2005 Texas Business & Commerce Code CHAPTER 34. PRINCIPAL AND SURETY

BUSINESS & COMMERCE CODE

TITLE 4. MISCELLANEOUS COMMERCIAL PROVISIONS

CHAPTER 34. PRINCIPAL AND SURETY


	§ 34.01. DEFINITION OF SURETY.  In this chapter, unless 
the context requires a different definition, "surety" includes 
endorser, guarantor, drawer of a draft which has been accepted, and 
every other form of suretyship, whether created by express contract 
or by operation of law.

Acts 1967, 60th Leg., p. 2343, ch. 785, § 1.                               


	§ 34.02. SURETY MAY REQUIRE SUIT ON ACCRUED RIGHT OF 
ACTION.  (a) When a right of action has accrued on a contract for 
the payment of money or performance of an act, a surety on the 
contract may require by written notice that the obligee forthwith 
sue on the contract.
	(b)  A surety who gives notice to an obligee under Subsection 
(a) of this section is discharged from all liability on the contract 
if the obligee
		(1)  is not under legal disability;  and either                               
		(2)  fails to sue on the contract during the first term 
of court after receiving the notice, or during the second term 
showing good cause for the delay;  or
		(3)  fails to prosecute the suit to judgment and 
execution.                 

Acts 1967, 60th Leg., p. 2343, ch. 785, § 1.                               


	§ 34.03. LEVY FIRST ON PRINCIPAL'S PROPERTY.  (a) If a 
judgment granted against two or more defendants finds a suretyship 
relation between or among them, the court shall order the sheriff to 
levy the execution
		(1)  first, against the principal's property which is 
located in the county where the judgment was granted;
		(2)  second, if the sheriff cannot find enough of the 
principal's property in the county to satisfy the execution, 
against so much of the principal's property as he finds;  and
		(3)  third, against so much of the surety's property as 
is necessary to make up the balance of the amount shown in the writ 
of execution.
	(b)  The clerk shall note the order to the sheriff on the writ 
of execution. 

Acts 1967, 60th Leg., p. 2343, ch. 785, § 1.                               


	§ 34.04. SUBROGATION RIGHTS OF SURETY.  (a) A judgment is 
not discharged by a surety's payment of it in whole or part if the 
payment is compelled or, if voluntarily made, is applied to the 
judgment because of the suretyship relation.
	(b)  A surety who pays on a judgment as described in 
Subsection (a) of this section is subrogated to all of the judgment 
creditor's rights under the judgment.  A subrogated surety is 
entitled
		(1)  to execution on the judgment against the 
principal's property for the amount of his payment, plus interest 
and costs;  and
		(2)  if there is more than one surety, to execution on 
the judgment against both the principal's property and the property 
of his cosurety or cosureties for the amount his payment exceeded 
his proportionate share of the judgment, plus interest and costs.
	(c)  A subrogated surety seeking execution under Subsection 
(b) of this section shall apply for it to the clerk or court, and 
execution shall be levied, collected, and returned as in other 
cases.

Acts 1967, 60th Leg., p. 2343, ch. 785, § 1.                               


	§ 34.05. OFFICER COMPELLED TO PAY ON JUDGMENT TREATED AS 
SURETY.  (a) An officer has the rights of a surety provided in 
Section 34.04 of this code if compelled to pay a judgment in whole 
or part because of his default.
	(b)  An officer who fails to pay over money collected, or who 
wastes property levied on by him or in his possession, does not have 
the rights of a surety provided in Section 34.04 of this code.

Acts 1967, 60th Leg., p. 2343, ch. 785, § 1.