
    [Pittsburg,
    September 13, 1824.]
    PETRIE against CLARK and others.
    IN ERROR.
    Of the right of creditors and legatees to follow assets which have been collusively parted with by an order of an executor j of the remedy in such cases, and of the power of an executor over the assets.
    Of an executor pledging the assets of his testator as a security for an antecedent debt of his own, to one who is ignorant of the mis-appropriation of the property.
    A promissory note was indorsed in blank to executors for goods purchased of them, which were part of the assets in then1 hands. One of the executors, without the knowledge of the other, being indebted to the plaintiff on his own promissory note of nearly the same amount, after his own note' became due, made an arrangement with the plaintiff; by which his own note was taken up by a new note, and the note which had been received by the executor for the goods of the testator, was handed over with the blank indorsement of the payee as a collateral security for the payment of this debtthe plaintiff' being entirely ignorant of the circumstances under which the latter note came into the hands of the executor. Held, that the plaintiff, not being a holder for a valuable consideration, was not entitled to recover the amount of the note.
    But, it seems, that if he could show that time was given in consideration of obtaining the note in question as a security for a debt, and in consequence, the debt was lost, it would be otherwise.
    This was an action on the case brought in the Court of Common Pleas of Allegheny county by the defendants in error, as indorsers of a promissory note, drawn by the plaintiff in error, the defendant below, for 366 dollars 17 cents, dated Pittsburgh, August 28, 1822, and payable in seven months.
    On the trial, the defendant offered the following statement of facts, which it was agreed could be established, and prayed the court to admit it in evidence.
    “ The note for three hundred and sixty-six dollars and seventeen cents, on which the suit is founded, was given by the defendant for goods purchased by him from the executors of Frederick Rodgers, which goods were a part of the assets of the deceased. It was drawn in favour of Jonathan Smith, who was the defendant’s surety for the purchase-money, was indorsed by the latter in blank, and handed over to the executors of Rodgers. Samuel 
      
      Smith, merchant of Pittsburg, (one of the executors, who after-wards became insolvent) put the said note, without indorsing it, and without thé consent of his co-executor, into the hands of M.S. Mason, agent for the plaintiffs, who resides in Philadelphia, in order to secure the payment of a note for three hundred and twenty-three dollars and twenty-one cents. This note was given by Samuel Smith, on his own private account, to the plaintiffs, for goods purchased. The goods were bought on the 18th of March, 1822, and a note given therefor, which fell due on the 18th of July. Default was made in payment, and on the 28th of October, Smith gave the new note, which was accompanied by that of Petrie The following memorandum was signed by Mason, the agent, ‘ Received, Pittsburgh, October 28, 1822, ,of Mr. Samuel Smith, Alexander Petrie’s note, favour Jonathan Smith, a seven months, dated 28th August, 1822, for 366 dollars 17 cents, which I hold as collateral security for a note of said Samuel Smith, dated this day a five months’ favour A. H. Clarke fy Co. Philadelphia, for 323 dollars 21 cents, which, if paid, the said note of Petrie’s to be returned. — M. S.Mason.’
    
    “Before the maturity of the note, a written notice of the foregoing circumstances was given to the defendant by the executors of Rodgers, on behalf of the creditors and legatees, and he was warned to pay the money only to them. The executors were Samuel Smith and John Hodge, the latter of whom had taken an activé part from the death of the deceased in the duties of his executor-ship. The plaintiffs and their agents were entirely ignorant at the time when the transfer of Petrie’s note was made, of the circumstances under which it came into the possession of Samuel Smith.”
    
    The court rejected the testimony upon which the counsel for the defendant excepted to the opinion.
    
