Part 13

Before the surety can be rendered liable on his guarantee, the principal debtor must have made default. When, however, this has occurred, the creditor, in the absence of express agreement to the contrary, may sue the surety, without even informing him of such default having taken place, or requiring him to pay, and before proceeding against the principal debtor or resorting to securities for the debt received from the latter. In those countries where the municipal law is based on the Roman civil law, sureties usually possess the right (which may, however, be renounced by them) originally conferred by the Roman law, of compelling the creditor to insist on the goods, &c. (if any) of the principal debtor being first "discussed," i.e. appraised and sold, and appropriated to the liquidation of the debt guaranteed (see Codes Civil, Fr. and Bel. 2021 et seq.; Spain, 1830, 1831; Port. 830; Germany, 771, 772, 773; Holland, 1868; Italy, 1907; Lower Canada, 1941-1942; Egypt [mixed suits] 612; _ibid._ [native tribunals] 502), before having recourse to the sureties. This right, according to a great American jurist (Chancellor Kent in _Hayes_ v. _Ward_, 4 Johns. New York, Ch. Cas. p. 132), "accords with a common sense of justice and the natural equity of mankind." In England this right has never been fully recognized. Neither does it prevail in America nor, since the passing of the Mercantile Law Amendment Act (Scotland) 1856, s. 8, is it any longer available in Scotland where, prior to the last-named enactment, the benefit of discussion, as it is termed, existed. In England, however, before any demand for payment has been made by the creditor on the surety, the latter can, as soon as the principal debtor has made default, compel the creditor, on giving him an indemnity against costs and expenses, to sue the principal debtor if the latter be solvent and able to pay (_per_ A. L. Smith, L.J., in _Rouse_ v. _Bradford Banking Company_, 1894, 2 Ch. 75; _per_ Lord Eldon in _Wright_ v. _Simpson_, 6 Ves., at p. 733), and a similar remedy is also open to the surety in America (see Brandt on _Suretyship_, par. 205, p. 290) though in neither of these countries nor in Scotland can one of several sureties, when sued for the whole guaranteed debt by the creditor, compel the latter to divide his claim amongst all the solvent sureties, and reduce it to the share and proportion of each surety. However, this _beneficium divisionis_, as it is called in Roman law, is recognized by many existing codes (Fr. and Bel. 2025-2027; Spain, 1837; Portugal, 835-836; Germany, 426; Holland, 1873-1874; Italy, 1911-1912; Lower Canada, 1946; Egypt [mixed suits], 615, 616).

The usual mode in England of enforcing liability under a guarantee is by action in the High Court or in the county court. It is also permissible for the creditor to obtain redress by means of a set-off or counter-claim, in an action brought against him by the surety. On the other hand, the surety may now, in any court in which the action on the guarantee is pending, avail himself of any set-off which may exist between the principal debtor and the creditor. Moreover, if one of several sureties for the same debt is sued by the creditor or his guarantee, he can, by means of a proceeding termed a third-party notice, claim contribution from his co-surety towards the common liability. Independent proof of the surety's liability under his guarantee must always be given at the trial; as the creditor cannot rely either on admissions made by the principal debtor, or on a judgment or award obtained against him (_Ex parte Young In re Kitchin_, 17 Ch. Div. 668). Should the surety become bankrupt either before or after default has been made by the principal debtor, the creditor will have to prove against his estate. This right of proof is now in England regulated by the 37th section of the Bankruptcy Act, 1883, which is most comprehensive in its terms.

Rights of sureties.

