
    Goold Hoyt, Executor, &c., Plaintiff and Respondent, v. Samuel Hoyt, Defendant and Appellant.
    1. Upon appeal from a judgment on the report of a referee, every intendment is to be made of which the evidence will admit, to sustain the report and supply the necessary facts to justify it.
    2. A referee has power, upon the trial, to permit an allegation in the complaint that the assignment to the plaintiff of a bond and mortgage in suit was in writing and for a certain sum, to be amended, by alleging that the assignment was by parol, and as security for an uncertain sum.
    3. A renewed assignment or continued hypothecation of a thing in action already in the possession of the assignee by virtue of a previous written assignment, is valid, though made by parol; especially where the consideration is the incurring of a future and contingent debt. The statute of frauds does not apply to such a case.
    4. A second assignee of a mortgage of land does not, by recording his assignment, obtain a title valid as against one having a prior unrecorded assignment. A purchaser of a mortgage is not a purchaser of “ real estate " within the meaning of the recording act.
    5. A finding of a Referee, as a conclusion of fact, that an assignment was delivered in settlement of a previous demand, and, as a conclusion of law, that it was not received in extinguishment of an equal amount of indebtedness, may be construed to mean that it was received only as a security.
    6. A debtor, under circumstances showing great embarrassment, and bad faith on his part, gave to one of the firm who were his creditors, an assignment of a bond and mortgage, with money and a check, together amounting to the sum of the debt; and the partner receiving them took the assignment of the bond and mortgage in his-own name, charging himself with the amount thereof, on the books of the Ann: Held, that he could not be deemed a bona fide purchaser for value: Held, further, that there was enough in the circumstances of this transaction as proved, to put him upon inquiry as to a prior assignment by the same debtor to another person; and that he was, therefore, chargeable with notice thereof.
    7. The cases of White v. Springfield Bank, (3 Sandf., 222 ;) New York Marbled Iron Works v. Smith, (4 Duer, 362;) and Purchase v. Matiison, (3 Bos., 313,) questioned, by Robertson, J.
    (Before Robertson and White, J. J.)
    Heard, March 11th and 12th;
    decided, October 5th, 1861.
    Appeal from a judgment entered upon the report of Henry Hicoll, Esq., as Referee.
    The relief demanded by the complaint in this action was that the defendant should deliver to the plaintiff two bonds and mortgages described therein, which had been assigned by the mortgagee to the defendant, and also should reassign the same if necessary. It was, however, agreed during the pendency of this action, that the plaintiff should continue an action for their foreclosure, commenced before the present one was begun, and should hold the proceeds of the sale on such foreclosure, subject to the decision in this action. All the issues were referred, and the Referee adjudged, that after paying a certain sum to the defendant, the plaintiff was entitled to retain a certain sum out of the proceeds of such sale, and that neither party was entitled to costs. Ho objection was made to the regularity or form of such judgment.
    The land embraced by the mortgages lay in Kings County; each of them was for $3,500, with interest, and was executed by one Wiegand to one Charles Hoyt. They, with the bonds mentioned in them, were assigned by a written assignment, in May, 1852, and delivered to the plaintiff as security for a balance due to him from the mortgagee, upon a previous purchase of lots from him by the latter. Such assignment was declared on its face to be a security for $2,095, and was never recorded. Upon the trial of the issues an amendment was allowed to be made to the complaint by the Referee, by which it was alleged, that such bonds and mortgages' were after such written assignment, “ assigned by parol .by Charles Hoyt, and delivered to the plaintiff as collateral security * . * * for all the indebtedness of Charles Hoyt to the plaintiff,” arising from the surrender by the latter of mortgages held by him upon property owned by the former, and from the sale of certain lots by the latter to the former, and also for a certain note of a third person, held.by the latter, and assumed by the former in consequence of his indebtedness to the maker, and also for “ the general indebtedness of Charles Hoyt to the plaintiff on account.”
    Various transactions by way of substituting said bonds and mortgages in place of others, upon the property of Charles Hoyt, took place between him and the plaintiff at different times, between the first written assignment of the bonds and mortgages in question, to the latter, and a final adjustment of accounts in June, 1855, between him and Charles Hoyt, in which the latter assured him that the mortgages already held by him would cover any balance of account. After all such transactions were closed, Charles Hoyt further “ agreed” with the plaintiff that he was to look for the balance of account due him, to the bonds and mortgages in question, then in process of foreclosure by him, and on being applied to for payment, subsequently told the plaintiff he must get it from the mortgages in question. These facts appear in evidence, although not found by the Referee.
    The following facts were found by the Referee in reference to the assignment of the mortgages in controversy.
    I. Charles Hoyt executed the written assignment of the-mortgages in question, in the first place, as security for the sum therein mentioned, and subsequently agreed thait they, Avith other assigned securities, should remain in the plaintiff’s hands as security for an additional loan of $6,000.
    II. Charles Hoyt, in April, 1854, by letter, authorized tire plaintiff to pay himself a note, held by him, drawn by James I. Hoyt, from the proceeds of such mortgages.
    
