RUSSELL

v.

2. As to the trust. It is objected that the assignments are to the Defendant, Clark & J. B. Murray jointly, CLARK'S and that the latter is not made a Defendant to this bill. EX'RS. But he was not within the jurisdiction of the Court, and by the act of Congress he could not be made a Defendant, unless he had been found in Rhode Island. By the practice of Courts of equity, they will not dismiss a bill for want of parties who cannot be served with process. 2. Atk. 510. Darwent v. Walton.

Another reason for charging Clark alone, is that he has recived by far the greater part of the funds of R. M. & Co. and it is a principle in equity that each trustee shall answer only for the effects which he himself received. Digest of chancery cases, 182. 1. P. Will. 81. Fellows v. Mitchel. 3. Atk. 583. Leigh v. Barry.

But there is a stronger ground for charging Clark alone. He received from Loomis and Tillinghast, an assignment of funds which they held in trust, to pay to Joseph and William Russell all such monies as they should be liable to pay as guaranty toe Plaintiff. The Defendant, Clark, received a transfer of this assignment from Loomis and Tillinghast, with full notice of the trust, and is thereby bound to execute it. It was a trust substantially for the benefit of the Plaintiff There were no funds of Joseph and William Russell, or of either of them, to which he could resort to satisfy his judgment against them. If he had recovered the money from them they might have resorted to this fund; and equity, which avoids circuity of action, will make it liable directly to the Plaintiff.

C. LEE, suggested that there was no allegation in the bill to which these facts are pertinent.

DEXTER. The Defendant, is charged with having received such assignments as make him liable as trustee to the Plaintiff.

These facts appear in the exhibits, which are referred to in the bill and make part of it. The bill prays for general relief-and under such a prayer, the Court will give such relief as the facts of the case will warrant.

C. LEE, contra.

This case presents two questions

1. Whether the Plaintiff's demand shall be satisfied out of the funds of Clark & Nightingale-and

2. Whether it shall be satisfied out of the funds of R. M. & Co.

1. Are Clark & Nightingale liable out of their own estate ?

If so, it can only be upon the letters of the 20th and 21st of January, 1796, either because they create a liability at law or because they contain a fraudulent misrepresentation. If the letters do not create a liability at law, a Court of Equity will not extend them beyond their legal import.-If they do create a liability at law, a Court of Equity, has no jurisdiction.

None of the parties considered them as letters of guaranty, until it was suggested by Jonathan Russell, in his letter to Nathaniel Russell, of the 11th of July, 1796. The Plaintiff himself, although he wrote six letters to the Defendant, after he indorsed the bills, and before notice of their dishonor, yet never once mentioned that he had indorsed such bills upon the credit of C. & N.This negligence to give them notice that he had done so, is a complete discharge to them, upon the same principles, as the want of notice discharges the drawer of a bill of exchange.

The bill states certain facts from which slight inferences are drawn, that C. & N. intended to guaranty the Plaintiffs indorsement of the bills; but the answer of Clark, expressly denies all those inferences, and all intention of becoming responsible, and all private assu rances of indemnity from R. M. & Co.

Although no external proof can be added to the letters, or adduced to explain them, yet the answer of the Defendant, who is called upon to answer as to his intention, is evidence. It is made evidence by the Plaintiff, having called for it in his bill.

VOL VII

12

RUSSELL บ.

CLARK'S

EX'RS.

USSELL The opinion of this Court, upon the construction of the letters in this case, as reported in 3. Dall. 424, alCLARK's though not conclusive, because it was not upon the point EX'RS. on which the Court decided the cause, yet will be respected. The Chief Justice, there states, that the ma jority of the Court inclined to the opinion, that the letters did not, of themselves, import an undertaking, or guaranty. To support this opinion, Mr. Lee referred to the cases cited in 3. Dall. 420. 421.

But it is said, that the Defendant is able by reason of the misrepresentation. If so, it is a clear case at law, and not in équity.

But the allegation is not supported by the evidence. The representation was true. R. M. & Co. were a house of integrity and punctuality-and were in good credit.

In order to charge the party at law, (and a fortiori in equity,) the representation must be false. 3. T. R. 51, Pasley v. Freeman-2. Esp. 92.-But here the evidence proves the representation to be true-and if it had been false, it would have been wholly a case at law.

2. As to the ground of trust. The Plaintiff relies upon three trust funds. 1. The indemnity to Clark and Nightingale. 2. The indemnity to Joseph and William Russell. 3. The trust fund in the hands of Loomis and Tillinghast.

