Volk v. Shoemaker

Citations

• 229 Pa. 407
• 78 A. 933
• 1911 Pa. LEXIS 507

Syllabus

<p>Bond — Nonnegotiable instrument — Confession of judgment — Assignment of bond — Mo'rtgage—Act of May 16,1901, sec. 5, P. L. 194.</p> <p>1. Under the Act of May 16, 1901, sec. 5, P. L. 194, the effect of a provision in a bond authorizing a confession of judgment before maturity is to make the instrument nonnegotiable.</p> <p>2. The assignee of a bond who fails to make inquiry, takes it subject to any defense to which it was subject in the hands of the obligor; the same rule applies to the assignee of a mortgage.</p> <p>3. Where a person executes a judgment bond and mortgage to another who has no interest in the transaction, and gives no consideration, and whose name is only used to facilitate a loan, and such mortgagee assigns the bond and mortgage to a third person who pays the obligor’s agent a sum much less than the face of the bond and mortgage, and it appears that the obligor never authorized cither the mortgagee or the agent to dispose of the bond and mortgage for anything less than its face value, the assignee is not entitled to the face value of the bond, and if he has entered judgment on the bond, the obligor will be entitled to have the judgment opened so that he may defend against any sum over and above what the assignee actually paid.</p>