to the tenant by the act of God," and states that he is not liable for the whole rent, "as where the sea break in and overflow a part of the land." He cites for this the ancient Case of Richards le Taverner, Dyer, 56a, and Rolle, Abr. p. 236, pl. 1; but, on subsequent consideration, the courts became thoroughly hostile to this view, at least so far as it relates to that kind of loss for which the tenant is in no sense himself responsible. 3 Kent, Comm. 465; Belfour v. Weston, 1 Term R. 310; Ellis v. Sandham, Id. 710; Hallett v. Wylie, 3 Johns. 44; Fowler v. Bott, 6 Mass. 63; Viterbo v. Friedlander, supra. What is said in the case of The Tornado, 108 U. S. 342, 351, 2 Sup. Ct. 746, does not apply where a lease has become executed, and has created an estate in the land for a term of years, as the foregoing authorities all show. The case of the music hall (Taylor v. Caldwell, 3 Best & S. 826), cited by Mr. Justice Blatchford, as it is by counsel here, was not a lease of the music hall, but only an agreement to let it, which makes a vast difference in the matter of a defense against the covenant to pay rent. In such an agreement it is open to a court of equity, as in other contracts, to apply the rule that the impossibility of performance, where it depends on the continued existence of a thing, is excused if the thing perish. Id. But a leasehold estate in land is an exception to this rule, as the cases cited establish. Tayl. Landl. & Ten. § 37.

But, moreover, as before stated, a court of equity will not specifically enforce such hard bargains, even where there is an express covenant. Tayl. Landl. & Ten. § 268. Therefore, if the defendants here had covenanted in the use of this landing to indemnify the plaintiff against all loss by flood or currents, and it came about that the loss was so enormous as to destroy the whole ground, river landing and all, so that a restoration was impossible, and the money it would have taken to stop the destruction was so out of proportion to the value of the thing leased as to make it unconscionable, a court of equity would, in its discretion, refuse specific performance. Hardness of bargain alone will not suffice to stay the hand of a court of equity, and it was so decreed in the case of a lease of telegraph wires where the rent money was inadequate. Telegraph Co. v. Harrison, 145 U. S. 459, 471, 12 Sup. Ct. 900. it was refused where the circumstances showed that it was unconscionable to compel a man to comply with a contract that was oppressive. Manufacturing Co. v. Gormully, 144 U. S. 224, 237, 12 Sup. Ct. 632. And in another case, where it was refused because the proof was doubtful, the rule is stated that, while the discretion to withhold relief is not to be exercised capriciously or arbitrarily, but according to settled principles, it must always be done with reference to the facts of the particular case. Hennessey v. Woolworth, 128 U. S. 439, 9 Sup. Ct. 109; Nickerson v. Nickerson, 127 U. S. 668, 8 Sup. Ct. 1355; Cheney v. Libby, 134 U. S. 68, 78, 10 Sup. Ct. 498. In Dalzell v. Manufacturing Co., 149 U. S. 325, 13 Sup. Ct. 886, the court quotes approvingly Lord Hardwicke's rule that the contract must be "certain, fair, and just in all its parts." In the case of Railroad Co. v. Cromwell, 91 U. S. 643, Mr. Justice

Bradley said the court would not shut its eyes to the evident character of the transaction. In Marr v. Shaw, 51 Fed. 860, it is said that "where, upon a review of all the circumstances of the case, it is patent that it will produce hardship or injustice to either of the parties," specific performance will be refused. And in Pullman Palace Car Co. v. Texas & P. R. Co., 11 Fed. 625, specific performance was refused because the contract was unconscionable as against the public. All these cases cite the leading case of Willard v. Tayloe, 8 Wall. 557, so much relied on here, where the contract was decreed to be performed upon conditions which provided against its inequitable features, which is impossible in this case. Mr. Story sums up the result by saying that "courts of equity will not decree specific performance, except in cases where it would be strictly equitable to make such a decree"; and Mr. Pomeroy, by saying that, "if the contract is unfair, one-sided, unjust, unconscionable, or affected by any other inequitable feature, or its enforcement would be oppressive or hard on the defendant, or would work any injustice, * its specific performance will be refused." 1 Story, Eq. Jur. § 750; 3 Pom. Eq. Jur. § 1405. It must be conceded that any court charged with such a wide discretion must look carefully to the legal principles that control it. and relieve it of all arbitrariness and capriciousness, lest we descend into a mere substitution of irregular and desultory judgment for that which is guided by "the established doctrine and settled principles of equity," as mentioned by Mr. Justice Bradley in Willard v. Tayloe, 8 Wall. 567. But, on the preceding page, he cites approvingly Lord Hardwicke's judgment, which refused to compel a tenant, under a covenant to repair, to pull down and rebuild houses which did not comply with the covenant. London v. Nash, 1 Ves. Sr. 12.

