slack piece of business, I guess, being the only reason I know." was transferred as collateral to Dodson & Son was the note upon which this suit is instituted. At the time of making said It is urged by counsel for defendants transfers, Smith also executed a written that the plaintiff purchased the note from power by which he authorized said Dodson the bank in February, 1905, which & Son, or their assigns, to sell said col- after its maturity, and, on that account, laterals, or any of them, upon default being was not an innocent purchaser thereof, but made in the payment of said principal note took it subject to all defenses that the makexecuted by him to them. The testimony ers had against the original payee, Smith, tended further to prove that shortly after- and they cite to sustain this contention wards Dodson & Son placed these collateral Nisbitt v. Brown, 30 Ark. 590, and Sornotes in the hands of a firm of lawyers for rells v. McHenry, 38 Ark. 127. But under collection. These attorneys testified that the faets of this case we do not think that they used every reasonable effort to collect the makers can resist the payment of this these notes and succeeded in collecting note by any defense which they might inabout $1,000 thereon by August, 1904. On terpose to it in the hands of the original September 1, 1904, Dodson & Son had a set- payee, even if it should be held that the tlement with said Smith of the collections plaintiff obtained the note from the bank which had been made by them upon the after its maturity. The note had been various collateral notes, which, being cred- transferred by the payee, Smith, to Dodson ited upon said principal note, left a bal- & Son, in August, 1903, long prior to its ance due thereon of $6,000. In renewal of maturity. If Dodson & Son were at that the balance thus found due upon said note, time holders thereof for value in the due Smith, on said day, executed to Dodson & course of business, then any subsequent purSon his note for $6,000, due January 1, chaser thereof from them, even though he 1905. The note herein sued on, which had obtained it after maturity, would be probeen transferred as collateral to secure the tected against any defense which the payment of the original note for $7,000, makers might have or be entitled to assert was still retained by Dodson & Son as col-against the original payee. As is said lateral to secure the payment of the renewal in 1 Daniel on Negotiable Instruments, note for $6,000. Some of the other col- p. 801: "As soon as the paper comes into lateral notes were also retained by them, | the hands of a holder unaffected by any and other notes were transferred to them defect, its character as a negotiable securas collateral for the payment of th re- ity is established; and the power of transnewal note. About that time Dodson & ferring it to others with the same imSon borrowed from, or became indebted to, munity which attaches in his own hands is the Ouachita Valley Bank in the sum of incident to his legal right, and necessary $4,346.62, and executed their note to it to sustain the character and value of the therefor, and in order to secure same instrument and to protect the bona fide transferred to the bank the said note for holder in its enjoyment." And the author $6,000 executed to them by Smith, and also further says: "If the holder acquired the the collateral notes attached thereto, paper after maturity from one who became amongst which was the note herein sued a bona fide holder for value and without on. Later, and in February, 1905, Dodson notice before maturity, he is then protected & Son, having made default in the payment by the strength of his transferrer's title.” of their note to the bank, the collateral notes were sold by the bank under the power granted by Smith to Dodson & Son and their assigns. At this sale the plaintiff became the purchaser of the note herein sued on. The testimony upon the part of the defendant tends to prove that in March, 1904, F. W. Miles paid the amount of the note herein sued on to said Smith for the purpose of satisfying it. The note was not then in the possession of Smith, but was then held by Dodson & Son, who had no knowledge of this payment. In excuse for or explanation of paying the this court, the rule is thus stated: "One note to Smith without knowing that he was the holder thereof, or for failing to demand the note at the time of its payment, Mr. Miles testified that "it was a 1 Dan. Neg. Inst. p. 776; Woodman v. At the time the note was transferred to Dodson & Son, it was assigned by Smith as collateral security for his debt to them. Dodson & Son were protected as innocent it was transferred to them to secure an holders of this negotiable note, whether indebtedness which was then incurred by Smith to them, or a pre-existing indebted ness. In the recent case of Haldiman v. Taft, 102 Ark. 45, 143 