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the “Law of Consideration” means essentially that a contract wasis null and void if both parties are not exchanging something of inherent value.

In this case, Jerome Daly defended himself against a lawsuit brought by a bank holding the mortgage on his house. Mr. Daly had defaulted on the mortgage and the bank was suing to foreclose and take his house.

Unfortunately for the bank, even though it was 1969 and all good little citizens were doing as they were told, never daring to question any kind of authority, Mr. Daly was well educated in the way banks create money. Mr. Daly knew that when a bank makes a loan, it instantly creates money by the stroke of a pen in a ledger, which then is transferred to the borrower’s account.

Mr. Daly argued, and somehow got the bank to admit, that they created the money with a stroke of a pen at the time of the loan (and that there was no actual official law empowering them to do so.) Since the bank did not “put up” anything of value (other than the ink from the pen) for Mr. Daly’s home mortgage, there was no consideration, therefore the mortgage agreement was null and void.

Justice Martin V. Mahoney ruled against the bank (in favor of Daly) and denied the foreclosure. Mr. Daly kept his house and paid no more mortgage. Six months later Justice Mahoney was found dead (allegedly by poison) and Mr. Daly was disbarred and never practiced law again.

 

Brief summary of the facts:

  1. Jerome Daly had a mortgage with the First National Bank of Montgomery , Minnesota .
    In Spring 1967, he was $476.00 in arrears, the bank foreclosed and bought the property at a Sheriff’s sale on June 26, 1967.
    The bank sued for possession.
  2. A jury trial presided over by Martin V. Mahoney, Justice of the Peace, Credit River Township , Scott County, Minnesota, was held on December 7, 1968.
  3. The bank’s president, one Lawrence V. Morgan (familiar name?) appeared along with lawyer R. Melby for the plaintiff and Jerome Daly, who was a lawyer, appeared on his own behalf.

“The Credit River Decision,” which is, still “The Law of the Land” declared the following:

  1. the Federal Reserve Act is unconstitutional and VOID
  2. the National Banking Act is unconstitutional and VOID
  3. the mortgage acquired by the First National Bank of Montgomery, Minnesota in the regular course of its business, along with the foreclosure and the sheriff’s sale, to be VOID

 

The decision:

1.That the Plaintiff is not entitled to recover the possession of Lot 19, Fairview Beach, Scott County, Minnesota according to the Plat thereof on file in the Register of Deeds office.

2.That because of failure of a lawful consideration the Note and Mortgage dated May 8, 1964 are null and void.

3.That the Sheriff’s sale of the above described premises held on June 26, 1967 is null and void, of no effect.

4.That the Plaintiff has no right title or interest in said premises or lien thereon as is above described.

5.That any provision in the Minnesota Constitution and any Minnesota Statute binding the jurisdiction of this Court is repugnant to the Constitution of the United States and to the Bill of Rights of the Minnesota Constitution and is null and void and that this Court has jurisdiction to render complete Justice in this Cause.

 

THE MAHONEY CREDIT RIVER DECISION

RE: First National Bank of Montgomery vs. Jerome Daly

IN THE JUSTICE COURT

STATE OF MINNESOTA

COUNTY OF SCOTT

TOWNSHIP OF CREDIT RIVER

JUSTICE MARTIN V. MAHONEY

First National Bank of Montgomery,
Plaintiff
vs
Jerome Daly,
Defendant

JUDGMENT AND DECREE

The above entitled action came on before the Court and a Jury of 12 on December 7, 1968 at 10:00 am. Plaintiff appeared by its President Lawrence V. Morgan and was represented by its Counsel, R. Mellby. Defendant appeared on his own behalf.

A Jury of Talesmen were called, impaneled and sworn to try the issues in the Case. Lawrence V. Morgan was the only witness called for Plaintiff and Defendant testified as the only witness in his own behalf.

Plaintiff brought this as a Common Law action for the recovery of the possession of Lot 19 Fairview Beach, Scott County, Minn. Plaintiff claimed title to the Real Property in question by foreclosure of a Note and Mortgage Deed dated May 8, 1964 which Plaintiff claimed was in default at the time foreclosure proceedings were started.

Defendant appeared and answered that the Plaintiff created the money and credit upon its own books by bookkeeping entry as the consideration for the Note and Mortgage of May 8, 1964 and alleged failure of the consideration for the Mortgage Deed and alleged that the Sheriff’s sale passed no title to plaintiff.

The issues tried to the Jury were whether there was a lawful consideration and whether Defendant had waived his rights to complain about the consideration having paid on the Note for almost 3 years.

Mr. Morgan admitted that all of the money or credit which was used as a consideration was created upon their books, that this was standard banking practice exercised by their bank in combination with the Federal Reserve Bank of Minneapolis, another private Bank, further that he knew of no United States Statute or Law that gave the Plaintiff the authority to do this. Plaintiff further claimed that Defendant by using the ledger book created credit and by paying on the Note and Mortgage waived any right to complain about the Consideration and that the Defendant was estopped from doing so.

At 12:15 on December 7, 1968 the Jury returned a unanimous verdict for the Defendant.

Now therefore, by virtue of the authority vested in me pursuant to the Declaration of Independence, the Northwest Ordinance of 1787, the Constitution of United States and the Constitution and the laws of the State of Minnesota not inconsistent therewith ;

IT IS HEREBY ORDERED, ADJUDGED AND DECREED:

1.That the Plaintiff is not entitled to recover the possession of Lot 19, Fairview Beach, Scott County, Minnesota according to the Plat thereof on file in the Register of Deeds office.

2.That because of failure of a lawful consideration the Note and Mortgage dated May 8, 1964 are null and void.

3.That the Sheriff’s sale of the above described premises held on June 26, 1967 is null and void, of no effect.

4.That the Plaintiff has no right title or interest in said premises or lien thereon as is above described.

5.That any provision in the Minnesota Constitution and any Minnesota Statute binding the jurisdiction of this Court is repugnant to the Constitution of the United States and to the Bill of Rights of the Minnesota Constitution and is null and void and that this Court has jurisdiction to render complete Justice in this Cause.

The following memorandum and any supplementary memorandum made and filed by this Court in support of this Judgment is hereby made a part hereof by reference.

BY THE COURT

Dated December 9, 1968

Justice MARTIN V. MAHONEY

Credit River Township

Scott County, Minnesota

MEMORANDUM

The issues in this case were simple. There was no material dispute of the facts for the Jury to resolve.

Plaintiff admitted that it, in combination with the Federal Reserve Bank of Minneapolis, which are for all practical purposes, because of their interlocking activity and practices, and both being Banking Institutions Incorporated under the Laws of the United States, are in the Law to be treated as one and the same