Opinion
December Term, 1836.
One who takes an assignment of property to secure a debt, and neither advances money nor releases his debt, is not a purchaser within the rule of equity which protects purchasers without notice.
THE plaintiff obtained a judgment before a justice on an attachment against Stephen Clements for $100, with interest from 21 December, 1826, to the rendition of the judgment, on 29 January, 1829. Two dollars were paid on the same. Clements was in the State of Tennessee. The judgment was left in the hands of John J. Carrington (the plaintiff alleges, as his agent), to have it sent to Tennessee, and collected. John J. Carrington sent James Carrington to Tennessee, as his agent, to collect this judgment, and other claims which he had against other persons in that State. James Carrington, on his arrival in Tennessee, took the notes of one Terry and James and Stephen Clements for the amount of the claims that were due John J. Carrington, including the judgment in favor of the plaintiff. John J. Carrington became insolvent, and on 27 September, 1827, in consideration of a large debt due from him to Horner, and his (Horner's) liabilities for him, executed to Horner, by way of security, a deed of assignment of all debts due to him by all persons whatever. The deed mentions "and the debts committed to James Carrington for collection, and all property which the said James may take in satisfaction of said debts." John J. Carrington gave an order on James Carrington to deliver to the defendant the notes and evidences of debt and what property he held of his, which was accordingly done, and among which were the notes of Terry and James and Stephen Clements.
W. A. Graham and Waddell for plaintiff.
P. H. Mangum and Norwood for defendants.
The plaintiff filed this bill to compel the defendant Horner to account to him for the amount of the aforesaid judgment (J. J. Carrington being insolvent), alleging the same belonged to him, the plaintiff. The defendant admitted that at the date of the deed of assignment he knew the said judgment had been sent by J. J. Carrington to (456) Tennessee for collection, and was one of the evidences of debt in the hands of James Carrington. He says that John J. Carrington, both before and after that time, told him — and he believed the statement — that he purchased for a valuable consideration the said judgment of the plaintiff. The defendant averred that he honestly believed that the judgment was passed to him by the deed of assignment executed by J. J. Carrington. He admitted that he had received evidences of debt which included that judgment, but he denied that the judgment was the property of the plaintiffs at the date of the deed of assignment. He insisted that he was a bona fide purchaser of it, without notice of the plaintiff's claim thereto.
There has been a great deal of testimony taken in this cause. We have examined it, and are satisfied that the judgment in favor of the plaintiff against Stephen Clements, as mentioned in the bill, was truly the property of the plaintiff, and that it had been placed in the hands of John J. Carrington, as agent of the plaintiff, to be sent to the State of Tennessee for collection. The defendant, by his admissions, had sufficient evidence before him to put him upon inquiry, if he had in fact advanced or paid at the time a valuable consideration for the judgment. But we are of the opinion that he does not come within the principles of the rule, as he in fact was nothing out of pocket by the assignment, so far as relates to this judgment. The inducement for the assignment was old debts due by Carrington to him, and already incurred liabilities, but no acquittance was given for the same to Carrington. There was no present loss to the defendant in consequence of the assignment. The defendant admits that he received the judgment or notes which were given for it. The evidence proves that he was compelled to receive this debt and others in horses, and as a just loss on the claims. We are of the opinion (as Carrington is insolvent) that the plaintiff is entitled (457) to a decree for an account of so much of the judgment as the defendant has actually received. It is, therefore, referred to the master of the Court of Equity for the county of Orange, as a commissioner, to state and report what sum in cash value the defendant Horner has received on the said judgment, allowing him reasonable commissions for his trouble in collecting that sum.
PER CURIAM. Decree accordingly.
Cited: Holderby v. Blum, 22 N.C. 52; Potts v. Blackwell, 56 N.C. 454; Brooks v. Sullivan, 129 N.C. 190.