US SUPREME COURT DECISIONS

A national bank went into voluntary liquidation in September, 1873. Before that, it had become liable to a state bank as guarantor on sundry notes made by a third person and which were discounted for it by the state bank. In August, 1874, transactions took place between the maker of the notes and the state bank, and the person who acted as the president of the national bank, whereby the maker was released from further liability on the notes, but such acting president attempted to continue, by agreement, the liability of the national bank as guarantor. In a suit begun in October, 1876, a judgment on the guaranty was obtained in May, 1880, by the state bank against the national bank. In a suit brought by a creditor against the national back and its stockholders to enforce their statutory liability for its debts, the court, on an application made in June, 1887, enquired into the liability of the stockholders to have the claim of the state bank enforced as against them in view of the transactions of August, 1874, and disallowed that claim.

Held: