itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder, unless and until it accepts or certifies the check.

TITLE IV.-GENERAL PROVISIONS.

ARTICLE I.

[TITLE OF ACT.] $ 190. This act shall be known as the Negotiable Instrument Law.

[MEANING OF WORDS USED IN ACT.] § 191. In this act, unless the context otherwise requires:

"Acceptance" means an acceptance completed by delivery or notification.

"Action" includes counter-claim and set-off.

"Bank" includes any person or association of persons carrying on the business of banking, whether incorporated or not.

"Bearer" means the person in possession of a bill or note which is payable to bearer.

"Bill" means bill of exchange, and "note" means negotiable promissory note.

"Delivery" means transfer of possession, actual or constructive, from one person to another.

"Holder" means the payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof. "Indorsement" means an indorsement completed by delivery.

"Instrument" means negotiable instrument.

"Issue" means the first delivery of the instrument, complete in form, to a person who takes it as a holder. "Person" includes a body of persons, whether incorporated or not.

"Value" means valuable consideration.

"Written" includes printed, and "writing" includes print.

[PERSON PRIMARILY LIABLE.] § 192. The person "primarily" liable on an instrument is the person who, by the terms of the instrument, is absolutely required to pay the same. All other parties are "secondarily" liable.

[REASONABLE TIME.] § 193. In determining what is a "reasonable time" or an "unreasonable time," regard is to be had to the nature of the instrument, the usage of trade or business (if any) with respect to such instruments, and the facts of the particular case.

[TIME PRESCRIBED SUNDAYS AND HOLIDAYS, ETC.] $194. Where the day, or the last day, for doing an act herein required or permitted to be done falls on Sunday or on a holiday, the act may be done on the next succeeding secular or business day.

[PROVISIONS OF ACT NOT TO APPLY TO PREVIOUSLY GIVEN INSTRUMENTS.] § 195. The provisions of this act do not apply to negotiable instruments made and delivered prior to the passage hereof.

[LAW MERCHANT TO GOVERN CASES NOT PROVIDED IN THIS ACT.] § 196. In any case not provided for in this act, the rules of the law merchant shall govern.

of the injury suffered. The contract of the guarantor is not only collateral, but it is secondary; the surety's contract is primary and direct.

The guarantor is liable only after the default of the principal; the liability is established by the default of the principal, and by showing performance of the conditions of the contract. But on discussing the distinctions between the surety and the guarantor in respect to the liability assumed, we must remember that guaranties are of two kinds, the conditional guaranty, and the absolute guaranty. In the former the guarantor is only liable after the condition of the guarantor's contract is fulfilled. So, then, where A guarantees the collectibility of a certain sum for another person, his obligation matures when the creditor makes the showing that the debt is not collectible; this usually requires the exhausting of all the legal remedies to collect, as by securing a judgment against the principal debtor, and having execution issue on the judgment, together with the sheriff's return showing that the execution cannot be made, because the principal has no goods or property, that may be sold when levied on, to satisfy the execution. An absolute guaranty is one that arises where the guarantor fixes the time to pay, as of some date certain; in this kind of guaranty it is not necessary that the creditor first take steps against the principal to charge the guarantor, as, for instance, where the guaranty is for the payment of a bond according to its terms, or a guaranty for the payment of a promissory note at its maturity. It has also been held that an absolute

Graff vs. Simms, 45 Ind., 262;

Harris vs. Newell, 42 Wis., 687. Milroy vs. Quinn et al., 69 Ind., 406.

6

Atwood vs. Lester, 20 R. I., 660.
Roberts vs. Ridle, 79 Pa. St., 468.
Campbell vs. Baker, 46 Pa. St.,
243.

guarantor is not discharged by the creditor's delay in enforcing payment from the principal.' It may be said, further, that it makes little difference whether the promissor calls himself a surety or guarantor, the terms of the agreement will control, in determining whether it is to be considered a contract of a surety or of a guarantor.

SECTION 6. THE LIABILITY OF THE SURETY.

It is the general rule, that the liability of a surety or a guarantor cannot be extended by implication or construction beyond the precise terms of their contract.8

The above rule is of universal application, no matter what variety of agreement the surety's contract may assume, and it is founded on the soundest principles of justice and public policy. From the practice of the courts in limiting the liability of the surety to the strict terms of his contract, the statement is made that the surety is a favorite of the law, but the use of the expression must not be misunderstood. The surety position is usually one of special misfortune, where his principal defaults, and the favor of the law is to excuse him for nothing that he has expressly bound himself to answer for, but the favor extends only to keeping his liability strictly within the terms of his agreement. The liability of the surety then is determined by the meaning of the language of his contract. A reasonable interpretation of the language used is to be had, and practically the same rules of construction are to be observed, in determining what the contract was, and in arriving ? Hooker vs. Gooding, 86 Ill., 60. • Brandt on Suretyship and Guaranty, Vol. 1, Sec. 93; Vinyard

vs. Barnes, 124 Ill., 346; Gunn vs. Geary, 44 Mich., 615; Burson vs. Andes, 83 Va., 445.

at the intention of the parties, as are usually employed. These things are to be gathered, as in other cases, from the surrounding circumstances. The terms of the contract, and the circumstances, must be examined in any case, to ascertain the extent of the liability and the character of the obligation assumed.' SECTION 7. THE CO-SURETY.

Parties who become liable for the same debt of another person, contracting with the same obligee, are co-sureties, and it is not necessary that they become sureties for the debt at the same time, as the other sureties; that is to say, co-sureties need not make their contracts contemporaneously, nor, need they become surety for the same amount, nor is privity of contract an essential, nor is it necessary that they even know that there is another, who is also liable as surety for the same debt.10

Where one of two or more co-sureties pays the debt of the principal debtor, he is entitled to contribution against his co-sureties, that is, he may maintain a suit for the sum, that he has paid in excess of the sum that he himself, as against his co-sureties, would be obliged to pay. Indebitatus assumpsit is the proper action by one co-surety against another, to recover the proportionate share of the common liability due from the co-surety." But one who is a surety for another surety is not liable in contribution." Other rights of the co-surety as against his co-surety will be spoken of later under a separate head. SECTION 8. THE GRANTOR OF MORTGAGED PROPERTY.

It is a general rule of law that the grantee of mortgaged premises, who agrees to assume the mortWelsh vs. Ebersole, 75 Va., 656. Matthews vs. Millsaps, 58 Miss., 564.

" Weeks vs. Parsons, 176 Mass.,

570.

1 Allen vs. State, 61 Ind., 268.