First Nat. Exch. Bank of Va. v. Johnson

This is an appeal in an action brought by a bank to recover on a demand note. We must determine whether the trial court erred in denying recovery against one of two makers of the note upon grounds of lack of consideration and constructive fraud.

The facts mainly are undisputed. In 1978, appellant First National Exchange Bank of Virginia through its branch office in the town of Lebanon made a commitment to Earl D. Johnson for a line of credit of $40,000 for the purpose of building a house for resale in Russell County. Johnson defaulted on the unsecured obligation after he had drawn the full…