A person liable as a surety for another under a guarantee possesses various rights against him, against the person to whom the guarantee is given, and also against those who may have become co-sureties in respect of the same debt, default or miscarriage. As regards the surety's rights against the principal debtor, the latter may, where the guarantee was made with his consent but not otherwise (see _Hodgson_ v. _Shaw_, 3 Myl. & K. at p. 190), after he has made default, be compelled by the surety to exonerate him from liability by payment of the guaranteed debt (_per_ Sir W. Grant, M.R., in _Antrobus_ v. _Davidson_, 3 Meriv. 569, 579; _per_ Lindley, L.J., in _Johnston_ v. _Salvage Association_, 19 Q.B.D. 460, 461; and see _Wolmershausen_ v. _Gullick_, 1893, 2 Ch. 514). The moment, moreover, the surety has himself paid any portion of the guaranteed debt, he is entitled to rank as a creditor for the amount so paid, and to compel repayment thereof. In the event of the principal debtor's bankruptcy, the surety can in England, if the creditor has not already proved in respect of the guaranteed debt, prove against the bankrupt's estate, not only in respect of payments made before the bankruptcy of the principal debtor, but also, it seems, in respect of the contingent liability to pay under the guarantee (see _Ex parte Delmar re Herepath_, 1889, 38 W.R. 752), while if the creditor has already proved, the surety who has paid the guaranteed debt has a right to all dividends received by the creditor from the bankrupt in respect thereof, and to stand in the creditor's place as to future dividends. This right is, however, often waived by the guarantee stipulating that, until the creditor has received full payment of all sums over and above the guaranteed debt, due to him from the principal debtor, the surety shall not participate in any dividends distributed from the bankrupt's estate amongst his creditors. As regards the rights of the surety against the creditor, they are in England exercisable even by one who in the first instance was a principal debtor, but has since become a surety, by arrangement with his creditor, duly notified to the creditor, though not even sanctioned by him. This was decided by the House of Lords in the case of _Rouse_ v. _The Bradford Banking Co._, 1894, A.C. 586, removing a doubt created by the previous case of _Swire_ v. _Redman_, 1 Q.B.D. 536, which must now be treated as overruled. The surety's principal right against the creditor entitles him, after payment of the guaranteed debt, to the benefit of all securities, whether known to him (the surety) or not, which the creditor held against the principal debtor; and where, by default or _laches_ of the creditor, such securities have been lost, or rendered otherwise unavailable, the surety is discharged _pro tanto_. This right, which is _not_ in abeyance till the surety is called on to pay (_Dixon_ v. _Steel_, 1901, 2 Ch. 602), extends to all securities, whether satisfied or not, given before or after the contract of suretyship was entered into. On this subject the Mercantile Law Amendment Act, 1856, S 5, provides that "every person who being surety for the debt or duty of another, or being liable with another for any debt or duty, shall pay such debt or perform such duty, shall be entitled to have assigned to him, or to a trustee for him, every judgment, specialty, or other security, which shall be held by the creditor in respect of such debt or duty, whether such judgment, specialty, or other security shall or shall not be deemed at law to have been satisfied by the payment of the debt or performance of the duty, and such person shall be entitled to stand in the place of the creditor, and to use all the remedies, and, if need be, and upon a proper indemnity, to use the name of the creditor, in any action or other proceeding at law or in equity, in order to obtain from the principal debtor, or any co-surety, co-contractor, or co-debtor, as the case may be, indemnification for the advances made and loss sustained by the person who shall have so paid such debt or performed such duty; and such payment or performance so made by such surety shall not be pleadable in bar of any such action or other proceeding by him, provided always that no co-surety, co-contractor, or co-debtor shall be entitled to recover from any other co-surety, co-contractor, or co-debtor, by the means aforesaid, more than the just proportion to which, as between those parties themselves, such last-mentioned person shall be justly liable." This enactment is so far retrospective that it applies to a contract made before the act, where the breach thereof, and the payment by the surety, have taken place subsequently. The right of the surety to be subrogated, on payment by him of the guaranteed debt, to all the rights of the creditor against the principal debtor is recognized in America (_Tobin_ v. _Kirk_, 80 New York S.C.R. 229), and many other countries (Codes Civil, Fr. and Bel. 2029; Spain, 1839; Port. 839; Germany, 774; Holland, 1877; Italy, 1916; Lower Canada, 2959; Egypt [mixed suits], 617; _ibid._ [native tribunals], 505).

