rence v. Am. Nat. Bank, 54 N. Y. 432; Nat. Bank of Commerce v. Nat. Mech. Bank, 55 N. Y. 211; Mayer v. Mayor, 63 N. Y. 455; Paine v. Upton, 87 N. Y. 327; Wilson v. Randall, 7 Hun, 15; 67 N. Y. 338.

II. The sureties upon the guaranties in suit did not become liable for any indebtedness of the bank to the plaintiff, beyond that arising from deposits of canal tolls made during the current years in which the guaranties were respectively given.

Full effect cannot be given to the language of the concluding clause; it is too broad. In so far as the language of the guaranty is broader than its recitals and special language, it is null and powerless to sustain a liability.

Arlington v. Merricke, 2 Saund. 411; Liverpool Water Works v. Atkinson. 6 East, 507; Wardens v. Bostock, 2 Bos. & P. N. R. 175; Pearsall v. Summersett, 4 Taunt. 593; Hassell v. Long, 2 Maule & S. 363; Napier v. Bruce, 8 Clark & F. 470; Tradesmans Bank v. Woodward, Anthon, N. P. 300; Mayor v. Kelly, 98 N. Y. 467.

Upon reference to the contract it will be seen that the deposits agreed by the bank to be received are "one tenth the deposits of the canal moneys collected at Buffalo during the year 1880," and in the ensuing year, are "a part of the canal tolls," etc. Those are the only deposits which are made the subject of any reference in the recitals of the guaranty. Had it been the intention of the parties that the sureties should be made responsible for a balance carried forward from the preceding year, it would have been a simple matter to add a second recital, stating the existence of such a balance. The State held, at the time that each year's guaranty was taken, a guaranty with perfectly solvent sureties for any balance due it from the preceding year. The principle contended for under this point controls and is decisive of the large class of cases reported in the books where sureties of public officers have been proceeded against for defaults of their principals, happening before the commencement or after the expiration of the terms during which their bonds were given.

U. S. v. Eckford, 1 How. 250 (42 U. S. bk. 11, L. ed. 120); Kingston Mut. Ins. Co. v. Clark, 33 Barb. 196.

The written parts of the instrument must control the printed. The obligation of the guaranty is printed; the recital is in writing.

1 Wait, Act. & Def. p. 27; Delonguemare v. Tradesmans Ins. Co. 2 Hall, 622. See also cases cited in 1 Wait, Act. & Def. 127; 4 Id. 21.

The referee erred in refusing to find that the bond and guaranty of 1882 were accepted by the plaintiff. The real question here is not whether the auditor was so well satisfied with the sureties on the guaranty as would have induced him not to request others later on; but it is whether the deposits made after it was given might have been recovered upon the bond and guaranty of 1882, without further action on the part of the plaintiff's auditor to indicate his approval of the same.

If the plaintiff began to do the things which, as a consideration for the guaranty of 1882, it agreed to do, then the sureties upon that guaranty would be bound; and if they were bound, then the plaintiff is.

1 Pars. Cont. 7th ed. p. 480.

It was not necessary for the auditor to notify either the bank or the sureties, upon the guaranty of 1882, of his acceptance of the guaranty before it took effect as a legal obligation.

Brandt, Suretyship, § 164; Carman v. Elledge, 40 Iowa, 409. See also Wade, Notice, $$ 403, 404; Douglass v. Howland,* 24 Wend. 35.

The guaranty of 1882 was a completed undertaking on the part of the sureties at the time of its execution and delivery and the State has to this day retained possession of it. It has never notified either the bank or the sureties of its refusal to accept the guaranty. There has been on the part of the State no affirmative act of rejection of the guaranty which it would be necessary for the sureties to establish in an action against them upon the guaranty of 1882. Davis v. Wells, 104 U. S. 159 (Bk. 26, L. ed. 686).

That the State is a party to the contract does not change the rule of law.

U. S. v. Bank of Metropolis, 15 Pet. 377 (40 U. S. bk. 10, L. ed. 774); Cooke v. U. S. 91 U. S. 396 (Bk. 23, L. ed. 242); Morse, Banking, 2d ed. 235; Bank of U. S. v. Dandridge, 12 Wheat, 64 (25 U. S. bk. 6. L. ed. 552); Postmaster General v. Norvell, Gilpin, 106.

Mr. D. O'Brien, Atty-Gen., for respondents:

It is only in those cases where the words of the condition of the bond are general and indefinite as to the time during which the surety shall remain liable, or as to the subject of his liability, that a recital in the bond specifying the time during which the prescribed duty is to be performed, or the particular duty itself which the principal undertakes to perform, will limit the application of general words in the contract part of the instrument.

Brandt, Suretyship, § 138, p. 194.

When the bond of an officer is general in its terms and the office is not annual, the liability of the surety is not, in the absence of special circumstances, limited to a year.

