collectible, the creditor must exhaust the estate of all prior solvent parties before the guarantor can be made to pay. (Pittman v. Chisolm, 43 Ga. 442; McClurg v. Fryer, 15 Pa. St. 293.)

Sec. 884. SAME SUBJECT-MEANING OF "DUE DILIGENCE."-When the contract of the surety is not the same as that of the principal, but only charges him when the creditor has exhausted his remedy against the principal, the creditor is bound to use due diligence in proceeding to collect from the primary obligors. Just what will constitute due diligence depends upon the circumstances surrounding each case, and is said to be that which a vigilant creditor employs when he has no other security than the obligation of the principal debtor. (Hoffman v. Bechtel, 52 Pa. St. 190.) Due diligence, in the absence of any special facts, is held to require suit to be instituted at the first regular term of court after the maturity, and the obtaining judgment and execution thereon as soon as practicable by the ordinary rules and practice of the court. (Voorhies v. Atlee, 29 Ia. 49.) The determination of the fact whether due diligence has been exercised or not is probably a mixed question of law and fact for the jury to pass upon under instructions from the court. (Brandt, Sur. & Guar., Sec. 101; Backus v. Shipard, 11 Wend. 629.) The insolvency of the principal, or the existence of war making it impossible to collect debts, will excuse delay in bringing the suit to collect from the principal. (Bashford v. Shaw, 4 O. St. 264; Kinyon v. Brock, 72 N. C. 554.)

But where in a guaranty of payment, the time within which payment shall be made is fixed, and there is a default by the principal within the time specified, the guarantor is in default, and no proceedings need be taken against the principal whether insolvent or not. (Cobb v. Little, 2 Greenl. [Me.] 261; Roberts v. Riddle, 79 Pa. St. 468.) Here the terms of the contract indicate an intention to become liable immediately upon default, and not after the principal has been pursued to judgment and execution. And where the guaranty is in terms which bind the promisor to the absolute payment of the note or obligation when due, demand on the principal is not necessary to charge such guarantor. (Brown v. Curtis, 2 N. Y. 225; Hooker v. Gooding, 86 Ill. 60.)

Sec. 885. LIABILITY OF SURETY FOR PAYMENT OF OVERDUE NOTES, AND FOR RENT WHEN TENANT HOLDS OVER.Though a note is past due, and the guaranty is to pay the note "when due," or "according to its tenor," the guarantor is bound, and is considered to have stipulated to answer for the payment of a note payable on demand, since he is understood to have contracted with reference to the overdue note. (Crocker v. Gilbert, 9 Cush. 131; Gunn v. Madigan, 28 Wis. 158.)

When there is an option in the lease for a renewal of it for another year or more upon the same terms, and the contract of the guarantor covers such lease, he is generally held for the default of the principal occurring during the period of the renewal. (Decker v. Gay

lord, 8 Hun 110; Deblois v. Earle, 7 R. I. 26.) And where the guaranty of the payment of another's rent reads: "So long as said lessee shall occupy said premises," it was held to include in the word "occupy" the whole period of tenancy. () (Morrow v. Brady, 12 R. I. 130.)

Sec. 886. EXTENT OF SURETY'S LIABILITY FOR A DEBT, OR ON A BOND.Where the contract of the surety expressly or in effect covers stipulated damages, they may be recovered. (First Natl. Bank v. Breese, 39 Ia. 640; Gridley v. Capen, 72 Ill. 11.) In general, the surety on a bond is not liable beyond the sum stated in the bond as the penalty. But when the surety is in default and neglects to pay within a reasonable time, he may be held liable for the legal rate of interest on the penal sum, as damages for the delay. (Brainard v. Jones, 18 N. Y. 35; Perry v. Horn, 22 W. Va. 381.) Such interest is held to run from proper demand, or from date of suit or service of summons. (United States v. Curtis, 100 U. S. 119.)

Sec. 887. LIABILITY OF SURETY ON DISCOUNTED NOTE.-The surety who has become a party to a promissory note to raise money for the principal for a specified purpose, cannot complain if the note is discounted by another than the payee and the money applied to the purpose intended. (Bank v. Bingham, 33 Vt. 621.) And where a note was executed to buy a yoke of oxen of one person the surety to have a mortgage on them for security, and the principal

bought the oxen of another person, who knew that the note was given to buy another pair of oxen, but did not know of the agreement as to the mortgage, both principal and surety were held liable on the note. (Laub v. Rudd, 37 Ia. 617.) But if the note signed by the surety for a particular purpose is diverted from that purpose, and the party taking it knew of the purpose for which it was executed, the surety will not be bound. (Brown v. Tabor, 5 Wend. 566.) A party taking such note in good faith for value and without notice may hold the surety regardless of the fact of the note being diverted from the purpose intended. (McWilliams v. Mason, 31 N. Y. 294.)

Sec. 888. LIABILITY OF GUARANTOR ON GENERAL AND PARTICULAR GUARANTY.-A general guaranty, as a letter of credit addressed to all persons, is valid and may be enforced by any person who gives credit on the strength of it. (Lowry v. Adams, 22 Vt. 160.) And though addressed to a named person, to the purchaser or a third person, the guaranty may be shown by the surrounding circumstance to be intended for the person who gives credit upon it. (Drummond v. Preston, 12 Wheat. 515; Benedict v. Sherill, Lalor's Sup. to Hill & Denio 219.)

When the guaranty is special, that is, addressed to a named person, it must generally be acted on by such party to bind the guarantor. So where there is no ambiguity, and the letter of guaranty is addressed to an individual, it could not be enforced by a partnership who had furnished goods upon it. though the individual was

a member of the partnership. (Sollee v. Mengy, 1 Bailey, Law 620.) And where the guaranty authorized the furnishing of goods in "Macon" and the place was changed to "Griffin" without the guarantor's consent, it was held he was not liable on the guaranty. (Johnson v. Brown, 51 Ga. 498.)

And the rule that the surety is only bound by the strict letter of his contract extends to a case where the surety has become liable for a single individual and the credit has been given to several, in such case the surety is not liable. (Bell v. Norwood, 7 La. 95; Connecticut Mut. L. Ins. Co. v. Scott, 81 Ky. 540.) Likewise, where the surety has become bound for several, as for a firm, he will not be bound if the credit is given to one of the parties, as a partner in the firm after dissolution. (Cremer v. Higginson, 1 Mason 323; Pemberton v. Oakes, 4 Russell 154.) So a surety to or for a firm is not liable after a change in the members of the firm. (Barnett v. Smith, 17 Ill. 565.) So the surety on a bond to perform the award of certain arbitrators will not be liable if the arbitrators are changed. (Mackey v. Dodge, 5 Ala. 388.)

The surety will not be held liable beyond the scope of his obligation, and if the terms of his obligation are varied, or a thing is done differently from what was intended or specified in his contract he will not be bound. (Mercer Co. v. Coovert, 6 Watts & S. 70; Ryan v. Morton, 65 Tex. 258.)

Sec. 889.

LIABILITY OF GUARANTOR OR SURETY IN SPECIAL CASES.-Where a person