Section II The Effects of Suretyship

1. The Relationship between the Surety and the Creditor

Article 782

A surety is discharged simultaneously with the debtor, and is entitled to avail himself of all the defenses that are open to the debtor.

When, however, the defense raised by the debtor is based on his lack of legal capacity, the surety who was cognizant thereof at the time the contract was entered into is not entitled to raise this defense.

Article 783

When the creditor has accepted a thing of another kind in payment of the debt, the surety is discharged, even if the thing given in payment is revendicated.

Article 784

A surety is discharged to the extent of the value of any warranties which the creditor has lost by his own fault.

The warranties referred to in this Article are the securities assigned to guarantee the debt, even if they were provided after the suretyship was entered into; also any securities provided in accordance with the law.

Article 785

A surety is not discharged merely by reason of the creditor's delay in taking proceedings or of the creditor not taking proceedings.

A surety is, however, discharged if the creditor does not take proceedings against the debtor within six months from the date of the summons served on him by the surety, unless the debtor himself provides an adequate guarantee to the surety.

Article 786

When a debtor becomes bankrupt, the creditor is bound to prove his debt in the bankruptcy, under penalty of being deprived of his remedy against the surety to the extent of the loss suffered by the surety as a result of the creditor's failure to prove his debt.

Article 787

A creditor is bound to hand over to the surety, at the time of the discharge of the debt, all documents that are necessary to enable him to exercise his right of action.

When the debt is secured by a pledge of a movable or by a right of retention on a movable, the creditor must surrender such securities to the surety.

When, however, the debt is secured by a charge on an immovable property, the creditor must comply with the formalities required for the transfer of such security. The expenses of such transfer are borne by the surety, subject to his right of action against the debtor.

Article 788

A creditor has not the right to take proceedings against the surety alone, unless he has first taken proceedings against the debtor.

He can only levy execution on the property of the surety after he has distrained all the property of the debtor; it is for the surety, in such a case, to claim this right.

Article 789

When a surety demands that the debtor's property shall first be distrained, he must at his own expense indicate to the creditor property of the debtor sufficient to satisfy the whole debt.

Property so indicated by the surety will not be taken into account if it is situated outside Egyptian territory, or if it is the subject of a dispute.

Article 790

When the surety has indicated property belonging to the debtor, the creditor will be responsible to the surety for the debtor's insolvency if the creditor fails to take the necessary proceedings in due time.

Article 791

When a real security is assigned either by law or by agreement as guarantee of a debt, and suretyship is also entered into subsequently or at the same time, without a stipulation that the surety is jointly and severally liable with the debtor, the surety's property can only be seized and sold after the real security assigned as guarantee has been realized.

Article 792

When there are several sureties for the same debt by one contract and it does not provide for their joint and several liability, the debt is apportioned between them and the creditor has only a right of action against each of the sureties to the extent of his share in the suretyship.

If several sureties have undertaken to guarantee the same debt by successive contracts, each surety is liable for the whole debt, unless he has reserved the right to apportion the liability amongst the co-sureties.

Article 793

A surety who has jointly and severally guaranteed the debtor cannot demand that the debtor's property first be distrained.

Article 794

A surety who has jointly and severally guaranteed the debtor may avail himself of all defenses which a surety who is not jointly and severally liable may invoke with regard to the debt.

Article 795

Judicial and legal sureties are always jointly and severally liable.

Article 796

When there are several sureties jointly and severally liable, a surety who has paid the whole debt on maturity may call upon each of the other sureties to pay his share of the debt as well as a proportional part in the share of any joint and several surety who is insolvent.

Article 797

A surety may be guaranteed by another surety. In such a case, the creditor may not call upon the principal surety's guarantee until he has taken action against the principal surety, unless the two sureties are themselves jointly and severally liable.

2. The Relationship between the Surety and the Debtor

Article 798

A surety must give the debtor notice before paying, on pain of forfeiture of his right of action against the debtor, if the latter has himself paid the debt or has grounds, at the date of maturity, for having the debt declared void or extinguished.

If the debtor does not object to the payment, the surety retains his right of action against him, even though the debtor had himself paid the debt or had grounds for having the debt declared void or extinguished.

Article 799

A surety who has paid the debt is subrogated to all the rights of the creditor against the debtor; if however, he pays only part of the debt, the surety can only exercise such rights in respect of that part he has paid after the creditor has recovered from the debtor the whole of the debt due.

Article 800

A surety who has paid the debt has a right of action against the debtor whether the suretyship was entered into with or without the knowledge of the debtor.

This right of action includes the right to claim the capital amount of the debt, interest and expenses. The surety, however, only has a right of action in respect of those expenses which he has incurred from the date he has notified the principal debtor of the proceedings taken against him.

A surety is entitled to interest at the legal rate on all amounts that he has paid from the date of payment.

Article 801

When there are several debtors jointly and severally liable for one and the same debt, a surety who has guaranteed them all, has a remedy against each of them for all that he has paid in respect of the debt.