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by the retirement of C. from the partnership of A., B. and C., the defendant as their surety was discharged from all further liability on the bond. (University of Cambridge v. Baldwin, 5 Mees. & W. 580.)
Where the consideration sufficiently appears upon the
written agreement, (p. 64.) “ Messrs. Kennaway and Co.
“ Gentlemen-I hereby guarantee to you, Messrs. Kennaway and Co., the sum of 2501., in case Mr. Paddon, of &c., should default in his capacity of agent and traveller to you.” It was held, that the consideration sufficiently appeared. (Kennaway v. Treleavan, 5 Mees. & W. 498.)
Where no consideration, or no sufficient consideration,
appears upon the written agreement, (p. 69.) (See Bentham v. Cooper, 5 Mees. & W.621.)
Where the consideration which appears upon the written
agreement is in part sufficient and in part insufficient, (p. 72.)
" Messrs, Raikes,
“ Oct. 19, 1832. “ Gentlemen-I hereby undertake to secure to you the payment of any sums of money you have advanced, or may hereafter advance, to Messrs. Henry Davenport and Co. their account with you, commencing the 1st Nov. 1831, not exceeding 2,0001.” (Raikes v. Todd, 8 Ad. & Ell. 846.)
Of the rights and remedies of the creditor with relation to
the surety, (p. 85.) If there is any condition precedent to any liability to be incurred by the surety, that condition must be strictly performed : thus, where a surety joined his principal in a bond, conditioned for the payment to the obligees of all sums of money advanced by them to the principal within three calendar months after receiving notice to pay such sums, It was held, that in assigning a breach of the condition, it was not enough to aver that the surety“ had and received notice,” that certain sums were due from the principal, without averring a notice or request to pay. (Batson v. Spearman, 9 Ad. & Ell, 298.)
Of the rights and remedies of the surety, with relation to
the creditors, (p. 122.) The principle of Ex parte Rushforth (10 Ves. 409), acknowledged at law. (Raikes v. Todd, 8 Ad. & Ell. 846.)
Where the creditor compounds with, or releases, the
principal, (p. 189.) A creditor who has compounded with and released the principal, with the parole consent of the surety, and under a promise that the surety will make good the difference of the debt, may have relief in equity, though the surety is discharged at law. (Brooks v. Stuart, 1 Beav. 512.)
Of actions by the creditor, (p. 227.) Where the averments contained in the declaration are not proved. (See Raikes v. Todd, 8 Ad. & Ell. 846.)
Of the necessary parties to a suit in Equity, (p. 234.) The principal is a necessary party to a bill by the creditor, for relief against the surety, where the bill states that the plaintiff had with the consent of the surety compounded with and released the principal, and consequently where the creditor could have no relief against the principal-unless it clearly appear that the surety likewise could have no relief against the principal. (Brooks v. Stuart, 1 Beav. 512.)
Page 28. in note, 1. 8, from the bottom, for “ Hulton," read “ Hutton."
46. 1. 9. for “ nomination,” read “ nominatim."
ruptcy,” read " is considered in a court of law as
a legal debt.'
Law of Principal and Surety.
OF THE INSTRUMENT OF SURETYSHIP.
OF THE NATURE OF AN INSTRUMENT BY WHICH
SURETYSHIP MAY BE CREATED.
A CONTRACT of suretyship (1), is a contract, whereby one person engages to be answerable for
(1) The practice of requiring surety for the due performance of duties and obligations has existed from a very early period; for we find in Genesis (chap. xlii), that when Joseph sent back his brethren to their father's house to bring Benjamin to him, Simeon was retained as surety.
Suretyship has at all times been looked upon as attended with dangers. Solomon, in various parts of the Proverbs, declaims against becoming surety:
“ Be not thou,” he says, one of them that strike hands; or of them that are sureties for debts.” (xxii. 26.) And, “ A man void of understanding striketh hands, and becometh surety in the presence of his friend.” (xvii. 18.) And,
“ He that is a surety for a stranger shall smart for it; and he that hateth suretyship is sure.” (xi. 15.) Erasmus, in his Adagia, records a saying, attributed by some to Thales, by others to Pittacus, (see Stobæus, Serm. 3; Diog. Laertius, Segm. 40, lib. 1; Hyginus Fab. 221,) illustrative of the dangers consequent on becoming surety, Sponde, noxa præsto est.” Amyot has concisely expressed the opinion of the French upon this point, in the words “ Qui repond, paye.” And, probably, there are few nations without some proverb, or saying, expressive of their conviction, that loss follows suretyship.
the debt, default, or miscarriage of another. To make this contract binding, certain formalities (which will be subsequently noticed) are, by the Statute of Frauds (a), required to be observed. If these requisites are complied with, the nature of the instrument is immaterial; it may be by a writing under seal, as a deed, or a bond; or by a writing not under seal, as a memorandum, note, or letter. Those instruments which are not under seal, are usually termed guarantees, though every contract of suretyship is, substantially, and in fact, a guarantee.
OF PROMISES WHICH ARE WITHIN THE STATUTE
The 4th section of the Statute of Frauds (6), enacts, that "no action shall be brought whereby to charge the defendant upon any special promise to answer for the debt, default, or miscarriage of another person, unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized.”
The object of the legislature in framing this section of the statute, seems to have been, that a person who undertakes to do that which by law he is not bound to perform, namely, to pay a debt which another has contracted, or which another is about to contract; or to be answerable for another's default, or miscarriage, shall not be made chargeable, unless his undertaking be reduced into writing(c)(2).
(a) 29 Car. II. cap. 3.
An exception, however, to the rule, that an undertaking by one person for the debt, default, or miscarriage of another, shall be ineffectual unless reduced into writing, has been made in the case of an attorney, who, acting in that character, verbally promised to pay the debt of a third party (the promise having been founded on a good consideration); in that case, the Court, in its jurisdiction over attornies, compelled the attorney to perform his undertaking, and would not allow him to take advantage of his own wrong (d).
A promise which is within the statute, and which requires the formalities above-mentioned to give it effect, is called a collateral promise, because the promise is in aid of, or collateral to, the liability of the principal debtor, or the person in whose favour the promise is given ; and the person to whom the
(e) See the observations of C.J., in Castling v. Aubert, 2 East, Bayley, J., in Edwards v. Kelly, 1 M. & Sel. 204; of Best, J., (d) In re Greaves, i Cr. & J. Kirkham v. Marter, 2 B. & Ald. 613; and of Lord Ellenborough,
(2) Although a person who has engaged to be responsible for the debt, default, or miscarriage of a third party, be not, by reason of the undertaking not being reduced into writing, liable to the person to whom such undertaking is given; yet, if from the transaction it can be collected that an authority was given by the person undertaken for, to the person giving the undertaking, to make good the engagement in case the person undertaken for, fails on his part to perform it, the person giving the undertaking, though not liable at the suit of the person to whom it was given, may, nevertheless, after default by the person undertaken for, and until such authority is retracted, make good such engagement, and will have his remedy over against the party undertaken for ; thus, where D., being in want of goods, went to C., aceompanied by J. S., and ordered goods, J. S. saying, in D.'s presence, that he would pay the money if D. did not, and the goods were furnished by C. to D.; it was held, that J. S. thereby acquired an authority to pay the money on the default of D.; and that having paid it, he was entitled to recover it back from D., as money paid and supplied to D.'s use; the authority not being shown to have been countermanded. (Alexander v. Vane, 1 Mees. & W. 511.)