timber for mining and domestic purposes should not be restricted to lands known to contain minerals in paying quantities, but should include such adjacent lands as, under all the conditions, would not be deemed to be subject to entry under any of the laws of the United States except as mineral lands; this right or privilege being exercised under such regulations as will preserve the timber for the benefit of the inhabitants engaged in or connected with the mining industry. The District Court for the District of Colorado in United States v. Edwards, 38 Fed. 812, and the Circuit Court for the District of Nevada in United States v. Richmond Mining Co., 40 Fed. 415, have similarly construed the act in question. No adverse construction of the act appears to have been given by any of the federal courts. Nor has the Secretary of the Interior changed his ruling with respect to this feature of the act. The evidence in this case shows that most, if not all, of the land from which the timber was cut was classed as mineral by the miners in that vicinity and in the return of the Surveyor General. The instruction of the trial court with regard to the character of the land and the meaning of the act was not, therefore, in our opinion, open to objection.

It is further assigned as error that the court refused to instruct the jury that, even though the lands might have been mineral lands. within the meaning of the act of Congress, if the cutting and removal of the timber therefrom was not done in compliance with the rules and regulations of the Secretary of the Interior governing such cutting and removal, such acts would be unlawful; and that it was necessary for the defendant in error, in order to justify the cutting and removal of the timber from the land in question, to show by a preponderance of evidence that it was done in full compliance with said rules and regulations. The act is specific in making the privilege of taking timber from the public domain for mining purposes subject to "such rules and regulations as the Secretary of the Interior may prescribe for the protection of the timber and of the undergrowth upon such land." The Secretary of the Interior has prescribed rules governing such taking of timber, and it is necessary, under the act, to show that timber was taken in accordance with the requirements of such rules as to show that it was taken from land of the character described in the act. It was, therefore, necessary for the defendant in error, the United States having established their title to the land in question, and the fact that the timber was taken therefrom, to show that the timber was taken for the purposes prescribed by the act, and in the manner directed in the rules and regulations of the Secretary of the Interior. There is no evidence in the record upon that subject. An instruction that such evidence was necessary was a proper one to give to the jury, and the United States was entitled to an instruction of that character. The court, in this connection, gave the following instruction:

"The law provides especially that the Secretary of the Interior may establish rules for the regulation of the cutting of timber, and especially as to the undergrowth. It is not always that rules established by the department under the law are valid rules. Rules established by the department must be in harmony with the law itself. There is one rule here which provides for the cutting of the undergrowth and the preserving of the undergrowth. This

comes clearly within the law, and there are some other rules there which I think are within the purview of the act. Some may not be. Now, there is no evidence here to show whether any of these rules were complied with or not, as I recollect; but you must be the judges of that. If there is no evidence whatever that those rules were complied with, then it results that they have not followed this law of Congress strictly. Those rules should have been complied with; but if you find that they have not complied with the rules, that does not authorize you, in my opinion, to assess the damages as in willful trespass. The most that can be done, if you find they acted in good faith in all other respects, would simply be to find the value as innocent trespassers. It would not go beyond that."

If it be contended that this instruction covered, in effect, that requested by the United States, then the verdict was against the instruction, and should have been set aside by the court.

The judgment of the Circuit Court is reversed, with instructions to grant a new trial.

FOLEY et al. v. GRAND HOTEL CO. et al.

(Circuit Court of Appeals, Eighth Circuit. March 17, 1903.)

No. 1,781.

1. EQUITY-RELIEF AGAINST FORFEITURE-OPPRESSIVE CONDUCT IN PROCURING APPOINTMENT OF RECEIVER.

A hotel company which had leased its hotel, acting in concert with a company which had made a conditional sale of the furniture therein to the lessee, to be paid for in installments, instituted a suit in equity against the lessee, alleging his failure to pay two monthly installments of rent, and obtained the appointment of a receiver, without notice, who took possession of the hotel and its contents, including the furniture and the funds on hand. At that time the lessee was not in default on the furniture, and had paid a large part of the purchase money. An installment which came due the next day, however, was not paid, and the seller declared a forfeiture of the contract under its terms, and filed an intervening petition in the suit, claiming to be the absolute owner of the furniture, and asking that its rights as such be protected. The lessee assigned his interest in the furniture contract to appellants, who held a mortgage thereon; and they offered to pay the installment due the seller, which was refused. They then filed an intervening petition, tendering payment of the installments remaining due, and asking protection of their rights as assignees of the contract. The remedy at law of the plaintiff in the suit was adequate under the lease, and no sufficient showing was made to justify the appointment of the receiver. Held. that the parties concerned in instituting the suit having taken the property into a court of equity by an unusual and unauthorized proceeding, which itself apparently caused the default in the furniture payment, upon which the forfeiture was declared, the court should exercise its powers to protect the equitable rights of all other parties in interest, and that, on the facts shown, appellants were entitled to a decree permitting them to pay into court the remainder due on the furniture contract, and to become the owners thereof.

