A guaranteed the honesty of a servant in the employment of B. The servant was guilty of dishonesty in the course of the service, but B continued to employ him and did not inform A of what had occurred. Subsequently, the servant committed further acts of dishonesty. B requires A to make good the loss. Discuss the liability of A.
In the given case, A cannot be held liable because of change in circumstances not brought to his notice by the creditor having knowledge of the same. Under such circumstances. Section 139 of the Indian Contract Act, 1872 becomes operative. It provides that if the creditor does any act which is inconsistent with the right of surety, or omits to do any act which his duty to the surety requires him to do, and the eventual remedy of surety himself against the principal debtor is thereby impaired, the surety is discharged. Thus, in the present case the omission of the creditor to inform A of servant's dishonesty and his conduct of continuing to employ him, shall discharge the surety A.
In the given case, A cannot be held liable because of change in circumstances not brought to his notice by the creditor having knowledge of the same. Under such circumstances. Section 139 of the Indian Contract Act, 1872 becomes operative. It provides that if the creditor does any act which is inconsistent with the right of surety, or omits to do any act which his duty to the surety requires him to do, and the eventual remedy of surety himself against the principal debtor is thereby impaired, the surety is discharged. Thus, in the present case the omission of the creditor to inform A of servant's dishonesty and his conduct of continuing to employ him, shall discharge the surety A.
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