First National Bank of Waterloo v. Story

Headnote

First Nat. Bank of Waterloo v. Story, 163 App. Div. 279 , affirmed.

Appeal from a judgment of the Appellate Division of the Supreme Court in the fourth judicial department, entered July 24, 1914, affirming a judgment in favor of defendants entered upon a dismissal of the complaint by the court at a Trial Term without a jury. The Water

loo Organ Company was engaged in the manufacturing business in the village of Waterloo, and defendant’s intestate was in the banking business at Waterloo and was interested in the organ company business. The organ company had to borrow considerable sums of money, and the plaintiff discounted its paper obligations and aided it in various ways. To secure the bank against any loss it might incur on account of organ company obligations, the bank required the parties interested in the enterprise to furnish it from time to time with security bonds, executed by these parties in their individual capacity. Nine of such bonds were furnished to the plaintiff in all, one in each of the years 1896 to 1902, inclusive, except the year 1900 in which there were three. The organ company was thereafter adjudged bankrupt. The last of these guaranty bonds was given in January, 1902, and after the organ company had been adjudged bankrupt plaintiff sued defendant as one of the signers of that bond and recovered the full amount of the bond, with interest. Thereafter this action was brought to recover upon a prior bond the amount of principal and interest due upon certain mortgage bonds issued by the organ company. The defense was that no demand had been made; that the guaranty bond in suit was one of a series of bonds given by defendant and others to the plaintiff as sureties to the Waterloo Organ Company, each of which bonds was a renewal of the one last previously given, and that the recovery by plaintiff on the 1902 bond, the last of the series, constituted" a full settlement and satisfaction of all claims of plaintiff against defendant on all the guaranty bonds, and that the organ company bonds were not obligations embraced within the scope and intent of the guaranty bond in suit.