the Supreme Court of the United States held that the surety was discharged from his responsiblity for moneys collected by his principal after the alteration. Again, in an English case, the facts were, that, in a bond by sureties for the careful attention to business and the faithful discharge of the duties of an agent of a bank, it was provided "that he should have no other business of any kind, nor be connected in any shape with any trade, manufacture, or mercantile copartnery, nor be agent of any individual or copartnery in any manner or way whatsoever, nor be security for any individual or copartnery in any manner or way whatsoever." The bank subsequently, without the knowledge of the sureties, increased the salary of the agent, he undertaking to bear one-fourth part of all losses which might be incurred by his discounts. It was held that this was such an alteration of the contract, and of the liability of the agent, that the sureties were discharged, notwithstanding that the loss arose, not from discounts, but from improper conduct of the agent.

The guarantor is also discharged if the liability or obligation 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. So a 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 he paid. In New York, it seems to be the law, that, if the surety requests the creditor to proceed against the principal debtor, 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 official capacity; or if he had no right to give the promise in his official capacity.

A guaranty was given for the price of a cargo of iron; and the 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 due 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

For value received I guarantee that the within (note or bill, or that such a note or bill, describing it) will be collected and paid if demanded in due course of law. (Date.)

(Signature.)

the goods he wishes to (this may be

year

buy (or the goods may be described) to the amount of omitted if the guaranty is intended to be of any amount), within (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, &c., 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."

Now this Witnesseth, That in the event of the non-payment at maturity of any or all of these

hereby authorize

or

assigns, to sell the above (the collaterals) at public or private sale, or and apply proceeds to payment responsible for any

at the brokers' board, without notice to

of said

and all necessary expenses, holding

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 pay the amount of the said loan, with all interest and charges thereon, and for so doing, I fully release him of all claims, actions, and causes thereof.

CHAPTER XIII.

THE STATUTE OF FRAUDS.

SECTION I.

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