Kleeman v. Frisbie

Citations

• 63 Ill. 482

Syllabus

<p>1. Assignment—defense against assignee before maturity. A promissory note being negotiable paper, an assignee of it before maturity, without notice and for a valuable consideration, will take it unaffected by any defense of usury not appearing on the face of the note. But this rule applies only to the assignment of negotiable securities.</p> <p>2. Same—of deed of trust—assignee takes subject to all equitable defenses. When negotiable paper is secured by a mortgage or deed of trust, the assignment of the first carries with it the security, but this is true only in equity. And as to such security, the assignee takes subject to all defenses and equities existing between the original parties.</p> <p>8. Same. The complainant gave his promissory note to A for §6900, and executed his deed of trust on land to secure its payment. Before its maturity, A assigned the note and deed of trust to B, the defendant, who was an innocent purchaser, without notice of any defense. After maturity, the holder was proceeding to have the trustee sell under the deed of trust, when the complainant filed his bill for an injunction, alleging that the note was given for the balance of the purchase money due on the land and a large amount of usurious interest; that all of the note, except $2700, was ■made up of such usury, and offered to pay the $2700, and prayed for the cancellation of the deed of trust as to the residue. The court below dissolved the injunction on motion, and dismissed the bill: Held,, that the court erred in dismissing the bill; that the assignee took the security subject to the same equities it was subject to in-tlie hands of the assignor.</p> <p>4. Same—chose in action. A deed of trust, like a mortgage, is a mere chose in action, and is assignable neither by our statute nor at the common law, so as to pass the legal title.</p>