that the note in question for $945 had been accepted in full satisfaction. This note was produced by the appellant and put in evidence by the appellee. Under these circumstances, the appellee setting up as a defense this alleged agreement as to the note, it would seem clear that the onus is upon him to prove it. But the only proof on this point offered by the appellee was the contract itself, or the written evidence thereof, which does not, as we have said, establish his contention on this point. And although there is some conflict of authority as to where the onus probandi rests in a case like this, (2 Amer. Lead. Cas. 299; Noel v. Murray, 1 Duer, 385,) yet in Maryland there is no doubt as to the rule. In the case of Fertilizer Co. v. White, 66 Md. 457, 7 Atl. Rep. 802, in which the defendant set up the same defense here relied on, it was held that the burden was upon him. It follows, therefore, that the prayer of the appellee, which placed the burden upon the plaintiff, should have been refused, and that of the appellant, so far as it related to this question, was correct, and should have been granted, for it placed the burden on the defendant.

As this case will have to be remanded by reason of the error already pointed out, it will be necessary for us to pass upon the questions presented by the other two exceptions, relating to the admissibility of testimony. It will be unnecessary to consider the first exception, because substantially the same evidence was offered and excluded under the second exception. There is a material difference, however, in the two offers, the first having been made during the cross-examination of the defendant, and properly excluded, because the evidence included in the offer had no relation whatever to anything testified to by the witness in chief; while the second was an offer of testimony in rebuttal, and for the purpose of showing that the appellee had actual knowledge of the insolvency of the maker of the note at the time of the transfer thereof, and that he concealed the fact of such insolvency from the appellant. We think it very clear that, if their testimony is admissible for any purpose, it was properly offered in rebuttal. The appellant fully proved his case below by proving the sale and delivery, and the defense was payment, the evidence of which was the promissory note in question, which note, it was claimed, by virtue of the contract, had beeu received by the appellant in full satisfaction for the goods. In order to rebut this defense the appellant offered the testimony referred to in order to show that, even assuming he had agreed to accept the note in payment, he was induced to do so by the frand of the appellee. It must be conceded that the testimony offered tends to prove the fact it was offered to prove, and the question then is whether the knowledge of the appellee and its concealment from the appellant constitutes a fraud under all the circumstances of this case. While the appellee admits that he would be guilty of the charge of fraud if he had made any false representations as to the solvency of the maker of the note, yet he contends, in effect, that, having remained

*

silent, and having thereby concealed the insolvency, nothing wrong morally, certainly no frand that will be regarded in a court of law, can be imputed to him. But we do not think such a position is consistent either with good morals or good law. No doubt some authority can be found to sustain the view of the appellee as to the legal proposition, (Bartle v. Saunders, 2 Grant, Cas. 199; Smith v. Smith, 21 Pa. St. 367;) but we cannot give them our approval. In Tobey v. Barber, 2 Amer. Lead. Cas. 299, the annotations say: "It will make no difference in point of principle that the maker of the note was insolvent at the time, if there is no fraud or undue concealment on the part of the purchaser;" and this is the general principle, stated in many different ways, which will be found in all the authorities. It is recognized in Maryland in the case before cited, (Phelan v. Crosby.) In support of the rule as laid down in 2 Amer. Lead. Cas. the leading case, Ricknall v. Waterman, 5 R. I. 43, and Byles on Rills, are cited. In the case just mentioned it is said that "the well-known common-law principle, applicable alike to sales and exchanges of personal things, is that fraud or warranty is necessary to render the vendor or exchanger liable in any form for a defect in the quality of the thing sold or exchanged. Applying this principle to the sale or exchange of a note of a third person, transferred by indorsement, without recourse, or by delivery merely, the vendee or person taking it * takes the risk of the past or future insolvency of the maker, * 營 * unless, indeed, in case of past insolvency, the vendor or exchanger is guilty of the fraud of passing it off with knowledge of that fact. And we assume that such conduct would be none the less a fraud, because the note happened to be passed in payment of merchandise then purchased. In Byles on Bills (page 257) it is said: "But in all cases, if notes or bids are transferred as valid when the transferrer knows they are good for nothing, the suppression of the truth is a fraud, and he is liable." "If," says Justice Bayley in the case of Camidge v. Allenby, 6 Barn. & C. 382, “it could show fraud or knowledge of the maker's insolvency in the payer, then it would be wholly immaterial whether the notes were taken at the time of sale or afterwards." And in Popley v. Ashly, 6 Mod. 148, Lord Holt uses this language: "If a man give a note upon a third person in payment, and the other takes it absolutely in payment, yet if the party giving it knew the third person to be breaking or in a failing condition, and the receiver of the note use all reasonable diligence to get payment, but cannot, this is a fraud, and therefore no payment; and here is no laches in the plaintiff, for the party failed before the money was payable. And this seems to be precisely the state of facts offered to be proved in this case. The case of Brown v. Montgomery, 20 N. Y. 287, was the case of the sale of commercial paper, but the principle there involved applies also to the case before us. In that case the court says: "The case is as though, after hearing of the failure

