McGrath v. Dougherty

The facts upon which plaintiffs base their cause of action are not seriously complicated. The Security Loan & Investment Company of Crestón, Iowa, was incorporated in 1920, for the purpose of selling and dealing in securities. The defendants were the incorporators. About the time of the incorporation the company entered into a contract with the Farmers & Merchants Savings Bank of Crestón, Iowa, which provided for the issuance of debenture bonds and this agreement provided that before any bonds could be issued there would be a deposit made with the bank of real estate mortgages of the face…