that, where the liability of the guarantor depends upon a contingency, it is necessary that notice of default should be given to the guarantor within a reasonable time after demand; and demand should be made of the principal at or very soon after maturity. (Clay v. Edgerton, 19 Ohio St. 553; Montgomery v. Kellogg, 43 Miss. 486.)

"But where the guaranty is absolute, the authorities are divided, some holding that the guarantor's liability becomes absolute at maturity, without any demand on the principal or notice of default to himself (Brown v. Curtis, 2 N. Y. 228; Voltz v. Harris, 40 Ill. 159), and others, claiming that in order to make sure of the liability of the guarantor in any case, demand must be made of the principal, and notice of default sent to the guarantor, within a reasonable time after maturity." Where principal is insolvent when the debt becomes

*Tiedeman, Com. Pap., Sec. 421; Douglass v. Reynolds, 7 Pet. 126 Second Nat. Bank v. Gaylord, 34 Ia. 248; Newton Wagon Co. v. Diers, 10 Neb. 285. "But this requirement of demand and notice is never considered an absolute condition precedent to the liability of the guarantor. The guarantor is discharged from liability on account of the failure of demand and notice, only when such failure results in some loss or damage to the guarantor, which he could have avoided, had he received notice of the principal's default within a reasonable time after maturity. If he has sustained no loss, he is liable, notwithstanding the failure of demand and notice. For example, the guarantor is liable, notwithstanding the want of notice, if the principal was insolvent at and before maturity of the paper, because the law presumes that the guarantor suffers nothing in such case.” (Tiedeman, Com. Pap., Sec. 421.)

due no notice of his default need be given the guarantor. (Wolfe v. Brown, 5 Ohio St. 304.) So, where the guarantor's promise is unconditional, and made after the debt was due from the principal, no notice of demand on principal and default need be given to hold the guarantor. (Munro v. Hill, 25 S. C. 476; Read v. Cutts, 7 Greenl., Me. 186.) The guarantor may waive demand and notice of default, and a subsequent promise to pay the debt made by the guarantor will be treated as a waiver of demand and notice. (Wadsworth v. Allen, 8 Gratt. 174; Reynolds v. Douglass, 12 Pet. 523.) But where the advances are made to the principal on a letter of credit given by the guarantor, by the weight of authority, demand of payment must be made on the principal, and notice of default given to the guarantor, unless the principal be insolvent at the date of maturity. (Douglas v. Reynolds, 7 Pet.

113.)

Notice of default, when necessary to be given, should be given within a reasonable time, and this depends upon the circumstances of each case. The question what constitutes reasonable time would be a question for the jury under instruction from the court. (Brandt, Sur. & Guar., Sec. 203; Lowry v. Adams, 22 Vt. 160.) Proof that notice was given may be inferred from circumstances, and any notice coming to the guarantor, whether from the creditor or not, will be sufficient to charge him. (Griffin v. Rewbert, 2 Rich. Law, N. S. 410; Oaks v. Weller, 16 Vt. 63.) The notice need not be in writing or any particular form, unless specified in

the contract. (Lee v. Briggs, 39 Mich. 592; Brandt, Sur. & Guar., Sec. 204.)

Sec. 896. LIABILITY OF BLANK INDORSERS AND ACCOMMODATION PARTIES TO COMMERCIAL PAPER.-Accommodation parties, as a rule, unless they have indicated the fact of their suretyship in signing, will assume the same liabilities, and are in general, entitled to the same rights of demand and notice of non-payment, except the principal, as if their apparent character of drawer, drawee, payee and indorser was real.*

"There is another class of indorsers not in general subject, like those above mentioned, to the law relating to commercial paper. Thus: A executes his note payable to B or order, or to B alone, and then, before its negotiation by B, X, in no way apparently connected with the note as holder or transferor, indorses his name in blank on the note, and then B or his assignee, sues upon it. The question arises, when and for what purpose did X do this? Such an outside blank indorsement on a bill or note does not come within the law

*Swan's Treatise, 15th ed., p. 578: "Even an accommodation drawer is entitled to notice of demand and non-payment if he had reason to expect his principal would provide funds to meet the bill; and the accommodation indorsers and parties to such bill of exchange are liable to the holder and each other separately, and in the order in which they have become apparently parties to the bill." Id.: As between themselves they may show their intention to be liable as co-sureties. And such accommodation indorsers on a promissory note are prima facie co-sureties. (Williams v. Blossom, 11 Ohio 62; Douglas v. Waddle, 1 Ohio 413.)

relating to indorsers of commercial paper, and is open, in general, to construction to the intent and liability of X, and to parol evidence to show the relation of X to the transaction." (Swan's Treatise, p. 579.) †

"It is, however," says Mr. Brandt, "well settled that the agreement upon which the blank indorser of another's obligation signed, and the liability which he intended to assume, may (at least between the original parties, or those parties and a holder with notice), be

"The English rule is that where one who appears as a principal party is a surety for another, who appears to be a secondary party, drawer or indorser, this fact may be shown by parol evidence, and the party who is in fact a surety will be entitled to all the rights and privileges of a surety, as against any holder who knew the fact. This is the equitable rule, enforced in all English courts, in which equitable pleas are admissible; but, according to the common law rule as laid down by Lord Mansfield, the parties to commercial paper sustain the liabilities and enjoy the privileges and rights, which are incident to their ostensible characters, and no others. According to this rule it is not permissible to show by parol evidence that the drawer or indorser is the principal debtor, and that the maker or acceptor is the accommodation party or surety, in order to bind the subsequent holder, who knew the fact. In the United States a few highly respectable authorities have adopted the English equitable rule. (Guild v. Butler, 127 Mass. 386.) But the weight of authority in this country favors the English common law rule. (Gano v. Heath, 36 Mich. 441; Summerhill v. Tapp, 52 Ala. 227.) The principal reason for holding to the common law rule is, that the party who is ostensibly the primary debtor can always protect himself against any act of indulgence to the ostensibly secondary, but actually primary obligor, by paying the debt himself, and recovering the sum so paid of the real primary debtor." (Tiedeman, Com. Pap., Sec. 422.)

shown by parol evidence, and he will be held only according to such agreement and intention." (Sur. & Guar., Sec. 182, citing Sanford v. Norton, 14 Vt. 228; Chandler v. Westfall, 30 Tex. 475, etc.)

OF THE DISCHARGE OF THE SURETY OR GUARANTOR.

Sec. 897. WAYS IN WHICH SURETY OR GUARANTOR MAY BE DISCHARGED.-In general, the surety or guarantor may be discharged by payment of the obligation for which he is liable; by the creditor giving an extension of time to the principal; by the alteration, without his consent, of his contract; by the fraud, concealment and the like acts on the part of the creditor; and by the creditor releasing, or negligently losing security for the debt. Each of these forms of discharges will be briefly discussed in their order.

Sec. 898. DISCHARGE OF SURETY OR GUARANTOR BY PAYMENT.-In general the liability of the surety or guarantor ceases when the debt of the principal is paid. (Petefish, Skiles & Co. v. Watkins, 124 Ill. 384.) But where a payment is made by the principal and accepted by creditor and afterwards, without fault of the creditor, such payment is set aside, as a fraudulent preference, the surety will not be discharged. (Watson v. Poague, 42 Ia. 482.) When payments are made by the principal on his general indebtedness to the creditor, the rule as to their application is practically the same as that given in a previous section as to payments on notes. (Ante, Sec. 832.) When the debt is once paid it cannot be revived by