      Biddle, for the plaintiff in error.
    The action was brought by the plaintiffs below to obtain the benefit of a fraudulent assignment of a chose in action by one of the executors, who jointly took out letters testamentary. This cannot be suffered. If the assignee has actually received any thing out of the resources put at his disposal by one executor, he may perhaps not be compellable to refund; but where he comes into court as a plaintiff, the court will not lend him its aid. In the case of Le-pa-rd v. Vernor, 2 Vez. fy Beame, 51, 52, 53, the following language is held, “The other claim was under the assignment by one of the executors, William Vernon, subsequent to the testator’s -death. It is said, as each of the executors has the power to dispose of the assets, the assignment by one is good. If he had parted with any portion of the property to Ooodenow and Buzzard, if, by the assignment they had obtained any legal advantage, it could not perhaps be taken from them: but this is a mere assignment of a chose in action by one of several executors, of which no use can be made, unless this court shall act upon it, and interfere, to give the particular creditor an advantage against the other executors, and the general creditors. ” A similar distinction on the subject of relief pi’evails in our Pennsylvania law, as to sales of real estate, without warranty. A purchaser, on the title proving defective, may resist a suit for the purchase-money, but if actually paid, he cannot recover it back. “It matters not,” says Judge Ye ates, 1 Serg..8,' Rawle, 447, “that no good, substantial reason can be given why A., having once paid the consideration-money, shall not recover it back: it is at once admitted to be a real hardship, super-induced by considerations of supposed policy; but the law is so settled, and we cannot alter it. To adopt a cant mode of expression, the funeral has passed by, the dead cannot be resuscitated. But in my sense of the Pennsylvania system of law, there is a locus ■ psenitentise, until the money is paid. Something still remains in fieri and the plain dictates of common sense, and common honesty point out the correct path to be pursued. ” The court in such cases refuse to be actually instrumental in enforcing the claim. The case from Vezey # Beames is certainly a very strong one, as the assignment by the one executor appears to have been honestly made to a fair creditor of the deceased. But suppose the act of one executor to be the act of both, in what character do they stand with regard to the assets ? An executor is but an agent, or trustee; his interest in the assets is tempoi'ary, and qualified; he holds in aider droit, and merely for the purpose of custody and distribution. Toller’s Law of Executors, p. 134, Boole 2. ch. 1. Executor is but an attorney for the deceased. Roll. Rep. 147. cites 14 II. 6. 14. An executor is but the minister and dispenser or distributor of the testator’s goods. ’JVentw. Off. Executor, 88. He is in the nature of one who has the custody of another’s goods. Wentw. Off. Executor, 113. Executor from his name is but a trustee, he being to execute the testator’s will, and therefore called an executor. Per Lord Chancellor Parker, in case of Farrington v. Knightly, Wms. Rep. 548. Trih. 1719. And afterwards his lordship said, that the reason why the spiritual court cannot compel a distribution is, because they cannot enforce the execution of a trust. Ibid, 549.
    This Is emphatically the ease in Pennsylvania, where the executor has no claim to the residue.
    Being thus an agent or trustee, the rule of law becomes applicable which declares, that even an innocent holder shall- not avail himself of a pledge of property fraudulently made by one having such temporary qualified interest. The general rule is perfectly well settled. D’Jlubigny v. Duval, 8 D. £? E. 604. Newson v. Thornton, 6 East, 17. Salby v. Rathbone, 2 Maulé Selwyn, 298. 5 Johnson’s Chancery Reports, 428. Debouschad v. Goldsmid, 5 Vez. Jr. 212, 213. The Lord Chancellor. — “ The defendants are certainly wrong in point of law. I take it not merely to be a principle of the law of England, but of the civil law, that if a person is acting ex mandato, those dealing with him must look to his mandate.” Shipley v. Kymer, 1 Maulé 8,- Selwyn, 484. Martin v. Coles, 1 Maulé 8' Selwyn, 140.
    The analogy between the cases of factor and executor is obvious, and well settled. In the case of Bay v. Coddington, 20 Johns, Rep. 652. whore the law with regard to pledges by a factor is finally settled in the Court of Errors; Chief Justice Spencer says, ££ In the case of Joy v. Campbell, Lord Redesdale refers to Lord Bolingbroke’s case, in the discussion of which, a case was cited which he mentions with approbation/ where an executor transferred part of the assets for the avowed purpose of paying his own debt; in which case the person receiving the assets was held liable. The administrator had the legal ownership: he had a right to all the goods: but as the purchaser paid him nothing, but took the goods on account of his debt against the administrator, equity would not allow him to retain them. The ease, in principle, is very analogous to the present.”
    Lord Redesdale, in the case of Joy v. Campbell, 1 Sch. 8,' Defray, 346. adverting to the same case, remarks further: ££ In fact, the executor gets nothing applicable, in any manner, to the trusts for which he holds the assets, in lieu of what he so parts with.”
    
