The contract of guaranty, like every other contract, implies two parties, and requires the agreement of both parties to make it valid. In other words, a promise to pay the debt of another is not valid unless it is accepted by the promisee. (c) Language is sometimes used by courts and legists which might seem to mean that there were cases of guaranty which need not be accepted; but this is not accurate; there are cases in which this acceptance is implied and presumed; but there must be * acceptance or assent, expressed or implied, or there can be no contract. The true questions are, when must statute of frauds if it fails to express the consideration. Parry v. Spikes, 49 Wis. 384, following Taylor v. Pratt, 3 Wis. 674.
(z) Chitty on Contracts, 196; Gall v. Comber, 1 J. B. Moore, 279.
(a) Since the first edition of this volume was published, the Court of Exchequer have decided in Couturier v. Hastie, 16 E. L. & E. 562; 8. c. 8 Exch. 40, that such agreement by a factor is not within the statute of frauds, as being a promise to answer for the default of another.
(b) See ante, vol. i. p. *92, note (c).
(c) Mozley v. Tinkler, 1 C. M. & R. 692; Mclver v. Richardson, 1 M. & Sel. 557. A mere overture or offer to guarantee is not binding unless accepted. Chitty on Cont. 437, n. (1); Caton v. Shaw, 2 Har. & G. 13; Menard v. Scudder, 7 La. An. 385; M'Collum v. Cushing, 22 Ark. 540.
this acceptance be express and positive, and in what way and at what time must it be made when an express acceptance is necessary. And these questions have sometimes been found to be very difficult. If one goes with a purchaser, and there says to the seller, "furnish him with the goods he wishes, and I will guarantee the payment," and the seller thereupon furnishes the goods, this would be a sufficient acceptance of the guaranty, and a sufficient notice to the guarantor. All the parts of the transaction would be connected, and could leave no doubt as to its character.1 But if the guaranty were for a future operation, perhaps for one of uncertain amount, and offered by letter, there should then, according to the weight of authority, be a distinct notice of acceptance, and also a notice of the amount advanced upon the guaranty, unless that amount be the same that is specified in the guaranty itself. (d) 2 The reason of this * is, that knowledge that his guaranty is accepted and acted upon, unless he is informed to the contrary. (e) As to the manner of the notice, no cases have prescribed any special form, (f) nor is the time precisely determined. But the notice must be given with sufficient distinctness, and in a reasonable time; and that time will be reasonable which secures to the guarantor all rights and means of protecting himself. (g) *
(d) We have already considered this subject somewhat in our chapter on assent. See vol. i. p. *478. The modern cases have quite generally established the doctrine, that where the proposition to guarantee, or letter of credit, is future in its application, and uncertain in its amount, the guarantor must have notice that his guaranty is accepted, and that goods are delivered upon it. Lee v. Dick, 10 Pet. 482; Adams v. Jones, 13 Pet. 207; Norton v. Eastman, 4 Greenl. (Bennett's ed.) 521; Tuckerman v. French, 7 Greenl. (Bennett's ed.) 115; Kay v. Allen, 9 Penn. St. 320; Cremer v. Higginson, 1 Mason, 323; Howe v. Nickels, 22 Me. 175; Hill v. Calvin, 4 How. (Miss.) 231; Taylor v. Wetmore, 10 Ohio, 490; Law-son v. Townes, 2 Ala. 373; Mussey v.
