"|T]he surety must prove two elements in order to be entitled to a discharge — ‘that the holder of the note was responsible for the loss or impairment of the collateral, and the extent to which the impairment results in loss.’ "
How later courts described this case
- "|T]he surety must prove two elements in order to be entitled to a discharge — ‘that the holder of the note was responsible for the loss or impairment of the collateral, and the extent to which the impairment results in loss.’ "
- Under Arkansas general suretyship law, a creditor must preserve a surety’s right of recourse in collateral.
Written by the judges who cited it.
The opinion
David Newbern, Justice, dissenting. First State Bank lost its claim to collateral when it inexplicably dismissed with prejudice its claims against those in possession. It thus breached its duty to the surety. While we may try to classify this decision as ad hoc in the future, I believe the precedent will prove to be bad, therefore, I dissent.
Purtle, J., joins this dissent.