The indorser on the note in suit gave his assent to the holder's release of the insolvent maker in return for a deed to certain real estate given by the maker. In reply to demands of the holder for the balance remaining due after sale of the real estate, the indorser stated he would pay the note, but asked for time. On failure of the indorser to pay, this suit was brought. Held, for the plaintiff. Consent of the indorser to release of the maker is not equivalent to an express reservation of rights as required by section 120(5) of the N.I.L. to preserve the liability of the indorser. Consent to the release, however, when considered with the other facts, was sufficient evidence for a jury to find a valid and binding agreement that the indorser was to remain liable after release of the maker, which agreement is to be treated as a casus omissus to section 120(5) and governed by the common law. Howard Nat. Bank & Trust Co. v. Newman, (Vt. 1947) 50 A. (2d) 896.
Bruce L. Moore,
BILLS AND NOTES-ASSENT BY INDORSER TO RELEASE OF MAKER AS UNDERTAKING BY FORMER TO CONTINUE LIABLE-SECTION 120, N.I.L.,
Mich. L. Rev.
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