Taussig v. Reid

Citations

• 145 Ill. 488

Syllabus

<p>1. Guaranty—notice of acceptance—when necessary. In the ease of a written guaranty for a debt yet to be created and uncertain in its amount, the guarantor is entitled to have notice, within a reasonable time, that the guaranty is accepted, and that credit has been given on the faith of it.</p> <p>2. Same—default of payment—notice to guarantor. In case of a collateral continuing guaranty for the payment of goods to be thereafter sold, the law requires that the holder of the same, who from time to time sells goods on its faith, shall give the guarantor reasonable notice of the default of payment on the part of the principal debtor, and the guarantor will be discharged from liability so far as he may sustain loss or damage resulting from a failure of the creditor to give him such notice.</p> <p>3. Where notice of the default of the principal debtor to make payment can result in no benefit to the guarantor, as where the former is insolvent when the guaranty is executed and remains in that condition, a failure to give notice of the default can not be relied on as a defense to an action on the guaranty.</p> <p>4. Where the guaranty is an absolute one, the guarantor is not entitled to demand or notice of non-performance, but when the undertaking is collateral, notice must be given in a reasonable time, unless circumstances exist which will excuse the want of notice. If the principal is insolvent when the debt becomes due or default is made, so that' no benefit can be claimed by the guarantor from the receipt of notice, none is required.</p> <p>5. Where the payee of a promissory note or a third party executes a contract written on the back of an unconditional note for the payment of money at a specified time, in which he guarantees the payment of the note at maturity, the holder of the note is under no obligation to demand payment of the maker,' and on default of payment notify the guarantor.</p> <p>6. Where A made and delivered to B a written guarantee of the prompt pay