not entitled to any compensation for what work he has done, but must compensate the owner for his loss or injury. For losses occasioned otherwise he is not responsible. (See Bailments.)

Length of Employment.-Where in the second class a person is employed to perform a certain class of duties, the time for which he is hired is an important element, whether that time be a day, a week, a month, a year or longer. When no time of service is specified, the time when payment is made will indicate the length of employment. Thus, if a clerk, messenger,

etc., is hired for no fixed time, but at so many dollars a week, or a month, it is a hiring for a week or a month, respectively. If the work continues the next week or month in the same manner, it is a new contract on the same terms.

Discharge of Employee.-An employee may be discharged at the end of his time without any cause or previous notice. If hired at so much per week and for no definite time he may be discharged at the end of any week, or even during the week, and he has no right to insist upon working after he is discharged. If, however, the discharge is without good cause, i. e., if the work is all right, he is entitled to payment for the whole period. If, on the other hand, there was good reason for the discharge, arising from his own fault, he is entitled to no pay for any of that period.

Leaving Services.-An employee can leave at the end of the time without giving notice. But if he leaves before the expiration of the time he is entitled to no pay for that period, no matter how much of the time he has worked.

Thus, if he agreed to stay a month and left at the end of three weeks he would be entitled to nothing. The general rule applies here as elsewhere. Each party must keep his part of the contract if the other does, but need not if the other does not. (See Contracts.)

GUARANTY

A Guaranty is a promise or undertaking to pay the debt of another in case the latter does not pay it.

Names of Parties.-The person who makes the promise is called the guarantor, the person in whose behalf the promise is made, the principal, and the person to whom the promise is made, the guarantee.

Who are Guarantors.-Every surety is a guarantor, and every indorser of a negotiable instrument is in fact a guarantor, but with peculiar rights and duties not known to common guarantors. (See Negotiable Notes.)

Consideration.-Like every other binding promise a guaranty must be founded upon a good consideration, but it is sufficient, however, if the person for whom the guarantor becomes surety receives a benefit, or the person to whom the guaranty is given suffer inconvenience, as an inducement to the surety to become guarantor for the principal.

Must be in Writing.-Being a promise to pay a debt of another, a guaranty is required to be in writing (see Contracts). But where one who promises to pay the debt of another receives therefor an independent consideration, the promise is deemed a promise to pay his own debt, and need not be in writing. Thus, if two parties go together into a shop or warehouse, and upon one selecting and giving an order for goods, the other engages verbally to pay for those goods in case the other does not, in whatever form of words that promise is given, he is not bound by it-it must be reduced to writing and signed by the guarantor. But if the guarantor tells the merchant that he will be responsible for goods purchased by the other and assents to having the goods charged to himself, the promise need not be in writing to bind the guarantor.

Any Material Change in the extent, terms, or character of the principal's liability discharges the guarantor, even though the change be in no way injurious to him. He may assent to it, however, and will then be liable.

Where there are several guarantors, and one of them is obliged to pay the debt, he can look to the others for their proportion. Indemnity.-A guarantor ought to take care to be indemnified against loss, in the event of being called on to pay the debt. With this view indemnities are given (frequently, but not always or necessarily, by bond), holding harmless him who, under an undertaking to be responsible for the debt or engagements of another, becomes chargeable or liable for the debt.

Guaranty Companies.-There are companies which transact a guaranty or surety business, from whom, for a consideration, persons on assuming a place of financial responsibility where an indemnity bond is required, can obtain the necessary bond.

Guaranty for the Performance of a Contract

For a good and valuable consideration, by us received, we, the undersigned, do hereby guarantee a faithful compliance with the terms of the above (or within) agreement upon the part of the said contractor, Richard Unger.

Done at Elkhart, Elkhart County, State of Indiana, this 15th day of June, A. D. 1911. WALTER HANKINS, [SEAL] FRANK KLINE. [SEAL]

Signed, sealed, and delivered

in the presence of

WILLIAM LOWER,

CHARLES ANDREWS

Guaranty for the Purchase of a Horse

Omaha, Nebraska, January 2, 1911.