      IH. Two actions were commenced in December, 1853, in the joint names of the plaintiff and Charles Hoyt, for the foreclosure of such mortgages by certain attorneys, (Messrs. Hawley & Glover,) in whose hands the same had been placed for such purpose, in which actions, notice of their pendency was filed in January, 1854.
    Certain other facts in relation to the delivering of such bonds and mortgages to the defendant, by Charles Hoyt, were contained in the Eeferee’s report, as found by him, which were substantially as follows:
    I. Charles Hoyt, on the 15th of June, 1855, obtained both such bonds and mortgages, and their written assignment to the plaintiff from the attorneys, in whose hands they had been placed for foreclosure, under pretext of needing them to make a settlement with the plaintiff, and only returned one of them within two days thereafter.
    II. Charles Hoyt, on the 16th of June, 1855, borrowed of the defendant’s firm, consisting of himself and a brother, $20,000, which he promised to return in half an hour but never repaid.
    ITT. Charles Hoyt, “in settlement” of the debt growing out of such last mentioned loan, paid to the defendant’s firm $1,000 in money, delivered them his check for $12,000, and assigned to the defendant the bonds and mortgages in question.
    IV. The sum of $7,000 at the time of such settlement, was debited to the defendant and credited to his brother, and he took the mortgages to his own account.
    The plaintiff and Charles Hoyt on the 17th of June, 1855, adjusted the indebtedness of the latter to the former, including the note of James I. Hoyt, at nearly $4,000, ($3,988.36;) on the same day, in the office of Charles Hoyt, the bond and mortgage returned by him to the attorneys to prosecute the same, was surreptitiously taken from them by some unknown person and never restored.
    The first assignment of the mortgages in question to the defendant, containing no covenant of the amount due thereon, was received by Jesse Hoyt, the defendant’s brother, in the city of New York, sometime after 11 o’clock of the morning of the 19th of June, and put on record by his counsel on the same day at Brooklyn, in Kings County: • Such counsel, on the same day, drew a second assignment of the same mortgages to the defendant, which his brother procured to be executed and recorded on the next day, (20th,) and which contained a covenant, that $7,000 and interest was due thereon.
    The defendant and his brother, Jesse Hoyt, were the only witnesses examined as to the execution of the assignment to the defendant: Jesse Hoyt, testified to the original loan by his firm to Charles Hoyt, that while such loan remained unpaid, the latter applied to him in order to sell or raise money on the mortgages in question, by whom he was informed that he had no money, but perhaps the defendant had. In this conversation, the witness asked Charles Hoyt if the mortgages had been assigned, who replied that they had, but it was all settled, and tore up a paper or two, which the witness understood from him was an assignment; although he did not understand to whom. On the 19th, a “ settlement” was made, by which Charles Hoyt gave the witness $1,000 in money, a check for $12,-000, and an assignment of the mortgages for $7,000. This witness, and the defendant, both stated that the latter agreed to take the mortgages as an investment for $7,000. The witness Jesse Hoyt, declared this to be the whole of the transaction; the mortgage was taken as payment of $7,000, and the check taken for the balance dated the 19th June; no memorándum or receipt was given for the original debt of $20,000, and it did not appear what was done with the original check for that sum given by Charles Hoyt.
    At the time Jesse Hoyt called on the defendant’s Counsel with the original assignment, he directed him to examine the papers, and the abstract of title, to see from that whether it was all straight, and desired him to search for assignments of the mortgages.
    The check for $12,000 given on the settlement, was unpaid, and two days afterwards a mortgage was given in lieu of it, upon a steamboat, said by Charles Hoyt to have been bought by him, and 112,000 paid therefor.
    It does not appear, that anything was said at the first interview between Charles and. Jesse Hoyt, on the 18th of June, of the debt due by the former to the firm of the latter.
    The Referee found as a conclusion from the facts, that the assignment of the bonds and mortgages in question to the defendant, was not “made for a valuable consideration, or received in extinguishment of an equal amount of indebtedness from Charles Hoyt, to the defendant and his brother.” The only other conclusion of law found by him, was that on the 19th June, 1855, the plaintiff was the rightful owner of the bonds and mortgages in question,, and entitled to be paid out of the proceeds thereof, the amount due to him on a settlement of accounts between himself and Charles Hoyt.
    