      Craft, for the defendant in error.
    The note on which this suit is brought would be negotiable in England, and although, by the decision of M‘Cullough v. Houston, such notes are, in Pennsylvania, deprived of one of the features of negotiability, yet the right of the indorsee to recover in his own name the amount due by the drawer, is expressly preserved and guaranteed by the statute upon which that decision was made. Act, 28th May, 1715, Purdon, 69, 70. Even in Pennsylvania, therefore, such notes may be assigned so as to rest the equitable interest in the indorsee, and enable him to recover in his own name. Per M£Kean, Chief Justice, (M‘Cullough v. Houston, 1 Dali. Rep. 448.) No distinction can be made between the assignees of bonds, and the indorsees of notes. They certainly may both sue in their own names, and respectively recover the money mentioned in the bonds or. notes, or so much thereof as shall really be due thereon, in like manner as the payees or obligees could have done. There is no question here as to the amount due by the drawer. All is due. The only question is, the. mode of assignment; the title of the indorsee, which is put by the Supreme Court in that case, and by the statute upon the footing on • which it would be in England as to the amount due.
    
    In the case of Wilkinson v. Nicklin, 2 Dali. 398. the indorsers had been guilty of a breach of trust, by misapplication of the bills from the purpose for which they were received. Yet the court held, that it could not affect the plaintiffs, who had paid a valuable consideration for the bill., for per Chase, Justice, There is no rule more perfectly established, more sacred in commercial transactions, than that the blank indorsement of a bill of exchange passes all the interest in the bill to every indorsee in succession. If the holder took the bill bona fide, and without knowing that the person making the transfer had no right to make it, whether he takes it absolutely, or as a pledge, such transfer will be as operative, and convey the same right as if it had been made by a person authorized to make it. Burr. 1516. 1 B. fy P. 546. 648. Tate v. Hilbert, 2 Ves. Jr. 115. 6 East, 21.
    If indorsed bills be delivered to a person for a particular purpose, and he negotiate them to a third person, who does not know of the trust, the latter will become beneficially entitled to the bills, however fraudulent the conduct of the agent may have been. 1 B.fyP. 539. iStark. 228. 1 B. 8? P. 648. 2 Esp. Cas. 520. It is clear, that if indorsed bills are deposited with a banker, and they are by him negotiated to a third person, though the purpose for which they are deposited be most cruelly disappointed, the original owner can have no claim to recover them in trover against such third person. 1 B. P. 546. 4 Mass. 45. And the rule is the same in equity. Where bills are actually negotiated by an agent, although against the express instructions of the principal, their circulation cannot be interrupted, nor the holders called in to deliver them up. 1 Rose, 23S. 1 Jitk. 234. Where money or notes are paid bona fide, and upon a valuable consideration, they never shall be brought back by the true owner. Clarke v. Shee, 1 Coup. 200. Though in general a factor cannot pledge the goods of his principal, it is otherwise in the case of a bill. In Collins v. Martin, 1 B. fy P. 648. the court were unanimous, that factors have the power of pledging as well as negotiating the bills of which they were enabled to hold themselves out to the.world as the true owners. This principle is recognized as undoubted in 20 Johns. 655. A blank indorsement has precisely the same effect that an indorsement to deliver to the plaintiffs would have. In the case of bills of exchange, the effect' of a blank indorsement is too well known to be doubted. Opinion of Buijler, J. Lickbarrow v. Mason, 6 East, 21, note. It is immaterial to the person who takes a bill with a blank indorsement whether the title of him from whom he takes it be good or not. Burr. 452. Even where the title accrued by finding, or theft. Dougl. 633. Burr. 1516. A note indorsed in blank passes by delivery, and possession proves property. JDougl. 636. It would, therefore, be unnecessary for the plaintiffs below to show that Smith, the ekeeutor, had authority to transfer. The mere delivery over by any person would be sufficient, if the holder gave value, and was untainted with fraud. It is so immaterial, that the plaintiffs need not, and did not, declare as indorsees of Smith, the executor, but as indorsees of the payee, who indorsed the note in blank; and this is sanctioned by every day’s practice. Chitty, 461. 4 Esp. Rep. 211. We may at the trial indorse over the blank indorsement, an immediate authority to pay to Jl. Ii. Clark <f' Co., the plaintiffs. We need not trace the bill from his hands, through all those into which it passes, but may disregard all intermediate indorsements in our declaration and evidence.
