It follows that if the covenant of the guarantor (that is, the hypothecation of the duplicate certificate of title by #100) is no longer enforceable because of the later contract to which the guarantor or surety is not a signatory or party, that #100 is entitled to the recovery of the duplicate certificate of title. In support of this proposition I refer to Bolton v. Salmon, [1891] 2 Ch. 48, at p.53: ...On principle I can find no ground for the proposition that, although the surety’s covenant is gone by alteration of the contract with the principal debtor, yet the security which the surety has given remains bound. A surety pledges his personal credit by note, covenant, or otherwise, and by the same contract pledges also his goods or charges, or mortgages his lands, as security for the same debt. The alteration of the contract without his consent or without the reservation of rights against him affects his position equally in regard to every part of his contract of suretyship. ... and at p.54: ... The true rule, as the Lord Justice went on to show, is that if there is any agreement between the principals with reference to the contract guaranteed, the surety ought to be consulted, and that if there is any alteration, which is not obviously either unsubstantial or for the benefit of the surety, he is to be the sole judge whether he will remain liable. This reasoning applies with the same force to a security given by the surety as it does to a personal obligation entered into by him. ...
"The most advanced legal research software ever built."
The above passage should not be considered legal advice. Reliable answers to complex legal questions require comprehensive research memos. To learn more visit www.alexi.com.