The contracts of guaranty and surety ship are not negotiable or assignable, and in general can be taken advantage of only by those who were included as obligees at the formation of the contract ; Bleeker v. Hyde, 3 McLean, 279; Fed. Cas. No. 1,537. See GUARANTY. Accordingly, the contract is terminated by the death of one of several obligees ; 4 Taunt. 673 ; or by material change, as incorporation; 3 B. & P. 34. But where a bond is given to trustees in that capacity, their succes sors can take advantage of it ; 12 East 399. The fact that a stranger has acted on a guaranty does not entitle him to the bene fits of the contract ; Partridge v. Davis, 20 Vt. 499; and this has been held in the case of one of two guarantees who acted on the guaranty; Smith v. Montgomery, 3 Tex. 199. A guaranty is not negotiable, whether made by a payee or subsequent party to a bill or note ; 1leDoal v. Yoemans, 8 Watts (Pa.) 361.
It is held that a guaranty addressed to no one in particular may be acted on by any one ; Lowry v. Adams, 22 Vt. 160 ; but the true rule would seem to be that in such cases a party who had acted on the contract might show, as in other contracts, that he was a party to it within the intention at the making; the mere fact that no obligee is mentioned does not open it to everybody.
In an action against sureties for violation of a bond by the principals, it is not neces sary to allege any violation on the part of the sureties; Farley v. Moran, 3 Cal. Un rep. 572, 31 Pac. 158.
The rule of construction applied to ordi nary sureties is not applicable to the bonds of fidelity and casualty companies ; any doubtful language should be construed most strongly against the surety and in favor of the indemnity which the insured had reason able ground to expect ; Fidelity &.Casualty Co. v. Supreme Council, 63 Fed. 48, 1• C. C. A. 96, 22 U. S. App. 439.
Enforcement of the obligation. As the surety cannot be bound to any greater ex tent than the principal, it follows that the creditor cannct pursue the surety until he has acquired a full right of action against the principal debtor. A surety for the per formance of any future or executory con tract cannot be called upon until there is an actual breach by the principal. A surety on a promissory note cannot be sued until the note has matured, as there is no debt until that time. All conditions precedent to a right of action against the principal must be complied with. Where money is payable on demand, there must have been a demand and refusal. But it is not necessary that the creditor should have exhausted all the means of obtaining his debt. In some cases it may be requisite to notify the surety of the de fault of the debtor, or to sue the debtor ; but this depends upon the particular condi tions and circumstances of each case, and cannot be considered a condition precedent in all cases. Even where the creditor has a
fund or other security to resort to, he is not obliged to exhaust this before resorting to the 'surety ; he may elect either remedy. and pursue the surety first. But if the sure ty pay the debt, he is entitled to claim that the creditor should proceed against such fund or other security for his benefit; Faw cetts v. Kimmey, 33 Ala. 261. And if the creditor having received such collateral se curity, avail himself of it, he is bound to preserve the original debt ; for in equity the surety will be entitled to subrogation; Denny v. Lyon, 38 Pa. 98, 80 Am. Dec. 463. A judg ment against the principal may be assigned to the surety upon payment of the debt; Ty • ler v. Hildreth, 77 Hun (N. Y.) 580, 28 N. Y. Supp. 1042. But an assignment of the debt must be for the whole ; the surety cannot pay a part and claim an assignment pro tan to; Gannett v. Blodgett, 39 N. H. 150.
In general, it is not requisite that notice of the default of the principal should be given to the surety, especially when the en gagement is absolute and for a definite amount; 14 East 514. The guarantor on a note is not entitled to notice as an indorser ; Greene v. Thompson, 33 Ia. 293 ; Simpson's Ex'r v. Bovard, 74 Pa. 351; Sterling v. Stew art, 74 Pa. 445, 15 Am. Rep. 559; Barker v. Scudder, 56 Mo. 272. Laches in giving no tice to the surety upon a draft of the default of the principal can only be set up as a de fence in an action against. the surety, in cas es where he has suffered damage thereby, and then only to the extent of that damage ; Bank v. Coster's Ex'rs, 3 N. Y. 203, 53 Am. Dec. 280 ; it is no defence to an action against a surety on a bond that the plaintiff knew of the default of the principal, and delayed for a long time to notify the surety or to prosecute the bond. Morris Canal & B. Co. v. Van Vorst's Adm'x, 21 N. J. L. 100. Mere passive delay in prosecuting a remedy against a principal does not release a surety ; Ben edict v. Olson, 37 Minn. 431, 35 N. W. 10; Edwards v. Dargan, 30 S. C. 177, 8 S. E. 858 ; Bank v. Homesley, 99 N. C. 531, 6 S. E. 797 ; not even if prolonged until the statute of lim itations has run; Nelson v. Bank, 69 Fed. 798, 16 C. C. A. 425. Sureties on a superse deas bond are not entitled to have a suit thereon stayed till attached lands of the principal are sold and the security exhaust ed ; Davis v. Patrick, 57 Fed. 909, 6 C. C. A. 632.