Case ID: nj-eq_6/html/0219-01.html
Source: Caselaw Access Project
Author: {"author": "The Chancellor.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ANDREW GARROCH v. ALVAH SHERMAN AND JAMES P. JUDSON.
    1. A bond, and a mortgage showing on its face that it was given to secure the payment of the bond, were executed. The mortgage came into the possession of the person named therein as mortgagee, he having given no consideration. The bond was never delivered. The person named as mortgagee assigned the mortgage to one who testified that he advanced no money on the faith of it, and he assigned it to the complainant, who, on taking the assignment of the mortgage, gave a writing under his hand and seal, that, in consideration of the assignment, he agreed to pay certain notes drawn and endorsed by the person named as mortgagee, and to cancel certain claims then in his hands against the person named as mortgagee.
    2. Under the pleadings and proofs, the bill to foreclose the mortgage was dismissed.
    3. A mortgage purporting to secure a bond is not good without the bond, unless it be made to appear that the person named as mortgagee is entitled to the possession of the bond. And a person coming into possession of the mortgage by assignment from him who is named as mortgagee, stands in no better position.
    
      The bill states that Alvah Sherman was indebted to Isaac Watkins in $1500, and to secure the same, made out and signed his bond to Watkins for that sum, but never delivered the bond, under the pretence that it was unnecessary, as the mortgage (afterwards mentioned in the bill,) would be sufficient without the bond, and that if the bond should be wanted he would deliver it.
    The bill then states that Sherman, to secure the said $1500, executed and delivered to Watkins a mortgage, (setting out the mortgage.)
    It then states an assignment of the mortgage by Watkins to one Eadie, and an assignment thereof by Eadie to Andrew Garroch, the complainant.
    It then states that the records of deeds show the title to the mortgaged premises to be in James P. Judson, and charges that, before the making of the mortgage, Judson had conveyed the premises to Sherman, and that after the making of the mortgage, Sherman had re-conveyed to Judson. Sherman and Judson are made defendants.
    The bill prays that Sherman may be decreed to deliver to the complainant the bond secured by the mortgage, and prays foreclosure, and a sale of the mortgaged premises.
    Sherman, in his answer, denies that he was indebted to Watkins, and says that the said writings were executed by him for the purpose of obtaining a loan for his own use; and that, on the assurance of Watkins that he could obtain the loan for him, he handed to Watkins the writing purporting to be a mortgage, for the sole purpose of enabling Watkins to show the nature and value of the security that would be given for the loan, and that no loan was ever effected.
    Sherman also denies, and so does Judson, in his answer, the conveyance and re-conveyance between them charged in the bill.
    The testimony, so far as it is important in reference to the points decided, is as follows :
    Samuel H. Gardner, sworn for the complainant. — I am a subscribing witness to the mortgage; I saw Sherman and his wife execute it; I was then a commissioner for taking the proof and acknowledgment of deeds; I think I saw a bond accompanying the mortgage, which was acknowledged before me at the same time the mortgage was; I think. I was the subscribing witness to it at the same time I subscribed the mortgage as a witness ; it was my understanding that the bond was the bond secured by the mortgage; the bond and mortgage were acknowledged at Sherman’s house, and I left them with him.
    (The bond, or paper purporting to be a bond, being produced, it appears there is no subscribing witness to it.
