Farmers & Merchants State Bank v. Beal

Citations

• 102 Kan. 481
• 170 P. 1007
• 1918 Kan. LEXIS 71

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>Promissory Note — Collateral Security — Innocent Holder — Extension. A bank loaned a sum of money to a customer, taking his promissory note therefor, secured by that of another, payable to such customer, as collateral. The consideration for the collateral note failed. The bank extended the collateral note at the request of the maker, and on payment of interest by him. After the original date of maturity, and before the expiration of the extension of the collateral note, the bank returned the principal note to the borrower, marking it paid on its ledger, and took over the collateral note, entering it as discounted on its record. There was nothing in the evidence to indicate any notice or knowledge on the part of the bank of any infirmity in or defense to the collateral note. Held, that as to the defendant, Beal, the bank is an innocent holder.</p>