Surety ostensibly bound as a principal with another; effect of knowledge of the creditor

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One who ostensibly binds himself as a principal obligor to satisfy the present or future obligations of another is nonetheless considered a surety if the principal cause of the contract with the creditor is to guarantee performance of such obligations.

A creditor in whose favor a surety and principal obligor are bound together as principal obligors in solido may presume they are equally concerned in the matter until he clearly knows of their true relationship.

Acts 1987, No. 409, §1, eff. Jan. 1, 1988.


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