First National Bank v. Whitman

Citations

• 66 Ill. 331

Syllabus

<p>1. Subety&emdash;whether released by surrender of collateral. At the time of the execution of a note to a bank, the principal deposited with the bank ‘ certain other notes as collaterals for the protection of the surety in his note. The surety then left the United States, giving his brother a general power of attorney to transact any and all his business. After this note had matured, and before the surety’s return, the principal induced the bank, with the consent of the surety’s brother and agent, to discount a $325 note, one of the collaterals, of which $100 was paid to the principal, $150 applied in payment of another note the bank held on him and others, $35 applied to balance the principal’s bank account, and the balance of $32.44 credited upon the note sued on. In a suit on the note against the principal and surety, it was set up in defense that the consent of the agent was procured by means of representations by the bank that it held the collaterals as general security for what the principal owed them, and that such consent was upon the condition that the bank would assign the $150 note to the agent of the surety, but that the bank surrendered the same to one of the makers, who delivered the same to the agent, whereby it was extinguished. It also appeared that the principal gave the agent another collateral in the place of that surrendered, and that the agent received the $150 note knowing it to have been paid: Held, that an instruction to the jury to find for the defendant, if they found from the evidence that the collateral was surrendered to the principal under ethe arrangement made between the plaintiff, the principal, and the agent, and by means of the representations as alleged in the plea, was erroneous in not leaving the jury to find whether the agent did not assent to the payment of the $150 note, and did not receive it after its payment without indorsement and without objection, and as entirely ignoring the fact that other collateral security was