the surety. thereof, if the creditor, without the assent of the surety, discharge alters the original contract or obligation of the principal' [except to the benefit of the surety'], or if, in any degree whatever, he impairs his remedy, or suspends his right to proceed against the principal,' the surety is exonerated, except so far as he may be indemnified by the principal. 'Gahn v. Niemcewicz, 11 Wend., 312; Elwood v. Deifendorf, 5 Barb., 398. * Ludlow v. Simond, 2 Cai. Cas., 1. Ellis v. McCormick, 1 Hilt., 313; Ogden v. Rowe, 3 E. D. 4 Bangs v. Strong, 7 Hill, 250, aff'g S. C., 10 Paige, 11. * Huffman v. Hulburt, 13 Wend., 377. 7 Reynolds v. Ward, 5 Wend., 501; Hall v. Constant, 2 § 1367. Mere delay on the part of the creditor to proceed against the principal, or to enforce any other remedy, does not exonerate the surety. Williams v. Townsend, 1 Bosw., 411; Albany Dutch § 1368. After the surety has been indemnified by the debtor, he is liable to the creditor to the extent of the indemnity, notwithstanding the creditor, without the surety's assent, may have modified the contract or released the principal. Supreme Ct., 1834, Moore v. Paine, 12 Wend., 123; Pratt Delay of does not creditor discharge a surety. surety by the indemnified debtor is not exone rated. against surety makes him liable as principal. § 1369. After the creditor has recovered judgment against Judgment the surety, the surety is liable to the creditor as a principal; but on satisfying the judgment, or any part thereof, he is entitled to the extent of what he has satisfied, to whatever remedies against the original debtor the creditor may then possess. The weight of authority seems to be, at any rate in the Exonerated by offer of satisfaction Surety not discharged by act of law discharging principal. relation of the surety. (Bangs v. Strong, 7 Hill, 250; Schroeppell v. Shaw, 3 N. Y., 446, aff'g S. C., 5 Barb., 580; Bay v. Tallmadge, 5 Johns. Ch., 305; Delaplaine v. Hitchcock, 11 Barb., 159; Boughton v. Bank of Orleans, 2 Barb. Ch., 458; Hubbell v. Carpenter, 5 Barb., 520, reversing S. C., 2 id., 484; La Farge v. Hester, 9 N. Y., 241; Storms v. Thorn, 3 Barb., 314.) But the above seems the more reasonable rule. § 1370. Where satisfaction of the principal obligation, or due offer of satisfaction, is made, whether by the principal or by a third person, the surety is exonerated. Elmendorph v. Tappen, 5 Johns., 176. § 1371. Where the liability of the principal is discharged by act of law and not through the intervention or omission of the creditor, the surety is not exonerated. Bowery Savings Bank v. Clinton, 2 Sandf., 113; Storm v. ARTICLE III. Surety may require the proceed against the principal. THE RIGHTS OF A SURETY. SECTION 1372. Surety may require the creditor to proceed against the principal. 1373. A principal bound to re-imburse his surety. § 1372. The surety may require his creditor to proceed creditor to against the principal, or pursue any other remedies in his power which the surety cannot himself pursue, and which would lighten his burden, on offering to indemnify the principal against loss by so doing; and if in such case the creditor neglects to do so, and the recovery from the principal is lost in consequence, the surety is exonerated. This seems on the whole to be the more reasonable rule, though the authorities do not fully sustain it. See Hayes v. Wood, 4 Johns. Ch., 123; Pain v. Packard, 13 Johns. 174; King v. Baldwin, 17 Johns., 384, revers. S. C., 2 Johns. Ch., 554; Fulton v. Matthews, 15 Johns., 433; Valentine v. Farrington, 2 Edw., 53; Warren v. Beardsley, 8 Wend., 195; Schroeppell v. Shaw, 3 N. Y., 446, affirming S. C., 5 Barb., 580, bound to re surety. § 1373. If the surety satisfies the obligation for which A principal he has become liable as surety, or any part thereof, whether imburse his with or without legal proceedings,' the principal is bound to re-imburse what he has disbursed, including necessary costs and expenses; but the surety has no claim for reimbursement against other persons, though they may have been benefited by his act.' 1 Mauri v. Hefferman, 13 Johns., 58; Vechte v. Brownell, 2 Bonney v. Seely, 2 Wend., 481; Hunt v. Amidon, 4 Hill, 3 Laws of 1858, 506, ch. 314, § 3. 4 Tom v. Goodrich, 2 Johns., 213. § 1374. The surety, upon satisfying the obligation, is entitled to enforce every remedy which the creditor had against the principal, to the extent of reimbursing what he has expended. Hayes v. Ward, 4 Johns. Ch., 123; Bullock v. Boyd, § 1375. Whenever property of a surety is pledged with the property of the principal, the surety is entitled to have the property of the principal first applied to the discharge of the principal's obligation. Vartie v. Underwood, 18 Barb., 561. § 1376. The provisions of sections 1373, 1374 and 1375, apply where the surety has only pledged his property, as well as where he is personally bound. Gahn v. Niemcewicz, 11 Wend.,312; affg. S. C., 3 Paige, 614. CHAPTER II. GUARANTY. SECTION 1377. Guaranty defined. 