* *20 change, although the guaranty given to the firm was expressly for "advances by them, or either of them. The mere fact that the partnership is very numerous, does not seem to vary this rule, if the guaranty be given to the whole firm. But where the partnership was numerous, and seven of the members were trustees for the firm, and a bond was given to these trustees to secure the faithful services of the clerk of the company, and a part of the trustees died, there it was held that the surviving trustees might maintain an action on the bond, although it was shown that there had been changes in the company. (r) A guaranty may doubtless be a continuing contract, and be unaffected by a change of circumstances, as to the subject-matter, and also as to the parties for whose benefit it shall enure. (x) It may provide, for instance, for the fidelity of a cashier in a bank, as long as it shall continue under its present charter, and under any extension or renewal thereof. So provision may be made for its validity to a partnership after a change of members, perhaps by adequate covenants, even without the intervention of trustees; although it would certainly be the better, if not the only safe way, to constitute trustees. But, from what has already been said, it will be obvious, that unless the contract of guaranty partners in the course of liquidating the business of the firm, and signed "S. R. Howlett, for the late firm of Peck, Howlett, & Foster," was indorsed by B. Held, that it was within the terms of the guaranty. The case of Pemberton v. Oakes, 4 Russ. 154, illustrates the principle of the text. See further, that guaranties are to be construed strictly, and that if any partners be taken into or retire from a firm, the guaranty does not continue. (x) See Parr's Banking Co. v. Yates, [1898] 2 Q. B. 460; Sullivan v. Arcand, 165 Mass. 364, 43 N. E. 198; Celluloid Co. v. Haines, 176 Mass. 415, 57 N. E. 691; Columbia El. Supply Co. v. Kemmet (N. J. L.), 50 Atl. 663; Buffington v. Bronson, 61 Ohio St. 231, 56 N. E. 762; L. Bauman Jewelry Co. v. Bertig, 81 Mo. App. 393; Crooks v. Propp, 66 N. Y. S. 753; Manry v. Waxelbaum & Co., 108 Ga. 14, 33 S. E. 701; Fogel v. Blitz (Mich.), 87 N. W. 640; Schneider-Davis Co. v. Hart (Tenn. Ch.), 57 S. W. 903; Doyle v. Nichols, 15 Col. App. 458, 63 Pac. 123; Cheshire Beef Co. v. Thrall, 72 Vt. 9, 47 Atl. 160. The language of these contracts is not construed most strongly against the party using it, but, in doubt Simson v. Cook, 8 J. B. Moore, 588; Kipling v. Turner, 5 B. & Ald. 261; Wright v. Russell, 3 Wils. 530; Barclay v. Lucas, 3 Dougl. 321; Penoyer v. Watson, 16 Johns. 100; Barker v. Parker, 1 T. R. 287; Dry v. Davy, 2 Per. & D. 249; Place v. Delegal, 4 Bing. N. C. 426; Dance v. Girdler, 4 B. & P. 34; Myers v. Edge, 7 T. R. 254. (r) Metcalf v. Bruin, 12 East, 405. ful cases, as the promise is to pay another's debt, the guaranty of a single transaction, or of limited transactions, is presumed to be intended rather than a continuing guaranty. Sherman v. Mulloy, 174 Mass. 41, 54 N. E. 488, 75 Am. St. Rep. 286; Crooks v. Propp, 66 N. Y. S. 753; Blyth v. Pinkerton (Wyom.), 67 Pac. 619, 57 L. R. A. 468; Burlington Ins. Co. v. Johnson, 120 Ill. 622, 12 N. E. 205; People v. Toomey, 122 III. 308, 13 N. E. 521; Gill. Sullivan, 62 Iowa, 529, 17 N. W. 758; Henrie v. Buck, 39 Kan. 381; Staver v. Locke, 22 Or. 519, 30 Pac. 497, 17 L. R. A. 652; Tolman Co. v. Griffin, 111 Mich. 301, 69 N. W. 649; Hartwell & Richards Co. v. Moss, 22 R. I. 583, 48 Atl. 941. expressly provides for these changes, their occurrence discharges the guarantor from his obligation. (s) * 21 * The obligation of guaranty for good conduct does not seem to be one which survives the obligee and passes over to his representatives. They may of course have their action for any liability of the guarantor incurred by the default of the party whose good conduct is guaranteed, during the life of the party receiving the guaranty. But when he dies, the guaranty dies also