The day before a certain installment of rent became due, a petition in involuntary bankruptcy was filed against the lessees, and they were adjudged bankrupt. The installment falling due the day next after the filing of the petition in bankruptcy was not paid in full, and the lessors retook possession. It was held that the resumption of possession for any reason other than termination of the lessees' tenancy prevented the lessor from collecting future rents. The court said:

"The lessors invoke the third clause of the lease contract, which provides that: If any installment of said rental shall remain unpaid for sixty days after it becomes due, the entire rental to the end of the lease shall become at once due and payable.' It is entirely competent to contract that the consequence of a default in the payment of an installment of interest for the use of money, or of rent for the use of property, shall be the precipitancy of the maturity of the principal of the money loaned, or of future installments for the rental of the property in respect to which default has been made. Rent is the compensation for the use and enjoyment of the thing rented, and is ordinarily demandable whether the tenant actually enjoy the use and possession of the subject of the rent or not, unless the failure is due to some fault of the letter. But in this case the letter demands that the lessee shall continue to pay rent, although it has repossessed itself of the thing for the enjoyment of which the rent is to be paid. The resumption of possession by the lessor operates as a surrender of the lease, and puts an end to the liability of the lessee for future rents, unless otherwise provided. A covenant in a lease authorizing a landlord, on default of rent, to take possession, and relet, if possible, for the benefit of the tenant, and that in such case the tenant shall remain liable for the deficiency, or for the whole rent if a reletting is impossible, has been held valid. In case of a covenant such as that just mentioned, the lessor's possession would be as agent for the lessee; and the liability of the lessee would be contingent upon a deficiency, and clearly not such a fixed and absolute liability as would be provable in bankruptcy. In the lease here under consideration, the lessor has reserved the right to resume possession in quite a number of contingencies, the effect of which the contract declares shall be to 'determine all right and interest the said lessee may have in said system.' Without more, it cannot be that the lessee shall be liable for the future rents, when the effect of the act of the lessor has been to determine all his right and interest in the subject of the lease. Forfeitures are never favored, and when it is claimed that the lessor of property may resume possession of the subject-matter of the lease, and continue to hold the lessee liable for future rents, although deprived of the use and enjoyment of the thing leased, the terms of the bond must be exceedingly plain. Liability under such circumstances for future rents would be in the nature of a penalty, and the covenant by which the lessor may have both the use of the thing rented, and the compensation which the lessee was to pay for its use, must be so specific as that no other reasonable interpretation can be placed upon it."

It is a noticeable fact that, in the petition for the allowance of the claims in question against the bankrupt estate, there was a singular omission in stating what was the consideration of the notes sought to be allowed against the estate, as required by the bankrupt law; the petitioner contenting himself with stating that the consideration was for the transfer of the notes to him by Jarmuth. The palpable reason for this omission in the statement of his case was that he would have had to disclose that the consideration for the notes as between the original parties was the right to remove and use the slag dumps. The evidence in this case shows that the notes paid by the vendee, up to the time of the forfeiture, fully covered all the slag removed, and the petitioners' evidence tended to show that the slag in the dump was actually worth more than the contract price; and, yet, while the vendor

took back and appropriated the entire remaining property, thereby taking away from the vendee and its creditors the very means of paying the notes given therefor, the petitioners come into a court of bankruptcy to have allowed against the estate the entire unpaid contract price, amounting to about $45,000.

In our judgment the right to such extraordinary exaction is not clearly so nominated in the bond, and the decree of the District Court in disallowing the claims should therefore be affirmed.

It is accordingly so ordered.

SANBORN, Circuit Judge (concurring). In my opinion the contract here in question evidences a conditional sale wherein the parties intended to agree, and did agree, that upon default in payment of any of the installments the vendor might collect the entire purchase price and might also retake and hold the property sold. It is only by a change in the decisive word of the agreement which seems to me to make the contract mean the very opposite of what the parties intended and clearly expressed and by an extended argument that a different construction is justified. I am content to take the agreement as the parties made and executed it without change. But such a contract is so unconscionable that it may not be enforced in equity, and a proceeding in bankruptcy is a proceeding in equity. In such a contract the vendor has the option to retake the property sold, to keep the payments already made, and to abandon collection of the future installments, or to keep the payments already made, to enforce the collection of the future installments by the sale of the property which he has taken back on the theory that it is security for the payment of the installments, to apply the proceeds to their payment and collect the balance, or to leave the property sold in the possession and ownership of the vendee and to collect the entire future installments. He may not, however, retake and retain the property sold, and then recover in equity the future installments of its purchase price, because the sale of the property is the consideration of the notes given or the promise made to pay the price.

