Schmitz v. Smentowski
New Mexico Supreme Court
109 N.M. 386, 785 P.2d 726 (1990)
- Written by Sharon Feldman, JD
Facts
Keith and Opal Mock (the Mocks) (plaintiffs) bought property from the Edmondsons and sold property to Roger Schmitz. The Mocks received a promissory note from Schmitz and gave the Edmondsons a mortgage. For tax purposes, the Schmitz note was payable to Leo Smentowski. Smentowski paid the Edmondsons on the Mocks’ behalf. Smentowski obtained a loan; the bank (defendant) took the Schmitz note as collateral. Smentowski defaulted. The bank knew Smentowski had no beneficial interest in the note but notified Schmitz to pay the bank. To prevent foreclosure, the Mocks borrowed on their line of credit, making the line unavailable for their cattle-raising business. The Mocks sued the bank for prima facie tort. The jury found for the Mocks. On appeal, the bank argued that the court should not recognize prima facie tort as a cause of action and the Mocks failed to show that the bank was motivated solely by malicious intent.
Rule of Law
Issue
Holding and Reasoning (Baca, J.)
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