Appeal from the Circuit Court of the United States for the Southern District of Iowa.

J. J. Shea (John P. Organ, on the brief), for appellants.

Charles M. Harl, for appellee Penn Mutual Life Ins. Co.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

THAYER, Circuit Judge. From the record on file in this case, it appears that the Grand Hotel Company, one of the appellees, which owned a hotel in the city of Council Bluffs, Iowa, filed a bill of complaint against its tenant, D. C. Smith, wherein it prayed for the appointment of a receiver for the hotel property. The bill so filed contained no allegations, we think, which entitled the complainant to the appointment of a receiver, or to other equitable relief. It simply alleged that its tenant had leased the hotel for a period of five years from and after April 1, 1899; that he had failed to pay two installments of rent, in the sum of $300 each, which were due, respectively, on June 1, 1901, and on July 1, 1901; and that he had suffered the hotel to run down, and had been careless in the management of the same. The bill of complaint showed on its face that by the terms of the lease the hotel company had the right to declare a forfeiture of the lease for the nonpayment of these installments of rent. Nevertheless, without declaring such a forfeiture, and bringing an action at law for an unlawful detainer if its tenant refused to surrender possession of the hotel property, it applied to a court of equity for equitable relief in the form of an order appointing a receiver; and the lower court, as we think, erroneously granted such relief, and assumed charge of the property through the hands of its receiver. The present appeal, however, does not challenge the order so made, and the action of the lower court in making it is not before us for review.

The bill of complaint was filed on July 31, 1901, and a receiver was appointed on that day by an order made without notice to the defendant. On September 23, 1901, the Penn Mutual Life Insurance Company, one of the appellees, which held a mortgage on the hotel, and also an assignment of the rents under the lease in favor of Smith, and which had also made a conditional sale of all the furniture in the hotel to D. C. Smith, the lessee thereof, filed what it termed an intervening complaint in the action that had been brought by the hotel company against Smith, the lessee. In its intervening petition the insurance company, after setting out the terms of the agreement under which it had sold the hotel furniture to Smith, alleged, in substance, that Smith had failed to pay one installment of the purchase money that was due on the furniture, amounting to $150, which matured August 1, 1901; that by virtue of his failure to make this payment it had declared a forfeiture of all of his rights under the conditional contract of sale, as it had a right to do under the provisions of that instrument; and that the furniture in question was in the custody and under the management and control of the receiver theretofore appointed by the court for the hotel property. It accordingly prayed that the receiver might be adjudged to hold the furniture for the intervener's benefit, and that the court would protect its interest therein and its rights and title thereto. A few days later the hotel company made a merely formal answer, practically admitting all of the allegations of the intervening petition. Afterwards, on November 1, 1901, T. J. Foley, as surviving partner of the firm of Fenlon & Foley, and Peregoy & Moore, filed an intervening complaint in the equity cause. This intervening complaint stated, in

substance, that on April 9, 1901, D. C. Smith had executed and delivered a chattel mortgage, covering the furniture in the hotel, to secure the payment of an indebtedness which he owed to the interveners, and that on August 1, 1901, said Smith had executed in favor of the intervener J. M. Fenlon a written assignment of all his interest in the contract whereby he had purchased the hotel furniture from the Penn Mutual Life Insurance Company; that the interveners had offered to pay the Penn Mutual Life Insurance Company the installments of purchase money that were due to it under the conditional contract of sale, and were ready and willing to pay the same, but that the insurance company had refused to accept the money, and was insisting upon its right to retain the furniture and all of the purchase money theretofore paid by Smith, amounting in the aggregate to the sum of $5,450. The interveners alleged that the hotel furniture was then of the reasonable value of $7,500; that the insurance company was not entitled to hold the furniture as forfeited, together with all of the purchase money which had been paid thereon, but, at most, was only entitled to fair compensation for the use of the property while it had been in the custody of Smith, and to reasonable compensation for any depreciation in the value of the property during that period; and that such fair compensation for the use of the property and for any depreciation in value did not exceed the sum of $1,500. The interveners accordingly prayed that the insurance company be required to receive from the interveners the sums of money due to it under the contract with Smith for the purchase of the furniture, or, if it declined to receive the same, that it be directed to pay into court, for the benefit of the interveners, the amount of money which it had received on account of the purchase, to wit, $5,450; first deducting therefrom reasonable compensation for the use of the furniture, and for any depreciation in the value thereof. They further prayed the court to fully protect the interveners' interest in the hotel furniture, which they had acquired by virtue of the chattel mortgage and by virtue of the assignment aforesaid.

