Common use of HELD Clause in Contracts

HELD. The SCA, in determining whether sureties who also bound themselves as co-principal debtors, such as the Respondent, became co-debtors with the principal debtor (ECE), rejected the Appellant’s contentions and held that a surety and co-principal debtor does not undertake a separate independent liability as a principal debtor. The addition of the words ‘co-principal debtor’ does not change such an agreement into any agreement other than one of Suretyship. The surety does not become a co-debtor with the principal debtor, nor does he become a co-debtor with any of the co-sureties and co-principal debtors, unless same has been agreed to by the respective parties. The SCA, in determining whether the service of a summons on any of the sureties interrupts the running of prescription in favor of the others, too rejected the Appellant’s argument in this regard, and held that if it were to extend the Justinian constitution, same would constitute a considerable departure from the common law principles on the law of suretyship, and there were no persuasive reasons for the SCA to have done so. Moreover, if the principal debt became prescribed, the surety’s debt, by virtue of same, had too prescribed. As such, the SCA dismissed the appeal with costs.