S. W. 112, cited by who takes negotiable paper before maturity in payment of or as security for an antecedent debt, and without notice of any defect, receives it in due course of busi ness, and is a holder for value and free from any equities of the maker or indorser." Brown v. Callaway, 41 Ark. 418; Winship v. Merchants' Nat. Bank, 42 Ark. 22; Tabor v. Merchants' Nat. Bank, 48 Ark. 458, 3 Am. St. Rep. 241, 3 S. W. 805; Evans v. Speer Hardware Co. 65 Ark. 204, 67 Am. St. Rep. 919, 45 S. W. 370; Exchange Nat. Bank v. Coe, 94 Ark. 387, 31 L.R.A. (N.S.) 287, 127 S. W. 453, 21 Ann. Cas. 934; White-Wilson-Drew Co. v. Egelhoff, 96 Ark. 105, 131 S. W. 208. According to the undisputed evidence, Dodson & Son received the note herein sued on as collateral before its maturity in the due course of business and without any notice of any defense thereto; in fact, at that time there was no defect in or defense to this note. Thereafter Dodson & Son transferred the note to the bank, which, in February, 1905, transferred it to plaintiff, who was, in fact, a member of the firm of Dodson & Son, and in effect the note was thus returned to the original assignee by the bank. But whether we shall consider the plaintiff as a purchaser of the note from the bank or only as retaking it from the bank after payment of the indebtedness of Dodson & Son to it, and thus obtaining it as collateral to the note for $6,000 given to them by Smith, which he also obtained from the bank, the rights of the plaintiff would be the same, and he would still be protected as an innocent holder of the note herein sued on. The note was constantly, after its assignment by Smith, the payee, in the hands of a holder who had acquired an interest in it, and such holder was alone entitled to the payment of it. After such transfer by the payee, the maker was not authorized to pay same to the payee of the note. He could only make a valid payment to the holder of the note, and if he made a payment to one who at the time was not the holder of it, he did so at his own risk. Block v. Kirtland, 21 Ark. 393; Jenkins v. Shinn, 55 Ark. 347, 18 S. W. 240; State Nat. Bank v. Hyatt, 75 Ark. 170, 112 Am. St. Rep. 50, 86 S. W. 1002, 5 Ann. Cas. 296; Bank of Batesville v. Maxey, 76 Ark. 472, 88 S. W. 968; Winer v. Bank of Blytheville, 89 Ark. 448, 131 Am. St. Rep. 102, 117 S. W. 232; Buchanan v. Hicks, 98 Ark. 370, 34 L.R.A. (N.S.) 1200, 136 S. W. 177. In March, 1904, the defendants claimed that Miles made payment of the note herein sued on to Smith, the payee. At that time Smith was not the holder or owner of the note. Long prior to that time he had transferred it to Dodson & Son, from whom plaintiff acquired it, and thereby plaintiff acquired all rights and interest which Dodson & Son then had in the note. The payment made by Miles to Smith, therefore, did not result in a payment of the note unless the principal note, which had been executed by Smith to Dodson & Son, has also been paid. This question of fact as to whether or not the principal note for $6,000, executed by Smith to Dodson & Son, has been paid, was, by consent of the parties, referred to a master. He took the testimony of all persons who had connection with the transaction, and who had made collections on the collaterals which had been put up to secure that note. He stated an account of these collections and found that there was still due and unpaid on this principal note the sum of $1,781.89. This finding was approved by the chancellor. The master who made this finding of fact was appointed by consent of the parties. This court has held that the finding of fact of a consent master is as conclusive as the finding of a jury; that is, if there is any legal evidence to sustain it, the finding must stand. Greenhaw V. Combs, 74 Ark. 336, 85 S. W. 768; McDonald v. Kenney, 101 Ark. 9, 37 L.R.A.(N.S.) 544, 140 S. W. 999. Upon an examination of the evidence relative to this issue, we are of the opinion that there is sufficient legal evidence to warrant this finding of fact made by the master and approved by the chancellor. It follows that the chancellor was right in rendering judgment in favor of plaintiff for the note sued on. The decree is accordingly affirmed. As to right of purchaser with notice from bona fide holder, to same protection as latter, see note to Dispatch Printing Co. v. National Bank, ante, 74. Generally, as to paper transferred after maturity, see Index to L.R.A. Notes, “Bills and Notes," § 36. The unquestioned rule of the law merchant is that the taker of overdue commercial paper takes it subject to all the equities or defenses existing between the original parties to the paper. The very fact that it is overdue is of itself sufficient to put the taker of such paper on notice. Under the English rule followed in many courts in the United States, the equities to which the bill or note or other paper is subject