delivered the opinion of the court:
The argument in this case has taken a wide range, and many things have been discussed in the argument which, in the view we take of the case, it will not be necessary to consider. We shall not, therefore, under-<3 • , take to follow counsel in their argument and consider all the questions raised and discussed.
*199Ida G. Williams, who purchased lot 38 and assumed the payment of a deed of trust on the lot given to secure a principal note of §1500 which had been executed by J. B. Armstead, under decree of court paid the amount of the note into court, and the question involved in this case is, whether this money belongs to Sarah A. Curtis, the purchaser of the note and deed of trust, or whether the fund can be reached by the complainant in the bill, Margaret A. Humble, to satisfy an alleged claim she holds against the Frisco Consolidated Mining Company, James M. Allen and H. H. Armstead, arising from a fraudulent sale of mining stock for the two lots, Nos. 37 and 38, which she traded for certain shares of stock in said company.
Whether there was such fraud in the exchange of the stock for the lots as would authorize the complainant to rescind the sale and recover her property is a question we shall not stop to consider. Conceding that complainant was defrauded in the exchange of her lots for mining stock, she cannot recover them as against innocent persons who have acquired rights in the property. It is conceded that Ida G. Williams purchased the lot in good faith, without notice that complainant had any rights of any character in the property, and, so far as she is concerned, she is entitled to hold the property. But when Mrs. Williams purchased there was an outstanding note for §1500, executed by J. B. Armstead, secured by a mortgage or deed of trust on the lot, which she, as a part of the purchase money, assumed aud agreed to pay, and appellee Sarah E. Curtis claims to be an innocent holder, having acquired the note before maturity, for full value.
As has been seen, the two lots were conveyed to James B. Armstead on September 1, 1884, and upon receiving the title Armstead executed a trust deed on each of the lots to J. E. Fay, trustee, to secure a note of §1500. The two notes were signed by Armstead, and payable to bearer in five years from date. On the 25th day of July, *2001885, James B. Armstead conveyed lot 37 to Hattie J. Harvey, and she, as a part of the purchase money, assumed and agreed to pay the $1500 deed of trust which Armstead had previously placed on the lot. On the same day he sold lot 38 to Ida G. Williams, and she assumed and agreed to pay the note secured by deed of trust on the property. H. H. Armstead testified that in April or Ma3r, 1885, he sold these two notes secured by the deed of trust to James R. McPherson, who held them until October 29, 1885, when he sold them to Miles Almy for $2905 and broker’s commission. The latter testified as follows : “I am in the real estate and loan business, and was in the same business in 1885. I know Mrs. Almy and Miss Curtis, parties to this suit. I bought the notes and trust deed signed by James B. Armstead and introduced here in evidence. This book is my check-book, and shows the checks I made out during 1884 and 1885. Mr. Payne was the broker who brought these papers to me from Mr. Gardner. Mr. Payne offered the papers to Mr. Gardner, who roomed in the same office with me. Mr. Gardnef turned the matter over to me, and I bought the papers through Mr. Payne. I examined the property and made up my mind what I would give for the paper, and told Mr. Payne. He brought the abstract and I examined it. The next day Payne came in with Mr. Arm-stead, and I told him what I would give for the paper, and Mr. Payne said that they would have to go and get the paper. Mr. H. H. Armstead said he didn’t own the papers, and they went off together to get them. They came back with the mortgages and notes. I gave them a check. Mr. Armstead said J. R. McPherson owned the papers. He said so when I asked to whom the check should be made. He answered, ‘To the owner—J. R. McPherson. ’ I made a check for $2905,—the net amount,— October 29, 1885. I made out a check at the same time for Payne for $22.50 and another to Gardner for $22.50, for commissions. The stub shows the check was made out *201to the order of J. R. McPherson. The check came back canceled from the bank.” The witness also testified that the abstract showed nothing in regard to any litigation concerning the notes; that neither Mrs. Almy nor Miss Curtis knew of the purchase until after it was made; that the notes were bought with their money.
It will be remembered that the bill of the complainant was not filed until September 25, 1885, and neither J. R. McPherson, Sarah A. Curtis nor Mrs. Almy was made a party to the bill. Now, it is a plain proposition that if McPherson purchased the notes in April or May, 1885, as testified to by H. H. Armstead, he would be a bona fide holder, and would not be affected by the frauds perpetrated upon the complainant by Allen and Armstead, and if he was a bona fide holder, the purchase of Miss Curtis and Mrs. Almy before the notes were due, for full value, would entitle them to protection as innocent purchasers of commercial paper before maturity. It may be that H. H. Armstead testified falsely in regard to the sale of the notes to McPherson, but we find no .sufficient evidence in the record.to impeach his testimony. The alleged want of means on the part of McPherson, and the fact that he was engaged in taking care of Armstead’s horses about the time the purchase was alleged to have been made, cannot be regarded as sufficient to overcome the positive evidence of Armstead in reference to the sale of the notes. Moreover, the evidence of Armstead in regard to the sale seems to be corroborated by the fact that five or six months after the alleged sale the notes were found in McPherson’s possession, and he, through his agents, sold them to Almy. The fact that McPherson was the holder of the notes in October, 1885, raises the presumption that he was a bona fide holder. (Matson v. Alley, 141 Ill. 284.) Miles Almy testified that on October 29,1885, he purchased the notes from J. R. McPherson, and made out a check in his name in payment for *202them. This evidence is not contradicted by the evidence of any other witness.
The fact that the note which Sarah A. Curtis purchased was secured by deed of trust did not deprive her of the right to protection as an innocent purchaser. Upon the purchase of the note before maturity .the mortgage or deed of trust given to secure the note passed to her as an incident of the debt, and upon a failure to pay the note she would be entitled to foreclose the mortgage. It may be true that she took the mortgage subject to the equitable defenses, if any, existing in favor of the mortgagor; but it cannot be held that she took the mortgage subject to equities existing in favor of third parties.
In Himrod v. Gilman, 147 Ill. 293, in the consideration of a similar question, it is said (p. 301): “That he (the assignee) would take the mortgage subject to the equitable defenses existing in favor of the mortgagor is settled in' Olds v. Cummings, 31 Ill. 188, and numerous other cases. The reason there given is, that it is the duty of the purchaser of a mortgage, it not being assignable so as to vest the legal interest, to inquire of the mortgagor if there be any reason why it should not be paid. But we there said: ‘He should not be required to inquire of the whole world to see if some one has not a latent equity which might be interfered with by his purchase of the mortgage, as, for instance, a cestui que trust,’—citing Murray v. Lylburn, 2 Johns. Ch. 441; Mott v. Clark, 9 Pa. St. 399; Prior v. Wood, 31 id. 142. In the first of these cases it is said by Chancellor Kent: ‘It is a general and well settled principle that the assignee of a chose in action takes it subject to the same equities it was subject to in the hands of the assignor. But this rule is generally understood to mean the equity residing in the original obligor, and not an equity residing in some third person against the assignor.’ * * * The question• involved came directly before this court in Silverman v. Bullock, 98 Ill. 11, and upon authority of the cases before mentioned *203it was held ‘that the assignee of a mortgage takes it subject only to the equities existing in favor of the mortgagor, as against the assignor, and not subject to latent equities in favor of third persons in the subject involved in the assignment, of which he had no notice.’ ”
We do not think appellant was entitled to relief against appellee Sarah A. Curtis, .and the judgment of the Appellate Court will be affirmed.
Judgment affirmed.