Encyclopaedia Britannica, 11th Edition, "Groups, Theory of" to "Gwyniad": Volume 12, Slice 6Various
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Encyclopaedia Britannica, 11th Edition, "Groups, Theory of" to "Gwyniad": Volume 12, Slice 6
Various
Encyclopedias and dictionaries
The liability incurred by a surety under his guarantee depends upon its
terms, and is not necessarily co-extensive with that of the principal
debtor. It is, however, obvious that as the surety's obligation is
merely accessory to that of the principal it cannot as such exceed it
(de Colyar, _Law of Guarantees_, 3rd ed. p. 233; Burge, _Suretyship_, p.
5). By the Roman law, if there were any such excess the surety's
obligation was rendered _wholly_ void and not merely void _pro tanto_.
By many existing codes civil, however, a guarantee which imposes on the
surety a greater liability than that of the principal is not thereby
invalidated, but the liability is merely reducible to that of the
principal (Fr. and Bel. 2013; Port. 823; Spain, 1826; Italy, 1900;
Holland, 1859; Lower Canada, 1933). By sec. 128 of the Indian Contract
Act 1872 the liability of the surety is, unless otherwise provided by
contract, coextensive with that of the principal. Where the liability of
the surety is _less_ extensive in amount than that of the principal
debtor, difficult questions have arisen in England and America as to
whether the surety is liable only for _part_ of the debt equal to the
limit of his liability, or, up to such limit, for the _whole_ debt
(_Ellis_ v. _Emmanuel_, 1 Ex. Div. 157; _Hobson_ v. _Bass_, 6 Ch. App.
792; Brandt, _Suretyship_, sec. 219). The surety cannot be made liable
except for a loss sustained by reason of the default guaranteed against.
Moreover, in the case of a joint and several guarantee by several
sureties, unless all sign it none are liable thereunder (_National Pro.
Bk. of England_ v. _Brackenbury_, 1906, 22 _Times_ L.R. 797). It was
formerly considered in England to be the duty of the party taking a
guarantee to see that it was couched in language enabling the party
giving it to understand clearly to what extent he was binding himself
(_Nicholson_ v. _Paget_, 1 C. & M. 48, 52). This view, however, can no
longer be sustained, it being now recognized that a guarantee, like any
other contract, must, in cases of ambiguity, be construed against the
party bound thereby and in favour of the party receiving it (_Mayer_ v.
_Isaac_, 6 M. & W. 605, 612; _Wood_ v. _Priestner_, L.R. 2 Exch. 66,
71). The surety is not to be changed beyond the limits prescribed by his
contract, which must be construed so as to give effect to what may
fairly be inferred to have been the intention of the parties, from what
they themselves have expressed in writing. In cases of doubtful import,
recourse to parol evidence is permissible, to explain, but not to
contradict, the written evidence of the guarantee. As a general rule,
the surety is not liable if the principal debt cannot be enforced,
because, as already explained, the obligation of the surety is merely
accessory to that of the principal debtor. It has never been actually
decided in England whether this rule holds good in cases where the
principal debtor is an infant, and on that account is not liable to the
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