Fink v. Farmers' Bank

Citations

• 178 Pa. 154
• 35 A. 636
• 1896 Pa. LEXIS 1146

Syllabus

<p>Equity — Mutual mistake of legal rights.</p> <p>Equity will not afford relief in cases of mutual mistake of legal rights where- it is impossible to restore both parties to the status quo.</p> <p>Principal and surety — Bond of cashier — Mutual mistake —Equity.</p> <p>The surety on the bond of a bank cashier who with knowledge of the facts but in mistake of the legal effect of them, has given his notes in settlement of a defalcation of the cashier, cannot maintain a bill in equity to compel the redelivery to him of the notes unless he can prove that the parties have remained in the status quo.</p> <p>Principal and, surety — Bond of bank cashier — Continuing employment.</p> <p>The contract of suretyship though only enforced according to its strict terms is nevertheless nothing more than a contract. No particular form of words is necessary to be observed, and in construing it courts should be governed by the rule applicable to all other contracts that the actual 'intention of the parties must prevail. As to official bonds the presumption that they apply only to the existing term of the officer may be admitted, but the presumption is very far from conclusive, and if it is clear that the parties meant to create a continuing liability, the bond must be held to have done so.</p> <p>Promissory notes — Consideration—Settlement of disputed claim.</p> <p>Promissory notes given by the surety on the bond of a bank cashier in settlement of a defalcation are supported by sufficient consideration where it appears that the bank forbore to sue on the bond; or that the notes were given as the result of negotiation and compromise; or that they were credited on the cashier’s account; or that in reliance on the settlement there was a change in the position of the parties so as to make a restoration of statu quo impossible; or that the bond was surrendered to the surety; or that the credit of the bank was maintained by the settlement; or that owing to the settlement permission was given