German American State Bank v. Watson

Citations

• 99 Kan. 686
• 163 P. 637

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Banking — Excessive Loam, to Customer — Accommodation Note by Third Party — Liability. Where a bank desires to make an additional loan to a customer, but can not do so because it has already lent him as much as the law permits, and for that reason induces another person to give his note for the amount, promising to hold him harmless in the matter, in legal contemplation the borrower*, who receives the money, and not the bank, which pays it out, is the party for whose accommodation the note is signed.</p> <p>2. Accommodation Note — Oral Agreement — Unavailable as a Defense. The maker of a note can not defend an action thereon by showing an oral agreement made at the time of its execution that he should not be held liable, for the reason that this would violate the rule forbidding the contradiction of the terms of a written instrument by parol evidence.</p> <p>S. Accommodation Note — Deceiving Bank Examiner — Liability. The maker of a note can not defend an action thereon by showing that it was executed without benefit to him, under an agreement exempting him from liability, in order to enable the bank to which it was payable to make an additional loan to a customer who had already borrowed to the limit allowed by law, for the reason that having voluntarily signed the note in order that the examiner might believe it to be an asset of the bank he ought not to be permitted to deny it that effect.</p> <p>4. Accommodation Note — Extension of Time —- Maker Not Released. The maker of a note given for the accommodation of one whose indebtedness is evidenced by a separate note to the same payee, is not released by the granting of an extension of time without his knowledge, or by the surrender of security to the person accommodated.</p>