Case ID: sc-eq_2/html/0001-01.html
Source: Caselaw Access Project
Author: {"author": "Chancellor Rutledge", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[Present, Chancellors Rüteedee, B óbice and Makshama]
    MAY, 1800.
    The State vs. Edward Penman and others.
    
    A partner in a company is not an admissible witness to pr< re that another person is a member, especially where there are written articles.
    A defendant denying- in his answer that he was a partner in a company, andtherebeing no proof that he was, shall not be presumed to he so from equivocal circumstances, nor shall he be presumed to know that a public agent was loaning public funds, of which there is no proof, and which he denies in his answer. A surety to a bond shall have the benefit of a release fairly obtained, though the bond is after-wards assigned to the state.
    THIS was a bill filed by the attorney-general against Edward Penman, to recover the amount of a bond dated 17 February, 1790, executed by Isaac Huger, Thomas Washington, Jacob Weed, Alexander Inglis, Alexander M’Gillivary, William Clay Snipes, and Edward Penman, to Alexander Moultrie, conditioned for the payment of 21310/. 4s. id. in general indents of this state. The bill charged that at the time this bond was given, Alexander-Moultrie was attorney-general, in which capacity he had recovered large sums from the public debtors, which had been paid to him in indents, and being- in default at the close of his office, and having taken the benefit of the insolvent debtors act, he had turned this bond over to the state. It was stated and alledged in the bill, that the in- ° ! dents which he advanced at the time the above bond was signed, were the property of the state. The indents had been sold by col. Moultrie for 2,700/. sterling, and 2,500/. of the money committed to J. Weed,'one of the signers of the bond; who had squandered the money. The bond contained nothing on its face implying that fact, but was conditioned to pay to'the said Alex. Moultrie, his executors, administrators or assigns, (like other common bonds) general indents of this state, to the same amount, “ and to save him harmless from any alteration in the nature of such indents,” with a clause expressing, that “ for such indents, Alexander Moultrie was to be accountable to the South-Carolina Yazoo. Company at their present rate of valueand another clause expressing, “ that this obligation is given by us in behalf of ourselves, and the rest of the members ' of the said company.” It was admitted on all hands, that those indents were advanced by col. Moultrie, who was a zealous member of the Yazoo Company, to enable them to make a present payment to the state of Georgia, conformable to the terms, and at the period prescribed by their law for issuing to the Yazoo company, a grant for a large tract of land ; which grant it was expected would soon be obtained, and large funds realized by the Company from sales. . The principal points on which the case made in the bill was bottomed, were that the defendant was a partner in the Yazoo Compony ; that he knew that the indents that had been borrowed from col. Moultrie, for the use of that company, were the property of the state; and that coL Moultrie held them only as its officer and trustee; and that the defendant ought to be considered as contracting with the state, when he contracted with its public officer, ■and should be charged with the trust of which he was so connusant. ' •
    On the 28th June, 1790, (about 4 months after the giving of the bond) col. Moultrie executed a deed of release to Edward Penman, “ releasing and discharging him from all obligations to him prior to that day, and especially one dated lith day of February last, for furnishing a sum in indents.” On the same day, the said Alexander Moul-trie gave a certificate which he signed as director of the ■ Yazoo Company, setting forth, “ that the said Edward Penman was not then a member of the company, nor was he at any time interested therein, except only that he had been offered a part of a share, (of about 150,000 acres of land,) for some friendly services he was to procure to be done for the Company in London, and which offer Mr, Penman had declined.” When col. Moultrie gave these instruments, he observed to the witness, J. Gairdiner, who attested the execution, that Mr. Penman had refused to accept of a large present of land.” One object of the bill in this case was to set aside the above release and certificate, as having been unduly and improperly obtained through great solicitations and pathetic appeals to the feelings of a man of an easy nature, and by representing that the public impression of defendants having a connex-ion in that business, would destroy his credit in England, and ruin himself and family.
