1 Louisville Co. v. Welsh, 10 How. U. S. 461; Wildes v. Savage, 1 Story, 22; Globe Bank v. Small, 25 Me. 366; Talbot v. Gay, 18 Pick. 534; Allen v. Rightmore, 20 Johns. 366; Douglass v. Howland, 24 Wend. 35; Farm. & Mech. Bk. v. Kerchavel, 2 Mich. 504; Cos v. Brown, 6 Jones, L. 100.

[sec 570 a.

1 Phillips v. Foxall, L. R. 7 Q. B. 660.

2 Douglass v. Reynolds, 7 Pet. 114; Clark v. Remington, 11 Met. 361; Craft v. Isham, 13 Conn. 28.

3 Day, J., Home Ins. Co. v. Holway, 55 Iowa, 578; Jones v. U. S., 18 Wall. 662; Albany Dutch Ch. v. Vedder, 14 Wend. 166; McKecknie v. Ward, 58 N. Y. 541; Atlantic Tel. Co. v. Barnes, 64 N. Y. 385; Pittsburgh R. R. v. Schaffer, 59 Penn. St. 350.

In Home Ins. Co. v. Holway, 55 Iowa, 575, we have the following summary of the cases: -

"The case of Roper v. Trustees of Sangamon Lodge, 91 111. 518, is also directly in point, and much stronger in its facts, in favor of the sureties, than the case at bar. The point determined is correctly stated in the syllabus as follows: ' Where a party becomes surety upon the bond of a treasurer of a secret society, for the faithful application of moneys in his hands, payable to the society, the fact that the officers and members of the society knew of his previous misappropriation of the funds intrusted to him during the previous year, and with such knowledge reelected him and failed to communicate such fact to his sureties, and they doing no act to put the sureties off their guard or prevent them from ascertaining the facts, no fraud can be imputed to the society which can be set up in avoidance of the sureties' liability on the bond.' See also Ham v. Grove, 34 Ind.

18; Atlantic and Pacific Telegraph Co. v. Barnes, 64 N. Y. 385; Cowley v. The People, Illinois Supreme Court, in the Reporter of Nov. 10, 1880 [95 111.249], page 592; The Remington Sewing Machine Company v. Kezertee, 5 N. W. Rep. 809 (Wis.) [49 Wis. 409]; Atlas Bank v. Brownell, 11 Am. Rep. 231; 9 R. I. 168.

"The cases relied upon by the appellee are nearly all distinguishable in principle from the case at bar. In Sooy v. State, 39 N. J. L. 135, it was held that ' A person taking a bond for the future good conduct of an agent already in his employment, must communicate to a surety his knowledge of the past criminal misconduct of such agent in the course of such employment, in order to make such bond binding.' No fact appears in the present case from which criminal misconduct on the part of Holway can be inferred. He made correct statements of the condition of his accounts to the plaintiff. It does not appear that he attempted to defraud them in any way. Upon the contrary, when he found himself running behind in his accounts, he made arrangements for the settlement of his delinquencies, and soon caused the plaintiff to be paid in full. He may have acted improperly and carelessly in the management of his principal's money, but his conduct is not shown by the evidence to be criminal. In Phillips v. Fonall, L. R. 7 Q. B. 666, it was held that 'on a continuing guaranty sec 571. As between a debtor and a creditor, it may happen for the honesty of a servant, if the master discovers that the servant has been guilty of dishonesty in the course of the service, and, instead of dismissing the servant, he chooses to continue him in his employ without the knowledge and consent of the surety, express or implied, he cannot afterwards have recourse to the surety to make good any loss which may arise from the dishonesty of the servant during the subsequent service.' In this case the surety guaranteed the honesty of a servant. The master detected the servant in acts of dishonesty, and took an agreement from the servant to pay a certain amount monthly on account of a defalcation which existed, which facts were unknown to the surety. It was for a defalcation subsequently occurring that it was sought to hold the surety liable. In Franklin Bank v. Cooper, 36 Me. 179, the bond was procured at the request of the bank, as surety for its cashier, who was then known to be a defaulter, and was made to cover past as well as future delinquencies, the bank having an opportunity to disclose the facts to the surety.

"Dinsmore v. Tidball, 34 Ohio St. 411, was an action upon a bond to indemnify the Adams Express Co. against loss from the dishonesty or unfaithfulness of an agent. The agent was at the time in the employment of the company, and had been guilty of acts of embezzlement, which fact was not communicated to the surety. The court say: 'Admitting that a principal, in accepting a guaranty for the faithful and honest conduct of his agent, is not bound, under all circumstances, to communicate to the guarantor every fact within his knowledge which increases the risk, yet we think there can be no doubt, either upon principle or authority, that when an agent has acted dishonestly in his employment, the principal, with a knowledge of the fact, cannot accept a guaranty for his future honesty from one who is ignorant of the agent's dishonesty, and to whom the agent is held out by the principal as a person worthy of confidence. The failure to communicate such knowledge under such circumstances would be a fraud upon the guarantor.'

"In Graves v. Lebanon National Bank, 10 Bush, 23, when a cashier who had given no bond was guilty of embezzlement which might easily have been discovered, and the bank furnished a statement of its good condition, after which parties became sureties for the cashier, it was determined that they could not be held. In Charlotte, Columbia, and Augusta Railroad v. Gaw, 59 Ga. 685, it was held that ' the agent of a corporation, being under bond to account and pay over daily, cannot be trusted with more money at the sureties' risk after dishonesty of the agent has been discovered by the corporation, but he may be so trusted so long as the circumstances, fairly interpreted, point not to moral turpitude, but to a want of diligence or punctuality rather than to a want of integrity.'