FIDELITY SA.FE DlllPOSIT " 'l'ROSTOO. V. ABM:S'l'BOlilG.
D. O'Brien. for N. O. Moak, for defendant.
WALLACE, J. It is undoubtedly true that courts of equity act upon misrepresentations of fact, and sometimes of law, as a ground for annulling contracts, when courts of law would treat the misrepresentation as innoxious. In other words, as stated by Mr. Pomeroy, (2 Pom. Eq. Jur. § 885:) "Whatever would be fraudulent at law will be in equity. But the equitable doctrine goes further, and includes instances of fraudUlent misrepresentation which do not exist in the law." But the plaintiff cannot invoke this doctrine in the case, because the action in which he seeks to avail himself of the misrepresentations of the defendant to avoid the effect of his release is at law, and not in equity If the suit had been tried in the state court, where the distinctions between legal and equitable actions are in some respects obliterated, instead of in this court,where it came by removal, it might perhaps have been treated as an action in equity; but in this court the complaint, as framed, does not present a case of eqUitable cognizance, (Buw.rd V. Houston, 119 U. S. 347, 7 Sup.· Ct. Rep. 249,) and, having been tried as a case at law, must be determined by the rules of the common law, and not by the principles of equity. Monttrjov. Owen, 14 Bl-atchf.· 324; Manufactwring Co. v· Tube- Works 00., 15 Blatchf. 432. The application for a reargument ofthe motion for a new trial is denied.
(Oircuit Oourt. S. D. Ohio. May 11,1888.)
.L.urDLORD AN]) TENANT-LEASES-NATIONAL BANKS"7lNsOLvENCY.
Where a national bank takes a lease for a long term. its insolvency and dis· solution soon afterwards, and the appointment of a receiver. who refuses to take possession of the leased premises, .do not entitle the lessor to damaKes out· of the assets, the rent having been paid fot the time during which the bank was in possession.
In Equity. Bill by the Fidelity Safe Deposit & Trust Company against Armstrong, receiver of the Fidelity National Bank of Cincinnati, to re<lOver upon a lease. . Dra'lUtin Wulsin, for complainllnt. O. W. Kiitredge and W. B. Burnett, for respondent. SAGE, J., (orally.) The bi1lsets forth, in substance. that on the 1st (If March, 1886. the complainant made a contract which, although not 'stated in the· bill to be, in terms, was, in effect, a lease of the premises occupied by the Fidelity National Bank, in the St. Paul building; Fourth .street, Cincinnati, for 20 years, at an annual rental of $5,600, pa.ya.ble
in monthly installments, at the end of each month. That the Fidelity National Bank entered into possession under this and. so .continued until the 20th of June, 1887, when the comptroller of the currency.took posse13sion of the pr9perty and assets of the bank, and the bank suspended operations. That on the 27th of June, 1887, the defendantwas appointed reCeiver, and entered into possession of the property of the bank, and has ever since continued as receiver. That on the BOth of June, 1887, the <)omptroller.of the currency instituted proceedh1gS which resulted in forfeiture ofthe charter ofthe Fidelity National Bank, by an order made by this court on the 12th of July, 1887. That the assets which passeq into the hands of the receiver are insufficient to pay thedehts of the bank. That there are due for rent upon this lease various amounts, se,t forth in the bill of the complainant, being $155.55 for each of the months Septemfor the month of June, 1887 ,and ber, October, November, and December, 1887. There is no explana:tion in the bill of this diminished amount, but the statement was made .by c.ounsel upon the argument that the receiver occupied the premises during those mouths upon an agreement at that sum. which, being Pllid, reduced the rent to the sum of; $291.66, instead of $4515.55; and this arrangement reserved all rights of both parties, without prejudice to the rights of either. The bill proceeds to state that the premises are vacant; receiver refused toenter::into possession; that the value of the premises is decreased to $S,OQOperannumj and that the complainant has been damaged in the sum of $50,000-Flirst, by reason of the insolvency of the Fidelity National Bank; second, by reason of the dissolution of the corporation; third, hy reason of the forfeiture of its charter; and, fourth, by the refusal of the receiver to take under the contract, and pay the rent. Th,e clairp was presented to. the receiver, and rejected. declared, and others are to follow. And the bill One proceeds to aver that the complllinantwill be entirely without remedy unless allowed to prove for a gross sum, which shall be a commutation of the entire rentl-or rather, the present value of tl,le rent for the entire terml and receive dividends thoreou. The prayer is that the receiver: . be required to withhold from the assets in his hands the sum of $50,000, meet the damages from month to ulOnth, or that.the cash value may be ascertalned, and the complainant be allowed to prove claim forrthe same. The grounds' of the damages claimed, I have already stated. The first reason of the insolvency of the Fidelity Bank," seems to meto ground, have nothing whatever in it. this lease had been for one month, or for three months, and the bank, having paid the rent in adval1ce,had become insolvent just before the expiration of the term, and thereby the rental value of the premises had been dirninished, could it be maintained that the lessor would be entitled to claim damages against the lessee? It seems to me, certainly not. Now, the secondclairn, "by reason of the dissolution of the corporation," that is not anything for which the receiver can be held liable; nor can be held liable for the forfeiture of the charter of the Fidelity
FIDELITY SAFE DEPOSIT &. TRUST CO. ". ARMSTROI\G.