    Caleb B. Headley, for complainant. — There has been a conversation between Sherman and me, about his borrowing some money of me; I cannot say there has directly ; there has been a considerable conversation between Watkins, Sherman, and me about borrowing money; the first sum named was $3500; I think $1500 was also named ; I don’t think I can tell with any certainty when it was ; my impression is it was in the spring, or fore part of summer, of 1844; a mortgage was proposed to be given to ine as security for the money, by Mr. Watkins, on Sherman’s property ; named two pieces of property for the purpose ; I preferred the mortgage on 24 acres of land; there was some difficulty, I don’t know what; and they proposed a mortgage on the house and lot described in the mortgage in controversy in this suit; I should say Watkins proposed it; I do not recollect of Sherman and Watkins talking together with me at any one particular time; Watkins did the most of the business; I had some conversation with Sherman ; I do not know that he ever proposed to give a mortgage on the property in question ; 1 think it likely Sherman and I had some conversation on the subject; but I cannot remember anything definite about it; I was notified that the mortgage was ready, and I requested that they should satisfy a friend of mine and a lawyer he should choose, that the mortgage was clear, and the money should be forthcoming; and that was the last I heard from them ; the money was not coming from me, but through me; I would not like to say positive who it was said the mortgage was ready, whether Sherman or Watkins ; I am under the impression that both of them said so ; the money I said would be forthcoming was $1500 ; during this negotiation, my impression is I had some conversation with Sherman on the subject, but I am not certain; I don’t recollect anything was said about J. P. Judson in this affair; I don’t recollect that I ever talked with him about this property or the mortgage up to yesterday; in this negotiation Sherman was said to be the owner of the land ; I so understood from Sherman, or Watkins, or both; I understood, at the time, that Watkins was to get the mortgage of Sherman and sign it over to my friend ; how it was to be done, I did not understand ; I don’t remember anything positive as to Sherman’s trying to persuade me to take that mortgage; I never heard that there was anything done by my friend or the attorney to satisfy them on the subject; I don’t know how to answer, satisfactorily to myself, whether from my conversation with Sherman I was led to believe the mortgage was a good one; there was a number of circumstances all tending to satisfy me that the mortgage was a good one; but whether I got it from one or the other I cannot say ; my own knowledge of the property was evidence to me that it was sufficient if it was clear ; I cannot say for a certainty whether Sherman, in his conversations with me, ever said he was not the owner of the property; this mortgage, as I understood, was to be made by Sherman; I understood it that this loan was to be made provided they satisfied my friend and his lawyer.
    Cross-examined. — I do not recollect what time it was that I was given to understand the mortgage was ready for $1500; I should not think that from the time Watkins first applied to me for the money, it was more than. four, five, or six weeks before the matter was at an end ; I think I have seen both Watkins and Sherman together, talking on the subject, but what was said I cannot remember; when the loan of $3500 was spoken of, Watkins was to give a mortgage on his own place; he was to pay off a mortgage on his own place out of it, and give a mortgage for $3500, clear; I do not know that Sherman was to have any share in that loan; I never heard him say he was ; with the $3500 to be lent to Watkins, he was first to pay off the $1700 mortgage on his own place, and for the rest he said he had got into difficulty and must have the money ;. Watkins, before 'the last year was in embarrassed circumstances, as he said ; I do not know what his pecuniary situation now is.
    
      In chief. — Watkins stated to me that he had endorsed paper for Sherman; that the paper had fallen due, and it was necessary, to save his goods and chattels, to raise the money.
    This is the plea he made for the want of the money; I understood that both Watkins and Sherman wanted money at the time; I should think it was the general opinion at that time that Sherman was in embarrassed circumstances.
    John Eadie, for complainant. — The mortgage was assigned to me by Watkins; I was present when he executed the assignment ; Cass, one of the subscribing witnesses to the assignment, was serving with me; Smith, the other subscribing witness, was serving with Watkins; they were laboring men; I saw them witness it; Smith is in Galveston, Texas; Cass, I believe, is living near Camptown ; Watkins made the application to me to take the assignment of the mortgage — to discount it; I refused; this was in the fore end of May, 1844; it was a long while after that that I agreed to take it; it was in January, 1845, before I agreed to take it; it was not offered to me again until then; the consideration of the assignment to me was, Watkins was indebted to me much more than the face of the mortgage, for moneys advanced to him ; Watkins lived next door to me, and Sherman also, one on each side of me; I had a conversation with Sherman about this mortgage, about a week, or perhaps only three or four days after it was offered to me; I. believe he asked me why I had not taken the mortgage; that it was a good one, and that I never had better paper of the kind; I refused to have anything to do with it, stating that I had not money at the time convenient, and that I did not like the paper; I think he observed in this way, that Watkins and him had got into difficulty on account of some notes that was passing betwixt them; that he, Sherman, wished to raise money in order to pay off these notes or judgments; that he did not wish Watkins’ property to be touched on his account; that is all that passed betwixt ns, that I recollect, in 1844; I think, in the course of the conversation, he stated that they had got into difficulty and there were notes betwixt them, and judgments pending against them both upon them ; I had no further conversation with Sherman on the subject, that I recollect, until the mortgage was assigned to me j when I took the asignment of the mortgage, I considered it a valid mortgage'; the other assignment on the mortgage is signed by me; I made the assignment to Mr. Garroch; the subscribing witness is the same man, Smith, who witnessed the other .assignment, and is now in Texas; the circumstances of this mortgage being assigned to me are these: Watkins got indebted to me pretty heavy; I pressed him for more securities than what I had, to make me safe; he said he had done all to secure me that he could, that mortgage of Sherman’s excepted; I observed to him that I would take an assignment of that; the assignment was made, in the form and at the time it appears on its face; between the time Watkins first offered me this mortgage and the time I took it, I advanced to Watkins, at one time, $2100 in cash, besides $1500 of an old mortgage that was pressing upon him, and another $1000 for which I took a mortgage on his place, making in all $4600; this is all I advanced him betwixt those two intervals; the $1000, I believe, was used for the purpose of taking up executions against him. (This was objected to by defendant’s counsel.)