Rayner, 22 Pick. 223; Wildes v. Savage, 1 Story, 22; Walker v. Forbes, 25 Ala. 139; Bell v. Kellar, 13 B. Mon. 381. And see Lowe v. Beckwith, 14 B. Mon. 187. This notice must be given in a reasonable time after it is accepted. Id. Notice of the acceptance is not necessary, however, where the acceptance is contemporaneous with the guaranty. Wildes v. Savage, 1 Story, 22; Bleeker v. Hyde, 3 McLean, 279. In New Haven County Bank v. Mitchell, 15 Conn. 206. where A executed a writing, whereby he agreed with B for value received, that he, A, would, at all times, hold himself responsible to B to a limited amount, for such paper as might be indorsed by C and held by B within the amount specified, without notice to be given to A by B, and the guarantor may know distinctly his liability, and have the means of arranging his relations as he would with the party in whose favor the guaranty is given, and take from him security or indemnity. From the reason of the thing we may state the rule to be, that every guarantor must have this opportunity; and unless the transaction is such that of itself it gives him all the knowledge he needs, at a proper time, then this knowledge must be given him by specific notice. The principle which underlies the whole law of guaranty, is that this contract, like every other, must be known to the parties to it. Still, this knowledge need be only a reasonable knowledge; and we understand the courts which hold that notice of acceptance is not always necessary to mean only, that where an offer to guarantee is absolute, and contains in itself no intimation of desire for specific notice of acceptance, it may be supposed that the offerer has a reasonable such writing was simultaneously delivered by A and accepted by B, and B on the credit thereof discounted paper indorsed by C; it was held, 1st, that no other acceptance by B or notice thereof to A was necessary to perfect the obligation of A; 2d, that no notice to A of the amount of credit given by B on the paper indorsed by C was necessary, this being expressly dispensed with by the terms of the contract. - Some authorities hold that not only must the guarantor have reasonable notice of the acceptance of his guaranty, but also of the amount of goods delivered upon it, and that payment for the same has been demanded of the original debtor. Howe v. Nickels, 22 Me. 175. And see Union Bank of Louisiana p. Bowman, 9 La. An. 195; Farm. & Mech. Bank v. Kercheval, 2 Mich. 504. So in Clarke v. Remington, 11 Met. 361, B. by his guaranty engaged to pay C. for goods which C. might, from time to time, sell and deliver to D. C. accepted the guaranty, and R. had notice that it was accepted. C. delivered one parcel of goods to D., for which D. seasonably paid. In September, 1842, C. delivered other goods to D.; in March, 1843, took D.'s note therefor, payable in twenty days, which was never paid. In June, 1843, D. was in business, and had property sufficient to pay C. In April, 1844, D. was discharged from his debts under the insolvent laws, but paid no dividend, and C. did not prove his claim against him under the proceedings in insolvency. C. gave R. no notice of the credit which he had given to D., nor of the state of D.'s accounts with him, nor of D.'s failure to meet his payments, until the 1st of January, 1845, when he demanded payment from R. of the amount due to him from D. Held, that R. was discharged from his liability on the guaranty by C.'s omission to give him seasonable notice of the amount due from D., and of D.'s failure to pay it. See also McGuire v. Newkirk, 1 Eng. (Ark.) 142. In Craft v. Isham, 13 Conn. 28, the facts were, that in April, 1832, A gave B a writing, guaranteeing the payment to B of goods which he should sell to C, to the amount of $1,000, if C should fail to pay at the end of three years. C was the son-in-law of A, and A daily passed C's store, and occasionally purchased goods there. B furnished C goods, to the amount of about $1,000, between the said April and November following, on a credit of four months, the last credit expiring on the 10th of March, 1833. In November, 1834, C became insolvent, and never paid for the goods. No notice was at any time given to A of the acceptance of the guaranty by B, nor was any notice given to him of the amount of the debt due from C for the goods, until November, 1835. In an action by B against A on the guaranty, it was held, that the defendant was entitled to notice, within a reasonable time, of the acceptance of the guaranty by the plaintiff, and of the amount of the goods furnished under it, and that the notice given in this case was not within a reasonable time.
1 Thompson v. Glover, 78 Ky. 193; Crittenden v. Fiske, 46 Mich. 70. If the guaranty is definite and absolute in terms, notice is not necessary; as, "I will sign the note with A. for the cow bought of B.," Carman v. Elledge, 40 Ia. 409; and "If A. purchases a case of tobacco on credit, I agree to see the same paid for in four months," Case v. Howard, 41 Ia. 479. And so of a guaranty of an existing liability, as where goods were sold on an oral guaranty, and the guarantor subsequently requested in writing to "give A. a little more time and I will see that you get your money." Wills v. Boss, 77 Ind. 1.
2 A direct promise to guarantee for future indebtedness requires no notice of acceptance. Wilcox v. Draper, 12 Neb. 138; Kline v. Raymond, 70 Ind. 271. A guaranty for existing and future indebtedness," unconditionally at all times," under seal and expressed for a nominal consideration, given to the debtor for delivery to the guarantee, and by him acted upon, requires no notice to the guarantor of acceptance, or of the amount of indebtedness, or of the default of payment, Davis v. Wells, 104 U. S. 159; see also King v. Batterson, 13 R. I. 117. But notice was held necessary of the acceptance of a guaranty sent by letter to a general purchasing agent, and by him shown to the guarantee. Claflin v. Briant, 58 Ga. 414. - Notice of acceptance may be waived, as by a letter recognizing liability on a prior guaranty and promising to make it good. Farwell v. Sully, 38 Ia. 387.