Case ID: keyes_3/html/0293-01.html
Source: Caselaw Access Project
Author: {"author": "Davies, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William J. Blydenburgh, Executor, etc., Appellant, v. Horace Thayer, Respondent.
    The assignee of a chose in action takes the thing assigned subject to all the rights which the debtor had acquired in respect thereto prior to the assignment.
    Hence, where A, who was a creditor of B, lent to him his note for accommodation, which B hypothecated as security for a loan from C, who recovered judgment against A on the note after maturity, and afterward assigned the judgment to D, on payment of the sum loaned to B, with interest and costs, D having also, as a further consideration for said judgment, sold to B certain property, who procured the assignment of the judgment, it was held, that A was entitled to have the judgment canceled, on payment of the sum for which his note was held as collateral, together with interest and costs of the action in which judgment was recovered. That is, D took the judgment subject to the equities existing against it at the time, which were, on the part of A that the same could only be enforced against him to the amount due to 0.
    
      G. Miller, for the appellant.
    
      Watson & Stone, for the respondent.
   Davies, Ch. J.

This action is brought to obtain a cancellation of a certain judgment against the plaintiff’s testator, now held and owned by the defendant. A correct understanding of the facts found by the referee will be more readily attained by reference to those stated in the pleadings, and not controverted. The plaintiff’s testator made his certain note for the sum of $950, payable to the order of one Robert Stewart, and delivered the same to him. Stewart-borrowed of one Amasa S. Foster the sum of fifty dollars, and transferred to him the said note as collateral security, before its maturity. Foster commenced a suit upon the note, when overdue, and recovered judgment thereon against plaintiff’s testator. Defendant sold to Stewart,'the payee of the note, certain property, for which he took in payment an assignment of said judgment from said Foster, and which was procured from him by said Stewart, on repayment to said Foster of the sum of fifty dollars, advanced by him to said Stewart, and the interest thereon, and the costs of said judgment.

The referee before whom the action was tried found as facts:

1. That the note upon which Foster recovered judgment against Blydenburgh, was, before it was due, indorsed over by Stewart, the payee, as security for fifty dollars borrowed money.
2. That the note was lent by Blydenburgh to- Stewart for accommodation.
3. That Stewart, at the time the note was given, was largely indebted to Blydenburgh for money lent and money paid to his use, and such indebtedness still remains.
4. That the defendant paid Foster his fifty dollars, with interest and costs, when the judgment was assigned to* him.
5. That such payment was made as part of the purchase-money agreed to be paid to Stewart by the defendant for the judgment, and the judgment was assigned to the defendant by Foster at Stewart’s request, and without any notice or knowledge on the part of either Foster or the defendant that Blydenburgh had any defense or set-off against the judgment or the demand on which it was recovered, and that the defendant paid full value for the judgment. The referee thereupon gave judgment for the defendant that the plaintiff’s complaint be dismissed with costs, and which judgment, on appeal, was affirmed at the General Term.

Upon the facts found by the referee, it is immaterial to inquire whether the plaintiff’s testator had a good defense to the action upon the note instituted by Foster. The interest of Foster in the note and judgment was only to the extent of the fifty dollars advanced by him to Stewart and the costs of the action. On payment of these sums to him by Stewart he was entitled to a transfer of the judgment. Stewart was, therefore, the equitable owner of the judgment, subject to the lien of Foster thereon, and his interests therein to the extent of these .amounts. The referee found as a fact that the note was indorsed by Stewart to Foster as security for fifty dollars borrowed money.”

It then becomes necessary to inquire what were the equities between Stewart and the plaintiff’s testator. They are settled by the finding of the referee. He finds that the note was lent by Blydenburgh to Stewart for his accommodation, and that Stewart, at the time the note was given, was largely indebted to Blydenburgh for money lent and money paid to his use, and that such indebtedness still remains.

It is too clear to need argument, or illustration, or authority, thht Stewart could not enforce this judgment against the estate of the plaintiff’s testator. The next inquiry is, does the defendant, who is the assignee of Stewart, of the whole judgment, except as to the amount paid to Foster, stand in any better position than Stewart ? This question has been repeatedly answered by adjudication in this court. (Callanan v. Edwards, 32 N. Y. 483; Bush v. Lathrop, 22 id. 535; Anderson v. Nicholas, 28 id. 600; Beebe v. Bank of New York, 1 Johns. 529.)

These cases all affirm the doctrine that the assignee of a chose in action, not negotiable, takes the thing assigned subject to all the rights which the debtor had acquired in respect thereto prior to the assignment. The assignee takes, subject to all existing equities, and those on the part of the plaintiff’s testator were, that the judgment could only be enforced against him to the amount due to Foster and which was paid to him. ■ Nothing was done by the plaintiff or his testator which estops .him from setting up these equities as against either Foster, Stewart or the defendant. The judgment was only available in the hands of either of them, to the extent of fifty dollars advance by Foster and the interest thereon, and the costs of the action. On payment of these sums, the plaintiff or his testator was entitled to have the judgment canceled.

The judgment should be reversed and a new trial granted, costs to abide the event.

All the judges concurring,

Judgment reversed.