Fairbank v. Merchants' National Bank

Citations

• 132 Ill. 120
• 22 N.E. 524

Syllabus

<p>1. Security—pledge—change of form of indebtedness—renewals— effect upon the security, as a continuing security. The general rule is,, that the mere change of the form of the indebtedness does not release-the security given therefor, unless such was the intention of the parties. A renewal of the note evidencing the indebtedness, its merger in a judgment, or other change, not intended to operate 'as a discharge of the lien, still leaves it, as between the parties, in full vigor.</p> <p>2. Same—re-pledge of security—upon renewal—whether a release of pledge. A person pledged to a bank one hundred shares of railway stock belonging to his wife, to secure his notes, and a note of himself, and a partner. As these notes matured, new ones were executed and the interest paid in advance. This was continued for about four years, when the husband, instead of paying interest in advance, made to the bank a new note, payable in ninety days, for the amount of the last preceding note, and interest on the new note to its maturity, and the old note was given up to the maker, and entries were made in the bank books, showing a credit of the amount of the old note paid, and a debit for the amount due on account of the new note, and indicating the balance due. The new note recited the deposit, of that date, of one-hundred shares of stock, etc., as collateral security for this, and another note from the same maker and his partner: Held, that the mere renewals of the notes could not have had the effect of releasing the original pledge of the stock.</p> <p>3. Same—whether a new pledge—or a continuation of thetformer one. In the same transaction, not only was the prior note given up to the maker, but the written contract of pledge which accompanied it was surrendered to him. He then re-pledged the stock to the bank to-secure a new loan, and the wife’s right to certain dividends upon her stock depended on the fact whether this transaction was a new pledge-of her stock, or but a continuation o