Drawing a distinction between liability as a surety and liability as surety and co–principal debtor

A Person binding himself as surety may in addition bind himself as co-principal debtor. But in the absence of an express undertaking to bind himself as the latter, one would need to look at the language of the suretyship and the circumstances surrounding same to ascertain whether he binds himself as both.

However what is the significance of this distinction?

  1. One who has bound himself as surety and co-principal debtor, is as far as the creditor is concerned a surety who has undertaken the obligations of co – debtor ,meaning his obligations are co equal in extent with those of the principal debtor and of the same scope and nature, stated differently he is liable with the debtor jointly and severally and the obligation of the surety and co- principal debtor becomes enforceable at the same time as that of the principal debtor not later or conditional upon the happening only of an event.
  2. Once a surety and co-principal debtor, he is not entitled to the benefit of division of the debt between himself and the principal debtor.

Jacqui Smith (LLB)

Legal Advisor

 

Subscribe now
Read More

More Articles

Why the need for TOP UP insurance?

For law firms and sole practitioners alike, it is critical that the limit of cover offered under your Professional Indemnity insurance policy is adequate for your business. We strongly recommend you review your limit to determine whether an increase in cover, beyond what may be offered by your professional indemnity fund. For attorneys this is…

Contemplating an application for the sequestration of a debtor’s estate in terms of the Insolvency Act?

An application may be launched in the High Court to sequestrate the estate of the insolvent if the creditor has a claim of R 1000 or more against the debtor. This figure hasn’t been increased for some time since the enactment of the Insolvency Act in 1936. However we can imagine only those persons with…

How Bond Claims Work

Should you suspect a loss has been suffered by an estate at the hands of a trustee / liquidator/ executor (the incumbent named on the bond of security), you should proceed to investigate it. Once your investigation is complete, you need to notify the Master of your investigations and be able to substantiate the loss…