On this ground I concur in the affirmance of the decree below.

BROCK et al. v. FULLER LUMBER CO.

(Circuit Court of Appeals, First Circuit. February 12, 1907.)

No. 659.

1. WRIT OF ERROR-PROCESS-AMENDMENT.

A writ issued out of the federal court described plaintiff's citizenship, but omitted to state the citizenship of either of the three defendants. De fendants moved to dismiss for want of jurisdiction because of this omission, whereupon plaintiff asked leave to amend the writ by inserting after the description of the "plaintiffs" the words "citizens and residents of.” This motion was allowed, all parties treating the word "plaintiffs" as intended for "defendants." after which defendants, who were represented by the same counsel, filed a special plea denying that one of them was a citizen of Massachusetts, which plea was heard and overruled. Held, that the error in the motion to amend was unsubstantial, and that plaintiff, as

defendant in error, was entitled to correct the record by substituting the word "defendants" for "plaintiffs."

2 Jury-Right TO JURY TRIAL-WAIVER.

A written stipulation is not essential to a waiver of a jury to assess damages on a bond after default, under Rev. St. § 961 [U. S. Comp. St. 1901, p. 699], declaring that, when the sum for which judgment shall be rendered in such suit is uncertain, it shall, if either party request it, be assessed by a jury.

3. SAME-PROCEEdings-RequesT FOR JURY-TIME.

Plaintiff sued on a contractor's bond to secure performance of a written contract. On the trial, defendants' attorney stated that defendants might be defaulted, but that he "would like to be heard on the question of damages," and immediately thereafter suggested that the case be sent to an auditor. This was agreed to, and, though a jury was then present, an auditor was appointed, and no request was made for a jury trial at any time during the term, nor until four months after default, and after defendants had learned that the auditor's report was unfavorable, when they applied for an assessment of damages by a jury, as authorized by Rev. St. § 961 [U. S. Comp. St. 1901, p. 699]. Held, that the finding of the Circuit Court that the request for a jury trial was too late should not be disturbed.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 31, Jury, §§ 1631⁄2, 164.

Right to trial by jury'in federal court, see note to O'Connell v. Reed, 5 C. C. A. 603; Vany v. Peirce, 26 C. C. A. 528.]

In Error to the Circuit Court of the United States for the District of Massachusetts.

Thomas Hunt (Gaston, Snow & Saltonstall, on the brief), for plaintiffs in error.

Charles F. Choate, Jr. (Frederick H. Nash and Choate, Hall & Stewart, on the brief), for defendant in error.

Before COLT, Circuit Judge, and BROWN and HALE, District Judges.

BROWN, District Judge. This is a writ of error to review the rulings of the Circuit Court in an action on a bond given to secure the performance of a written contract. The plaintiffs in error (defendants in the Circuit Court) contend that the Circuit Court erred (1) in denying their motion to dismiss for lack of jurisdiction, and (2) in denying their claim for a jury trial on the question of damages.

The writ properly described the plaintiff as the Fuller Lumber Company, a corporation duly organized under the laws of New Hampshire, and a citizen of New Hampshire, but omitted to state the citizenship of either of the three defendants. Upon this omission the defendants based a motion to dismiss for want of jurisdiction. The plaintiff then filed a motion to amend its writ. In this motion it asked that the writ be amended by inserting after the description of the "plaintiffs" the words "citizens and residents of." The use of the word "plaintiffs" was obviously a mere slip of the pen. The plaintiff was already properly described; and the use in the motion of the plural in "plaintiffs," and in "citizens and residents of," shows clearly that it was intended to amend, not as to the single plaintiff, whose citizenship was already properly alleged, but as to the several parties defendant. There is no

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doubt that, in overruling the motion to dismiss, and in granting the motion to amend, it was assumed by the court that the amendment related to the parties defendant. This slip of the pen apparently was noticed neither by the court nor by counsel on either side. The defendants were all represented by the same counsel, who, upon the overruling of the motion to dismiss and the granting of the motion to amend, filed a special plea in behalf of one of the defendants denying that he was a citizen of Massachusetts, which plea was heard and overruled. The error is so obvious, and it is so clear that the error was overlooked by every one in the Circuit Court, that we cannot regard this point as substantial. The motion of the defendant in error to correct the record by inserting, instead of the word "plaintiffs," the word "defendants," is granted.

