The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-10-13
DUMMY BORROWERS APPEAR
WARRANTS DRAWN BEFORE DEEDS
GIVEN THEM WE'RE RECORDED.
Land Not Worth Appraisement-Mort-
gage by n Negro, who Says
He Never signed.

responsible for all loans made. Some of the
transactions that took place at that time
were disastrous Mortgages TO the school
fund on property that was worth but little
had to be forfeited. When an attempt was
made to sell the lands to pay off the mort
cages no buyers could be found and as a
result the county has to shoulder the loss.
In one deal there is now loss of $S,106.06.
This was in what is known in the auditors
Office as the Franklin Landers case" And
there are others.
The law governing the school fund sets
aside portion of the state fund to each
county in proportion to the children Of
school age. Each county is required to pay
the State per cent interest and account
for both principal and interest. This pro-
vision was inserted in order to force the
counties to keep the fund invested and in
order to compel them TO account for it in
case it was mismanaged or dissipated by
county officials. In other words, 1t was in
tended that the State should never lose
cent, and that the fund should be kept in
violate. The law provided that no one per-
son should be allowed to borrow more than
$1,000. 1t also provided that no loans should
be made on property that was not worth
twice as much as the money borrowed How
Franklin LanderS was permitted TO borrow
$4,000, seven times as much money as the
law allows, on land that was not worth
nearly that, may be interesting. The law
was evaded. Landers owned a number of
lots in an addition he had laid out west of
Blake street, near the canal and the old
Landers pork house, where, it will be re-
membered, Coxeys commonwea army en-
camped. Those who know that part of the
city know about how little the land in that
vicinity is worth. In August 1889, Franklin
Landers wanted $4,000. Under the law gov
erning the school fund he could not borrow
more than $1,000 So, in order to get around
this point, he decided a number of lots to
several persons. The deeds were made on
Aug. %, 1889. One. to Jacob S. Mccullough,
conveyed four lots. The others were TO
Horace L. Mathews, four lots: E. b. Swift.
eight lots; George III. McCaslin, seven lots:
John Larkin, five lots, and Jordan Free
man, four lots. Then Franklin Landers and
each OF the others borrowed $1,000 out of
the school fund. E. M. Johnson deputy
auditor drawing the mortgages, taking the
notarial acknowledgements, etc.
Inc Landers loan was made Aug %. those
TO Larkin, Swift, Mathews and McC1ll-
Tough Aug. 80, and those to McCaslin and
FREEMAN Aug. 81. Warrants for $1,000 in
favor of each were drawn on the day of
the several conveyances. Mccullough deed
ed the lots back to Landers Aug 30. and
all the others the next day, Aug 81. The
deeds Landers made to all six stated the
consideration to be $4,000. Their deeds back
to him stated the same consideration. IT is
the law that the Interest on a mortgage at
. per cent. for one year shall be deducted
from the loan, so that the first years in
terest is paid in advance Those borrowing
the money must also bear the incidental
expenses, including recording fees, notarial
fees and fees to the three appraisers. A
memorandum of the interest and expenses
or the seven mortgages were made on the
back of the Landers warrant indicating
that he paid the interest charge of $40 on
the seven loans, with the other expenses.
WARRANTS BEFORE DEEDS RE-
CORDED.
While the deeds were made by Landers to
the parties Aug. 2S they were not recorded
Until Aug 81, so that warrants were dra wn
before they were recorded The six deeds
were recorded in Deed Record PIP. Pages 81
to S76. inclusive. Although the property was
conveyed back to Landers three DAYS after
it had nominally passed out of his possess
sion, the deeds back to him ere not re-
corded until Nov. 49, 1889, nearly three
months later That the auditor. Thomas
Taggart, and his deputy, E. M. Johnson.
knew all the time that the parties were
simply acting to accommodate Ianders is
perfectly plain from the records in the au-
ditor's office. AS soon as the deeds were
recorded they should have been transferred
to the new owners on the records in the
auditors office. This was not done. The
books other than those of the recorder do
not show that the property was ever out
OF Landers's name. The auditor and his
deputy knew that Landers had never parted
with the property, and reasoned that it was
not necessary 10 make the transfers to the
new parties, and then back to Landers after
the deeds to him had been recorded.
The interest on the seven mortgages was
paid up to Aug. 80, 1893. In November. Of
1885. the present auditor discovered, when he
came in, that the interest was over two
years delinquent. He sent notices TO the
parties. Jacob S. Mccullough. now dead,
and who had worked for Murphy Hibben &.
Co. when Landers was interested in
the firm, came to the auditors Office much
disturbed. He feared that he might be per-
sonally liable and had conversation with
Auditor Smith, who, for the first time,
learned the facts in the Landers deal
Il never got dollar of that money" said
Mccullough. Mr.. Landers asked me to
become party to the transaction as an
accommodation to him."
Mr.. Mccullough was distressed lest he
would have TO settle the mortgage loan in
case the land could not be sold for enough
to satisfy it if it were to be forfeited to the
State. The record of the school fund mort
cages, of course, did not disclose the various
conveyances and reeonveyances. but after
Mr.. Mccullough talked TO him Auditor
Smith looked it up discovering as set forth
above, how the law had been evaded and
$4,000 loaned where Landers himself could
only have borrowed $1,000
WHAT COUNTY WILL LOSE.
None of the interest having been paid.
Auditor Smith, in March. 1896, advertised
the land for sale. The law requires the
auditor TO thus dispose of delinquent loans
on the March following the date of default
in interest. 1t was offered for sale at the
door OF the courthouse. The Indianapolis
Water Company bought in four of the
pieces. those mortgaged in the names OF
Swift. Mathews. Mccullough and McCaslin.
Last night Edward c. Leible. bookkeeper
of the water company. and who bought in
the ground as trustee. said that the water
company bought il to protect itself The
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