Id. 145, p. 204; Mayor of Birmingham v. Wright, 16 Ad. & El. N. S. 623; Dedham Bank v. Chickering, 3 Pick. 335.

In the present case while there was an annual designation of the bank, yet the contract between the bank and the State was unlimited as to the term during which the liability was to continue. It provided that such liability should continue until either the bank had made a voluntary payment of the moneys on hand into the state treasury, or had honored the draft of the state treasurer thereon for such amount.

Bank of British N. A. v. Cuvillier, 14 Moore, P. C. C. 187; Thompson v. Roberts, 17 Irish Law Rep. 490; Worcester Bank v. Reed, 9 Mass. 267; Evans v. Earle, 1 Hurl. & G. 1.

In this case the application of payments made by the bank during the years 1880 and 1881 is of no materiality, inasmuch as these defendants are upon both bonds, unless it should be held that under the bond of 1880 the defendants were not liable for the balance of $65,000 which was on deposit in the bank at the time the bond was executed. But the account was a continuous one. The relation of debtor and creditor existed between the bank and the State. There *See note to this case, Lawyers' edition. [Ed.]

was no application by either party, of the payments made; and the general rule is that under such circumstances, if payments be made upon the account, the law will apply them upon the oldest item.

Quincy Union Bank v. Tutt, 5 Mo. App. 342; Ward v. Johnson, 95 Ill. 216; Johnson v. St. Louis Dispatch Co. 2 Mo. App. 565; Commercial Bank v. Hughes, 17 Wend. 94; Marsh v. Oneida Cent. Bank, 34 Barb. 298; Dows v. Morewood, 10 Barb. 184; Allen v. Culver, 3 Denio, 284; Sheppard v. Steele, 43 N. Y. 52, 59, 60.

Ruger, Ch. J., delivered the opinion of the

court:

The First National Bank of Buffalo had, prior to 1882, for a series of years, been annually appointed a depositary of the State for canal tolls receivable in the City of Buffalo, and had annually executed and delivered to the State contracts regulating the relations between them, the performance of which had been in each year guarantied on the part of the bank by some of its directors in their individual capacity.

Early in the season of 1882 said bank became insolvent after it had been appointed a depositary, but before it had completed and delivered to the State satisfactory security for the performance of its obligations for the ensuing year; and after that time the State discontinued its relations with such bank.

Upon its insolvency the bank was found to be indebted to the State in a large sum of money; and the question in this case arises over the liability of its guarantors for such debt.

The complaint embraces the guaranties of both the years 1880 and 1881, in its allegations, and seeks to recover the balance appearing to be due on the account for moneys deposited at the commencement of the year 1882.

These contracts and guaranties were expressed in precisely similar language, and so far as the parties to them are concerned are subject to the same rule of interpretation, and must be understood to have been intended to cover the same class of obligations, and to differ only in respect to the time of their execution and the period of time covered by their provisions.

Such guaranties are joint and several in character, and it would constitute no defense to an action upon any of them to show that there were other persons liable to the State for the whole or a portion of the same debt claimed of the defendants, or that such persons are not made parties to the action.

The defendants here are each and all obligors upon the bonds of both 1880 and 1881; and in the view we take of the case it does not enlarge their liability to consider their situation as parties to the guaranty of 1880.

It may be that, as the result of investigation, it will be discovered that other parties liable to the State for a portion of the money due from the bank to the State at the time of its insolvency, may be found, and as a consequence flowing from such fact that the defendants in this action may have a claim for contribution from such parties in case they are obliged to pay the whole sum due the State; but it is not perceived how that fact can affect the liability

of such guarantors upon their express contract of indemnity.

The only breach of the obligations of the guaranty alleged in the complaint consists of the refusal of the bank to pay the sum claimed to be due from it by the State on the 20th day of April, 1882, and that amount consisted of the general balance due on the account accruing through a series of years and covering the operations of 1880 as well as those of 1881.

Whatever, therefore, may be the liabilities or obligations of the parties to the contract and guaranty of 1880, it is entirely immaterial in this action; for the guaranty of 1881 covers not only the transactions of that year but also the liability resulting from the transactions of 1880 as represented by the balance due from the bank to the State at the execution of the contract and guaranty of 1881.

If, therefore, it shall appear upon the further examination of the case that the defendants are liable upon the guaranty of 1881, for the whole balance due from the bank to the State in the spring of 1881, no question arises as to the proper application of payments made by the bank in the respective years, or as to the equities of the guarantors of the respective years as between themselves.

Such rights are to be settled and adjusted in an appropriate action, to which all such guarantors are made parties, and where everyone interested may be heard in his own behalf; and these could not be heard here for want of proper parties, if for no other reasons.

This is a simple action at law, upon a written instrument, for a sum of money claimed to be due to the plaintiff from the parties thereto. If the letter of their contract shows that they have made themselves liable for the sum claimed, it is no defense to this action to show that there are other persons who might also be resorted to by the State for a portion of the

same sum.

