cannot be better than it would be at law in any mode he could take to recover what was due upon the assignment." The principal is distinctly recognized that the measure of liability upon the instrument secured is the measure of the liability chargeable upon the security. The condition of the assignee cannot be better in law than it is in equity. So neither can it be worse. Upon this ground we place our judgment. We think the doctrine we have laid down is sustained by reason, principle, and the greater weight of authority. Decree reversed, and the case remanded with directions to enter a decree in conformity with this opinion.5 FOSTER v. CARSON. SUPREME COURT OF PENNSYLVANIA, 1894. Scire facias sur mortgage. Opinion by MR. CHIEF JUSTICE STERRETT, Jan. 22, 1894: On the trial of this scire facias, it appeared among other things that the mortgage in suit was executed and delivered by the defendant 5"Conceding, then, that a mortgage given as security for a negotiable note, which refers to it, may partake of the negotiable character of the latter, the rule should be limited by the proposition that when the terms of the mortgage so affect the note as to render it uncertain in amount, or in time of payment, or ingraft upon it conditions as to the payment of the amount, it takes away the negotiable character of the note, and leaves its owner or purchaser in the same position as the owner or purchaser of any other chose in action. No good reason is suggested for a contrary rule. If a negotiable note is 'a courier without luggage' that passes from hand to hand, and choses in action, which are burdened with uncertainties and conditions, are not, why should the courier who carries his luggage in a trunk be held to be not excluded from the negotiable class because he has no hand baggage? If it be said that the general usage justifies it, we should at least be able to find cases in the books which support such general usage. Yet it is confidently believed that such cannot be found where the language of the mortgage goes beyond provisions for the collection of the security, and undertakes to increase, diminish, or place conditions upon the obligations of the parties, thereby rendering the instrument uncertain." Hooker, J., in Brooke v. Struthers, 110 Mich. 562. Compare, Wilson v. Campbell, 110 Mich. 580. "It was urged that the note in question here, although payable to order, and without contingency, on a day certain, was not negotiable, because it purported to be according to the condition of a mortgage. But, as the terms of the mortgage correspond with those expressed in the note, there is nothing to affect its negotiability." Campbell, J., in Littlefield v. Hodge, 6 Mich. 326. Agnes J. Carson to Mary Speelman, who assigned the same, on the margin of the record thereof, to A. C. Jarrett: of which assignment the mortgagor had actual notice. The bond accompanying the mortgage was also assigned, by indorsement thereon, to said Jarrett, and a certificate of no defense, executed and acknowledged March 28, 1888, was delivered to him. On May 22, 1888, said Jarrett assigned, on the margin of said mortgage record, "to plaintiff, his heirs and assigns, seven hundred dollars of the moneys secured by the mortgage, with interest from January 26, 1888." Same day this assignment was noted by the recorder on the back of the mortgage. The mortgagor had no actual notice of the assignment to plaintiff until after she had paid said Jarrett the entire mortgage debt, except the sum of two hundred dollars, etc. A verdict was taken in favor of the plaintiff, subject to the opinion of the court on the question of law reserved. The facts above stated are, in substance, those upon which the question was reserved. Judgment was afterwards entered for defendants non obstante veredicto, and this appeal was taken. Briefly stated, the question presented is whether the assignment of May 22, 1888, on the margin of the mortgage record, by Jarrett to plaintiff, was such legal notice to the mortgagor as precluded her from setting up payments made by her to Jarrett before she had any actual notice of said assignment. The key to the solution of this question is in the principle that the recording act was intended not for the benefit of the mortgagor, but to provide a real security for his debt. Not being for the mortgagor's benefit, it is obviously immaterial to him whether or not the mortgage has been recorded. His creditor may or may not avail himself of his security; but the fact of record does not alter the contract relations of the parties. The undertaking of the mortgagor is to pay, and payment wherever or however made will satisfy the debt. He is under no obligation to make inquiry as to the record; and the