surety

The surety is a special kind of secured creditor. For its claim against the principal is secured by its right of subrogation to the remedies of the creditor which it has been compelled to pay.

A person who binds himself for the payment of a sum of money, or for the performance of something else, for another, who is already bound for the same. See "Suretyship."

A surety is one who at the request of another, and for the purpose of securing to him a benefit, becomes responsible for the performance by the latter of some act in favor of a third person or hypothecates property as security therefor. Civ. Code Cal. § 2831; Civ. Code Dak. § 1673. A surety is defined as a person who, being liable to pay a debt or perform an obligation, ls entitled, if It is enforced against him, to be indemnified by some other person who ought himself to have made payment or performed before the surety was compelled to do so. Smith v. Shelden, 35 Mich. 42, 24 Am. Rep. 529. And see Young v. McFadden, 125 Ind. 254, 25 N. E. 284 ; Wise v. Miller, 45 Ohio St 388, 14 N. E. 218 ; O'Conor v. Morse, 112 Cal. 31, 44 Pac. 305, 53 Am. St. Ren. 155; Hall v. Weaver (C. C.) 34 Fed. 106.

— Surety company. A company, usually incorporated, whose business is to assume the responsibility of a surety on the bands of officers, trustees, executors, guardians, etc., in consideration of a fee proportioned to the amount of the security required.

— Surety of the peace. Surety of the peace is a species of preventive justice, and consists in obliging those persons whom there is a probable ground to suspect of future misbehavior, to stipulate with, and to give full assurance to, the public that such offense as is apprehended shall not take place, by finding pledges or securities for keeping the peace, or for their good behavior. Brown. See Hyde v. Greuch, 62 Md. 582.

A person who engages to be answerable for the debt, default or miscarriage of another. Surety of the peace: a bond or recognizance to keep the peace, acknowledged before a justice of the peace,

