
157 U.S. 212 (1895)
BAKER
v.
WOOD.
No. 162.
Supreme Court of United States.
Argued January 21, 1895.
Decided March 18, 1895.
APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF COLORADO.
*216 Mr. Henry M. Teller, (with whom was Mr. Clinton Reed on the brief,) for appellant.
Mr. Edward O. Wolcott, (with whom were Mr. Joel F. Vaile and Mr. William W. Field on the brief,) for appellees Wood and Taylor.
MR. CHIEF JUSTICE FULLER delivered the opinion of the court.
In King v. Doane, 139 U.S. 166, 173, it was stated as the general rule that "if in an action by an indorsee against the maker, a negotiable note is shown to have been obtained by fraud, the presumption, arising merely from the possession of the instrument, that the holder in good faith paid value is so far overcome that he cannot have judgment unless it appears affirmatively from all the evidence, whether produced by the one side or the other, that he in fact purchased for value," while if the fact is established that he did so, "he will be entitled to recover unless it is proved that he purchased with actual notice of defect in the title, or in bad faith, implying guilty knowledge or wilful ignorance."
But in respect of the assignment of choses in action, not negotiable, the assignee takes subject to the equities between the debtor and the original creditor subsisting at the time of the assignment, or when notice is received thereof. Where, however, equities between the original assignor and a subsequent assignee, or entirely in favor of third persons are involved, and the unconditional power of disposition has been entrusted by such assignor to his assignee, the principle of estoppel applies in favor of purchasers in good faith, and without notice. Judson v. Corcoran, 17 How. 612, 615.
The effect of the assignment of a judgment at common law was merely to transfer an equitable title, and the assignee was not authorized to bring an action thereon in his own *217 name. We are aware of no statute of Colorado permitting the assignment of a judgment so as to vest title in the assignee, but there is a provision in the Code of that State, (Code Civ. Proc. § 3,) that suit should be brought in the name of the real party in interest, and it is contended that the effect of this is to unite the legal title with the equitable ownership in the instance of such an assignment. Nevertheless, the question in this case is, whether the real owner of a judgment, the plaintiff therein, must fail of relief as against an assignee of that judgment, to whose assignor plaintiff had in form assigned it, thereby furnishing him with the indicia of title, because estopped to assert his ownership on the ground that such second assignee occupies the position of a purchaser for value in good faith and without notice, in reliance on the apparent ownership. The fraud committed on complainant by Hulburd is conceded, and the inquiry relates to the defence of a valuable consideration, paid in good faith, and without notice.
The amount of the consideration is under some circumstances important in determining whether within the rule on the subject the purchaser paid value, for the amount paid may be so disproportionate to the real value of the security purchased that the claim to have paid value will be treated as a pretence and the security as having been obtained without paying anything for it; and it is also, and more commonly, important as bearing upon the question of notice and good faith. King v. Doane, supra. Here the judgment was for $16,054, with interest at ten per cent from November 12, 1883, and the amount paid was $2500. While there was evidence tending to show that the judgment was not worth its face, nevertheless the disproportion is so great as to form a significant element in the transaction. Moreover, it must be remembered that Hulburd was Baker's attorney, and had recovered the judgment in question as such. When, therefore, the attorney of record entertained, as his client's assignee, the offer of such a sum, the law imposed upon the proposed purchasers the burden of inquiry, and their conduct is to be tested accordingly.
*218 Without attempting to recapitulate the evidence a brief reference will suffice to indicate the ground for the conclusion at which we have arrived. Seeley testified that Hulburd had previously offered him the judgment for fifty or sixty cents on the dollar; that he so informed Wood, and Wood suggested its purchase, but he told Wood that Hulburd talked too much; that he was absent from the State for a time, and, on his return, Wood told him that he had just closed the trade for the judgment, but that he had taken time to look the matter up; and that he asked Seeley to investigate, and, if he found there was nothing wrong, to pay $2500 and take the judgment. The result of Wood's testimony is that the only person who acted as his agent in buying the judgment was Seeley, who was buying it for himself and Wood. But Seeley also testified that before the purchase was made: "I asked Hulburd, in so many words, before witnesses, `Now, you know you are a little uncertain, and I want you to tell me if there is any reason on the face of the earth why you have not full power to dispose of this judgment and whether it is not yours?' He said it was his, and went on to explain why it was and how it came to be in his possession and all that. He said he had worked for Higginbotham and Barnes, had been in Barnes' litigation up there with ____ and others, which I knew to be a fact, and that they had paid him but a very small sum; that for four years he had carried on their business, and that Barnes settled with him out of this, and the explanation looked as though there might be something in it. It was a good explanation to me... . He said he had attended to their litigation there, and had lived cheap, and had nothing and got along the best way he could, and that he had always promised him that out of this he should be paid."
Although the witness also claimed that he supposed Hulburd to be the absolute owner of the judgment, we think the reasonable conclusion is that Hulburd represented that he held it for the collection of fees, which the receipt of $2500 might be regarded as covering.
Granting, then, that Hulburd was clothed with apparent *219 ownership, yet that was qualified by the representation, and the measure of the operation of the estoppel was limited accordingly. The doctrine invoked is purely equitable and ought not to be extended, under circumstances like these, beyond permitting the person misled to recover indemnification. Campbell v. Nichols, 33 N.J. Law, 81, 88; Grissler v. Powers, 81 N.Y. 57. The extent of the loss which Seeley and Wood would sustain, if the truth of the representation were denied, would be the money they had paid, and to that it appears to us their interest in the judgment must be confined in the most favorable view that can be taken of the position they occupied. And, upon the whole, as Baker put it in the power of Hulburd to act as he did, that result probably best accords with the equities of the case. The assignments should be cancelled and Wood and Seeley's administrator decreed to account for the amounts received, less the amount paid, with interest.
Decree reversed and cause remanded with a direction to enter a decree for complainant in conformity with this opinion.
