trary. The rule applies to a bond or other obligation given as collateral security for the payment of a promissory note. It is immaterial whether the existence of the mortgage security is known to the indorsee of the note at the time of the transfer so long as the same has not been separately extinguished. Where part only of the evidences of indebtedness are assigned, only a pro rata portion of the security follows. The rule applies in favor of notes given in re

newal or substitution of other notes, secured by mortgage,' subject to proof that such notes were given in full payment of the notes secured by mortgage, in which event the security ceases. While the indorsement and delivery of a negotiable promissory note, the payment of which is secured by a mortgage or deed of trust, carries with it the mortgage security, for the benefit of the indorsee for value, an assignment of the mortgage security alone, without the personal evidences of debt, conveys no right or title to the assignee, and is a nullity. The mortgage itself, without the debt to sustain it, has no reason for existence; when the debt is paid, it loses its vitality as a valid instrument. The only effect of the assignment of a mortgage by a mortgagee, where given to secure the payment of negotiable collateral notes which have passed into possession of third persons, indorsees, for value, is to create a quasi or secondary trusteeship on the part of the assignee in favor of the indorsees of the paper, the payment of which is se

Mayer . Campbell, 9 Ib. 279; Stevenson v. Black, 1 N. J. Eq. 338; Rigney v. Lovejoy, 13 N. H. 247; Page v. Pierce, 26 N. H. 217; Pattison v. Hull, 9 Cow. 747; Jackson . Blodgett, 5 Ib. 202; Green v. Hart, 1 Johns. 580; Prescott v. Hull, 17 Ib. 284; Beresford v. Ward, 1 Disney, 169; Swartz o. Leist, 13 Ohio St. 419; Lynch. Hancock, 14 S.C. 66; Langdon . Keith, 9 Vt. 299; Keyes v. Wood, 21 Vt. 331; Rolston v. Brockway, 23 Wis. 407; Batesville Inst.

. Kauffman, 18 Wall. 151; Martin e. Moulin, 2 Burr, 979. And a release, of part of the debt will discharge the mortgage security pro tanto. Hawke 7. Snydacker, 86 Ill. 197.

Jones v. Guaranty etc. Co., 101 U. S. 622; Kuhns v. McGeach, 38 Ohio St. 468; Christian v. Newberry, 61 Mo. 446; McDonald v. Hulse, 16

Ib. 543; Lippold v. Held, 57 Ib. 213; Burdett v. Clay, 8 B. Monr. 287; Mc Namara v. Condon, 2 Mac Ar. 364; Seymour . Darrow, 31 Vt. 122; Howard Bank v. Loomis, 51 Ib. 349; Bailey v. Merrick, 50 Me. 171; Verner v. Johns, 15 S. C. 613; Boswell v. Goodwin, 31 Conn. 79; Lever v. Bessenger, 9 Baxt. 393; Rogers v. Traders' Ins. Co., 6 Paige, 583; Tripp . Vincent, 3 Barb. Ch. 614; Stanton v. Thompson, 49 N. H. 272; Taft v. Boyd, 13 Allen, 84; Melledge v. Boston Iron Co., 5 Cush. 158; Curtis v. Hubbard, 9 Met. 322; Parham Mach. Co. v. Brock, 113 Mass. 194; Dodge v. Emerson, 131 Ib.467; Washington Co. v. Slaughter, 54 Ib. 265; State v. Lake, 17 Ib. 219.

2 Weston v. Wiley, 78 Ind. 54; Alford v. Baker, 53 Ib. 279: Lover v. Bessenger, 9 Baxter, 393.

cured thereby.

And this trusteeship is, upon occasion, enforced by courts of equitable jurisdiction. The assignee of a mortgage security, without more, obtains no title or interest therein.'

§ 145. THE MORTGAGEE AS TRUSTEE FOR THE INDORSEE. The mortgagee, or his assigns, continuing vested with the legal estate in the land, pledged for the payment of negotiable promissory notes of the mortgagor, is a trustee for any bona fide indorsee of such notes, for value, and is bound to act in good faith in his relations to him; and the indorsee has the right to control the security. Ordinarily, a mortgagee is, as between himself and the mortgagor, not a trustee ; but a trust is raised upon the negotiation for value of the negotiable notes secured thereby in favor of the indorsee, where there is no actual assignment of the mortgage security.

$146.

CASES WHERE SECURITY DOES NOT FOLLOW DEBT.-The rule that the assignment of a debt will carry

Carpenter v. Longan, 16 Wall. 271, 274; Wanzer v. Cary, 76 N. Y. 526; Peters v. Jamestown Bridge, 5 Cal. 334; Huntington v. Smith, 4 Conn. 235; Quniebang Bank v. French, 17 Ib. 134; Jackson v. Blodgett, 5 Cow. 205; Same v. Willard, 4 Johns. 43; Jackson v. Bronson, 19 Ib. 325; Merritt v. Bartholick, 36 N. Y. 44; Johnson v. Cornett, 29 Ind. 59; Dearborn v. Taylor, 18 N. H. 553; Hobson v. Roles, 20 Ib. 41; Hayes c. Lewis, 17 Wis. 212; Cleveland v. Cohrs, 10 S. C. 224; Perkins v. Sterne, 23 Tex. 561; Hamilton v. Lubukee, 51 Ill. 415; Grafton Bank

Foster, 11 Gray, 265; Burdett v. Clay, 8 B. Mon. 287; Perkins v. Stern, 23 Tex. 563; Bayley v. Gould, Walker's Ch. 478; Martin e. McReynolds, 6 Mich. 73; Rankin v. Major,

9 Iowa, 297; Hill . Edwards, 11 Minn. 29; Picket v. Jones, 63 Mo. 195; Watson v. Hawkins, 60 Ib. 550; Delano v. Bennett, 90 Ill. 533.