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no implied warranty even of the genuineness of the note. But the court is careful in quoting authorities to sustain this position as applicable even to that case, that it must be assumed that the assignor was not guilty of any fraud in the transaction, and in connection with this necessary assumption it is stated as a fact that the assignor was ignorant of the defect in the note. Of course, if he had known of the forgery of the note, the conclusion in Fisher v. Rieman and Brown v. Montgomery would have been identical, that the assignor was guilty of fraud. We refer to these authorities to show that the facts offered to be proved in this case have been generally held to constitute fraud, whether the transaction be a sale or exchange of the note of a third person without recourse, or the transfer of the note itself in payment of a debt. But, independent of authority, we think there is no difficulty in reaching the same conclusion in this case, which, as we have said, is the sale of goods for the note of a third party. Where both parties are ignorant of the insolvency, other and different questions arise, with which we are not now concerned. Our conclusion, therefore, is that the prayer offered by the plaintiff should have been granted, and the testi. mony offered by him should have been admitted. Judgment reversed, and cause remanded.

WESTERN MARYLAND RAILROAD, LAND & IMP. CO. OF BALTIMORE CITY v. GOODWIN.

(Court of Appeals of Maryland. March 15, 1893.)

MORTGAGES-SALE UNDER POWER-AUTHORITY OF SUCCEEDING TRUSTEE.

1. Property was mortgaged to a trustee to secure a debt evidenced by a note, the mortgage containing a power of sale in favor of the trustee, his successors and assigns, in case of default. Subsequently, the trustee wishing to be released, M. was appointed his successor, the mortgage assigned to him by a writing on the back thereof, and the note assigned by indorsement. A more formal assignment of the mortgage was executed a few days later, and recorded. Held, that M., either as the successor of the former trustee or in virtue of the assignment of the mortgage debt to him, was fully authorized to exercise the power of sale.

2. The fact that the original mortgage with the assignment written on the back, and no certified copy of the recorded assignment, was filed in the foreclosure proceedings, does not detract from the legal sufficiency of the title of the purchaser.

Appeal from circuit court, Baltimore county, in equity.

Action by Charles Ridgly Goodwin against the Western Maryland Railroad, Land & Improvement Company of Baltimore City to determine the validity of a conveyance of land. A decree was entered in favor of plaintiff, and defendant appeals. Affirmed.

Argued before ALVEY, C. J., and BRYAN, McSHERRY, FOWLER, BRISCOE, PAGE, and ROBERTS, JJ.

John P. Poe, Atty. Gen., for appellant. Rich S. Culbreth, for appellee.

