SURETY. A surety is one who undertakes to be answerable for another, who is called his principal. Snell must be in and It may be either by bond or by simple A con tract is not in law, unless made upon some aullioient ; but in the case of a bond this consideration is inferred from the circumstances of deliberation incident to its execution as a deed. When the undertaking is not by bond, It is necessary that the con eiderntion should be capable of proof, and that the instrument should be signed by the party who becomes the surety. The instrument however may consist of several if they are so connected by reference to eaoh other that they can be considered as incorporated. The instrument by which the surety becomes bound, when it has reference to civil matters, is generally called a guarantee, and ordinarily consists of an to become answerable for the payment of furnished to the principal, or for his skill, attention, alai other like matters. In such cases the consideration would pro bably be the of the goods to the prhicipal, or his employ ment by the party guaranteed. In the construction of guarantees the same rule of law prevails as in the case of all written instruments,— that they shall be understood in the sense most unfavourable to the party making them which the words will reasonably bear. The appli cation of the rule is very frequent in cases of guarantee where the question arises whether or not the guarantee is what is called a con tinuing guarantee. Thus where the surety undertakes to bo answer able to the amount of 1001. for goods supplied to his principal, this may mean that ho will be answerable for the first 100/. worth, nd cease to be answerable for any goods supplied afterwards; or, that lie will continue to be answerable to the amount of 100/. for any indefinite period during which goods may be supplied, although the principal has paid for the first 100/. worth. Tho latter kind of guarantee is called a continuing guarantee. Observations of a similar character may be made as to the application of payments by the principal.
The circumstances connected with the relative position of the guaranteed and the principal are considered as embodied in the con tract between the and the surety, and as forming part of that upon which the undertaking of the latter is founded. lf, there fore, these are substantially varied, so as to Increase the risk of the guaranteed, or to destrtiy or suspend his remedy against the principal, the surety is thereby Thus, if the has, at the time the guarantee is given, a lien upon property of the principal in his hands, which he afterwards parts with ; or if he extends the time of credit, or after commencing an action against the principal gives him time, the surety will be released. But the variation of circinn
stances must be substantial ; a change which does not operate so as to increase the risk or lessen the remedy will not have such an effect. Neither can the surety discharge himself by a mere request or caution to the guaranteed to abstain from trusting the principal, or to watch his acts, fie. Nevertheless it is the duty, and perhaps an implied undertaking, on the part of the guaranteed, against the consequences of the neglect of which a court of equity might relieve the surety, to employ a reasonable degree of prudence and attention in intimating his goods, or inspecting and checking the accounts of his clerks or servants. The surety is entitled to the benefit of all the securities which the guaranteed has against the principal.
With respect to the rights of the surety against the principal, Mr. Justice Buller has distinctly laid down the law, " wherever a person gives a security by way of indemnity for another, and pays the money, the law raises an a.ssumpsit," that is, implies a promise on the part of the principal to repay to the surety all the money that he has expended on his behalf, and this money may be recovered in an action against the principal for money paid to his use. But in no case is the surety entitled to more than an indemnity from his principal. Thus, if the guaranteed is content with a less sum from the surety, instead of exacting the full amount for which he is liable, the principal will be bound to repay to the surety the less sum only. If the surety has himself taken a bond or other security from the principal, ho relin quishes his right to bring an action upon the promise implied in law, and must have recourse to an action upon his security.
Where more persons than one become sureties for the same principal, they are called co-sureties. If one of these has paid the whole of the debt due from the principal, he may recover in an action of assumpsit from his co-sureties the amounts for which they were respectively liable. A court of equity will also interfere to regulate the proportions partly due from each. And in1 case any of them are unable to pay from insolvency, &c., it will compel the others to contribute propor tionally the amount for which the defaulters were liable. law is the same as to co-sureties, whether all have been created by the same instrument in writing, or each one by a distinct instrument.