Central Bank & Trust Co. v. Jarrett

The question of law is this: In the event of insolvency and the appointment of a receiver for a debtor, has a secured creditor the right to resort primarily to the general fund for the payment of his debt?

The defendant, E. 0. Jarrett, was engaged in the grocery business in Asheville. He applied to the plaintiff bank for a line of credit in the sum of $19,450. Plaintiff agreed to advance said sum provided Jarrett and his wife would execute as security therefor a deed of trust upon certain real estate. Thereupon the plaintiff advanced to Jarrett the sum of $19,450, evidenced by notes made or…