
    JOHN A. J. CRESWELL, ROBERT PURVIS AND ROBERT H. T. LIEPOLD, COMMISSIONERS OF THE FREEDMAN’S SAVINGS AND TRUST COMPANY, vs. THOMAS M. LANAHAN, ZEPHANIAH AND EMILY POTUT, JUDSON T. CULL, ANNE E. BOYLE, OCEANA C. SEDGWICK, ESMARALDA BOYLE, AND REBECCA BOYLE.
    In Equity. —
    No. 4464.
    Where $10,000 was loaned to the Freedman’s Savings and Trust Company on the note of said company and collateral securities, and which money was used for the exclusive benefit ofthe company ahd in payment of this note, the actuary transferred other secured notes to the holder, who thereupon surrendered his collaterals to the bank, it was held that the oomplainants could not maintain a bill in equity for the return of the secured notes so transferred in payment of the loan, although such transfer was not authorized by a previous vote or the board of trustees, without rescinding the agreement and refunding the amount actually loaned to the institution, or at least returning the collaterals which had been surrendered. He who asks equity must do equity.
    STATEMENT OF THE CASE.
    The third section of the act of Congress incorporating the Freedman’s Savings and Trust Company provides as follows: “That the business of the corporation shall be managed and directed by the board of trustees, who shall elect from their number a president and two vice-presidents, and may appoint such other officers as they may see fit; nine of the trustees, of whom the president, or one of the vice-presidents, shall be one, shall form a quorum for the transaction of business at any regular or adjourned meeting of the board of trustees; and the affirmative vote of at least seven members of the board shall be requisite in making any order for on authorizing the investment of any moneys, or the sale or transfer of any stock or securities, belonging to the corporation, or the appointment of any officer receiving any salary therefrom.” One of the by-laws adopted by the trustees provides, that “ no securities belonging to the company sli all be sold or transferred, except as authorized by a vote of the finance committee, duly recorded, in which at least three members of the committee shall concur.”
    The facts to be gathered from the pleadings and the testimony are substantially as follows:
    When the great excitement in monetary affairs began in September, 1873, the Freedman’s Savings and Trust Company owned and held among its securities two promissory notes, secured by deeds of trust on real estate in the city of Washington. One of these notes was made by Juan Boyle, for the sum of $2,590, dated July 31, 1871, and was payable to the said company one year after date. The other bore date on the 27th of July, 1871, and was made by Ann E. Boyle and others, for the sum of $8,000, payable, with interest at ten per cent., to the said company, one year after date. In the month of November, 1873, the president and actuary of the corporation, feeling embarrassed for means with which to meet the demands of the depositors of the institution, entered into an arrangement with the defendant, by which they borrowed from him the sum of $10,000. For the use of this money if was agreed that he should be paid interest by the corporation at the rate of two or two and one-half per cent, per month. As an evidence of this loan, they assumed to make or indorse, in the name of the corporation, a promissory note, and deliver it to the defendant. To secure the payment of the note, they took from the securities of the trust company about forty of the certificates issued by the board of public works of this District, commonly called eight per cent, improvement bonds, of the par value of $20,009.
    There was no special resolution of the board of trustees authorizing the actuary or president to negotiate this transaction. It appears to have been the practice of those officers to receive payment of money due the bank on loans, and in transferring the District bonds as security for the loan by Lanahan, the actuary proceeded according to the usage of the bank from the time it was organized. It also appears that a paper had been delivered to Lanahan, signed by the president, under the seal of the company, stating that the secretary had authority to indorse and give notes on behalf of the bank. The negotiation with Lanahan was conducted on the part of the bank by the defendant Juan Boyle, who had also large transactions on his own account with the bank as well as with Lanahan. When the note matured, it was arranged that Lanahan should return the said note for $10,000 and also the improvement bonds which he held as collateral security, and that the officers of the company should pay the same, by delivering over to the defendant two secured notes first above mentioned held by the company, and which are the notes now in controversy, amounting in principal- and interest to the sum of $11,314.44. The difference was accounted for by Boyle in his settlement with the bank. The bill is filed to compel Lanahan to return these two notes and the instruments securing their payment. The case is certified to be heard here in the first instance.
    