      David Hawley, for plaintiff, (respondent.)
    I. The bonds and mortgages had not only been assigned by the written assignment, but they had also been assigned as collateral security for Charles Hoyt’s indebtedness to the plaintiff on several accounts, and the plaintiff had a ■lien upon them for the balance due him, and was entitled .to the possession of them on the 19th day of June, 1855, when they were transferred to the defendant.
    II. At any rate, there was an equitable assignment from Charles Hoyt to the plaintiff, to secure his indebtedness, to constitute which no particular form is necessary. (2 Story’s Eq., § 1047 ; Morton v. Naylor, 1 Hill’s R., 583 ; 1 Parsons on Con., 197 ; and see James v. Johnson, 6 Johns. Ch., 417 ; Bosanquet v. Dudman, 1 Starkie’s R., 1.)
    ITT. Had these bonds and mortgages been in the hands of an entire stranger, the agreement between Goold Hoyt and Charles Hoyt created a valid lien or pledge of them. (Cross on Lien, 65 ; Falkener v. Case, 1 Brown’s Ch. Cas., 125 ; and see Coote on Mortgages, 202.)
    
      IY. The letter which Charles Hoyt wrote the plaintiff, authorizing him to pay himself for the note held by him against James I. Hoyt, dated 8th February, 18.51, for $1,000, and interest from 8th February, 1852, out of the securities he held as executor of the estate of Gr. Hoyt, deceased, and the attending circumstances, constituted an equitable assignment of. those securities for the payment of the same. (Morton v. Naylor, 1 Hill R., 583.)
    The statute of Frauds does not apply. The order is to pay out of a fund, and there is no accountability, if not realized from that fund. (Parson’s Mercantile Law, 74.)
    The consideration was the giving up the note in question to James I. Hoyt. (1 Parsons on Con., 190.)
    Y. The defendant is not a purchaser in good faith, so as to be protected under the registry act, because he had notice of a previous assignment.
    1. Charles Hoyt gave Jesse Hoyt notice that they had been previously assigned. (Willard Eq. Jur., 256 ; 1 Story’s Eq., § 397 ; Anderson v. Van Alen, 12 John. R., 343.)
    There was enough to put him on inquiry. (Haight v. Hayt, 19 N. Y. R., 471 ; and see 2 Barb. Ch. R., 151, 159.)
    2. The filing of the lis pendens in the foreclosure suit was constructive notice of the pendency of the foreclosure, and, therefore, of the rights of the plaintiff therein."
    The word “purchaser” includes the assignee of a mortgage. (2 R. S., 3d ed., 46.)
    At least, the assignee of a mortgage subsequent to filing lis pendens, becomes a subsequent incumbrancer."
