
    James Payne et al. vs. The Commercial Bank of Natchez.
    A mere voluntary engagement to indulge the principal debtor will not discharge the surety.
    There must he a positive and binding agreement between the creditor and principal debtor, based upon some new and valuable consideration, sufficient to tie up the creditor, and prevent him from asserting any remedy, during the time for which the indulgence has been given, against the principal, in order to effect a release of the surety.
    L. being indebted to the Commercial Bank, in various notes, upon which he was liable, either as indorser or maker, and on which other persons were sureties for him, to reduce his liability to a single amount, proposed to the cashier of the bank to execute his individual note for the sum total due the hank, and confess a judgment, in Louisiana, on the note thus made, which judgment should bind all his property, and be in discharge of the notes on which he was liable; the cashier, on consultation with several of the directors, agreed to the arrangement, to be consummated when L. had, at his own expense, carried the arrangement into effect, and exhibited to the bank satisfactory evidence of it. L. after this agreement, and before he confessed the judgment, sold all of his property in Louisiana which the judgment was to bind, to B., and then executed his note for the sum total, payable to the bank, and confessed the judgment, as agreed upon : Held, that the agreement of the bank, being purely conditional, and that condition not being complied with by L., the bank might disregard the arrangement with L. and sue upon the original notes against all the parties to them.
    
    A creditor who takes collateral security for his debt, is bound to hold it impartially and justly; and if it be lost by his negligence or improper conduct, the surety on such debt may bar the creditor of so much of his demand as he might have received from such collateral.
    L. being indebted to a bank on sundry notes, as maker or indorser, on some of which notes other persons were bound as sureties for him, proposed an arrangement to the bank for their adjustment, by the substitution of his individual separate note for the.sum total, to be secured by confession of judgment to bind his property in Louisiana, to which proposal the hank acceded ; to be complete when proper evidence of its consummation was given to the bank. Previous to this proposal L. had deposited with the bank two hundred shares of bank stock as collateral security for the payment of these notes. L., having first sold his property in Louisiana, executed his note, and confessed the judgment in favor of the bank, without notifying the bank, or the bank’s ratifying it; execution issued on this judgment, and the sheriff, to whose hands it came in Louisiana, sold the bank stock for $2200, to B., and gave B. an order on the bank for the stock, which delivered it to B.; the bank never received the proceeds of the sale of the bank stock, nor did it appear what had become of them: Held, in a suit by the bank on the original notes, that the parties to them were not entitled to a credit thereon for the amount of said stock ; as the security of the stock had not been lost; for if the sheriff’s sale changed the title, its proceeds would be within their reach, and if the sale had not changed the title the stock would be subject to their order.
    Where in an action by a bank against the parties to a note held by it, it appeared in proof that the cashier of the bank had made an agreement which, if carried out, would have discharged all the parties to the note but one; and that he had made that agreement after consulting with two or more of the directors, and the court instructed the jury that the cashier of the bank had no authority to bind the bank by any contract that would release parties, but that if he acted on consultation with two or more of the directors, then' his acts would be binding on the bank; held, that the entire instruction, taken together, and applied to the facts, would not be erroneous in its conclusion.
    In error, from the Adams circuit court, Hon. C. G. Cage, judge.
    The Commercial Bank of Natchez sued Simon Murchison and Harrison Doyal, James Payne and John P. Walworth, as indorsers of a note made by Silas Lillard, for the sum of $7076 88, dated February 5, 1838, and payable twelve months after date. In the declaration, Lillard was averred to be a nonresident.
    The defendants plead non-assumpsit, accompanied with notice that under that plea they would set up as defence that the plaintiffs had discharged the defendants from liability as indorsers on the note sued on, by giving time to the maker of the said note, on good consideration, without their consent; the plaintiffs having taken a new note from the maker, and a confession of judgment thereon, and made sale of property of the maker, under the judgment, and which last note they expected to prove was given in consideration, partly, of the note on which the defendants were sued.
    
