Sumner v. Waugh

Citations

• 56 Ill. 531

Syllabus

<p>1. Assignee of a mortgage—holds subject to what defenses. A mortgage, not being assignable by the common law, or by any statute in this State, it being a mere chose in action, a purchaser thereof takes it subject to all the infirmities to which it would have been liable in the hands of the assignor, except the latent equities of third persons of whose rights he could know nothing.</p> <p>2. A mortgagor of lands sold and conveyed the same to a third person, subject to the mortgage. Such grantee sold to the mortgagee, the mortgage to be taken in part payment of the purchase price, and to be given up and canceled, as shown by a written contract between them to that effect. Afterward the mortgagee assigned the mortgage to a person who had notice of the rights of the vendor of the lands under such contract, and it was held, the assignee took the mortgage subject to those rights.</p> <p>3. The mortgagee purchaser, going into and retaining possession, under his purchase, could allege nothing against the binding force of the contract under which he had agreed to surrender his mortgage as a part of the purchase price of the land, and his assignee, under such circumstances, would hold no better position in that respect.</p> <p>4. And where such vendor of the mortgagee, upon his own purchase, and prior to his sale to the mortgagee, executed a mortgage on the same premises, to secure a part of the purchase money due to his vendor, the first mortgagor, his subsequent contract with his vendee, the original mortgagee, under which the first mortgage was to be canceled, would operate to make the lien of the second mortgage superior to that of the first, whether in the hands of the original mortgagee, or of his assignee with notice.</p> <p>5. Same—of the mode of enforcing the assignee’s rights. In order to enforce such equities as might remain to the assignee, if any, under such circumstances, a foreclosure should be had of the second mortgage, which had thus become the prior lien