In consideration of One Hundred and Twenty-five Dollars for a black mare, I hereby guarantee her to be only five years old, sound, free from vice, and easy to ride or drive. CHAS. HOWLAND.

[N. B. In this guaranty the seller will be held for all the defects in the animal at the time of sale. This is the safest way for one who is not an experienced judge of horses to purchase one.]

Guaranty for a Debt Not Yet Incurred

MESSRS. SANFORD & BARTH,

Buffalo.

Rochester, N. Y., March 10, 1911.

GENTLEMEN: The bearer of this, Mr. R. J. Walker, of this city, is on the point of visiting your city for the purpose of buying goods, and desires articles in your me. He is considered worth some thirty thousand dollars, and such is our confidence in his ability and integrity, that we hereby guarantee the payment of any bills which he may make with you during this year, to an amount not exceeding five thousand dollars.

GENTLEMEN: In consideration of One Dollar, paid by yourselves, the receipt of which is hereby acknowledged, I guarantee that the debt of three undred dollars, now owing to you by Henry Wilcox, shall be paid at maturity. Yours truly,

CHAS. SUNDERLAND.

Definitions.-Terms Employed.-Insurance is a contract by which one of the parties, called the insurer, binds himself to the other, called the insured, to pay him a sum of money or otherwise indemnify him in case of the happening of a fortuitous event, provided for in a general or special manner in the contract, in consideration of a certain sum of money called a premium, which the latter pays or binds himself to pay him.

The Instrument of writing by which the contract is made is called a policy, the events or causes to be insured against risks or perils, and the thing insured the subject-matter or insurable interest.

Kinds of Insurance.-Insurance is divided generally into three kinds: fire, marine, and life-the last including accident insurance as a branch.

MODERN MOTOR PROPELLED FIRE ENGINE
FIRE INSURANCE

Fire Insurance includes all undertakings to indemnify the insured against losses by fire, whether upon buildings, ships, or the goods and stock contained therein, or live stock.

What Property may be Insured.-Every kind of property may become the subject of insurance, unless, from motives of public policy, it has been prohibited by law. Insurances are most commonly made on buildings, goods, merchandise, freight, bottomry, loans, profits and commissions.

Who may Insure.-A person in order to secure a valid policy must have an interest in the property insured. It is not neces

sary, however, that a person should be the owner of the whole or a part of the property in order to enable him to effect an insurance thereon. It is sufficient if he is directly interested in its safety. A person, therefore, has an insurable interest in any property when he is so circumstanced with respect to it, that its loss will be prejudicial to him.

Increasing Risk.-The amount of premium is based upon the degree of danger there is of fire. The insured must, therefore, not increase the risk; if he does the policy becomes void. No change should be made without notifying the insurance company and obtaining its consent.

Changes made after the policy is issued, for which the insured is not responsible, will not affect the contract.

Conditions in the Policy.-All policies contain certain additional agreements, such as: that no gunpowder or gasolene shall be kept on the premises insured; that they shall not become vacant, or that if any other insurance is added the company be notified.

Misrepresentations on the part of the owner as to the character of the property or the danger to which it may be exposed make the policy void.

Negligence.-A fire caused by negligence does not exempt the company from paying the loss, unless the negligence is so great as to be criminal or to indicate fraud.

Proof of Loss.-In order to recover amount of insurance the insured, after the loss of property by fire, must prove the quantity and value of the goods so lost, and also the injury sustained on goods not burned by reason of water used in attempting to extinguish the fire, and must make such affidavits and produce such certificates as the terms of the policy require, and cause the same to be filed in the office of the company within the time specified in the policy of insurance.

Amount Paid.—The amount to be paid in fire insurance is the amount of the loss, unless the loss exceeds the amount of the policy. The company never pays more than the policy. Thus if the policy is for $3,000 and the loss is $300, it pays $300 and the policy becomes $2,700. If the policy is $5,000 and the loss $6,000, the company pays only the $5,000 and the policy is discharged.

Valuation is sometimes made in policies upon chattels of uncertain value, as books, plate, or works of art, and if a loss happens the insured is entitled only to actual indemnity.