      The case was, on this state of pleading, submitted to a jury, who found for the plaintiff the full amount of principal and interest sued for. The defendants moved for a new trial, which was refused, and they filed a bill of exceptions; from which the following facts appear :
    The plaintiffs having read the note sued on, and fixed the liability of the indorsers by proof of demand and notice, the defendants read the deposition of Lillard, the maker of the note, who testified that about the 28th day of March, 1840, he executed and delivered to the plaintiffs a note for $31,593 02, payable three days after date; the consideration of which was for sundry notes, for which he was liable as drawer and indorser ; the single note being given to concentrate all his indebtedness to the plaintiffs into one debt, including the note sued on ; that the single note given by him was then in judgment in the district court of Louisiana, in and for the parish of Concordia; that $2200 of it had been paid by the sale of two hundred shares of stock in the Commercial Bank of Manchester, in the summer of 1840; that the plaintiffs held as security for this note, upon which judgment had been thus confessed, the said bank stock, and the notes of R. C. Ballard, amounting to $30,000, with a mortgage on his plantation in Louisiana, to secure the payment of the same; that this confessed judgment was a lien on the said stock, and notice of said Ballard; that previous to the confession of judgment he had sold his plantation in Louisiana, to Ballard, and taken from him, in part payment, and for the purpose of selling his debt to the plaintiffs, the notes of Ballard, for $30,000 secured by mortgage upon the property, and had also taken the $20,000 in the stock above.-mentioned; that he offered to the plaintiffs in payment of this note for $31,593 02, the stock and the notes of Ballard; which notes the bank might have sold under the judgment, in Louisiana, as it did the stock; but it disliked the notes, and returned them to him after the judgment; and one of them was subsequently paid to the bank for the United .States Bank, for another debt of his to that bank. The bank stock sold for eleven dollars a share, but was worth from fifty to seventy-five.
    
      The defendants read also to the jury the manuscript from the records of the district court of the parish of Concordia, of the suit of the bank against Lillard, on the note for $31,598 02; by which it appeared that the bank had filed its petition upon a note of that amount, dated March 28, 1840, payable to the plaintiffs, three days after date; upon which a judgment final was rendered on the 21st day of December, A. D. 1840; an execution issued upon this judgment, and was levied on two hundred shares of bank stock of the Commercial Bank of Manchester, of the state of Mississippi, as the property of Lillard ; and which was sold under the execution to Ballard, for the price of eleven dollars per share.
    To rebut this testimony, on the part of the plaintiffs, Thomas Henderson testified that he was cashier of the Commercial Bank of Natchez, when Lillard called at the bank to make an arrangement to take up all his liabilities to the bank; that Lillard proposed to confess a judgment for the full amount due, and put the judgment in such a position as to bind all his property ; to employ his own counsel, and to pay the expenses attending the confession of said judgment.
    That, after consulting one or two of the directors, he agreed with Lillard that when the judgment should have been confessed, so as to bind all of his property, and evidence of the fact produced to the bank, that the bank would give up the paper of Lillard, including the note sued on, and discharge his securities ; that in order to complete the arrangement Lillard called on him for a memorandum of the amount due the bank, which he gave to him. The agreement was entirely a conditional one, intended and understood to depend on the confession of judgment in such a manner as to bind all Lillard’s property in the state of Louisiana, and on the condition that it should be so confessed, and the bank notified of it at Lillard’s expense.
    That after this understanding took place, and before any confession of judgment, Lillard sold his plantation and negroes in Louisiana to Ballard, which was the property intended to be bound by the judgment to be confessed.
    That some time before this understanding took place, Lillard delivered to him two hundred shares of stock in the Commercial Bank of Manchester, which he was to hold for Lillard, as collateral security for all of his debts due the bank, including the one sued on in the pending suit. That after the sale of the property to Ballard, Lillard confessed a judgment to the bank, and execution issued on it, under which the bank stock was sold to Ballard for the $2200; but the plaintiffs had never received any portion of it.
    That he never gave, and never agreed to give, any time or indulgence to Lillard, in any manner whatever. That he gave Lillard the memorandum referred to at his own request, and to enable him to carry out his own arrangement. That he had no authority, by any resolution of the board of directors, or otherwise, to make any arrangement with Lillard, but that he was in the habit of making such arrangements, in consultation with some of the directors.
    That the bank stock was given to him by Lillard, after the maturity of all Lillard’s liabilities, and was delivered up to Ballard by order of the sheriff of Concordia parish, Louisiana, who had sold it under execution. That the bank did not any time relinquish the right to sue, either Lillard or his indorsers.
    On this testimony, at the instance of the plaintiffs, the court charged the jury:
    1. That the agent, or cashier, has no authority to bind the bank by a contract that would release parties from the note.
    2. To release an indorser the engagement must be upon a good consideration, and binding, and on that will suspend the remedy of the holder, so as to prevent his bringing any action upon the note.
    3. Unless the judgment given by Lillard in Louisiana, bound all his property, and secures the lien to the plaintiffs, and that this contract was ratified and agreed to by the plaintiffs, the law is with the plaintiffs.
    To which charges the defendants excepted, and moved for the following:
    1. If the jury believe that the plaintiff had, as collateral security for the payment of the note sued on, two hundred shares of bank stock, and voluntarily parted with it, either by suffering it to be withdrawn by the party depositing it, or by sale, without authority and consent of the indorsers, or by due course of law, the indorsers are thereby legally discharged, at least to the extent of the security which was deposited.
    2. If the jury believe that the plaintiffs gave the maker of the note any delay whatever, even one day, on a valid agreement, without the consent of the indorsers, the indorsers are thereby discharged.
    3. That if a party takes from his debtor a note payable three days after date, in payment of a precedent debt, he cannot proceed upon either the debt or the note, until after the three dáys.
    4. The testimony of Lillard, that he gave the $>31,000 note to the bank, is competent evidence until disproved.
    5. That if they believe the stock was in bank as collateral security for this debt and others, and has been given up by the bank without the assent of the indorsers, then they are released for an amount equal to the portion of stock to which it would be entitled.
    6. That if the acts of the cashier were made in consultation, with two or more of the directors, such acts are binding on the-bank.
    7. If they believe the cashier was authorized to make such, contracts as are set up in the defence, it was binding-on tho bank.
    8. If plaintiffs accepted of the judgment • against Lillard in Louisiana, and undertook to enforce satisfaction, by execution, it may be presumed they accepted it in satisfaction of the notes held by the bank, in accordance with the agreement with the cashier. All of which were given.
    The defendants prosecute this writ of error.
    