    The defendant in his answer, denied that he ever was a member of the above Company. He also denied aknowledge that the indents loaned by col. Moultrie, were the property of the state ; and he did not admit the fact to be so. That had he known he was incurring any responsibility to the state, he never would have signed the bond. That on the urgent solicitations of q.11 the parties, and col. Moultrie himself, (all of whom represented that it was only a temporary thing, to enable the company to make the cash payment, and get their grant, which would speedily reimburse the sum,) and on the express stipulation by col. Moultrie, that the sum would be so applied, and the grant obtained with the money, and immediately reimbursed from the sales of lands, the defendant was prevailed upon to sign the bond. That his principal inducement to facilitate their acquisition of the grant was the expectation that some of the company who owed money to himself and friends would be enabled to pay their debts, and particular}y Alexander Inglis, who was not only one of the debt- •’, r 1 ■ , . ors, but also one for whose interest and prosperity the defendant took a friendly concern. But the defendant had no share'or, agency in'the concerns or plans of the company, or the application of the funds so borrowed. The defendant farther insisted in his answer, that as soon as he found that the indents, instead of being faithfully applied to the purchase of the grant, had been sold, and the money confided to J. Weed, who had squandered.it, he called on col. M. and demanded to have his name taken from the bond, as the express condition on which he’ signed it was broken, and that col. M. readily admitted the fact, and requested, that instead of erasing the name of the defendant, which would mutilate the deed and might destroy its effect upon the other parties who were of the company, the defendant would accept of a distinct release, which the defendant agreed to, provided col. M. would give him something to counteract the effect of those words in the bond, which implied his being a partner in the Ya-zoo Company.
    To prove that the defendant was a member of the company, the attorney-general relied on the before recited clauses of the bond. He also produced evidence from the records to shew that col. Moultrie was overwhelmed by judgments and mortgages, and that his affairs were so greatly embarrassed at that time as necessarily to suggest the 'fact that so large a sum in general indents in his hands, must have been the property of the state, and held by col. M. as such, of which the defendant could not but be sensible. The attorney general also produced long lists of judgments and executions against the other parties named in the bond, with returns of radia bona, to prove their insolvency. And the attorney-general also offered ■ to call col. Moultrie himself, as a witness to prove that the defendant was a partner in the company, and the circumstances under which the indents were loaned, and also the occasion and inducements for his giving the release and cer-'alicate before mentioned.
    The court, on argument over ruled this species of testimony, on the ground that there was a written charter of association signed by the parties thereto, which was the highest evidence ; and col. M’s evidence was refused on the additional ground that he was directly interested, to fix the liability of the defendant, who being the only solvent party in this bond, was the only source from whence reimbursement can be obtained, and col. M. shielded from being hereafter sued for those indents by the state. For although he also had before this time taken the benefit of the insolvent debtors act, the state was not then a suing creditor, nor had they taken any dividend under the assignment ; and therefore were not barred from suing him after a year and a day.
    The defendant laid before the court a printed pamphlet, published by the Yazoo Company, which contained proof that the company was constituted under a deed of association, and the individualnames subscribed thereto; and having given notice to produce it, now called for the said deed. The deed was produced, and the name of “ Thomas Wash-ingtonfor Edward Penman,” subscribed thereto by Thomas Washington. The defendant havingprovedthathe was in England at the date of this signature, and no authority for W ashington or Welsh to sign defendants name being produced, he called James Gairdiner as a witness, who proved that he was the sole and lawful attorney of the defendant while he was absent, and the power was produced. That he knew nothing of the transaction, and did not give to Washington, alias Welsh, or any other person, authority or instruction to put defendants name to the Yazoo association. Defendant further proved that he arrived from England about the close of January, 1790; that on the 28th February following, Washington, alias Welsh, having ar-from Savannah, (beine; a director of the company') , , i r i ° , . , , , . wrote a letter to the defendant, which was produced, inquiring if it was true, as he had heard, that he (the defendant) had resolved to decline the offer of being a member of the company; that the company was to meet that evening, and he wished Mr. Penman’s answer, that he might let the company know it. On thé reverse of this letter, was a copy of the answer, of the same date, in the most unqualified manner, disavowing all connexion with the company.
