If the principal debtor defaults on his contract, thereby making the surety liable, and the surety makes payment of the debt that he is so bound to pay, the law gives the surety, immediately on his payment of the debt, a right of action over against the principal for the amount of money he has so paid out.43

41 King vs. Baldwin, 17 Johns, 384.

42 Rowley vs. Jewett, 56 Iowa, 492;

Baker vs. Briggs, 8 Pick., 122.

43 Campbell vs. Rotering, 42 Minn., 115.

There is no need of an express promise on the part of the debtor to indemnify the surety; the promise is implied by law.44 And part payment of the debt only will give the surety a right to sue for the partial payment made, but no right of action accrues until the surety makes payment to the obligee of the debt, either in whole or in part.45 An express stipulation by the principal debtor that he will indemnify the surety, as by the giving of a bond of indemnity, would limit the surety to his right to be indemnified to the express contract as stated in the indemnity bond; it would nullify the implied promise so far as anything outside the bond is concerned. Merely taking security for the principal's debt, however, would not have this effect; the security taken would be considered cumulative. The right of the surety to sue the principal for indemnity is not affected by the fact that the principal did not join in the execution of the bond signed by the surety, even though it was agreed the principal was to sign.46

If the surety makes payment of his obligation by delivering his own note, and it is received as payment of the debt, he may sue the surety at once, the same as if the debt was paid to the creditor in cash. And it would make no difference if the surety himself afterward defaults in the payment of his note.47 But the surety will never be permitted to make a profit of his payment of the obligation for which he is surety on the default of the principal; the most that he can claim is reimbursement for the money he has actually paid out, with legal interest and the costs he has reasonably been subjected to, and which he has paid out in good faith. So if he makes payment in something other than money, as in personal property of any kind, or he makes payment in real estate, he can only recover the actual value of the property he has turned over to the creditor.

44 Martin vs. Ellerbee's Admr., 70

Ala., 326. 45 Harper vs. McVeigh, 82 Va., 75.

46 School Trustees vs. Sheik et al., 119 I11., 579. 47 Peters vs. Barnhill, 1 Hill Law (S.C.),237.

On the right of indemnity, the surety can only recover for the amount he has paid out, and, moreover, he can recover nothing for other damages or sacrifices he may be obliged to make incidental to the principal's default.48 To hold otherwise would open the road to fraud and collusion, the courts have declared repeatedly.

"A surety, after the debt has become due, may, without having made payment himself, come into a court of equity and compel the principal to pay the debt, making the creditor a party, that he may be at hand to receive the money." 49 The surety stands in the position of an assignee, and may use the remedies of the creditor, at his own risk and cost, however. The above is the statement of the legal principle by the Illinois Court. This principle as stated is one of supreme recognition, and is another of the surety's means of relief from a situation that is usually a difficult one. A surety cannot generally recover indemnity from his principal, where he pays a debt for which the principal is not liable, and so also he could not claim indemnity where at the time of payment he has knowledge of facts which would discharge himself or his principal.50 But where the surety pays the debt, not having knowledge that the consideration for the same had failed, he may still claim indemnity.51

48 Vance vs. Lancaster, 3 Haywood (Tenn.), 130. 49 Moore vs. Topliff et al., 107

I11., 241.

50 Noale vs. Blount, 77 Mo., 235. 51 Gasquet vs. Oakey, 19 La. (Curry;, 76.