    The question being put, “ Did you understand, at the time, that the advancement of this money was to relieve Watkins from executions that were against him on Sherman’s account?” the question was objected to.
    The master overruled the objection and the witness answered; I was informed by Watkins and Mr. Frelinghuysen, his attorney, that such was the case. (The answer was objected to.)
    The circumstances of making the. assignment by me to Garroch were these: Mrs. Watkins called on me and wished to know if I would not assign over that mortgage of $1500, in behalf of Enos Baldwin, William Ashley and Andrew Garroch; she showed me a title she had for some little property in Scotland, and offered to assign that over to me if I would assign that mortgage to those persons, and I agreed to it, for to cover notes they had endorsed for Watkins, I believe to the amount stated in that paper gived by Garroch to me; the proposal was made, unknown' to. Watkins, wholly on the part of his wife; as far as I know, he agreed to it; I don’t know that he and I had any conversation about it at the time; he never made any objection to it that I ever heard of; I am from Scotland ; I understood where the property lay, but not much about it; Watkins is from Setotland also ; in pursuance of that arrangement I made that assignment on the mortgage; at the time of that assignment, Garroeh gave me back a writing, a copy of which has been exhibited on the part of the complainant; the original I have io my possession; at the time of making the assignment to Garroeh, I considered it a good mortgage ; I think likely I told Garroeh so ; I don’t think Sherman ever told me the mortgage was not a good mortgage until after I had assigned it to Garroeh; sometime in the spring of 1845, after Sherman had returned from the legislature, and aft,or I had assigned it to Garroeh, Sherman told me the mortgage was good for nothing.
    Cross-examined.' — On the 8th or 9tn of May, when Watkins first applied to me to discount the mortgage, 1 saw it and read it; I did not see any bond accompanying it; I made no inquiry for it; I notice that the condition of the mortgage called for a bond ; the loan to Watkins of $2100 was made in New York, on the security of his own note and an old note for that amount which was taken up by Watkins, in the City Bank, under protest; Watkins was endorser on this old note, for some friends in Rhode Island or Connecticut; I don’t remember where that old note was dated ; I gave it up to Watkins when I got a deed for his property; this loan was made, as far as my memory serves me, from the 1st to the 10th of July, 1844; it was for 80 days; the new note was payable in 30 days, I think; it was not paid when it fell due; it was not lodged for collection; when it fell due I did not take any further security until I got a deed for his property; the advance of $1500 was made in May previous; that was made for the lifting of an old mortgage that was foreclosing against him, which was assigned to me; (his was in the fore end of May, 1844; there was no bond accompanying this old mortgage, but I got a new bond from Watkins alone ; this bond has been paid, so far as I have got a deed for his property; the $1000 loan was made in the same month of May, after the application by Watkins to discount the mortgage in question; I am not sure whether the $1500 was lifted before or after he applied to me to discount the mortgage in question in this suit; the $1000 was advanced after that application ; I took a bond and mortgage on the whole of Watkins’ farm as security for this $1000; this money, I understood, went into the hands of Fred. T. Frelinghuysen, to pay judgments on endorsements by Watkins and Sherman; but whose debts they were I know nothing about it; that is what I meant in my direct examination; I never advanced a dollar on the faith of the assignment by Watkins to me of the mortgage in question; I received the deed from Watkins for his farm in August, 1844 — the 24th, I think ; it was not acknowledged when I first received it; it was acknowledged about February 1st, 1845, and at that time Watkins was indebted to me $5800; Mrs. Watkins never acknowledged the deed — she signed it, but never would acknowledge it; the deed was delivered to me at the time of its date, and remained in my possession from that time till the said 1st of February, Í845; a bill of sale was made by Watkins to me, about the time of the date of the deed, of all his personal property; an estimate was made of its value at the time, and the property was delivered; it was taken as collateral security; I do not remember the amount; the deed was not a collateral security — that was a sale ; the price of the whole property was $5800 ; it was sold to me out and out, bona fide, for that price; there was an encumbrance on the property of $300 a year; the thing was fairly finished on or about February 1st, 1845; the deed was made in August preceding, but the bill of sale was not made, I think, till February ; it may have been made in August; the $5800 was for the whole property, real and personal; the personal property remained as a collateral security until on-or about February 1st, 1844, when it was turned over to me absolutely; I do not recollect what was the consideration of the real estate ; the two was connected