3 A person who engages to be answerable for the debt, default, or miscarriage of another. The engagement constitutes a contract of suretyship.* A person who, being liable to pay a debt or perform an obligation, is entitled, if it is enforced against him, to be indemnified by > L. supremus, upg^most. ' 1 Story, Eq. § 626, quoting Lord Hardwicke in Pit v. Cholmondeley, 3 Ves. 566-66 (18S4). See also Perkins f. Hart, 11 Wheat. 266 (1826). >F. sureti: L. se-, apart from, free of; euro, anxsome other person who ought himself to have made or performed before the former was compelled to do so.i The relation is fixed by the arrangement and equities between the debtors or obligors, and may be un lino wn to the creditor.^ ' Co-surety. Persons are co-sureties, so as to give the right of contribution, when they are bound for the performance by the same principal of the same duty.2 A contract of " suretyship " is a direct liability to the creditor for the act to be perforaied by the debtor; a " guaranty " is a liability only for his ability to perform this act. A surety assumes to pierform the contract if the principal should not; a guarantor undertakes that his principal can perform — that he is able to perform. The undertaking in suretyship is immediate and direct that the iact shall be done; if not done, the surety becomes at once responsible. In a case of guaranty, non-ability, that is, insolvency, must first be shown. ^ A "^ surety " is usually bound with his principal, by the same instrument, executed at the same time and on the same consideration. He is an original promisor, and a debtor from the beginning, and held to know every default of his principal. He may be sued with the principal. The contract of a "guarantor" is his own separate undertaking, in which the principal does not join. The original contract of the principal is not his contract, and he is not bound to take notice of its non-performance. He is often discharged by indulgence to the principal, and usually is not liable unless notified of his default. At the same time, each stands responsible for the debt, default, or miscarriage of the other; each is a favorite in law, and not bound beyond the strict terms of the engagement.* The liabilitj^ of a surety is not to be extended, by implication, beyond the terms of his contract. To the extent, and in the manner, and under the circumstances, pointed out in his obligation, he is bound, and no farther. It is not sufi Sicient that he may sustain no injury by a change in the contract, or that it may even be for his benefit. He has a right to stand upon the very terms of his contract; and if he does not assent to any variation of it, and a variation is made, it is fatal. The courts scan contracts of sureties with considerable strictness. ^ When a change is made without his assent, he is not bound by the contract in its original form, for that has ceased to exist. He is not bound by the conti-act in its altered form, for to that he never assented. " 1 Smith V. Shelden, 35 Mich. 48 (1876), Cooley, C. J.; Wendlandt v. Sohr, 37 Minn. 163 (1887). 2 Young V. Shunk, 30 Minn. 505 (1883), Gilfillan, C. J. 8 Eeigart v. White, 52 Pa. 440 (1866), Agnew, J. 4 Markland Mining & Manuf. Co. v. Kimmel, 87 Ind. 56&-69 (1882), cases, Zollars, J. S^e also Barns u Barrow,. 61 N. Y. 42-46 (1874), cases; Kingsbury v. Westfall, ib. 360 (1875); Hammel v. Beardsley, 31 Minn. 315 (1883). He is a " favored debtor." His rights are zealously guarded both at law and in equity. The slightest fraud on the part of the creditor, touching the contract, annuls it. Any alteration after it is made, though beneficial to the surety, has the same effect. His contract, exactly as made', is the measure of his liability; and, if the case against hiih be not clearly within it, he is entitled to go acquit. But there is a duty incumbent on him. He must not rest supine, close his eyes and fail to seek important information within his reach. If he does this, and a loss occurs, he cannot, in the absence of fraud by the creditor, set up as a defense facts then first learned which he ought to have known and considered before entering into the contract. ^ "VVTien it is said that the contract is to be construed strictly, the meaning is that the obligation is not to be extended to any other subject, or person, or period of time than is expressed or necessarily included in it This rule applies only to the contract itself, not to matters collateral and incidental or arising in execution of it, which are governed by the rules that apply to like circumstances, whatever the relation of the parties." In the case of an absolute guaranty by a surety of payment of a debt, no duty rests upon the creditor in the first instance to take steps against the debtor, and a request to proceed, and damage resulting to the surety from a failure to proceed, must be shown by the surety, to establish a defense. But in the case of an undertaking of such a nature that proceedings must be taken against the debtor before the obliga-. tion of the surety to pay arises, proof of a request to proceed is not necessary, the law in such case implying the condition precedent that due diligence will be used in proceeding against the principal. ^ Where a law provides that a surety may require his creditor, by written notice, to commence action against the principal, the notice must be unconditional — to commence forthwith; a notice that the surety "wishes" the creditor to collect the claim or have it arranged, the surety not desiring to remain liable, is mot sufficient.^ A surety who pays the debt for which he is bound is not only entitled to all the rights of the creditor against the principal for the whole amount, but against the other sureties for their proportional part.^ United States, 2 Wall. 233-35 (1864), cases; Read v. Bowman, ib. 603 (1864), cases; State v. Churchill, 48 Ark. 442 (1886), cases; 20 Cent. Law J. 183-89 (1885), cases. 1 Magee v. Manhattan Life Ins. Co., 92 U. S. 98 ^1875), cases, Swayne, J. 2 Warner v. Connecticut Mut. Life Ins. Co., 109 U. S. 363 (16a3), Matthews, J.; Burge, Suretyship, 1 Am. ed. 40. 3 Toles V. Adee, 91 N. Y. 573 (1883), Rapallo, J. 4 Meriden Silver Plate Co. v. Flory, 44 Ohio St. 435 (1836); Baker v. Kellogg, S9 id. 665 (1876): Ohio Rev. St. §5833. 6 United States v. Ryder, 110 U. S. 733 (1884); Hampton V. Phipps, 108 id. 263-66 (1833), cases; Shaeffer v. Clendenin, 100 Pa. 567 (1882); Stevens v. Tucker, 87 Ind. The rule of law is that where one surety has paid the debt, he can recover from a co-surety, at law, an aliquot part of the debt, regard being had to the number, but not to the solvency, of the sureties. It any co-surety is insolvent, a larger proportion may be recovered in equity.^ When a surety has contracted with reference to the conduct of a party in a proceeding in court, in the absence of fraud or collusion, he is concluded by the judgment. ^ If the surety holds indemnity from the principal, the cx'edltor may have the debt satisfied out of it; if the indemnity Is against a contingent liability, the creditor cannot be substituted until the liability hecomes absolute, that is, until the claim is reduced to judgment.* If the purpose for which the contract is made is illegal, the surety cannot be held. Thus, a bond to release property from an unlawful attachment creates no liability.* Surety company. An association of persons, usually incorporated, which makes a business of acting as surety for persons occupying positions of trust, for a compensation which varies with the amount of the bond or security required. Such companies are sometimes also called " guaranty companies." See Alteration, 2; Appeal, 2; Assent; Conteibution; Discussion;0uaranty, 2; Indorsement; Joint AND Several; Liability, Contingent; Peace, 1; Recognizance; Strictus; Subrogation.

