Davidson v. Plant

Citations

• 113 Miss. 482
• 74 So. 328

Syllabus

<p>1. Bills and Notes. Release. New note by different party.</p> <p>The execution and acceptance of new notes with a new principal obligor releases the old note for which the renewal notes were given.</p> <p>2. Peincipal and Surety. Agreement as to application of payments.</p> <p>Where P. signed a note of M. to a bank apparently as co-maker but in reality as a surety, an agreement with the bank “that when M. shall pay into the bank upon his present indebtedness the amount that P. is indorser for him, that the said P. shall then he released of his indorsement and obligation in full upon the note of said M.” is valid and binding on the parties and in such case it is immaterial that P. is a director of the bank.</p> <p>3. Same.</p> <p>The benefits of such an agreement as between the bank and P. are not varied by the fact that P. was a' director' of the bank, that this note was carried for several years as a part of the bank’s assets; that is was reported along with the other bills receivable to the directors at their regular meetings and that P. at none of these meetings, advised the board of directors that he was relying upon the written agreement in question, but on the contrary, permitted the bank to discount the note and use it as a basis of credit, the party to whom the bank assigned or pledged the note at any time not. being a party to the litigation and ’not complaining, and the bank not being injured by such conduct of P.</p>