together, and amounted to $5800, but I do not recollect what each was valued at by itself; I have advanced no money to Watkins since that time; there is some rent and other small matters due to me ; rent, $150, and 10 per cent, on the value of the personal property; the assignment to Garroch was made just about the same time I finished up a settlement with Watkins, in February, 1845; they were both done about the 1st of February; but they were distinct transactions, each one by itself, and were not connected together; I took Mrs. Watkins’ statement as to the value of the property in Scotland; I knew something of its value from knowing where it was situated ; from what I understood, I estimated the value of it to something like from two to two hundred and fifty pounds sterling; she had the copy of a will of her uncle, willing it to her and a couple of her sisters, and she gave me a power of attorney to get it; Watkins never signed it; there was never any occasion for it; it had never come into her hands; I hold that power of attorney, so that, provided I cannot sell the property here to cover me, I may be safe to the amount due me ; I bought the real estate and personal property at an out and out sale for $5800; there is no time limited in which I am to sell the property here; I may sell it now, or I may sell it in 100 years if I choose; there was no bond accompanying the mortgage in question in this suit, when it was assigned to me; I never saw any until I saw it here today. [An interlineation in the assignment from Watkins to the witness, in these words, “ and the bond therein mentioned and all moneys secured by the said mortgage,” being shown to the witness, he says] — I think Watkins made the interlineation; but I do not know; it was made at the time it was signed, as far as I know; I do not know who wrote with a pencil first, under the interlineation; I think it was done at the same time the body was wrote, but I cannot remember particularly; I cannot say when it was done; I have no recollection of it; the assignment from me to Garroch, I presume, is in Mr. Boylan’s handwriting; the other is not; I don’t think he ever saw it before"the execution of the assignment from me to Garroch ; it was not out of my possession till then ; the assignment from Watkins to me was made, I suppose, in my own house. [An interlineation in the other assignment being shown to witness, and he being asked when it was made, he says] — I don’t recollect when the interlineations were made; I have no recollection about them; if my attention had not been called to them now, I should not have known they ever were made; I knew there was no bond with the mortgage when I took the assignment from Watkins ; I never looked for one; I did not consider the bond of much worth, & mere personal thing; I never applied to Sherman for the bond, nor ever asked him why one was not delivered; I cannot say that I said anything to Garroeh about the bond when I assigned the mortgage to him; he must have seen there was none; I negotiated the assignment to Garroeh, and the terms of it, at Mrs. Watkins’ request; Watkins gave his consent to it; X' believe all the terms of that assignment were made between me and Garroeh.
    The question being put “ I want you to state distinctly and fully the terms on which Garroeh holds the mortgage,” the complainant’s counsel objected to the question, and to any evidence as to the terms on which Garroeh holds the mortgage, except as they appear by the-written agreement. The master overruled the objection, and the witness answered:
    The terms specified in the paper was agreed upon betwixt him and me, and the money to be paid over to the separate parties, as soon as collected; that is the whole sum and substance of the business ; I do not recollect of any conversation in the fall of 1844, between Sherman and me, in reference to the state of accounts between Watkins and Sherman, in connection with that mortgage; there was a settlement of accounts between me and Sherman that fall; I think we did not at that time, to my knowledge, have any conversation about the state of accounts between him and Watkins in relation to that mortgage; Xdid once make an effort, at Sherman’s request, to get a settlement between him and Watkins; this was, to the best of my recollection, early dn the spring of 1844; it was before the application was made to me to discount the mortgage, a long time, according to the best of my recollection; Sherman at that time made no mention of the mortgage in question ; I heard something of an effort made by Sherman to raise money in New York; I think he mentioned it to me himself, but when it was, I cannot recollect; he said a dark cloud was hanging over him, and he must raise money to get it off; I understood he proposed to give a mortgage on the property and buildings where he lives now; before any suit was brought by Garroeh, on this mortgage, he and I called on Gov. Pennington, with the papers, and showed him the assignments on the mortgage; Gov. Pennington observed that the words interlined in the assignment were wanting, and he said if I would leave them with him, he would make them as they should be, and would send them up to me, to be executed by Watkins and myself over again; the mortgage was sent to me with the interlineations in pencil-marks, and