Eddie Cordes, Inc., et al. - Page 29




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               Mr. Cordes later collected payments of principal and                   
          interest on those notes and transferred those payments to CFC in            
          exchange for additional notes.  Petitioners have failed to offer            
          any evidence that those subsequent transfers to CFC were other              
          than funds used to purchase notes.  Petitioners contend instead             
          that CFC owned the notes because the borrowers were never told to           
          make payments to Mr. Cordes, the ledger cards were merely moved             
          across the room, payments were still made payable to CFC, and               
          those payments were ultimately deposited in CFC’s account.                  
               We reject petitioners’ contentions for several reasons.  The           
          borrowers’ beliefs regarding the identity of the lender, and the            
          retention of the ledger cards in the same room, are of                      
          comparatively little relevance in these circumstances.  What is             
          more relevant is that CFC treated the notes as satisfied and                
          completely removed the records from its computer and files, going           
          so far as to claim deductions for bad debts, and Mr. Cordes added           
          the records to his files and treated them as outstanding debts              
          owed to him.  Moreover, any payments delivered to CFC were                  
          promptly forwarded to Mr. Cordes.  Although CFC’s employees                 
          occasionally collected the payments from the borrowers, recorded            
          them in Mr. Cordes’s records, and issued receipts for those                 
          payments, they did so on behalf of Mr. Cordes.                              
               We also reject petitioners’ allegation that Mr. Cordes                 
          merely held the payments “in escrow”, ultimately delivering them            
          to CFC.  We presume petitioners’ argument is that because Mr.               
          Cordes never deposited the payments in his own account, he did              





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