ROBERTS, J. The appeal in this case is taken from a decree of the circuit court for Baltimore county, in equity, based upon a special case stated under rules 47 and 48, promulgated by this court for the regulation of the pleading and practice of the courts of equity in this state. The facts agreed upon and stated in the record are as follows: "That by a deed of mortgage dated the 3d day of September, A. D. 1889, and recorded on the following day among the mortgage records of Baltimore county in Liber J. W. S., No. 144, folio 292, etc., Andrew Banks and Rebecca E. Banks, his wife, conveyed to Charles Ridgly Goodwin, trustee under the will of George G. Presbury, late of Baltimore city, deceased, the property in said mortgage described, situated in Baltimore county, to secure the payment of a loan of twenty-four thousand and eight hundred dollars, made by the said trustee to the said Andrew Banks; said mortgage containing the usual provisions and covenants of a county mortgage, and especially the provision that, if default be made in the payment of said money or the interest thereon to accrue, or any part of either of them, at the time limited for the payment of the same, or in any agreement, covenant, or condition of this mortgage, then the entire mortgage debt shall be deemed due and demandable, and it shall be lawful for the said Charles Ridgly Goodwin, trustee, his successors and assigns, or Richard S. Culbreth, his or their attorney or agent, at any time after such default, to sell the property hereby mortgaged, or so much thereof as may be necessary to satisfy and pay said debt, interest, and all costs incurred in making such sale, and to grant and convey the said property to the purchaser or purchasers thereof, subject, however, as to a part of the property described in said mortgage, to a prior mortgage between the same parties, dated the 14th day of December, A. D. 1883, and recorded among the mortgage records of said county in Liber W. M. J., No. 110, folio 203, etc., to secure the payment of a loan of thirty thousand dollars.' (2) That subsequently the said Charles Ridgly Goodwin, trustee as aforesaid, was at his own request relieved of and discharged from said trust by the circuit court of Baltimore city, which had assumed, and has since had jurisdiction thereof, and Howard Munnikhuysen was appointed by said court as trustee in his place and stead, and the said Munnikhuysen became then, and has been since, and is now, the successor of the said

Goodwin in said trust; and by an order of said court passed on the 23d June, 1890, the said Goodwin, trustee as aforesaid, was directed to assign to said Munnikhuysen, trustee as aforesaid, the said mortgage and mortgage debt, and said mortgage debt, which was evidenced by a negotiable promissory note for the amount thereof, was accordingly assigned by the indorsement and delivery of said note by said Goodwin, trustee, to the said Munnikhuysen, trustee, and an assignment of said mortgage was made on the back thereof in language following: 'For value received, and in pursuance of an order of the circuit court of Baltimore city, passed June 23d, 1890, in the matter of the estate of George G. Presbury, deceased, I do hereby assign the within mortgage to Howard Munnikhuysen, trustee, appointed as such in my place and stead by said court in and by said order. Witness my hand and seal this first day of July, 1890. C. Ridgly Goodwin, [Seal,] Former Trustee. Teste: R. S. Culbreth,'-which assignment was not recorded; and also a more formal assignment between the same parties of said mortgage was made by deed of assignment dated the 8th day of July, 1890, and recorded on the 9th day of July, 1890, among the mortgage records of said county in Liber J. W. S., No. 149, folio 27, in which assignment it is recited that an assignment of said mortgage has been inade on the back thereof, and that a more formal assignment thereof was desirable; and in said assignment so recorded the said Goodwin, trustee, as aforesaid, grants and assigns unto the said Munnikhuysen, trustee, as aforesaid, all his right, title, and interest in and to said mortgage, and in and to the property described in said mortgage, and in and to the mortgage debt secured thereby, which assignment, as recorded, or a certified copy thereof, was not filed in said foreclosure proceedings. (3) That, afterwards, to wit, on the 15th day of May, 1891, default having been made in the payment of said mortgage debt, the said Munnikhuysen, trustee, as aforesaid, proceeded to foreclose said mortgage by filing in this court the following order: Howard Munnikhuysen, Trustee, Assignee of C. Ridgly Goodwin, Trustee, vs. Andrew Banks, Mortgagor. In the circuit court of Baltimore county. John W. Shanklin, Esq., Clerk: Please docket this case, file mortgage, assignment of same, and affidavit of mortgage claim. Attorneys for assignee.' And, after giving bond, and duly advertising the sale of said property, the said Munnikhuysen, trustee, assignee, by virtue of and in pursuance of the power of sale contained in said mortgage, sold the same at public sale at the time and place and in the manner stated in the said notice to the plaintiff, subject, however, as to a part thereof, to a prior mortgage for thirty thousand dollars, herein before mentioned; and said sale was by this court on the 1st day of July, 1891, finally ratified and confirmed. (4) That the plaintiff has since sold said property, subject, as aforesaid, as to a part thereof, to a prior mortgage for thirty thousand dollars, to the defendant, and he is ready and willing to convey to the defendant

