Forsythe v. Kimball

The case made by the bill is as follows:–– The appellant, John Forsythe, negotiated a loan of $5,000 from the insurance company. He had four brothers. For $4,000 of the amount loaned, he and each of his brothers gave a separate note of $800. Ten notes of $200 each, signed by all the parties, were given for the interest, which was to be paid semi-annually, at the rate of ten per cent per annum. The notes all bore date on the 5th of January, 1869. Those for the principal were to be paid at the end of five years. At the same time, Robert H. Forsythe, one of the brothers, gave for the residue of the loan his note for $1,000, of the same date with the five notes of $800 each. He also then gave his ten notes of $50 each for the interest, which was at the same rate as that upon the notes of $800, and payable at the same times. The notes were all made payable to J. Y. Scammon, or order. Four thousand dollars of the money loaned was invested in real estate, and the title taken to the five brothers who had executed the five notes of $800. They secured those notes and the ten interest notes by a mortgage on the premises. The $1,000 for which Robert H. Forsythe gave his notes was invested in land which was conveyed to him, and he secured his notes by a mortgage upon it. Scammon was an active officer of the insurance company. When the loan was negotiated and consummated, the appellant, as an inducement to the company to make it, assumed and promised by parol to pay all the notes above mentioned, both for principal and interest. Upon receiving the securities, Scammon indorsed and transferred them to the insurance company. The appellant insists that the $5,000 was lent by the company, and not by Scammon, and that the loan was to him, and in no part to the other parties who executed the notes. The appellant paid all the interest notes, amounting to $1,250, which fell due prior to the 9th of October, 1871. His brothers are irresponsible, and paid nothing. On the day last named the great Chicago fire occurred. He held fire-policies issued by the company upon buildings which were consumed. The company thus became indebted to him to the amount of $11,000. His losses were settled and adjusted at that sum. No part of it has been paid. On the 28th of April, 1873, his four brothers conveyed to him their rights and titles to the several mortgaged premises.