The principal question in the case is whether the Circuit Court erred in denying a jury trial upon the question of damages. The bill of exceptions states the facts as follows:

"The defendants filed, by way of answer, a general denial. The case was then placed upon the list of actions for trial by jury. When the case was called for trial before Aldrich, J., counsel for plaintiff arose and said he was ready for trial. Counsel for defendant stated to the court that as far as the liability in the case was concerned he would agree that the defendant might be defaulted, but that he would like to be heard on the question of damages. The defendants were thereupon defaulted.

"Immediately afterwards, counsel for defendant addressed the court on this question, and suggested to the court that this case appealed to him as a proper case to send to an auditor. The court then said that he thought it was a proper case for an auditor, and asked counsel to agree upon an auditor."

Subsequently there was filed the following agreement, signed by counsel for both parties:

"It is agreed that Irving McD. Garfield, of Boston, may be appointed auditor in this cause."

A rule to auditor was entered December 1, 1904, in the following

terms:

"And now, to wit, December 1, 1904, by agreement of parties, it is ordered by the court that Irving McD. Garfield, Esq., be and hereby is appointed auditor in the above-named action, to hear the parties and examine their vouchers and evidence and to state the accounts and make report thereof to the ceurt."

The case was heard only upon the question of damages by the auditor, who, on March 24, 1905, filed his report. March 29, 1905, a motion was filed by the plaintiff that the report be confirmed, and that execution issue for the penal sum named in the bond. March 30, 1905, the defendants claimed in writing a trial by jury upon the question of damages. March 31, 1905, the defendants moved to recommit the report of the auditor for errors of law. April 15, 1905, the defendants filed exceptions to the report of the auditor, and on the same day filed the following motion for trial by a jury:

"And now come the defendants in the above-entitled action and move and request that the sum for which judgment shall be rendered herein be assessed by a jury in accordance with the provisions of section 961 of the Revised Statutes [U. S. Comp. St. 1901, p. 699].”

The case was heard by the court upon exceptions to the auditor's report, and the motion for trial by jury. The motion for a jury trial was denied, and exception duly taken. March, 28, 1906, judgment was entered for the plaintiff for the penal sum named in the bond.

The plaintiffs in error base their claim to a jury trial upon section 961 of the Revised Statutes [U. S. Comp. St. 1901, p. 699]:

"In all suits brought to recover the forfeiture annexed to any articles of agreement, covenant, bond, or other specialty, where the forfeiture, breach, or non-performance appears by the default or confession of the defendant, or upon demurrer, the court shall render judgment for the plaintiff to recover so much as is due according to equity. And when the sum for which judg ment should be rendered is uncertain, it shall, if either of the parties request it, be assessed by a jury."

Upon the default of the defendants, it became the duty of the court to render judgment for so much as was due according to equity. Juries were then sitting, but the defendants did not request a jury trial. In Aurora City v. West, 7 Wall. 82, 104, 19 L. Ed. 42, it is said:

"But if the sum for which judgment should be rendered is certain, as where the suit is upon a bill of exchange or promissory note, the computation may be made by the court, or, what is more usual, by the clerk; and the same course may be pursued even when the sum for which judgment should be rendered is uncertain, if neither party request the court to call a jury for that purpose. Common-law rules were substantially the same, except that 'the court themselves might, in a large class of cases, if they pleased, assess the damages, and thereupon give final judgment.'"

The defendants' request for an auditor was not preceded by a request for a jury trial. The case stood for trial by the court on the question of damages, unless affirmative action should be taken by the defendants to procure a jury trial. The defendants' counsel did not state that the auditor was desired to prepare the case for jury trial. We think that the court was entitled to assume that the appointment of an auditor was requested, and was agreed upon simply as a convenient step in the assessment of damages by the court. The statement of defendants' counsel, "that he would like to be heard on the question of damages," certainly conveyed no indication of a desire for a jury trial. On the contrary, we think it might well have been understood by the court to indicate a desire to be heard by the court. It is contended by the plaintiffs in error that the right to a jury trial upon the question of liability, by express provision of Rev. St. 648, 649 [U. S. Comp. St. 1901, p. 525], can be waived only by stipulation in writing; and that there is no possible reason why the rule as to the question of damages should be different. This is contrary to the decision of the Supreme Court in Kearney v. Case, 12 Wall. 275, 20 L. Ed. 395, in which it was held that parties may waive a jury trial without filing a written stipulation, and by implied consent, though in such case no error can be considered in the action of the court on such trial. It was said (page 283 of 12 Wall. [20 L. Ed. 395]):

"In those courts where juries are called from a great distance and detained at a heavy sacrifice, the courts usually give jury trials the preference. The efit, therefore, of an announcement by which the number of these trials s diminished and the case placed in an attitude to be taken up at the conven