**

善

It was not, in my judgment, within the contemplation of the parties, or either of them, to provide by the covenants of this lease against the calamity that came upon this lessor and lessee by the extraordinary and unprecedented destruction of the banks of the river in front of this city,-a violence of nature which at one time threatened to carry away a considerable portion of the city itself, by undermining its foundations and establishing the channels of the river where streets and houses had been, which thing has been done before under our eyes in front of this very city, where the ground for the houses and streets is now again restored after years of submersion. The unconscionable character of the demand does not arise out of the covenants themselves, but out of the construction that is now put upon them, and the demand for damages for the not doing of things which it is not certain would have stopped the ravages if they had been done; and this, in lieu of a specific performance which might not have been decreed if the covenants for it had existed. If the very demand now made had been expressed in the words of the covenant, under the principles and cases cited, it would be inequitable to grant it and it would be refused. We have seen how the courts have struggled against

the attempt to introduce hardship as an equitable relief in favor of the lessee, as against the lessor's demand for rent, when the property has been partially or wholly destroyed without his fault. Surely, a court of equity will not superadd to the burden of the rent that of damages and compensation for the value of the prop-erty, upon either improvident covenants so binding him, or by implication upon words not expressing that especial and particular obligation; certainly not, if it have any discretion in the matter. Decree for the rent and interest, with reference to fix amount, if necessary.

CENTRAL TRUST CO. OF NEW YORK v. ASHVILLE LAND CO. et al. (Circuit Court of Appeals, Sixth Circuit. March 3, 1896.)

No. 342.

1. CORPORATIONS-AGENT'S AGREEMENT FOR ARBITRATION-RATIFICATION. If an English corporation, controlled by a board of directors in England, objects to an agreement made by its general manager in this country to submit to arbitration a claim against the company for a trespass in cutting timber from the lands of another, it is its duty, within a reasonable time of receiving notice of the agreement, to notify the other party of its disapproval; and, in the absence thereof, a ratification may be presumed. The assertion of counterclaims by it is not a disaffirmance, but rather justifies a presumption of an affirmance.

2. TAXATION BY COUNTIES-LEVY BY COURT-SUFFICIENCY OF RECORD.

Under the Tennessee statute authorizing counties to lay the same or a less tax upon privileges as that levied by the state, it is sufficient if the record of the court levying the county tax shows that the rate on privileges is made the same as that of the state, for the subjects of the tax and the rate on each are definitely specified in the revenue law of the state, and by reference thereto the county tax is definitely shown. 8. SAME.

The Tennessee statute requires that three-fifths of the justices entitled to attend are necessary for the levying of a county tax. Mill. & V. Code, § 4974. By requirement of the state laws there is an official record of the division of the counties into districts, and of the election and commission of every justice of the peace entitled to sit at the sessions of the county court. Held, therefore, that where the record of a session at which a tax was levied shows that a specified number of the justices were acting, who, by reference to the official records above referred to, of which the court takes judicial notice, are ascertained to constitute three-fifths of the number entitled to attend, this is sufficient evidence that the requisite proportion acted in levying the tax.

Appeal from the Circuit Court of the United States for the Northern Division of the Eastern District of Tennessee.

John K. Shields, for appellants.

Jesse L. Rodgers, for appellee.

Before TAFT and LURTON, Circuit Judges, and HAMMOND, J.

