Snell v. Baker City Bank

Opinion by Mr. Chief Justice Bean. The contention for the plaintiff is that the decree of the court below should be sustained because: (1) The appellant is estopped by its conduct and agreement to set up its mortgage as against the plaintiff; (2) that by permitting the mortgagor to remain in possession of the mortgaged property and to sell the same at retail it abandoned its lien, and rendered the mortgage fraudulent and void against creditors; (3) that if the mortgage had any validity whatsoever it constituted an assignment for the benefit of creditors. It will be necessary for us to notice the first -only of these contentions, as we deem it decisive of the case. The undisputed evidence shows that the bank induced plaintiff to forego levying an attachment on the property of Van Slyck by its promise to do nothing until another meeting could be had between its representative and plaintiff’s [254] agent, and, after thus lulling the company’s agent into false security, and without his knowledge, in the mean time took the mortgage in question upon all the property of the common debtor to secure its own claim. Under these circumstances it would be an exceedingly -harsh rule which would give a mortgage thus obtained the priority claimed for it. The bank was under no obligation to make any promise or agreement with Buchanan because he had consulted it about plaintiff’s claim. It could have kept silent and afterwards protected its own interest without being guilty of any legal wrong. But when it agreed with him to do nothing in the matter until another meeting could be had in the evening, and in violation of such agreement undertook to secure its own claim to the exclusion of the plaintiff, it was guilty of a fraud against which a court of equity will relieve. For this reason the decree of the court below should be affirmed, and it is so ordered. Affirmed.