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cember 1, 1905. No rent was paid beyond October 1, 1905. understand the rule of law to be that a waiver in such instance applies where the rent has accrued and been accepted after the right of re-entry has attached on account of forfeiture; and not where it is paid and accepted as due for a period prior thereto. Big Six Development Company v. Mitchell (C. C. A.) 138 Fed. 279, 1 L. R. A. (N. S.) 332; Douglas v. Herms, 53 Minn. 204, 54 N. W. 1112; Gluck v. Elkan, 36 Minn, 80, 30 N. W. 446; Norris v. Morrill, 43 N. H. 213; Campbell v. McElevey, 2 Disney, 574; Jackson v. Allen, 3 Cow. (N. Y.) 220, 230; Blecker v. Smith, 13 Wend. (N. Y.) 531; Hunter v. Osterhoudt, 11 Barb. (N. Y.) 33; Price v. Norwood, 4 Hurlstone & Norman, 511.
Objection is made to the service of the notice to quit. Service was made August 1, 1905, upon the corporation, Evans, Johnson, Sloane Company, by delivering to and leaving a copy with Rudolph Altshul, he being the treasurer of the corporation. In Kansas City Railroad Company v. Daughtry, 138 U. S. 305, 11 Sup. Ct. 308, 34 L. Ed. 963, the court said: 'At common law, service was made on such head officer of a corporation as secured knowledge of the process to the corporation." 2 Taylor on Landlord & Tenant, § 481, says: "Notice to quit. When a corporation is tenant, the notice must be addressed to the corporate name, and served upon one of its officers." Under the general laws of Minnesota service of summons upon a corporation defendant in the district court in a civil action is by delivering a copy thereof to the president or other head of the corporationsecretary, cashier, treasurer, a director, or managing agent. Section 5199, Gen. St. Minn. 1894. As the lessees named in the lease contract were individuals it accounts for the absence of the usual prescription where the lessee is a corporation as to how the notice to quit should be served. The service of notice in this case we think was good under the local statute of the state, and was good at common law, made upon so important an officer as the treasurer as a means of conveying notice to the corporation. The service being good at the time when made upon the corporation, the subsequent adjudication of bankruptcy and the selection of trustees did not abrogate the service already made upon the corporation or necessitate reservice on the trustees in bankruptcy. In this respect the trustees succeeded only to the rights and stead of the bankrupt, and took the estate cum onere. Under such circumstances, the trustees stand simply in the shoes of the bankrupt at the time they succeeded to the estate. See York Manufacturing Company v. Cassell et al., 201 U. S. 344, 26 Sup. Ct. 481, 50 L. Ed. 782; Thompson v. Fairbanks, 196 U. S. 516, 25 Sup. Ct. 306, 49 L. Ed. 577; Yeatman v. Savings Institution, 95 U. S. 764, 24 L. Ed. 589; Hewit v. Berlin Machine Works, 194 U. S. 296, 24 Sup. Ct. 690, 48 L. Ed. · 986.
The final contention of appellants' counsel is that the courts are adverse to forfeitures and that they are the abhorrence of courts of equity. Equity, however, still more abhors a failure of justice, as nature does a vacuum. In Brewster v. Lanyon Zinc Company (C.
C. A.) 140 Fed. 801, 819, the conditions under which a court of equity will assist in the enforcement of a forfeiture under lease contracts, are extensively discussed by Judge Van Devanter. His conclusion is aptly expressed in the following paragraph:
"The better view is that the rule is not absolute or inflexible, any more than is every forfeiture harsh and oppressive; that its influence and operation do not extend beyond the reasons which underlie it; and that in cases, otherwise properly cognizable in equity, there is no insuperable objection to the enforcement of a forfeiture when that is more consonant with the principles of right, justice, and morality than to withhold equitable relief. As said by Story, Eq. Jur. par. 439: "The beautiful character and pervading excellence, if one may so say, of equity jurisprudence, is that it varies its adjustments and proportions so as to meet the very form and pressure of each particular case in all its complex habitudes.'"
