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be renewed or extended by law. As if a bank, incorporated for twenty years, be renewed for ten more, and the officers and business of the bank go on without change; the original sureties of the cashier are not held beyond the first term. guaranty to a partnership is extinguished by a change among the members, although neither the name nor the business of the firm be changed. But a guaranty, by express terms, may be made to continue over most changes of this kind.
A specific guaranty, for one transaction which is not yet exhausted, is not revocable. If it be a continuing or a general guaranty, it is revocable, unless an express agreement, founded on a consideration, makes it otherwise.
A creditor may give his debtor some accommodation or indulgence without thereby discharging his guarantor. It would seem just, however, that he should not be permitted to give him any indulgence which would materially prejudice the guarantor. Generally, a guarantor may always pay a debt, and so acquire at once the right of proceeding against the party whose debt he has paid. On this ground, it has been held, that where a surety requested the creditor to proceed against the principal debtor, and the creditor refused to do this, and afterwards the debtor became insolvent and the surety was without indemnity, still the surety (or guarantor) was not discharged, because he might have paid the debt, and then sued the party whose debt hat paid. In New York, it seems to be the law, that, if the surety requests the creditor to proceed against the principal debtco and he refuses, and the principal debtor afterwards becomes insolvent, the surety will be discharged. If, by gross negligence, the creditor has lost his debt, and has deprived the surety of security or indemnity, the surety must be discharged unless he was equally negligent. If a creditor gives time to his debtor by a binding agreement which will prevent a suit in the mean time, this undoubtedly discharges the guarantor (unless the surety consents to the delay) because it deprives him of his power of acquiring a right of proceeding against the debtor, by paying the debt; for the debtor cannot during that time be sued.
If there be a failure on the part of the principal, and the guarantor is looked to, he should have reasonable notice of this. And, generally, any notice would be reasonable which would be sufficient in fact to prevent his suffering from the delay. And if there be no notice, and the guarantor has been unharmed thereby, he is not discharged.
If a guaranty purport to be official, that is, if it be made by one who claims to hold a certain office, and to give the promise of guaranty only as such officer, and not personally, the general rule is, that he is not liable personally, provided he actually held that office and had a right to give the guaranty officially. But he would still be held personally, if the promise made, or the relations of the parties indicated that credit was given personally to the parties promising, and not merely to them in their mifficial capacity; or if he had no right to give the promise in lis official capacity.
A guaranty was given for the price of a cargo of iron, and tine buyer bargained with the seller to pay him more than the fair price, the excess to go towards an old debt. The guaranty was held to be altogether void, because fraudulent; and could not be enforced even for the fair price.
FORMS OF GUARANTY.
(39.) Guaranty to be Indorsed on a Note. For value received I guarantee the payment of the within-written note. (Date.)
(Signature.) (40.) Guaranty of a Note on Separate Paper. For value received I guarantee the due payment of a promissory note dated whereby
promises to pay to dollars, in
(Signature.) (41.) Guaranty in Another Way. For value received I guarantee that the within (note or bill, or that such e note or bill, describing it) will be collected and paid if demanded in due course of law. (Date.)
Letter of Guaranty. Sir,- If you will sell to Mr. of the goods he wishes to buy (or the goods may be described) to the amount of may be omitted if the guaranty is intended to be of any amount), within year (or days or months, or the time may be omitted if it is not intended to limit it) from the date hereof, I, for value received, hereby promise and guarantee that the price thereof shall be duly paid. (This letter should also state on what terms the goods should be sold, as to credit, delivery, etc., unless it is intended to leave all this to the buyer and seller. (Date.)
(Signature.) When goods or stocks or other securities are given as collateral security for borrowed money or any other debt, an instrument is sometimes given, the intention of which is to guarantee that the collaterals should be and remain sufficient to secure the indebtedness. It may be in one of the following forms, as the bargain requires. These are sometimes called "margin guaranties."
(43.) Guaranty with Collaterals authorizing Sale. Whereas, I (or we) have deposited with
as collateral security for payment at maturity of the following
(here describe the debt guaranteed.)
Now this Witnesseth, That in the event of the non-payment at maturity of any or all of these hereby authorize
assigns, to sell the above (the collaterals) at public or private sale, or at the brokers' board, without notice to
and apply proceeds to payment of said and all necessary expenses, holding
responsible for any deficie In Witness Whereof,
have hereunto set
hand and seal , this day of
one thousand nine hundred and
(44.) Guaranty with Collaterals, promising Additional security
or authorizing Sale, Having Borrowed this Day of
(the sum borrowed) on the following collaterals (here describe the collaterals.)
I Hereby Agree, in case the market-price of the said stock should fall at any time during the continuance of the loan to an amount insufficient
to cover the sum loaned, with per cent, margin added thereto, that in such event I will, on demand, deposit additional security to be approved by him, which shall be sufficient to keep the collaterals thus deposited equal to a sum per cent. above said loan, and so as often as said collaterals shall diminish; and that, in default thereof, the said
shall have power to sell at public or private sale, without notice, all, or any of the said securities (as well as any others he may hold), to my the amount of the said loan, with all interest and charges therson, and for so doing, I fully release him of all claims, actions, 79 d. causes thereof.
THE STATUTE OF FRAUDS.
ITS PURPOSE AND GENERAL PROVISIONS.
The Statute of Frauds, so called, was passed in the 29th year of Charles II. (1677) for the purpose of preventing frauds and perjuries, by requiring in many cases written evidence of a contract. In nearly all our States a similar statute has been enacted. But no two of the statutes of the different States agree exactly in all their provisions. They do, however, agree substantially; and we shall give in this chapter the prevailing and nearly universal rules for the construction and application of this statute. It is often of very great importance in commercial transactions. Those provisions which especially relate to business law are contained in the fourth and seventeenth sections.
By the fourth section, it is enacted that "no action shall be brought whereby to charge any executor or administrator, upon any special promise, to answer damages out of his own estate; or whereby to charge the defendant, upon any special promise, to answer for the debt, default, or miscarriages of another person; or to charge any person upon any agreement made upon consideration of marriage; or any contract for sale of lands, tenements, or hereditaments, or any interest in or concerning them; or upon any agreement that is not to be performed within the space of one year from the making thereof: unless the agreement, upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized.”
By the seventeenth section, it is enacted that “no contract for the sale of any goods, wares, and merchandises, for the price of £10 sterling, or upwards, shall be allowed to be good, except the buyer shall accept part of the goods so sold, and actually receive the same, or give something in earnest to bind the bargain, or in part of payment, or that some note or memorandum in writing of the said bargain be made and signed by the parties to be charged by such contract, or their agents thereunto lawfully authorized.”
The second and fifth clauses of the fourth section, and the whole of the seventeenth, relate to our present subject. The second clause prevents an oral guaranty from being enforced at law; but if money be paid on one, it cannot be recovered back.
A PROMISE TO PAY THE DEBT OP ANOTHER. It is very often difficult to say whether the promise of one to pay for goods delivered to another is an original promise, as to pay for one's own goods, and then it need not be in writing, or a promise to pay the debt or guaranty the promise of him to whom the goods are delivered, and then it must be in writing. If it be a promise to pay the debt of another, it is said to be a collateral promise, and not an original promise. The question may always be said to be: To whom did the seller give, and was authorised to give, credit? This question the jury will decide, upon consideration of all the facts, under the direction of the court. If a seller sues one to whom he did not deliver the goods, on the ground that this other promised to pay for them, then the question is, Did this other promise to pay for them as for his own goods ? for then the promise need not be in writing Or did he promise to pay for them as for the goods of the party receiving them ? and then it is a promise to pay the debt of