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Suretyship

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"Arrabo."

The liability, contract, or undertaking of one who becomes a surety. Reference to a surety occurs only once in the Pentateuch; namely, in Genesis 43:9, where Judah tells Jacob that he will be surety for Benjamin's safe return. But in Proverbs the commercial surety, the man bound for the debt of another, is mentioned again and again, both in warnings against undertaking a suretyship and in admonitions to fulfil the obligation when it has been undertaken. The Hebrew word , and the derivative , "pledge or earnest-money," were also Phenician words, and came, through them, into Latin in the form "arrabo."

The Talmud distinguishes between the surety in the usual form and one who, though he has not received the benefit of a loan or sale, makes himself in form the principal debtor; and it calls such a person "ḳabbelan" (undertaker). This relation is known in modern law as that of an accommodation maker or acceptor; and it may arise in many other ways than that referred to in the Talmud.

For the necessity of a consideration for the suretyship, see see DEED; for the means at the disposal of the surety to protect or to recoup himself, INDEMNITY.

1. Where the loan is made or credit is given on the faith of the surety, and he joins in the bond or contract, no question of his liability arises. But if the loan or sale has been made the money or goods are handed over to the borrower, and if afterward a third person offers to become surety in order to obtain forbearance for the debtor ("let him alone and I become his surety"), opinions differ as to the requirements for a binding contract. Maimonides, basing his views on the discussions in the Talmud (Ket. 101b, 102a, and B. B. 176a, b), takes the ground that the surety's promise must, even when he joins in the bond, rest on a "ḳinyan" (acquisition), some article being delivered to him pro forma as a consideration for his promise; while others require such a formality only when the surety comes in after the ensealing of the debtor's several bond.Suretyships may be contracted in open court. Ajudgment having been rendered against A, proceedings in execution against him may be stayed if B, a solvent and well-to-do man, makes himself answerable for the judgment, as is the case in many states of the United States ("replevin bonds" or "stay bonds"). Maimonides admits that in such a case no formal ḳinyan is necessary; and he is of opinion that a recognizance made in open court operates like a bond ("sheṭar") upon sold or encumbered land.

Surety After Debtor.

1. Though the surety be fully bound, the creditor must demand payment from the principal debtor before demanding it from the surety; and if the former has any property, this should be exhausted before that of the surety. But when the principal debtor has property only in another country, or when he is a man of violence, who will not submit to the judges, or will not appear in court, the creditor may satisfy his claim out of the surety first, and leave him to contest the matter with the debtor. Under an institution of the Geonim the creditor, unless he is excused as above, before proceeding against the surety has to make oath (the lesser oath) that he has exhausted the debtor's estate and that the debt is still unpaid. But if the parties have agreed that the surety may be sued first, the creditor may sue him; and the "ḳabbelan" who contracts in form as principal is always sued in the first instance. The language which constitutes one a ḳabbelan must be very precise: thus the words "lend money to him" indicate a borrower; and he who is mentioned after those introductory words as promising to pay is necessarily a surety (B. B. 174a).The Talmud (ib. 174b) takes it for granted that among the Gentiles the creditor has always the right to sue the surety first; certainly in the Roman law two or more joint obligors may be sued together, regardless of the question which of them enjoyed the consideration and which was only bound as surety. Where two sureties have bound themselves for a debt the creditor may levy on the estate of either. On the other hand, following an opinion of the Palestinian Talmud in Shebu. , it was held that where two men borrow on the same bond, or partners incur a joint debt, each one is a principal for his own share, but only a surety for his companion as to the remainder, which he should not be compelled to pay while the true debtor has property open to levy.

As Regards Dowry.

1. It seems (ib.) that one who declares himself liable for the jointure ("ketubah") as fixed by law is not held liable unless he be the groom's father, and then only by means of ḳinyan; but a suretyship on the clause to refund the dowry is binding. In decisions of later date than the Talmud, but fully recognized by Maimonides, a suretyship on a conditional contract—for instance, on a warranty of title in a deed of conveyance—is not binding at all, even though the forms of ḳinyan be observed. It is admitted, however, that where A says to B, "Be thou surety for C, and I will be surety to thee against loss," the agreement is binding.The question as to the validity of indefinite guaranties is not discussed in the Talmud; and the later authorities differ concerning it. Maimonides says: "Where one has not defined the amount of suretyship, but says, 'Whatever thou shalt lend him, or whatever thou shalt sell him, I am good for,' some of the Geonim taught that even if 20,000 dinars' worth of goods or 100,000 in money had been advanced, the surety [guarantor] is bound for it all; but in my opinion he is bound for nothing; because his mind had never conceived what he was bound for. But let whoever understands these things reason the matter out." The Shulḥan 'Aruk does not touch the point.