the property so sold, but the defendant objects that the plaintiff cannot convey a good and merchantable title to said property, because it is advised that the assignment of said mortgage, indorsed on the back thereof, as aforesaid, was not recorded, nor a certified copy thereof was filed in said foreclosure proceedings; and that, by mistake, there was filed in said proceedings a recorded assignment of two other mortgages from the said Goodwin, trustee, to the said Munnikhuysen, trustee, for other sums and affecting other property, and not the property herein mentioned, although said mortgage and the unrecorded assignment thereof, indorsed thereon, were filed in said proceedings in pursuance of said order, and a formal assignment of said mortgage had been duly recorded, as aforesaid, among the mortgage records of Baltimore county."

The question raised for the decision of this court is: Was the sale by the 'said Munuikhuysen, trustee, assignee, to the plaintiff, under the circumstances herein related, a valid exercise of the power of sale contained in the said mortgage? The court below answered and determined this question in the affirmative, and decreed accordingly, so that the sole question now presented for our consideration and determination on this appeal is that which the parties to the cause bave formulated and submitted. The question is certainly narrow and technical, and not by any means difficult of solution. It is not often we are called upon to examine and determine questions in this court when counsel for appellant as well as for appellee agree that the decree of the lower court ought to be affirmed. Under these circumstances, it should not be surprising, if we find ourselves compelled to agree not only with the court below, but with the counsel for the respective parties. We will, however, proceed to examine the question. The mortgagee, Goodwin, as shown by the case stated, was the trustee under the will of George G. Presbury, late of Baltimore city, deceased. The mortgage was given to secure the payment of a promissory note, payable to said Goodwin, trustee, and was recorded in Baltimore county, where the land was situated. Good win, desiring to be released from the further discharge of the duties of his trust, applied to the court below for that purpose, and was by said court relieved of said trust, and thereupon Munnikhuysen was appointed trustee in his place and stead. The primary question presents itself whether, under the terms of the power of sale, Munnikhuysen, the successor of Goodwin, trustee, was entitled to exercise the power of sale solely upon the ground that he had succeeded to the office of trustee, made vacant by the resignation and release of Goodwin. The terms and provisions of a mortgage constitute the contract between the parties to it. They are at liberty to make such contract as they deem proper, if in so doing they violate no provision of law.

The sixth section of article 66 of the Code provides that "in all mortgages there may be inserted a claim authorizing the mortgagee or any other person to be named therein to sell the mortgaged prem