To this intervening petition the insurance company filed a reply in which it reasserted its right to hold the furniture and all of the purchase money which had been paid by the vendee. It also prayed that it be adjudged and decreed that it was the sole and absolute owner of the furniture in controversy, and that all of the rights of D. C. Smith, the purchaser thereof, and all of the rights of the interveners claiming under Smith, be adjudged forfeited.

Many other persons who had claims against Smith, the lessee of the hotel, on account of wages, etc., subsequently intervened in the cause; but the proceedings had thereon are unimportant, and need not be stated. By its final decree, which was entered on December 3, 1901, the lower court decreed that the claims of the interveners T. J. Foley, Peregoy & Moore, and J. J. Shea, as executor of the estate of James Fenlon, deceased, the latter of whom had been made a party to the proceeding, be fully barred and dismissed, and that the Penn Mutual Life Insurance Company was the full and absolute owner of the hotel furniture. From this latter order an appeal was taken by T. J. Foley and J. J. Shea, as executor of the estate of J. M. Fenlon,

deceased. Peregoy & Moore, as it seems, declined to join in the appeal, and they were accordingly named as appellees. The question to be determined, therefore, is one which arises solely between the Penn Mutual Life Insurance Company and Foley and Shea, the latter of whom claim to have succeeded to all the rights of D. C. Smith, the original purchaser of the hotel furniture. Some time after the litigation was inaugurated, Smith surrendered to the hotel company his lease of the hotel, and assigned to it all of his interest in the furniture now in controversy, subject, however, to the rights of the interveners, and is no longer interested in the litigation.

The principal error which the interveners assign is that the lower court erred in enforcing or declaring a forfeiture of their interest in the hotel furniture. It is said, and said truly, that a court of equity never lends its aid to enforce forfeitures, but leaves the parties concerned to assert their rights in a court of law. Courts of equity will grant relief against a forfeiture which has been incurred through accident or mistake, or by reason of any fraudulent, oppressive, or unfair conduct on the part of one who is asserting a right of forfeiture; but a chancellor will not lift his hand to aid a litigant in enforcing a forfeiture. Marshall v. Vicksburg, 15 Wall. 146, 149, 21 L. Ed. 121; Livingston v. Tompkins, 4 Johns. Ch. 415, 8 Am. Dec. 598; Insurance Co. v. Norton, 96 U. S. 234, 242, 24 L. Ed. 689; Henderson v. Carbondale Coal & Coke Co., 140 U. S. 25, 33, 11 Sup. Ct. 691, 35 L. Ed. 332. It is hardly accurate, however, to characterize the intervening petition of the insurance company as a bill to enforce a forfeiture, or the intervention by Foley and Shea as a bill to obtain relief against a forfeiture. After the lower court had appointed a receiver for the hotel property, including the furniture, both the appellants and the insurance company intervened in the case, as they were then obliged to do for the protection of their respective interests. The lower court, having the custody of the res, was asked by the insurance company to declare that it was the sole owner of the property, and had lawfully exercised its right of forfeiture, and to protect its interest, while the appellants asked permission to preserve their interest in the furniture by paying the installments of the purchase money which were due thereon pursuant to the conditional contract of sale. Both interveners were compelled to seek the forum in question after the receiver was appointed, and the court had assumed possession of the property in controversy.

The question of most importance in the case, as we view it, and the one upon which the decision principally depends, is whether the hotel. company and the insurance company acted in concert in filing the original bill and procuring the appointment of a receiver. This is a question of fact, and we have considered it with some care, with the result that we have been constrained to believe that the bill was filed by the hotel company with the full knowledge and consent of the insurance company; the purpose of both parties being to force the lessee out of the hotel, and recover the possession of the same, as well as the possession of the furniture, with as little delay as possible. The question to be determined being, as above stated, one of fact, it would subserve no useful purpose to discuss the same at length.