most of the states have by statute opened the way for the creation and operation of corporations transacting such business. Where the charter of the corporation permits them, and the law accepts them, surety companies may act as sole surety in the matter of private obligations, or in official business as the surety upon the bonds of public officers.18

As to the validity of statutes, we quote from Brandt on Suretyship, Vol. 1, Sec. 14: "Statutes authorizing the organization of corporations for the purpose of guranteeing bonds and undertaking as well the fidelity of persons holding positions of public or private trust, are held valid and such companies may lawfully become liable as sureties or guarantors."

"Travis vs. Travis, 48 Hun., 343.

Hurd vs. Hannibal & St. Jos. R.

R. Co., 33 Hun., 169; Cramer vs. Tittle, 72 Calif., 12.

The contract of suretyship is no exception to the rule of law that every contract requires a consideration to support it. Where the surety's contract is made contemporaneously or concurrently with the principal debtor's, one consideration answers for both contracts.1 It is not required that the consideration move directly to the surety himself. The consideration is usually some benefit that accrues to the principal debtor, or some forbearance given or detriment suffered by the creditor. The promise of the surety or guarantor may follow the making of the original contract; if so, a new consideration must follow to support the surety's contract. A past consideration will not suffice. The consideration must not be illegal, either by rule of the common law or statute, nor must it be opposed to the rule of public policy."

SECTION 22. DELIVERY.

Where the contract of suretyship takes the form of a bond, or in any case where the contract is under seal, delivery and acceptance of the bond is required to complete the contract and to put the bond into effect. The delivery must be unconditional; it may be by actual manual delivery, or it may be made by the surety placing the contract beyond his own control and by the obligee treating such delivery as a true delivery and Bailey vs. Croft, 4 Taunt., 611. ' Rouse vs. Mohr, 29 Ill. App., 321.

acting under it. This would be a constructive delivery. Prima facie proof of delivery is made by showing possession by the obligee of the bond. Possession also imports acceptance and approval. A promise to answer for the debt of another, where the writing is not in the form of a specialty, need not be delivered; the statute of frauds does not require a delivery of the memorandum of the agreement.

A bond that is not delivered until after the death of the obligor will not be binding on the surety." Delivery of a bond to a third person, to be delivered to the obligee, will constitute sufficient delivery to bind the surety.

SECTION 23. IMPERFECT OR INCOMPLETE INSTRU

MENT.

It is a general rule of law that where the promissor in suretyship puts the written contract in the hands of the principal, and authorizes him to fill the blanks, the surety will be bound by the acts of the principal, even though the principal disobeys instructions and fills in the blanks in a manner wholly unauthorized." The rule is one of the law of agency, and it is thought to be absolutely necessary, in order that third persons, dealing with agents, may be relieved from the chance of fraud and surprise, when they deal with agents apparently vested with authority. It is perhaps a broad application of the principle, that secret instructions of the principal have no force in binding third parties. In some cases the law gives the right to the beneficiary named in the contract to fill in certain blanks.

• Bank of U. S. vs. Dandridge,

12 White, 64.

Fay vs. Richardson, 7 Pick., 91. • Cawley et al. vs. The People, 95

Ill., 249; Butler vs. U. S., 21
Wall., 272.

• Fullerton vs. Sturgess, 4 Ohio St.,

529.

SECTION 24.

SURETY WHO BINDS HIMSELF AS
PRINCIPAL.

Where one, who in fact is a surety on a contract, by express terms binds himself as a principal, by naming himself as a principal, he will be liable as such, and he can claim none of the rights of a surety. By signing as principal to the obligation, he waives the rights and privileges he might have claimed by making his contract one of suretyship only.' Where a number of parties sign a bond and all add the word principal after their names, and there is nothing to indicate that any of them are sureties, they will all be bound as principals, notwithstanding some were sureties merely; it is held also in such a case that they could not plead a defense to the contract by showing that an extension of time was given for the payment of the debt. It is a general rule subject to certain exceptions that sureties are estopped to deny the facts stated in their contract.

SECTION 25. CONSTRUCTION OF THE CONTRACT.

Following the general rule that suretyship contracts are to be strictly construed, and that the liability of the surety shall rest on the express language used, and that the liability shall not be increased by implication, it follows that where the language used is ambiguous in part, it is the rule that the courts will endeavor to so construe the contract and to give it an interpretation as to prevent a forfeiture of the instrument if possible. There is no apparent way, however, to reconcile the decisions of the courts on this point. One line of decisions hold that the surety who is responsible for the use of ambiguous words, which mis• Cordle vs. Burch, 10 Gratt (Va.),

' McMillan vs. Parkell, 64 Mo., 286. • Spring V8. Bank of Mount Pleasant, 10 Peters, 257.

480.