Ward Hunt

“ He then pays with knowledge of the fraud, to which he becomes a consenting party. One who pays with knowledge of a fraud is in no better position than if he had not paid at all. He has no greater equity, and receives no greater protection. Such is the rule as to contracts generally. In the case of the sale of real estate for a sum payable in instalments, and circumstances occur showing the existence of fraud, or that it would be inequitable to take the title, the purchaser can recover back the sum paid before notice of the fraud, but not that paid afterwards. ”

“ Mere security to pay the purchase price is not a purchase for a valuable consideration. Hardingham v. Nicholls, 3 Atk. 304; Maundrell v. Maundrell, 10 Ves. 246, 271; Jackson v. Cadwell, 1 Cowen, 622; Jewell v. Palmer, 7 J. C. 65. The decisions are placed upon the ground, according to Lord Hardwicke, that if the money is not actually paid the purchaser is not hurt. He can be released from his bond in equity.'
The plaintiff here occupies the same position as the bona fide purchaser of the first of a series of notes, of which, after notice of a fraud, he purchases the rest of the series. ”

“ The cases are numerous that where a bona fide holder takes a note misappropriated, fraudulently obtained, or without consideration, as collateral security, he holds for the amount advanced upon it, and for that amount only. ”