so far, that if the party for whose good conduct the guaranty is given, goes on with the same service as before, but now rendering it to the representatives of the deceased, they cannot hold the guarantor for the default of one who is now at work for them. Thus, a bond for the good conduct of a clerk, when the obligee died, and the executor employed the same clerk in arranging and finishing the business of the obligee, was not held sufficient to maintain an action by the executor for misconduct of the clerk after the death of the obligee. (t) 1 In regard to the subject-matter a guaranty to cover goods supplied to a certain amount, without restriction of time, continues until revoked; although even such continuing guaranty may be discharged by a change of the terms of credit. (u) If the guar (s) The case of Barclay v. Lucas, 3 Dougl. 321; s. c. 1 T. R. 291, n. (a), (x) although it has been doubted on some points (see Weston v. Barton, 4 Taunt. 681), is yet an authority for this principle, that if the terms of the contract show it was the intention of the parties that the liability should continue, such will be the case, although the names of the firm change. Such was evidently the court's understanding of the bond in that case, for Lord Mansfield observed: "The question turns, as Lord Chief Justice De Grey observes, in the case which has been cited, upon the meaning of the parties. In endeavoring to discover that meaning, the subject-matter of the contract is to be considered. It is notorious that these banking-houses continue for ages with the occasional addition of new partners. In such establishments clerks are necessary, who now and then succeed as partners, an arrangement very proper and very beneficial to the clerks. The house requires security for their honesty. Now it seems to me to make no difference whether a new partner is introduced or not, for there is no doubt that it is a security to the house. I am glad that there is a distinction between this case and that decided in the Common Pleas ; for I think that the plaintiffs are entitled to recover to the extent of the whole sum embezzled, or at all events to the extent of their own share.” This principle was the foundation of the decision in Pease v. Hirst, 10 B. & C. 122. (t) Barker v. Parker, 1 T. R. 287. (u) In Barstow v. Bennett, 3 Camp. 220, A gave to B a written guaranty to the extent of £300 for any goods he might supply to C, provided C neglected to pay in due time. B supplied goods to Caccordingly at two months' credit, and C paid in due time to an amount exceeding £300. The account having run for some time on these terms, and there being a balance due to B, a new account was opened on new terms of credit. Held, 1 A continuing guarantee also for advances, in the absence of express provision, is revoked as to subsequent advances by notice of the death of the guarantor. Coulthart v. Clementson, 5 Q. B. D. 42; Home Nat. Bank v. Waterman, 30 Ill. App. 535; Hyland v. Habich, 150 Mass. 112-W. (x) See the notes to this case in 12 English Ruling Cas. 469, 482. antor means to limit his liability to a single transaction, he should so express it. (v) But as no special form or manner of expression is necessary, if this purpose may fairly be gathered from the whole contract, courts will so construe it. (w) that the guaranty extended to all goods furnished while the term of credit remained unchanged, but not to those furnished after the term of credit was changed, and a new account opened. See Hatch v. Hobbs, 12 Gray, 447. (v) Merle v. Wells, 2 Camp. 413. In this case the guaranty was in these words: "Gentlemen, I have been applied to by my brother, William Wells, jeweller, to be bound to you for any debts he may contract, not to exceed one hundred pounds (with you), for goods necessary in his business as a jeweller. I have wrote to say by this declaration I consider myself bound to you for any debt he may contract for his business as a jeweller, not exceeding one hundred pounds, after this