Gray v. Farmers' National Bank

Citations

• 81 Md. 631
• 32 A. 518
• 1895 Md. LEXIS 89

Syllabus

<p>Liability 'of Surety on 'Note — Delay in Proceeding Against Principal Debtor — Authority of Cashier of Bank — Renewal Notes.</p> <p>A bank cashier has no authority by virtue of his office to accept a new note for an existing indebtednéss to the bank so as to discharge a surety on the first note, or to make a contract so to do.</p> <p>A creditor does not lose his right to enforce the liability of a surety by mere delay to proceed against' the principal debtor or to enforce a sale of property held as security for the debt.</p> <p>Plaintiff was a surety on a note given to the defendant bank by A. The note was secured by a deed of trust of the property of A., the principal debtor, and was renewed from time to time, the plaintiff signing the renewal notes until 1885, when he informed A. that he would no longer sign a renewal. The bank was notified of plaintiff’s refusal, and, after the maturity of the last note signed by plaintiff, a renewal note was presented to the bank without plaintiff’s name. This was declined and returned to A., and plaintiff informed thereof. Subsequently the bank agreed to renew the note without plaintiff, provided other security was obtained in his place, with the assent of the co-sureties, and interest and discount paid ; but. no renewal note was in fact accepted. A. expected to renew the note, and deposited with the bank to his individual credit funds to meet the discount and interest. In 1886 the cashier, the note being overdue for nearly a year, made an entry on the books by which these funds were placed to the credit side of the bank’s account as interest on the note. . An action was brought on the last note signed by plaintiff and judgment obtained against him. After-wards he filed a bill to restrain execution, alleging that he was ignorant at the time of the action of the facts concerning the renewal of the note. Held,</p> <p>1st. That the bank did not in fact agree to release plaintiff except upon conditions that had not been complied