guaranty

The guaranty is in no sense a personal one. It attaches to the note—is part of it, as much so as if written on the back of it; goes with the note everywhere, and invites every one who has taxes to pay to take it.

An undertaking to answer for another's liability, and collateral thereto. A collateral undertaking to pay the debt of another in case he does not pay it. Shaw, C. J., 24 Pick. (Mass.) 252. 194 111. App. 514. It is distinguished from suretyship in being a secondary, while that is a primary, obligation; or, as sometimes defined, guaranty is an undertaking that the debtor shall pay; suretyship, that the debt shall be paid. The undertaking is essentially in the alternative. A guarantor cannot be sued as a promisor, as the surety may; his contract must be specially set forth. A guarantor warrants the solvency of the promisor, which an indorser does not. 8 Pick. (Mass.) 423. Guaranty, as distinguished from "suretyship," is an independent contract, while the surety is bound jointly with his principal. "A contract of suretyship is a direct liability for the act to be performed by the debtor, and a guaranty is a liability only for his ability to perform the act." 52 Pa. St. 440. As distinguished from "indemnity," in that a principal obligation is essential to guaranty, while indemnity may be a primary contract. Guaranties are either: (1) General, running to any person dealing with the principal. (2) Special, to a particular person. (3) Limited, i. e., covering only a particular transaction. (4) Continuing, applicable to a class of future transactions. (5) Absolute, conditioned only on the default of the principal. (6) Conditional, dependent on some extraneous condition.

n. A promise to answer for the payment of some debt or the performance of some duty, in case of the failure of another person, who, in the first instance, ls liable to such payment or performance. Gallagher v. Nichols, 60 N. Y. 444; Andrews v. Pope, 126 N. C. 472, 35 S. E. 817 ; Deming v. Bull, 10 Conn. 409; Reigart v. White, 52 Pa. 438. A guaranty is an undertaking by one person to be answerable for the payment of some debt, or the due performance of some contract or duty, by another person, who himself remains liable to pay or perform the same. Story, Prom. Notes, § 457. A guaranty is a promise to answer for the debt, default, or miscarriage of another person. Civil Code Cal. § 2787. A guaranty is a contract that some particular thing shall be done exactly as it is agreed to be done, whether it is to be done by one person or another, and whether there be a prior or principal contractor or not. Redfield v. Haight, 27 Co.nn. 31. The definition of a "guaranty," by text-writers, is an undertaking by one person that another shall perform his contract or fulfill his obligation, or that, if he does not, the guarantor will do it for him. A guarantor of a bill or note is snid to be one who engages that the note shall be paid, but is not an indorser or surety. Gridley v. Capen, 72 111. 13. Synonyms. The terms guaranty and suretyship are sometimes used interchangeably ; but they should not be confounded. The contract of a surety corresponds with that of a guarantor in many respects; yet important differences exist The surety is bound with his principal as an original promisor. He is a debtor from the beginning, and must see that the debt is paid, and is held ordinarily to know every default of his principal, and cannot protect himself by the mere indulgence of the creditor, nor by want of notice of the default of the principal, however such indulgence or want of notice may in fact injure him. On the other hand, the contract of a guarantor is his own separate contract. It is in the nature of a warranty by him that the thing guarantied to be done by the principal shall be done, not merely an engagement jointly with the principal to do the thing. The original contract of the principal is not his contract, and he is not bound to take notice of its non-performance. Therefore the creditor should give him notice; and it is universally held that, if the guarantor can prove that he has suffered damage by the failure to give such notice, he will be discharged to the extent of the damage thus sustained. It is not so with a surety. Durham v. Manrow, 2 N. Y. 548; Nading v. McGregor, 121 Ind. 465, 23 N. E. 283, 6 L. R. A. 686. Guaranty and warranty are derived from the same root, and are in fact etymologically the same word, the "g" of the Norman French being interchangeable with the English "w." They are often used colloquially and in commercial transactions as having the same signification, as where a piece of machinery or the produce of an estate is "guarantied" for a term of years, "warranted" being the more appropriate term in such a case. See Accumulator Co. v. Dubuque St. R. Co., 64 Fed. 70, l2 C. C. A. 37; Martinez v. Earnshaw, 36 Wkly. Notes Cas. (Pa.) 502. A distinction is also sometimes made in commercial usage, by which the term "guaranty" is understood as a collateral warranty (often a conditional one) against some default or event in the future, while the term "warranty" is taken as meaning an absolute undertaking in præsenti, against the defect, or for the quantity or quality contemplated by the parties in the subject-matter of the contract. Sturges v. Bank of Circleville, 11 Ohio St. 169, 78 Am. Dec. 296. But in strict legal usage the two terms are widely distinguished in this, that a warranty is an absolute undertaking or liability on the part of the warrantor, and the contract is void unless it is strictly and literally performed, while a guaranty is a promise, entirely collateral to the original contract, and not imposing any primary liability on the guarantor, but binding him to be answerable for the failure or default of another. Masons' Union L. Ins. Ass'n v. Brockman. 20 Ind. App. 206, 50 N. E. 493.

