2. Of contracts opposed to the laws of other countries THE LAW OF CONTRACTS. CHAPTER VII. GUARANTY OR SURETY. SECT. I. What is a Guaranty. - 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.1 And this we shall now consider. 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 Pa. 438; Kramph's Ex. v. Hatz's Ex. 52 Pa. 525; Hartman v. First Nat. Bank, 103 Pa. 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 guaranty 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. |