date. (Signed) John Wells." And Lord Ellenborough said: "I think the defendant was answerable for any debt not exceeding one hundred pounds which William Wells might from time to time contract with the plaintiffs in the way of his business. The guaranty is not confined to one instance, but applies to debts successively renewed. If a party means to be surety only for a single dealing, he should take care to say so. By such an instrument as this, a continuing suretyship is created to the specified amount. There must be, therefore, a verdict for the plaintiffs for £100." See Brown v. Bachelor, 1 Hurl. & N. 255. (w) See Cremer v. Higginson, 1 Mason, 323, which is a leading case on this subject. In this case the letter of guaranty contained this clause: "The object of the present letter is to request you if convenient to furnish them" (Messrs. Stephen and Henry Higginson), "with any sum they may want, as far as fifty thousand dollars; say fifty thousand dollars. They will reimburse you the amount, together with interest, as soon as arrangements can be made to do it: and as our embargo cannot be continued much longer, we apprehend there will be no difficulty in this. We shall hold ourselves answerable to you for the amount." It was held, that this was not an absolute original undertaking, but a guaranty; that it covered advances only to Stephen and Henry Higginson (who were then partners), on partnership account, and could not be applied to cover advances to either of the partners separately, on his separate account; that the authority of the guar anty was revoked by the dissolution of the partnership, and no subsequent advances made by the party after a full notice of such dissolution were within the reach of the guaranty; that the letter did not import to be a continuing guaranty for money advanced, toties quoties from time to time, to the amount of $50,000, but for a single advance of money to that amount; and that, when once advances were made to $50,000, no subsequent advances were within the guaranty; although, at the time of such further advances, the sum actually advanced had been reduced below $50,000 by reimbursements of the debtors. In Grant v. Ridsdale, 2 Har. & J. 186, a guaranty in the following terms: "I will guarantee their engagements, should you think it necessary, for any transactions they may have in your house," was held an absolute and continuing guaranty, until countermanded. So where the defendant addressed a letter to the plaintiffs, stating that his brother wished to go into business, and promising to be accountable for such goods furnished by the plaintiffs as his brother should call for, from $300 to $500 worth in consequence of which the plaintiffs furnished him with divers parcels of goods; it was held, that this was a continuing guaranty to the amount specified, and was not limited to the bill of parcels first delivered. Rapelye v. Bailey, 5 Conn. 149. See also Clark v. Burdett, 2 Hall, 167. — A writing in these words: "I agree to be responsible for the price of goods purchased of you, either by note or account, at any time hereafter, to the amount of $100," is a continuing guaranty to that extent, for goods to be at any time sold before the credit is recalled. Bent v. Hartshorn, 1 Met. 24. Many of the cases seem to hold with Lord Ellenborough, in Merle v. Wells, 2 Camp. 413, that the guaranty will be understood to be continuing, unless expressly limited. the contrary opinion was expressed in White v. Reed, 15 Conn. 457. In that case the defendant gave the plaintiff a writing in these words: "For any sum that my son G. may become indebted to you, not exceeding $200, I will hold my. self accountable." Held, that the terms of this instrument were satisfied when any indebtedness within the amount limited was incurred by G., and conse : But * SECTION VI. HOW A GUARANTOR IS AFFECTED BY INDULGENCE TO A DEBTOR. 