277 F. 145 | 8th Cir. | 1921
Plaintiff in error brought suit in the court below against the Yellow Rose Mining Company and the de
The defendants in error and the company as a defense set up in their answer with some particularity that in February, 1917, J. I,. McCarty, by fraudulent, representations, had induced the company to purchase certain mining property for a consideration of which the principal sum mentioned in the note in suit was a part; that the company as principal and the defendants in error as sureties had signed said note relying upon the representations so made by said McCarty; that the company by reason of said false representations had been damaged in excess of the amount of the note.
As a defense personal to them the defendants in error alleged that on the 1st day of May, 1917, the company, being indebted to J. I* McCarty for the balance unpaid of the purchase price of the mining property above mentioned agreed to make and deliver a note for such balance payable in six months from date; that they the answering defendants signed said note as sureties at the request of McCarty the payee on the condition that he would secure from the company a mortgage upon all of its property, cause said mortgage to be recorded, and, in case the note was not paid by the company, foreclose the mortgage, sell the property described therein, apply the proceeds on the note, and look to and require the answering defendants to pay the deficiency, if any, only. Defendants then allege that the mortgage was executed by the company; that McCarty received it, but failed to have it recorded as he had agreed to do; that as a result of a conspiracy entered into between him and the Miners’ & Citizens’ Bank the property described in the mortgage was seized and sold for debts due to the bank, and the lien of the mortgage lost.
As a second defense personal to them the defendants in error alleged, in effect, that by reason of the failure of McCarty to preserve the lien of the mortgage they had been deprived of the benefit which would have inttred to them by subrogation upon the payment of the note by them. By reason of their several defenses they prayed judgment that plaintiff take nothing by its complaint.
At the trial plaintiff obtained judgment against the company, but was defeated as to the other defendants. Plaintiff brings error, and has assigned numerous rulings of the trial court as error which will be referred to more specifically hereafter.
The plaintiff acquired the note in this way: J. L. McCarty, the payee, after he had received the note indorsed it to McCarty & Angel, a firm in which he was a partner. Thereafter he applied to- the Miners’ & Citizens’ Bank of Yellville, in the state of Arkansas, to discount the note for the firm. Under the banking laws of Arkansas a bank is not permitted to loan in excess of 30 per cent, of its capital stock to any single borrower. The capital stock of the Miners’ & Citizens’ Bank was $20,000; it was therefore unlawful for it to discount the note. J. F. Carson, the cashier of the bank, however, agreed, upon his
When, if at all, the plaintiff received such notice, or what sum, if any, had been paid on account of the note, we do not, upon the record before us, deem it proper to attempt at this time to determine.
The other errors assigned do not require special notice.
As against the defendants in error the judgment is reversed, and the court below directed to grant a new trial.
Judge HOOK participated at the hearing of this cause, but died before a conclusion was reached and the opinion prepared.