Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: CHAPTER XYIL GUARANTY AND SURETYSHIP. Definition.—A surety or guarantor is one who agrees to become responsible for the debt or default of another ; that is, to pay damages in. case the other does not perform his obligations. There is a slight distinction between the two, but it is not of sufficient importance nor sufficiently plain, to admit of discussion here. We shall consider them both as falling under the same definition. A guaranty, being a contract, must, of course, have all the necessary conditions of a contract, but the definition implies the existence of a principal contract to which the guaranty is merely collateral. For example A owes B a certain sum of money; this constitutes the principal contract. C agrees with B that he will pay the debt if A does not; this is the collateral contract—the guaranty. It is evident from this that there must be at least three parties to every guaranty, the principal debtor, or the one who is primarily responsible, the creditor, or the one to whom he is responsible, and the guarantor or surety. A guaranty, being an agreement to answer for the default of another, must be in writing according to one of the provisions of the Statute of Frauds. Kinds of Guaranties.—Guaranty is a very common kind of contract. It includes all such agreements as sureties and indorsements on negotiable paper, and all bonds given for the faithful performance of some duty, such as are required of clerks in banks, treasurers of corporations, public officers, etc. The guaranty with which we deal principally in this book is for the payment of money, and of this class there are three kinds in general use ; viz., guaranty of payment, guaranty of collection, and continuing guaranty. Guaranty of Payment.—This is a kind of guaranty very much used. By it the gu...