    ■ It was contended by Mr. Pbungle, the attorney general, on behalf of the state, that although by the form in which this bond was taken, and has he’en transferred to the state, she appears to hold as assignee, and stand in a derivative capacity, yet that the circumstances that are developed entitle her to claim in an original right; and if so, that no acts subsequent to the signing of this bond can prejudice her claim. That the office of attorney general conferred no power to release the just and lawful claims of the state by matter in pais ; and therefore that col. Moultrie’s release, (he being then attorney general) though under his seal, and might bind him individually, provided it were properly obtained, could not bar the right of the state.— That it is now admitted on all hands that the large sum of public indents which col. M. advanced on the security of this bond, was the property of the state, paid into the hands of their attorney by the public debtors, and ought to have been cancelled in the. treasury as obligations paid off by the state. For although these obligations of the state were a species of circulating medium, yet they carried in them, inherently, the quality of all obligations, that their obligatory force would be destroyed upon being paid off by the obligor. That to issue them again into circulation, and give them the second time an efficacy against the state, by the officer or agent who was intrusted with the possession of them as instruments equitably cancelled, was a breach of trust, and all parties engaged therein must be affected thereby.
    As to the defendant’s knowledge that the indents which col. M. offered to advance were the property of the state whose officer he was, it is inferrable from all the circumstances. col. M. was before and at that time in most embarrassed circumstances, greatly pressed by his creditors, whose multiplied suits, judgments and executions against him were public and notorious.
    In these circumstances it was impossible to suppose that he had then in his own right so large a command of eftec- • tive funds ; and they being of that species which were usually payable for dues to the state, in whose behalf he was the suing officer; the conclusion was obvious and unavoida* ble, that they were the property of the state. This was also more than implied by the circumstances of taking this bond and the terms used in it. Abundant security was to be taken by col. M. not for paying the indents over to any of the obligors, but for his “ becoming accountable to the Yazoo Company for the indents at their present rate of value” — that is, he was to' convert indents that were then in his hands to the use of the company, and the penalty of the bond was stated in indents specifically, and the condition of the bond was not only to repay the precise sum in indents, with no reservation of intermediate interest, but H to save him harmless from any alteration in the nature of such indents.” To what could this clause allude, but to the idea that these indents were quasi cancelled and withdrawn by the state from, circulation, and now about to be re-issued ? That their negotiable nature had ceased in fact — but were now about to be altered in that respect, and to commence a new course of negotiability ? There is nothing in the case that furnishes any other construction to this clause of the bond. The importunity by which the defendant states in his answer, he was prevailed upon-.to sign the bond, and that too by col. Moultrie himself, in a case too in which his own interests as a principal membef of the company were to be advanced, proves that his personal indemnity was the prominent condition on which orjy pe could be induced to depart from the official obli-J , gations of duty, and violate the trust under which he held those indents.