As regards the rights of the surety against a co-surety, he is entitled to contribution from him in respect of their common liability. This particular right is not the result of any contract, but is derived from a general equity, on the ground of equality of burden and benefit, and exists whether the sureties be bound jointly, or jointly and severally, and by the same, or different, instruments. There is, however, no right of contribution where each surety is severally bound for a given portion only of the guaranteed debt; nor in the case of a surety for a surety; (see _In re Denton's Estate_, 1904, 2 Ch. 178 C.A.); nor where a person becomes a surety jointly with another and at the latter's request. Contribution may be enforced, either before payment, or as soon as the surety has paid more than his share of the common debt (_Wolmershausen_ v. _Gullick_, 1803, 2 Ch. 514); and the amount recoverable is now always regulated by the number of solvent sureties, though formerly this rule only prevailed in equity. In the event of the bankruptcy of a surety, proof can be made against his estate by a co-surety for any excess over the latter's contributive share. The right of contribution is not the only right possessed by co-sureties against each other, but they are also entitled to the benefit of all securities which have been taken by any one of them as an indemnity against the liability incurred for the principal debtor. The Roman law did not recognize the right of contribution amongst sureties. It is, however, sanctioned by many existing codes (Fr. and Bel. 2033; Germany, 426, 474; Italy, 1920; Holland, 1881; Spain, 1844; Port. 845; Lower Canada, 1955; Egypt [mixed suits], 618, _ibid._ [native tribunals], 506), and also by the Indian Contract Act 1872, ss. 146-147.

The discharge of a surety from liability under his guarantee may be accomplished In various ways, he being regarded, especially in England and America, as a "favoured debtor" (_per_ Turner, L.J., in _Wheatley_ v. _Bastow_, 7 De G. M. & G. 279, 280; _per_ Earl of Selborne, L.C., in _In re Sherry--London and County Banking Co._ v. _Terry_, 25 Ch. D., at p. 703; and see Brandt on _Suretyship_, secs. 79, 80). Thus, fraud subsequent to the execution of the guarantee (as where, for example, the creditor connives at the principal debtor's default) will certainly discharge the surety. Again, a material alteration made by the creditor in the instrument of guarantee after its execution may also have this effect. The most prolific ground of discharge, however, is usually traceable to causes originating in the creditor's laches or conduct, the governing principle being that if the creditor violates any rights which the surety possessed when he entered into the suretyship, even though the damage be nominal only, the guarantee cannot be enforced. On this subject it suffices to state that the surety's discharge may be accomplished (1) by a variation of the terms of the contract between the creditor and the principal debtor, or of that subsisting between the creditor and the surety (see _Rickaby_ v. _Lewis_, 22 T.L.R. 130); (2) by the creditor taking a new security from the principal debtor in lieu of the original one; (3) by the creditor discharging the principal debtor from liability; (4) by the creditor binding himself to give time to the principal debtor for payment of the guaranteed debt; or (5) by loss of securities received by the creditor in respect of the guaranteed debt.

In this connexion It may be stated in general terms that whatever extinguishes the principal obligation necessarily determines that of the surety (which is accessory thereto), not only in England but elsewhere also (Codes Civil, Fr. and Bel. 2034, 2038; Spain, 1847; Port. 848; Lower Canada, 1956; 1960; Egypt [mixed suits], 622, _ibid._ [native tribunals], 509; Indian Contract Act 1872, sec. 134), and that, by most of the codes civil now in force, the surety is discharged by _laches_ or conduct of the creditor inconsistent with the surety's rights (see Fr. and Bel. 2037; Spain, 1852; Port. 853; Germany, 776; Italy, 1928; Egypt [mixed suits], 623), though it may be mentioned that the rule prevailing in England, Scotland, America and India which releases the surety from liability where the creditor, by binding contract with the principal, extends without the surety's consent the time for fulfilling the principal obligation, while recognized by two existing codes civil (Spain, 1851; Port. 852), is rejected by the majority of them (Fr. and Bel. 2039; Holland, 1887; Italy, 1930; Lower Canada, 1961; Egypt [mixed suits], 613; _ib._ [native tribunals], 503); (and see Morice, _English and Dutch Law_, p. 96; van der Linden, _Institutes of Holland_, pp. 120-121). A revocation of the contract of suretyship by act of the parties, or in certain cases by the death of the surety, may also operate to discharge the surety. The death of a surety does not _per se_ determine the guarantee, but, save where from its nature the guarantee is irrevocable by the surety himself, it can be revoked by express notice after his death, or, it would appear, by the creditor becoming affected with constructive notice thereof; except where, under the testator's will, the executor has the option of continuing the guarantee, in which case the executor should, it seems, specifically withdraw the guarantee in order to determine it. Where one of a number of joint and several sureties dies, the future liability of the survivors under the guarantee continues, at all events until it has been determined by express notice. Moreover, when three persons joined in a guarantee to a bank, and their liability thereunder was not expressed to be several, it was held that the death of one surety did not determine the liability of the survivors. In such a case, however, the estate of the deceased surety would be relieved from liability.