      Montgomery and Boyd, for plaintiffs in error;
    From the whole of the testimony we think it is clear that the plaintiffs entered into an informal agreement with Lillard for the liquidation of the note sued, on ; but owing to-the change of the condition of Lillard’s property, before the arrangement was completed, it was broken off, and nothing definite done. The testimony, however, is somewhat contradictory, and therefore the law should have been properly propounded, so that they could apply it to the facts as they understood them. The first charge given was calculated to lead the mind of the jury from the investigation of the true issue. It was virtually withdrawing from the jury the consideration of the question how .far Henderson’s agreement as cashier, constituted a valid agreement to give time to Lillard, .without the knowledge or consent of the indorsers of the note. And we think, from the evidence of Lillard and Henderson, there was a valid agreement to give time, until the confession of judgment in Louisiana, which would operate as a lien. And such an agreement would discharge the indorsers. The acts of the parties under the agreement shows the understanding they had of its meaning. The circumstance that Lillard confessed a judgment for the debt, under rvhich an execution issued, which was levied on stock of the Commercial Bank of Manchester, which was then in the possession of the plaintiffs, as collateral security for this debt, and that the plaintiffs delivered the stock to the purchaser, under the sheriff’s order, tend very strongly to show, that until then at least all parties were satisfied with and disposed to complete the arrangement, and for that purpose time was given the maker of the note.
    Now, had the cashier authority to make such an arrangement? We think he had, according to law, the custom of the bank, and his own evidence as to his powers. As a general rule the agents of a corporation, acting within the scope of their agency, can bind the corporation by simple contract, as well as by specialty. 3 Harris & John. 367; 3 Halst. 182; 8 Pick. 178.
    But if the cashier was not authorized by his general powers, yet, as he made the agreement, and the plaintiffs availed themselves of its benefits, so far as to cause a sale of the bank stock, such act satisfies the contract, and makes the corporation liable. 1 Pick. 372; 7 Cranch, 299; 19 John. 60.
    