What would be the attitude of the lessor in this case if the court cannot declare a forfeiture and restore the possession of the premises to it so long as the trustees in bankruptcy may continue to pay the rentals and observe the other requirements of the lease, short of the erection of the new building? A suit for specific performance would hardly lie against the trustees in bankruptcy to erect the new building on the premises. Where would they get the funds applicable to such purpose? If they have other assets than the leasehold interest, the court of bankruptcy could not take that fund which it holds for the benefit of all the creditors of the estate and invest it in a permanent building improvement to run with the lease. Neither would the court of bankruptcy hold up the closure of the administration of the estate through a long period of time for the construction of such improvement as the lease contemplates, and await the result of the income therefrom for distribution among the creditors. The bankrupt law does not contemplate such proceeding. The only remedy, therefore, according to appellants' suggestion, would be an action for damages on the broken covenant to build. The fact of the adjudication of the corporation as a bankrupt shows it is insolvent. Its entire property, including the leasehold interest, has passed to the trustees in bankruptcy for administration among the creditors. Is the lessor to have its claim liquidated and then allowed against this estate, and then participate in a dividend that might not amount to 10 cents on the dollar of its claim? There is no provision of the lease contract which contemplates that such a judgment allowance would be a continuing lien upon the leasehold estate. Under the bankrupt law the leasehold interest would be sold, and the proceeds distributed pro rata among all the general creditors of the estate. If the lessor should present its claim for liquidation and allowance against the estate, the judgment therein would cover the entire present and prospective loss consequent upon the breach of the building covenant, as it is an indivisible unit. The purchaser of the leasehold interest under the sale by the trustees in bankruptcy would not be liable for any antecedent breach of the covenant to build; and if the claim for damages therefor were liquidated and allowed in the bankruptcy proceeding, in any view the purchaser would take the property unburdened of the building covenant. If the claim were not so liquidated, under appellants' the
ory, even if the lessor should recognize the new tenant, there would be no default on his part as to the building covenant until after the expiration of another five years, and the only remedy of the lessor would be an action for specific performance against, or damages for the breach committed by, the purchasing tenant. It would be difficult to conceive of a situation that appeals more strongly to the equity jurisdiction of the court for protection and relief. The remedy adopted by the lessor in this suit was proper, and the remedy afforded by the decree of the District Court was just.
The findings and decree of the District Court are, therefore, affirmed.
NAUMBURG v. CITY OF MILWAUKEE.
(Circuit Court of Appeals, Seventh Circuit. April 10, 1906. Rehearing Denied June 18, 1906.)
MUNICIPAL CORPORATIONS-NEGLIGENCE OF SERVANTS-INJURIES TO THIRD PERSON-CORPORATE OR GOVERNMENTAL ACTS.
Milwaukee City Charter, c. 9, § 6, provides for the maintenance of certain drawbridges at the expense of the city; and section 5 requires the board of public works to appoint, subject to the approval of the common council, all bridge tenders, whose compensation shall be fixed by the common council, and who may be removed at the pleasure of the board of public works or the mayor. Chapter 2, § 1, declares that the officers of the city shall be a mayor * and as many bridge tenders, firemen, policemen, etc., as may be provided by the act or the common council may from time to time direct; and chapter 15, § 4, provides that the mayor and aldermen and harbor master and bridge tenders of the city shall severally exercise within the city all the powers of policemen, etc. Held, that where the tender of a drawbridge maintained by the city was guilty of negligence in the operation of the bridge, causing injuries to plaintiff, his act was an act of the city in its corporate, and not its governmental, capacity, for which the city was therefore responsible.
[Ed. Note. For cases in point, see vol. 36, Cent. Dig. Municipal Corporations, §§ 1569-1576.
Liabilities of municipal corporations for torts of public officers, see note to Mayor, etc., of New York v. Workman, 14 C. C. A. 534.] Baker, Circuit Judge, dissenting.
In Error to the Circuit Court of the United States for the Eastern District of Wisconsin.
The plaintiff in error filed his complaint in the Circuit Court of the United States for the Eastern District of Wisconsin. alleging in substance that he was a citizen of the state of New Jersey, and that the defendant was a municipal corporation having applied for and received its charter from the Legislature of Wisconsin; that within its limits the municipality maintained a certain draw, jackknife, or bascule bridge known as the "Grand Avenue Bridge," over the Milwaukee river; that said bridge is and was built and operated so as to allow the passage of boats and vessels along said river; that said bridge is and was divided in the center, so as to have two parts, each of which parts was attached to the abutments at either end of said bridge; that at the points where said parts were attached there were certain mechanical devices and arrangements for raising the parts of the bridge 146 F.-41
from the center; that said bridge was worked by electricity and was controlled and operated by men employed by and under the direction of the city, known as bridge tenders, all in accordance with the city charter; that defendant had not supplied any guards or warnings at said bridge, but left the approaches unguarded and unsafe; that said bridge was used and provided for the convenience of persons traveling the streets, and at the time of the acts complained of the said bridge and the streets leading thereto were crowded with people going to and from and upon said bridge and streets; that plaintiff was a traveling salesman in the employ of a New York firm, and about 7 o'clock p. m. on September 1, 1903, was traveling along said Grand avenue and approached the bridge for the purpose of crossing over it; that no warning of danger was given to plaintiff by the bridge tender, and no guard or device was put up to warn or caution him of any danger in crossing the bridge; that when he approached the bridge the bridge tender said to plaintiff, "Come on, you have plenty of time to cross," and while he was attempting to cross, the bridge tender raised the bridge and threw plaintiff off, from which he received the injuries complained of; that said injuries were caused by the negligence of the bridge tender, and without any fault on the part of plaintiff. To this complaint the city filed its demurrer for the want of sufficient facts. The demurrer was sustained, and judgment was rendered for the defendant.
