McCormick v. Buehler

Mr. Justice Waterman delivered the opinion oe the Court. By the common law, choses in action were not assignable, and consequently the purchaser of a chose in action could not enforce the same in an action at law in his own name. He did acquire an equitable right thereto, which a court of equity would enforce, but subject to all equities existing between the assignor and the debtor. Following this rule, the Supreme Court of this State, in the case of Olds v. Cummings, 31 Ill. 138, held that the assignee of a mortgage takes it subject to the infirmities and defenses to which it was subject in the hands of the assignor. A mortgage is but an incident or accessory to the debt which it is given to secure. If such debt be represented by a promissory note, which is in good faith, for value, assigned before it comes due, the assignee of such note takes it divested of any equities as to the same existing between the maker and the assignor, because what is known as negotiable instruments are not only assignable by virtue of the law merchant, but by the statute of this State; as a mortgage, an accessory or incident to a note is not assignable, the purchaser of a note, when he comes to foreclose the mortgage, although by his purchase, as such incident, it passed to him, may be confronted by and holds the mortgage subject to whatever equities, at the time of the assignment of the note, existed between the maker and the assignor. Such ruling in Olds v. Cummings, has been affirmed in Walker v. Dement, 42 Ill. 272; Sumner v. Waugh, 56 Ill. 531; White v. Sutherland, 64 Ill. 181; Bryant v. Yix, 83 Ill. 11; C., D. & V. Ry. Co. v. Lowenthal, 93 Ill. 433; Foster v. Strong, 5 Ill. App. 223; Towner v. McClelland, 110 Ill. 542. The rule of this State is in this regard, variant from what it is in almost all the other States of the Union. 15 Am. & Eng. Eney. of Law, 854; Jones on Mortgages, 5th Ed., Sec. 834; Carpenter v. Longan, 16 Wallace, 271. In most of the States of the Union it is held that a mortgage, being but an incident of the debt, can have no separate existence; that when the debt is paid, the mortgage expires; that the dependent and incidental relation of the mortgage is the controlling consideration, and that thereby the case of a mortgage is taken out of the rule applicable generally to choses in action where no such state of dependence exists; that the principle acoessormm non ducit sequitur jprincif ale applies. As to the rule now under consideration, that the assignee of a mortgage takes it subject to all the equities of the mortgagor, there is no distinction between trust deeds and mortgages; each is but an incumbrance, and each is, in common parlance, properly termed a mortgage. Nor is there any distinction between mortgages made to secure notes payable to a particular person, and mortgages made to secure notes payable to bearer or to the order of the payor, and by him indorsed. Randolph on Commercial Paper, Secs. 153, 159; 1 Daniel on Negotiable Instruments, 4th Ed., Sec. 729. We do not regard the case of Miller v. Larned, 103 Ill. 562, or P. & S. R. R. Co. v. Thompson, 103 Ill. 187, as, so far as this case is concerned, affecting the rule enunciated in Olds v. Cummings, supra. The note, to secure which this mortgage was given, having been paid prior to the assignment of the note by the holder, neither the assignee nor the complainant acquired, as against the mortgagor, any right to or interest in the mortgaged premises. The decree of the Circuit Court is therefore reversed, and a decree will here be entered dismissing the bill for want of equity. Reversed, and bill dismissed.