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Full-Text Articles in Secured Transactions
The Principal's Warranty And Offset Claims Against The Creditor As Defenses To The Surety, Victor Levine
The Principal's Warranty And Offset Claims Against The Creditor As Defenses To The Surety, Victor Levine
Michigan Law Review
When a buyer seeks to purchase goods on credit, the seller often refuses to make the sale unless the buyer procures some third person to become liable for the price; and the seller also exacts the privilege of suing either the buyer or the third person or both in the event that payment is not made on the date the price falls due. In a three-party transaction of this sort, the buyer, after the goods are delivered, is commonly called the principal, the seller the creditor, and the third person the surety.
Suretyship--Fraud Of Principal On Surety--Principal As Agent Of Creditor
Suretyship--Fraud Of Principal On Surety--Principal As Agent Of Creditor
Michigan Law Review
The plaintiff manufactured medicines, selling to peddlers who operated as independent contractors. Menning, a peddler, signed a new contract with plaintiff for operations for the ensuing year, the contract also covering payment of existing debts ($1,794) to plaintiff. The defendant, induced by Menning and relying on his statement that there was no existing debt, signed the contract as surety, the guaranty reciting a consideration of $1 received by defendant and an extension of time on any debts. This contract was terminated after seven weeks, and plaintiff sued for $1670, the balance due. The defendant claimed that Menning was plaintiff's agent …
Suretyship-Discharge Of Guaranty By Payment Of Amount To Which Liability Is Limited
Suretyship-Discharge Of Guaranty By Payment Of Amount To Which Liability Is Limited
Michigan Law Review
Defendant wrote a letter to plaintiff, "Kindly extend credit to A for materials to the amount of $250, and I hereby become security for the same." Relying on this letter, plaintiff for several years sold goods to A. By reason of A's defaults, defendant paid plaintiff $71.80 on one occasion and $197.10 on another. Later, A became indebted to plaintiff to the amount of $464.22 and this action was brought to recover on the guaranty the sum of $250. The court construed the guaranty as a continuing one, but held that that fact did not impose a continuing liability on …