22 A guarantor is entitled to a just protection. But this principle is not carried so far as to permit him to compel the creditor * unreasonably to proceed against the principal debtor. (x) * 23 5 Man. & G. 392; Hitchcock v. Humphrey, id. 559; Martin v. Wright, 9 Jur. 178; Johnston v. Nichools, 1 C. B. 251; Farmers' & Mechanics' Bank v. Kercheval, 2 Mich. 504; Agawam Bank v. Strever, 16 Barb. 82. quently that it was not a continuing guaranty. So in Boyce v. Ewart, I Rice, 126, the guaranty was in these words, "The bearer is about to commence business, to assist him in which he will need your aid, which, if you render, we will, in case of failure, indemnify you to (x) It seems to be well settled that the amount of $4,000." Held, that it was mere delay by the creditor to proceed not a continuing guaranty, but applicable against the principal, although requested to the bearer's commencing in business, to do so by the surety, will not in and of and that, as soon as the bearer had re- itself discharge the surety. Huffman v. funded $4,000, the guaranty ceased. In Hulbert, 13 Wend. 377; Davis v. Huggins, Fellows v. Prentiss, 3 Denio, 512, a guar- 3 N. H. 231; Bellows v. Lovell, 5 Pick. anty in these words: "I hereby agree to 307; Erie Bank v. Gibson, 1 Watts, 143; guarantee to you the payment of such an Cope v. Smith, 8 S. & R. 110; Johnson v. amount of goods, at a credit of one year, Planters' Bank, 4 Sm. & M. 165; Beebe v. interest after six months, not exceeding Dudley, 6 Foster (N. H.), 249; Bickford $500, as you may credit to A," was held, v. Gibbs, 8 Cush. 184. But if this delay not to be a continuing guaranty, but it of the creditor operates to the injury of was held to be exhausted by a single pur- the surety, as if the principal debtor was chase of goods to the amount of $500. at the time of the request solvent, but See also Whitney v. Groot, 24 Wend. 82; afterwards became insolvent, and the sureLawrence v. McCalmont, 2 How. 26; ty will not be able to collect the amount, Chapman v. Sutton, 2 C. B. 684; Tanner he is pro tanto discharged. Row v. Pulver, v. Moore, 11 Jur. 11; Allnut v. Ashendon, 1 Cowen, 246; State v. Reynolds, 3 Mo. 1 The following cases hold or tend to show that if the creditor after request from the surety fails to sue a solvent principal, the surety is discharged if the principal afterwards becomes insolvent. Thompson v. Robinson, 34 Atl. 44; Martin v. Skehan, 2 Col. 614; Remsen v. Beekman, 25 ̊ N. Y. 552; Colgrove v. Tallman, 67 N. Y. 95; Equitable Life Ass. Soc. v. Bostwick, 100 N. Y. 628, 629; Strickler v. Burkholder, 47 Pa. 476; Fidler v. Hershey, 99 Pa. 363; see also p. 25 note (c), post. This doctrine seems to have originated with Pain v. Packard, 13 Johns. 174, cited in note (a), supra. But the weight of authority is otherwise, Dane v. Corduan, 24 Cal. 157; Gage v. Mechanics' Nat. Bank, 79 Ill. 62; Halstead v. Brown, 17 Ind. 202; Nichols v. McDowell, 14 B. Mon. 6; Ingels v. Sutliff, 36 Kan. 444; Frye v. Barker, 4 Pick. 382; Adams Bank v. Anthony, 18 Pick. 238; Watertown Fire Ins. Co. v. Simmons, 131 Mass. 85, 86; Inkster v. First Nat. Bank, 30 Mich. 143; Mich. Ins. Co. v. Soule, 51 Mich. 312; Benedict v. Olson, 37 Minn. 431; Langdon v. Markle, 48 Mo. 357; Dillon v. Russell, 5 Neb. 484; Quillen v. Quigley, 14 Nev. 215; Thompson v. Bowne, 39 N. J. L. 2; Jenkins v. Clarkson, 7 Ohio, 72; Findley v. Hill, 8 Oreg. 247; Harris v. Newell, 42 Wis. 687; Hicock v. Farmers' Bank, 35 Vt. 476. It is intimated in some of these cases, however, that the surety might by bill in equity, tendering indemnity for costs, compel the creditor to take proceedings. And see Ranelaugh v. Hayes, 1 Vern. 189; Antrobus v. Davidson, 3 Meriv. 569, 579; Rice v. Downing, 12 B. Mon. 44; Whitridge v. Durkee's Ex., 2 Md. Ch. 442; Huey v. Pinney, 5 Minn. 310; Hayes v. Ward, 4 Johns. Ch. 123, 131; Kent v. Matthews, 12 Leigh, 573; In re Babcock, 3 Story, 393. And in some States by statute the surety is discharged if the creditor after formal notice to sue the principal fails to do so for a specified time. The terms of such a statute must be strictly complied with by the surety if he wishes to avail himself of it. See Halstead v. Brown, 17 Ind. 202; Langdon v. Markle, 48 Mo. 357; Iliff v. Weymouth, 40 Ohio St. 101.