Encyclopaedia Britannica, 11th Edition, "Groups, Theory of" to "Gwyniad": Volume 12, Slice 6Various
Science
Encyclopaedia Britannica, 11th Edition, "Groups, Theory of" to "Gwyniad": Volume 12, Slice 6
Various
Encyclopedias and dictionaries
Egypt [mixed suits], 615, 616).
The usual mode in England of enforcing liability under a guarantee is by
action in the High Court or in the county court. It is also permissible
for the creditor to obtain redress by means of a set-off or
counter-claim, in an action brought against him by the surety. On the
other hand, the surety may now, in any court in which the action on the
guarantee is pending, avail himself of any set-off which may exist
between the principal debtor and the creditor. Moreover, if one of
several sureties for the same debt is sued by the creditor or his
guarantee, he can, by means of a proceeding termed a third-party notice,
claim contribution from his co-surety towards the common liability.
Independent proof of the surety's liability under his guarantee must
always be given at the trial; as the creditor cannot rely either on
admissions made by the principal debtor, or on a judgment or award
obtained against him (_Ex parte Young In re Kitchin_, 17 Ch. Div. 668).
Should the surety become bankrupt either before or after default has
been made by the principal debtor, the creditor will have to prove
against his estate. This right of proof is now in England regulated by
the 37th section of the Bankruptcy Act, 1883, which is most
comprehensive in its terms.
Rights of sureties.
A person liable as a surety for another under a guarantee possesses
various rights against him, against the person to whom the guarantee is
given, and also against those who may have become co-sureties in respect
of the same debt, default or miscarriage. As regards the surety's rights
against the principal debtor, the latter may, where the guarantee was
made with his consent but not otherwise (see _Hodgson_ v. _Shaw_, 3 Myl.
& K. at p. 190), after he has made default, be compelled by the surety
to exonerate him from liability by payment of the guaranteed debt (_per_
Sir W. Grant, M.R., in _Antrobus_ v. _Davidson_, 3 Meriv. 569, 579;
_per_ Lindley, L.J., in _Johnston_ v. _Salvage Association_, 19 Q.B.D.
460, 461; and see _Wolmershausen_ v. _Gullick_, 1893, 2 Ch. 514). The
moment, moreover, the surety has himself paid any portion of the
guaranteed debt, he is entitled to rank as a creditor for the amount so
paid, and to compel repayment thereof. In the event of the principal
debtor's bankruptcy, the surety can in England, if the creditor has not
already proved in respect of the guaranteed debt, prove against the
bankrupt's estate, not only in respect of payments made before the
bankruptcy of the principal debtor, but also, it seems, in respect of
the contingent liability to pay under the guarantee (see _Ex parte
Delmar re Herepath_, 1889, 38 W.R. 752), while if the creditor has
already proved, the surety who has paid the guaranteed debt has a right
to all dividends received by the creditor from the bankrupt in respect
thereof, and to stand in the creditor's place as to future dividends.
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