frauds and is enforcable though not in writing; or, if the promise is in effect to pay the promisor's own debt, though the debt of another is incidentally guaranteed, the contract need not be in writing. In the case of Davis v. Patrick (5) we find these principles illustrated. The defendant had promised to advance certain sums of money to a mining company, and the latter in return was to furnish him a large quantity of ore free of cost and to allow the plaintiff to have absolute control of the mine it was operating, till the debts of the mining company were paid. The plaintiff, who was manager of the mine, sued defendant for his services, on the defendant's oral promise to pay him if he would continue in charge of the mine. The court held the defendant was liable on his promise, for, since he was the party who was chiefly interested in and benefitted by the working of the mine, the promise was not within the statute of frauds. The court thought the contract here was not a pure suretyship contract, but involved chiefly the benefit of the surety himself, consequently was not a promise to answer for the debt, default, or miscarriage of another within the meaning of the statute. The principle seems to be that the contract is not within the statute where the guarantor receives so substantial a benefit that he would be unjustly enriched if his promise were not enforceable.

§ 10. Strict suretyship. As was previously stated, a strict surety is one who is directly and primarily liable on his contract to the creditor the principal. He is usually a joint obligor with the principal, and the creditor can sue

him as such. It is no defense to an action brought by the creditor against him that he is only a surety, for, as to the creditor, he is a principal obligor, and is surety only as between himself and his principal. Thus, in the English case of Sison v. Kidman (6) an action in debt was brought against the defendant as maker of a promissory note, and the defendant pleaded that the debt was the debt of another and not his debt, and that there was no consideration for the note as to him. The court held, however, that the plea was not good for it was not a guaranty but the defendant was a principal obligor. When the defendant became a party to the note he entered into an immediate contract with the plaintiff, and the consideration was the money loaned to the other maker.

§ 11. Common forms of suretyship. Suretyship may be created by express contract or may arise by operation of law, but the law is the same no matter in what manner created. A grantee of mortgaged land, who assumes the mortgage debt, becomes principal and his grantor his surety for the debt, as between themselves. Likewise, where a lessee who is personally bound to pay rent on his lease assigns the lease, he stands in the position of a surety for the rent as to the assignee of the lease. A similar case of suretyship arises, when a partnership is dissolved and one partner assumes the firm debts. He thereby becomes principal and the other party surety for the debts, as between themselves. Endorsers on promissory notes are sureties as to the makers. Property may stand in the position of surety for a debt, as where a man

(6) 11 Law Journal Reports, Common Pleas, 100.

pledges his property as security for the performance of an obligation of another. Parties may even be placed in the position of sureties against their wills, as for instance where A and B each makes his negotiable note and sends it to C to sell on commission, and C wrongfully pledges the note to D to secure debts due D from him. A and B are in effect sureties for the debt of C, for D, being a bona fide purchaser of the notes, can sue on them while of course the debt secured is the debt of C (7).

§ 12. Consideration. A contract of suretyship must be supported by a sufficient consideration. This must consist of some detriment to the provisor. Whatever consideration is sufficient to sustain the promise of a principal will sustain a surety's promise which is concurrent with that of the principal. See Contracts, §§ 40-61, in Volume II. This is true whether the contract be one of guaranty or strict suretyship. When the contract between creditor and principal is induced by the surety's promise to the creditor, the making of such contract is sufficient consideration. However, when the surety's promise is subsequent to the creation of the debt, and the creation of the debt is not an inducement to it, there must be some new consideration or such promise will be void. An agreement by the creditor, to forbear the collection of a debt for a definite time, is a good consideration for a surety's promise (8), as is also an agreement to extend the time of payment (9). Any other consideration suf

(7) McBride v. Potter, Lovell Co., 169 Massachusetts, 7.

(8) Jackson v. Jackson, 7 Alabama, 791.

(9) Pratt v. Hedden, 121 Massachusetts, 116,

ficient to support a contract may be given to make the surety's promise binding.

§ 13. Delivery of contract of suretyship. A contract of suretyship under seal is not executed and complete until delivery of the instrument creating it, and takes effect only from execution and delivery; because the obligation of the surety is to the creditor and not to the principal, and hence the instrument is of no validity until it is delivered to the creditor or his duly authorized agent. The instrument creating the surety's obligation may be delivered by one who is not authorized to deliver it. In such case, if the person who delivers it to the creditor has apparent authority-if the circumstances are such that the delivery is apparently valid and proper, and the creditor has no notice of anything improper to arouse his suspicion, the delivery is valid and the surety liable on such contract. This depends upon principles of estoppel or incidental authority in agency. See Agency, §§ 97, 110-11, 120-21, in Volume II. Thus, where a bond properly executed and signed by a surety is wrongfully delivered to the creditor by the principal debtor, and the creditor has no notice that the delivery was unauthorized, the surety will be bound; for the principal, having the bond properly executed in his possession, and being a proper person to deliver it, would, as to the creditor, have apparent authority to make such delivery (10).

§ 14. Delivery of an imperfect instrument. If an instrument, incomplete on its face, is delivered to a creditor, of course a surety on it is not bound, because the creditor

(10) Belden v. Hurlburt, 94 Wisconsin, 512

has notice that it is incomplete. Sometimes, however, a bond or note is executed by sureties but is not executed by the principal, and is then delivered to the creditor so that nothing irregular appears on the face of it. For instance, when a joint bond is given, signed by two or more sureties but not signed by the principal, the sureties appearing as principal obligors on the bond, it would appear to be a perfect bond. In such case, the sureties are usually held liable on the bond, though not signed by the principal debtor as intended (11) though a number of states hold a contrary rule (12). The states holding the rule as stated consider that, since the sureties executed the bond and permitted it to get into the hands of some party who delivered it, they are therefore more to blame than the creditor or obligee, who with nothing to arouse his suspicion innocently took the bond in good faith and paid value for it. The loss thus falls on the sureties whose lack of care caused the damage.

When a surety signs an instrument with the understanding that the principal is to get one or more additional sureties to sign it, the instrument, if delivered, is binding on him, though no others sign it as sureties. Thus, where A executed his promissory note and induced B to sign as surety, on the promise he would also have C and D sign as sureties, and A then delivered the note to the payee therein named, without having C and D sign as sureties, it was held that B was bound as surety on the note (13). It would be different in a case like the above

(11)

Trustees v. Sheik, 119 Illinois, 579. (12) People v. Hartley, 21 Calif. 585.

(13) Deardorff v. Foresman, 24 Indiana, 481.