    But we can show that Smith, one of two executors, had authority to transfer. It is like other cases of joint interests, affected by the act of one person. One person may transfer a bill, though in fraud of the other co-partners, viz. to himself. Kirby v. Cagswall, 1 Caines, 505. Chitty, 160, and the cases cited Chitty, 40. If a man appoint several executors, they are esteemed in law as but one person, representing the testator; and, therefore, the acts done by any one of them, which relate either to the delivery, gift, sale, payment, possession, or release of the testator’s goods, are, deemed the acts of all; for they have a joint and entire authority over the whole. Godolphin, 134, 135. Office, Ex. 95. Roll. JPbr. 934. Toller’s Executors, 37. If the testator dies, possessed of a lease for years, and having made two executors, and one of them grants all his interest to a stranger, the whole term passes, for each had an entire authority and interest. Dyer, 23. B. p. 146. Cro. Eliz. 347. If an obligee make two executors, and die, and one of them deliver the obligation to a stranger, in satisfaction of a debt due from himself, and die, the surviving executor cannot recover in detinue. Kelsock v. Nicholson, Dyer, 236, in marg. Cro. Eliz. 478. 496. And this decision has never been impeached, but on the ground that the obligation was not assignable, being a chose in action ; the ground of which objection is taken away in this case. The right of assignment and indorsement is extended by the statute of Pennsylvania to executors; and the general principle, therefore, applies, that each has a right to deliver, &c. This may be a devastavit assignment to Smitli, but cannot affect even the other executor, for one is not liable for the devastavit of the other. Toller, 430. Off. Executor, 161. Dyer, 210. 3 Bac. JPbr. 31. 3 Br. Ch, Rep. 74. Each is amenable for his own acts, being complete by himself. If executors take a note or bond from a creditor to the estate of the testator, they must sue in their own name. Such a note, transferable by indorsement, would go to his administrator, and not to his administrator de bonis non. 10 Mod. 315. 3 Bos. ¿r Pul. 11. which show the full authority of'executor over such bill, they being as his own. The ease of Lepará v. Pernor, 2 Ves. <§• Beatne, 51, 52, S3, cited on the other side, is not the case of a mercantile, negotiable instrument, where the benefit of trade, and facilities of commercial intercourse were concerned; as they are in promoting the free and unembarrassed circulation of bills and notes. This is not the mere assignment of a chose in action, of which no use could have b'een made, without the assistance of this court. It might have been realized by negotiation, discount, &c. before it was due, and this court could not follow in the hands of the indorsees, nor the plaintiffs; who are as unaffected by the circumstances intended to bear against them, as the most remote indorsee could be.
    The case of relief against bonds given for a title to lands, which proves defective, cannot surely operate on principle here. That is a case between the original parties. Lord Mansfield says, the case is settled, that a holder coming fairly by a bill or note, has nothing-to do with the original parties. Peacock v. Rhodes, Rougl. 636. It may be grantéd, that-an executor is but an agent; but the authorities are express, that if the holder does not know of the agency, the title of the agent to transfer, indorse, &c. is as good as that of his principal. It may also be granted, that even an innocent holder shall not avail himself of a pledge of property made by a person having a temporary qualified interest. But a different rule has been applied to negotiable paper; the avails, perhaps, of that very property, and in the hands of the same agent; because the interests of trade have been supposed to require, that every facility should be afforded to its negotiation, that thereby commercial credit might be extended; when extended in good faith upon the paper itself, it should be sustained. Coddington v. Bay, 20 Johns. 655. This casé is strongly in favour of the defendants in error, in all its principles. The case of Lord Bolingbroke, contra, was cited, where the banker receiving the notes from the holder, with notice of the special purpose for which he held them, was obliged to account to the true owner. But here is no such notice. Its existence is strongly negatived. The case of an executor transferring the assets, for the avowed purpose of paying his own debt, the debtor concurring in the devastavit, is also a case of full notice and collusion.
    It is only necessary to add, that the law and usage, as understood by merchants, even oxit of Philadelphia, would not prepare the person about to receive such a bill, to institute any other precautionary inquiry, than, What is the amount dxie ? To such a question, the drawer of this bill would have answered, dill is due, Upon this answer, the utmost prudence which the law of Pennsylvania has taught the indorsee to use, would have been satisfied; and it would'be now exceedingly inequitable to say to him, “There were other precautions which you might have taken, in anticipation of a decision we are now for the first time to pronounce,”
    If it is said, “ that this note was seized upon as collateral security,” the fact appears to be, that it was delivered over at the time of the sale of the merchandize which was sold on the credit of this note.
    
      Reply..
    