      The evidence of Henderson, that he was in the habit of making such arrangements, with the advice of two or three directors, proves that it was the custom of the bank to transact business in that manner.
    If we are correct in these positions, the defendants were discharged, and the jury should have so found.
    But if the whole negotiation and arrangement with Lillard passes for nothing, then we insist the defendants were, under the law and the evidence, entitled to a credit for a proportional amount of the true value of the bank stock, which was held as collateral security for this and other notes, amounting, in all, to $31,593, which would entitle this case to a credit of about thirty per cent, of the bank stock. 4 John. C. R. 129; 1 McCord’s Ch. R. 112.
    If the creditor releases any of the securities he has for the payment of the debt, it discharges the surety. 1 McCord Ch. R. 443. It at least amounts to a discharge pro tanto. 3 Paige’s R. 614; 1 John. C. R. 414; 6 Mon. R. 188; Pothier on Ob. No. 520; Pow. on Mort. 871, note; 1 Nott. & McCord, 118.
    Eustis, on the same side.
    It seems to us that this was an agreement on the part of the creditor giving time to the principal without consent of the surety. Take the agreement as understood by the cashier, it is evident that time was necessary, within which to comply with the conditions ; a reasonable time to perfect the judgment, and obtain the required lien, was the right of Lillard in order to fulfil conditions, which fulfilled, would have discharged the note now sued on. During this reasonable time, the bank could not have sued.
    " The rule is, that when a creditor without the consent of the sureties, gives time (by express agreement, not by mere quiescence) to the principal debtor, by so doing he discharges the surety.” Samuel v. Howarth, 3 Meriv. 278; Eyre v. Bartrop, 3 Mad. 225; Bedford v. Deakin, 2 Barn. & Aid. 214.
    Our legislature has placed the indorser on the footing of a surety. In Rees v. B.arrington, 2 Yes. jr. 543, Lord Lough-borough says, “It amounts to this, there shall be no transaction with the principal debtor without acquainting the person who has a great interest in it.”
    True, this is in equity ; but King v. Baldwin, 2 J. C. R. 554, shows that the defence should be made at law. We may look to equity cases to see if the transaction amounts to a release : and if so, then that release is matter of defence at law.
    But it is evident that the charge of the circuit judge led the jury to believe that the act of the cashier did not bind the bank. We have hitherto thought that the cashier was the especial organ of the bank in all such cases. What he assumes to do, that ■ the world have a right to believe he is authorized to do, so far as the bank is concerned. It is for the bank to see that he does not exceed his authority. Suppose Lillard had had the amount to his credit, and the cashier had paid it over to him, the sure-' ties would have been released. Such seems to be the law.
    “ Nothing is more clear than whether that was done with the consent and by the order of the company or not, but ignorantly by their officers, it was as to the sureties a complete discharge.” Law v. East India Company, 4 Yes. jr. 829, and note.
    The sum of two thousand two hundred dollars, for which the stock sold under execution, was a liquidated and ascertained credit, a portion of which should have been allowed by the jury. There was evidence of the sum total for which the stock was security; there was also evidence of the sum sued on in this action, the proportion which the latter sum bore to the former, would settle the portion of said sum of two thousand two hundred dollars, which should have been allowed by the jury as a credit. This being a suit under the joint action law, the plea of non assumpsit admitted proof of this credit, and if not now entered, the new trial should be granted.
    “ If the creditor has any security from the debtor, and he parts with it, without communication with the surety or by gross negligence, it is lost; that will operate at least to the value of the security, to discharge the surety.” 1 Story Eq. Ju. § 326; Mayhew v. Crocker, 2 Swanst. 185 ; United States 
      v. Kirkpatrick, 9 Wheat. 720 ; McLemore v. Powell, 12 Wheat. 554; Josslyn v. Smith, 3 West, (Vermont) 353.
    
