Page:Federal Reporter, 1st Series, Volume 6.djvu/486

 4t4 FEDERAL REPORTER. �not corne to the hands of the defendant, and so he would not be liable for them in an action for money had and received. Nor were the notes laot mentioned converted by him in such manner as to enable the complainant to enforce liability in an action of trover. These moneys and notes remained ail the time in the hands of the bankrupts until they were deliv- ered to the bank to be appliedin paymentof the $5,000 note; and, if personal responsibility for them can be fastened upon the defendant at all.it is because the appropriation of them to the payment of the bank indebtedness was made to protect him against a contingent liability, and was therefore for his benefit, and because he was a party to the transaction. The methods pursued to accomplish the object in view, j,ccording to the averments of the bill, were circuitous, and any liability of the defendant arising from the use made of the moneys and notes referred to is one springing from the application of equitable principles to the transaction, and only enforceable in equity. As the defendant derived the benefit he sought by indirect and circuitous means, and not by personal appropria- tion or conversion of the property, the transaction can only be unravelled by a court of equity, which may, if a case is made upon the proofs, charge him in equity with the value of these moneys and notes ; and this is one of the results sought to be attained by the bill. Since, therefore, under the rule before stated, equity has jurisdiction as to part of the sub- ject-matter of the bill, it may take cognizance of the whole. Thep first ground of demurrer must be held untenable. �2, It is insisted, however, that the bill makes no case for relief in law or equity, and the grounds urged in support of tbis point are that the use made of the assets of the bankrupts was not a payment to the defendant, nor to his use, as he had not been chargea with a fixed liability on the note held by the bank, and owed no one on account of the note ; that the action should have been brought, if at ail, against the bank, as the party receiving the payment and realizing the sole legal benefit thereof, and if the bank received the money innocently, then there was no unlawful preference. I think this view of the case made by the bill is unsound. The stat- ��� �