Fitchburg Savings Bank v. Rice

Soule, J. The memorandum on the note, “ $25,000, Framingham and Lowell Railroad bonds as collateral,” is capable of several interpretations, but cannot be construed as notice to the plaintiff of an agreement between the principal and sureties that he would pledge the bonds named as security for the note, [76] nor as annexing, to the absolute promise contained in the note, the condition precedent that the plaintiff should receive the bonds named as security. The plaintiff, therefore, was under no obligation to take care of the interests of the sureties by refusing to lend the money on the note and a different security from that named in the memorandum; nor did it lose any rights against them by failing to observe that the collaterals left were notes instead of bonds. It had a right to assume that all parties to the note were aware of the details of the transaction, and assented to what was done; or, more properly, that what was done was the act of all. The answers given by the treasurer of the plaintiff to the inquiries of the defendant Brown did not release any of the sureties from their obligation to pay the note. The principle is well established, as contended by the defendants, that the surety is released by any false statement made by the creditor as to the existing condition of the debt, which puts him off his guard, and causes him to lose the opportunity to protect himself, although the statement is innocently made. Baker v. Briggs, 8 Pick. 122. Carpenter v. King, 9 Met. 511. But the facts do not bring this case within that principle. The treasurer of the plaintiff would naturally understand the inquiries of Brown to be directed merely to the point of ascertaining whether the plaintiff still held the securities which it took when the loan was made, or had surrendered them. Nothing in the form of the inquiry directed attention to the question whether the securities left were of the kind named in the memorandum or not. If Brown wished information on that point, he should have inquired more particularly. The questions were answered truly in the sense in which the treasurer had a right to understand them; and it does not appear that Brown intended them in any other sense. His testimony, therefore, that, if he had known that the collaterals were notes and not bonds, he should have taken steps to collect the note, has no bearing upon the rights of the parties. The evidence offered by the defendants constituted no defence to the action, and the ruling at the trial was correct. Judgment on the verdict.