Indian Contract Act,1872
Act No : 9
Section : Discharge of surety by creditor's act or omission impairingsurety's eventual remedy
139. Discharge of surety by creditor's act or omission impairingsurety's eventual remedy.-If the creditor does any act which isinconsistent with the rights of the surety, or omits to do any actwhich his duty to the surety requires him to do, and the eventualremedy of the surety himself against the principal debtor is therebyimpaired, the surety is discharged. Illustrations (a) B contracts to build a ship for C for a given sum, to bepaid by instalments as the work reaches certain stages. A becomessurety to C for B's due performance of the contract. C, without theknowledge of A, prepays to B the last two instalments. A isdischarged by this prepayment. (b) C lends money to B on the security of a joint and severalpromissory note made in C's favour by B, and by A as surety for B,together with a bill of sale of B's furniture, which gives power to Cto sell the furniture, and apply the proceeds in discharge of thenote. Subsequently, C sells the furniture, but, owing to hismisconduct and wilful negligence, only a small price is realized. Ais discharged from liability on the note. (c) A puts M as apprentice to B, and gives a guarantee to B forM's fidelity. B promises on his part that he will, at least once amonth, see M make up the--------------------------------------------------------------------- 1 See s. 44, supra.---------------------------------------------------------------------54cash. B omits to see this done as promised, and M embezzles. A isnot liable to B on his guarantee.
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