mortgagee cannot allege an unsatisfied record in answer to a plea of actual payment. If the debtor is under no obligation to take notice of the record of his mortgage, much less must he take notice of the assignment of it. The assignee has but an equity, and as he is bound to inquire for all the defenses which the debtor may have, whether they appear of record or not, so he must give notice of the assignment if he would protect himself against subsequent payments made to his assignor; Bury v. Hartman, 4 S. & R. 175; Henry v. Brothers, 48 Pa. 70; Horstman v. Gerker, 49 Pa. 282. "Legal or constructive notice as distinguished from actual," said Mr. Justice Strong, in Henry v. Brothers, supra, "is that which the law regards as sufficient to give knowledge. If the existence of knowledge is presumed from any other fact, if the presumption be juris et de jure, the other fact must be certain. But there is no certainty that a debtor has knowledge of the entry of a judgment against him by virtue of a warrant of attorney which he may have signed, much less that he has knowledge of the assignment of a judgment. * * A subsequent incumbrancer or purchaser must know, for it is his duty to examine the record." The recording act imposes no such duty on a mortgagor; it is to the interest of the assignee, not his, that the assignment should be made effectual; and it would be an intolerable hardship if every time he may wish to make a payment and obtain a credit on his debt, he should be compelled to visit the recorder's office to ascertain whether or not his mortgage has been assigned. It is therefore apparent that actual notice of the assignment is essential to the completion of the contract relations between the assignee and the mortgagor; and, consequently, until that has been given, the mortgagor does no wrong in making payments to the mortgagee. The court below was therefore right in entering judgment for defendants non obstante veredicto; and its judgment must be affirmed.6 MORSE, C. J., in WILLIAMS V. KEYES, 90 Mich. 290 (1892). The note made by Keyes to C. L. Luce was a negotiable one, and was transferred to complainant before due, and for a valuable consideration. Under the previous rulings of this court he took his mortgage free from all equities of which he had no notice between Luce or his administrators and Keyes; and any payment made to Arthur B. Luce, or arrangement between him and Keyes, after the note and mortgage were transferred to complainant, could not affect the latter's rights in the premises. See Reeves v. Scully, Walk. Ch. 248; Dutton v. Ives, 5 Mich. 515; Helmer v. Krolick, 36 Id. 371; Judge v. Vogel, 38 Id. 568. After the assignment of the mortgage, and indorsement and delivery of the note, to complainant, and before maturity, the defendants assumed to pay the note and mortgage to the administrators of the original mortgagee, without requiring the production of the note; and the only question here is, could they thus discharge the note and mortgage, so as to defeat the right of a good-faith purchaser? The statute (How. Stat., § 5687) provides that 6Compare, Vann v. Marbury, 100 Ala. 438; Brown v. Blydenburgh, 7 N. Y. 141; Foster v. Beals, 21 N. Y. 247; Robbins v. Larson, 69 Minn. 436; Brewster v. Carnes, 103 N. Y. 556. See also, Rodgers v. Peckham, 120 Cal. 238, construing C. C. § 2935— "When the mortgage is executed as security for money due, or to become due, on a promissory note, bond or other instrument designated in the mortgage, the record of the assignment of the mortgage is not, of itself, notice to a mortgagor, his heirs or personal representatives, so as to invalidate any payment made by them, or either of them, to the person holding such note, bond or other instrument." "The recording of an assignment of a mortgage shall not, in itself, be deemed notice of such assignment to the mortgagor, his heirs or personal representatives, so as to invalidate any payment made by them, or either of them, to the mortgagee." This statute has no application whatever to the present case. It was not intended to authorize the mortgagor to pay the mortgage to one not the holder of the note; but if a payment be made to one who, by the possession of the evidence of debt, shows himself prima facie entitled to receive payment, or, in case of non-negotiable security, if the payment be made to the original holder, the fact that an assignment has been placed of record will not, of itself, invalidate a payment made in good faith to such apparent owner. The statute means no more than that the mortgagor shall not be required to search the record before making payment to the one prima facie entitled to receive it. In case of negotiable securities, the holder alone is the one