Indianapolis Morris Plan Corp. v. Karlen

The issue in this case could hardly be simpler, namely, whether a secured lender may release the collateral security, if so authorized by -the instrument of indebtedness signed by the sureties, without discharging the sureties. Confusion has been engendered, thus far, by the failure to distinguish the debtor’s equity of redemption, which may not be waived, from the surety’s rights in the collateral, which may be waived. The lack of precedent, matching and exact, is occasioned, no doubt, only by the novelty of the confusion.

Summary judgment was denied to plaintiff lender, who sues the…