1. The indemnity to Clark & Nightingale, was only against the suit at law then depending, which has been since. abandoned by the Plaintiff; and the fund withdrawn, and the deed revoked under the power of revocation which it contained.

2. The indemnity to Joseph and William Russell, was only for what they should pay. They never did, and never will pay any thing. It was a provision for their benefit, not for that of the Plaintiff. Equality is equity. If the Plaintiff claims a priority of payment, he must show a strict right. The indemnity is upon the condition of a release, which J. & W. Russell have never given. But the deeds under which this indemnity is

claimed, were revoked by those of March, 1799, and RUSSELL, May, 1800.

3. As to the trust deed to Loomis and Tillinghast ;--the evidence respecting it is not admissible. It appears only in a copy of the examination of one of the partners of the house of R. M. & Co. before the commissioners of bankrupt, certified by the clerk and judge of the district Court, which is not competent evidence.

Nothing in the bill alludes to this deed, so that Clark had no opportunity of answering respecting it. Besides it appears that the amount of indemnity claimed by Loomis and Tillinghast, which was to be first satisfied before the trust could arise in favor of Joseph and William Russel was for R. M. & Co's. notes to the amount of 60,000 dollars, indorsed by Loomis and Tillinghast, and the property pledged to them does not appear to exceed 28,000 dollars. Clark delivered up to L. and T. the notes for 60,000 dollars, and received the property amounting to 28.000 only. Clark had a right to stand in the shoes of L. and T. and claim the 60,000 dollars, in preference to J. and W. Russell, so that, in fact there was no fund assigned for the benefit of the latter. There was no surplus after satisfying the claim of Loomis and Tillinghast.

J. B. Murray ought to be a party. The Plaintiff has no right to call upon one of the trustees only to answer for the whole fund, when he has received only a part. If the jurisdiction of the Circuit Court of the United States is so limited, that it cannot compel the appearance of all the parties, let the Plaintiff apply to the State Court. The case of Darwent and Walter, 5. T. R. 500 applies to the State Courts, but not to Courts of limited jurisdiction; as the Circuit Courts of the United States are.

The assignees of the bankrupt, Murray, ought also to be made parties, for they have an interest in the residuum.

The Plaintiff also ought to have obtained a judgment and fieri facias against R. M. & Co. before he could call for a discovery of their effects. t. Vernon, 399. Augell v. Draper.-3. Atk. 200, Shirley v. Watts.

V. CLARK'S

EX'RS.

RUSSELL The want of proper parties, may be objected at the v. hearing. 3. Atk. 111. Jones v. Jones.--2. Atk. 10. DarCLARK's went v. Walton.

EX'RS.

JONES, on the same side.-1st. As to the law of the case.

This Court, as a Court of Equity, has no jurisdiction upon any ground stated in the bill. It states that the letters amount to a guaranty, but that the Plaintiff has failed in three suits at law. If there be a remedy at law, and no fraud, nor defect of evidence, it is no case in equity. Nor is there any equitable jurisdiction on the ground of construction of the letters. They must have the same construction in equity as at law. The confession that the Plaintiff has no legal remedy, is a confession that the Defendant is not bound by the contract. Mitford, 111. 189. Nor does the ground of fraud alone, give an equitable jurisdiction. A Court of law is as competent as a Court of Equity, to decide a case of fraud. But it is said, there is a different remedy in a Court of Equity. This is true in some cases. When the fraud is on the part of the Complainant, a Court of Equity will refuse its aid ;-when on the part of the Defendant, it may set aside a deed obtained by fraud; but it will give no remedy in damages for a fraud; it will give no indemnity for a deceit by a third party. Where these are the object of the suit, the remedy is at law where the damages are assessed by a jury. Préc. in ch. 147,

It is true, that mistake and accident, are grounds of equitable juris liction; but the mistake or accident, must be specifically, stated; the accident must be manifest, and the evidence clear. The Court will then correct the instrument, and make it what it ought to have been. 1. Vez. 318, 319. Hankle v. Roy. Ex. ass. Comp. 3. Br. C. C. 451. Burt v. Barlow.-1. Vez. jun. 59, Doran v. Ross.-id. 171, Payne v. Collier. id. 364, Smith 7. Maitland.

2. As to the construction of the letters, per se; and the effect of the evidence in regard to them.

They do not import a contract on their face.-A letter of credit is well understood among merchants. It