    The case in 2 Barb. Ch. R., 151, applies to a previous mortgagee, who, of course, is not a subsequent purchaser.
    Besides, this provision as to subsequent purchasers and incumbrancers was not contained in the Bevised Statutes, but was added in the Code.
    YI. The defendant is not a purchaser for a valuable consideration, so as to be protected under the Begistry Act, because the assignment of the mortgages was taken for a pre-existing debt.
    1. The consideration was not advanced on the credit of these mortgages. There was no new consideration. Stalker v. McDonald, 6 Hill, 96 ; Coddington v. Bay, 20 John., 637 ; Van Husen v. Radcliff, 17 N. Y. R., 583 ; Higby v. New York and Harlem R. R. Co., 3 Bosw., 497 ; Noel v. Murray, 3 Kern., 168.)
    A note taken in exchange for a pre-existing debt is not presumption of payment, except in Maine and Massachusetts. (3 Fairf., 381 ; 15 Maine R., 340.) And assigning other dioses in action, such as bonds, without guarantee, and credited on the books of the creditor, is not payment nor presumption of payment. (Leas v. James, 10 Serg. & Rawle R., 315 ; Day v. Leal, 14 John. R., 404.)
    There is no proof here of any agreement with Charles Hoyt, that these bonds and mortgages should be received in payment of the debt the defendant and his brother held against him, and he be absolutely released.
    The fraudulent representations of Charles Hoyt, that the bonds and mortgages were free and clear of all incumbrances, would have rendered any positive and absolute agreement to receive them in payment void, (1 Parsons on Contr., 463,) and leaves the defendant in as good condition after he re-transfers, as he would have been in had no transfer taken place.
    The fact that the assignment was to one of two partners, for a portion of his claim in the debt, can make no difference in principle. It is still a pre-existing debt. And where joint creditors divide the debt, it cannot change the relation at all as to the debtor, so as not to make it a preexisting debt, if one is more diligent or fortunate than the other in collecting his claim.
    The defendant not being within the registry act, took the assignment of these bonds and mortgages, subject to the plaintiff’s rights, and got no greater or better right than Charles Hoyt himself had. (Ventress v. Smith, 10 Pet. 175 ; Willis v. Twambly, 13 Mass. R., 204 ; Westfall v. Jones, 23 Barb., 12.)
    “ As between equities merely, the prior one, as a general rule, prevails.” (Mechanics’ Bank v. N. Y. and N. H. R. 
      
      R., 3 Kern., 599 ; Williams on Personal Property, 322, margin.)
    