    If the defe-ndant did not therefore Icno w by direct formal information the concern the state had in these indents, tffe fact was sufficiently manifest to put him on enquiry — and there are many cases in this court to shew that to be sufficient to affect the party, and be equivalent to notice of a trust. As to the grounds on which the defendant after-wards sought to be discharged from the obligatory effect of the bond, they were not well founded. It is true that Col.-M. intrusted them toan agent, who instead of applying them to the uses of the company, sold them and squandered the money. But supposing that agent not to have been one agreed upon by all the parties, and employed to use the fund for the purpose of obtaining the grant, (which is highly presumable from all circumstances) yet the stipulation by col. M. in the bond was, that he was to be accountable, not to the defendant, but to the “ South-Carolina Yazoo Company.” To that company he was still accountable, and the defendant, in common with the other signers of the bond, had the remedy. The release therefore was demanded on fallacious grounds ; and it was yielded to the intreaties of the defendant improperly and ought not to stand — more especially too as the release operates in law as effectually to discharge the other co-ob-ligors as though the name of the defendant had been erased as' he required. So that the reason given for substituting the release was equally fallacious. It ought therefore to be regarded as a collusive instrument to defeat a responsibility already incurred to the state, the consideration of which was past and gone — beyond the possibility of recalL As to the defendant’s not being a member of the Yazoo Company, he cannot be permitted to aver against his own deed which expressly says, “ this obligation is given by us in bebalf of ourselves and the rest of the members of the said company.” This was a strong affirmation that all the ,1 , i , • ,1 signers then were members — and each is estopped to deny it. The defendant might be a dormant partner, and it might suit his purposes and views to remain such, and therefore his not subscribing the association or articles of partnership was not repugnant to such a connexion: a person who is interested in a concern for profit and loss, according to a well known rule of law, is equally chargeable as a partner, with those who do formally subscribe the articles of partnership. And the certificate of Col. M. an insolvent partner, surely ought not to be set up against the creditors of the concern, after the responsibility has once attached. Authorities cited. 2 Foubl. 155. 2 Vern. 2/1. 1 Atk. 490. Amb. 313. 2 P. Wms. 414.
    Mr. Ford defendant’s counsel stated that he would in the first place review the transactions between the parties, as they appear of themselves unconnected with extraneous circumstances. 2d. State what is necessary to be made out in order to connect them with the state, and produce a responsibility to her.. 3d. Examine how the facts and the law so necessary, have been made out and proved.
    Here we have a simple bond given to Alexander Moul-trie, dated 17th February, 1/90, in the penal sum of 21310/. in indents payable on demand: conditioned to pay to the said A. M. his executors, administrators, or assigns, general indents of this state to the like amount; and save him harmless from any alteration in the nature of such indents — with a clause expressing that for such indents, “the said A. M. was to be accountable to the South Carolina Yazoo Company at their present rate of value and another clause, “ that this obligation is given by us on behalf of ourselves and the rest of the members of the said company.” This instrument purports on its face to be a mere private transaction; and by its terms implies nothing-more than the plain matter expressed — intimating no interests except those of the parties. The attorney general has erected an ingenious construction on the clause of indemnity to col. Moultrie, “ to save him harmless from any alteration in the nature of the indents.” But a more obvious construction, and doubtless the true one, will be found jn the fluctuating value of that species of paper. This is ,, , , , , well known — and from this circumstance indents were as much a subject of speculation as any other commodity in the market. Col. M. advanced them “ at the present rate of value” — if when they came to be repaid him, they should have fallen from that value, he would have been a loser had not this clause been provided to make good the difference. The release given 28th June, 1790, sealed by A. Moultrie to the defendant, imports also to be a private transaction between individuals, no less than the bond. — . We see neither the attorney general nor the state in the one or the other : and as to the certificate that is given, it is subscribed expressly “ as director of the Yazoo Company.” The release is expressed on its face to be for consideration. The bill states