lead or tend to mislead the other party, uses such words at his peril, and the words so used will be construed most strongly against the surety. This line of decisions gives the obligee the right to adopt his construction of the contract, provided it is reasonable and provided he acts on it and it is employed by the surety in the contract.10 The other line of decisions follows the rule laid down by Chief Justice Marshall in the case of Russel vs. Clark in which he says: "It is the duty of the individual who contracts with one man on the credit of another not to trust to ambiguous phrases and strained constructions, but to require an explicit and plain declaration of the obligation he is about to assume.' 99 11 Many decisions, on the question involved, have followed the rule enunciated by Chief Justice Marshall, giving a construction tending to the opposite of the other line of decisions.12 Taussig vs. Reid et al., 145 III., 488; Rindge vs. Judson, 24 N. Y., 64. 17 Cranch, 90 19 Cutler vs. Ballou, 136 Mass., 337; Morgan vs. Boyer, 30 Ohio State, 324. CHAPTER IV. LIABILITY AND RIGHTS OF SURETY. SECTION 26. THE EXTENT OF THE SURETY'S The meaning of the surety's contract having been determined, it remains for the court to say whether a strict construction in favor of the surety should be given the contract, or whether the contract should receive the same construction as any other contract. The general rule, which it seems in reason is to be preferred, is to adopt the latter of the two constructions and bring to the analysis of the surety's liability the same rules of construction that are generally to be applied by the courts in the construction of the ordinary contract. For instance, the courts have frequently applied to suretyship contracts the general rule that a contract is to be most strongly construed against the person who is responsible for the language used in the contract; likewise the courts have endeavored to sustain the obligation of the surety where another construction would leave the creditor without a remedy. In any event it is to be remembered that all questions of construction are for the court. It is the duty of the court and the court alone to construe the contract.2 In Keeler vs. Herr, the Illinois Court says: "Where the contract is in writing, it is for the court to state its meaning; * * * the acts of the parties are to be looked to, only where there is a doubt as to the mean 1 Shreffler vs. Nadelhoffer, 133 Ill., 536. Machine Co. vs. Laster, 81 I. ing of the contract, arising from the ambiguity of the words or phrases used." The student of law should bear in mind that in determining the liability of the surety, and in passing on defenses that the surety might plead as the privilege of his office, there should be no confusion of the rule that a surety is a favorite of the law, with the application of the general rules of construction to the surety's contract. The general rules of construction are in no way to interfere with the rule that the surety has the right to stand on the strict terms of the contract, and to claim a discharge where the contract is altered in any respect without his consent. Usually the surety secures no personal benefit on his contract of suretyship; the purpose of the contract is to assist the principal debtor; therefore he in justice ought to be bound no further than he has expressly obligated himself. In the application of this principle, in this sense, he is a favorite of the law. The contract of suretyship will not begin until the day is reached named in the contract, and will close at the time stipulated, if the parties have agreed on the time in the contract. In such instances, where the terms of the contract are not made uncertain, the liability is limited strictly as shown by the terms of the contract. SECTION 27. SURETY MAY BE SUED BEFORE PRINCIPAL WHEN. When the surety's contract or the guarantor's contract is the same as the principal's, he may be sued before the principal is sued, and as soon as the principal is in default, because the promissor in the suretyship contract is likewise then immediately in default. The • 157 Ill., 57. Hoey vs. Jarman, 39 N. J. L., 523; Redfield vs. Haight, bringing of the suit alone is sufficient demand as to the surety in such a case; he is bound to observe the default of his principal. It is also held that the creditor is not bound to exhaust any remedies he might have on mortgage security, which he has also taken to secure the debt, but he may proceed at once against the surety personally. Nor would the bankruptcy of the principal debtor, make it necessary for the creditor to delay his action against the surety, and proceed to file his claim in the bankruptcy court and await the disbursement of the bankrupt's estate; nor is he bound to delay his action even though the claim has been filed in the bankruptcy court against the bankrupt's estate. Some states have adopted the rule of the civil law, and give the surety the right to compel the creditor to proceed first to sue the principal debtor, at the expense of the surety, a bond usually being required of the surety to protect the creditor against loss. A guarantor who guarantees payment of a debt at some time certain is an absolute guarantor, and may be sued if the debt is not paid, without first suing the principal, but where the guaranty is made conditional, by the promise reading that the guarantor is to be considered as a conditional guarantor, as for instance a guarantor for the collectibility of the debt, then the creditor must exhaust his legal remedies in an endeavor to make collections, or show authoritatively that a suit against the principal debtor followed by an execution, or other proper steps to collect, would be unavailing. Exhausting his remedies against the principal debtor is held to be a condition precedent to the creditor's right to hold the guarantor, unless the guaranty is an absolute one. 'Lemmon vs. Strong, 55 Conn., 443; French vs. March, 29 Wis., 649. SECTION 28. SURETY NOT LIABLE BEYOND PENALTY OF HIS BOND. Another example of strict construction of the surety's contract is in the holding that the amount named in the surety's bond is the maximum sum that could be recovered in a suit instituted on the bond.® This being in accordance with the obligation of the surety's agreement, the penalty in the bond must therefore be considered as the limit of promissor's obligation. Where, however, after the surety is in default, he delays meeting his obligation, he must answer, in addition, for the legal rate of interest on the money due on the obligation and withheld from the creditor. The rule is sometimes stated that, when the obligation matures on the default of the principal, then the surety being also in default, he must answer for the consequences of his own delay in meeting the obligation thereafter. Some courts hold that interest runs from the date of breach, others from the date of demand. But it is held, nevertheless, that the doctrine that the surety is not to be liable beyond the penalty named in the bond does not apply where the bond is conditional for the performance of a covenant other than the payment of money. In such a case, quantum damnificatus is the issue." A surety, or guarantor, is likewise liable for stipulated damages to be paid in case of breach, and this may include the expense of suit, attorney's fees and additional damages. This would be the This would be the case, for instance, |