND TENANT—WAIVER OF RIGHT TO DECLARE FORFEITURE OF LEASE-ACCEPTANCE OF RENT.
A lessor having a right to declare a forfeiture of the lease, and who has served notice of such forfeiture, does not waive his right by the subsequent acceptance of rent from the lessee covering a period which will expire before he is entitled to re-enter under the terms of the lease.
[Ed. Note.-For cases in point, see vol. 32, Cent. Dig. Landlord and
Tenant, § 345.] 4. SAME—NOTICE TO QUIT-SERVICE ON CORPORATION.
Where a corporation is tenant under a lease, service of notice to quit upon its treasurer is a good service upon the corporation, both at common law and under Gen. St. Minn. 1894, § 5199, which provides that in an action against a corporation, service of summons may be made on its presi
dent, secretary, cashier, treasurer, a director or managing agent. 5. BANKRUPTCY-EFFECT OF ADJUDICATION-LANDLORD AND TENANT-NOTICE TO
Where notice to quit was served on a corporation tenant, its subsequent adjudication as a bankrupt did not affect the efficacy of the notice nor necessitate a reservice upon the trustees in bankruptcy who took only the rights
of the bankrupt at the time of the adjudication, 6. EQUITY-ENFORCEMENT OF FORFEITURE.
The rule that courts of equity will not enforce a forfeiture is not absolute or inflexible, and does not extend beyond the reasons which underlie it, and where its enforcement is more consonant with the principles of equity than the denial of such enforcement equity will enforce it in a case within its cognizance.
[Ed. Note.--For cases in point, see vol. 19, Cent. Dig. Equity, 88 69–76.] 7. BANKRUPTCY-LANDLORD AND TENANT-ENFORCEMENT OF FORFEITURE OF LEASE.
A corporation tenant for a long term failed to perform a covenant of the lease which required it to build an expensive building on the leased premises, and after notice of a forfeiture of the lease in accordance with the terms thereof had been served upon it, was adjudged a bankrupt, and its assets passed into the hands of its trustees. Held, that on petition of the lessor, the court of bankruptcy properly decreed the enforcement of the forfeiture, and directed the trustee to surrender possession of the property
as the only effective remedy for the protection of the rights of the lessor. Appeal from the District Court of the United States for the District of Minnesota.
The appellee, the Associates Realty Company, a corporation of Minneapolis, Minn., being the owner of 44 feet of lots 1 and 2, in block 221, in the city of Minneapolis, with the store building thereon, leased the same, on the 26th day of March, 1900, to J. F. Evans, R. W. Munzer, Adam Pickering, A. V. Hamburg, W. A. Alden and J. F. Elwell, partners under the firm name of Evans, Munzer, Pickering & Co., to run 50 years from the 1st day of April, 1900, at an annual rental of $5,000, to be paid in quarterly installments in advance, upon the 1st days of April, July, October and January of each year during said term; and further, and in lieu of additional rent, to pay all taxes and assessments of every kind and nature which may be assessed against any part of said leased premises, or against any buildings, structures, or improvements thereon or which might thereafter be placed thereon during said term. "And in consideration of the premises, the said parties of the second part (Evans, Munzer, Pickering & Co.), for themselves, their heirs, executors, administrators and assigns, do hereby covenant and agree to and with the said party
of the first part, its successors and assigns, that the said parties of the second part will, and their heirs, executors, administrators, and assigns shall, at all times during the continuance of this lease, pay the rents which may become payable under this lease, and all taxes and assessments which may be leried upon or assessed against the said leased land, and against any buildings, structures, or improvements now on said land, or that shall hereafter be placed thereon during said term, or against any part of the same, promptly, and as above provided.
“It is further agreed between the parties hereto as one of the conditions upon which this lease is made, that 'if said parties of the second part, their heirs, executors, administrators or assigns, shall make default for the space of sixty (60) days in the payment of any of said rent, taxes or assessments, when any of the same shall become payable, or in the performance of any of the covenants or agreements on the part of the said parties of the second part to be performed, the said party of the first part, its successors or assigns, may give said parties of the second part, their heirs, executors, administrators, and assigns, notice in writing of its or their intention to terminate this lease, and all the rights thereby reserved or granted unto the said parties of the second part, which notice shall be subscribed by the said party of the first part, its successors or assigns, or its agent or attorney, and shall specify the sums of money, or the covenant or agreement on account of the nonpayment, or nonperformance of which such declaration of forfeiture shall be made; and if the said parties of the second part, their heirs, executors, administrators, or assigns, shall not within four (4) months after the time of service of said notice, pay the rents, taxes, or assessments for the nonpayment of which said forfeiture shall have been declared, together with interest on said rent from the time the same shall have been due and payable, and any and all expenses that said first party shall have incurred in and about the preparation and service of said notice, or shall not perform the covenants or agreements for the nonperformance of which said forfeiture shall have been declared, then and in that event this lease shall, from and after the termination of said four (4) months, become ended and determined, and all rights of said parties of the second part, their heirs, executors, administrators and assigns hereunder, shall be forfeited and lapse as fully as if this lease had expired by lapse of time, and all buildings and improvements thereon shall remain as attached to the freehold and become and be the property of the party of the first part, its successors and assigns. And the said party of the first part, its successors and assigns, shall at once have all the rights of re-entry upon said premises, and to repossess and have and enjoy the same, which it, or they, would have upon the expiration of this lease by lapse of time.”