-W. From some cases it may be doubted whether he has any power in this way. In one case, (y) it was held, that a surety, who was injured by a delay in suing the principal debtor, was not discharged, on the ground that he might have insured a prompt demand against the debtor, by making himself an indorser instead of a surety. But this would have secured only a demand, and not a suit; and it seems hard and severe to say that because one does not secure to himself the precise and immediate demand and notice necessary to hold indorsers, he shall not be entitled to any care or diligence on the part of the creditor. It would seem to be a just and reasonable rule, that the guaranteed creditor should use in collecting the debt from the original debtor, the same care and diligence which prudent creditors commonly use in collecting their debts; they have certainly no right to neglect a guaranteed debt because it is guaranteed. (yy) If the surety requests the creditor to collect the debt, and there is refusal, and delay, and subsequent insolvency, it would seem difficult to resist the surety's claim to be discharged. (z) * 24 * In 1816 it was said by the Supreme Court of New York, in a case where such facts were pleaded and demurred to, that the plea was good, and the defence sufficient. (a) Chancellor 95; Herrick v. Borst, 4 Hill (N. Y.), 650. And see note (c), post. See Miller v. Berkey, 27 Penn. St. 319. See also, for a general statement of the duties arising from the relation of principal and surety, Huey v. Pinney, 5 Minn. 310. (y) Townsend v. Biddle, 2 N. H. 448. And Woodbury, J., said: "Here the character of the defendant as a surety did not appear on the face of the contract, nor was it proved that the plaintiff knew him to be only a surety. Here he was not liable as a mere indorser on the same instrument, or as a guarantor on a separate one. No time for an adjustment with the principal was fixed by law; no delay was given to him after a request by the surety for a prosecution; no new engagement for forbearance appears to have been entered into between the creditor and debtor." (yy) Hoffman ". Bechtel, 52 Penn. St. 190. For a case in which the right to recover was lost by laches, see Whiting v. Stacey, 15 Gray, 270. () In the Trent Navigation Co. v. Harley, 10 East, 35, Lord Ellenborough said: "The only question is, whether the laches of the obligees, in not calling upon the principal so soon as they might have done, if the accounts had been properly examined from time to time, be an estoppel at law [in an action] against the sure ties? I know of no such estoppel at law, whatever remedy there may be in equity." And in Dawson v. Laws, 23 E. L. & E. 365, the Vice-Chancellor said, that in order to discharge sureties for the faithful performance of duties by their principal, from their obligation, there must be such an act of connivance as enabled the party to get the fund in his hands, or such an act of gross negligence as to amount to a wilful shutting of the person's eyes to the fraud which the party was about to commit, or something approximating to it. In (a) Pain v. Packard, 13 Johns. 174. And see People v. Jansen, 7 id. 336. Herrick v. Borst, 4 Hill (N. Y.), 650, it was held, that although the creditor neglect to prosecute the principal after a request by the surety, this will not discharge the surety, if the principal was then insolvent. And the surety, in order to establish a defence of this kind, must show clearly that at the time the request was made, the debt could have been collected of the principal. Cowen, J., then observed: "The view taken of the question in Huffman v. Hulbert, 13 Wend. 377, the only case in this court where the kind or degree of insolvency on which the surety is to be discharged has been noticed, is not inconsistent with the direction given at the circuit. Mr. Justice Nelson there said, |