Federal Land Bank v. Taggart

The court of appeals determined that when a lending institution grants an extension of time to make payment to the primary obligor of a promissory note, which is secured by a mortgage, but does not otherwise involve the surety on the note, such surety is discharged by operation of R.C. 1303.01 et seq. (UCC Article 3), as adopted by the *10General Assembly. In this instance, for the reasons set forth hereinafter, we conclude otherwise, and accordingly reverse.

Appellee’s principal argument, relied upon by the court of appeals, derives from R.C. 1303.72(A) (UCC 3-606[l]), which states:

“Impairment…