Secured Transactions Commons^™

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 …