prima facie entitled to receive payment. Neither under the statute nor under the law-merchant can the maker of a negotiable note assume that it has not been transferred, and make payment thereof before maturity to the original holder, and thus defeat the right of a purchaser for value before maturity. The case of Dutton v. Ives is directly in point. See, also, 2 Daniel, Neg. Inst., § 1233, and cases cited. JONES, MORTGAGES, § 843. Whether the rule [that the assignee of a non-negotiable chose in action takes subject to the equities against his assignor] is limited to equities between the original parties is a question upon which different courts are not in accord. On the one hand, the rule that the assignee of a bond and mortgage, which are merely choses in action, takes them subject to existing equities, is limited in its application to such equities only as existed between the mortgagor and mortgagee, and is not extended to those existing between the mortgagee and third persons. The reason for this limitation seems a strong one. "The assignee," says Chancellor Kent, (2 Johns. Ch. 441), "can always go to the debtor, and ascertain what claims he may have against the bond, or other chose in action, which he is about purchasing from the obligee; but he may not be able, with the utmost diligence, to ascertain the latent equity of some third person against the obligee. He has not any object to which he can direct his inquiries; and for this reason the claim of the assignee, without notice, of a chose in action, was preferred, in the late case of Redfearn v. Ferrier, (3 Dow. 50), to that of a third party setting up a secret equity against the assignor. Lord Eldon observed in that case that, if it were not to be so, no assignments could ever be taken with safety." §844. But the settled rule in New York is that the assignee is affected by equities in favor of third persons in the same manner that he is affected by equities existing against him in favor of the mortgagor. This question has been frequently discussed in recent cases in that State. In the case of Bush v. Lathrop, (22 N. Y. 535), Mr. Justice Denio, after examining numerous authorities, came to the conclusion that the supposed distinction between these equities is without foundation, and that the assignee takes the security subject to all equities that third persons could enforce against the assignor, as well as subject to those existing between the parties to the instrument. In that case the holder of the mortgage and bond assigned them by an absolute and unconditional bond, as security for a debt for a much smaller sum than that due upon the mortgage, and his assignee transferred the mortgage for full value to a third person without notice of this fact. The rule above stated as to the equities of third persons was applied to the case, and it was held that the subsequent assignee took the security subject to the equity of the former holder of the mortgage, to redeem it upon payment of the amount of the debt for which he had pledged it. § 844a. The doctrine of estoppel may come in to qualify the application of this rule. Thus in the case last named the application of this rule to the facts presented was overruled by the case of Moore v. Metropolitan National Bank, (55 N. Y. 41), although the rule there stated as to the equities of third persons was not questioned. The latter case held that, where the holder of a nonnegotiable chose in action has conferred the apparent absolute ownership of it upon another by assignment, one who purchases from such assignee in good faith for value, relying upon the faith of such apparent ownership, obtains a valid title as against the first assignor, who is estopped from asserting a title in hostility to such apparent ownership. The decision is based altogether upon the doctrine of estoppel. The owner of the security, having conferred apparent ownership upon his assignee and apparent authority to convey, is estopped as against a bona fide purchaser to deny that ownership or that authority. Applying this rule of estoppel to the facts of the case presented in Bush v. Lathrop, the owner of the mortgage and bond having assigned them absolutely and conferred upon his assignee apparent absolute authority over the securities, would be estopped from asserting his title to them against one who had purchased upon the faith of the assignee's apparent authority to sell. But aside from the doctrine of estoppel, the rule above stated as to the equities of third persons has been several times approved in recent cases before the Court of Appeals of New York; and the general doctrine is there well established, that one who takes an assignment of a bond and mortgage takes them subject not only |