Story Case

Mrs. Hildebrand and her friend, Miss Bradley, were shopping together. In the window of the Ling Lo Curio Shop they saw displayed a handsome Japanese screen which delighted Miss Bradley. She entered the shop, purchased the screen, and signed a note in payment; Mrs. Hildebrand signed as surety. Before the note came due, the Ling Lo Curio Shop was in urgent need of money, and attempted to collect on it; but, since Miss Bradley was in New York City, the firm collected the money from Mrs. Hildebrand, the surety. When the note fell due, the latter reminded Miss Bradley of her obligation. Miss Bradley replied, "You were foolish to pay the money, Mrs. Hildebrand. Since you are a married woman, they could not have collected from you. I do not intend to pay now." Mrs. Hildebrand at once sued her. What chance did she have before the court?

NOTE: Except when the distinction between surety and guarantor is of importance, as in the cases involving the Statute of Frauds, the two are denoted under the word "surety."

Ruling Court Case. Miller Vs. White, Volume 47 Indiana Reports, Page 385

White was in need of money. He asked Miller to become surety on a note made by him to one, Goff, for $800 for one year. Miller agreed and signed the note. Previous to the expiration of the year, Miller, without any notice to White, paid the note. When White refused, this action was brought against him.

White contended that Miller had no right, as surety, to pay this note without his knowledge and consent.

Mr. Justice Downey said: "When the surety pays the debt of his principal after its maturity, whether a suit has been commenced for its collection or not, he may unquestionably have his action to recover the amount, which he has so paid, from his principal. But the material question here is, can the surety voluntarily, and without the request of his principal, pay off and discharge the debt of his principal before it has matured, and, after the lapse of the time which the obligation had to run, sue the principal for the money then paid?" In answer to this question, the court was of the opinion that the surety might do so. Judgment was given for Miller.

Ruling Law. Story Case Answer

The strict surety is under an obligation to pay the debt or perform the obligation, and the third person need not resort to the principal unless he chooses to do so. Likewise, the surety is not obliged to wait until the third person sues him, but may pay the obligation immediately upon the maturity of the debt, or he may even pay the debt before it matures. But, having satisfied the debt, or performed the obligation, he is entitled to recover, as indemnity from the principal, the amount which he expended in caring for the obligation. In case he pays the obligation or performs prematurely, he cannot recover indemnity from the principal until the time arrives when the debt should have been paid, or when the obligation should have been performed.

Mrs. Hildebrand, of the Story Case, will not have any difficulty in securing judgment against Miss Bradley. Her right to be indemnified for payment of Miss Bradley's debt is absolute, and can not be denied her because of her failure to use any personal defense that might have been available.