when taken after maturity are such only as inhere in the paper itself, and the holder, although taking after maturity, is not subject to such equities as may have arisen out of matters entirely collateral to the note and independent of it. In some of the courts of the United States, however, the maker may, against a taker of overdue paper, set up equities against the payee which arise out of collateral transactions. PPEAL by defendants from a judgment A of the Superior Court for Spokane County in plaintiff's favor in a suit to foreclose a mortgage. Affirmed. The facts are stated in the opinion. Messrs. Happy & Hindman and James T. Burcham, for appellants: The transferee of negotiable paper, to whom it is transferred after maturity, acquires nothing but the actual right and title of the transferrer. 1 Dan. Neg. Inst. § 724a; 7 Cyc. 789, 790; Ames, Bills & Notes, p. 47; 2 Ames, Bills & Notes, p. 853; Miller v. Bingham, 29 Vt. 82; Howard v. Ames, 3 Met. 308; Reed v. Warner, 5 Paige, 650; Kellogg v. transferred after maturity without discrimination. It may be said that the majority of the courts hold that a maker cannot interpose equities arising directly between himself and an intermediate indorsee, although the paper was transferred after maturity. First Nat. Bank v. Texas, 20 Wall. 72, 22 L. ed. 295; Vinton v. Crowe, 4 Cal. 309; Hayward v. Stearns, 39 Cal. 58; Root v. Irwin, 18 Ill. 147; Favorite v. Lord, 35 Ill. 142; Unseld v. Stephenson, 33 Mo. 161; Hunleth v. Leahy, 146 Mo. 408, 48 S. W. 459; Downey v. Tharp, 63 Pa. 322; Young V. Shriner, 80 Pa. 463; Ludwig v. Dearborn, 8 Pa. Dist. R. 69; Nixon v. English, 3 M'Cord, L. 549; Perry v. Mays, 2 Bail. L. 354; Hooper Spicer, 2 Swan, 494; Sykes Bkg. Co. v. Morris, 2 Tenn. Ch. App. 236; REARDAN V. COCKRELL, V. It should perhaps be noted that in none of these cases, except REARDAN V. COCKRELL, was the equity attempted to be set up a payment made upon the note itself, but in most of them, at least, the equity had relation to collateral transactions. In Vinton v. Crowe and Root v. Irwin, the language used is broad enough to include payments upon the note which were made to inter mediate holders. right to set off against the bona fide holder, REARDAN V. COCKRELL, however, presents a further question, namely, whether the maker may, against the taker of overdue paper, set up equities or defenses existing in his favor against an intermediate indorser. Although there would seem to be an important distinction between the equities existing against the payee, and those existing against an intermediate indorser, nevertheless it is frequently diffi- after maturity takes subject to any defense The statute providing that an indorsee cult to determine from the facts of the which the maker may have against the case whether the equities sought to be inter-payee does not provide for the case of a posed were against the payee or against an payment made to, or a set-off against, an intermediate indorser. The courts dis- intermediate indorser. Root v. Irwin, 18 criminate between equities which inhere in Ill. 147. the bill itself, and those arising out of collateral matters, but in some cases apparently proceed upon the assumption that it is not material against whom such equities exist. Again, the question is somewhat complicated by the statute as to set-offs, the courts holding that such statutes do or do not apply, and assert the rule adopted to paper transferred before maturity and to paper And in Downey v. Tharp, 63 Pa. 322, it was held that the maker of a note could not set off against an indorsee after maturity another note which he held against an intermediate indorser at the time the latter held the note in suit. The court said: "The circumstance that the note was overdue when it was passed to Sayers [the real plaintiff] was not enough to put him on inquiry of the makers as to matters of set Schnaake, 56 Mo. 136; Elgin v. Hill, 27 | McMull. L. 258; Driggs v. Rockwell, 11 LaDue v. First Nat. Bank, 31 Minn. 33, 16 N. W. 426; Linn v. Rugg, 19 Minn. 181, Gil. 145; Martin v. Pillsbury, 23 Minn. 175; Harris v. Burwell, 65 N. C. 584; Wyman v. Robbins, 51 Ohio St. 98, 37 N. E. 264; Fossit v. Bell, 4 McLean, 427, Fed. Cas. No. 4,958; Burnham v. Tucker, 18 Me. 179; Wood v. Warren, 19 Me. 23; Davis v. Neligh, 7 Neb. 78; Haywood v. McNair, 14 N. C. (3 Dev. L.) 231, 19 N. C. (2 Dev. & B. L.) 283; Turner v. Beggarly, 33 N. C. (11 Ired. L.) 331; Cain v. Spann, 1 off with the intermediate assignee. He took the risk of equities and set-off between the makers and payee, and is not to be involved in the accounts of all the successive holders through whose hands it may have passed, with the original makers." So, in Hooper v. Spicer, 2 Swan, 494, it was held that the maker could not set off a note held by him against an intermediate indorser, although he held the note at the time the note sued on was the property of such intermediate indorser. This decision was based upon the principle that set-offs are allowable only in the case of mutual debts. The decision in Favorite v. Lord, 35 Ill. 142, apparently turns solely on questions of pleading, but the language used supports this rule. See also an early appeal in the same case, 29 Ill. 149. In Munday v. Clements, 58 Mo. 577, the statute permitting set-offs in actions on assigned accounts or non-negotiable instruments was held to apply to actions on negotiable instruments assigned after maturity; consequently, the maker of a note could, in an action on the note, set off an v. Stuart, 19 Johns. 