As to forbearance operating as a sufficient consideration, the courts of the United States generally adhere to the rule that mere forbearance alone is not sufficient to support the guarantor's contract, but that an agreement to forbear as well is essential," but it seems the English Courts hold that actual forbearance coupled with a request is alone sufficient to support the contract, notwithstanding there was lacking the promise to forbear. 15 The consideration must not be the doing of something that is against public policy, as this would render the contract itself illegal. SECTION 48. NOTICE TO GUARANTOR OF PRINCIPAL'S DEFAULT. Where the guaranty is absolute, there is no ground for the guarantor's plea of a right to demand notice of the principal's default. By the terms of his contract the possible default is fixed, and his not receiving notice of the same, puts no extra burden on him, as the date for the fulfillment of the contract already being known to him, he may make his plans accordingly. But the case of the conditional guaranty furnishes a different situation, and in the following cases notice of default is held necessary. First, where the contract contains the express condition that notice of default shall be given; a failure to give notice, in such a case, would discharge the surety, without his showing any injury resulting therefrom. Second, demand and notice are necessary where the guarantor's liability rests or is dependent on knowledge peculiarly within the power of the creditor or 14 Welbe vs. Romond Oolitic Stone Co., 58 Ill. App., 226. Crears vs. Hunter, 19 Q. B. Div 341. 16 depending on his option; as where the determination of some question, such as the solvency of the principal, is to be looked to by the creditor. An example of this class would be a guaranty of the collectibility of a debt. The protection to the guarantor is the receiving the notice that the guarantor is in default, the creditor having endeavored to make collection through the legal remedies given him with no success; this protection is accorded the guarantor by showing him that the conditions of his contract have been fulfilled, and that he must meet the terms of his contract. The third class of cases in which notice is necessary is found in those that grow out of continuing guaranties of payment for advances to be made from time to time, as under a general letter of credit. A guarantor will not be held liable where, having made himself a guarantor, and having been accepted as such, and goods are sold under the guaranty, but no notice was given of the amount so sold to his principal, nor of the default in payment by the principal, until two years had gone by, and the principal had become insolvent." Whenever the determination of the amount to be paid on a guaranty for an uncertain sum is a matter over which the guarantor has no control, the duration of the guaranty being fixed, the guarantor is always entitled to notice.18 SECTION 49. LIABILITY OF THE GUARANTOR. The liability of the guarantor having been fixed, either by default of the principal in the case of an absolute guaranty, or by the creditor meeting the conditions of the conditional guaranty, then the 16 Bashford vs. Shaw, 4 Ohio St., 467. " Clark vs. Remington, 11 Metc. (Mass), 361. 18 Courtis vs. Dennis, 7 Metc. (Mass.), 510. guarantor is bound; his liability is as great and no greater than the terms of the contract show. The liability of the guarantor once having been fixed, the guarantor is then situated as a surety would be, and his rights under the contract, as well as his liability, would be controlled by the same principles that control the surety's position, who finds himself bound to answer for the debt or default of another. "As a guaranty is regarded as a mercantile instrument, it is not to be interpreted by any strict technical rules of construction," says the Virginia Court, "but by what may fairly be presumed to have been the intention and understanding of the parties. " 19 What has been said, then, of the liability of a surety, and of his peculiar rights and privileges, applies, in great part, to the guarantor, as guaranties are simply a branch of the law of suretyship, and are goverened by the same principles, for the most part. SECTION 50. IS A GUARANTY OF A NOTE NEGOTIABLE? 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 19 Moore vs. Holt, 10 Gratt. (Va.), 30 Ellsworth vs. Harmon, 101 m., 284. 274. 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."1 A special guaranty is not even assignable, until the right of action has accrued on the same." 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. " Central Trust Co. vs. National 23 Russell vs. Klink, 53 Mich., 161; Hatcher vs. Natl. Bank, 79 Ga., 542, |