3 Grant 281 | Pa. | 1859
The opinion of the, court was delivered at Harrisburg,
Whatever may have been the rights of Almeron Field or his assigns against the holder of the Cox judgments, after they had been purchased by John Abel with David Abel’s money, it is clear that the judgments were not actually paid. They were regularly assigned to John Abel as living judgments, and the intention of the arrangement was to keep them alive.. Admitting that Field might have enforced the entry of satisfaction upon them had he retained his contract with David Abel, it is not so sure he could have done so against Milliken, a subsequent bona fide holder, and purchaser without notice. But even if he could, can the holder of a subsequent mortgage ? Not as mortgagee, because the equity did not arise from the mortgage, and did not pass to him by its assignment. It had its origin in the agreement of' June 8th, 1846, by which the mortgagor engaged to assume the payment of the Cox judgments. That agreement was a mere personal contract of Field with David Abel, the purpose of which was not to give additional security to the mortgage which Field was taking, or to give it priority over the judgments. That was impossible without the consent of Cox. The agreement was designed rather to secure the payment of that part of the purchase money of
This is sufficient to indicate, if it does not fully determine, that the rule is that the purchaser for value of a chose in action is not to be affected by latent equities of third persons. He is a only bound to inquire of the debtor, and there is much reason " for such a rule. Secret equities in third persons are clogs upon alienation, and cannot, therefore, be favorites in law. The holder of them virtually empowers the creditor to practise a fraud upon the innocent — a fraud against which no vigilance can guard. Where an equity exists in the debtor the assignee knows where to inquire, but not so for latent claims of strangers. It may be said indeed that such claimants cannot know
Without pursuing this subject further, it may be said that all the authorities agree that the presence of laches in the holder of a secret equity will postpone him. Even an equity in the obligor may be lost by neglect to assert it, and a fortiori will a third person lose his right by any laches which causes an injury to a purchaser of a chose in action. This is well illustrated in Fisher v. Knox, 1 Harr. 622. There the moiety of a judgment had been assigned, but the assignee' did not mark his interest upon the docket, and the whole judgment was afterwards assigned by the creditor without notice to the assignee of any equity in a prior assignee. The court postponed the first assignee to the second, and this though no law requires an assignment of judgment to be docketed. Gibson, O. J., remarked that any one who leaves it within the power of another to deceive may be said to collude with him beforehand. Certainly a chancellor would not execute an equitable assignment in his favor. The principle is that the holder of such a secret equity against the obligee, an equity collateral to the contract, may not by any action or inaction unnecessarily expose others to loss in purchasing the contract. Applying this principle to the facts in this case, how stands .the appellant ? His rights originated in the agreement of June 8, 1846, by which David Abel undertook to assume the payment of the Cox judgments. That was an assumption of immediate liability. Until July 29th, 1847, when the agreement was assigned to Quincey, Eield could have compelled payment by Abel by suit on any day. After the assignment Quincey might have done the same. He had knowledge of the judgments, and of the fact that their lien was superior to that of his mortgage, for the record and agreement gave him notice, and he took a transfer of the agreement to enable him to enforce the extinction of the judgments. They, were assigned to John Abel in 1847, revived at his instance against the land bound by the mortgage, and purchased by Milliken in 1851. For nearly five years the appellant, and those under whom he claims, holding a secret equity, suffering it to remain dormant, allowed the world to believe that the judgments were what they appeared to be, and enabled the judgment creditor to sell them to a purchaser, whose utmost vigilance could not have discovered what is now set up to strip him of the fruits of his purchase. It cannot be permitted that the holder
The decree of the Court of Common Pleas is affirmed, with costs to be paid by the appellant.