2009 California Civil Code - Section 2832-2856 :: Article 7. Position Of Sureties

CIVIL CODE
SECTION 2832-2856

2832.  One who appears to be a principal, whether by the terms of a
written instrument or otherwise, may show that he is in fact a
surety, except as against persons who have acted on the faith of his
apparent character of principal. It is not necessary for him to show
that the creditor accepted him as surety.

2837.  In interpreting the terms of a contract of suretyship, the
same rules are to be observed as in the case of other contracts.
Except as provided in section 2794, the position of a surety to whom
consideration moves is the same as that of one who is gratuitous.

2838.  Notwithstanding the recovery of judgment by a creditor
against a surety, the latter still occupies the relation of surety.

[2839.]  Section Twenty-eight Hundred and Thirty-nine. Performance
of the principal obligation, or an offer of such performance, duly
made as provided in this Code, exonerates a surety.

2845.  A surety may require the creditor, subject to Section 996.440
of the Code of Civil Procedure, to proceed against the principal, or
to pursue any other remedy in the creditor's power which the surety
cannot pursue, and which would lighten the surety's burden; and if
the creditor neglects to do so, the surety is exonerated to the
extent to which the surety is thereby prejudiced.

2846.  A surety may compel his principal to perform the obligation
when due.

2847.  If a surety satisfies the principal obligation, or any part
thereof, whether with or without legal proceedings, the principal is
bound to reimburse what he has disbursed, including necessary costs
and expenses; but the surety has no claim for reimbursement against
other persons, though they may have been benefited by his act, except
as prescribed by the next section.

2848.  A surety, upon satisfying the obligation of the principal, is
entitled to enforce every remedy which the creditor then has against
the principal to the extent of reimbursing what he has expended, and
also to require all his co-sureties to contribute thereto, without
regard to the order of time in which they became such.

2849.  A surety is entitled to the benefit of every security for the
performance of the principal obligation held by the creditor, or by
a co-surety at the time of entering into the contract of suretyship,
or acquired by him afterwards, whether the surety was aware of the
security or not.

2850.  Whenever property of a surety is hypothecated with property
of the principal, the surety is entitled to have the property of the
principal first applied to the discharge of the obligation.

2854.  A creditor is entitled to the benefit of everything which a
surety has received from the debtor by way of security for the
performance of the obligation, and may, upon the maturity of the
obligation, compel the application of such security to its
satisfaction.

2855.  An arbitration award rendered against a principal alone shall
not be, be deemed to be, or be utilized as, an award against his
surety.
   The intent of this legislation is to apply existing law to
arbitration awards.

2856.  (a) Any guarantor or other surety, including a guarantor of a
note or other obligation secured by real property or an estate for
years, may waive any or all of the following:
   (1) The guarantor or other surety's rights of subrogation,
reimbursement, indemnification, and contribution and any other rights
and defenses that are or may become available to the guarantor or
other surety by reason of Sections 2787 to 2855, inclusive.
   (2) Any rights or defenses the guarantor or other surety may have
in respect of his or her obligations as a guarantor or other surety
by reason of any election of remedies by the creditor.
   (3)  Any rights or defenses the guarantor or other surety may have
because the principal's note or other obligation is secured by real
property or an estate for years. These rights or defenses include,
but are not limited to, any rights or defenses that are based upon,
directly or indirectly, the application of Section 580a, 580b, 580d,
or 726 of the Code of Civil Procedure to the principal's note or
other obligation.
   (b) A contractual provision that expresses an intent to waive any
or all of the rights and defenses described in subdivision (a) shall
be effective to waive these rights and defenses without regard to the
inclusion of any particular language or phrases in the contract to
waive any rights and defenses or any references to statutory
provisions or judicial decisions.
   (c) Without limiting any rights of the creditor or any guarantor
or other surety to use any other language to express an intent to
waive any or all of the rights and defenses described in paragraphs
(2) and (3) of subdivision (a), the following provisions in a
contract shall effectively waive all rights and defenses described in
paragraphs (2) and (3) of subdivision (a):

   The guarantor waives all rights and defenses that the guarantor
may have because the debtor's debt is secured by real property. This
means, among other things:
   (1) The creditor may collect from the guarantor without first
foreclosing on any real or personal property collateral pledged by
the debtor.
   (2) If the creditor forecloses on any real property collateral
pledged by the debtor:
   (A) The amount of the debt may be reduced only by the price for
which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price.
   (B) The creditor may collect from the guarantor even if the
creditor, by foreclosing on the real property collateral, has
destroyed any right the guarantor may have to collect from the
debtor.
   This is an unconditional and irrevocable waiver of any rights and
defenses the guarantor may have because the debtor's debt is secured
by real property. These rights and defenses include, but are not
limited to, any rights or defenses based upon Section 580a, 580b,
580d, or 726 of the Code of Civil Procedure.

   (d) Without limiting any rights of the creditor or any guarantor
or other surety to use any other language to express an intent to
waive all rights and defenses of the surety by reason of any election
of remedies by the creditor, the following provision shall be
effective to waive all rights and defenses the guarantor or other
surety may have in respect of his or her obligations as a surety by
reason of an election of remedies by the creditor:

   The guarantor waives all rights and defenses arising out of an
election of remedies by the creditor, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security
for a guaranteed obligation, has destroyed the guarantor's rights of
subrogation and reimbursement against the principal by the operation
of Section 580d of the Code of Civil Procedure or otherwise.

   (e) Subdivisions (b), (c), and (d) shall not apply to a guaranty
or other type of suretyship obligation made in respect of a loan
secured by a deed of trust or mortgage on a dwelling for not more
than four families when the dwelling is occupied, entirely or in
part, by the borrower and that loan was in fact used to pay all or
part of the purchase price of that dwelling.
   (f) The validity of a waiver executed before January 1, 1997,
shall be determined by the application of the law that existed on the
date that the waiver was executed.

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