38 Mich. 568 | Mich. | 1878
The only question presented by this record is, whether, where a chattel mortgage is given for a sum named, but really to secure future advances, and none have been made, but the mortgagee assigns it to one who supposes it to be given for an actual indebtedness, the assignee, if he takes it-in good faith and for value, is entitled to hold it as a security for the sum named in it. The circuit judge ruled that he would have in it no rights superior to those of the mortgagee.
We cannot see how this conclusion can be questioned. It is only a new application of the rule laid down in Ladue v. Detroit & Milwaukee Ry. Co., 13 Mich., 380. It is true- it has been held in this State that if a mortgage is given to secure negotiable paper, the assignee of this paper and of the mortgage, if he becomes such in good faith for value and before maturity, may hold them discharged of pre-existing equities; Reeves v. Scully, Walk. Ch., 248; Dutton v. Ives, 5 Mich., 515: but where it does not secure negotiable paper, the rule is the other way. Russell v. Waite, Walk. Ch., 31; Nichols v. Lee, 10 Mich., 526. There was no such paper in this case.
The judgment must be affirmed with costs.