    As to the negotiable character of the chose in action, transferred to the plaintiffs below, it will be found, on examining the cases cited, which bear on the question, that they turn upon the circumstance of the negotiable instruments fraudulently passed away, having been put by the principal into the hands of a banker ,or broker, and that it was considered his folly, thus unguardedly to intrust such instruments with men, whose business it was to deal in them as a commodity; and that the extension and rapid transactions dependent on the intervention of this class of men, would be infinitely perplexed, and great mischief ensue, if assignments could not fearlessly be taken from them. To the same purpose is the case of Lausatt v. Lippincott, 6 Serg. £? Raíale. It is not pretended that Smith, the executor in the case before the court, bore any such office in the commercial world, as to bring his fraudulent transfers within the policy which led to theexceptiqn to the general rule, invalidating pledges by agents. 2d, In Pennsylvania, notes and bills not dated in Philadelphia, by the act of 27th of February,' 1797, and the decisions of our courts, have not the peculiar character which is given to the negotiable instruments^ noticed in the cases cited by the defendants in error. They are put by. the counsel (and correctly) on the same footing with bonds. They bear close resemblance to those instruments which it has been decided even in England, can not be fraudulently assigned, so as to deprive the real owner of his property. Thus, a Bill of Lading, 16 East. 17. Lottery Tickets, Ford v. Hopkins, 1 Salkeld, 284. India Bonds, Glynne v. Baker, 13 East. 509, though assigned to an innocent holder, may be reached by the real owner. So in Lee v. Lagury, 1 B. Moore, 556. “ Where an agent is guilty of a misapplication of a bill of exchange, which is over due at the time, by indorsing it to a third person, in breach of the trust reposed in him, the indorsee takes it subject to all the equity which affected it in the hands of the agent: and consequently, cannot detain it, or the produce of it from the principal. Thus, where A. drew a bill of exchange on B., payable to the order of C., who indorsed it to his agent, David; it appeared that the bill in question was given as a substitute for a former bill, which had been dishonoured, and of which E. became ultimately the holder, and that E. sent that bill to F. to be forwarded to G., for the purpose of receiving the amount from A., (who was the drawer,) and that G. instead thereof indorsed it (it being then over due,) to C. for a valuable consideration, and on C’s. demanding payment from A., he drew the bill in question, as a substitution for the former, and before the substituted bill became due, E. gave notice to A. not to pay it; it was held that A was not liable in an aetion on the bill brought by D. as C’s agent.” This nóte was not received by the defendants in error, in the usual course of trade. It was seized upon as collateral security, and the transaction is thus brought completely within the case of Boddington v. Bay, 20 Johnson. So Truetel v. Barandon, 1 Moore Rep. 543, cited in Chitty on Bills, p. 147, in note.
    
    The cases collected in Bacon’s Abridgment, title Executors, and cited, can have no weight. In' the only case which can be pretended to be analogous (reported in Dyer and in Croke,) it is represented to have been decided by two judges against three, that an individual io whom a bond had been assigned by one of two executors, was not liable to an action of detinue, on the ground, that by the delivery, the party hath such an interest in the paper and wax, that he may be justly detained of the instrument. He was considered as having a sort of lien on the papers like an attorney. Fenner, Justice, dissented, saying that “ inasmuch as the debt remains to the surviving executor, the deed shall remain and appertain unto him.” The case decides nothing on principle, but so far as it goes, is in favour of the doctrine, for which we contend, as it seems to have been conceded, that the debt was not transferred, which is all that is necessary for us to establish.
    The meaning of the Court of Chancery in the case of Lepard v. Vernon, 2 Vez. fy Beame, has been misunderstood. It is asserted that the intervention of a court was not necessary to give Clark 8? Co. the benefit of the assignment, that it might have been realized by negotiation, discount, &c. So, undoubtedly, may any claim whatever. It may be passed from hand to hand for value; but finally, when payment is resisted, the intervention of a court becomes necessary, as appears by the bringing of this very suit. Then, the expressions of the Court of Chancery in Lepard v. Vernon, and the analogous expressions quoted from 1 Serg. 8? Rawle, are applicable, and induce the court to refuse its aid to inforce a claim coming before it under such circumstances. Our complaint is, that the court below used a language, and pursued a course diametrically the reverse.
    Tilghman, C. J. not having heard the argument, in consequence of indisposition, gave no opinion.
   The opinion of the court was delivered by

Gibson, J.

