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Continuing held that the £200 was not intended to point out
the extent to which the goods should be from time to time supplied under that guaranty, but to indicate the extent to which the surety was willing to pay on his undertaking as a continuing guaranty (q). Again, where the guaranty, on the face of it, was expressed to be by way of inducement to the plaintiffs to continue their dealings with J. S., it was held to be clearly the intention of the defendant that his guaranty should be continuing until revocation, or further notice (r). Where the guaranty expresses that the liability shall be to a certain amount and during a specified time, it is a continuing guaranty within such period (■?). Non-con- On the other hand, where the words have reference to a particular dealing between the parties, the guaranty is not continuing. Thus, the words, "I agree to be answerable for the amount of five sacks of flour to be delivered to J. S."(0; or, "I engage to guarantee the payment of J. S. to the extent of £60 at quarterly account for goods to be purchased by him of the plain- Non-contiffs"(w);—were held insufficient to constitute a guaranties. continuing guaranty. So, an engagement "to be "answerable for the payment of ,£50 in case J. S. "does not pay for the gin which he receives "from you," was held not to be a continuing guaranty (cr).
(q) Hargreave v. Smee, 6 Bingli. 244; S. C. 3 M. & Payne, 573; see 3 Tyrvdi. 169, per Bay ley, B.
(r) Allan v. Kenning, 9 Bingh. 618; S. C. 2 M. & Scott, 769. It seems that a continuing guaranty may be revoked by parol; Brocklebank v. Moore, 2 Stark. Ev. 371, n. (2nd Ed).
(s) Simpson v. Manley, 2 Tyrwh. 87; S. C. 2 Cr. & J. 13. See Williams v. Rawlinson, 1 Ry. & M. 233.
(0 Kay v. Groves, 6 Bingh. 276; S. C. 3 M. & Payne, 634; see Bovill v. Turner, 2 Chit. Rep. 205; Kirby v. Marlborough (Duke), 2 M. &S. 18.
III. The party entering into a guaranty may be Discharge discharged from his liability by, 1. Time being given to the principal. 2. Laches on the part of the plaintiff. 3. Fraud, or improper dealing between the plaintiff and the principal. 4. Agreement to discharge, before breach.
1. It is a general rule in the law of principal and Giving time
..... . . to principal.
surety, that, by giving time to the former, the surety is discharged; on the principle, that by so doing the plaintiff has, unauthoriz'edly, altered the relative situation of the parties, since the surety can no longer have the same remedy against the principal, as he would have had under the original contract^). By the expression, 'giving time,' is
(«) Melville v. Hayden, 3 B. & A. 593. This case certainly approaches very closely to Mason v. Pritchard, (ubi supra); for the Court observed that the words "quarterly account" were immaterial; see 3 B. & A. 594. Indeed the only difference seems to be the word " any." Vid. supra, p. 387.
(*) Nicholson v. Paget, 1 Cr. & Mees. 48; S. C. 3 Tyrwh. 164; 5 C. &P. 395.
(ij) This rule is the same now both at law and in equity. See
Discharge meant, "extending the period at which the principal debtor was originally liable, on the contract between them, to pay the creditor, and extending it by a new and valid contract between the creditor and principal debtor, to which the surety does not assent "(*)• Therefore, where the usual course of dealing between the plaintiff and the principal was to give six months' credit, it was held that, by extending the credit to nine months, the goods to be then paid for by a bill at two (thus virtually giving eleven months credit), the plaintiff had discharged the defendant from liability on his guaranty^). If the guaranty does not specify the terms of credit to be given, it will be held to mean, not the ordinary credit of trade, but such fair and reasonable terms of credit as may be agreed upon between the parties (Z»).
Uchei. 2. Laches on the part of the plaintiff will ex
onerate the defendant. Thus, where the defendant undertook to indorse bills given by J. S. to the plaintiffs in payment for goods, provided application was made within convenient and reasonable Discharge
per Lord Eldun, Ch., 3 Meriv. 277. Rees v. Berrington, 2 Ves. Jun. 540; Nisbet v. Smith, 2 Bro. C. C. 579.
(2) Per Curiam, 1 Cr. M. & R. 107.
(a) Combe v. Woolf, 8 Bingh. 156; S. C. 1 M. & Scott, 241; Howell v. Jones, 1 C. M. & R. 97; S. C. 4 Tyrwh. 548; Samuell v. Howarth, 3 Mer. 272.
(6) Simpson v. Manley, 2 Cr. & Jer. 12; S. C. 2 Tyrwh. 86. See above, p. 385, as to non-compliance with the strict terms and conditions of the contract.
time, it was held that negligence on the part of the plaintiffs, in suffering an unreasonable time to elapse, discharged the surety(c). Where the payment of a bill of exchange given for the price of goods by the vendee is guaranteed by defendant, he is entitled to notice of dishonour, and the want of such notice will exonerate his liability (d). But Wa.»tof
» v' notice.
if the defendant is not a party to the bill, and his guarantie extends to the payment generally of the value of the goods themselves, and is not confined to the mere discharge of the security, it seems not necessary to prove notice of dishonour, or even presentment for payment, where the vendee is notoriously insolvent (e). And in the case of guaranties in general, notice to the surety, of default made on the part of the principal, is not requisite in order to charge the surety (/).
(c) Payne v. Ives, 3 D. & R. 664. The guaranty, in this case, did not speak of the time of making the application; but the Court held that a reasonable time must be intended. The bills were at 18 months, and 17 months and 10 days we're allowed to elapse, and J. S. had become insolvent, before the defendant was applied to.
(rf) Philips v. Astling, 2 Taunt. 206.
(e) HoWorow v. Wilkins, 2 D. & R. 59; S. C. 1 B. & C. 10. See Sviinyard v. Bowes, 5 M. & S. 62.
(/) Goring v. Edmonds, 6 Bingh. 94; S. C. 3 M. & P. 259; Peel v. Tatlock, 1 B. & P. 419. The case of bills of exchange seems to be peculiar, on the ground that the party guaranteeing is considered to be somewhat in the situation of an indorser.
Discharge 3. As laches on the part of the plaintiff discharges
ol stmty. * * °
the surety, so a fortiori this will be the effect where Fraod. actual fraud can be established. Thus, where the defendant agreed to guarantee the payment of the price of certain iron to be delivered to J. S., and a secret bargain was entered into between J. S. and the plaintiff that 10s. per tow should be paid beyond the market price, this was held to be such a fraud upon the defendant as to discharge his liability (g). On the same principle, if the real object, which the guaranty had in view, be evaded, and the transaction between the plaintiff and the principal be colourable only, the defendant will not be held liable on his guaranty (A).
Agreement 4, The liability of the surety may be discharged charge. by express agreement between him and the plaintiff, or by the substitution of another contract, before breach; provided that the plaintiff can avail himself of his remedy on the substituted contract (J). Thus, where the declaration stated » ■
(g) Pidcuck v. Bishop, 3 B. & C. 605; S. C. 5 D. & R. 505. "Such a bargain would have the effect of increasing the surety's responsibility; for, it would compel the vendor to appropriate to the payment of the old debt a portion of those funds, which the surety might reasonably suppose would go towards defraying the debt for the payment of which he made himself collaterally responsible." Per Abbott, C. J., 3 B. & C. 609.
(/<) Evans v. Whyle, 3 M. & Payne, 137, note (c); S. C. M. & Malk. 468; 5 Bingh. 485.
(i) See Case v. Barber, Sir T. Raym. 450.