The Statutes of Limitation bar the right of action on guarantees under seal after twenty years, and on other guarantees after six years, from the date when the creditor might have sued the surety.

AUTHORITIES.--De Colyar, _Law of Guarantees and of Principal and Surety_ (3rd ed., 1897); American edition, by J. A. Morgan (1875); Throop, _Validity of Verbal Agreements_; Fell, _Guarantees_ (2nd ed.); Theobald, _Law of Principal and Surety_; Brandt, _Law of Suretyships and Guarantee_; article by de Colyar in _Journal of Comparative Legislation_ (1905), on "Suretyship from the Standpoint of Comparative Jurisprudence." (H. A. de C.)

GUARATINGUETA, a city of Brazil In the eastern part of the state of Sao Paulo, 124 m. N.E. of the city of Sao Paulo. Pop. (1890) of the municipality, which includes a large rural district and the villages of Apparecida and Roseira, 30,690. The city, which was founded in 1651, stands on a fertile plain 3 m. from the Parahyba river, and is the commercial centre of one of the oldest agricultural districts of the state. The district produces large quantities of coffee, and some sugar, Indian corn and beans. Cattle and pigs are raised. The city dwellings are for the most part constructed of rough wooden frames covered with mud, called _taipa_ by the natives, and roofed with curved tiles. The Sao Paulo branch of the Brazilian Central railway passes through the city, by which it is connected with Rio de Janeiro on one side and Sao Paulo and Santos on the other.

GUARDA, an episcopal city and the capital of an administrative district bearing the same name, and formerly in the province of Beira, Portugal; on the Guarda-Abrantes and Lisbon-Villar Formoso railways. Pop. (1900) 6124. Guarda is situated 3370 ft. above sea-level, at the north-eastern extremity of the Serra da Estrella, overlooking the fertile valley of the river Coa. It is surrounded by ancient walls, and contains a ruined castle, a fine 16th-century cathedral and a sanatorium for consumptives. Its industries comprise the manufacture of coarse cloth and the sale of grain, wine and live stock. In 1199 Guarda was founded, on the site of the Roman Lencia Oppidana, by Sancho I. of Portugal, who intended it, as its name implies, to be a "guard" against Moorish invasion. The administrative district of Guarda coincides with north-eastern Beira; pop. (1900), 261,630; area, 1065 sq. m.

GUARDI, FRANCESCO (1712-1793), Venetian painter, was a pupil of Canaletto, and followed his style so closely that his pictures are very frequently attributed to his more celebrated master. Nevertheless, the diversity, when once perceived, is sufficiently marked--Canaletto being more firm, solid, distinct, well-grounded, and on the whole the higher master, while Guardi is noticeable for spirited touch, sparkling colour and picturesquely sketched figures--in these respects being fully equal to Canaletto. Guardi sometimes coloured Canaletto's designs. He had extraordinary facility, three or four days being enough for producing an entire work. The number of his performances is large in proportion to this facility and to the love of gain which characterized him. Many of his works are to be found in England and seven in the Louvre.

GUARDIAN, one who guards or defends another, a protector. The O. Fr. _guarden_, _garden_, mod. _gardien_, from _guarder_, _garder_, is of Teutonic origin, from the base _war-_, to protect, cf. O.H. Ger. _warten_, and Eng. "ward"; thus "guardian" and "warden" are etymologically identical, as are "guard" and "ward"; cf. the use of the correlatives "guardian" and "ward," i.e. a minor, or person incapable of managing his affairs, under the protection or in the custody of a guardian. For the position of guardians of the poor see POOR LAW, and for the legal relations between a guardian and his ward see INFANT, MARRIAGE and ROMAN LAW.

