it became due, and not for any antecedent debt due from John to Robert Anderson; and became void on the payment of said note, and remained null and void and was not a lien on the said surplus monies, although the assignee, the said George Rapelye, might have purchased the same for a bona fide consideration and without notice of anything to invalidate it.

Exceptions were taken to the report by George Rapelye.

Mr. Benjamin Haight, in support of the exceptions.

Mr. D. M. Cowdrey, for De La Fayette Schanck.

Mr. James R. Whiting, for the assignees of John Anderson.

1839.

PURSER ข.

ANDERSON.

THE VICE-CHANCELLOR:-The evidence is contradicto- Dec. 27. ry as to the consideration of the bond and mortgage between John Anderson and his brother Robert, which the latter assigned to Rapelye, who now claims to receive payment of it out of the surplus money in this court. But I consider the preponderance is decidedly in favor of the supposition that the bond and mortgage were given to secure Robert and their uncle David against the note which they had made, for John's accommodation, to be discounted at the Seventh Ward Bank; and that, when John paid that note, as it appears he did, the specific purpose for which the bond and mortgage had been given was satisfied.

After this, however, it was still competent for the parties, John and Robert, to keep the bond and mortgagè alive for any other purpose founded on a good or valuable consideration, provided the rights of creditors or third persons did not intervene. It is attempted to be shown that another indebtedness of John to Robert did exist, which served as a consideration, but the evidence falls short of proving the fact in a satisfactory way, either as to the actual indebtedness or the amount for which Robert should hold it as security; and it could not be held as against John's crediters for the benefit of his family. Upon the whole, therefore, the conclusion must be, that on payment of the note at the bank,

1839.

PURSER

v.

ANDERSON.

the bond and mortgage were satisfied and became a dead letter in the hands of Robert.

Such being the condition of the bond and mortgage, could it be assigned so as to be of any effect or avail in the hands of the assignee ?

With the assent and concurrence of the mortgagor, it could be assigned, and in the hands of an assignee for value it would be available as against the mortgagor and mortgagee. In the present case, the mortgagee has covenanted, in the assignment, that the money mentioned in the mortgage was due upon it; and John Anderson, the mortgagor, appears to have been ready, at all times, to admit the mortgage to be a subsisting security and to concur in the assignment -and Mr. Rapelye having actually paid value for it, I see no difficulty in considering the bond and mortgage as a valid and subsisting security in his hands as against these parties.

But the question is, whether it is so as against third persons who claim adversely to him? Before Rapelye paid his money and took the assignment, John Anderson gave a mortgage to Conover; and, then, assigned his equity of redemption for the benefit of his creditors. When Conover took his mortgage, he understood the preceding mortgage to Robert Anderson was satisfied and no longer an incumbrance, and it was not competent for John and Robert, afterwards, to revive a defunct mortgage to the prejudice of Conover's security. So, after executing the assignment for the benefit of his creditors, it was not competent for John Anderson to defeat the benefit of it to them, by consenting to the setting up of this former incumbrance. The Conover mortgage and the assignment for creditors were both on record anterior to Rapelye's purchase and the payment of his money. He is, therefore, chargeable with notice of them; and if he had inquired of Conover or the assignees, he might have ascertained whether they claimed in opposition to or in subordination of the mortgage he was about to purchase. If they had admitted that they claimed subject to it as a subsisting incumbrance, he would have been safe in becoming the assignee. But if they had objected, as they do now, he could not have made the purchase, except at the risk of being defeated by them. There was enough to put

Rapelye on this inquiry; and it is tantamount to notice to him that they would dispute the validity of the mortgage. He is not, therefore, to be regarded as a bona fide purchaser without notice.

The equity set up by the holder of the Conover mortgage and by the assignees, to a preference, is not a latent equity which Rapelye could not know or guard himself against; and he is not entitled to the benefit of the rule on that subject as laid down by the judges in James v. Morey, 2 Cowen's R. 246.

I am of opinion that the master has reported correctly on the subject of the claims to the surplus; and the exceptions. to the report must be overruled, with costs of the exceptions and hearing to be paid by George Rapelye. Each party may be left to bear his own costs of the reference.

1839.

DEWEY *

V.

ADAMS.

DEWEY and another v. ADAMS and others.

