Office in this city, postage prepaid, notices addressed as

follows:

One for

One for

directed to him at

directed to her at

Each of the above named places being the reputed place of residence of the person to whom the notice was addressed, and the Post Office nearest thereto.

,

Whereupon I, the said Notary, at the request aforesaid, have protested, and do hereby publicly and solemnly protest, against the drawer and endorsers of the said and all others concerned, for all exchange, re-exchange, costs, damages and interest, incurred by reason of the non-payment of the said . I also hereto affix a copy of the said notices. In witness whereof, I have hereto subscribed my name and affixed my seal of office:

(Seal).

SIR:-Take notice, that a

A. B., Notary Public.

for dollars, indorsed by

NOTICE TO A DRAWER OR ENDORSER.

you, was this day protested for non-payment, and that the holder looks to you for the payment thereof, payment of the same having been this day demanded and refused.

NOTE.-Protest for non-acceptance of a bill of exchange may be easily varied from the above, by inserting, wherever payment and non-payment occur, acceptance and non-acceptance, instead. For law and directions as to sending of notices, time of sending, and as to what paper needs to be protested, see Section 6, of this chapter.

CHAPTER X.

OF GUARANTY AND SURETYSHIP.

SECTION 1.-Definitions and General Principles.

A GUARANTY is defined to be," a promise to answer for the payment of some debt, or the performance of some duty, in case of the failure of another person, who is in the first instance liable."

The engagement is a common one in the business world, and it is important that we should have a clear idea of its general principles.

We have seen that a section of the statute of frauds requires the contract of a surety or guarantor to be in writing, because it is "for the debt of another."

Like other contracts, it must be upon sufficient consideration, but whether the consideration should appear in the writing has been a vexed question, and is differently held in the different States.

Where it is held necessary that it should be so expressed, the strictness of the former rules has been relaxed, so that the words, "for value received," are deemed a sufficient expression of the consideration. The person primarily liable is called the principal debtor, and the collateral debtor is called "guarantor," or "surety."

It is the distinguishing characteristic of this contract, that there is an original debt or duty, for payment or performance of which a third person agrees, (or in some way intervenes), as an additional security.

This suretyship may be by a pledge of property, real or personal, for the payment of such debt, or performance of such duty, as well as by an agreement; and the same gen

eral rules apply in either case. The guaranty must be upon sufficient consideration, but where it is given at the same time with the making of the original contract, which it secures, and the original contract would not have been made without it, that, of itself, is a sufficient consideration.

This is, perhaps, much the most frequent example of the contract: "A"is willing to loan money to "B," if he will secure the payment by a note, with satisfactory surety; "C" signs the note as surety. The loan is the consideration, not only for the note, but, for the suretyship of the guarantor.

Every guaranty, however simple, must, to bind the guarantor, be in writing; and, as has been stated, the test is, whether there is a principal debt and debtor and a collateral

one.

"A" goes into a store with "B," and proposes to the merchant, “let' B' have what goods he wants and I will pay for them."

It is clear that in this case the merchant would have right to charge the goods sold directly to "A," in which case the contract of "A" need not be in writing, as he is the principal debtor; but, if the merchant understands it to be an agreement authorizing him to look to both parties for payment, or if the terms of the proposal and contract be slightly varied, as, "let 'B' have what goods he wants and I will see you paid, or see that he pays you for them," then "B" is the principal debtor, and unless the contract of "A" is in writing, it is not a valid contract.

The contract of guaranty need not always have a valid and binding contract to rest upon as collateral; as, where the principal is an infant, his contract is voidable, but the surety is bound, and can take no advantage of the infancy of his principal. The contract between the principal parties cannot be varied or in any material matter departed from, without the consent of the surety, or he may say, "this is not the contract into which I entered," and he will be no longer bound.

This result follows equally whether the suretyship is by

the pledge of the property of the surety for the debt of his principal, or his personal contract for its performance.

If the debt guarantied become due, any valid agreement for a further extension of credit will discharge the surety.

An agreement to guaranty payment for goods, to be sold on six months' credit, will not be valid if they be sold on three months, not even if the debt is permitted to lie six months. There must be no variation.

A guaranty, that a mechanic shall build and complete for me a specified article within a given time, will be discharged if I add in any respect, even with the full consent of the mechanic, to the labor to be performed upon the article, or, in any essential particular, change its character.

A guarantor of payment of a note should have notice, within a reasonable time, of the non-payment of the note, or else he will be discharged, if the maker was solvent when the note became due and has afterwards become insolvent, so that the remedy over of the guarantor is impaired. The difference between his case and that of an endorser being, that the neglect to give notice to a guarantor must have produced some loss or damage.

If the guaranty be absolute, and the failure of the principal be a matter equally within the knowledge of the surety, as of the creditor, or, if it can be learned by reasonable diligence, the guarantor is bound to inquire of his principal whether he has performed, unless notice be required by the contract of guaranty.

When a guaranty is, that a debt is or shall be collectable, legal proceedings must be resorted to, against the parties primarily liable, before the guaranty can be enforced.

If the creditor has property of the principal debtor in his hands, by way of mortgage, or pledge, or collateral deposit, he must not release it or any portion of it, or he will release the surety, absolutely or pro tanto.

In case of payment by the surety, he is entitled to all the securities and collaterals held by the principal creditor, and equity will compel their assignment to him. This is generally denominated subrogation.

A very common form of suretyship is by letters of credit. These may be general, that is, to all or any persons furnishing goods upon the faith of them; or special, to some one person, and they may be confined to a single transaction or be continuing.

They should be written with care, and the guarantor may easily confine his guaranty within the limits which he designs to observe.

There may also be a proposal to guaranty, which will not amount to a contract binding the proposer, unless the party, to whom it is made, upon accepting it gives notice to the proposer, of his acceptance, and that he is acting upon it.

The proposer of such a prospective guaranty has clearly a right to know, whether he is acting in that capacity or not, and to give him such knowledge, he must have notice from the party accepting and acting upon, his proposal.

SECTION 2.

Forms of Contract.

Some forms of guaranty may perhaps be given here with advantage, even at the risk of their repetition among the forms at the end of the principal text:

"HARTFORD, Dec. 18, 1868." "To A. B.-If you will furnish goods to C. D. to an amount not exceeding two thousand dollars, on a credit of four months, I will guaranty his payment therefor." "E. F.".

"To Mr. Belknap."

"Hartford, Dec. 18, 1868."

"A. B. tells me that you propose to furnish him books to the amount of $1000, if he can procure satisfactory guaranty therefor, on a credit of six months.

I am willing to be his guarantor for that amount."

These are both, mere proposals, and the party to whom they are made, if he intends to accept and act upon them, should so inform the party making them.

"Hartford, December 18, 1868." "In consideration that A. B. furnish to C. D. goods to the