Watkins filled up the interlineation in his assignment, in presence of the said attesting witness, James Smith, and I filled up mine in presence of the same witness, who then, for the first time, signed his name as a subscribing witness to the said assignments ¡ this has come to my recollection since my previous examination, and on a conversation with Gov. Pennington; the assignments were re-acknowledged by Watkins and myself, at that time, in presence of that witness; this was done when Garroch applied to Gov. Pennington to prosecute the mortgage in question, but before this suit was brought thereon; I think it was within eight or ten days after the assignment to Garroch ; I held the mortgage in question at the time of assigning it to Garroch, on account of a debt owed by Watkins to me for money lent and advanced; I don’t recollect stating to Garroch anything to the effect that the mortgage was doubtful, or an invalid security • I do not recollect that I gave him (Garroch) any intimation in the negotiation with him in reference to this mortgage, that there was any difficulty about it, for I had no such idea myself j I represented it to Garroch as a good and valid mortgage ,• at our first interview with Gov. Pennington, wo left the mortgage with him ; I believe I received it again from Gov. Pennington’s hands, at my house, a very short time- — one, two, perhaps five days — -after we left it with him; he said he was going further, and would call in the evening, on his return, and get it, which he did; I remember having conversations with Sherman — -it strikes me it was in the spring of 1844 — in relation to a settlement of accounts between him and Watkins; this was before the settlement of accounts between me and Sherman — some time before his offering to me the mortgage for discount — as I have before stated; I don’t think I was informed by Sherman, at that time — the time of these conversations — that he owed Watkins nothing.
    In chief. — Cass was not present when the assignments were re-acknowledged; I now affirm and approve the assignment by me as it now stands; I knew, before taking the mortgage in question, that Sherman and Watkins had had dealings and accounts together; they both told me so; Sherman has been engaged in business in that neighborhood ever since I have known him; I can’t say that I knew that Watkins was doing any business; I had no knowledge of any business of his, except what he told me himself; he lived in Camptown for five or six years — was on a farm he purchased there; I believe his principal business was signing accommodation bills and borrowing money.
    Re-cross-examined. — I came to Camptown May 29th, 1843; the first money I advanced was that for lifting the $1500 mortgage which I spoke of before; I do not recollect of his applying to me for any amount before that; I may have let him have a few dollars; it was at the time of advancing money for that mortgage, which was foreclosing at the time, that I first learned that Watkins was in failing circumstances; it was public rumor that he had erected large improvements on the property he occupied ; I have no knowledge of it myself.
    After the closing and signing of Eadie’s examination, the defendant’s counsel objected to the admissibility of his testimony, on the ground that it appears, on the face of the testimony given by him, that he is interested in the event of the cause.
    The testimony on the part of the defendants, so far as it relates to the points decided, is as follows:
    Abraham H. Sherman. — I have seen the bond and mortgage exhibited in this cause; in the latter part of May or 1st of June, 1844,1 know of the said mortgage being in the possession of A. Sherman; I think, certainly, it was the last week in May.
    Mary C. Sherman, aged sixteen years. — I remember seeing Mr. Samuel H. Gardner at my father’s house in May, 1844; I am a daughter of A. Sherman; I was in the store when Gardner called; he inquired for my mother; he came alone; I invited him into the room, and called my mother; he remained about five minutes; he came to leave a mortgage; I saw the mortgage; it was on the premises where the store is; I saw the mortgage a number of times during the summer and fall of 1844; can’t say how late in the fall; think, it was September; the mortgage was from my father and mother to Mr. Watkins, for $1500; my father had gone to New York when Gardner sailed; the mortgage was in father’s secretary when I saw it in the summer and fall of 1844; I do not know the form of taking an acknowledgment; I understood that Gardner had taken the acknowledgment at that time; Judson was not there at that time ; I did not see him there during that day ; I fix the month of May as the time of taking the acknowledgment of my mother because I was then assisting in the store; I had never seen the mortgage before then; I remember the paper marked Exhibit P No.,4, (the bond,) as one of the papers Mr. Gardner had, and remember the similarity in the blotting on the bond and mortgage.
    Cross-examined. — Mr. Gardner carne about ten in the morning ; my father started for New York about 8 or 9 that morning ; I can’t say how he went; in going to New York he would go near Mr. Gardner’s house; I made no memorandum of the time spoken of; my mother and Mr. Gardner retired to another room.
