Allentown National Bank v. Trexler

Citations

• 174 Pa. 497
• 34 A. 195
• 1896 Pa. LEXIS 913

Syllabus

<p>Principal and surety — Condition attached to deposit of collateral — Mortgage — Banks and banking.</p> <p>A national bank may take a bond and mortgage as collateral security for a note, with a condition that the bond shall not be entered up unless something shall occur to lead the bank to believe that such action is necessary ; and the failure of the bank to enter up the bond or to record the mortgage until it is too late to realize anything thereon will not discharge an accommodation indorser from liability on the note.</p> <p>A national bank loaned money on a note indorsed by an accommodation indorser and took, as collateral security for the payment of the note, a bond and mortgage, with the agreement that the bond should not be entered up unless something should occur to lead the bank to believe that such action was necessary. It did not appear that the accommodation indorser knew anything of the character and nature of the collateral. Held, (1) that the entry of judgment upon the bond was a matter altogether within the discretion of the bank; (2) that the entry of judgment or the recording of the mortgage was not for the purpose of protecting the accommodation indorser, but the bank; (3) that the indorser was not discharged by the omission of the bank to enter judgment upon the bond, when it had no notice of other judgments being entered against the maker.</p>