Bank, because both of these results are provided for by law,and must have been, in the eye of the law, in contemplation of the parties when the lease was made. These were contingencies which it was the duty of the, lessor to take into account when he made his contract, and, if not satisfied to rely upon the bank itself, the only other course would have. been to insist upon security for the performance of the conditions of the lease. As to the claim for damages by reason of the receiver-of the defendant-refusing to take under the contract and pay the rent, it is settled by all the authorities that the receiver was not bound to take possession. He had his election to take or not to take. If, satisfied that the was valuable as an asset of the bank, he might take possession, and, having taken possession, would be liatle for the payment of the rent; but if satisfied that the lease was of no value, and that it would be of no interest to the trust-to the creditors,-he might refuse to take possession. TheclaimpHhepomplainant, however, was argued upon the hypothe· sis that the case was to be regarded as a breach of the contract by the Fidelity National Bank to pay rent for which a claim might be proven against the receiver. The difficulty is that during the existence of the bank,and up to the time when the receiver took possession, there was no breach. The rent was payable at the end of each month; and it was paid for the entire time that the bank was actually in occupation of the premises. The bank ceased to occupy the premises on the 20th day of June, 1887; the defendant was appointed receiver on the 27th day of June, 1887, ap!l entered into and took possession of all its property. The default occurred later. On the 12th of July, 1887, thecPllrter of the Fidelity Bank was forfeited, and the bank thereby passed out of existence, and this complainant ceased to have any party with whoOl to deal in reference to that contract; and the lease was necessarily terminated, because the lessee had ceased to exist, and had no successors who, in the eye of the law, stood in its place. Now, if there had been a de-fault at the time of the appointment of the receiver, and of his taking possession of the premises, that claim might have been proven.againstthe receiver. But there was no such claim. The claim is subsequent; and it was held Jiil Deane v. Caldwell, 127 Mass. 242, decided by Chief Justice GRAY, now of the supreme court, that" before the date at which rentis covenanted to be paid it is'in no sense a debt; it is neither debitum nor 801vendwrn, for if the lessee is evicted before that day it never becomes payable. It is not within the provision of a bankrupt act, allowing' uncertain or contingent demands' to be proved against the estate of a bankrupt, because it is not an existing demand, the cause of action on which depends upon a contingency, but the very existence of the demand depends upon a contingency." But it was contended by the complainant that as in that case the cll;lim might be set up against the bankrupt him,self, notwithstanding his discharge in bankruptcy, and as in this case the Fidelity. National Bank was-to use the expreSSlOn of counsel-"cra-mated," or rather, stricken out of.existence, by the forfeiture of itil charter. and the receiver has taken possession of all the assets and and has instituted a suit against the directors to enforce.their Or al-
leged liability, for' negligence in the administration of the affairs of the bank, and proposes to appropriate all that can be realized from the individual liability of the stockholders, and leaves nothing in any direc. tion to which this complainant, can look. that this case ought to bean exception. ,The answer is that all these proceedings of the receiver are in strict conformity with the statute, which was in force at the time this lease was made, and which this complainant was bound to recognize. And, having failed to provide against the contingency that has arisen, he is not entitled to the relief which he seeks by this bill of complaint. The demurrer, therefore, will be sustained, and the bill dismissed.
(JirlJuit Oourt, E. D. :t1rkall,a,. June 80, 1888.)
EVIDENCE-JUDICIAL NOTtCE-WORDS OF THE ENGLISH LANGUAGE.
Courts are bound to take notice of the meaning of words in the EngliSh language, and of such matters of common knowledge and science as are or may be known to all men of ordinary understanding and intelligence.
Cider is an alcoholic beverage, ,obtained by the fermentation of the juice of apple's. and cannot lawfully be sold in a state whose statutes prohibit the sale of" alcohol, or any spirituous, ardent, vinous, malt. or fermented liquors... <SVUabm bt/tlu Oourj,)
2. INToxICATING LIQUORS-WHAT
A.t Law. A.ction by the Eureka Vinegar Company .against the Gazette Printing Company for publishing the statement that the plaintiff, as the vendor of Old Orchard cider, was amenable to the prohibition laws of the state. Frank M, Estes, F. T. Vaughan, and W. J. Terry, for plaintiff. John McOlure and Sandera & Watkins, for defendant. CALDWELL, J. The substance of the plaintiff's complaint is that it manufactured for sale, from pure apple juice, a cider known as "Old Orchard Cider;" that this cider could be lawfully sold as a beverage in the prohibition districts in this state, and lawfully sold elsewhere in the state without the payment of the license fee required by law for the sale of liquor; that this cider was introduced into this state and became popular, and that the plaintiff was selling great quantities of it to·dealers at a large profit, when the defendant destroyed or very much lessened the .trade, and the prodts derived froniit, by maliciously publishing in its paper the false statement that persons selling the cider were amenable to the liquor laws of the state, and could nllt lawfully sell such beverage in the prohibition districts at all, nor elsewhere in the state without paying the license fee required of dealers in liquors; that this malicious and false publication deterred its patrons from making further purchases of the cider, and prevented plaintiff from gaining any new customers, and