Page:The American Cyclopædia (1879) Volume VIII.djvu/299

 GUARANTY 285 an original and not a collateral promise, and therefore it needs not to be in writing. So, if A delivers goods to B, at the request of C, who is to pay for them, and who may be considered as the buyer of them, C, when he promises to pay for them, promises to pay his own debt, and therefore the promise may be in spoken words only. But if A sells goods to B, on C's promise to pay for them if B does not, then A's promise is only collateral to B's, and it must be in writing. The question therefore is, were the goods sold to C for the benefit of B, or were they sold to B on C's guaranty ? On this question the seller's entry in his books is some- times very important evidence. If he charges ] with them primarily, this may not go far to ind C, because he may have charged them so r the very purpose of holding C. But if he arges them simply to B, it will be very difficult r him to prove afterward that he considered imself as selling them to C, and not to B on s guaranty. But still he might show that en this entry was made by mistake, and did t represent the truth. The contract of guar- ty, like every legal contract, requires two rties, who agree to the same thing. It fol- ws therefore that a guaranty, or a promise pay the debt of another, is not valid until is accepted ; and this is true, whatever be consideration, and whether it be in wri- g or otherwise. But this acceptance need t be direct and unequivocal ; indeed, it need ^ be in any words whatever ; it may be im- ied from circumstances. Thus, if A goes with B to C, and says to C, " If you will sell B the goods he wishes, I will see that he pays the price," and C, without reply to A, rns to B and sells and delivers him the s, there would be no question in this case to whether accepted and acted upon the aranty of A. It is under a different class circumstances that this question generally ises. Thus, if the guaranty were by letter, and ferred to subsequent operations, the question ould then arise whether there was a sufficient ptance of it. Some courts have asserted the guarantor had a perfect right to know hether his offer was accepted, and whether e stood bound as guarantor ; and some have ne so far as to hold that the guarantor was titled to know at once, not only that his guar- ,nty was acted upon, and the amount, but all he terms of the sale which it could be desira- le for him to know, that he might arrange ac- ordingly. On the other hand, courts of the ighest authority have held, tfiat where an of- r of guaranty is absolute, and does not ex- essly or by distinct intimation call for any ceptance or any special information, the par- y making the offer might suppose it to be ac- ipted and act on that supposition; and the arty receiving the offer may act under it and within the terms of it, and hold the guarantor without giving him any notice of his accept- ance. It has already been said that the party receiving the guaranty must conduct himself with good faith and proper care toward the guarantor ; and one effect of this principle is, that if any material change is made in the ex- tent or the terms or character of the liability of the principal, this discharges the guarantor. Nor will a guarantor be held in such case by the party guarantied showing that the change was in no way injurious to the guarantor ; be- cause he has a right to judge for himself as to the circumstances under which he is content to be liable, and he may stand upon the precise terms of his contract. The guarantor may, however, assent to such a change, and then he will be held. Thus, if a new note be given for an old one, this discharges the guarantor on the old note ; and it has been held that if a guarantor thus discharged, in ignorance that his liability has thus terminated, makes a new acknowledgment of this liability, he cannot be held thereon. So, a guaranty to a partnership is discharged by a change in the partnership, although no change in the firm or style of it be made ; and this has been held where the guar- anty was given "for advances made by them, or by either of them." The reason given is, that the guarantor may have trusted to the skill or care of the members of the firm as they stood when he gave his guaranty; and the change of a single member may be important in this respect. It should be stated, however, that the guaranty itself may provide expressly for all these changes, and will not, of course, be affected by any which it anticipates. Whether a guaranty be a continuing guaranty, or be intended to cover one single transaction only, is sometimes a difficult question. In gen- eral, however, a guarantor who intends to lim- it his liability to a single transaction should so express it ; but if it can be gathered from the terms of the guaranty that it was intended and should have been understood to apply to more than one transaction, it will be so held. The limit may be one of time, as to be liable for any amount of goods sold before a certain day ; or one of amount, as for any goods up to a certain sum. That a guarantor is entitled to a rea- sonable protection we have already seen, but it has been much disputed whether, on this ground, he may insist that the party guarantied shall proceed forthwith against the debtor. It would seem to be very unjust to the guarantor to permit a creditor to let his debt lie without taking any steps to secure it, because he knows that the guarantor is perfectly responsible, and he chooses to indulge some feeling of personal kindness to the debtor. This question has fre- quently come before the courts, especially in New York ; and it must be admitted that the law is not quite certain. We think, however, that this rule may be drawn from the best au- thority, and sustained by strong reasons, viz. : that the guarantor is not discharged by mere delay of the creditor in calling on the debtor ; but if after a request from the guarantor that he should proceed (especially if the request be accompanied by an offer to pay the costs of