      C. Van Santwoord, for the defendant (appellant.)
    • I. The written assignment to plaintiff to secure a specified sum, could not, as against subsequent purchasers, or incumbrancers, on account of a precedent debt, be made available as security for a debt entirely distinct and separate from the particular debt, which it was given to secure, by a subsequent parol agreement. (Hooper Exp., 19 Ves., Jr., 479 ; Truscott v. King, 2 Selden, 146-166 ; Mead v. York, 2 Selden, 449 ; The Bank of Utica v. Finch, 3 Barb. Ch. R., 293, 302.)
    II. The allegations that the $6,000, in Sept., 1852, was advanced on the bonds and mortgages, and of a further assignment by parol as collateral security, so far as the same might be necessary for the payment thereof, were not proved.
    HI. The claim of the plaintiff to the mortgages as collateral security, under and by virtue of the assignments alleged, was thereby extinguished by payments or receipts before June 15,1855, and the plaintiff ceased to hold even the legal title. (Kortright v. Cady, 21 N. Y. R., 343.)
    IV. The Referee had no power to allow the amendment.
    This was allowing the plaintiff to set up a claim to the mortgages on a new and distinct title and ground, wholly without the scope and meaning of the allegations of the complaint, which he was not authorized to do. (Union Bank v. Mott, 18 How. Pr., 506, 508 ; S. C., 19 Id., 267, 273.)
    V. But if he had the power, the assurances of Charles Hoyt that the mortgages would cover him for any balance of account, and the agreement of Charles Hoyt with the plaintiff, that he was to look to the collections of these bonds and mortgages, without clear evidence of an original actual deposit of the bonds and mortgages themselves by Charles Hoyt with Goold Hoyt, as security for advances, or the continuance of such deposit, did not bring the case within the principle of an equitable assignment by deposit of title deeds, &c. (Ex parte Hooper, 19 Ves., 479 ; Bradley’s Case, Ridgeway t. Hardwicke, 194.)
    VI. Hence the plaintiff at the date of the assignment of the mortgages to the defendant on the 9th of June, 1855, had no title to them as against the defendant if he had no better title than that of an assignee for a pre-existing debt or a judgment creditor.
    VII. The defendant was “ a purchaser in good faith, and for a valuable consideration” of the mortgages in question under two assignments by Charles Hoyt.
    VIII. The acceptance of a deed or note in payment of a pre-existing debt, as distinguished from the case of its acceptance as collateral security for or on account of a pre-existing debt, without giving up any security, or parting with any right, or incurring any new responsibility, or placing the party taking the deed or note in a worse situation than he would have been if he had received notice of a prior equitable title or lien previous to the purchase, constitutes the party accepting, a bona fide purchaser for value. (Bank of Sandusky v. Scoville, 24 Wend., 115 ; Bank of Salina v. Babcock, 21 Wend., 499.) The case of Dickerson v. Tillinghast, (4 Paige, 215,) is not in conflict with the above statement, though the marginal note is so.
    IX. The facts that the mortgages were taken as payment of $7,000 of the loan of $20,000, in the settlement for that loan upon the agreement of the defendant to take them for $7,000 in acceptance of the proposal of Charles Hoyt, through Jesse Hoyt, to sell the mortgages to him is as conclusive to show that the mortgagees were taken as actual payment for so much, as any formal agreement to take them as actual payment for so much, could be. (Higby v. The New York and Harlem Railroad Company, (3 Bosw., 497, 504,) is not inconsistent with this proposition, and see Bank of Sandusky v. Scoville, (24 Wend., 115.)
    X. Feither Jesse Hoyt nor the defendant had any notice of claim such as to deprive the defendant of the character of a bona fide purchaser. (Jackson v. Van Valkenburgh, 8 Cow., 260, 264.)
    
      XI. In the foreclosure suits pending on the mortgages, Charles Hoyt was co-plaintiff with Goold Hoyt. The lis pendens in those suits relied on as notice by the plaintiff was not notice except from persons deriving title from the defendants in those suits. (Stuyvesant v. Hall, 2 Barb. Ch. R., 160.) The Referee so held.
    XII. As against the defendant’s title as a purchaser in good faith, for a valuable consideration under the assignments to him, dated June 19, 1855, and duly recorded as above stated, the prior unrecorded assignments to the plaintiff were void by express statute. (1 R. S., original ed., 756, §§ 1, 37, 38.) See Revisers’ Notes, (3 R. S., 2d ed., 605,) where it is stated that it seems evident that an innocent assignee of a mortgage is entitled to the same protection as an innocent purchaser. (Vanderkemp v. Shelton, 11 Paige, 28 ; Pickett v. Barron, 29 Barb. S. C. R., 505.)
   By the Court—Robertson, J.

Only two questions arise in this case, upon whose determination it depends ^ the first is the efficacy of the parol assignment of the mortgages in question to the plaintiff, from Charles Hoyt, as security for a debt due by him, to confer an ownership as against subsequent purchasers; and the second embraces the good faith of the purchase by the defendant for value, without any notice of the plaintiff’s rights, at the time of the written transfer of them to the former, within the meaning of the recording act.

