Page:United States Statutes at Large Volume 76A.djvu/317

–221– -221Subchapter I—General Provisions § 3831. Definition of surety A surety is one who at the request of another, and for the purpose of securing a benefit to him, becomes responsible for the performance by the latter of some act in favor of a third person, or hypothecates property as security therefor. § 3832. Apparent principal may show that he is surety One who appears to be a principal, whether by the terms of a written instrument or otherwise, may show that he is in fact a surety, except as against persons who have acted on the faith of his apparent character of principal. Subchapter II—Liability of Sureties § 3851. Limit of surety^s obligation A surety cannot be held beyond the express terms of his contract, and if the contract prescribes a penalty for its breach, he is not in any case liable for more than the penalty. § 3852. Rules of interpretation In interpreting the terms of a contract of suretyship, the same rules are to be observed as in the case of other contracts. § 3853. Effect of judgment against surety Notwithstanding the recovery of judgment by a creditor against a surety, the latter still occupies the relation of surety. § 3854. Exoneration by performance or offer of performance Performance of the principal obligation, or an offer of performance, duly made as provided in this title, exonerates a surety. § 3855. Discharge by certain acts of creditor A surety is exonerated: (1) in like manner with a guarantor; (2) to the extent to which he is prejudiced by any act of the creditor which would naturally prove injurious to the remedies of the surety or inconsistent with his rights, or which lessens his security; or (3) to the extent to which he is prejudiced by an omission of the creditor to do anything, when required by the surety, which it is his duty to do. Subchapter III—Rights of Sureties § 3871. Surety has rights of guarantor A surety has all the rights of a guarantor, whether he becomes personally responsible or not. § 3872. Pursuit of certain remedies by creditor; exoneration of surety for neglect A surety may require his creditor to proceed against the principal, or to pursue any other remedy in his power which the surety cannot himself pursue, and which would lighten his burden; and if in such case the creditor neglects to do so, the surety is exonerated to the extent to which he is thereby prejudiced. § 3873. Compelling principal to perform A surety may compel his principal to perform the obligation when due,

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