U.S. Supreme Court
Biebinger v. Continental Bank, 99 U.S. 143 (1878)
Biebinger v. Continental Bank
99 U.S. 143
A customer of a bank who had deposited with it, as collateral security for his current indebtedness on discounts, the note of a third person secured by mortgage and had withdrawn the same after maturity for the purpose of foreclosure and collection under an agreement to return the proceeds or to replace the note by securities of equal value, purchased the mortgaged property at the foreclosure sale. At the request of the bank, he deposited with it the deed he had received for the property. His indebtedness to the bank was then fully paid, and his dealings with it were temporarily suspended. He afterwards incurred debts to it, and on his becoming an adjudicated bankrupt, it filed its bill against his assignee, claiming an equitable lien in its favor upon the property. The bill contained no allegation of money loaned or debt created on the faith of the deposit of the deed, and it prayed for the specific performance of the agreement to replace the note withdrawn. Held that the bank could not claim an equitable mortgage by such deposit.
The facts are stated in the opinion of the Court.