Suretyship

2 definitions found

From The Collaborative International Dictionary of English v.0.48 [gcide]:

  Suretyship \Sure"ty*ship\, n.
     The state of being surety; the obligation of a person to
     answer for the debt, default, or miscarriage of another.
     --Bouvier.
     [1913 Webster]



From Bouvier's Law Dictionary, Revised 6th Ed (1856) [bouvier]:

  SURETYSHIP, contracts. An accessory agreement by which a person binds 
  himself for another already bound, either in whole or in part, as for his 
  debt, default or miscarriage. 
       2. The person undertaken for must be liable as well as the person 
  giving the promise, for otherwise the promise would be a principal and not a 
  collateral agreement, and the prommissor would be liable in the first 
  instance; for example, a married woman would. Not be liable upon her 
  contract, and the person who should become surety for her that she would 
  perform it would be responsible as a principal and not as a surety. Pitm. on 
  P. & S. 13; Burge on Sur. 6; Poth. Ob. n. 306. If a Person undertakes as a 
  surety when he knows the obligation, of the principal is void, he becomes a 
  principal: 2 Id. Raym. 1066; 1 Burr. 373. 
       3. As the contract of suretyship must relate to the same subject as the 
  principal obligation, it follows that it must not be of greater extent or 
  more onerous' either in its amount, or in the time or manner, or place of 
  performance, than such principal obligation; and if it so exceed, ii will be 
  void, as to such excess. But the obligation of the surety may be less 
  onerous, both in its amount, and in the time, place and manner of its 
  performance, that of the principal debtor; it may be for a less amount, or 
  the time may be more protracted. Burge, on Sur. 4, 5. 
       4. The contract of suretyship may be entered into by all persons who 
  are sui juris, and capable of entering into other contracts. See Parties to 
  contracts. 
       5. It must be made upon a sufficient consideration. See Consideration. 
       6. The contract of suretyship or guaranty, requires a present agreement 
  between the contracting parties; and care must be taken to observe the 
  distinction between an actual guaranty, and an offer to guaranty at a future 
  time; when an offer is made, it must be accepted before it becomes binding. 
  1 M. & S. 557; 2 Stark. 371; Cr. M. & Ros. 692. 
       7. Where the statute of frauds, 29 Car. II., c. 3, is in force, or its 
  principles have been adopted, the contract of suretyship "to answer for the 
  debt, default or miscarriage of another person," must be in writing, &c. 
       8. The contract of suretyship is discharged and becomes extinct, 1st. 
  Either by the terms of the contract itself. 2d. By the acts to which both 
  the creditor and principal alone are parties. 3d. By the acts of the 
  creditor and sureties. 4th. By fraud. 5th. By operation of law. 
       9.-Sec. 1. When by his contract the surety limits the period of time 
  for which he is willing to be responsible, it is clear he cannot be held 
  liable for a longer period; as when he engages that an officer who is 
  elected annually shall faithfully perform his duty during his continuance in 
  office; his obligation does not extend for the performance of his duty by 
  the same officer who may be elected for a second year. Burge on Sur. 63, 
  113; 1 McCord, 41; 2 Campb. 39; 3 Ad. & Ell. N. S. 276; 2 Saund. 411 a; 6 
  East, 512; 2 M. & S. 370; New R. (5 B. & P.) 180; 2 M. & S. 363; 9 Moore, 
  102. 
       10.-Sec. 2. The contract of suretyship becomes extinct or discharged by 
  the acts of the principal and of the creditor without any act of the surety. 
  This may be done, 1. By payment, by the principal. 2. By release of the 
  principal. 3. By tender made by principal to the creditor. 4. By compromise. 
  5. By accord and satisfaction. 6. By novation. 7. By delegation. 8. By set-
  off. 9. By alteration of the contract. 
       11.-1. When the principal makes payment, the sureties are immediately 
  discharged, because the obligation no longer exists. But as payment is the 