      Quitman and McMurran, for defendants in error.
    The errors complained of in this case are presented to the consideration of this court, upon the decision of the court below in overruling the motion made by plaintiffs in error for a new trial. No bill of exceptions was taken during the trial of the cause, though in the bill-of exceptions upon the overruling the motion for a new trial, the instructions to the jury, &c. are embodied. This, however, cannot alter the position of the case. For it is only under the provisions of the law of 1830, (Rev. Stat. 314,) making decisions upon motions for new trials examinable in this court, that this court has any jurisdiction of the case. And this view of the attitude of the case we deem important to a proper discussion and a correct decision, because the court, in reviewing and deciding on the errors assigned for a reversal of the proceedings of the circuit court, will be governed by different principles from what they would be, examining objections and exceptions taken during the progress of the trial.
    Thus, no principle is better established, no rule for the government of courts in deciding on motions for new trials, is more universally recognized than this : “ that where justice has been done, on the whole case, between the parties, and the verdict is substantially right, no new trial will be granted, although there may have been some mistakes committed at the trial.” And the granting or refusing a new trial, being a matter resting solely in the sound discretion of the court, “ it is to be granted only when in furtherance of substantial justice.” McLanahan et al. v. Universal Insurance Company, 1 Pet. R. 170-183. So, in the case of Edmondson v. Mitchell, 2 D. & E. 4, where there was a misdirection of the judge to the jury, the court refused a new trial because substantial justice had been done. And if the verdict is consistent with the justice, conscience and equity of the case, no new trial will be granted, though the verdict may be against the weight of evidence, or even the strict rules of law. Wilkinson v. Payne, 4 D. & E. 468, 469 ; Salk. 116, 646-648.
    Upon the testimony, then, the jury were right in' finding the verdict they rendered. The bank had never done any act by which she lost her recourse on Payne and Walworth. Lillard’s proposition never was complied with on his part, never was binding for a moment, never was consummated. The bank has never received the payment of the first cent of the debt claimed in this action; the indorsers have never been injured in any way; no time was even granted, nor suit suspended against Lillard or them for an instant. And therefore there is no principle of strict law opposed to the bank’s recovery, independently of the liberal rules applicable to the doctrine of new trials, which we have already stated to the court. Besides, the bank would not be bound by such acts of the cashier. 6 Peters, 51 ; 8 Ibid. 12; Commercial Bank Charter, Acts of 1836, p. 247.
    If a debtor voluntarily confesses a judgment in favor of his creditor, if he causes execution to be issued on it, and a sale of property under it, without the knowledge, wish or consent of the creditor, surely it will not be contended, that the creditor is bound thereby, or his rights in any way affected by this conduct of the debtor. Osgood Co. v. Brown et al., 1 Free. R. 392 - 399; Reynolds v. Nye, Ibid. 470.
    As far as any authorities can . be found bearing on the subjects of collateral security and conditional payment, we will find that they support the rights of the bank to the judgment she has recovered against the indorsers, Payne and Walworth. This court say, in its opinion in the case of Wade et al. v. Stanton Co., 5 How. R. 631-634, “that to admit a defence of this character, it was necessary there should be a positive and binding agreement to indulge- the debtor, based upon a valuable consideration, sufficient to tie up and restrain the creditor during the period of the new credit,” citing 3 Mer. R. 272; 10 J. R. 591; 1 Leigh, 436, &c. So, where a note is taken as conditional payment, it does not bar a suit on the original contract, and party need not show an offer to return the paper taken as conditional payment before suit, &c. 1 Law Library, 79; 4 Car. & Payne, 151; same case in 5 How. 635 - 36, citing the case of Clark v. Young, 1 Cranch, 181; Theobald on Principal and Surety,' 1 Law Library, 79.
    As to the stock placed in Mr. Henderson’s hands as collateral security for all Lillard’s debts in bank, it can form no legal defence in this action. That matter could be adjusted only by another suit, in equity or at law. Again; the instructions asked of the court on the part of the bank, are all proper and legal, in conformity with the authorities we have referred to. And of the eight instructions asked on the part of Payne and Walworth, the court gave the whole of them in charge. Whether all these be unexceptionable or not in point of law, we will not undertake to assert, but as they w re asked for by the plaintiffs in error, they cannot complain of them.
   Mr. Chief Justice Sharkey

delivered the opinion of the court.

The plaintiffs in error were sued as indorsers of a promissory note, and after verdict against them, moved for a new trial, which motion was overruled. The defence set up was, that the holder of the note had discharged the indorsers by giving time to the maker.