Phelan v. Olney, 6 Cal. 478; Cutler v. Haven. 8 Pick. 490; Young . Miller, 6 Gray, 152; Johnson v. Brown. 31 N. H. 405; Brown e. Blydenburgh, 7 N. Y. 141; Waterman v. Hunt, 2 R. I. 298; Dudley ». Cadwell, 19 Conn. 228; Parsons . Wells. 17 Mass. 425; Sanger v. Bancroft, 12 Ib. 367; Swartz v. Leist. 13 Ohio St. 419: Johnson v. Carpenter, 7 Minn. 176, 184; Sturtevant o. Jaques, 1 Allen, 523; Torrey . Dearth, 53 Vt. 331; Blumenthal . Jassey, 30 Minn. (14 Rep. 52); Lucas v. Harris, 20 Ill. 165.

220.

Warner . Jacob, L. R. 20 Ch. D.

the security given for its payment does not apply in cases in favor of indorsees of bills of exchange where a deed of trust having been given as collateral security for their acceptance, upon the bankruptcy of the acceptor, the drawer withdrew his security; nor in favor of holders of bills of exchange, where part of the land covered by a deed of trust had been released by the acceptor, and conveyed to a bona fide pledgee, as security, for a valuable consideration.' Nor is the mortgage security preserved in favor of a drawee of bills of exchange, where the mortgage having been made to secure the payment of certain bills which were dishonored, the drawee accepted and paid other bills of like amount, taking an assignment of the mortgage. Nor in favor of a third party, where a mortgage given as indemnity to a surety upon a note made by a corporation for an advance, and the note was subsequently taken up by a third person giving his own note for the amount.3

§ 147 THE INDORSEE SUBJECT TO RECORD AND SHOULD RECORD ASSIGNMENT. - The duty of the indorsee of a note and mortgage is to inquire of the mortgagor if there be any reason why the note and mortgage should not be paid. The indorsee is subject to any prior encumbrances , appearing on record, in the direct line of the title of his mortgage security, although without notice thereof. But he is not required to search the records before taking the same as security to learn if the grantor or mortgagor, or grantee or mortgagee, have made any further conveyances since the making and recording of the mortgage security. The pledgee is chargeable, as said, with notice of convey

1 St. Louis Building Assn. v. Clark, 36 Mo. 601.

* Wilkinson v. Simpson, 2 Moore Pr. Co. 275.

Corbett v. Woodward, 5 Sawy. 403, 410.

4 Silverman v. Bullock, 98 Ill. 17; Olds ». Cummings, 31 Ib. 188.

5 Buchanan v. International Bank, 78 Ill. 500; U. S. Mortgage Co. v. Gross, 93 Ib. 497; Hosmer v. Campbell, 98 Ib. 572; Miller v. Larned, 103 Ib. 562, 577; Connecticut v. Bradish, 14 Mass. 296.

ances and encumbrances only in the direct line of the title he receives as collateral security.'

As between the parties, no record of any assignment of the mortgage security, given for the payment of promissory notes, is necessary; but as against third parties, even where not required by direct statutory provisions, such assignment should be placed on record, thus charging all parties dealing with the property, or negotiable securities, with notice of the rights of the indorsee and assignee. The recording of assignments of mortgages is required to protect assignees from future dealings with the property by the mortgagee and mortgagor, and third parties. Nor will the record of an assignment of a promissory note and mortgage impart any validity to such assignment where there was no delivery of the securities and the same were not in the possession of the pretended assignor. The absence of possession and delivery is sufficient to put an assignee upon inquiry, and

1 Ogle v. Turpin, 102 Ill. 148. A mortgagee indorsed the notes, secured by mortgage, to a bona fide person advancing value, before maturity, and delivered them with the mortgage. Subsequently, obtaining a deed of his equity from the mortgagor, he fraudulently entered a release of the first mortgage upon record. and having recorded his deed, conveyed the premises by deed of trust as security for a further loan made by parties without notice of the outstanding notes and mortgages, of which no assignment had been recorded. The second mortgagee was protected against the lien of the first notes, there being no presumption that the payee of such notes had transfered the same before purchas ing the equity of redemption, and that reliance might be placed upon the record showing the release and title in the vendor.

Williams v. Jackson, 2 Sup. Ct Rep. 814; Flower v. Elwood, 66 Ill. 444; Ogle v. Turpin, 102 Ill. 148; Howard v. Ross, 5 Bradw. 461; Smith v. Keohane, 97 Ib. 156; James v. Johnson, 6 Johns. Ch. 417; Vanderkemp v. Shelton, 11 Paige, 28; James v. Morey, 2 Cowen, 246; Campbell v. Vader, 1 Abb. 295; Johnson v. Carpenter, 7 Minn. 183; Gregory v. Savage, 32 Conn. 250; Cornog v. Fuller, 30 Ia. 212; Bank v. Anderson, 14 Ib. 544; Lewis c. Kirk, 28 Kan. 497; Burton v. Baxter, 7 Blackf. 297; Hutchins . State Bank, 12 Met. 424; Welsh v. Priest, 8 Allen, 165; Young . Miller, 6 Gray, 152; Mitchell . Burnham, 44 Mo. 286; Bailey v. Myrick, 50 Ib. 179; Warren v. Homestead, 33 Ib 256; Fosdick v. Barr, 3 Ohio St. 371; Schwartz v. Leist, 13 Ib. 419; Fisher v. Knox, 13 Pa. St. 622; Henderson v. Pilgrim, 22 Tex. 464.