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COLLATERAL SECURITY Definition & Legal Meaning

Definition & Citations:

A security given in addition to the direct security, and subordinate to it, intended to guaranty its validity or convertibility or insure its performance ; so that, if the direct security fails, the creditor may fail back upon the collateral security. Butler v. Rockwell, 14 Colo. 125, 23 Pac. 462; McCor- mick v. Bank (C. C.) 57 Fed. 110; Munn v. McDonald. 10 Watts (Pa.) 273; In re Wad- dell-Entz Co., 67 Conn. 324, 35 Atl. 257. Collateral security, in bank phraseology, means some security additional to the personal obligation of the borrower. Shoemaker v. Bank, 2 Abb. (U. S.) 423, Fed. Cas. No. 12.801

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