v.

RUSSELL house of R. M. & Co. was ficticious and not real-he denies that C. & N. attempted to give them a false creCLARK's dit to deceive the public or any person. He avers that EX'RS. he as well as the house of C. & N. had full faith and

confidence in the responsibility and solvency, the honor and integrity of the house of R. M. & Co. and had no agreement, or understanding with them for their indemnity or security in case of any disastrous event, of which he had no apprehension. He denies that C. & N. ever made any agreement to aid R. M. & Co. in raising funds for the speculation in Carolina produce and that they ever asked from C. & N. any letter of guaranty to go or be sent to Charleston-he denies that they ever promised such letter of guaranty, or gave R. M. & Co, any authority to instruct their agent to assure any person that such letter of guaranty should be furnished by them. He denies that the letters of 20th & 21st of January were designed, or written in artful and ambiguous terms with intent to deceive. He does not admit that his partner, Nightingale, acknowledged that they were letters of guaranty or that the house of C. & N. were bound thereby to indemnify the Complainants.

He avers that C. & N. never asked, and R. M. & Co. never offered, any security for their responsibilities until after the failure of R. M. & Co. was publicly known in the United States. He admits the deeds and assignments to himself, and J. B. Murray, as set forth in the Complainants bill, and admits the receipt of large sums of money, a part of which has been applied, and part remains to be applied to the objects of the trust. He states that since the execution of the deeds of assignment to him and J. B. Murray, Robert Murray has been discharged as a bankrupt, under the law of the United States; and the assignees under that commission have brought suit in equity in New York against this. defendant, and J. B. Murray and R. M. & Co. claiming an account of the assigned property and praying that it may be transferred to them; which suit is still pending.

He declares his belief that the assigned property will be sufficient to discharge all the appropriations made by the deeds of trust, and also the whole claim due to the Complainant, but denies that it is liable in his hands therefor.

D.

William Russell, in his answer, admits the guaranty, RUSSELL and judgment; and the insolvency of the house of Joseph and William Russell. He states that he has no CLARK'S knowledge that R. M. & Co. ever conveyed any proper- EX'RS. ty to the Defendant, Clark, and J. B. Murray in trust to indemnify him, but if there be any such conveyance he is willing that the Complainant should have the benefit thereof.

There was evidence that bills of exchange for 15,500 sterling drawn in eighteen sets, by R. M. & Co. and indorsed by Clark and Nightingale, were sold in Boston, in December, 1795, and January, 1796, and derived credit chiefly from their indorsement.

There was also evidence to prove that the house of R. M. & Co. were in good credit until after January, 1796.

The decree, in the Court below, was rendered, by consent, against the Complainant who brought his writ of error.

DEXTER, for the Plaintiff in Error, contended,

1. That the letters themselves, under the circumstances of the case, imposed a liability upon Clark and Nightingale to indemnify the Plaintiff and

2. That the Defendant, Clark, was liable by reason of the funds which he held in trust for the Plaintiff's indemnification.

1. In support of the first point he contended, first, that the letters themselves created an absolute responsibility.-2d. That if they did not of themselves create an absolute responsibility, yet they contained a direct affirmation of a fact which the Defendant must show to be true, or must prove that he was himself deceivedand sd. That the evidence shows that the affirmation, contained in the Defendant's letters, was not true; and that he was guilty of such negligence and falshood, as will render him liable to indemnify the Plaintiff.

1. The Defendant is absolutely bound by these letters.

v.

RUSSELL They contain an unqualified assertion of a fact-the responsibility and integrity of R. M. & Co. In other CLARK's cases, if a man will assert positively a fact, and request EX'RS. another person to act upon the faith of such assertion, he is bound to make good his assertion, or to compensate the injury which he has sustained who placed confidence in such assertion.

Thus if a person covenant that he has good title-he is bound to make it good or to repair the damage sustained by his defect of title. This is the case of a coyenant under seal.

So in a policy of insurance, the positive assertion of a fact is a warranty, and he who makes it is bound to prove it to be true. This is a case not under seal.

In the present case, it is more reasonable that C. & N. should sustain the loss, because they volunteered the affirmation, and with a view to induce the Plaintiff to give credit to R. M. & Co. Words spoken upon enquiry made for information will not bind, if he who spoke them was himself deceived.

But the present case is not like that, it was not a sudden answer to be made on enquiry-it was a deliberate affirmation, in writing, made to one who they knew would place confidence in their representation, of a fact which they had the means of knowing, and which they ought to have known, before they asserted it in such a manner. It was not a letter of friendship-but of business. It requested the Plaintiff to render them every assistance in his power;" that is, to aid them with his credit.

If a man receive services upon request, he is bound to remunerate them. Is there in reason, justice, or law, any difference between, services rendered, and responsibilities incurred? In the present case, C. & N. not only requested the Plaintiff to lend his credit to R. M. & Co. but told him he might be assured of their complying fully with any contract or engagement they might enter into with him. If the words had been "we assure you,” &c. there could have been no doubt of their responsibility. But when they say "you may be assured," &c. it is evident they meant the same thing. It was

their assurance, whether expressed in the one way or RUSSELL the other-and it was their assurance upon which the Plaintiff acted.

2d. But if these words are so artfully selected, that they would not in a Court of law bind the Defendant, yet if they were calculated to deceive,, and intended to induce the Plaintiff to give credit to R. M. & Co.-if they were such as between merchants, were understood to guaranty the credit of the persons recommended, they will have that effect in equity.

C. & N. ought to have been assured of the fact of the solidity of the house of R. M. & Co. before they stated it so positively.

They ought to have enquired of them the state of their affairs. It is not sufficient for them to say that they did not know but the fact was so. If they were not certain, they ought to have stated the simple truth-that it was a young house-had been conducting business for some time and sustained a good character. That they themselves had given them credit to a considerable amount and that they were still their debtors. If C. & N.. had written thus, as they ought to have done, the Plaintiff would not have given them credit he would have continued to hold the rice until he had security-and would not have given it up, but upon the faith of letters which in his opinion would bind C. & N. to indemnify him.

They must have known that they were not justified in stating the facts as they did. There were facts within their knowledge which ought to have excited their suspicions of the credit of R. M. & Co.-particularly the fact that their bills could not be sold without the indorsement of C. & N. and then only in small sums. The knowledge of the great losses of R. M. & Co. by captures in 1794, and the fact that they began business without capital, ought to have made C. & N. more careful. That C. & N. trusted them, is not evidence that they believed them solid. They had a personal confidence that R. M. & Co. would secure them by assignments in case of difficulty, as in fact, they did,

v. CLARK'S

EX'RS.

RUSSELL

บ.

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 to the 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.