— Absolute guaranty. An unconditional promise of payment or performance on the default of the principal. Mast v. Lehman, 100 Ky. 466, 38 S. W. 1056 ; Beardsley v. Hawes, 71 Co.nn. 39, 40 Atl. 1043; Farmers' Bank v. Tatnall, 7 Houst. (Del.) 287, 31 Atl. 879; Es-berg-Bachman Tobacco Co. v. Heid (D. C) 62 Fed. 962

— Collateral guaranty. A contract by which the guarantor undertakes, in case the principal fails to do what he has promised or undertaken to do, to pay damages for such failure ; distinguished from an engagement of suretyship in this respect, that a surety undertakes to do the very thing which the principal has promised to do, in case the latter defaults. Woody v. Haworth, 24 Ind. App. 634, 57 N. E. 272 ; Nading v. McGregor, 121 Ind. 470, 23 N. E. 283. 6 L. R. A. 686.

— Conditional guaranty. One which depends upon some extraneous event, beyond the mere default of the principal, and generally upon notice of the guaranty, notice of the principal's default, and reasonable diligence in exhausting proper remedies against the principal. Yager v. Title Co., 112 Ky. 932, 66 S. W. 1027 ; Tobacco Co. v. Heid (D. Ct) 62 Fed. 962; Beardsley v. Hawes, 71 Co.nn. 39, 40 Atl. 1043.

— Continuing guaranty. One relating' to a future liability of the principal, under successive transactions, which either continue his liability or from time to time renew it after it has been satisfied. Sewing Mach. Co. v. Co.urtney, 141 Cal. 674, 75 Pac. 296; Buck v. Burk, 18 N. Y. 340; Bank v. Drake (Iowa) 79 N. W. 121.

— Special guaranty. A guaranty which is available only to the particular person to whom it is offered or addressed; as distinguished from a general guaranty, which will operate in favor of any person who may accept it. Everson v. Gere, 40 Hun (N. Y.) 250; Tidioute Sav. Bank v. Lib-bay, 101 Wis. 193, 77 N. W. 182, 70 Am. St Rep. 907; Evansville Nat. Bank v. Kauffmann, 93 N. Y. 273, 45 Am. Rep. 2O4.

— Guarantied stock. See Stock.

— Guaranty company. A corporation authorized to transact the business of entering into contracts of guaranty and suretyship ; as, one which, for fixed premiums, becomes surety on judicial bonds, fidelity bonds, and the like. See Ætna L. Ins. Co. v. Coulter, 74 S. W. 1050, 25 Ky. Law Rep. .193.

— Guaranty insurance. See Insurance.

To become responsible performance of a duty by properly liable.

o. Toundertake collaterally to answer for the payment of another's debt or the performance of another's duty, liability, or obligation; to assume the responsibility of a guarantor; to warrant. See

A promise to answer for the payment or performance of another; a warranty; to warrant, v. Surety.

Guarantee. L. Fr. & Eng. A promise to answer for the payment of some debt, or the performance of some duty, in case of the failure of another person, who, in the first instance, is liable to such payment or performance. Fell on Guaranties, 1. 3 Kent's Com. 121. — An engagement to be responsible for the debts or duty of a third person, in the event of his failure to fulfil his engagement. Story on Contracts, § 852. The primary meaning of guaranty is an undertaking to pay the debt of another in case he does not pay it. 24 Pick. R. 260, 262. See U. S. Digest and Supplement, Guaranty. This word seems to be essentially the same with warranty; being scarcely distinguishable from garrantie and garranty, (qq. v.) the old French forms of that word. Guarantie is the form used by Mr. Fell in his Treatise. To GUARANTY (or GUARANTEE.) [L. Lat. guarentare, guarentisare.] To become responsible for the payment of money or the performance of a duty by another person; to warrant the payment of a debt or performance of a duty by another, who is primarily and properly liable to pay or perform it; to undertake that a person shall pay a certain debt or perform a certain duty to another, or, in case of failure on his part, that the party guaranteeing will himself pay the debt, or answer for the default. The obligation of a guaranty is essentially in the alternative, as is noticed by Britton in his definition of garaunter, (to warrant.) Britt. c. 75. See Guaranty.