LURTON, Circuit Judge. The Central Trust Company of New York, trustee under a mortgage made by the American Association, Limited, an English corporation owning lands in Tennessee,

filed its foreclosure bill in the circuit court of the United States for the Eastern district of Tennessee. Subsequently Henry Holbrook Curtis filed an independent bill in the same court for the purpose of winding up the affairs of the American Association, Limited, as an insolvent corporation. Receivers were appointed, the property of the corporation placed in their possession, and the two causes consolidated. The Ashville Land Company, a corporation of the state of Tennessee, and the county of Claiborne, one of the counties of the state of Tennessee, became parties by intervention, for the purpose of asserting claims against the American Association, Limited. Each of these interveners obtained decrees, from which appeals were allowed to this court. The claim of the Ashville Land Company, as presented by its intervening petition, was that it was the owner of lands in Tennessee upon which the American Association, Limited, had trespassed by cutting and removing timber to the value of about $2,000, and that its claim for damages had, by agreement between the two corporations, been submitted for arbitration to one John M. Brooks, who assessed the damages at the sum of $1,933.71, which sum the American Association, Limited (hereafter called the "English Company"), had not paid, although it had accepted the award, and promised to pay the sum thus awarded. The English Company denied the trespass, denied the authority of its agent to submit the matter to arbitration, and denied any agreement to pay the award of the arbitrator. It also set up a claim for money paid for and on account of the Ashville Land Company, amounting to $600, and pleaded this by way of offset. The issues thus presented were referred to D. A. Gaut as special master, to take proof, and report his conclusions of law and fact. The special master reported that the claim of the Ashville Land Company had been submitted to the arbitration of John M. Brooks, through the action of A. A. Arthur, general manager and representative in Tennessee of the English Company, and that the arbitrator had found that the English Company was liable, by reason of the trespass mentioned, to pay the sum of $1,933.71. He further reported that this award had been ratified by the directors of said English Company. He found in favor of the set-off claimed by the latter company, and that, after crediting same, there was due $1,462.86, with interest from May 28, 1892, and that this sum was entitled to priority over the mortgage to the Central Trust Company by virtue of priority in date and the statute of Tennessee giving preference to domestic creditors out of the assets of foreign corporations doing business within the state. The exceptions filed to this report were overruled, and a decree rendered accordingly.

The errors assigned involve two questions. First. The authority of A. A. Arthur, as an officer of the English corporation, to submit the claim of the Ashville Land Company against the English Company to arbitration. Second. If his authority was insufficient, then has his act in excess of his agency been ratified by the corporation?

Arthur's position is designated as that of "general manager." Whether his duties and powers were defined by any by-law of the company does not appear, though no such office or officer is mentioned in its cha ter. The company whose agent he was, in respect of such matters as were properly within the scope of a "general manager," was, as before stated, an English corporation managed by a board of directors from its principal office in London. Its charter powers were very wide, and contemplated the conduct of a varied business in America. It had authority to buy, own, and sell lands, lay off and build up towns, engage in iron and steel making, railroad building, and generally to do all that pertains to a town-building, mining, manufacturing, and land-speculating company. Arthur was its chief representative in America, where these varied enterprises were to be chiefly conducted. A power of attorney was given him of limited character, and evidently intended as only partially defining his powers, for it relates alone to his power to make sales of town lots or parcels of land, lay off roads, streets, etc. It is, however, difficult, on this record, to say that he had authority, by reason of either the recorded power of attorney or the general and undefined powers of a general manager, to submit a claim against his corporation to arbitration, without express authority from the directors. This it is unnecessary, however, to decide, for we are clearly of opinion that if he exceeded his powers in signing the articles of submission his act was subsequently affirmed by his directors. He did, while its representative in America, and while exercising the authority of a general manager, enter into an agreement with the appellee for an arbitration of a matter in dispute between the two corporations, and that the award should be final. After the award was made, it, together with the submission, and a statement of the circumstances made out by his assistant, was forwarded to the company at its London office, which thus became apprised of the action of its general manager, and of the result. That the company had the power to submit such a claim to arbitration, or to authorize Arthur, in his discretion, to do so, is not questioned. The most that can be said is that he, as general manager, exceeded his power in doing so under the constitution and by-laws of the corporation. If the company so regarded this agreement, it was its undoubted duty, upon being apprised that he had made this submission, to in a reasonable time disaffirm his act, and notify the Ashville Land Company of its disapproval. Failing to do this within reasonable time, a ratification may be presumed. Indianapolis Rolling-Mill v. St. Louis, Ft. S. & W. R., 120 U. S. 256, 7 Sup. Ct. 542; Pittsburgh, C. & St. L. Ry. Co. v. Keokuk & H. Bridge Co., 131 U. S. 371, 9 Sup. Ct. 770. The evidence submitted not only fails to show such disaffirmance within a reasonable time, but tends strongly to establish that his action was affirmed. The corre spondence between the London office and the American office, and between the latter and the Ashville Company, seems to establish that the directors sought to offset the award by the assertion of