Russell v. Clark's Executors
11 U.S. 69

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U.S. Supreme Court

Russell v. Clark's Executors, 11 U.S. 7 Cranch 69 69 (1812)

Russell v. Clark's Executors

11 U.S. (7 Cranch) 69

ERROR TO THE CIRCUIT COURT FOR

THE DISTRICT OF RHODE ISLAND

Syllabus

The construction of a letter of credit or of guarantee must be the same in a court of equity as in a court of law, and any facts which might be introduced into one court to explain the transaction may be introduced into the other.

On the question of fraud also, the remedy at law is complete.

Where the only ground of equitable jurisdiction is the discovery of facts solely within the knowledge of the defendant, and the defendant by his answer discloses no such facts, and the plaintiff supports his claim by evidence in his own possession, unaided by the confessions of the defendant, the plaintiff should be dismissed from the court of chancery and permitted to assert his rights in a court of law.

To charge one person with the debt of another, the undertaking must be clear and explicit.

It is the duty of him who gives credit to another upon the responsibility or undertaking of a third person immediately to give notice to the latter of the extent of his engagement.

A fraudulent recommendation will subject the person giving it to the damages sustained by the person trusting to it.

An answer responsive to the bill is evidence in favor of the defendant.

A misrepresentation of the solidity of a mercantile house, made under a mistake of the fact, without any interest or fraudulent intention, will not sustain an action although the plaintiff may have suffered damage by reason of such misrepresentation.

A merchant who endorses the bills of another upon the guarantee of a third cannot, upon the insolvency of the principal debtor and of the guarantee, resort to a trust fund created by the principal debtor for the indemnity of the guarantee for the amount which the guarantee should pay. But the person for whose benefit a trust is created, who is to be the ultimate receiver of money, may sustain a suit in equity to have it paid directly to himself.

When the guarantee is insolvent, a court of equity will not decree the money raised for his indemnity to be paid to him without security that the debt to the principal creditor should be satisfied.

This Court will not make a final decree upon the merits of the case unless all persons who are essentially interested are made parties to the suit, although some of those persons are not within the jurisdiction of the court.

Error to the Circuit Court for the District of Rhode Island in a suit in equity brought by Russell against Clark in his lifetime as surviving partner of the firm of Clark & Nightingale to recover from him the amount of sundry bills of exchange drawn by one Jonathan Russell for the use of Robert Murray & Co, whose agent he was, upon James B. Murray, in London, and endorsed by the complainant, Nathaniel Russell upon the faith of two letters written to him by Clark & Nightingale in the following words:

"Providence, 20 January, 1796"

"Nathaniel Russell, Esq."

"DEAR SIR,"

"Our friends, Messrs. Robert Murray & Co. merchants in New York, having determined to enter largely into the purchase of rice and other articles of your produce in Charleston but being entire strangers there, they have applied to us for letters of introduction to our friend. In consequence of which we do ourselves the pleasure of introducing them to your correspondence as a house on whose integrity and punctuality the utmost dependence may be placed; they will write you the nature of their intentions, and you may be assured of their complying fully with any contract or engagements they may enter into with you."

"The friendship we have for these gentlemen induces us to wish you will render them every service in your power; at the same time, we flatter ourselves the correspondence will prove a mutual benefit."

"We are, with sentiments of esteem, Dear Sir,"

"Your most obedient servants,"

"CLARK & NIGHTINGALE "

Page 11 U. S. 70

"Providence, 21 January, 1796"

"Nathaniel Russell, Esq."

"DEAR SIR,"

"We wrote you yesterday, a letter of recommendation in favor of Messrs. Robert Murray & Co. We have now to request that you will render them every assistance in your power. Also that you will, immediately on the receipt of this, vest the whole of what funds you have of ours in your hands in rice on the best terms you can. If you are not in cash for the sales of the China and Nankins, perhaps you may be able to raise the money from the bank until due, or purchase the rice upon a credit till such time as you are to be in cash for them; the truth is, we expect rice will rise, and we want to improve the amount of what property we can muster in Charleston vested in that article at the current price; our Mr. Nightingale is now at Newport, where it is probable he will write you on the subject."

"We are, dear sir,"

"Your most obedient servants,"

"CLARK & NIGHTINGALE"

The bill stated that in February, 1796, Jonathan Russell arrived in Charleston from New York, bringing a letter of credit from the house of Joseph & William Russell of Providence, with whom the complainant had only a slight acquaintance, but believed them to be in good credit.

That Jonathan Russell informed the complainant, that when he left New York, he was authorized by R. M. & Co. to say that they would forward to him at Charleston, letters of guarantee from their friends, Clark & Nightingale, of Providence, addressed to the complainant, and that he expected soon to receive them.

That he soon afterwards presented to the complainant, the before-mentioned letters of Clark & Nightingale, of 20 and 21 January, 1796, and that confiding in the responsibility and integrity of C. & N. and in the purity and simplicity of their views, he endorsed

Page 11 U. S. 71

the bills in question, amounting in the whole to

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