Court Opinion

ID: 6243603
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:51:37.30076+00
Date Added: 2024-06-11T08:58:16.644014
License: Public Domain

Opinion by
Mr. Justice Green,
Had the plaintiff bank held the mortgage and bond without condition or restriction, they would undoubtedly have been subject to the rules which regulate the holding of collaterals by creditors when the rights of sureties or indorsers are concerned. If they had not used the securities' to protect thosé contingently liable, or had suffered them to be lost or postponed by neglect, or had not availed themselves of opportunities to realize upon them, they would have been liable for the consequences, and the authorities upon wMch the appellant relies would have been directly applicable. But these securities were not so held and they were not so obtained. On the contrary the testimony shows that when Friteh & Bro. gave the note in suit and agreed' to give as collateral the bond and mortgage of A. L. Friteh it was upon the express condition that they were not to be entered of record unless something thereafter occur which the bank should consider made it necessary to take such action. The letter of Mr. Wright, president of the bank, dated November 4,' 1893, contains an express recognition of tMs condition in these words: “ The condition being also that we shall not enter it of record unless sometMng should occur to lead us to believe that such action is necessary.” We know of no reason why it was *504nrot lawful for tlie bank to accept tbe security upon such a- com dition. Mr. M. L. Fritch, who conducted the transaction on the part of the firm, testified that he refused to give the mortgage except upon this condition, and in this he was corroborated by the testimony of Mr. Wright. There was no contradiction of this evidence, and it must therefore be regarded as an established fact that the mortgage was given upon the express condition stated. If it was lawful for the bank to accept the security upon the condition named, they were bound to keep their contract and cannot be charged with neglect for not securing the debt by violating it. This is the circumstance which takes this case out of the operation of the rule which ordinarily affects creditors holding collateral securities where there are sureties or indorsers concerned. The opinion of the learned court below on the motion for a new trial contains a full and satisfactory treatment of the subject, and for the reasons there stated and upon the considerations herein expressed, we affirmed the judgment.
Judgment affirmed.