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Rights of the Surety or Guarantor Against the Creditor


RIGHTS OF THE SURETY OR GUARANTOR AGAINST THE CREDITOR. This topic would include the different acts of the creditor which prejudice the surety and operate to discharge him, as giving time to the principal, and the like, which were discussed in the preceding chapter. In addition to these rights of the surety, by the weight of authority it is held that the surety may set-off a debt due by the creditor to the prin cipal when sued by the creditor on the suretyship obligation. (Andrews v. Varrell, 46 N. H., 17; Hollister v. Davis, 54 Pa. St., 508; Coffin v. Mc Lean, 80 N. Y., 560.) The contrary of this rule is held in a number of cases. (Gillespie v. Torrance, 25 N. Y., 306; Thalheimer v. Crow, 13 Col., 397.) In some States, as Ohio, it is provided by statute that the surety may compel the creditor to proceed against the principal on notice to him, after the debt is due. There is also a number of authorities holding the surety may, in the absence of a statutory provision, by verbal or written notice to the creditor demand that he sue the principal, and if this is not done, and the principal becomes insolvent there after, the surety will be discharged. (King v. Bald win, 17 Johns, 384; Colgrove v. Tallman, 67 N. Y., 95.) But the great majority of cases hold that the creditor need not comply with such notice from the surety in the absence of a statute providing for it. (Jenkins v. Clarkson , 7 Ohio, 72; Halstead v. Brown, 17 Ind., 202; Inkster v. Natl. Bank, 30 Mich., 143; Dane v.Corduan, 24 Cal., 157.)

principal and notice