The question here turns on the right of creditors and legatees, to follow assets that have been collusively parted with by an executor; which .involves a course of inquiry somewhat different from that which has been pursued by the counsel. This right is n’ever claimed on the supposed existence of a lien. Neither can it be claimed at law; for the executor is the owner of the legal title to the goods, and may dispose of 'them'by any spe'cies of voluntary alienations by which he may dispose of his own. The remedy is invariably in equity; where it is afforded on the ground that the executor, although complete owner of the legal title, is quasi, a trustee for creditors and legatees, whether pecuniary, specific, or residuary; each of which classes, notwithstanding what was'thought of it in the earlier cases on the subject, is intitled to equal relief. Here the defendant stands in the situation of a st«ek=(l holder, who might compel the plaintiffs and the creditors and legatees, to interplead, provided we had a Court of Equity to entertain a bill for that purpose; or the creditors and legatees might file their bill against the present plaintiffs directly; and there is, therefore, no doubt, that the merits might be tried between them, in the shape in which the defence was offered at the trial.

The ground of relief, as I have said, is, that the executor has the legal title to the goods, in some respects, only as the trustee; and equity, therefore, will follow them into the hands of any one who is not a purchaser for valuable consideration; or who having paid a valuable consideration, has been guilty of fraud and collusion, with the executor. This is, in effect, to declare such person a trustee for those who have the beneficiary interest. Although there is no doubt of the general principle as stated, there is some inconsistency of decision as to what constitutes fraud and collusion. In two of the earliest cases on the subject, Ewer v. Corbel, and Burting v. Stonard, 2 P. Wms. 148, 149, it was held, that if the executor sell a term which the testator has specifically devised, the purchaser shall hold it, unless he was apprized that there were no debts, or that they could be paid without breaking in on this specific legacy; or unless he has purchased at an undervalue. Notice of these facts, is notice that the executor is abusing his trust, by wantonly defeating the provisions of the will; and,this, therefore, is a case of collusion. In Nugent v. Gifford, 1 Atk. 143, the executor assigned over a mortgage term inpayment of his own debts; and this was held good' against the daughters of the testator, who were creditors under a marriage settlement. The same principle was asserted in Jacomb v. Harwood, 2 Ves. 265, and in Meade v. Lord Orrery, Ib. 235: but it was ruled differently in Crane v. Drake, 2 Vern. 616, the authority of which, is certainly strengthened by the reversal of- Humble v. Bill, in the House of Lords, 2 Vern. 444; notwithstanding what Lord Hardwick says of these two cases in Meade v. Lord Orrery. Indeed, my mind is not prepared implicitly to acquiesce in the decision by that Chancellor, of any of the cases that came before him. A purchaser from an executor, is not bound to see to the application of the purchase money; and the assignment of a chattle in payment of an antecedent debt is an assignment for valuable consideration: so far I agree. But the executor is not, even at law, the owner of the goods, to every intent; he has only a qualified property in them, insomuch, that he cannot bequeath them, nor can they be levied for his debt, even by his own permission; whereas, they may be levied in the first instance for the debt of the testator, when those of the executor could not: which clearly shows a distinction. In Chancery,' however, the executors interest is purely fiduciary; and the law exacts from the dealing with him, with full knowledge of his representative character, the most perfect good faith. s Now, the assets are a fund i» his hands, not for the payment of his own debts, but the debts of the testator, and the legacies bequeathed in the' will; and where the assignee knows at the time,that he is receiving his debt out of a fund which is not the property of the person paying, but which is appropriated to the payment of other debts, that alone is a circumstance of suspicion, that ought to put him on inquiry as to the propriety of the transaction. An executor may, in some cases, with strict propriety, convert the assets to his own use, as where he has paid debts of the testator to the value, with his own money; but where the assignee finds him in the first instance, applying the assets out of the ordinary course of administration, it may bear on argument, whether he does not take upon himself the risk of the executors right to apply them, or of his ability to replace them if they were improperly withdrawn from the fund: and later cases have, I think, gone this length. It is no answer to say, that the executor may sell the goods, and pay his debt with the price: if the creditor knew that the payment made under these circumstances would prejudice the creditors or legatees, he would be a party to the devastavit, and liable to refund; for money, where it has been received mala fide, may be followed as readily as a chattle. But in Tanner v. Ivi0e, 2 Vern. 469, Lord Hard-wicks seems to doubt the firmness of the ground on which he had before stood, and to wish to be understood as having decided those cases, not on general principles, but on their peculiar circumstances. It may be supposed, however, that his doctrine derives force from the analogy between the particular case of which I have been speaking, and that of a note drawn by a partner, in the name of the firm, for the separate debt of such partner, antecedently contracted; With respect to which, it has been held, in the last case on the subject, Ridley v. Taylor, 13 East. 175, that the fact of the creditor having known at the time, that the name of the firm was used for the partner’s private benefit, is not sufficient, per se, to invalidate the transaction. With respect to this, it is enough to say, that the law had all along been held differently in England; as it is still held so in Pennsylvania, Neto York, and I believe, in most, if not all, of the other states: so that the authority to be derived from this source is againstLord Hardwicke’s doctrine, instead of being in favour of it.

