## Facts

- Frank H. Eaton, living in Nova Scotia, wrote Charles A. Bishop in Illinois stating: “If Henry needs more money, let him have it, or assist him to get it, and I will see that it is paid.”
- Relying on that letter, Bishop became surety on a $200 promissory note made by Eaton’s brother, Harry Eaton, dated January 7, 1887, payable in one year at 8% interest.
- Shortly after signing as surety, Bishop mailed Frank a properly addressed and stamped letter describing the note and the transaction; Frank testified he never received it.
- When the note matured, its payment was extended for another year; whether Frank knew of, consented to, or later ratified the extension was disputed.
- In August 1889, Bishop asked Frank to take up the note; Frank responded in substance that Bishop should try to get Harry to pay and, if not, Frank would pay and it would not cost Bishop anything.
- After continued disputes and correspondence, Bishop paid the note as surety in 1891 and sued Frank on the guaranty to recover what Bishop paid.

## Issues

1. Whether Frank’s letter created a guaranty requiring seasonable notice of action taken on it.
2. Whether a seasonably mailed, properly addressed notice of acceptance/action satisfies the notice requirement even if the guarantor never receives it.
3. Whether failure to give prompt notice of the principal debtor’s default discharges the guarantor absent proof of injury from the delay.
4. Whether an extension of time granted to the principal debtor without the guarantor’s consent discharges the guarantor, and whether later conduct can ratify the extension.

## Decision

- The Supreme Judicial Court sustained the defendant’s exceptions and ordered a new trial.
- The court held the letter was “a guaranty only,” which, though not requiring express acceptance, requires seasonable notice of action taken under it.
- The court held that if a mailed letter is the only notice reasonably expected under the circumstances, the guarantor is not relieved because the letter was not received, provided it was duly and seasonably mailed.
- The court held lack of prompt notice of the principal’s default does not by itself discharge the guarantor; the guarantor must show injury caused by the delay.
- The court held an extension of time to the principal without the guarantor’s consent discharges the guarantor unless the guarantor later ratifies it.
- The trial court’s instructions did not correctly present these rules—particularly the extension/ratification question and the conditions for discharge—requiring reversal for instructional error.

## Legal Principles

- A letter offering to “see that it is paid” upon the creditor’s future advance is generally a guaranty, not an immediate primary obligation.
- A guaranty offer may not require express acceptance, but it may require seasonable notice that the creditor acted on it.
- When notice by mail is objectively reasonable, proper and timely mailing satisfies the notice-of-action requirement even if the guarantor does not receive the letter.
- A guarantor seeking discharge for delayed notice of the principal’s default must prove resulting injury; delay alone is insufficient.
- An unauthorized extension of time granted to the principal debtor discharges the guarantor unless the guarantor later ratifies the extension.

## Conclusion

The court ordered a new trial because the jury was not properly instructed on acceptance notice by mail, discharge for delayed default notice requiring proof of injury, and discharge from an unauthorized extension of time absent later ratification.


Bishop v. Eaton, 161 Mass. 496, 37 N.E. 665 (1894)