It is further covenanted and agreed that upon the termination of the lease, whether by lapse of time or under any of the conditions or provisions contained therein, the lessees or their assigns would peaceably surrender the possession of the property and the buildings and improvements thereon unto the lessor, its successors or assigns; except that such buildings that might have been previously removed from said premises are freed from the provisions of the contract; and that no waste or injury to said premises, or to any building thereon, should be permitted or committed by the lessees or any persons holding under them during the continuance of the lease.
The lessees further covenanted and agreed to keep the sidewalks, alleys and passageways contiguous or appertaining to the leased premises in good repair and free from obstructions as might be prescribed by the city of Minneapolis; and to indemnify and hold harmless the lessor against claims or demands that might be made by reason of any defect, imperfection, or obstruction in said sidewalks, alleys or passageways.
The lessees covenanted and agreed to keep the buildings insured in some reliable fire insurance company or companies, selected by the lessor, in an amount equal to the insurance value of said buildings, and cause the insurance policies to be made payable, in case of loss, to the lessor or its mortgagees, as collateral security for the payment of the rents due or to become due, and for the payment of taxes, assessments, and charges against said real estate; and that so soon as the new buildings hereinafter provided for should be erected, the
lessees would cause the same to be insured in at least the amount of $12,500 and keep the same insured for not less than said amount, in some reliable insurance company selected as aforesaid, with a like provision respecting the payment of loss to the lessor, as collateral security, whether said policies are held and made payable in that way or not.
It was further covenanted and agreed that in case of any default by said lessees as aforesaid in the payment of any rents, taxes, or assessments due under the terms of the lease, the lessor, at its election, instead of declaring the lease forfeited might pay the taxes or assessments in default, and that all rents in arrears, and such taxes and assessments and insurance premiums paid by said lessor should become a specific lien and paramount to all other liens, drawing interest at the rate of 6 per cent. per annum; with power to foreclose said lien and sell the said leasehold estate, buildings, etc., at auction, as in case of the statute relating to the foreclosure of mortgages, and out of the purchase money to retain the amount of rent in arrears, taxes, assessments, and interest as aforesaid. Said lease was made subject to the terms and conditions of a certain party-wall contract made between certain parties and entered upon the records of the county, the conditions of which the lessees assumed and agreed to perform, and to indemnify the lessor harmless therefrom. It was also made subject to a mortgage thereon, which the lessor agreed to pay off, which mortgage was in the sum of $50,000. The said lessees for themselves, their heirs, executors, etc., further covenanted and agreed with the lessor that they would within five years from the 1st day of April, 1900, erect and complete upon said leased premises a substantial business building, to cover the entire property leased, at least five stories in height, and as substantial in character and attractive in appearance, and equal in manner and cost of construction to the building now occupied by said lessees adjoining said described premises, and would complete the same in all respects free and clear of any liens within the time aforesaid, and that they would cause the same at once to be insured as before stated.
It was further covenanted and agreed that before the old buildings, situated on the premises were torn down and removed, the lessees should first enter into a valid contract with a responsible contractor providing fully for the erection and completion of said new building, according to plans and specifications providing for a building of the kind, etc., aforesaid, which said contract should specifically provide that said building should be so erected and completed within a reasonable time therein specified, free from any lien or claim on the part of the contractors, and should be submitted to and approved by the lessor before the building standing upon the premises should be demolished as aforesaid. It was covenanted that the lessees or their assigns on paying the rents, taxes, assessments and insurance charges, and performing the covenants and agreements provided for in the lease, could peaceably hold and enjoy the premises during the continuance of the lease. The further covenant and agreement was that at all times during the last year of the said term of the lease and after the end of said first term, the lessor should have the option either to buy the improvements on said land or to sell said land to the lessees at a valuation in either case to be arrived at by arbitration, or to release said premises to the lessees for a further term of 20 years, at an annual rental of 5 per cent. on the fair market value of the land exclusive of the improvements, to be fixed by arbitration. Said valuation, however, not to be less than the initial valuation thereof of $100,000, agreed to be the present value of the land exclusive of the improvements; and to relet the same for a further successive term of 20 years at the expiration of said term, and thereafter to relet the same for a further term of 10 years, unless the lessor shall have either purchased said improvements on said land or shall sell said lands to the lessees, at a valuation in either case to be arrived at by arbitration ; the lessees covenanting that they would either buy said leased lands or sell the improvements thereon or release said lands on the basis as fixed by such arbitration (in case of reletting, however, such valuation in no case to be less than $100,000), at the election of the lessor. The manner of selecting the arbitrators under the provisions of the lease was then set out.
And finally it was mutually covenanted and agreed "That all covenants,