1378. Guarantor. 1379. Necessity of a consideration. 1380. Guaranty to be in writing, &c. 1381. What engagement to answer for obligation of another is not guaranty. 1382. Continuing guaranties. 1383. Revocation. The surety the right of &cquires the creditor The properpal to be ty of princi taken first. A surety property pledging alone. Guaranty defned Guarantor. Necessity of a con SECTION 1384. A party, how ecostrued. 1385. Liability upon guaranty of payment or performance. 1877. A guaranty is a contract of suretyship whereby the surety engages to satisfy the obligation of the principal, if the principal fails to do so himself. 1378. A person may become guarantor even without the knowledge of the principal. Code Nap. art. 2014. 1379. Where a guaranty is entered into at the same sideration. time with the original obligation, or with its acceptance by the person guaranteed, and forms, with that obligation, a part of the consideration to him, no other conideration need exist. In all other cases there must be a consideration distinct from that of the original obligation. Guaranty to be in wri ing, &c. See Mallory v. Gillett, 21 M. Y., 412. § 1380. A guaranty must be in writing, signed by the guarantor or his agent, and express the consideration. 2 R. S., 135, § 2, sub. 2. It may be worthy of consideration whether the words requiring the consideration to be expressed, should not be omitted. They were introduced in the revision of 1830, under the expectation, it seems, that they would mitigate the litigation arising out of this provision (see Rogers v. Kneeland, 13 Wend., 114), but have greatly extended the labyrinth of conflicting cases on this subject. So common a form of transaction as a guaranty ought not to be the subject of such uncertain and nice distinctions as those which abound in the books. Since the testimony of the parties is now admissible, the statute of frauds is less important to its primary object than before. In the next section, the criterion by which to distinguish a guaranty from an original undertaking is given; and if the guaranty is required to be in writing, perhaps the consideration may be left to be gathered from the terms of the instrument, or even to be supplied by parol, as in other cases. Barnes v. Perine, 15 Barb., 249; affirmed, 12 N. Y., 18; Frink v. Green, 5 Barb., 455. The change here suggested has been adopted in England, by stat. 19 and 20 Vict., c. 97, and a guaranty there is no longer required to express any consideration. See Holmes v. Mitchell, 7 C. B. (N. S.), 370. See many of the cases on the present rule reviewed in Mallory v. Gillett, 21 N. Y., 412. a gagement for obliga to answer another tion of § 1381. An engagement to answer for the obligation of What enanother person, made in terms or under circumstances such that the promisor becomes a principal debtor, upon new consideration to himself, and the original debtor becomes, in effect, his surety, is not a guaranty within the meaning of the preceding section. State Bank v. Mettler, 2 Bosw., 392; Beach . Hunger- ty. guaranties. § 1382. A guaranty relating to a future liability of the Continuing principal, under successive transactions, which either continue his liability or from time to time renew it after it has been satisfied, is called a continuing guaranty. § 1383. A continuing guaranty may be revoked at any Revocation. time by the guarantor, as to future transactions, unless there is a continuing consideration as to such transactions. which he does not renounce. 1 Pars. on Contr., 517. There seems no sufficient reason for preserving the exception in the case of guaranties under seal. how con strued. § 1384. A guaranty is to be deemed an unconditional A guaranty, guaranty of payment or performance, unless its terms import some condition precedent to the liability of the guar antor. Morris v. Wadsworth, 11 Wend., 100; 17 id., 103; Smith § 1385. A guarantor of payment or performance is liable to the person guaranteed immediately upon the principal's default,' and without proof of demand and notice." 1 Van Rensselaer v. Miller, Hill & D. Supp., 237; Bank Allen v. Rightmere, 20 Johns., 365; Clark v. Burdett, § 1386. Where one guarantees a conditional obligation, his liability is commensurate with that of the principal, and he is not entitled to notice of the principal's default, Liability anty of pay upon guar ment in performance. Liability upon guar anty of a conditional obligation. |