CHAPTER 1. REMEDIES OF SURETIES AGAINST THEIR PRINCIPALS
IC 34-22
ARTICLE 22. CAUSES OF ACTION: SURETY'S
REMEDIES AGAINST PRINCIPAL
IC 34-22-1
Chapter 1. Remedies of Sureties Against Their Principals
IC 34-22-1-1
Applicability of chapter; surety may require creditor or obligee to
commence action on contract
Sec. 1. (a) This chapter applies to a person who is bound as surety
upon a contract in writing for the:
(1) payment of money; or
(2) performance of any act.
(b) When the right of action has accrued, the surety may require,
by notice in writing, the creditor or obligee to immediately institute
an action upon the contract.
As added by P.L.1-1998, SEC.17.
IC 34-22-1-2
Discharge of surety
Sec. 2. If the creditor or obligee does not:
(1) proceed within a reasonable time to bring an action upon the
contract; and
(2) prosecute the action to judgment and execution;
the surety is discharged from all liability on the contract.
As added by P.L.1-1998, SEC.17.
IC 34-22-1-3
Trial on issue of suretyship; two or more defendants
Sec. 3. (a) This section applies when:
(1) an action is brought against two (2) or more defendants
upon a contract; and
(2) at least one (1) or more of the defendants is a surety for the
others.
(b) The surety may, upon a written complaint to the court, cause
the question of suretyship to be tried and determined, upon the issue
made by the parties at:
(1) the trial of the cause; or
(2) any time before or after the trial.
(c) Proceedings described in subsection (b) do not affect the
proceedings of the plaintiff.
As added by P.L.1-1998, SEC.17.
IC 34-22-1-4
Order of levy upon property of principal and surety
Sec. 4. (a) If the finding upon the issue described in section 3(b)
of this chapter is in favor of the surety, the court shall make an order
directing the sheriff to:
(1) levy the execution, first upon the property of the principal;
and
(2) exhaust the property of the principal;
before making a levy upon the property of the surety.
(b) The clerk shall endorse a memorandum of the order on the
execution.
As added by P.L.1-1998, SEC.17.
IC 34-22-1-5
Judgment remaining in force for use of surety or other person
making payment
Sec. 5. (a) This section applies to a:
(1) defendant-surety in a:
(A) judgment;
(B) special bail; or
(C) replevin bail;
(2) surety in a delivery bond or replevin bond; or
(3) person who is a surety in any undertaking.
(b) This section does not apply to a sheriff, officer, or surety
providing bond in an official capacity who:
(1) fails to pay over money collected; or
(2) wastes property upon which the sheriff, officer, or surety
has levied.
(c) When a person described in subsection (a):
(1) is compelled to pay a judgment, or part of a judgment;
(2) makes any payment which is applied to a judgment by
reason of the person's suretyship; or
(3) is compelled, by reason of a default of a sheriff, officer or
surety providing bond in an official capacity, to pay a judgment,
or part of a judgment;
the judgment is not discharged by the payment.
(d) However, the judgment remains in force for the use of the bail,
surety, officer, or other person making the payment, and after the
plaintiff is paid, so much of the judgment as remains unsatisfied may
be prosecuted to execution for use by the person making the
payment.
As added by P.L.1-1998, SEC.17.
IC 34-22-1-6
Remedies against codefendants and cosureties
Sec. 6. A person who:
(1) is one (1) of several:
(A) judgment defendants; or
(B) replevin sureties; and
(2) paid and satisfied the plaintiff;
has the remedy provided in section 5 of this chapter against the
codefendants or cosureties to collect from them the ratable
proportion each is equitably bound to pay.
As added by P.L.1-1998, SEC.17.
IC 34-22-1-7
When confessed judgment or default judgment by surety not
permitted
Sec. 7. No surety or representative of a surety shall confess
judgment or suffer judgment, by default, in any case, when the surety
or representative is notified that there is a valid defense, if the
principal will:
(1) enter as a defendant to the action; and
(2) tender to the surety or the representative good security to
indemnify him, to be approved by the court.
As added by P.L.1-1998, SEC.17.
IC 34-22-1-8
No relief from valuation or appraisement laws
Sec. 8. Whenever a surety seeks a remedy against the principal for
discharging a debt, or claim upon contract, in whole or in part,
without any relief from valuation or appraisement laws, the remedy
of the surety is also enforced without any relief from valuation or
appraisement laws.
As added by P.L.1-1998, SEC.17.
IC 34-22-1-9
Applicability of provisions to heirs, executors, administrators, and
persons under legal disabilities
Sec. 9. Sections 1 through 8 of this chapter extend to:
(1) heirs;
(2) executors; and
(3) administrators;
of deceased persons. However, the provisions concerning sureties
giving notice to the creditor do not operate against persons under
legal disabilities.
As added by P.L.1-1998, SEC.17.
IC 34-22-1-10
Surety's recovery of interest on debt paid
Sec. 10. When a surety on a bill, note, bond, or other instrument
in writing, is compelled to pay the debt or obligation of the principal
debtor, the surety shall recover the rate of interest on the amount paid
by the surety for the principal, as was originally provided for in the
bill, note, bond, or other instrument in writing, held against the
principal debtor. The judgment given to the surety bears the same
rate of interest, not exceeding ten percent (10%) per year.
As added by P.L.1-1998, SEC.17.