Two objections are made to the plaintiff’s availing himself, of any parol assignment to him, even if it existed and was valid; First, That the Referee has not found any such fact, and Secondly, That there was no such allegation in the complaint, until an' amendment was allowed by the Referee; which he either had not the power to allow, or ought not to have allowed. It is fully established by the recent adjudications of the Court of Appeals, that every intendment is to be made, of which the evidence will admit, to sustain the report of a Referee, and to supply the necessary facts to justify it, (Carman v. Pultz, 21 N. Y. R., 547 ; Grant v. Morse, 22 Id., 323,) and the evidence in this case fully warrants the assumption of the making of such a parol assignment. In reference to the second objection, the title or ground of claim to the mortgages by the plaintiff by the parol assignment, does not appear to me to be so distinct from that set out in the complaint, as to bring the case within the principle laid down in The Union Bank v. Mott, (18 How. Pr. R., 506, 508 ; S. C., 19 Id., 267, 273 :) The person from whom either assignment came, was the same, the only differences between that first and that afterwards set out, were; that the former was by parol instead of written, and was taken as security for an uncertain balance of account, instead of a certain debt; it was, therefore, not beyond the jurisdiction of the Eeferee to permit the amendment, and his discretion appears to have been well exercised in permitting such amendment, as in so many dealings between the parties, an innocent mistake might easily have arisen as to the debts which the assignment was intended to cover, as well as the fact of a parol assignment having been made after the written one. It was, besides, only anticipating what might have been the action of the Court, in conforming the pleadings to the proofs, as evidence of the existence of such parol assignment, had already been received without objection at the time of the amendment. (Code, §§ 173, 272.)

The parol assignment was clearly effectual to transfer the property to the plaintiff, unless prevented from doing so by the Statute of Frauds, and such objection can be taken by third persons. The written bonds and mortgages were already in the possession of the plaintiff, and he held a written assignment of them; the consideration for the parol assignment was a new debt to be incurred thereafter: There was, therefore, no necessity for them to be delivered a second time, and as no part of the consideration could be paid at the time of the assignment, unless a parol assignment was good, there was no other substitute which could have been made to take the place of a written one in order to make the transaction binding. Before the Eevised Statutes of 1830, such choses in action could have been assigned by the delivery of written evidences of them or of some instrument creating a lien or obligation, (Runyan v. Mersereau, 11 J. R., 534 ;) and no particular form was necessary for the purpose; (2 Story Eq. Jur., § 1047, Marten v. Naylor, 1 Hill, 583 ; 1 Pars. on Con., 197 :) Where they were already in the party’s possession, an agreement that he might retain them was all that was necessary, (James v. Johnson, 6 Johns. Ch., 417 ;) and this was probably so even if in the hands of another. (Cross on Lien, 65 ; Falkener v. Case, 1 Brown Ch. C., 125.) I apprehend the addition of the words “ things in action,” in the present Statute of Frauds, to the articles whose sale was required, by the former statute, to be manifested in writing, was not made to include a case like the present, or interfere with any previous law. The statute itself was originally intended to prevent the absolute sale of property, for an inadequate price established by perjured or mistaken testimony, or the conversion of a mere treaty for selling into an absolute sale. But it did not intend to interfere with the custom of commerce, by which certain acts, such as part delivery or part payment, had been adopted as evidence of a sale; and it certainly could not have been intended by the addition already spoken of, to require a writing for the continuous hypothecation of an article already in the pledgee’s possession and transferred to him by a bill of sale; and still less where the consideration was the incurring of a future and contingent debt, which could not be defined, although it might be described in general terms. The parol assignment, therefore, I must hold to be valid and effectual.

The second question which arises is, whether the defendant was, within the meaning of the statute, (1 R. S., 756, § 1,) such a subsequent purchaser in “ good faith and for a valuable consideration of the same real estate,” as that for which the plaintiff held an unrecorded conveyance.