  act of two parties, the party tendering the debt and the party receiving it, 
  the money or thing due must be accepted. 7 Pick 88; 4 Pick. 83; 8 Pick. 122. 
  See Payment. 
       12.-2. As the release of the principal discharges the obligation, the 
  surety is also discharged by it. 
       13.-3. A lawful tender made by the principal or his authorized agent, 
  to the creditor or his authorized agent, will discharge the surety. See. 2 
  Blackf. 87; 1 Rawle, 408; 2 Fairf. 475; 13 Pet. 136. 
       14.-4. When the creditor and principal make a compromise by which the 
  principal is discharged, the surety is also discharged. 11 Ves. 420; 3 Bro. 
  C. C. 1; Addis. on Contr. 443. 
       15.-5. Accord and satisfaction between the principal and the creditor 
  will discharge the surety, as by that the whole obligation becomes extinct. 
  See Accord and satisfaction. 
       16.-6. It is evident that a simple novation, or the making a new 
  contract and annulling the old, must, by the destruction of the obligation, 
  discharge the surety. 
       17.-7. An absolute delegation, where the principal procures another 
  person to assume the payment upon condition that he shall be discharged, 
  will have the effect to discharge the surety. See Delegation. 
       18.-8. When the principal has a just set-off to the whole claim of the 
  creditor, the surety is discharged. 
       19.-9. If the principal and creditor change the nature of the contract, 
  so that it is no longer the same, the surety will be discharged; and even 
  extending the time of payment, without the consent of the surety, when the 
  agreement to give time is founded upon a valuable consideration, is such an 
  alteration of the contract as discharges the surety. See Giving Time. 
       20.-Sec. 3. The contract is discharged by the acts of the creditor and 
  surety, 1. By payment made by the surety. 2. By release of the surety by the 
  creditor. 3. By compromise between them. 4. By accord and satisfaction. 5. 
  By set off. 
       21.-Sec. 4. Fraud by the creditor in relation to the obligation of the 
  surety, or by the debtor with the knowledge or assent of the creditor, will 
  discharge the liability of the surety. 3 B. & C. 605; S. C. 6 Dowl. & Ry. 
  505; 6 Bing. N. C. 142. 
       22.-Sec. 5. The contract of suretyship is discharged by operation of 
  law, 1. By confusion.  2. prescription, or the act of limitations. 3. By 
  bankruptcy. 
       23.-1. The contract of suretyship is discharged by confusion or merger 
  of rights; as, where the obligee marries the obligor. Burge on Sur. 256; 2 
  Ves. p. 264; 1 Salk. 306; Cro. Car. 551. 
       24.-2. The act of limitations or prescription is a perfect bar to a 
  recovery against a surety, after a sufficient lapse of time, when the 
  creditor was sui juris and of a capacity to sue. 
       25.-3. The discharge of the surety under the bankrupt laws, will put an 
  end to his liability, unless otherwise provided for in the law. 
       26. The surety has the right to pay and discharge the obligation the 
  moment the principal is in default, and have immediate recourse to his 
  principal. He need not wait for the commencement of an action, or the issue 
  of legal process, but he cannot accelerate the liability of the principal, 
  and if he pays money voluntarily before the time of payment arrives, he will 
  have no cause of action until such time, or if he pays after the principal 
  obligation has been discharged, when he was under no obligation to pay, he 
  has no ground of action,. 
       27. Co-sureties are in general bound in solido to pay the debt, when 
  the principal fails, and if one be compelled to pay the whole, he may demand 
  contribution from the rest, and recover from them their several proportions 
  of their common liability in an action for money paid by him to their use. 6 
  Ves. 807; 12 M. & W. 421 8 M. & W. 589; 4 Scott, N. S. 429. See, generally, 
  15 East, R. 617; Yelv. 47 n.; 20 Vin. Ab. 101; 1 Supp. to Ves. jr. 220, 498, 
  9; Ayliffe's Pand. 559; Poth. Obl. part 2, c. 6; 1 Bell's Com. 350, 5th ed.; 
  Giting time; Principal; Surety.