North Hudson Mutual Building & Loan Ass'n v. First National Bank ( 1891 )

Upon motion for a rehearing there was a brief signed by Bashford da Disney and R. H. Start, attorneys, and Bash-ford, O' Oonnor da Policys, of counsel. They argued that the association was not estopped to deny the validity of the transaction, at least so far as concerns the sum remaining unpaid on the loan. It is not bound to return the entire consideration before demanding back the securities, but only so much as has been properly applied to the legitimate purposes of its organization, Hollenback v. Shoyer, 16 Wis. 499; Tobey v. McAllister, 9 id. 463; Williams v. Fitzhugh, 37 N. Y. 444; Warren v. Chapman, 105 Mass. 87 ; 1 Jones, Mortg. secs. 620, 321; 2 Pomeroy, Eq. Jur. sec. 704. The bank was chargeable with notice of the want of power in the officers to make the loan and pledge the securities. Alexander v. Caulwell, 83 N. Y. 480.

The motion was denied February 24, 1891.