342; Stockbridge v. Damon, 5 Pick. 223; Sargent v. Southgate, 5 Pick. 312, 16 Am. Dec. 409; Armstrong v. Chadwick, 127 Mass. 156; Fitch v. Gates, 39 Conn. 373; Downing v. Gibson, 53 Iowa, 517, 5 N. W. 699; McDuffie v. Dame, 11 N. H. 244; Ordiorne v. Woodman, 39 N. H. 541; Cross v. Brown, 51 N. H. 486. An assignor cannot question the title of a purchaser from one to whom he has given all the indicia of title, of an overdue note, and the right of the maker of such paper to set up any defenses which the Maroney, 87 Ala. 563, 13 Am. St. Rep. 67. 6 So. 343. But some of these cases were cited as authority in Bostick v. Scruggs, 50 Ala. 10, for the holding that the maker of a note could not set off against an indorsee after maturity the amount due him upon a note made by an intermediate indorser which was in his hands when such indorser held the note in suit. In an action against a prior indorser, an indorsee after maturity is not subjected to the equities held by the defendant against his indorsee, who was the plaintiff's indorser. Sheffield v. Parmlee, 8 Ala. 889. The rule that the maker cannot set up equities existing in his favor against intermediate indorsers in an action brought by the taker of overdue paper applies with greater reason where the paper was transferable by delivery only. Thus, in Nixon v. English, 3 M'Cord, L. 549, the court said: "It would be destructive of all commercial paper to say that a note payable to bearer should carry along with it all the equities which might subsist between the maker and any or every dis tinct holder of it. For this would neces other note against an intermediate indorser which he purchased before receiving notice that such intermediate indorser had as-sarily impose on all who receive such notes, signed the note. But this case was overruled in Cutler v. Cook, 77 Mo. 388, upon the ground that a promissory note does not become non-negotiable simply because it is transferred after maturity. In Alabama, under an early statute the a courts asserted the rule that set-off against an intermediate indorser of a promissory note could not be maintained, but in some of the cases asserting this rule the note was transferred before maturity, and in others the time of the transfer is not set out in none of the cases does the time of the transfer appear to influence the court in arriving at its conclusion, so that it is impossible to tell the exact bearing of these eases upon the question under discussion. Richardson v. Farnsworth, 1 Stew. (Ala.) 55; Stocking v. Toulmin, 3 Stew. & P. (Ala.) 35; Kennedy v. Manship, 1 Ala. 43; McKenzie v. Hunt, 32 Ala. 494; Goldthwaite v. National Bank, 67 Ala. 549; Brown v. Scott, 87 Ala. 453, 6 So. 384; Manning v. the necessity of going back to all who may have held it, to ascertain if there were any dealings between them and the maker which at a future time might be pleaded in discount." Although this quotation does not show it, the note was in fact transferred after maturity. So, in Sykes Bkg. Co. v. Morris, 2 Tenn. Ch. App. 236, the doctrine of the Hooper Case, supra, was reiterated. The court said: "If it were otherwise the greatest confusion would ensue, and it would be practically impossible to transfer an overdue note through a series of intermediate hold ers. It would even be impracticable, if not wholly impossible, for the last purchaser to investigate the history of the notes sufficiently to ascertain the names of all the persons through whose hands it had passed, where, as in the present case, it had been transmitted by delivery, and not by indorse. ment." A number of cases not strictly in point, statute makes available to him is nowise, 545, 9 Pac. 942; Clark v. Sigourney, 17 affected. Conn. 511; Earp v. Richardson, 81 N. C. 5; 16 Cyc. 776. Moore v. Moore, 112 Ind. 149, 2 Am. St. Rep. 170, 13 N. E. 673; Greenwell v. Haydon, 78 Ky. 332, 39 Am. Rep. 234; Gardner v. Beacon Trust Co. 190 Mass. 27, 2 L.R.A. (N.S.) 767, 112 Am. St. Rep. 303, 76 N. E. 455, 5 Ann. Cas. 581. The rule throwing the loss upon one of two innocent persons as against the other does not apply to transfers of negotiable instruments overdue. Messrs. Danson & Williams, for respondent: No defense existed to the note or mortgage, and