- 29 -
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
Page: Previous 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 NextLast modified: May 25, 2011