52 N.J. Eq. 298 | N.J. | 1894
The opinion of the court was delivered by
The bill in this case is to foreclose a mortgage. In form the suit is between William L. Bull, trustee, the holder of the legal title to the mortgage, and Fisher & Furman, owners as tenants, in common of the legal title to the mortgaged premises. The real
Turning now to the claim of the defendants Fisher & Fur-man, the ease shows that they have an equitable defence to the said mortgage, resting upon a certain payment by them for and on behalf of said Harry F. Worthington, under an assignment to them of his interest in said mortgage, prior in point of time to the assignment by which the executors of Henry R. Worthington, deceased, claim title. The transaction with the defendants was in this wise: After Harry F. Worthington had conveyed his undivided interest in the brick property to the Worthington Brick Company, one James Sweeney, on the 5th day of October, 1881, sued out a writ of foreign attachment in this state against said Harry F. Worthington, under which the interest of said Harry F. Worthington in all of said lands was seized and .attached. After the death of Henry R. Worthington and after
From this recital it is evident that the real complainant in equity is not William L. Bull, the trustee of said mortgage, but William L. Bull and others, executors of Henry R. Worthington, deceased, whose claim rests not upon or through the legal title of William L. Bull, trustee, but solely upon their settlement with Harry F. Worthington and his consequent assignment to them of his interest as the cestui que trust of said mortgage. The defendants Fisher & Furman may in equity be regarded indifferently as prior assignees of the interest of Harry F. Worthington, or as mortgagors who have discharged part of their debt. In the court of chancery the case was tried upon the theory that William L. Bull, trustee, must recover upon the strength of his legal title unless he had notice of the assignment by his cestui que trust to Fisher & Furman. Upon this point a large mass of testimony was taken, which, however, failed to satisfy the learned vice-chancellor that notice had been given,
It would seem clear that in this disposition of the case the real parties in interest are lost sight of, as likewise is the true nature of their dispute. The'essential facts to be dealt with were these: First. That Harry F. Worthington, who was in equity the owner of the debt due from Fisher & Furman, received from them a certain part thereof for which he assigned to them his interest in their own debt. Second. That Harry F. Worthington afterwards assigned all of his interest in said debt to the executors of his father’s estate.
From this brief summary of the case it is evident that under a mass of detail the real transaction was simply the purchase by the complainants of a debt that had been partly paid, by the debtor to their assignor. That an assignee of a bond and mortgage or any other non-negotiable or matured debt takes it subject to all the equitable defences that the original debtor may have, is a settled rule in this state as well as elsewhere. Magie v. Reynolds, 6 Dick. Ch. Rep. 113, and cases there cited. Whether Bull, trustee, had notice of the first assignment, is not a question that concerns us, for the reason that no party in interest claims through the legal title of which he was trustee, the real parties having dealt, over his head, directly with the owner of the debt in equity. That there might have been such action by Bull, trustee, in the execution of his trust as would have postponed a prior assignee to the taker of the legal title without notice to the trustee, may be conceded -without affecting at all the decision of the case in hand. At bottom the doctrine of notice is part of the law of negligence. It is undoubtedly true, as a general rule, that an assignee of a fund is negligent if he fail to give notice to the depositary, who otherwise may innocently pay it out to a subsequent assignee. That is not the case here, where the first assignee is not only the debtor, but is also, so to speak, the depositary of the fund itself. The case discloses no negligence of which the second assignees can complain. They were buying a debt, and it was clearly their duty to find out from the
The case will be remitted to the court of chancery, in order that an account may be taken and a decree entered in accordance with these views.
For reversal — The Chief-Justice, Abbett, Depue, Dixon,. Garrison, Lippincott, Reed, Van Syokel,. Bogert, Brown, Krueger, Smith — 12.
For affirmance — None.