The question depends mainly on the evidence introduced on the trial, which is to the effect following: — The maker of the note testified, that about the 28th of March, 1840, he executed a note to the plaintiffs below for $31,593, payable three days after date, the consideration of which was sundry notes then held by the bank, on which he was liable, either as maker or indorser; his object being to concentrate all his indebtedness in one note. On being asked where the note given then was, he stated that it was in judgment in Louisiana, and that $2200 had been paid on the judgment by a sale of bank stock, and that the judgment was also a lien on certain promissory notes, given by R. C. Ballard to the witness, for property sold to Ballard, which notes were secured by mortgage. He also stated, that these notes were liable to be sold under execution. A transcript of the judgment in Louisiana was also introduced.

To rebut this proof, the plaintiff below introduced Thomas Henderson, the cashier of the bank, who explained the transaction with Lillard, the maker of the note, in the following manner:— Lillard called on him and expressed a wish to take up all his liabilities to the bank, and proposed to confess judgment for the full amount due, and to bind thereby all of his property. On consultation with one or two of the directors, the witness agreed with Lillard, that when such a judgment should be confessed so as to bind all his property, and evidence thereof produced to the bank, the paper of Lillard should be given up, Lillard employing his own attorney, and paying all the expenses incident to the consummation of this arrangement. In order to effect the arrangement, Lillard called on the witness for a statement of the amount of his indebtedness, which was furnished. The agreement was entirely conditional, intended, and so understood, to depend upon the confession of a judgment which should bind all of Lillard’s property in Louisiana; and on the further condition, that this should be done at Lillard’s expense, and the bank notified. After this understanding took place, and before any confession of judgment, Lillard sold all of his property in Louisiana, consisting of land and negroes, to R. O. Ballard, which was the property intended to have been bound by the judgment. Some time before this understanding took place, Lillard delivered to witness two hundred shares of stock of the Commercial Bank of Manchester, to be held for him, as collateral security for all of his debts due to the bank. After the sale of the property to Ballard, the witness was informed that Lillard did confess judgment, and that an execution had issued, under which the bank stock was sold by the sheriff of Concordia for the sum of $2200, but the bank had never received any of the money. On the order of the sheriff of Concordia, the bank stock was delivered to Ballard. The witness never gave, nor did he agree to give any time whatever to Lillard. The memorandum was given at his request to enable him to carry out his own arrangement. The witness had no authority, by resolution of the board of directors or otherwise, to make' this arrangement, but was in the habit of making such arrangements on consultation with some of the directors. The deposit of the bank stock as collateral security, occurred after the maturity of all of Lillard’s liabilities, and the bank never relinquished the right to sue on the notes at any time.

At the request of the counsel for the bank, the court charged the jury that the agent or cashier had no authority to bind the bank by any contract that would release parties from their notes. 2. To release an indorser, the engagement must be upon a good consideration, and binding, and one that will suspend the remedy. 3. That unless the judgment in Louisiana bound all of Lillard’s property, and the contract was ratified by the plaintiffs, the law is for them.

The kind of contract with the principal which will discharge the surety, is well defined and settled. The effect of giving time to the principal in a forthcoming bond, was considered by this court in the case of Newell & Peirce v. Hamer, 4 How. 684. It was decided, that a mere voluntary engagement to indulge the principal debtor, would not discharge the surety. There must be a positive and binding agreement, based upon some new and valuable consideration, which is sufficient to tie up the creditor, and prevent him from asserting any remedy, during the time for which the indulgence has been given. The same rule was holden to apply to indorsers of promissory notes. Wade v. Buckner, Stanton & Co., 5 How. 631. In this last case, a bill of exchange had been taken, payable at twelve months, and a receipt given expressing that the note was tobe credited with the proceeds of the bill ; and this was decided to be insufficient to discharge the indorser. See also McLemore v. Powell, 12 Wheat. 554.

