ARK.] CITY NATIONAL BANK' 'V. TAYLOR. 35 • • :; CITY , NATIONAL , BANK V. TAYLOR. " 4-3911.. • •
Opithon delivered June 24 1935.. 1. JUDGMENT-PES .J . ImICATA.— . Where the hokler -of notes secured by mortgage prOcured judgment . against a hanit on the ground ,A deCeit or fraud iii inducing the exchinge of prior notes; arid collected . such judginent, the holder was not • entitled 't6 a _second judgment for the same I deceit or fraud. ' ' . • - "
36 CITY NATIONAL BANK V. TAYLOR. [191 2. Bruz AND NOTES-TRANSFER WITHOUT RECOURSU.-A bank which transferred a third party's notes 'without recourse is not a guarantor of the notes. • Appeal from Sebastian Chancery Court, Fort Smith District ; C. M. WOfford, Chancellor ; reversed. James B. McDonough, for appellant'. Hill, Fitzhugh & Brizzolara, fOr appellee. HUMPHREYS, J. This is the fourth appeal in this caSe. The first- appeal is reported under style City National Bank v. Riggs, 188 Ark. 420, 66 S. W. (2d) 293. -The second appeal is reported under style City National' Bank v. Riggs, 189 Ark. 123; 70 S: W. (2d) -574: The third APPeal is reported under style 'City NatioUat Bank ' v. Johnson-, ante p. 29. 'On'the first two appeals, the decrees rendered by the : chancery court were affirmed, and on the third appeal the decree rendered • y *the chandery court was affirmedin'parCand reversed in part:- 'All these appeals came c to this cOurt for settlement 'Of questions -,Which arose in 'the foreClosure proceeding commenced' in the chancery court of -the Fort' Smith Distriet of Sebastian Coinity l on December 2, 1932,' and this appeal i'S from 'a decree in• the 'same ease rendered in 'faVor-of' aPpellee against' appellant on appellee's motion or' , petition for damages in the stun of $2,797.83' en . the 5th day of Ode-bet, '1934, alleged to have , been susiained -by her on account . Of being induced to exchange notes in the sum of $8;000, and a"inor . tgag6 secilking same ''on 'property 'in Fort 'Smith . for — renewal . notes Iii the'same 'amount on the rePresentation by aPpellant, that the reilOwal-notes were secured bra -mOrtgage covering the same property and a lot of additional property. A detailed statement of the facts connected with the foreclosure proceeding may be found in the opinions above referred to, and reference . is made to them for a general history of the case rather , than to restate them in this opinion. The only additional facts not appearing in those opiniens relate to the sale of the four pieces of property described in the renewal Mortgage executed by the Johnsons, 'and the apportionment of the proceeds derived from the sale between those entitled to participate therein, and that the bank paid them pro rata the judg-
ARK.] 37 ment against it for $12,300, the amount received from the sale of lot 9, block 30, city of Fort Smith, which it released from the first Mortgage without authority and failed to include in the new mortgage. The four pieces , of property actually included- in the reneWal mortgage brought $8,075 at the foreclosure sale. After apportioning appellee's share in the $12,300 receiVed from the bank, and the $8,075 received from the sale and applying it to her judgment against the Johnsons, it left a 'balance of $2,797.83 due her from the Johnsons, which deficiency was made the basis in awarding damages to appellee against appellant for the deceit or fraud practiced upon her that indnced the exchange of the old notes and mortgage for the new notes and renewal mortgage. The rendition of this judgment 'was erroneous. She *was awarded a judgment in the decree rendered by the trial court on May 17, 1933, for the damages she sustained by reason of the deceit nr fraud practiced upon her inducing the exchange of the securities, which judgment was appealed from and affirmed by this court in the case styled City National Bank v. Riggs,:188 Ark. 420, 66 S. W. (2d) 293. Appellee was entitled to only one judgment on account ' of the deceit or fraud,. which she obtained in that decree, and which has been paid. If the . construction given that decree by appellee were adopted, it would necessarily make the bank a guarantor of her investment which was not the intention, as the securities were assigne , d to her by the bank without recourse. Awotin v. Atlas Exchange Nat. Bank, 295 IT. S.. 209, .55 S. Ct. 674. The deficiency judgment is therefore reyersed as to the bank (appellant), and the cause is remanded with directions to dismiss appellee's motion to obtain, additional damages.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.