The opinion of the Court was delivered by
Green, J.
It was found as a fact by the learned judge of the Court below, and is not denied, that Weldon paid a valuable consideration for the judgment of Farrand against the Lewis-town Engine and Brass Company. It was also found that before, or at the time he purchased the judgment, he inquired of several of the parties, who, as partners composing the defendant company, executed the confession of judgment in question, whether the judgment was all right, and was assured by them that it was. It is not pretended that Weldon had any actual notice of any equity existing in the appellant, or in A. R. Reese, to have the judgment applied to the benefit of either of them. In point of fact, neither the company defendant, nor any of the parties who signed the confession of judgment, have any defence whatever against its payment. Weldon holds, by valid assignment, the entire title of the plaintiff in the judgment. The fund in court is the proceeds of an execution issued on this judgment, and it has been claimed by, and has been awarded to, Weldon as the assignee of the plaintiff Farrand.
Why should he not have it? The only reason urged is, that the appellant, having discounted certain paper, given by the company defendant, indorsed by A. E. Eeese, A. J. Far-rand, and T. B. Eeese, had an equity to have the judgment applied to its use, because it was given to indemnify the indorsers against their liability as such. The claim is pressed upon the ground that Weldon made no inquiry of A. E. Eeese when he took the transfer, and that the latter was not bound by the declarations of his co-obligors, because the partnership was then dissolved. We do not perceive the materiality of this contention. The appellant’s claim is in no sense whatever a defence against the judgment. On the contrary, it is a claim to hand the fruits of the judgment over to the appellant. In other words, the appellant claims the ownership of the judgment, not by force of any transfer or assignment, but because of its equitable right as a creditor, to have securities given by the debtor to protect the indorsers, applied in satisfaction of the debt. This would be all very well as between the bank and Farrand, if they only were the parties to the controversy; but how can such a claim aifect an innocent purchaser from Farrand, for value actually paid, and without any notice of the equity set up by the appellant ? It is very true that the assignee of a judgment or mortgage takes it subject to allthe defences of the obligor against the obligee; but it is equally true that he does not take it subject to the secret equities of third persons. This is very familiar doctrine, and has been repeatedly enforced by this Court. In Davis v. Barr, 9 S. & R., on page 140, it was said by Gibson, J.: “ It certainly is not a general principle of equity, that a purchaser for valuable consideration of the legal title to any kind of property, should take it subject to an equity of which, he had not notice.” And again, on page 141: “But with any agreement between the original parties inconsistent with the purport or legal effect of the instrument, the assignee has nothing to do. No such agreement is within the purview of the act, and the assignee is not bound to call on the obligor for information about matters, the existence of which he has no reason to suspect, the necessity of inquiry being limited, as I have said, to want of corn sideration and set-off.”
In Mott v. Clark, 9 Barr, on page 404, it was said of the assignee of a bond and mortgage: “ He takes it subject to all the equity of the mortgagor, but not to the latent equity of a third person. To subject him to such an equity, he must have express or constructive notice at the time of the assignment.”
The same doctrine has been held in the eases of Taylor v. Gitt, 10 Barr, 428 ; Wetherill’s Appeal, 3 Grant, 281 ; McConnel v. Wenrich, 4 Harris, 365 ; and Twitchell v. McMurtrie, 27 P. F. S., 383. As A. R. Reese had no defence against the judgment, it was not necessary to apply to him to learn whether he had any secret agreement with the appellant that the judgment was to be held for the benefit of the latter. In any point of view, "Weldon was not subject to the duty of inquiry for such latent equities as it is sought to set up against him, and can stand upon his clear legal title to the judgment and its fruits.
Decree affirmed, and appeal dismissed at the costs of the appellant.