It is claimed by the appellants that the sureties on the bond of 1881 have been released from liability thereon by reason of the acceptance by the State of a contract and guaranty from the bank for the year 1882; and it is contended that such acceptance operated as a discharge of all previous guaranties.

This claim seems to be disposed of by the findings of fact made by the referee. He expressly finds that the State never accepted the same as a compliance by the bank with the condition imposed upon them by the State in respect thereto.

The evidence in the case seems to us fully to support this finding, and renders it not only probable but quite certain that the State authorities did not intend to accept the guaranty in question.

The State could only be bound to such acceptance by the express action of its officers duly authorized to approve such guaranty, or perhaps their omission to act thereon for such a lapse of time as would authorize a legal presumption that they intended to approve the guaranty.

During the period between the receipt of this guaranty and the insolvency of the bank but a few days intervened; and the auditor was diligently employed in this time in inquiring into

1. A national bank executed a bond to secure deposits made or which might be made with it by the obligee, a savings bank. Certain individuals indorsed on the bond: "In consideration of the making of the deposits mentioned in the foregoing agreement we each and severally guaranty the performance of the foregoing contract by the" national bank; a similar bond between the same banks, which had been in force for some time, was surrendered on the execution of the new bond; after the giving of the new bond the national bank failed, having funds of the savings bank on deposit, the date of the last deposit being prior to the execution of the new bond. Held, in an action to recover such funds from the guarantors of the new bond, that:

(a) The new bond was intended as a substitute for the old one.

(b) That the surrender of the old bond was a good consideration for the new bond and also for the guaran. ty, and that it was immaterial whether the guarantors knew or did not know that the surrender of the old bond was in the contemplation of the parties when they became guarantors.

2. Where a contract of guaranty is entered into concurrently with the principal obligation, a consideration which supports the principal contract supports the subsidiary one also; and the consideration need not be expressed in the guaranty, but may be shown by parol. 3. An agreement by a savings bank to make deposits in an incorporated bank in this State is permissible, where the deposit does not exceed the limit prescribed by Laws of 1875, chap. 371, § 27; and an agreement by the bank of deposit to pay interest (the deposit being at all times subject to call by the savings bank) does not convert the deposit into an unauthorized loan.

(Decided March 1, 1887.)

The defendants are not estopped from asserting and standing upon their rights, based upon the actual facts proved by any recital contained in the contracts. The defendants as sureties were guarantors with no benefit to themselves on a contract collaterally binding them for the performance of a contract between the principals, and for their sole benefit, and without any knowledge of the dealings or arrangements out of which it arose.

Brandt, Suretyship, § 32; 11 Md. 322; Morgan's DeColyar, Guiar. 179; Halliday v. Hart, 30 N. Y. 474.

A valid agreement to forbear the collection of a debt may furnish a good consideration; but forbearance only cannot.

Manter v. Churchill, 127 Mass. 31; Shupe v. Galbraith, 32 Pa. 10; Mecorney v. Stanley, 8 Cush. 85.

In the case at bar the plaintiff neither agreed nor intimated that if the contract was given it would permit the deposits to remain in the First National Bank.

The giving of this contract by the First National Bank in no way changed the rights or obligations of it or the plaintiff to each other. The indebtedness was wholly antecedent; nor was there any agreement on the part of either to the other to do or omit to do anything in the future as a consideration of the giving or taking said contract and guaranty. The plaintiff sustained no detriment whatever in getting it; parted with nothing; gave nothing; promised nothing.

Wood v. Tunnicliff, 74 N. Y. 38; 3 McLean, 388; Hopkins v. Logan, 5 Mees. & W. 247. guaranty of defendants to secure the payment The plaintiff had no authority to take the of money deposited in the First National Bank.

of trustees in the management of savings banks The statute declaring the powers and duties establishes beyond question the want of power in the plaintiff to take the personal obligation of the defendants (the guaranty in suit) as security for the repayment of its deposits with the First National Bank, and that such taking was an illegal and void act; Bushnell v. Chautauqua Co. Nat. Bank, 10 Hun, 378; and is so declared by the statute.

Sess. Laws 1875, chap. 371.

Section 1, subd. 7, empowers them "To receive money on deposit and invest the same *** as hereinafter provided."

Section 22 authorizes the receipt of money on deposit, "and to invest the same *** as hereinafter authorized and provided, and not oth

Section 26 authorizes the trustees to "invest the moneys deposited therein only as follows," naming the securities.

Sections 27 and 28 authorizes the deposit temporarily in certain banks, the excess of current daily receipts, and a sum for current expenses until the same can be judiciously invested in securities named in section 26.

Section 30 declares: "It shall not be lawful for the trustees of any savings bank to loan money deposited or any part thereof upon notes, bills of exchange, drafts, or any other personal securities whatever."

Section 36 provides for making semi-annual reports by savings banks.