plaintiff acquired titie freed from any defense or equities except such as might inhere in the instrument itself between the original parties thereto. Cochran v. Stewart, 21 Minn. 435; 7 Cyc. 820; 8 Cyc. 64; Tinsley v. Beall, 2 Ga. 134; Hayward v. Stearns, 39 Cal. 58; Stedman v. Jillson, 10 Conn. 55; Kilcrease v. White, 6 Fla. 45; Hankins v. Shoup, 2 Ind. 342; Procter v. Cole, 115 Ind. 15, 17 N. E. 189; Richards v. Daily, 34 Iowa, 427; Stannus v. Stannus, 30 Iowa, 448; Way v. Lamb, Foley v. Smith, 6 Wall. 492, 18 L. ed. 931; Osborn v. McClelland, 43 Ohio St. 284, 1 N. E. 644; Weathered v. Smith, 9 Tex. 622, 60 Am. Dec. 186; Farrington v. Park Bank, 39 Barb. 645; Towner v. McClelland, 110 Il. 542; Chase v. Whitmore, 68 Cal. but which have some bearing on the ques-ize a set-off held against a remote indorser tion, are cited below. to be interposed against a subsequent holder. The paper in this case was a bill of exchange, and no reference is made to the time of the indorsement. An indorsee after maturity is not, in an action brought upon the notes against the first indorser, subject to any equities existing in favor of such first indorser against The fact that negotiable paper is overdue an intermediate indorser. Wynn v. Kelly, when transferred in the usual course of 22 La. Ann. 594. In this case the inter- business by an indorsee having all the mediate indorser was a state bank, which, indicia of an absolute title, but holding it being in liquidation, was, upon the sale of in fact only as collateral security, does not the notes by it, required to take in payment subject the title of the transferee, who its own notes, which were at a discount; takes it after maturity, to the latent but the plaintiff was held entitled to re-equities existing in favor of third parties cover the par value of the notes in lawful money. against the person holding the paper as collateral. Y. M. C. A. Gym. Co. v. Rockford Nat. Bank, 179 Ill. 599, 46 L.R.A. 753, 70 Am. St. Rep. 135, 54 N. E. 297. In a few jurisdictions it has been held that equities against intermediate holders may be set up in an action brought upon the paper by one who took it after maturity. It should be noted in connection with these cases that in some instances the equity or defense interposed was payment, while in others it was some collateral transaction. In Parker v. Stallings, 61 N. C. (Phill. L.) 590, 98 Am. Dec. 84, the court seemed to assume that an indorsee after maturity would be "affected by intermediate fraud," but it was held that the principle that a taker after maturity stands in the shoes of the former holder did not apply in a case where the note was payable "one day after date with interest from date," and the maker and intermediate indorser both indorsed after maturity, since from the form In Massachusetts the rule is that the inof the note it was evident that the parties dorsee of a note overdue takes it with notice intended it should circulate after date. on its face that it is discredited and thereThere is no adverse presumption from the fore subject to all payments and to all the paper's being in dishonor as between suc-equities between the prior parties. Bond cessive indorsers, as there is between the maker and the holder. In Etheridge v. Gallagher, 55 Miss. 458, the court said that an indorsee after maturity could enforce the note against the maker, unless there was some defense that would be available against the payee. In this case the plaintiff was seeking to enforce the note against the property of the payees, as indorsers, and the latter attempted to interpose as a defense the failure of the consideration received by them for the note from their indorsee. In Savage v. Laclede Bank, 62 Miss. 586, it was held that a statute entitling the defendant in an action upon an assigned bill or note to the benefit of all want of consideration, payments, etc., against the bill or note previous to notice of assignment, in the same manner as though the suit had been brought by the payee, does not author v. Fitzpatrick, 4 Gray, 89. In this case payments had been made upon the note. But this right of set-off is confined to those demands against the prior holder which accrued to the maker while such prior holder was the actual holder of the note, and does not extend to demands which accrued afterward, although no notice of the indorsement was given to the maker. Baxter v. Little, 6 Met. 7, 39 Am. Dec. 707. So, in Eaton v. Corson, 59 Me. 510, although the case turned upon a question of evidence, the court said that the plaintiff, having taken a note when overdue, took it subject to any and all defenses which might have been set up against any prior holder. The equity or defense was payment. So, too, in LaDue v. First Nat. Bank, 31 Minn. 33, 16 N. W. 426, the court said: "Gen. Stat. 1878, chap. 66, § 27, provides: 'In the case of an assignment of a thing in |