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A couple of points re whether the surety should necessarily take over securities.

(1) Is the "risk" argument really sound? There is no reason why the risk taken by the surety as against the creditor should be co-extensive with the risk as against the principal debtor.

(2) A case of some interest in this connection is Re Chipboard Products unrep Irish High Court 20/10/94 (Barr J). The surety took an express unsecured covenant from the principal debtor in case the latter defaulted. It did: the surety then sought subrogation to securities given by it to the creditor. Despite what seems an entirely convincing argument that the surety by taking an unsecured covenant had waived any right to the securities under the 1856 Act or otherwise, Barr J held he was entitled to be subrogated to them. This seems perverse.

Andrew Tettenborn
Pembroke College, Cambridge