Pauly v. O'Brien

• Decision Date: 12 August 1895
• Docket Number: 598.
• Citation: 69 F. 460
• Court: U.S. District Court — Southern District of California
• Parties: PAULY v. O'BRIEN.

69 F. 460

PAULY v. O'BRIEN.

No. 598.

United States Circuit Court, S.D. California.

August 12, 1895

David L. Withington, for plaintiff.

E. W Britt and Works & Works, for defendant.

ROSS Circuit Judge.

This is another of the many rascally transactions disclosed in suits brought before this court in connection with the insolvent California National Bank of San Diego. The action is upon a promissory note executed by the defendant to the bank, and is submitted to the court upon an agreed statement of facts which shows-- First, that the facts alleged in the complaint which is in the ordinary form in such actions, are true; and second, the purpose of the note and the circumstances under which it was executed, which are, in substance, as follows On the 15th day of November, 1889, one Naylor was indebted to the bank in the sum of $3,714.40, evidenced by his promissory note, secured by a deposit with the bank of a lot of jewelry as collateral. Naylor was insolvent, and, on the day named the bookkeeper of the bank, who was a brother of the defendant, at the instance of its vice president, one D. D. Dare, asked the defendant to give his note to the bank in place of and to take up that of Naylor at the time stating 'that Naylor's note was past due, and was secured by collaterals which were believed to be ample to pay the note, and that the bank wanted to get the note out of the past-due notes, and that the Naylor note and collaterals were to be collateral to the note to be given by him, and would wipe his not out when the collaterals were disposed of, assuring him that the bank held jewelry as collateral sufficient to pay it. ' The defendant consented to this request, and, pursuant thereto, executed his note to the bank for the sum of $3, 714.40, 'and the Naylor note was entered as paid on the books of the bank, and the O'Brien note was entered as a discount for its face. ' Thereafter, the bank sold 'some or all' of the jewelry for the sum of $1,150, and credited that amount on the note given by the defendant. Subsequently, and on the 21st of March, 1891, the bank informed the defendant of the sale, at which time he executed to the bank a new note, for the amount of the first one, less the amount realized by the sale of the jewelry; and still later, to wit, on the 21st of July, 1891, defendant executed to the bank, in renewal of the one last mentioned, the note sued on herein, the amount of which was the...