Felin v. Arrow Motor Machine Co.

The defendant is an insolvent corporation. In October, 1922, it executed a real estate mortgage on its factory building, and a chattel mortgage on its machinery, fixtures and personal property contained therein, to Anton Felin, its president, to secure $20,000. The mortgages were assigned to Robert J. Metzler, Inc., for a loan of $15,000 and a bonus of $5,000. The mortgages were made to Felin as a dummy for the Metzler company. The receiver sold the land and personal property as a unit for $34,000 subject to real estate mortgages of $21,000, but free and clear of the two mortgages of the…