Where an assignment for creditors is had, and the assignees let furniture (embraced by it) on a rental to one of the assignors, until a favorable time for sale, the assignment will be void as to this, for want of a change of possession.

May 8, 1839.

Debtor and

JUDGMENT Creditor's Bill. The defendants, Adams and Welsh, had made an assignment for the benefit of creditors. Part of their properties consisted of the furniture of an hotel known as Knickerbocker Hall. The complainants insisted Creditor. that there had been no change of possession. The defen- Fraud. dant Welsh had remained in possession of the furniture in Possesthe sleeping apartments in Knickerbocker Hall, until the fil- sion. ing of the bill; and it appeared that the assignees had let the same to him at a rent of $125 per month; and they alleged that they had kept it on hand so that, in the fall of the year, it could be sold to advantage.

THE VICE-CHANCELLOR decided that the assignment was void as to the furniture in the lodging rooms in Knickerbocker Hall, which were left in Walsh's possession on rent:

1839.

LOVETT

v.

DIMOND.

there not having been a sufficient change of possession; and his honor directed the property to be delivered to a receiver.

Mr. D. Marvin, for the complainants.

Mr. E. Sandford, for the defendants.

July 30, 1839.

Mortgagor and

Mortgagee. Assign

ment.

Assignor.
Usury.

LOVETT V. DIMOND, RACEY, &c.

Where a bond and mortgage are unimpeached by the parties to it, an afterpurchaser of the premises (covered by the latter) cannot affect their amount on the ground that the mortgagee has sold and assigned them at a less amount than is secured by them.

A note given for interest is not payment.

An assignor of a mortgage taking, from after purchasers who buy subject to the mortgage, an additional security and amount for forbearance, will not, thereby, invalidate the original security for usury; but, on foreclosure, he will have to give credit for such addition.

FORECLOSURE. Bill filed by the complainant, George Lovett, as assignor of a mortgage of real estate, for ten thousand dollars, made to secure part of purchase money. The property was bought by the defendant, Elizabeth Racey, as trustee for a Mrs. Curtis, subject to the mortgage. It will be gathered, by the opinion of the court, that George Lovett purchased the mortgage at an under price; and that, thereafter, something was received by him for forbearance. The question was, as to the effect of these things upon the validity of the security.

Mr. Peter A. Cowdrey, for the complainant.

Mr. T. R. Lee, for Mrs. Racey and Mrs. Curtis.

THE VICE-CHANCELLOR :-The defendant, Mrs. Curtis, for whom Mrs. Racey holds the title of the mortgaged premises as trustee, purchased the same in September, one thousand eight hundred and thirty-five, subject to the incum

brance of the mortgage for ten thousand dollars, which was then a valid and subsisting incumbrance to that amount. In October, one thousand eight hundred and thirty-six, the complainant purchased the bond and mortgage of Daniel B. Talmadge, and took an assignment of them. No matter what the complainant paid: his title is not disputed by any body who had an interest in the bond and mortgage; and there could be no usury in the transaction to affect the original validity of the securities on which these defendants can have any right to set up. It is immaterial to them for how much less than the face of the bond and mortgage the complainants bought them up. As to the defendants, the bond and mortgage stand good for the amount due when they purchased, except so far as payments have been made since by or on behalf of these defendants. There must be a reference to a master to compute the amount due; and in making the computation, the defendants will be entitled to a credit of three hundred dollars, on account of the interest for which James L. Curtis's promissory note was given, unless the complainant produces and surrenders the note and shows that it has never been paid. If paid in part, so much is to be credited on the surrender of the note for the residue.

In June, one thousand eight hundred and thirty-seven, on granting a forbearance of payment, the complainant had no right to stipulate for fourteen per cent. interest; and all that he could exact, if he thought proper to extend the time for payment, would have been to advance the rate of interest from six to seven per cent. from that time. If the master shall find that it was within the scope of the defendant's agreement to pay seven per cent. from that time, he may charge the interest at seven per cent. after that period; and the defendants will be entitled to a credit of the fourteen hundred dollars for which Curtis's note and the collateral security of a mortgage was given, as so much paid for interest money, unless it appears that such amount has not been realized by the complainant and he shall think proper to surrender the note and the security which accompanied

1839.

LOVETT

V.

DIMOND.