A Civil Law Tradition
Art. 3044. Ordinary suretyship; interpretation. An ordinary suretyship is one that is neither a commercial suretyship nor a legal suretyship. An ordinary ·suretyship must be strictly construed in favor of the surety.
Art. 3043. Legal suretyship. A legal suretyship is one given pursuant to legislation, administrative act or regulation, or court order. Art. 3063. Commercial suretyship rules apply to legal suretyship. The provisions governing commercial suretyship contained in this Title apply to legal suretyship except as otherwise provided in this Chapter.
Art. 3064. Supplementary nature of this Chapter. The provisions of this Chapter apply to the extent they are not contrary to special laws governing particular kinds of legal suretyship.
Art. 3065. Qualifications of legal surety; evidenced by affidavit; lack thereof not a defense. Legal suretyship may be given only by a person authorized to conduct a surety business in Louisiana or by a natural person domiciled in this state who owns property in this state that is subject to seizure and is of sufficient value to satisfy the obligation of the surety. The qualification of a natural person to act as legal surety must be evidenced by his affidavit and the affidavit of the principal obligor. A legal surety may not raise his lack of qualification as a defense to an action on his contract.
Art. 3066. Legal suretyship to conform to law. A legal suretyship is deemed to conform to the requirements of the law or order pursuant to which it is given, except as provided by Article 3067.
Art. 3067. Permissible variations. A surety is not liable for a sum in excess of that expressly stated in his contract. A legal suretyship may contain terms more favorable to the creditor than those required by the law or order pursuant to which it is given, but it may not provide for a time longer than is provided by law for bringing an action against the surety.
Art. 3068. Pledge of funds in lieu of suretyship. Legal suretyship may be given whenever the law requires or permits a person to give security for an obligation. The principal obligor may in lieu of legal suretyÂship deposit a sum equal to the amount for which he is to furnish security to be held in pledge as security for his obligation.
Art. 3069. Necessity for judgment against legal surety. No judgment shall be rendered against a legal surety unless the creditor obtains judgment against the principal obligor fixing the amount of the latter’s liability to the creditor or unless the amount of that liability has otherwise been fixed. The creditor may join the surety and principal obligor in the same action.
C.C.P. art. 5121. Bond payable to clerk; cash bonds by plaintiffs authorized; person in interest may sue. When a party to a judicial proceeding is required by law or order of court to furnish security, any bond so furnished shall be made payable to the clerk of the trial court in which the proceeding was brought. When the party required to furnish same is a plaintiff, a cash bond may be furnished in lieu of other security; at his option.Any person in interest may sue thereon. No error, inaccuracy, or omission is naming the obligee on the bond is a defense to an action thereon.
C.C.P. art. 5121.1. Bond secured by immovable property. Any party to a judicial proceeding who is required by law or court order to provide security may furnish as security a bond secured by immovable property located in this state. The party providing the property bond shall present to a judge of the parish in which the immovable is located an assessment certificate, a homestead exemption waiver if applicable, and a mortgage certificate. Prior to presenting the bond to the court having jurisdiction over the judicial proceeding the bond shall be recorded in the mortgage office of the parish where the immovable is located and the recordation shall be evidenced on the mortgage certificate.
C.C.P. art. 5122. Oath of surety and principal on bond. A. Except as otherwise provided in this Article, no bond shall be accepted in a judicial proceeding unless accompanied by affidavits of:
(1) Each surety that he is worth the amount for which he bound himself therein, in assets subject to execution, over and above all of his other obligations.
(2) The party furnishing the bond that he is informed and believes that each surety on the bond is worth the amount for which the surety has bound himself therein, in assets subject to execution, over and above all of the other obligations of the surety.
(3) The party furnishing a bond secured by immovable property under Article 5121.1 that he is worth the amount for which he has bound himself and that the immovable securing the bond contains assets subject to execution, over and above all his other obligations.
B. This Article does not apply to a bond executed by a surety company licensed to do business in this state.
Art. 3042. Commercial suretyship. A commercial suretyship is one in which:
(1) The surety is engaged in a surety business;
(2) The principal obligor or the surety is a business corporation, partnership, or other business entity;
(3) The principal obligation arises out of a commercial transaction of the principal obligor; or
(4) The suretyship arises out of a commercial transaction of the surety.
Art. 3041. Kinds of suretyship. There are three kinds of suretyship: commercial suretyship, legal suretyship, and ordinary suretyship.
Art. 3040. Rules may be varied. Suretyship may be qualified, conditioned, or limited in any lawful manner.
Art. 3039. Suretyship requires formal acceptance. Suretyship is established upon receipt by the creditor of the writing evidencing the surety’s obligation. The creditor’s acceptance is presumed and no notice of acceptance is required.
Art. 3038. Formal requirements of suretyship. Suretyship must be express and in writing.
Art. 3037. Surety ostensibly bound as a principal with another; effect of knowledge of the creditor. One who ostensibly binds himself as a principal obligor to satisfy the present or future obligations of another is nonetheless considered a surety if the principal cause of the contract with the creditor is to guarantee performance of such obligations. A creditor in whose favor a surety and principal obligor are bound together as principal obligors in solido may presume they are equally concerned in the matter until he clearly knows of their true relationship.
Revision comments-1987. (a) Sureties may sign one or several separate agreements. Some may sign separate contracts of guaranty, while others may endorse notes, sign them as co-Âmakers, or even sign as a maker, when the principal signs as an endorser. Sureties are asked to sign contracts with the principal obligor that identify them as “guarantor”, “sureties in solido”, “co-signers”, “co-makers” etc. This article makes it dear that the form in which the surety’s undertaking is cast is irrelevant, and that the inherent nature of the undertaking determines whether or not the provisions of this Title regulate its provisions.
(b) The second paragraph of this article makes it clear that the creditor will be protected if he deals in good faith with parties who are in fact principal and surety but who contract jointly as principals and fail to disclose their true relationship to him.
Art. 3036. Obligations for which suretyship may be established. Suretyship may be established for any lawful obligation, which, with respect to the suretyship, is the principal obligation. The principal obligation may be subject to a term or condition, may be presently existing, or may arise in the future.
Art. 3035. Definition of suretyship. Suretyship is an accessory contract by which a person binds himself to a creditor to fulfill the obligation of another upon the failure of the latter to do so.
Art. 1913. Principal and accessory contracts. A contract is accessory when it is made to provide security for the performance of an obligation. Suretyship, mortgage, pledge, and other types of security agreements are examples of such a contract.