Before the Eevised Statutes of 1830, the record of an assignment of a mortgage was not notice to any one of its existence. (James v. Morey, 2 Cow., 246 :) But now, although such an assignment would come within the statutory definition of “ conveyance,” (1 R. S., 762, § 38 :) the preference over the holder of a prior unrecorded “ conveyance,” given in the same statute, is only to a purchaser of the “ real estate,” conveyed by such conveyance, and not to a purchaser of the “ conveyance ” which a mortgage would be: What is meant by “real estate” is defined in-the same statute, (1 R. S., 762, §.38,) which does not include “mortgages.” These considerations are overlooked by Chancellor Wai/wobth in deciding Vanderkemp v. Shelton, (11 Paige, 28 :) The statute ought to be construed strictly as being in derogation of existing rights.

The Eeferee, however, has stated, as a conclusion of law, from the facts found by him, that the assignment to the defendant of the mortgages in question, was “ not received in extinguishment of an equal amount of indebtedness existing at the time of the transfer,” one of those facts being that such assignment was delivered in settlement: This I apprehend is to be construed to mean, by way of security yand the evidence points rather to such an arrangement, than to a discharge of Charles Hoyt. (See Higby v. The New York and H. R. R. Co., 3 Bosw., 504, and cases cited :) If such be considered to be the inference as a fact, from the other facts of the case, it is clear the defendant was not a Iona fide purchaser, but took the assignment as mere security for a debt; and if the question be still open I think we are warranted in drawing as an inference of fact what the Eeferee has stated as a conclusion of law; if necessary to sustain the report, we are undoubtedly at liberty to do so.

At the time of the first interview between Charles and Jesse Hoyt, the former was indebted to the latter’s firm in a large sum of money, borrowed by him, two days previously for half an hour only and never heard of in the meantime: Ho thing appears to have been said about this breach of faith and the only thing proposed was to sell the mortgages or raise money on them. ' This might possibly be construed as meaning to obtain it for the purpose of discharging the debt in question, were it not that Jesse Hoyt said, he had no money, but the defendant might have some. This clearly did not refer to canceling any of the debt, because both parties owned that at the time". No money was ever advanced; the only act done was a change of credit on the books of the defendant’s firm and the assignment was then executed: This assignment was accompanied by a worthless check, and was taken without any examination of the title or even a covenant that any amount was due on the mortgages; but is alleged to have been taken in payment of a debt of §7,000: Tiiough pronounced defective, and notwithstanding another was obtained without difficulty, it was put on record forthwith, also without even an examination of the title: The check, of the payment of which, there was no probability at the time, was settled two days afterwards by a doubtful security. These circumstances show so much embarrassment in the affairs of Charles Hoyt, and such a fear by the defendaut of his insolvency, as to warrant the conclusion that the mortgages were taken as temporary security to be replaced by better if he could give it, rather than as an investmeut of money due from a solvent debtor.

But if this were not so, these circumstances, in connection with others, lead us irresistibly to the conclusion that the defendant took the assignment with knowledge of facts sufficient to put him on inquiry as to the existence of a prior assignment. Charles Hoyt told Jesse Hoyt, in their first interview, in reply to a question to that effect by him, (for putting which, no reason is assigned,) that the mortgages had been assigned, but it had been settled; and he then tore up in his presence some assignment: Jesse Hoyt deemed this of importance enough to be communicated to his brother, and even after the arrangement was completed, was so impressed with the belief of the existence of a prior assignment, that he specially instructed his Counsel, besides examining the title, to search for assignments. The whole negotiation was conducted and concluded in haste, without the presence of Counsel, who might have been dangerous witnesses in case of a subsequent investigation into the good faith of the transaction, and I think it cannot be doubted on this state of facts, that enough circumstances came to the knowledge of the defendant and his agent, to have put them upon inquiry; and had they been desirous of ascertaining the existence of a prior assignment, of enabling them to discover to whom it had been executed. This they would have done, unless Charles Hoyt should deceive them, which he could not well do, after once stating the existence of an assignment. But neither Jesse Hoyt nor the defendant used due diligence in prosecuting the proper inquiry. (Anderson v. Van Alen, 12 J. R., 343 ;) and this, in connection with the fact that the assignment was taken to secure a doubtful debt from an embarrassed debtor, shows that the defendant had a motive in not pushing his investigations too far.

