Nathaniel Russell v. John Clark Executors, and Others

CourtUnited States Supreme Court
Citation7 Cranch 69,3 L.Ed. 271,11 U.S. 69
Decision Date17 February 1812

11 U.S. 69
7 Cranch 69
3 L.Ed. 271
February 17, 1812

Absent Washington, justice.

ERROR to the Circuit Court for the District of Rhode Island, in a suit in equity, brought by Russell, against Clark in his life time, as surviving partner of the firm of Clark and 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 indorsed by the Complainant, Nathaniel Russell, upon the faith of two letters written to him by Clark and Nightingale, in the following words:

Providence, 20th January, 1796.

'Nathaniel Russell, Esq.


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 punctuali 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,


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Providence, 21st January, 1796.

'Nathaniel Russell, Esq.


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,


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 guaranty 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 the 20th and 21st of January, 1796, and that confiding in the responsibility and integrity of C. & N. and in the purity and simplicity of their views, he indorsed

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the bills in question, amounting in the whole to 3,886l 10s 8d sterling.

That Clark & Nightingale, knew that the house of R. M. & C. began business without capital, under their patronage, and were supported by their credit, and that in the year 1795, it was found requisite, in New York and Boston, where the house of R. M. & Co. chiefly did business, that their bills of exchange, in order to their being negotiated in those places, should have the indorsement of C. & N. and even then it was necessary they should be drawn for very small sums.

That the advances and responsibilities of the house of C. and N. for that of R. M. and Co. were originally predicated chiefly upon their personal honor and integrity, and afterwards continued upon the assurances of R. M. & Co. that in case of disastrous events, they should be secured by a priority of indemnity. And that upon like assurances C. and N. agreed to aid R. M. & Co. with funds and credit to enable them to carry on the Charleston speculation which had been concerted between them; and had agreed to give them a letter of credit and guaranty to the Complainant; and if the letters sent, did not in legal construction, amount to such, (which the Complainant does not admit) it must have arisen either from the Defendant, Clark, accidentally penning the letters in terms that did not quite come up to the idea intended by himself, (in which case it would be contrary to equity and good conscience, that he should be permitted to avail himself of such accident to the injury of the Complainant,) or from the terms being artfully and fraudulently contrived by the Defendants, Clark, to give to the Complainant the impression he intended, and yet by secret reservation to leave a door open for his own escape.

That the deceased partner of the Defendant, (Nightingale,) in his life time, confessed, that the house of C. & N. was bound by their letters to indemnify the Complainant; and that Clark has offered to compromise.

The bill further states, that the recommendations of the house of R. M. & Co. given by C. & N. were fallacious

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and unwarranted, covenous, and deceitful, and were made in consequence of a concerted plan, to put R. M. & Co. into possession of large property, upon credit, to give the chance in the first instance of great profits to that house, in case the speculation should be successful, and finally, whether successful or not, to bring to the hands of C. & N. large reimbursements from the proceeds of property so to be acquired, and that accordingly, shortly after, it was known in America, that the house of R. M. & Co. must fall, the Defendant, Clark, availed himself of the private stipulations before alluded to, by obtaining from that house, the greater part of their property, including the proceeds of the rice purchased upon the credit of the Complainant's indorsements.

That J. B. Murray, who was named a trustee, being a citizen of New York, could not be compelled to appear in the Circuit Court, at Rhode Island, and therefore, is not made a party.

The Complainant exhibited copies of five deeds from R. M. & Co. assigning their property to the Defendant, Clark—viz: one dated 23d March, 1798—one 24th March, 1798—two dated 22d of March, 1799—and one 31st of May, 1800; and called for the originals.

The bill avers, that the house of R. M. & Co. has been duly declared bankrupt, and discharged—that the assignees under the commission, are resident in New York, and could not be made parties to this bill; and that in fact, there was nothing left to assign to them—the previous assignments to the Defendant, having transferred the whole.

That Joseph and William Russell, assigned away all their property, so that the Complainant cannot enforce against them, the judgment at law, which he had obtained upon their letter of credit.

That in the deed of the 24th of March, 1798, among the uses to which the assigned property is to be applied, is the following viz: 'Also for the sum or sums, which the said Clark & Nightingale, have paid or are liable to pay on a suit commenced against them, by Nathaniel Russell, of Charleston, South Carolina, for

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amount of certain bills of exchange, there drawn in his favor by Jonathan Russell, of New York, for the amount of three thousand nine hundred and ninety-eight pounds seven shillings and two pence sterling, or thereabouts.' And in a subsequent part of the same deed, another use declared is, 'to retain, and pay to Joseph & William Russell, the amount that shall be recovered and paid from them to Nathaniel Russell, of Charleston, in South Carolina, upon account of a letter of credit to him, given by the said Joseph & William Russell, in favor of Jonathan Russell,' &c.

The Complainant further states, that although, he is unable to compel the payment from Joseph & William Russell, by reason of their having assigned away all their effects, yet William, who has survived Joseph, refuses to assent, or afford any aid in converting those funds to the relief of the Complainant; and the Defendant has the use of the property for an indefinite time; and refuses to account therefor to the Complainant.

He further charges, that C. & N. were dormant co-partners with R. M. & Co. in the Charleston speculation—that R. M. & Co. were, at the time of the recommendation from the Complainant, deeply involved in debts, which they had not the means of discharging. that their credit was fictitious, and the fiction created and kept up by C. & N. who were privy to their transactions, and who knew that the representation they made was false, and fraudulent.

The bill seeks a discovery of the funds of R. M. & Co. in the hands of the Defendant, Clark, and of the trusts upon which he holds them, and the manner in which he has applied them or any part of them; and prays that the intention of the parties as to the guaranty, may be enforced—that the proceeds of the rice purchased by means of the Complainants indorsements may be applied to his relief—that the Defendant, Clark, may be compelled to execute the trust reposed in him, and to apply to his indemnification, the funds set apart for the indemnification of Clark & Nightingale, and of Joseph and William Russell; and that he may have such other relief, as his case may require, and be entitled to.

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The deed of assignment of the 23d of March, 1798, transferred all the property and effects of the firm of R. M. & Co. in the United States,...

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