Court Opinion

ID: 6718535
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:50:40.440586+00
Date Added: 2024-06-11T16:01:32.695850
License: Public Domain

CHITTENDEN, J.:
Epitomized Opinion
The Ohio Savings Bank & Trust Company brought an action on various promissory notes. A corporation borrowed money of a bank and gave certain notes for the loan, secured by collateral, and the personal endorsement of two of the officers of the Marleau-Bucklen-Schoen Company. As the company could noil pay these notes when they matured, the time was extended. and new notes given. At the time these new notes were given a contract was entered into by the parties. Shortly afterwards the bank brought suit on the old notes against the indorsers. The defendants claimed that the contract was a novation and that the new notes were substituted for the old. The lower court held that the action was prematurely brought, and also held' that there was no novation. The plaintiff bank prosecuted error. The Court of Appeals held:
1. That as the terms of the agreement showed that Ihe new notes were not aken as a substitute, so as to extinguish the old notes, no novation had taken place.
2. That inasmuch as the contract specifically provided that the agreement should in no wise affect the rights of the holders of the original notes, those holders might sue at any' tinje after the notes became due. '