GUARDS, AND HOUSEHOLD TROOPS. The word _guard_ is an adaptation of the Fr. _guarde_, mod. _garde_, O. Ger. _ward_; see GUARDIAN. The practice of maintaining bodyguards is of great antiquity, and may indeed be considered the beginning of organized armies. Thus there is often no clear distinction between the inner ring of personal defenders and the select corps of trained combatants who are at the chief's entire disposal. Famous examples of corps that fell under one or both these headings are the "Immortals" of Xerxes, the Mamelukes, Janissaries, the _Huscarles_ of the Anglo-Saxon kings, and the Russian Strelitz (_Stryeltsi_). In modern times the distinction of function is better marked, and the fighting men who are more intimately connected with the sovereign than the bulk of the army can be classified as to duties into "Household Troops," who are in a sense personal retainers, and "Guards," who are a _corps d'elite_ of combatants. But the dividing line is not so clear as to any given body of troops. Thus the British Household Cavalry is part of the combatant army as well as the sovereign's escort.

The oldest of the household or bodyguard corps in the United Kingdom is the King's Bodyguard of the _Yeomen of the Guard_ (q.v.), formed at his accession by Henry VII. The "nearest guard," the personal escort of the sovereign, is the "King's Bodyguard of the Honourable Corps of _Gentlemen-at-Arms_," created by Henry VIII. at his accession in 1509. Formed possibly on the pattern of the "Pensionnaires" of the French kings--retainers of noble birth who were the predecessors of the _Maison du Roi_ (see below)--the new corps was originally called "the Pensioners." The importance of such guards regiments in the general development of organized armies is illustrated by a declaration of the House of Commons, made in 1674, that the militia, the pensioners and the Yeomen of the Guard were the only lawful armed forces in the realm. But with the rise of the professional soldier and the corresponding disuse of arms by the nobles and gentry, the Gentlemen-at-Arms (a title which came into use in James II.'s time, though it did not become that of the corps until William IV.'s) retaining their noble character, became less and less military. Burke attempted without success in 1782 to restrict membership to officers of the army and navy, but the necessity of giving the corps an effective military character became obvious when, on the occasion of a threatened Chartist riot, it was called upon to do duty as an armed body at St James's Palace. The corps was reconstituted on a purely military basis in 1862, and from that date only military officers of the regular services who have received a war decoration are eligible for appointment. The office of captain, however, is political, the holder (who is always a peer) vacating it on the resignation of the government of which he is a member. The corps consists at present of captain, lieutenant, standard bearer, clerk of the cheque (adjutant), sub-officer and 39 gentlemen-at-arms. The uniform consists of a scarlet swallow-tailed coat and blue overalls, with gold epaulettes, brass dragoon helmet with drooping white plume and brass box-spurs, these last contrasting rather forcibly with the partizan, an essentially infantry weapon, that they carry.

_The Royal Company of Archers._--The king's bodyguard for Scotland was constituted in its present form in the year 1670, by an act of the privy council of Scotland. An earlier origin has been claimed for the company, some connecting it with a supposed archer guard of the kings of Scotland. In the above-mentioned year, 1676, the minutes of the Royal Company begin by stating, that owing to "the noble and usefull recreation of archery being for many years much neglected, several noblemen and gentlemen did associate themselves in a company for encouragement thereof ... and did apply to the privy council for their approbation ... which was granted." For about twenty years at the end of the 17th century, perhaps owing to the adhesion of the majority to the Stuart cause, its existence seems to have been suspended. But in 1703 a new captain-general, Sir George Mackenzie, Viscount Tarbat, afterwards earl of Cromarty (1630-1714), was elected, and he procured for the company a new charter from Queen Anne. The rights and privileges renewed or conferred by this charter were to be held of the crown for the _reddendo_ of a pair of barbed arrows. This _reddendo_ was paid to George IV. at Holyrood in 1822, to Queen Victoria in 1842 and to King Edward VII. in 1903. The history of the Royal Company since 1703 has been one of great prosperity. Large parades were frequently held, and many distinguished men marched in the ranks. Several of the leading insurgents in 1745 were members, but the company was not at that time suspended in any way.