Second National Bank v. Graham

Citations

• 246 Pa. 256
• 92 A. 198
• 1914 Pa. LEXIS 505

Syllabus

<p>Negotiable instruments — Promissory notes — Action against endorser — Acceptance of collateral notes — Payment of interest or discount on collateral notes — Extension of time of payment — Intention of parties — Reservation of recourse against endorser — Negotiable Instruments Act of May 16,1901, P. L. 19k></p> <p>1. Whether the acceptance of a new note is an extinguishment or payment of an old or is as collateral security depends upon the intention of the parties, the presumption being that it is only a further security for the indebtedness, and the burden of proving that the new obligation has been taken in payment is on the party asserting it. If the evidence is conflicting or the facts are in dispute, the question is for the jury.</p> <p>2. The receipt of interest in advance for a period beyond the maturity of a note is prima facie but not conclusive evidence of an agreement extending the time of payment, but evidence that notes deposited as collateral security for the payment of other notes were renewed from time to time, interest thereon collected in advance, and the time of payment extended will not of itself support a finding that the holder of the original note extended the time of payment of the later one.</p> <p>3. The holder of a negotiable instrument may relieve himself from the operation of the rule that a definite extension of time without the consent of the endorsers and for a consideration relieves- the endorser, by expressly reserving the right of recourse against the endorser, for in such case the right of action against the maker is not suspended.</p>