Where the guaranty is general, that is, addressed to all persons, any person who acts upon it may enforce it. This principle has already been stated, the law creates the privity of contract between the person so offering himself as a guarantor, and the person who accepts the offer so made. It has been held that where there is a general guaranty of negotiable paper, the indorsee of such paper acquires the benefits of the guaranty, without a special assignment of the guaranty being made to him.20 But the general question remains, is this general guaranty of negotiable paper to be considered as passing to the indorsee the same rights that he would acquire by an indorsement? This question is answered in the negative, the guarantor having as against an indorsee of the paper after maturity at least the same defenses as the makers against the original payee.21

19 Moore vs. Holt, 10 Gratt. (Va.), 284.

20 Ellsworth vs. Harmon, 101 I11., 274.

A special guaranty is not even assignable, until the right of action has accrued on the same.22 Any other rule would rob this kind of a guaranty of its limitations; a substitution of one in the place of the one, to whom the trust is implied, would lack the necessary privity of contract to bind the promissor.

Where the payee or holder of negotiable paper transfers the same, and instead of making a regular indorsement, he writes over his name a contract of guaranty, some courts hold that such a transfer is nothing more than a mere assignment, and that the negotiability of the paper is thereby destroyed. There is, on the other hand, the decided weight of authority to the effect that where a transfer is made, accompanied by a contract of guaranty, that this kind of an indorsement does not destroy the negotiability of the contract.23 In reason, it would seem the writing of the guaranty over the name of the transferrer, while it would deprive the guarantor from the full privilege of notice, that the indorser can always claim, such a change in the obligation ought to have no more effect on the matter of negotiability, than an indorsement "without recourse," and that confessedly does not affect the negotiability of the paper in any way.

21 Central Trust Co. vs. National Bank, 101 U. S., 63. 22 Evansville Natl. Bank vs. Kauffman, 93 N. Y., 273.

23 Russell vs. Klink, 53 Mich.. 161; Hatcher vs. Natl. Bank, 79 Ga., 542.