Court Opinion

ID: 3515175
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:26:21.471834+00
Date Added: 2024-06-11T09:20:42.377301
License: Public Domain

In order to understand my position in this case, it will be necessary to make some additional statements with reference to this case.
This suit originated by George W. Armstrong filing a bill in the chancery court of Adams county, where the mortgage was recorded in favor of the National Stockyards National Bank, in which he charged that the loan made to him was usurious, being in excess of the amount which the said bank was authorized to charge under the federal laws and those of the state of Illinois, where it was domiciled. This bill charged that more than one hundred thousand dollars of the debt claimed was *Page 377 
usurious, and prayed for an accounting, and that the debt be purged of the said usury, among other things.
The national bank filed an answer, in which it denied generally the allegations of the bill, and interrogatories were propounded under the statute of this state by which nonresidents could be compelled to answer them under oath, where a suit in this state was pending. When said questions are answered under oath, as they are required to be, they have the force of a deposition — in fact, they constitute a deposition, and are available to either party. In answering these interrogatories, the national bank, through Mr. Wright, its president, denied specifically that it was a debt of the bank, stated that it was the debt of the National Cattle Loan Company, a corporation under the laws of the state of Delaware, of which Mr. Wright was also president, and disclaimed interest entirely in the controversy.
Thereupon the bill was amended, making the National Cattle Loan Company a defendant, and in the pleadings of the National Cattle Loan Company it denied that the debt belonged to the bank, but it alleged that it was a debt due the Cattle Loan Company, and that the reason it was taken in the name of the bank was that it occurred to the president of the National Cattle Loan Company that he had not filed a copy of its character with the secretary of state of Mississippi, and that the loan company might be doing business in violation of the laws of Mississippi. It is claimed specifically in the sworn deposition of the bank and in the answer of the National Cattle Loan Company that the bank did not own the debt, or have any interest in it, but that it was taken, merely for convenience, in the name of the bank; that, although the bank did not own any interest in the debt, it would, when it desired to do so, purchase from the National Cattle Loan Company notes secured by mortgages or deeds of trust, but it was under no obligation so to do, and, in fact, that most of the notes were sold to other banks, trust companies, and financial institutions, in the *Page 378 
markets of the North and East, interested in buying such paper.
After the cause reached this state, Armstrong was placed in bankruptcy, a trustee appointed, and the trustee intervened, by permission of the bankrupt court, in the suit to prosecute the litigation for the interest of the bankrupt creditors, and the trustee set up that he stood in the relation of a purchaser without notice, under the statute referred to in the majority opinion, which provided that, in order to record an instrument under the recording act of this state, it was necessary for the name of the beneficiary to be shown therein, and that no deed of trust or mortgage should be recorded unless the beneficiary was disclosed therein, and, if recorded, it should not be notice to any one. When the trustee intervened, and raised this question for the first time, the Cattle Loan Company changed its position and claimed that the bank was also the beneficiary in the deed of trust.
The two corporations are entirely separate entities. The National Cattle Loan Company is a Delaware corporation, and its incorporators are presumed conclusively to be citizens of the state of Delaware. The National Stockyards National Bank is a banking corporation, domiciled in the state of Illinois, and incorporated under federal laws. It is true that most of the officers of the institutions were common, and each had the same manager and president, Mr. Wright, whose deposition was taken in the suit against the National Stockyards National Bank, and who also swore to the answer of the National Cattle Loan Company. There was no showing that any mistake had been made, or that he did not know all the facts at the time he filed the said answers and gave his deposition under oath. In fact, it cannot be presumed that he was unaware of all the facts, because the proceedings were had with him when the notes were made, and the bank was put squarely upon notice by the allegations in the bill, and was called upon to answer the allegations. In addition to its being called upon to plead *Page 379 
to the bill, it was called upon to answer, under oath, the interrogatories propounded to it, and it did so. The only reason for changing its position was to avoid the effect that the statute might have upon the suit. The change made from the sworn statement was not by reason of any mistake discovered, but solely on account of the change of the defendants' interest to the suit.
The majority opinion states that the testimony to show that the National Cattle Loan Company was the real beneficiary is very weak. If the testimony is regarded as weak at all, it must be based upon the conflicting testimony given by the same witness at different times, without any reasonable explanation therefor. The answers were positive and direct, and the whole record shows that the witness knew the facts exactly when he first answered these interrogatories and the bill against the National Cattle Loan Company. The chancellor had the right to pass upon the credibility of the witness and to judge of the reasonableness of the testimony, in the light of the circumstances existing at the time, and had the right to believe that the first deposition related the truth of the matter, and that the answer of the National Cattle Loan Company represented the truth. If there is anything at all that ought to be binding upon the litigant, it is the solemnity of his oath; and courts can refuse to be influenced by different testimony, where it is manifest that the change was made purely to serve the interest of the litigant brought about by a change in the situation. Any litigant who places himself in the position of marching down the "ringing grooves of change," changing his oath with each shifting necessity, and faithful alone to self-interest, ought to receive but little consideration at the hands of the court.
I think it is fundamental that the two corporations are separate entities, and, while there may be subsidiary relationships, the legal rights of the corporations are as separate as those of any two individuals. Under the proof in this record, the loan was clearly made for and *Page 380 
on behalf of the Cattle Loan Company, and the National Stockyards National Bank was in no sense the beneficiary. Consequently the deed of trust placed upon the record, in not disclosing the name of the real beneficiary, was not constructive notice to any one, and had no efficacy in giving notice of the claims to the creditors of the bankrupt, Armstrong.
I therefore am compelled to differ with the holding of the majority.