Chandler v. People's Savings Bank

McKee, J.: Samuel Poorman, being indebted to the Capital Bank, of Sacramento, by a promissory note for fifteen thousand dollars, secured its payment by a deed of trust made to the bank for two hundred acres of land near the City of Sacramento, and by two negotiable promissory notes, which he assigned to the bank—one made by L. C. Chandler, the plaintiff in this case, for three thousand dollars, secured by mortgage upon real property, and the other by one Todhunter for four thousand dollars. The Todhunter note was taken up when it fell due, and the amount was credited by the bank on Boorman’s note leaving due and unpaid upon it, in April, 1879, a balance of about twelve thousand two hundred and eighty-eight dollars, Upon receipt of that sum the bank, at that date, assigned and transferred the note itself and its securities to one Smith, who afterwards, for a valuable consideration, assigned and transferred them to the People’s Savings Bank of Sacramento, one of the defendants in the ease. At the same time the People’s Savings Bahk became the assignee of another promissory note, given by Poorman in March, 1878, to the Odd Follows’ Savings and Commercial Bank of Sacramento for about forty thousand dollars, which was secured by a subsequent deed of trust on the same two hundred acres of land and some other real property, and also by a deed absolute on its face of the same property.

Being thus the owner and holder of the two promissory notes given by Poorman, and of the several liens and securities for the satisfaction of each of them, the People’s Savings Bank caused the two hundred acres of land to be sold under the first deed of trust, and at the sale the land was bid in for the bank for the sum of ten thousand one hundred and twenty-five dollars.

[398]After acquiring the right of property to the land, the bank entered into an agreement with Chandler, to sell and convey it to him, and to transfer to him all the interest which it had in his six thousand dollar note and mortgage for the sum of twelve thousand dollars. In performance of this agreement the bank, on August 9, 1879, caused the trustees, who had sold the land, to make the deed of it to Chandler. This deed the bank had recorded, and notified Chandler of the fact; and Chandler executed and delivered to the bank his promissory note for twelve thousand dollars, and a deed of trust on the land as security for the payment of the note; but the bank withheld from his possession the deed, and refused to deliver the six thousand dollar note and mortgage, assigning as a reason that Mrs. Poorman—the intervenor in the case— claimed an interest in them. And, in fact, Poorman, the payee of the note, had, in December, 1878, after he had assigned it to the Capital Savings Bank, “sold, assigned, and transferred to his wife, Margaret Poorman, all indebtedness of every nature and kind due and owing from L. C. Chandler on book account or otherwise.”