The cases which I have cited on the subject of an executor’s power over the assets, are the principal ones that were decided befoire the American revolution; and notwithstanding the discrepancy that is found in them, as to what circumstances constitute fraud or collusion, in contemplation of law,-they undoubtedly concur in proving the general principle as I have stated it. The later cases have gone much further in circumscribing the executor’s authority over the assets; and, with great propriety, very far to overrule Lord Hard-wick’s decisions, that an assignee of the assets, for his own debt, cannot be disturbed, except on specific evidence of actual and positive collusion. That, however, is not the point on which the case before us turns: a more material inquiry will be made in regard to the difference between an assignment in payment of an antecedent debt, and a pledge, as a security for it.

In regard of a pledge, there is a decisive difference between the pawning of a security for an antecedent debt, and the pawning of it for money, advanced at the time. As to the first, ail the cases agree, that the interest of the pawnee is defeasible by creditors or legatees: and as to the second, the validity of the contract depends on all those considerations that would' affect an absolute sale under like circumstances; that is, where it appears the pawnee knew that the money was obtained for purposes foreign to the executor’s duty, the transaction is to be considered as collusive. Then to come to the facts of the case before us.,- The note on which suit is brought, was indorsed to the executors in blank, for goods purchased from them, which were part of the assets, and the note itself, was, consequently, assets in their hands. The executor who had this note in possession, was indebted to the plaintiff on his own promissory note, to nearly the same amount; and after his note had become due, made an arrangement with the plaintiff, by which, it was taken up, and a new note, at five months, substituted in its stead, and the note on which suit is brought, was handed over with the blank indorsement of the payee, as collateral security for the payment of this debt, the other executor being no party to the transaction, and the plaintiff being entirely ignorant of the circumstances under which the note in question came to the hands of the executor. On this naked statement of facts, it will be seen, that collusion is altogether out of the case, and that the question is, whether the plaintiff is to be considered as a holder for value. If the note had been delivered to him in discharge of the debt, there would be no difficulty in saying, in the absence of collusion, that taking it in the usual course of business, as an equivalent for a debt which is given up, would be a purchase of it for valuable consideration. But as it appears on the bill of exceptions, that it was given in pledge for securing an antecedent debt, which was not discharged, but suffered to remain, and as it does not appear that money was advanced, or any act done, that would in law be a present consideration, the case presented, was against the plaintiff. The evidence, therefore, prima facie, made out a defence; although it might, I apprehend, have still been shown on the other side, that the plaintiff had a right to recover, provided he had been able to prove, that time was given in consideration of obtaining the note in question, as security for the debt, and that in consequence, the debt was lost. The giving of time would be a present, and a valuable consideration, and a pledge on these terms would be the same as a pledge for money paid down.

There is nothing in the commercial nature of the security, to vary the nature of the transaction. Where the holder of a note or bill has paid* value for it, he is in privity with the first holder. Collins v. Marten, 1 Bos. & P. 651. There is a difference too, between a note regularly negotiated, which always supposes a consideration, and a note placed like the present, in the hands of a creditor, merely as a security, which in this respect, stands exactly as it would if it were a bond; that is, as a mere pledge, subject in the hands of the holder to every equity that could be set up against it, in the hands of the person from whom he obtained it. Roberts et al, Executors of Horseman v. Eden, Bos. & P. 398. #In this respect, equity and the commercial law perfectly agree, both being founded on principles of reason as well as convenience. The question then is, whether the plaintiff is a holder for value; and as the case stands on the bill of exceptions, the evidence went directly to prove, that he was not. At all events, an inquiry into the whole transaction was proper, and there is no rule of commercial law which forbids it: the evidence, therefore, should have been admitted.

Judgment reversed, and a venire facias de novo awarded.  