Rankin

This is an appeal from a judgment in favor of the plaintiff in an action brought to foreclose a mortgage in which the defense is based upon the fact that the makers of the mortgage never received the money represented thereby.

In the fall of 1928, the appellants, for the purpose of completing a building they were erecting, applied to the First National Bank in Bakersfield for a loan of $25,000, proposing to draw the money from time to time as they needed it, and to pay interest thereon only as the money was used. The application was referred by the bank to its discount committee, one member of which was a man named Fitzgerald, a director in the bank; who was also the manager of a building and loan association in the same city. The bank desired to accommodate the appellants but felt unable to do so, and Fitzgerald stated that he thought he could get them a private loan. Shortly thereafter, Fitzgerald called upon the appellants, who knew he was connected with the bank, and “seemed to know all about the loan and what the terms were”. Fitzgerald then called upon the respondent who had $25,000 to loan and, at his suggestion, the respondent went to see the appellants. The respondent…