This is an appeal by Bartlett Doe, the plaintiff in a suit in equity, brought in the district court of the United States for the district of California, from a decree of the circuit court for that district, affirming the decree of the district court, dismissing the bill on demurrer. The defendant is Henry C. Hyde, assignee in bankruptcy of the City Bank of Savings, Loan, and Discount, a California corporation, which was adjudicated a bankrupt by the district court in December, 1870. The case made by the bill is this: In December, 1869, Doe lent to the bank $10,000, on its promissory note, at two years, secured by the assignment of six promissory notes and six accompanying mortgages of real estate, made by other parties, amounting to $20,550. By an instrument executed by the parties at the time, it was agreed that the bank should be at liberty to substitute other securities of equal value with any of the assigned notes and mortgages in their place, at any time before the maturing of the $10,000 note. In April, 1870, four of the six collateral notes and mortgages, amounting to $10,550, were, by consent, given up, and three other promissory notes and three like mortgages, made by other parties, amounting to $3,900, were substituted. In February, 1871, the assignee in bankruptcy presented to the district court a petition, alleging that Doe had unlawfully possessed himself of the five notes and five mortgages, which he then held, amounting to $13,900, and praying that he be cited to show cause why he should not be ordered to deliver them up to the assignee. After Doe had been so cited, the assignee demanded from him the delivery of the three notes and the three mortgages, so substituted in April, 1870, and Doe, 'believing him to be entitled to the custody thereof, delivered the same to him.' Before the assignee collected any moneys on them, Doe appeared to the petition, and in July, 1871, filed an answer, setting forth the indebtedness of the bank to him, and how it was secured, and the facts attending the substitution of securities, before mentioned, and averring that he was entitled to the possession of those which he had so delivered to the assignee, and to the moneys collected or which might be collected on them.
In November, 1872, the assignee filed a bill in equity, in the district court, against Doe, to obtain a decree for the delivery up of the two remaining notes and mortgages, amounting to $10,000, on the ground that the bank had no right to transfer them to Doe. Doe answered the bill, setting forth the transactions between the bank and himself respecting the loan and the securities transferred for securing it, and particularly the facts attending such substitution of securities; and averring that the assignee had collected the money due on the securities so delivered to him, and that he (Doe) was entitled to have them applied on the debt of the bank to him. In 1876 an interlocutory decree was made in that suit, to the effect that the assignee was entitled only to the surplus which should remain after applying the two notes and the two mortgages to the payment of the $10,000 note, of December, 1869, and that an accounting should be had as to the amounts severally due on that note, and on those securities. The accounting was had, and on January 29, 1877, the district court decreed that on January 1, 1877, there was a balance due to Doe of $7,096.82, after applying the securities retained by him. The assignee appealed to the circuit court, but the appeal was dismissed, for want of prosecution, before July 2, 1877. The amount of the deficiency remains due to Doe. The assignee collected the three notes and three mortgages which Doe delivered to him, collecting on one, June 19, 1872, $1,301.07; on another, May 19, 1875, $500; and on the third, June 19, 1872, $293.80,-the assignee giving the debtor an acquittance of the remainder. After the decree was rendered in the equity suit begun in November, 1872, and after the appeal therefrom was dismissed, and after Doe had ascertained it would be necessary to resort to the three notes and three mortgages he had delivered to the assignee, for the payment of the amount due to him from the bank, he demanded from the assignee the delivery of those securities, or the payment of the moneys thereby secured, which the assignee refused.