Opinion
(June Term, 1838.)
The assignee of a bond without notice, who took it before it fell due, as a surety for preexisting debt, without paying anything for it, or impairing his original debt, in consideration of the assignment, is not a purchaser so as to protect himself against an equity subsisting in favor of the obligor to have the bond canceled.
PLAINTIFF purchased of A. D. Murphy a tract of land, and executed four bonds to secure the purchase money, payable at different times. Subsequently the plaintiff became embarrassed, and Murphy agreed to receive a reconveyance of the land and to surrender the bonds. This agreement was executed by the plaintiff, but Murphy on several pretenses evaded the execution of his part of it, and assigned them before they became due to the defendant, the agent of the Bank of Cape Fear at Salem, as collateral security for a judgment obtained against him by the bank. Upon this assignment nothing was paid Murphy for the bonds, neither was the judgment of the bank in any way affected thereby.
J. T. Morehead and Boyden for plaintiff.
Mendenhall for defendant.
The plaintiff prayed that the bonds might be surrendered to be canceled, and for an injunction against a suit commenced on them by the defendant.
The plaintiff, as to Murphy, had an undoubted equity to have the bonds surrendered and canceled. What is there in the case that puts the defendant in a better situation than his assignor? The defendant says that he was only agent of the bank in this transaction. But we think the facts admitted in law make (52) him also the agent of Murphy. But let us put the case in the strongest light against the plaintiff. Suppose the assignment of the bonds had been to the bank directly: still, if the bank had given no new credit, money, or other consideration for the assignment, it could not pretend to have an equity equal to that of the plaintiff, although it might have the legal title. Therefore the rule, where equity is equal the law shall prevail, could not have aided in the bank. In the language of this Court in Donaldson v. Bank, 16 N.C. 103, we would ask, What value did the defendant or the bank pay for the assignment? Nothing; it was to secure a debt contracted before the assignment was contemplated. As regards expenditure, the bank stood after as it did before the assignment. Had the bank purchased with an antecedent debt, the extinguishment of the debt would have been value sufficient. But the judgment against Murphy was not released or extinguished by the bank; it stands in full force now. The assignment is without foundation, and as to the plaintiff void. The law, as just stated, was by this Court affirmed in Harris v. Horner, 21 N.C. 455. We think the case clear against the defendant, and the plaintiff must have the decree prayed for.
PER CURIAM. Decree accordingly.
Cited: Potts v. Blackwell, 56 N.C. 454; Burns v. Todd, 115 N.C. 143; Brooks v. Sullivan, 129 N.C. 190; Banks v. Dew, 175 N.C. 88.
Distinguished: Baggarly v. Gaither, 55 N.C. 82.