      Enoch Totten for complainants:
    1st. The securities of the Freedman’s Savings and Trust Company were a trust-estate, held by trustees for specific purposes, and to be transferred only in a special manner. (See 13 Stats., 510.) The defendant, when dealing with these securities, had notice, both actual and constructive, of this fact. He knew, or should have known, that the persons with whom he was dealing possessed no authority to transfer the notes in question. The statute provides the method of transferring such property, and they could be transferred only according to the method pointed out by the law. Mitchell vs. Cook, 7 N. Y., 538.
    2d. The fact that the defendant paid value for the notes does not alter the case, because the rule is, that in cases where a man buys trust-property, with notice of the trust, he shall be charged with the trust in respect to-the property. Perry on Trusts, sec. 217; Oliver vs. Piatt, 3 How., 401; 2 Story’s Eq. Jur., secs. 395,1257,1258.
    In this-case he derived his title through persons who had no right whatever to sell, and hence he took no other or different title than that held by his assumed vendors. Perry on Trusts, sec. 831.
    
      Walter S. Cox, for defendant, cited
    12 Wheat, 70; 8 ib., 82; 5 Wall., 779.
   Mr. Justice MacArthur

delivered the opinion of the court:

This is a bill in equity, praying that the defendant Lanahan be decreed to bring certain notes into court, and the transfer of the same to him be declared null and void, and that the property mortgaged to secure the payment of said notes may be sold, and the proceeds derived therefrom be applied to the satisfaction of the notes by the order of the court.-

The notes and deeds of trust in question were held by the Freedman’s Savings and Trust Company for moneys advanced by the company to Juan Boyle and several members of his family. At a later date the record shows that Boyle procured Lanahan to loan the trust company $10,000, for which he took their note, and to secure the payment of the note they transferred to him about forty certificates issued by the board of public works of this District, commonly called eight per cent, improvement bonds, of the par value of $20,000. This transaction occurred in the month of November, 1873, during the financial crisis, and when the corporation were greatly embarrassed for means with which to meet the demands of the depositors of the institution, and the money was received and used for that purpose.

About the 1st of May, 1874, the notes above mentioned, of Juan Boyle, were transferred to Mr. Lanahan in payment of the $10,000 note he held against the company, and the eight per cent, bonds he held as collateral security were also surrendered to the company. The actuary testified that he transferred these notes to Lanahan in payment of what the institution owed him, and for the return of the securities. The complainants now say that the notes of Boyle and the trust-deeds to secure their payment were unlawfully taken from the company and transferred to Lanahan, for the reason that the actuary had no authority to transfer the papers in question, and they ask that they be returned to the assets of the bank.

Neither the trust company nor the complainants have ever offered to rescind the agreement by which these notes were handed over to Lanahan in payment of his note, nor’ have they ever offered to return the bonds which he surrendered in pursuance of that agreement; but they have substantially confirmed that contract, by retaining the note and the bonds, as well as the $10,000 in money which was actually loaned them, and which was used by them in paying off the claims of their depositors. We think the company is precluded from the relief which they ask. This is a bill in equity; and before the court can compel the return of these securities to the complainants, there must be an offer to return the money actually advanced by Lanahan, or the securities which he had surrendered, or it must be clear that there were collusion and combination between Boyle and Lanahan to defraud the institution. Lanahan advanced the money to the company, and in equity he is entitled to have it back, or hold his securities until the money is refunded. The exact question of power on the part of the - actuary, without a previous resolution of the board of trustees, is not necessarily involved in the case. The complainants have appealed to the equity powers; and the rule of the court is that equity shall be mutual. When, the complainants allege that the actuary transcended his authority, because there was no vote of the board, yet it is evident that the loan was for the sole use and benefit of the corporation, and was obtained by its agents for the purpose of meeting the pressing demands of the depositors — a purpose clearly authorized by the charter — and whether the corporation can be bound by the act of its agents, ing profited by them, and used the means thus obtained, or whether it is precluded from denying those acts after havare not questions which need to be considered largely, for they show at least an equity in the defendant which the court can neither overlook nor deny. If the complainants have a right in equity, it is because that is the forum which alone can mete out the rights between the parties. It would not be right to say that one party can get possession of the money of another and reader no account therefor. The party seeking equity must always offer to do equity, or they must rest upon their legal rights. We think the bill in this case ought to be dismissed  