Twitchell v. McMurtrie

• Decision Date: 10 May 1875
• Parties: Twitchell <I>versus</I> McMurtrie.
• Court: Pennsylvania Supreme Court

Page 383

77 Pa. 383

Twitchell versus McMurtrie.

Supreme Court of Pennsylvania.

February 8, 1875.

May 10, 1875.

February 8th 1875.

Before AGNEW, C. J., SHARSWOOD, WILLIAMS, MERCUR, GORDON, PAXSON and WOODWARD, JJ.

Error to the District Court of Philadelphia: No. 224, to January Term 1873.

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J. J. Ridgway, for plaintiff in error.—The declarations of no set-off were of no value in determining the sufficiency of the affidavit of defence; the effect of them was for the jury. No fact outside of the copy filed will be looked at by the court: 1 Troubat & H. 371; Imhoff v. Brown, 6 Casey 504. The certificate of an acknowledging magistrate may be impeached: Jamison v. Jamison, 3 Whart. 457; Barnet v. Barnet, 15 S. & R. 72; Hall v. Patterson, 1 P. F. Smith 289; Shrader v. Decker, 9 Barr 14; McCandless v. Engle, 1 P. F. Smith 309; Michener v. Cavender, 2 Wright 237. The assignee takes subject to all objections the obligor could make: Elliott v. Callan, 1 Penna. R. 24; Wheeler v. Hughes, 1 Dall. 23; Rudy v. Wenner, 16 S. & R. 18; Morton v. Rose, 2 Wash. C. C. R. 233; Horstman v. Gerker, 13 Wright 287. On allegation of fraud an innocent holder of even negotiable paper must prove a valuable consideration; Hutchinson v. Boggs, 4 Casey 294; Hoffman v. Foster, 7 Wright 137; Chew v. Barnet, 11 S. & R. 389; Hancock's Appeal, 10 Casey 155. An attorney cannot take a gift from his client instead of his bill: Wells v. Middleton, 1 Cox C. C. 112; Ormond v. Hutchinson, 13 Ves. 52; Morse v. Royal, 12 Id. 372.

A. S. Biddle and R. C. McMurtrie, for defendant in error.— The estate conveyed by the mortgage was not a chose in action, but a title defeasible by payment of the debt: Scott v. Fields, 7 Watts 360; the secret agreement not to convey would affect it only as it would other conveyances. The debt being admitted, the conveyance cannot be destroyed by anything that would not affect other conveyances: Philips v. Bank, 6 Harris 402. The defendant's title was her equity of redemption; Gilmore v. Commonwealth, 17 S. & R. 276; Simpson v. Ammons, 1 Binn. 175. The condition in the mortgage is the payment of the debt which subsists in innocent hands who bought on the faith of her conveyance. The debt carries the estate: Foster v. Fox, 4 W. & S. 92; Farmers' Bank v. Fordyce, 1 Barr 455; and the owner of that is a purchaser for value: Lancaster v. Dolan, 1 Rawle 231; her position is of one seeking to redeem: Rinton v. Vandegrift. Notice of a defect in the acknowledgment, arising out of fraud, must be brought home to the purchaser: Schrader v. Decker, 9 Barr 14; Louden v. Blythe, 4 Harris 541; Louden v. Blythe, 3 Casey 25; Hall v. Patterson, 1 P. F. Smith 290.

Mr. Justice WOODWARD delivered the opinion of the court, May 10th 1875.

There can be no doubt that if John O'Byrne, the first assignee of the mortgage, had been the plaintiff in this action, the defendant would have had the right to prove the facts alleged in her affidavit. The mortgage, according to her statement, was executed at his instance. The defendant and her husband were confined in prison on a charge of crime, and Mr. O'Byrne undertook to provide and disburse the funds required to meet the expenses of their approaching trial. These funds were to be raised out of the defendant's property, and the mortgage, which he agreed he would never part with, was the means by which the control of the property was placed in his hands. He took possession, and collected the rents up to a time shortly before this suit was brought. Besides this, he procured the appointment of William Callahan as administrator of Mary E. Hill, the mother of the defendant, retaining the management of the estate entirely in himself, selling the personal property, collecting the credits in his own name, paying the debts of Mrs. Hill, and acting in all respects as if the administration had been committed to him and not to Callahan. The settlement of the estate is pending in the Orphans' Court, and the defendant asserts her belief that a large portion of the assets has been unaccounted for, amounting to more than the principal of the mortgage. In the meantime, no statement has been made of the expenses of the trial of the defendant and her husband, and no account has been rendered of the management of the mortgaged premises, although such an account has been demanded. On the 8th of February 1869, in violation of his agreement that he would not part with the mortgage, he assigned it to the trustees represented by the plaintiff below. The consideration stated in the assignment was one dollar.

Upon facts like these, it is clear that even an endorsee of a promissory note would be required, in an action against the maker, to prove that he had received it in the usual course of business, for a valuable consideration, and before it was due. A party may rest upon the presumptions of law in his favor in the first instance, but where circumstances are shown making out, primâ facie, a case of fraud upon the maker, the holder must establish his title to the note: Hutchinson v. Boggs and Kirk, 4 Casey 294. The assignee of a specialty is subject to a different and more stringent rule than the endorsee of negotiable paper. He is affected more directly and to a very much greater extent by the equities and trusts subsisting between the original parties. While the broad principle of Chew v. Barnet, 11 S. & R. 389, and Kramer v. Arthurs, 7 Barr 165, has been modified, slight notice of facts constituting a defence is sufficient to bind an assignee, and "anything that would put a prudent man upon inquiry, it has often been held, is equivalent to notice:" Churcher v. Guernsey, 3 Wright 84. The nominal consideration for this assignment was one dollar. The transfer to the trustees, upon the assumption that the allegations of the affidavit are true, was a fraudulent violation on the part of Mr. O'Byrne of the duty which the law imposed on him, as well as a breach of his express agreement with the defendant. It was said in Hancock's Appeal, 10 Casey 156, that while, in the absence of any evidence to the contrary, an assignment under seal imports a valuable consideration, yet the...