The provisions of the city charter which bear upon the question here are as follows: Chapter 9, § 6: "Draw or swing bridges, with openings sufficient for the passage of vessels, shall be maintained and supported at the expense of the city, at the following places in said city, to-wit [among other places]: From Wisconsin street, in the Third and Seventh Wards, to Grand avenue in the Fourth Ward [the bridge in question]." Chapter 9, § 5: "The board of public works shall appoint, subject to the approval of the common council, all bridge tenders, whose number, duties and compensation shall be fixed and determined by the common council. Any bridge tender may be removed at pleasure by the board of public works, or by the mayor." Chapter 2, § 1: "The officers of said city shall be a mayor * * * and as many bridge tenders, firemen, constables, policemen, and such other officers and agents as may be provided by this act, or as the common council may from time to time direct." Chapter 15, § 4: "The mayor and aldermen and the harbor master and bridge tenders of the city * * * shall severally and respectively have and exercise within said city, all the powers of policemen of said city, without any compensation or claim to compensation therefor."
Charles Friend and A. D. Friend, for plaintiff in error.
Before GROSSCUP and BAKER, Circuit Judges, and ANDERSON, District Judge.
After stating the facts, as above, the opinion of the court was delivered by ANDERSON, District Judge.
The cause of action set forth in the complaint is based upon the negligence of the bridge tender in opening the draw or lift of the bridge, when plaintiff was crossing, whereby the plaintiff was injured, while exercising due care. The sufficiency of the complaint turns upon the question whether the bridge tender was such an agent or servant of the municipality as that the latter is liable for his negligence-whether the doctrine of respondeat superior applies. applies. The Circuit Court held that the question was one of local law, that under the decisions of the Supreme Court of Wisconsin the opening of the draw was a public or governmetal service, and that the doctrine of respondeat superior did not apply.
It is well settled that municipal corporations have a dual character. They are governmental instrumentalities, endowed with powers and duties necessary for the establishment and maintenance of good government within their territory. In the exercise of these powers and discharge of these duties they are political divisions of the state, employed by it as a means through which it may perform the duties that it owes to all citizens alike. But they are more than mere governmental instrumentalities. "They are incorporated at the wish and special instance of the inhabitants for the advancement of their own private interests," and "extensive powers and privileges, which are to be exercised for the improvement of the territory within their limits and for its adaptation to the purposes of business and residence, are conferred upon them." While acting in their capacity as governmental instrumentalities they are, like the sovereign power itself, exempt from liability for acts done or omitted, unless such liability is expressly created by statute. On the other hand, when they are acting, not in their public or governmental capacity, but in their municipal or corporate capacity, exercising powers and privileges given them for their own corporate benefit, they are held liable for their acts and omissions in exercising these powers. Williams, Municipal Liability for Tort, §§ 4, 5, et seq., and authorities cited, The Supreme Court of Wisconsin has repeatedly recognized and declared this doctrine, with its distinctions. In Hayes v. Oshkosh, 33 Wis. 314, 14 Am. Rep. 760, it was held that a municipality is not liable for the misconduct of its officers or employés when "the corporation is engaged in the performance of a public service, in which it has no particular interest, and from which it derives no special benefit or advantage in its corporate capacity, but which it is bound to see performed in pursuance of a duty imposed by law for the general welfare of the inhabitants or of the community." The defendant city was accordingly held not liable for the negligence of the fire department. In Folk v. Milwaukee, 108 Wis. 359, 84 N. W. 420, it was held that the city was not liable for the death of a child lawfully attending one of its public schools, when such death was caused by negligently allowing the sewer of the school building to become clogged up; and the court there said:
"This court early adopted and has consistently maintained the rule that a municipal corporation is not liable for injuries resulting from the acts or defaults of its officers when it is engaged in the performance of a merely public service, from which it derives no benefit in its corporate capacity, but which it is bound to see performed in pursuance of a duty imposed by law for the general welfare of the inhabitants, or the community"-citing Hayes v. Oshkosh, supra.
This phase of the rule is illustrated in many other Wisconsin Schultz v. Milwaukee, 49 Wis. 254, 5 N. W. 342, 35 Am. Rep. 779, and Little v. Madison, 49 Wis. 605, 6 N. W. 249, 35 Am. Rep. 793, are illustrations of the doctrine of nonliability in respect to the acts or omissions of police officers. In Kuehn v. Milwaukee, 92 Wis. 263, 65 N. W. 1030, the doctrine was applied to the acts of the board of public works in disposing of the city's garbage; and in Manske v. Milwaukee (Wis.) 101 N. W. 377, it was applied to a