Judge rules foreclosures illegal: Banks lack real consideration
Tuesday, October 28th, 2008This article was written by Ellen Brown, July 3rd, 2007. It’s a powerful case documenting that banks have no legal standing to foreclose on people’s homes lacking having made real consideration in the loan.
First National Bank of Montgomery vs. Daly (1969)
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http://www.webofdebt.com/articles/dollar-deception.php
Excerpts:
First National Bank of Montgomery vs. Daly (1969) was a courtroom
drama worthy of a movie script.3
Defendant Jerome Daly opposed the bank’s foreclosure on his $14,000
home mortgage loan on the ground that there was no consideration for
the loan. “Consideration” (“the thing exchanged”) is an essential
element of a contract.
Daly, an attorney representing himself, argued that the bank had put
up no real money for his loan. The courtroom proceedings were
recorded by Associate Justice Bill Drexler, whose chief role, he
said, was to keep order in a highly charged courtroom where the
attorneys were threatening a fist fight.
Drexler hadn’t given much credence to the theory of the defense,
until Mr. Morgan, the bank’s president, took the stand.
To everyone’s surprise, Morgan admitted that the bank routinely
created money “out of thin air” for its loans, and that this was
standard banking practice. “It sounds like fraud to me,” intoned
Presiding Justice Martin Mahoney amid nods from the jurors. In his
court memorandum, Justice Mahoney stated:
Plaintiff admitted that it, in combination with the Federal Reserve
Bank of Minneapolis, . . . did create the entire $14,000.00 in money
and credit upon its own books by bookkeeping entry. That this was
the consideration used to support the Note dated May 8, 1964 and the
Mortgage of the same date. The money and credit first came into
existence when they created it. Mr. Morgan admitted that no United
States Law or Statute existed which gave him the right to do this. A
lawful consideration must exist and be tendered to support the Note.
The court rejected the bank’s claim for foreclosure, and the
defendant kept his house. To Daly, the implications were enormous.
If bankers were indeed extending credit without consideration –
without backing their loans with money they actually had in their
vaults and were entitled to lend – a decision declaring their loans
void could topple the power base of the world. He wrote in a local
news article:
This decision, which is legally sound, has the effect of declaring
all private mortgages on real and personal property, and all U.S.
and State bonds held by the Federal Reserve, National and State
banks to be null and void. This amounts to an emancipation of this
Nation from personal, national and state debt purportedly owed to
this banking system. Every American owes it to himself . . . to
study this decision very carefully . . . for upon it hangs the
question of freedom or slavery.
The creation of money has been privatized, usurped from Congress by
a private banking cartel. Most people think money is issued by fiat
by the government, but that is not the case. Except for coins, which
compose only about one one-thousandth of the total U.S. money
supply, all of our money is now created by banks. Federal Reserve
Notes (dollar bills) are issued by the Federal Reserve, a private
banking corporation, and lent to the government.1 Moreover, Federal
Reserve Notes and coins together compose less than 3 percent of the
money supply. The other 97 percent is created by commercial banks as
loans.2
Don’t believe banks create the money they lend? Neither did the jury
in a landmark Minnesota case, until they heard the
evidence.http://www.webofdebt.com/articles/dollar-deception.php