Was there any such contract in this easel The evidence seems'to fall far short of establishing any contract whatever that was binding on the plaintiffs below for one moment, even assuming that Henderson was authorized to do all that he did do. Lillard states that he executed a note, but he does not state that he did so by request, or with the knowledge of the bank, or that it was ever delivered. His testimony is unsatisfactory. He omits to state anything of the transaction which led to the making of the note. He merely says that he made such a note ; and that it was then in judgment in Louisiana. Henderson states the transaction in such a manner as to make it intelligible. It was a mere unexecuted promise to contract, on the performance of certain conditions. There was nothing in it binding. Lillard had promised to do certain things, and Henderson promised if they were done in a particular manner, he would deliver up the notes of Lillard. Lillard defeated the proposed settlement by selling his property. There was no consideration for this agreement; nor was there in fact any agreement to give time. Lillard does not state that there was, and Henderson states positively that there was not. Try this by the true test. Was there any period of time at which the bank was not at liberty to sue? There was not. When the proposed arrangement was spoken of, nothing was said about his giving a new note, and if by so doing his indorsers were discharged, then every indorser may be discharged in the same way. Lillard seems to have been the only actor in the matter. Even the money raised by the execution was never received by the bank.

But it is insisted that even if the indorsers are not discharged, still they are entitled to a credit for such an amount on account of the stock sold, as the amount of sale bears to the whole sum for which it was pledged as collateral security. If the bank had received the proceeds of sale, or if it had appropriated the collateral security, so much of the debt for which it was pledged would be extinguished ; but the bank received nothing. The sale seems to have been brought about by Lillard exclusively. The bank took no step in the matter. The stock was given up under a mistaken notion of the rights of the parties. If the sale was valid, then unquestionably the delivery was proper ; if it was invalid, then no title to the stock was acquired by Ballard, and the right is where it was before. The principle involved is, that a creditor who takes a collateral security for his debt, is bound to hold it impartially and justly, inasmuch as a surety who pays the debt, is entitled to be substituted to the rights of the creditor in using the security for his protection. In such cases, if the security is lost by the negligence, or improper conduct of the creditor, the surety may bar the creditor of so much of his demand as he might have received from the security. Hayes v. Ward, 4 Johns. C. R. 123. This seems to be a matter of equity cognizance. The case from 3 Paige, 650, cited by counsel, decides that the whole of this doctrine depends upon the equitable principle that the creditor shall do no act to the injury of the surety. Tn the case cited from 1 Nott & McCord, the principle is adverted to, and it was said if the holder accept a deposit as security, and part with it without the consent of the indorser, he forfeits his claim upon the indorser; but the case before the court was not one of that description, and the doctrine, to 'its full extent, was not discussed. It is very difficult to apply this doctrine in the present case for several reasons. No act of bad faith is shown, nor is the security lost to the indorsers. Either the title to the stock is not changed by the sale in Louisiana; or if it is changed, the proceeds of sale are still within their reach if they should pay the debt. The bank seems to have disclaimed any interest in the judgment, and, under the circumstances, has an undoubted right to do so. But if it should be a valid judgment, then the sureties or indorsers may be entitled to all the benefits it can secure. The principle can only apply where the benefit of the security is lost to the indorsers by the improper conduct of the holder, and we cannot feel warranted, in this instance, in saying that it has been lost. If the indorsers relied on the execution sale as a satisfaction of so much of the debt, they should have pleaded it as a payment of so much.

But it is also said, that the court erred in charging the jury that the agent or cashier has no authority to bind the bank by any contract that would release parties from their notes. In the case of The State v. The Commercial Bank of Manchester, decided at the present term, we had occasion to inquire how far the acts of the cashier are binding on the bank, and have nothing to add. The court, however, at the • request of the counsel for the defendants below, charged the jury that if they believed the cashier acted in the premises on consultation with two or more of the directors, his acts are binding on the bank. This last charge is a modification of the first, and it was so framed as to meet fully the evidence given in. Henderson testified, that after consulting with one or two of the directors, he agreed with Lillard, that when the judgment should be confessed so as to bind all his property, his paper should be given up. On the evidence the charge could not have been given in terms more favorable to the defendants. It is evident the verdict was.not predicated on a want of power in Henderson to bind the bank, but on the total absence of any binding contract. This is the more manifest from the several other charges given at the request of defendants below, which could not, under the evidence, have been more favorable to their cause. The court gave every charge they requested, and still the jury found against them, and could not, as we think, have found differently.

The judgment must be affirmed.  