A pledge; a person who becomes or default of another. He is not supposed tody of his principal, Hke bail; and without a prc Tious suit against the peace: a recognizance or bond to keep before a justice of the peace, either on complaint of a third party who s-wears one bound [makes oath that he is in bodily not do it for mahoe or vexation].

One who has become answerable for payment or performance of an obligation by another; one who has engaged that a debtor shall pay; a third person, who incurs an obligation to a creditor that he shall be paid by the principal debtor; one who undertakes for the act or debt of another. Suretyship: the relation in which one who has engaged to be answerable for another's debtor duty stands, as towards the creditor and the primary debtor; an undertaking to be answerable for another. A surety is defined as a person who, being liable to pay a debt or perform an obligation, is entitled, if it is enforced against him, to be indemnified by some other person who ought himself to have made payment or performed before the surety was compelled to do so. Smith v. Shelden, 35 Mich. 42. Suretyship denotes the relation in which one person who is not primarily indebted stands towards two other persons; viz., the primary creditor whom he further assures in his debt, and the primary debtor whom he assists in obtaining credit. The relation is contractual in these respects, viz., the surety agrees with the creditor to pay liim, failing the debtor; and the debtor agrees to repay the surety the amount which he may have paid on his account to the creditor. Brown. Tiie contract of suretyship has been defined to be a contract whereby one person engages to be answerable for the debt, default, or miscarriage of another. It is an obligation accessorial to that of the principal debtor; the debt is due from the principal, and the surety is merely a guarantor for its payment. Hence it is of the essence of the contract that there should be a valid obligation of the principal debtor; also, that the surety may, in general, avail himself of any defence which his principal could make, while a defence which the principal has precluded himself from making, or has waived, cannot be made by the surety. Evans v. Keeland, 9 Ala. 42. tion if the debtor does not ( Cip. Code, art. 3004). The obligation of the surety is to pay the creditor in case the debtor himself does not satisfy the debt; and the property of the debtor must first be discussed or seised, unless the surety has renounced the plea of discussion, or has become bound in solido with ttie debtor. Judicial sureties are an exception to these rules; the judicial surety cannot exercise the privilege of discussion, but is bound absolutely. Alley V. Hawthorn, 1 La. Ann. 122. Surety of the peace, or for good behavior. By the Saxon constitution, sureties for good behavior were always at hand by means of King Alfred's wise institution of decennaries or frank pledges, wherein the whole neighborhood of tithing or freemen were mutually pledges for each other's good behavior. But this great and general security being now fallen into disuse, and neglected, there has succeeded to it the method of making suspected persons find particular and special security for their future conduct. This security consists in being bound, with one or more sureties, in a recognizance or obligation to the king, entered on record, and taken in some court, or by some judicial officer; whereby the parties acknowledge themselves to be indebted to the crown in the sum required, with condition to be void and of none effect if the party shall appear in the court on such a day, and in the mean time shall keep the peace; either generally towards the king, and all his liege people; particularly, also, with regard to the person who craves the security. Or, if it be for the good behavior, then on condition that lie shall demean and behave himself well (or be of good behavior), either generally or specially, for the time therein limited, as for one or more years, or for life. Jacob. Surety of the peace is a species of preventive justice, and consists in obliging those persons whom there is a probable ground to suspect of future misbehavior, to stipulate with, and to give full assurance to, the public that such offence as is apprehended shall not take place, by finding pledges or securities for keeping the peace, or for their good behavior. Brown. Surety of the peace is an acknowledgment of a bond to the crown, taken by a competent judge of record, for the keeping of the peace. Any justice of the peace may bind all those to keep the peace who, in his presence, make affray, or contend together with hot and angry woids, or go about with unusual weapons, to the terror of the people. So, if a private man hath just cause to fear that another will burn his house, or do him a corporal injury, or will procure others to do so, he may demand surety of the peace against such person; and every justice of the peace is bound to grant it, if he who demands it person; and will also further swear that he does not require such surety out of malice or for mere vexation. This is called swearing the peace against another. ( Cowel; 4 BL Com. 255; 4 Steph. Com. 293- 205.) Modey^ W.