First Nat. Bank v. Bennett

Citations

• 111 Miss. 26
• 71 So. 169

Syllabus

<p>Estoppel. Wrongful act. Loans to barites. Receivers.</p> <p>Where a bank took two deeds of trust on the same property on the same day but for different amounts, but recorded one of them in advance of the other to give it priority, and then transferred each of the trust deeds with other collateral to a different bank to secure its notes for borrowed money, without informing either of the banks of the existence of the other trust deed, and subsequently, the bank failed and each of .the creditor banks applied the funds on deposit with it and the proceeds of the other collateral to the payment of the note held by it, and the bank which received the first deed of trust had its claim thereby satisfied in full and returned the first trust deed to the receiver of the insolvent bank Who forclosed it. The note of the bank holding the junior trust deed not being satisfied by the funds on hand, it brought suit to have the balance of its debt satisfied out of the proceeds of the foreclosure sale made by the receiver. In such case while the constructive notice of the existence of the prior trust deed would have prevented the bank holding the second trust deed from enforcing it as against the other creditor bank, yet the failure of the insolvent bank to inform it of the existence of the other trust deed under the circumstances estopped it from claiming thereunder as against the second trust'deed, and its receiver was likewise estopped from setting up any such claim.</p>