It is true that the whole of the old debt of $20,000 was . closed up; but only by taking a check, which was not paid, and probably not expected to be paid; the want of money on the part of Charles Hoyt, not appearing to have ceased. A new security, instead of such check, was given two days after, for giving which, at the time, there seems to have been no reason. The taking of the check was probably to give color to the theory of an absolute extinguishment of the original debt.

The report of the Beferee would, therefore, not be set aside, were this a motion for a new trial on a case, if he had found that the assignment to the defendant was only as security for, and not in extinguishment of, so much debt, and that as matter of law, he had notice of sufficient facts to put him on inquiry. If the two facts, that such assignment was merely for security and such notice, can be now supplied without a formal finding, the judgment should be affirmed.

But even if the defendant had absolutely relinquished seven-twentieths of his claim against Charles Hoyt for the mortgages in question, I do not think the law so clearly settled in his favor as his Counsel seemed to imagine. It is true this Court in three cases has so held, (White v. Springfield Bank, 3 Sandf., 222 ; New York Marbled Iron Works v. Smith, 4 Duer, 362, and Purchase v. Mattison, 3 Bosw., 313 ;) hut the language of Judge Bexio, in deciding the more recent case of Van Heusen v. Radcliff, (17 N. Y. R., 583,) in the Court of Appeals, is explicitly to the contrary: lie there states, that “in regard to commercial paper, it has long been settled that no person could claim the title of bona fide holder, who receives the bill or note on account of a precedent debt, there being no new consideration or anything parted with by the indorsee at the time,” and he refers to the cases of Youngs v. Lee, (2 Kern., 553,) and Dickerson v. Tillinghast, (4 Paige, 219,) as authority. In the first of those cases, (Youngs v. Lee,) which was in the Court of Appeals, the decision was put on the ground, that the debt discharged was not due at the time of the discharge; and in it the other case of Dickerson v. Tillinghast, as well as those of Stalker v. McDonald, (6 Hill, 93 ;) Coddington v. Bay, (20 J. R., 637 ;) The Bank of Sandusky v. Scoville et al., (24 Wend., 115 ;) and Bank of Salina v. Babcock, (21 Wend., 499,) were cited with approbation. In Boyd v. Cummings, in a subsequent part of the same volume, (17 N. Y. R., 101,) it was deemed advisable to place the decision upon the ground of the abandonment of supplementary proceedings, as part of the consideration. Chancellor Walwobth, in the case of Dickerson v. Tillinghast, already referred to, (ubi sup.,) held distinctly and decidedly, that a mere release of a debt is not a sufficient parting with value to constitute a bona fide purchaser, and in this he followed the early case of Coddington v. Bay, (20 J. R., 637), where that doctrine was first laid down. The same eminent jurist had occasion still further in the Court of last resort, (Court of Errors,) in Stalker v. McDonald, already referred to, (ubi sup.,) to reiterate the principle and fortify it by an elaborate argument and examination of authorities; commenting among others, upon the cases of The Bank of Sandusky v. Scoville, and Bank of Salina v. Babcock, already alluded to; (ubi sup.) those being cases in which the doctrine was inapplicable, because the plaintiffs had discharged' indorsers as well as drawers of the notes: In this conflict of authorities, it might appear presumptuous to pronounce, when not essentially .necessary, that the Court of Appeals, in the case of Van Heusen v. Radcliff, (ubi sup.,) had adopted the principles laid down by Chancellor Walworth, and the Supreme Court, and thereby overruled the cases in this Court already referred to : But upon the other two grounds, both that the defendant was not a purchaser at all, of the mortgage, or if he was, was clearly not one in good faith, because he was chargeabló with notice, of the plaintiff’s prior assignment, the judgment should be affirmed, with costs.  