#### MARY A. TAYLOR et al. v. M. W. CARMON, Administrator of George Wilcox, et al.

(Filed 29 September, 1910.)

1. Notes, Negotiable — Equities—Notice—Due Cause.

While our statute authorizes the assignment of things in action and allows the assignee to sustain a demand therefor in his own name, it must be “without prejudice to any set off or other defense, existing at the time of, or 'before notice of, the assignment,” mating an exception of “negotiable promissory notes or bills of exchange transferred in good faith, and upon good consideration before due.”

2. Same — Offsets.

In an action brought to cancel certain notes secured by mortgages, the plaintiff alleged that the notes were without valuable consideration and had been paid to the mortgagee with certain money and personal property. It appeared that the defendant’s intestate W., the holder of the mortgages, was indebted to one M. and had transferred the mortgages as security to this debt. There was no evidence that plaintiff had notice or knowledge of this last assignment of the notes and mortgages, or that M. was a holder in due course. The case was referred, and the referee found for the defendant, but the jury substantially reversed the findings of the referee on issues duly submitted and found that *102the B. note was paid, to W. before notice of transfer, and that tbe value of personal property, etc., of plaintiff received by bim was in a greater sum than tbe amount of tbe mortgage notes. Held, (1) Tbe value of plaintiff’s property received by tbe original mortgagee should be applied to tbe mortgage notes beld by tbe administrator of W. with judgment against tbe administrator for tbe balance; (2) as M. was not a bolder in due course, bis note was taken subject to tbe equities existing between tbe plaintiff and W.

Appeal from Peebles, J., at tbe April Term, 1910, of GraveN.

Civil action beard on exceptions to a report of referee and on issues submitted to a jury. There was judgment for plaintiff, and defendant excepted and appealed.

W. D. Mclver for plaintiff.

Guión & Guión for defendant Meadows.

Moore & Dunn for defendant Camion.

Hoke, J.

Tbe Court has carefully considered tbe record and testimony presented and finds no reversible error to appellant’s prejudice.

It appears that plaintiff, having executed three mortgages on her land, one to T. Burke for $300 acquired by George W. Wilcox, intestate of defendant Garmon; one to Wilcox himself for $221 and the third to said Wilcox for $190, instituted this action alleging that the two mortgages made direct to Wilcox were for accommodation of said intestate and without valuable consideration, and that all- of them had been much more than paid and satisfied by certain personal property delivered by plaintiff to said Wilcox for the purpose in the course of the dealings between them, and to an amount of not less than $1,000.

Defendant Carmon, administrator of George Wilcox, answered denying payment and denying the other allegations and averring that the amounts secured by said mortgages were still due, and alleged that plaintiff owed other sums to her intestate to an amount of $380.

Defendant Jane Meadows, administratrix of J. A. Meadows, answered, denying plaintiff’s allegations and alleged further that said mortgages had been acquired by her intestate for full value, and were held by him to secure certain sums due from George *103Wilcox and tbat no part of same bad been paid. Tbe cause was referred, according to tbe course and practice of tbe court, and tbe referee made report finding tbat tbe amounts secured by tbe mortgages were due and unpaid and tbat over and above said amounts there was a small balance still due from plaintiff to tbe intestate Wilcox.

Tbe court sustained several exceptions to said report, and on issues raised by specific exceptions, tbe jury further rendered tbe following verdict:

“1. Was tbe Burke bond and mortgage of $300 paid to George S. Wilcox before notice of transfer ? Answer: No.

“2. What amount have plaintiffs paid on tbe Burke $300 note and mortgage? Answer: One hundred and fifty dollars.'

“3. What is tbe value of tbe personal property received and bad by George S. Wilcox from plaintiffs as alleged in tbe complaint? Answer: Eight hundred and one dollars and sixteen cents.”

On this verdict and tbe rulings of tbe court sustaining plaintiff’s exceptions to the report and which together substantially reversed the conclusions of tbe referee, tbe court gave judgment that tbe sum established in plaintiff’s favor to tbe extent required should be applied in tbe discharge and satisfaction of tbe mortgages and tbat plaintiff have and recover tbe remainder of said amount of defendant Garmon, administratrix of Wilcox. There is no evidence in tbe record tbat plaintiff bad either knowledge or notice of tbe assignment and transfer of these mortgages to J: A. Meadows, tbe intestate, nor is there any claim or evidence tending to show tbat said Meadows was a bolder in due course of tbe notes which tbe mortgages were given to secure, and while our statute authorizes the assignment of things in action, allowing tbe assignee to sustain a demand therefor in bis own name, tbe law also provides as follows:

“In tbe case of an assignment of a thing in action tbe action by tbe assignee shall be without prejudice to any set off or other defense, existing at the time of, or before notice of, tbe assignment; but this section shall not apply to a negotiable promissory note or bill of exchange, transferred in good faith, and upon good consideration, before due.” Tbe mortgages therefore were *104held by tbe intestate Meadows subject to any set off or other defense existing in plaintiff’s favor against tbe intestate Wilcox and tbe sum of $801.16, established by tbe verdict to tbe extent required, was properly 'applied to their satisfaction. This being true, tbe many exceptions noted to tbe rulings of tbe court on tbe question of tbe transfer of these mortgages to J. A. Meadows become immaterial. As heretofore stated there is no sustainable objection shown to tbe validity of tbe trial. Tbe only one that could be seriously urged was to tbe exclusion of certain items of charge against plaintiff appearing on tbe books of intestate, Wilcox. Tbe judge below finds that these books were never offered in evidence, and if it were otherwise, tbe proof concerning them was very far from meeting tbe conditions required for the admission of entries in a party’s own favor.

There is no error and tbe judgment below must be affirmed.

No error.