THE LAW OF CONTRACTS.

CHAPTER VII.

GUARANTY OR SURETY.

SECT. I. What is a Guaranty.

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ORIGINALLY, the words "warranty" and " "guaranty were the same; the letter g, of the Norman French, being convertible with the w of the German and English, as in the names William or Guillaume. They are now sometimes used indiscriminately; but, in general, warranty is applied to a contract as to the title, quality, or quantity of a thing sold, which we have already considered under the head of sales; and guaranty is held to be the contract by which one person is bound to another, for the due fulfilment of a promise or engagement of a third party. And this we shall now consider.

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1 The words "surety” and “guarantor "are often used indiscriminately, but the distinction is taken that while a surety is an original contractor, bound usually by the same instrument and in the same terms as the principal, the contract of a guarantor is collateral, not to do the same thing which the principal agrees to do, but to make good the damages, if the principal fails to do what he has agreed. As to this distinction and its consequences, see Hall v. Weaver, 34 Fed. Rep. 104; White's Adm. v. Life Assoc., 63 Ala. 419, 423; Saint v. Wheeler, &c. Co., 10 South. Rep. 539 (Ala.); McMillan v. Bull's Head Bank, 32 Ind. 11; Markland Mining, &c. Co., v. Kimmel, 87 Ind. 560, 566; Weik v. Pugh, 92 Ind. 382; La Rose v. Logansport Nat. Bank, 102 Ind. 332, 335; Courtis v. Dennis, 7 Met. 510; Reigart v. White, 52 Penn. St. 438; Kramph's Ex. v. Hatz's Ex., id. 525; Hartman v. First Nat. Bank, 103 id. 581; Kearnes v. Montgomery, 4 W. Va. 29; Harris v. Newell, 42 Wis. 687. As a guaranty is a collateral contract, it may take any form which the parties may agree upon. "Guaranties are expressed in so many different forms and are applicable to so many different conditions of things, that it sometimes becomes difficult to give them their true interpretation. They are often mere proposals to guarantee, sometimes mere recommendations, and frequently little more than expressions of friendship, confidence, or courtesy. Sometimes they guarantee what is fixed and known; sometimes something to be done or brought into existence; sometimes they are continuing, sometimes limited to a single transaction; sometimes direct and sometimes collateral, and always refer to something beyond themselves." Milroy v. Quinn, 69 Ind. 406, 410, per Biddle, J. A guaranty of collection guarantees that a debt can be collected with due diligence, if an action is promptly brought, the debtor's insolvency in some cases excusing a failure to sue. Aldrich v. Chubb, 35 Mich. 350; Brackett v. Rich, 23 Minn. 485; Stone v. Rockefeller, 29 Ohio St. 625; Evans v. Bell, 45 Tex. 553. — W.

In general, a guaranty is not negotiable, nor in any way transferable, so as to enable an action to be maintained upon it by any

other person than him with whom the contract is made. (a)1 4 *It is a promise to pay the debt of another; but the guaran

tor may be held, although no suit could be maintained upon the original debt; and such guaranty may have been required for the very reason that the original debt could not be enforced at law; as where the guarantor promises to be responsible for goods to be supplied to a married woman, (b) or to be sold to an infant, not being necessaries. (c) But where the original debt is not enforceable at law, the promise to be responsible for it is considered, for some purposes, as direct and not collateral; as, in fact, the original promise. (d) But if an infant purchase necessaries, and give a promissory note signed by himself, and by ancther as surety, who pays the note, such surety can recover the amount so paid, of the infant. (e) In general, the liability

(a) True v. Fuller, 21 Pick. 140; Tyler v. Binney, 7 Mass. 479; Lamourieux v. Hewett, 5 Wend. 307; Springer v. Hutchinson, 19 Me. 359; McDoal v. Yeomans, 8 Watts, 361; Canfield v. Vaughan, 8 Mart. (La.) 682; Upham v. Prince, 12 Mass. 14; Miller v. Gaston, 2 Hill (N. Y.), 188; Watson v. McLaren, 19 Wend. 557; Tuttle v. Bartholomew, 12 Met. 452; Tayler v. Binney, 7 Mass. 479; Ten Eyck v. Brown, 4 Chand. 151; Tinker v. McCauley, 3 Mich. 188. Although the instrument may be in the form of a guaranty, yet if it contain in itself all the elements of a negotiable promissory note, it is then negotiable. See Ketchell v. Burns, 24 Wend. 456. In this case, the instrument was as follows: "For and in consideration of thirty-one dollars and fifty cents received of B. F. Spencer, I hereby guarantee the payment and collection of the within note to him or bearer. Auburn, Sept. 25, 1837." (Signed) Thomas Burns. And it was held negotiable. In Reed v. Garvin, 12 S. & R. 100, it was held, that a guaranty given by the assignor of a bond runs with it into whosesoever hands it may come, and the guarantor cannot be a witness. See McLaren v. Watson, 26 Wend. 425; Adams v. Jones, 12 Pet. 207; Walton v. Dodson, 3 C. & P. 163; Bradley v. Cary, 8 Greenl. (Bennett's ed.) 234; Phillips v. Bateman, 16 East, 356. If a guaranty is directed to

a particular house, by name, and another house advance goods upon it, they have no claim upon the guarantor. Bleeker v. Hyde, 3 McLean, 279 ; Grant v. Naylor, 4 Cranch, 224, contra, see McNaughton v. Conkling, 9 Wis. 317. And if the letter of guaranty is addressed to two persons and received and acted upon by one only, the guarantor is not bound. Smith v. Montgomery, 3 Tex. 199; Myers v. Edge, 7 T. R. 254. But where the guaranty is addressed to no person in particular it may be acted upon by any one, and if such appear to be the intention of the parties, goods may be furnished by several differ ent dealers on the faith of the guaranty. Lowry v. Adams, 22 Vt. 160. And in Vermont it would seem that a guaranty is negotiable. Partridge v. Davis, 20 Vt. 499.

(b) See Maggs v. Ames, 4 Bing. 470; Connerat v. Goldsmith, Ga. 14.

(c) See Conn v. Coburn, 7 N. H. 368. (d) Harris v. Huntbach, 1 Burr. 373, and Reid v. Nash, there cited. See also Buckmyr v. Darnall, 2 Ld. Raym. 1085.

(e) Conn v. Coburn, 7 N. H. 368. In such case, the cause of action arises when the surety pays the note. Clark v. Foxcraft, 7 Greenl. 348. See also Fagin v. Goggin, 12 R. I. 398; Knaggs v. Green, 48 Wis. 601. Compare Ayers v. Burns, 87 Ind. 245.

1 If a person can enforce the principal debt, he can enforce a guaranty of it. Craig r. Parkis, 40 N. Y. 181; Claflin v. Ostrom, 54 N. Y. 581. In Iowa and Michigan, a guaranty is negotiable, and the assignee may sue in his own name. First Bank v. Carpenter, 41 Iowa, 518; Waldron v. Harring, 28 Mich. 493. - A letter of credit is not negotiable. Roman v. Serna, 40 Tex. 306. K.