What are the Rights of Surety against the Creditor?


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1)    The surety may require the creditor to sue the debtor. But he cannot compel the creditor to do so.

2)    In the case of fidelity contracts, he can insist upon the creditor to dispense with the services of the principal debtor when his dishonesty is established.

3)    He can claim set off or counter-claim which the principal debtor could have obtained against the creditor.

4)    On payment of the guaranteed debt, ha can require the creditor to assign to him all the securities held by the creditor in respect of the debt. If the creditor loses or parts with such securities without the consent of the surety, the surety is discharged to the extent of the value of the security.

Illustration: C advances to B, his tenant, Rs. 2000 on the guarantee of A. C has also a further security for the sum of Rs. 2000 by mortgage of B’s furniture. C cancels the mortgage. B becomes insolvent and C sues A on his guarantee. A is discharged from liability to the amount of the value of the furniture.


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