CIVIL PROCEDURE — Joinder of Parties — Guarantee — Necessity of Joining Principal Debtor
Principle Statement
It is settled law that where a person personally guarantees the liability of a third party by entering into a contract of guarantee or suretyship, a distinct and separate contract from the principal debtor's is thereby created between the guarantor and the creditor. The contract of guarantee so created can be enforced against the guarantor directly or independently without the necessity of joining the principal debtor in the proceedings to enforce same.
Ratio Decidendi (Source)
Per Onnoghen, JSC, in Chami v. United Bank for Africa Plc (2010) NLC-123-257-2003(SC) at p. 20, para. B – p. 21, para. A.
"It is settled law that where a person personally guarantees the liability of a third party by entering into a contract of guarantee or suretyship, a distinct and separate contract from the principal debtor's is thereby created between the guarantor and the creditor. The contract of guarantee so created can be enforced against the guarantor directly or independently without the necessity of joining the principal debtor in the proceedings to enforce same."
Explanation / Scope
This principle establishes that a contract of guarantee creates a distinct and separate contract between the guarantor and creditor, enforceable without joining the principal debtor. The principle applies where a guarantee is enforced. It ensures that the guarantor can be sued directly. The principle reflects the nature of a guarantee contract. It prevents the need to join the principal debtor. The court must enforce the guarantee independently. The principle provides guidance on the enforceability of guarantees.
