Petillon v. Noble

Mr. Justice Sheldon delivered the opinion of the Court: The evidence submitted on the hearing of the motion to dissolve the injunction, shows, very satisfactorily, that the notes in question were purchased by the Central National Bank of Chicago, from W. T. Noble & Co., on the 4th day of June, 1873, for a full consideration, then paid in good faith, without notice of the alleged defense to them, and that they were, at the same time, duly assigned, by indorsement thereon, to the bank. The bank, then, being the innocent holder of the notes by purchase for value before maturity, the alleged failure of consideration, in whole or in part, as regards them, can not be set up as against the bank, and, so far as respects the notes, the injunction was rightly dissolved. But it is different as regards the chattel mortgage. The bank has no other interest in that and the mortgaged property than what it derives by virtue of the assignment of the notes. That carried with it the mortgage as an incident to the principal debt, but only so in equity, and onty an equitable interest in the mortgage. The mortgage did not carry Avitli it to the assignee of the notes the same exemption from defense as did the notes. It is the doctrine of this court, as laid doAvn in Olds v. Cummings et al. 31 Ill. 188, and affirmed in subsequent cases, that the assignee of a mortgage takes it subject to the defense Avhicli the mortgagor had against it in the hands of the mortgagee. The evidence shows that W. T. ¡Noble & Co. did not finish the Avork by the time stipulated, the day of the public opening of the hotel, but that for about four weeks thereafter the workmen of W. T. ¡Noble & Go. Avere at Avork in the barber shop, to the considerable damage of appellants, and that the Avork has not yet been finished. It is ansAvered to this by appellees, that the delay Avas occasioned by appellants making alterations in the work to be done, and by ordering additional Avork. But the preponderance of the evidence sIioavs, that the alterations were such as Avould diminish the amount of Avork, and enable W. T. ¡Noble & Go. to finish the Avork earlier than they could otherwise ha\re done. The weight of the evidence is to disclose a defense as against W. T. Noble & Co., in whole or in part. The bank, then, under the decisions of this court, having no other or greater rights in relation to the mortgage, and standing in no better position than W. T. Noble & Co., the mortgagees, the injunction, as to the mortgage, should not have been dissolved. The decree and order of dissolution of the injunction, so far as they respect the notes, are affirmed, but as respects the mortgage they are reversed, and the cause is remanded foi further proceedings. Decree modified.