SURETYSHIP - RELEASE OF SURETY

Authors

Abstract

Defendant was the surety on a fidelity bond of the treasurer of plaintiff corporation. The principal wrongfully deposited money in X Bank. This bank was about to be closed by the state, but Y Bank proposed to take over the assets and liabilities of X Bank if plaintiff would leave on deposit with them $200,000 for four years without interest. Plaintiff notified two of defendant's officers, but they lacked authority to act, and, prompt action being necessary, the arrangement was concluded without defendant's concurrence. At the end of the four years plaintiff sued defendant for the interest lost by reason of the treasurer's default and the agreement made necessary thereby. Held, the surety was released from liability. American Surety Co. v. Greek Catholic Union (U.S. 1932) 52 Sup. Ct. 235, 76 L. ed. 323.

Recommended Citation

SURETYSHIP - RELEASE OF SURETY, 30 Mich. L. Rev. 1347 (1932).
Available at: https://repository.law.umich.edu/mlr/vol30/iss8/25