Merchants & Mechanics Federal Savings & Loan Assn. v. Evatt

The sole inquiry is whether the proceeds of construction-mortgage loans credited to borrowers in a general account on the books of a savings and loan association, as due borrowers (after checks for the proceeds of the respective loans have been endorsed by the mortgagors and turned back to the association) with no names of individual borrowers except as found in a breakdown showing specific transactions, constitute taxable deposits.

The method of making the loans, as shown by the agreed statement and the evidence may be simply stated: The borrower executes and delivers to the association his…