    William W. Sherman, son of defendant, A. Sherman. (The mortgage in dispute being shown him.) — I have seen this paper before to-day and subsequent to the day it bears date ; I saw it at our place several times during the summer of 1844, and along iti the fall of the same year, at the same place; I saw it five or six times; I recollect seeing it late in the fall, in my father’s desk — what they call the secretary ; my sister Mary was with me when I saw it in the desk ; we were looking at the contents of the paper together at that time ; I saw it several times in the desk besides; I heard a conversation between my father and Mr. Isaac Watkins respecting the mortgage and the purpose for which it was given; it was along in the summer of 1844, as late as June or July, and while the mortgage was yet in the secretary; it was stated in the conversation, that the object of the mortgage was to raise a fund for father’s benefit, and Wat- , kins said he thought at the time he would be able to raise the money for him ; I know of an effort made by Mr. Watkins for that purpose; he said he had gone to Westfield to see if he •could not raise it from a gentleman there, but he said he could not get it there; he said he would go to see Mr. Headley, to see if he, Headley, could not get it from a lady; I heard him say afterwards that he could not get it there; it was along in June, 1844, that he went to see Mr. Headley, or said that he went. (So much of the above testimony as has relation to the conversation between Sherman and Watkins was objected to by complainant’s counsel.)
    Cross-examined. — The latest date I can fix, with certainty, as to the time when I saw the mortgage in my father’s possession, was along in September, 1844; it was prior to this date that Watkins made the efforts referred to to get the money; Watkins did not take the mortgage with him when he went to raise the money ; can’t say whether there were any assignments on the mortgage at that time or not; my father and Watkins were friends at that time — prior to that time they had considerable dealings together ; I know that, prior to that time, Mr. Watkins had endorsed for my father a few hundred dollars; I should say ten or twelve hundred dollars; I am a son of A. Sherman,
    In chief. — The endorsements spoken of were for the firm of C. A. Sherman & Co., composed of Alvah Sherman and his son, Charles A. Sherman; I should not think the endorsements were over $1000, but I hav.e no memorandum of them.
    An instrument under the hand and seal of Garroch, of which the following is a copy, was produced on the part of the complainant : “ Whereas John Eadie has this day assigned to me a mortgage made by Alvah Sherman and wife for fifteen hundred dollars. In consideration whereof I do agree to pay the face of the following notes, to wit, one note of $400, drawn by Isaac Watkins, and endorsed by Enos Baldwin ; one do., of $310, drawn by Isaac Watkins, and'endorsed by Enos Baldwin ; one do., of $420, drawn by Wm. Ashley, and endorsed by Isaac Watkins and Enos Baldwin; and I further agree to give up and cancel claims now in my hands against Isaac Watkins and Enos Baldwin, which claims amount to $345. In witness whereof I bind myself, my heirs, executors, and administrators, firmly by these presents. Sealed with my seal, and dated this first day of February, in the year of our Lord one thousand eight hundred and forty-five. Signed, A. Garroch. [L. S.]
    “ Sealed and delivered in the presence of Aaron A. Boylan.”
    
      
      F. T. Frelinghuysen and W Pennington, for the complainant.
    They cited 4 Kent’s Com. 145 ; 2 Story’s Eq., §§ 145, 1018 , 1 Ib., §§ 381, 389.
    
      A. C. M. Pennington and A. Whitehead, for the defendants.
    They cited 1 Johns. Ch. R. 499 ; 2 Atk. 19 ; 1 Bro. Ch. 52.
   The Chancellor.

The answer of Sherman has not been overcome'] and there is no proof that Sherman was indebted to Watkins, or that Watkins, either before or since the writing purporting to be a mortgage came into his possession, paid any of Ms endorsements for Sherman, or paid money for him in any other way.

Watkins could not have foreclosed the mortgage, (it purporting to secure a bond,) without producing the bond, unless he could show that he was entitled to the possession of the bond. No reason or consideration has been shown why the bond should have been delivered to Watkins.

Eadie, who took from Watkins an assignment of the mortgage, admits that he advanced no money on the faith of it.

If the assignment by Eadie to Garroch, the complainant, could put Garroeli in any better position than Watkins or Eadie occupied, and if, from the testimony, I could feel well assured that the assignment to Garroch was a bona fide transaction, yet the fact that the mortgage showed on its face, that it was intended to secure a bond was sufficient to put him on inquiry in reference to the bond, and he, therefore, took the mortgage subject to every defence that could be made against it as between Sherman and Watkins.

The bill will be dismissed.

Order accordingly.