John G. Duarte Amd T. S. Shinn v. Bank of Hawaii

This is an action on a promissory note instituted by the Bank of Hawaii, prom-issee and holder, in the Circuit Court of the Second Judicial Circuit, Territory of Hawaii. Named as defendants were Y. H. Char and Wm. H. Crozier, Jr., makers of the note, and the two accommodation endorsers, John G. Duarte and T. S. Shinn. The action was thereafter dismissed as to Char and Crozier.

The remaining parties filed cross motions for summary judgment. Defendants’ motions were denied and plaintiff’s motion was granted. Judgment was accordingly entered for the bank against both defendants, the monetary award being $41,063.47.

Duarte and Shinn appealed to the Supreme Court of Hawaii, which affirmed. Bank of Hawaii v. Char, 43 Haw. 17 , reaffirmed on rehearing, 43 Haw. 223 . Appeal was then taken to this court. We have jurisdiction under 28 U.S.C.A. § 1293 and section 13 of Public Law 86-3, 73 Stat. 10, enacted March 18, 1959. See 28 U.S.C.A. § 91 and notes under §§ 1252, 1293.

In their opening brief in this court appellants argue that they were released from liability as endorsers because the proceeds received from a contract assigned to the bank as security for the note were diverted to…