Page:United States Statutes at Large Volume 76A.djvu/318

–222– -222§ 3874. Reimbursement of surety by principal If a surety satisfies the principal obligation, or any part thereof, whether with or without legal proceedings, the principal shall reimburse what the surety has disbursbd, including necessary costs and expenses; but the surety has no claim for reimbursement against other persons, though they may have been benefited by his act, except as prescribed by section 3875 of this title. § 3875. Subrogation to creditor's r i g h t s; contribution from cosureties A surety, upon satisfying the obligation of the principal, may enforce every remedy which the creditor then has against the principal to the extent of reimbursing what he has expended, and may require all his cosureties to contribute thereto, without regard to the order of time in which they become cosureties. § 3876. Entitlement to benefits of securities held by creditor A surety is entitled to the benefit of every security for the performance of the principal obligation held by the creditor, or by a cosurety at the time of entering into the contract of suretyship, or acquired by him afterward, whether the surety was aware of the security or not. § 3877. Property of principal to be applied first Whenever property of a surety is hypothecated with property of the principal, the surety may have the property of the principal first applied to the discharge of the obligation. Subchapter IV—Rights of Creditors

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§ 3901. Entitlement to benefits of securities held by surety A creditor is entitled to the benefit of everything which a surety has received from the debtor by way of security for the performance of the obligation, and may, upon maturity of the obligation, compel the application of the security to its satisfaction. Subchapter V—Letter of Credit § 3921. Definition of letter of credit A letter of credit is a written instrument, addressed by one person to another, requesting the latter to give credit to the person in whose favor it is drawn. § 3922. How addressed A letter of credit may be addressed to several persons in succession. § 3923. Liability of the writer The writer of a letter of credit is, upon the default of the debtor, liable to those who gave credit in compliance with its terms. § 3924. General or special letters of credit A letter of credit is either general or special. When the request for credit in a letter is addressed to specified persons by name or description, the letter is special. All other letters of credit are general. § 3925. Nature and effect of general letter of credit A general letter of credit gives any person to whom it may be shown authority to comply with its request, and by his so doing it becomes, as to him, of the same effect as if addressed to nim by name. § 3926. Extent of general letter of credit Several persons may successively give credit upon a general letter.

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