The liability of a party whose name appears on the back of a negotiable promissory note, as guarantor or otherwise, is to be determined by the relation which is thereby assumed towards the payee, indorsee or holder, at the time when the note first takes effect by delivery as a valid security-for the money paid upon it. The condition of the note when first delivered and accepted as a binding contract is the test of liability. Dubois v. Mason, 127 Mass. 37. National Pemberton Bank v. Lougee, 108 Mass. 371. Stoddard v. Penniman, 108 Mass. 366. Bigelow v. Colton, 13 Gray, 309. Clapp v. Rice, 13 Gray, 403.
There was evidence in the present case, which fully warranted the judge, who tried the case without a jury, in finding that the note upon which the guaranty of the defendants is -written, was made in its present form to enable the Boston and Mystic Valley Railroad Company to borrow money upon it for its own use; that the guaranty was signed by the defendants, who were directors of the company, at the time the note was written, with the intention that it should become available for the benefit of any one to whom the note should be transferred as security for money lent to the corporation; and that the note was made payable to Pratt, who was then treasurer of the corporation, merely for convenience in negotiating it; and was first transferred to the plaintiff as security when the latter paid the amount thereof *418less the discount to the corporation. The evidence received in support of these findings was competent for the purpose of showing the consideration of the contract, and the time when it first took effect by delivery, but not to vary or control its terms.
By the rule above stated, the contract of guaranty is to be interpreted as if, when the plaintiff paid the money to the corporation, all the parties were present, and then signed and delivered the note and guaranty in the present form. It is a guaranty indorsed upon a negotiable promissory note payable on time and indorsed by the payee for the accommodation of the .maker. There is no person named to or with whom it is made. It is to be presumed that the defendants by their contract intended to give credit to the note as a security for the money obtained upon it. To say that Pratt, the payee, is the one to whom the guaranty is made, is to declare that the parties intended to give the benefit of it to one who was merely a surety for the maker. The more reasonable construction is, that it was given to secure the party who first accepted it as a valid contract and advanced money to the maker of the note upon its credit. In the well-considered case of McLaren v. Watson, 26 Wend. 425, where with some dissent it was decided by the Court of Errors that the guaranty of a negotiable note was not itself negotiable, it was also, without dissent, declared that a general guaranty of the payment of a note, without naming any person as the party guaranteed, was a valid instrument, and might be enforced by any one who advanced money upon it. And in Northumberland Bank v. Eyer, 58 Penn. St. 97, where a negotiable promissory note, which was indorsed by the payee for the accommodation of the maker, and upon which the defendant added his signature to the words, “ I guarantee the collection of the within note,’' it was decided that the law implied that the contract of guaranty was not with the accommodation payee, but with the plaintiff, who discounted the note and was the first holder for value. See also Story on Bills, § 458; Story on Notes, § 484.
Judgment for the plaintiff.