that this release was given in consequence of great importunity and pathetic representation — but it does not charge fraud. That this release and certificate were so obtained, is however not admitted in the' answer, nor proved by the. state, and therefore forms no feature of the case. Yet were it even true, mere importunity is not sufficient to set aside a deed if attended with no fraud or circumvention. If the facts alledged in the answer were true, that the very condition of the whole transaction was that the grant should be obtained with the indents, there was on the part of Col. M. a moral obligation, upon that purpose being frustrated, to give the release— most probably it would have been decreed in this court — - and therefore importunity and pathetic representations were just and proper. And as to the certificate of the defendant’s not being a member of the company, we have no need of its aid' — for it is charged in the bill and denied in the answer, and by the rules of this court that denial stands good and conclusive, until it shall be encountered at least by the testimony of one positive credible witness, and his attestation fortified by strong corroborating circuxn-stances. 1 Vern. 161. 2 Atk. 19, 140. 3 Atk. 649.— The state has not produced even one witness — the attorney general has rested on circumstances only. But surely the door was not open for the proof by circumstances, until the effect of the defendant’s answer on oath was neutralized by the oath of one credible witness. This is .stumbling at the threshold. Yet 'if the circumstances apart from the answer be considered, they preponderate in favor of the defendant. It is proved that the company was formed by a written instrument to which the names of the members were subscribed. This was the highest evidence of who constituted the company — and being called for was produced. It is true the name of the defendant was found at the bottom of the instrument; but instead of proving him to be a party, the very history of that signature proved that he was not a party. It was officiously placed there by Washington (or Welch) who we have proved had no authority ; and whose correspondence with the defendant at an after period, in effect admitted fully that he had no authority. This signature, and. the great pains taken by that same person, and by all the other parties, to get the defendant’s name signed to this bond, with the insidious clause attached at the end of it, “ for ourselves and the rest of the members of the Yazoo Company,” sa-vours rather of a desire to obtain by an indirect means what they had failed to accomplish by the consent of the defendant. The words used by Col. M. to the witness when he executed the certificate, a Mr. Penman refuses to accept of a large present of land” — shews that their obtaining his association in their plans, had been a matter of trial and experiment. As to those words of the bond, they ought to be restrained to those signers who are confessedly members of the company. As the bond was not made for the purpose of specifying who were members, that clause is to be regarded as res inter aüos acta. 1 P. Wms. 683. And an ancient maxim saith, “ if many join in one act, the law saith it is the act of him who could best do it.” Noy Max. p. 33. Thus the answer, which by the rules of this court was entitled to stand conclusive, instead of being encountered, is strongly confirmed by all the attendant circumstances. And so stands the question as between original parties. And this brings us to consider se-con(jp^ what is necessary to be made out, in order to connect these transactions with the state, & induce a responsibility to her. The attorney general, with his usual discrimination, has seen the danger of predicating the claim of the state upon the footing of an assignment of the bond by Col. Moultrie, knowing that by all the established rules, the bond would pass to the state, charged with all the original equity. For an assignment of a bond “ is an agreement, only that the assignee shall have all the fair and equitable benefit that the assignor was himself entitled to.” 1 P. W. 498. 1 Vern. 240, 348, 475. 2 Vern. 499, 588. 2 Ves. 375. 1 Bro. C; R. 543. The bill therefore seeks to place the state in an original relation, either by an actual or constructive privity. It is charged that the indents which were the subject of the contract, were the property of the state — that they were known to be so by the defendant — that they were advanced for the benefit of the Yazoo Company — that the defendant was a member of it — that these indents being subject to a trust in the hands of Col. M. the defendant is affected by actual or constructive notice, and therefore a trust results to the state. If these points have been máde out, the liability of the defendant must follow — but it is necessary they should be made out by confession, or by proof. And this leads to the consideration,
    Thirdly, how far these grounds are made out.
