203 U.S. Argument for Appellant. Held, as to the defendants other than the beneficiary, that as the action was prosecuted in good faith, whatever notice they may have had by virtue of the company's defense was purged by the verdict, and although they had received their respective shares from the proceeds paid into court it was the same in law as though they had been paid in money directly by the judgment creditor and it could not be recovered. Whether in view of the Seventh Amendment a Federal court sitting in equity may inquire into whether a judgment based on a verdict was obtained by fraud and, if so found, set the verdict aside, argued, but not decided. THE facts are stated in the opinion. Mr. Maurice E. Locke and Mr. Eugene P. Locke for appellant: The Circuit Court and this court are not deprived of jurisdiction to entertain plaintiff's bill by the provision in the Seventh Amendment that no fact tried by a jury shall be otherwise reëxamined by any court of the United States than according to the rules of the common law, as under the common law, as it was understood in England at the time of the adoption of the Constitution, equity could examine into whether a judgment, based on a verdict, had been fraudulently obtained. 3 Blackstone's Comm. *53; Hallam's Con. Hist. of England, Chap. 6, p. 247; 1 Campbell's Lives of the Chief Justices, 332; 2 Campbell's Lives of the Chancellors, 362; 3 Pomeroy's Eq. Jurisp., § 1360; 1 Story's Eq. Jurisp., § 51; 1 High on Injunctions, § 112; Lord Ellesmere's pamphlet, "The Privileges and Prerogatives of the High Court of Chancery." There are no American cases, state or Federal, where the right of a court of equity to reëxamine for fraud a judgment or a verdict at law was the matter under consideration, which hold that courts of the United States sitting in equity had not that power. It has been held that the first clause of the Seventh Amendment, correctly interpreted, cannot be made to embrace the established, exclusive jurisdiction of courts of equity, nor that VOL. COIII-5 Argument for Appellant. 203 U. S. which they have exercised as concurrent with courts of law. Shields v. Thomas, 18 How. 253; Waring v. Clarke, 5 How. 441; Barton v. Barbour, 104 U. S. 126. See also Home Life Ins. Co. v. Dunn, 19 Wall. 214; Ocean Ins. Co. v. Fields, 2 Story, 59. In a case in a Federal court, the judge may call in a jury to find upon issues, or may have a jury empaneled upon the law side of the court and its verdict certified to him, and in either case the verdict is not binding on him but advisory only. This accords with the long established practice of courts of chancery, but is apparently contrary to the letter of the Seventh Amendment, and justified only by historic interpretation. See Prout v. Roby, 15 Wall. 472; Garsed v. Beall, 92 U. S. 684; Wilson v. Riddle, 123 U. S. 608; Idaho Land Co. v. Bradbury, 132 U. S. 509; and as to effect of jury trials in admiralty cases see Boyd v. Clark, 13 Fed. Rep. 908. For other cases in which a verdict was reviewed for fraud see Young v. Sigler, 48 Fed. Rep. 182; Crim v. Handley, 94 U. S. 652; Stanton v. Embry, 93 U. S. 548; S. C., 46 Connecticut, 65 and 595; Embry v. Palmer, 107 U. S. 3; Phillips v. Negley, 117 U. S. 665. The fraud of the original conspirators is not the same fraud which is the basis of this suit, and this distinguishes the case from United States v. Throckmorton, 98 U. S. 61, and United States v. Flint, 4 Sawyer, 42. See also Marshall v. Holmes, 141 U. S. 589; Graver v. Fawrot, 64 Fed. Rep. 241; 73 Fed. Rep. 1022; 76 Fed. Rep. 267; 162 U. S. 435; Maddox v. Apperson, 14 Lea, 596, 615; Marine Ins. Co. v. Hodgson, 7 Cr. 332; N. Y. Life Ins. Co. v. Bangs, 103 U. S. 780. A court of equity can and will grant relief under the circumstances of this case. Coddrington v. Webb, 2 Vernon, 240; Wonderly v. Lafayette Co., 150 Missouri, 635; Guild v. Phillips, 44 Fed. Rep. 461; Trefz v. Knickerbocker Life Ins. Co.,8 Fed. Rep. 177; Stowell v. Eldred, 26 Wisconsin, 504; State v. Fraker, 148 Missouri, 143. The bill does not come too late, and the situation demands equitable relief. 203 U.S. Argument for Appellant. If one person gets possession of another's money by fraud, the law raises a promise to return it, and upon such implied promise an action may be maintained. Bishop on Contracts, § 226; Moses v. Macferlan, 2 Burrows, 1005; Buller v. Harrison, 2 Cowper, 565; N. W. Mutual Life Ins. Co. v. Elliott, 5 Fed. Rep. 225; National Life Ins. Co. v. Minch, 53 N. Y. 144; Gaines v. Miller, 111 U. S. 395; Merryfield v. Wilson, 14 Texas, 224; Michigan v. Phænix Bank, 33 N. Y. 9. The fraud in this case consisted in obtaining by wrongful means a judgment that William A. Hunter had died, thereby rendering the plaintiff liable to Mrs. Smythe. Whether he had so died was the question directly in issue in the action at law, and the verdict and judgment therein are conclusive between the parties and privies, save upon such direct or collateral attack as may be permissible under the circumstances. Bigelow on Estoppel, 90; Outram v. Morewood, 3 East, 346; Hazen v. Reed, 30 Michigan, 331; Monks