10 Watts 270 | Pa. | 1840
The opinion of the court was delivered by
The use of the-term collateral security, when a debtor transfers to his creditor an article of-value, or an evidence of debt, is intended to express, that it is not received in payment of the principal debt, and that it is not an additional right, to which the creditor is absolutely entitled. It is merely a concurrent security for another debt, whether antecedent or newly created, and is designed to increase the means of the creditor to realize the principal debt which it is given to secure. It is subsidiary to the principal debt — running parallel with it — collateral to it — and when collected, is to go to the credit of the principal debt; or if the principal debt be paid off, the debtor is entitled to a restoration of the collateral security. But though a thing be given as collateral security, the rights of the.creditor in it, as against third persons, must depend on other considerations, and may vary with the circumstances of each particular case. If one delivers to his creditor,- as collateral security, a negotiable note, .already endorsed by several endorsers, there can be no other meaning, in such a transaction, than that- the creditor shall enjoy all the remedies on the note, which the law gives him.as holder, and the state of the parties to that note; is iri nowise' changed by its being taken as collateral security. Shell holder may recover from the last endorser,, as-well as the others, and such last endorser, in that case, may recover against a prior endorser, or the maker, free in either case from any defence on the
The parol evidence does not go to contradict the terms of the receipt, but to show the circumstances under which it was given, aud that the defendant was liable, notwithstanding the note was transferred as collateral security.
Judgment' affirmed.