    That the indents did in fact belong to the state, has been assumed — but is neither confessed in the answer nor proven. No witness has sworn it — no document has established it. Individual persuasion has been adopted for legal proof — but for the sake of experiment, let that fact be as-> sumed. The next point is, that the indents were advanced for the benefit of the company. This is an indispen-sible link, because the very bond given to col. Moultrie expressly makes him a trustee for so applying the indents. Therefore,, if he diverted or allowed them to be otherwise applied, or used them, the very substratum of the contract would fail, even at law, and far less would equity •up and enforce it. But it is in proof that Col. Moultrie did not so apply the indents, but they were sold and the money squandered — and.so this ground would fail. But if this point should be conceded or surmounted, the next point, “ that the defendant did know that the indents belonged to the state, remains to be considered. And were we still to overlook the defect of proof, in regard to the principal fact, that they did so belong — what proof have we that the defendant knew it at the time ? There is no proof, and it is denied in the answer ; and if more were needed, even probability is against it — for if Col. M. was in fact committing a gross breach of trust, in converting & disposing of the public funds in his hands, he must have felt the strongest inducements to conceal it from every body ; and there was no circumstance attending this transaction, prompting the disclosure of such a fact. Then the law of this court, before adduced to another point, is conclusive on this. But it is arguedthat because Col. M. was much in debt, and pressed by his creditors, the defendant ought to have presumed that the indents could not be his own. This ground is very broad indeed, and would go to convict any one of a legal indiscretion, who carried on dealings with a man who was in debt. It goes farther — it imposes an obligation to make an offensive scrutiny into the funds of a man in debt, to ascertain whether the monies in his hands were truly his own, to guard one against becoming constructively a confederate in a breach of trust. It is said the circumstances of col. M„ were sufficient to put the defendant on enquiry. From whom else could he have enquired, but from col. M. himself ? And the answer he would have given, ("had not the indecorum of the enquiry prevented any answer at all) is sufficiently manifest from what the bond itself implies. He proffered them as his own indents — disposed of them as bis own — and took bond, payable to himself, his executors, administrators and assigns. Then the answer denies knowledge of the fact, if it existed, (which is not proved) an¿ the enquiry of the defendant, if the court could exact * J from men a precaution so extraordinary, would have conducted to the same result. Indents were a species of circulating medium, payable to bearer. They passed from hand to hand like cash; and like money, having no ear mark, it was equally impossible to distinguish the owner from the possessor. The authorities cited and urged for the complainant, have therefore no application, “ as where a party will take a thing, knowing of a use or trust, he shall be construed a trustee, for then he is particeps crimi-nis et dolus and fraus nemini patrocinantur,” cited from 2 Fonb. 155 ; and 2 Vern. 2/1. Also, “that constructive notice shall be held sufficient, for whatever is sufficient, to put a party upon enquiry, is good notice in equity.” 1 Atk. 490. Ambl. 313. And that where a purchase is made with trust money by a trustee, and the conveyance taken to himself, a trust will result. 2 P. yVh 414. All these authorities, good and true in themselves, fail of application here, for want of the facts on which they arise. The defendant was no trastee — had no notice actual or constructive, of this being a trust fund, and was not particeps criminis of any fraud on the state; and having already been shewn to be no member of the company, and being released from this bond by the obligor, before it was assigned or transferred, he is on no ground whatever liable to the state. The bill therefore ought to be dismissed.
    
      
       This case was intended to be inserted in the preceding volume, but could not be prepared in time.
    
    
      
      This was a noted speculator, who had impudently assumed the above name while in Georgia; his real name was Welsh. He came to this state in 1790, where he exercised his pernicious talents for a time, and in the year 1791, was executed for forging the state indents. Vide, X Bay’s Reports. The State vs. Washington.
    
   Chancellor Rutledge

delivered the Decree of the Court.