v. McGrady, 71 Texas, 134; McGrady v. Monks, 20 S. W. Rep. 959. The Federal courts and the courts of all the States in which the various defendants reside agree in holding that a judgment cannot be collaterally attacked for fraud. Christmas v. Russell, 5 Wall. 290; Peninsular Iron Co. v. Eells, 68 Fed. Rep. 24; K. C., Ft. S. & M. K. Co. v. Morgan, 76 Fed. Rep. 429; Lake County v. Platt, 79 Fed. Rep. 567; Maddox v. Summerlin, 92 Texas, 483; Anderson v. Anderson, 8 Ohio St. 109; State v. Ross, 118 Missouri, 23. The defendants Clark, Culberson, Spoonts and Phillips Investment Company are all privies to the judgment by assignment of interests in its subject-matter, and are protected by it to the same extent as Mrs. Smythe. Bigelow on Estoppel, 142-149; 2 Black on Judgments, §§ 549-550; Lake Co. v. Platt, 79 Fed. Rep. 567; Porter v. Bagby, 50 Kansas, 412. Therefore as to all the defendants equitable relief is necessary and proper in the case, if the facts are sufficient, as they are, to warrant interfering with the judgment. When property has been obtained by fraud, its true owner Argument for Appellant. 203 U. S. may recover it from any person except a bona fide purchaser for value, without notice. Buller v. Harrison, 2 Cowper, 565; Thurston v. Blanchard, 22 Pickering, 18; Devoe v. Brandt, 53 N. Y. 462. The exception relates only to those kinds of property whose purchasers for value are protected by the policy of the law from equities outstanding against their vendors of which they had no notice. A judgment is not such property. The assignee of a judgment takes it subject to all equities existing between the litigants, whether he had notice of the same or not, and regardless of the consideration paid therefor. 2 Black on Judgments, §§ 953 and 955; 1 High on Injunctions, 190; Taylor v. Nash. & Chat. R. Co., 86 Tennessee, 228; Blakesley v. Johnson, 13 Wisconsin, 592; Rock Rapids v. Schreiner, 46 Iowa, 172; Rea v. Forrest, 88 Illinois, 275; Northam v. Gordon, 23 California, 255; Weber v. Tschetter, 1 S. D. 205; Ellis v. Kerr (Tex. Civ. App.), 23 S. W. Rep. 1050 and 32 S. W. Rep. 444; Wright v. Treadwell, 14 Texas, 255; Thresher Mfg. Co. v. Holz, 10 N. D. 16; Brisbin v. Newhall, 5 Minnesota, 273; McJilton v. Love, 13 Illinois, 486; Wright v. Levy, 12 California, 257; Jeffries v. Evans, 6 B. Mon. 119; Devoll v. Scales, 49 Maine, 320; Padfield v. Green, 85 Illinois, 529; Mulford v. Stratton, 41 N. J. Law, 466; Magin v. Pitts, 43 Minnesota, 80; Brewing Co. v. Hansen, 104 Iowa, 307; Ricaud v. Alderman, 132 N. Car. 62; Frankel v. Garrard, 160 Indiana, 209. As to policies of insurance and orders drawn against specific funds see 1 May on Ins., § 386; Joyce on Ins., § 2326; 7 Cyc. 578; 3 Pomeroy's Eq. Jurisp., § 1280 et seq; Bank v. Yardley, 165 U. S. 634; Brill v. Tuttle, 81 N. Y. 454. The appellees hold under assignments. Appellees' position that the assignments can be ignored, and the case be dealt with as if the facts were that Mrs. Mettler collected the amount of the judgment obtained by her against the insurance company, and then paid to her attorneys the fees owing by her to them for their professional services cannot be maintained. No portion of the avails of the judg 203 U.S. Argument for Appellees. ment ever passed through Mrs. Mettler's hands, save the net sum of $11,160.50, sent to her by Mr. Clark. Each of the appellees received his part of the fund directly from the court, in the form of a non-negotiable order in his own favor, drawn on the United States depository in which the fund was deposited, and payable out of that specific fund. The clerk and the judge, who respectively signed and countersigned the orders, were in no sense the agents of Mrs. Mettler. They were acting only in their official capacity, receiving and holding the fund in the name of the court, and distributing it among its apparent owners. None of the appellees knew at the time of acquiring his interest that Hunter was not dead. But they all knew that the insurance company claimed that he was living and that it denied liability. The notice which the lawyers had was not in the nature of hearsay. They were dealing directly with, and were seeking to overthrow, the company's contention that Hunter was still alive. A statement by one person or his representative to another that the former has or claims a certain right is actual notice. to the latter of that right. Notice and knowledge are two very different things; and a man may have actual notice sufficient for all legal purposes of something which he does not know and which even in the best of faith he wholly disbelieves. As a general proposition the rendition of professional services by a lawyer, or his contract to render such services, may form a valuable consideration for property conveyed to him as compensation therefor. But more than this is needed to block the pursuit of the real owner of the property seeking to recover it. Mr. F. M. Etheridge, with whom Mr. W. M. Alexander, Mr. Lauch McLaurin, Mr. George Thompson and Mr. Rhodes S. Baker were on the briefs, for appellees: A Circuit Court of the United States sitting in equity and |