and recorded. Such is not our opinion of the proper construction to be placed upon the act in question. It was not the purpose of the act in question to affect in any manner the equitable assignment of mortgages by the mere assignment of the mortgage debt, nor to impair the rights of assignees thereunder. Byles v. Tome, 39 Md. 463, 464; Harnickell v. Orndorff, supra. The fact that there was no certified copy of the. recorded assignment of the mortgage filed in said proceedings, in com pliance with the order of the appellee's attorneys, in no way detracts from the legal sufficiency of the title to the property sold by said Munnikhuysen, trustee. Either as the successor of said Goodwin, trustee, or in virtue of the assignment of the mortgage debt to him, Munnikhuysen, trustee, was fully authorized to exercise the power of sale. Chancellor Johnson, in Clark v. Levering, 1 Md. Ch. 180, says: "The principle settled by the author- | ities appears to be this: That whoever muy be the holder of the debt intended to be secured by the mortgage will be con- | sidered in equity as the owner of the mortgage itself; that the debt cannot reside in one person and the pledge in another, the | former [the debt] being the principal, and the latter the accessory; and that consequently, in whatever hands the debt is found, in the same hands will the mortgage also be found; that the debt and the mortgage are so inseparably united, the one being in truth appurtenant to the other, that a separate and independent alienation of them cannot be made." It does not appear from the statement of facts, nor is it anywhere intimated, that any one has been injured by the want of notice of the assignment of the mortgage, nor do we perceive how any one could have been misled or injured by the failure to file in the proceeding to foreclose a copy of the recorded assignment. The formal assignment of the mortgage had been recorded long prior to the exercise of the power of sale, and contained a full notice of the fact, and of the contents of the assignment of the mortgage written on the back of the original thereof, which was filed among the proceedings in the foreclosure suit. We have, perhaps, gone to unnecessary length in the examination of this question, but the magnitude of the interests involved seemed to justify it. We, however, entertain no doubt as to the correctness of the answer given by the court below, and we therefore affirm the decree appealed from.

HARDISTY v. HARDISTY et al. (Court of Appeals of Maryland. March 14, 1893.)

DEATH OF PARTNER-SETTLEMENT-LACHES OF SURVIVING PARTNER.

Where the surviving member of a firm is executor of his copartner, and as such pays all the debts of deceased, and settles the estate without any claim that deceased was indebted to the firm, he will be barred by laches from setting up against the proceeds of real estate owned by the members of the firm as tenants in

common a claim based on a note signed by deceased and payable to the firm, which is disclosed and produced for the first time 30 years after its date, 18 years after the last indorsement thereon, and 15 years after the dissolution of the firm.

Appeal from circuit court, Prince George's county, in equity.

Action by Richard T. Hardisty and others against Richard Hardisty for an accounting and settling of the affairs of a partnership formerly existing between plaintiffs' testator and defendant. There was a degree in favor of plaintiffs, and defendant appeals. Affirmed.

Argued before ALVEY, C. J., and ROBINSON, BRYAN, IRVING, MCSHERRY, FOWLER, PAGE, and ROBERTS, JJ.

F. Snowden Hill, for appellant. C. H. Stanley, for appellees.

FOWLER, J. The appellant, Richard Hardisty, and John T. Hardisty, the father of the appellees, were copartners, and carried on a large business at Collington, in Prince George's county, in this state. The partnership was formed in 1853, and continued until the 10th July, 1877, when it was dissolved by the death of John T. Hardisty. The deceased part. ner left a will appointing his wife executrix, and his brother and copartner, executor, and devising and bequeathing all his real and personal property to his wife during her life, and at her death to be equally divided among his children, who are the appellees, their mother having died. The estate of the deceased partner was duly settled in the orphans' court of Prince George's county, and the sum of $7,693. 21, being the amount which remained after the payment of debts, was passed and paid to his widow in accordance with the will, and in the administration accounts there is no notice taken of the testator's interest in the partnership property. The business was continued by the appellant, Richard Hardisty, but whether as surviving partner or on his own account does not clearly appear. However, on the 10th August, 1878, he sold the stock of goods, and divided the proceeds equally between himself and the widow of his deceased partner; each of them receiving the sum of $2,821.15. A few years after this transaction Mrs. Hardisty died, and it appears that, upon proceedings taken for that purpose, the real estate which the firm owned and held as tenants in common was sold. The bill in this case was filed by the appellees to compel the appellant to account and settle the partnership affairs of the firm of J. T. & R. Hardisty, of which their father and the appellant were the only members. The appellant answered, admitting many of the allegations of the bill, but alleged that upon a proper accounting it would be found that the firm was indebted to him in the sum of $1,746. 98. Testimony was taken, when for the first time the appellant produced as the foundation of his claim set out in the answer, the following promissory note: “$2,727.56. Collington, January 7, 1861. One day after date I promise to pay to the order of J. T. and R. Hardisty two thousand seven hundred and twenty seven 56