This is altogether a bill of discovery. There is no fraud charged on defendants. The allegations of the bill are intended to draw from defendants a discovery whether they are not associated in the company called the Yazoo Company j whether they did not apply to Mr. Moultrie to loan them a sum of money in indents, and did not know at the time of obtaining them that they were the property of the state, and could not be lent to them by him as his private property ; but merely as the agent or trustee of the state, and that the bond they gave, was to , r . , . . , secure the re-payment ox them to the state. The defendant Penman in his answer explicitly denies that he was ever associated with that company; nor did he know that Moultrie had judgments in his hands, belonging to the state; nor did he apply to him to loan them. That no explanation was ever made by Moultrie, & defendant supposed they were his own, as he offered to loan them, and took the obligation in his own name, and to his own use. That had he known they belonged to the state, he would not have signed the bond. The proposed loan came from M. and so far from defendant’s seeking it, great pains were taken by Moultrie and other defendants, to get his name to the bond. That he never signed the association; and some short time after he returned from Europe, finding his name had been set down by Washington, alias Welch, he immediately applied to him to know by what authority he had done it, and insisted on its being erased.. He then assigns his reasons for signing the bond to Moultrie, and that it was on the express conditions declared at the time to the, obligee and the others, and acceded to by them, that the grant should be immediately obtained with the indents 1 so loaned, and that he signed on that condition only; and if the grant was not obtained, he would not be bound. That when they failed, he applied to Moultrie to be released agreeably to his stipulations, who refused to take his name from the bond, in as much as the others were still liable, but gave him a release, and also a certificate, declaring defendant was not, nor had he ever been associated with them in the company. Counsel for complainant, to prove Penman a member ofthe Yazoo Company, produced the bond above inferred to, which in the concluding part, declared that the obligation was given by them in behalf of themselves, and the rest of the members of the company. A list of judgments against Moultrie, the obligee, and mortgages to a considerable amount,-were also produced; whence an inference was drawn, that penman could not but have known Moultrie’s embarrass-e¿ situation, and.that it was not in Moultrie’s power to „ . , , , . , . , , have furnished them with indents to so large an amount out of his own funds. And to prove by circumstantial evidence, that Penman was the person who principally induced the loan, a list of judgments was also produced against Huger and Snipes, two ofthe co-obligors. Opposed to this evidence, is the defendants answer,, pointedly denying his ever" being associated with the Company, corroborated by the deed of association, signed in 1789, when defendant was in England ; signed indeed'by Washington on his behalf, but without any authorityas Mr. J. Gair-diner, who was sworn, declared he was the only attorney of defendant, authorized to.act for him. Next, Washington’s letter to Penman, in March, 1Y90, requests to know if it was true that he had refused being a member; with Penman’s answer, declining- it. Then the certificate of the obligee in the bond, and director of the company, declaring' Penman was not, nor had he ever been a member ofthe company, together with the release, under hand and seal of the obligee, at a very early period after the bond was signed.

It was objected tothe release, that it was provisional; that, the other obligors should still be bound, or it was not to have effect. ^ ‘The release does not purport any thing- of the kind; it is absolute, - and the obligee must have known it would have the effect.to release them all. As to the idea that the release was to be kept secret, and the co-obligors made responsible, it was absurd, because, if the bond was ever put in suit, defendant Penman, must have been sued with the others; & his pleading the release, would be an effectual bar to a. recovery against them all. It was known at the time the bond was given up, and stated in the bill, that .the release existed. The state took the bond from the ohligee subject to that release, and would not allow it in Moultrie’s account, as a payment; but held it merely as a collateral security, which plainly shews they did not consider it as a bond taken by him for their use. Nor indeed has it been attempted to be proved, that the indents loaned were the property of the state. There is a pro- . r . . , , vision m the bond, specifying that lor such indents to be paid, the obligee should be accountable to the company. There is no proof before the Court, that he ever accounted for them to the company. On the contrary, it was proved that he sold some of them, and gave ethers to one of the obligors, who dissipated them. If defendant received nothing, and the company for whose use they were loaned never received them from obligee, (and if they had, it is presumed that might have been .proved,) the bond was given without consideration, and the obligee might have fairly released it.

It is a maxim in this Court, that he who would have equity must do equity. It is hard that the state should suffer so great a loss by the improvident conduct of one of its confidential officers ; it would be still harder, that the defendant should make good that loss, when it is evident that he did not contribute to it, or even received a single farthing of the money ; and the obligee, who induced him to sign the bond, was so conscious of his innocence, that he gave him the release and certificate before mentioned. It were to be wished that the rules of evidence had permitted the obligee to be examined; it is very probable the defendants case would have appeared in a still more favorable light. But we can judge of it only from what appears to us. Upon the whole, the answer of defendant on oath, positively denying the allegations in the bill, supported by the variety of testimony above mentioned, cannot but make so strong an impression on the mind, as to leave no doubt, that he ought, in this Court to have the full benefit of the release pleaded, and therefore the bill should be dismissed.

Pringle for the complainant. Ford for the defendant,