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80C328(3) PB

CONFORMING AMENDMENT.

Subtitle C, Title 2, Civil Practice and Remedies Code, is amended by adding

Chapter 43 to read as follows:

CHAPTER 43.

PRINCIPAL AND SURETY

Revised Law

DEFINITION.

In this chapter, "surety" includes:

an endorser, a guarantor, and a drawer of a draft that has been accepted; and

every other form of suretyship, whether created by express contract or by operation of law.

(Bus. & Com. Code,

Sec. 34.01.)

Source Law

DEFINITION OF SURETY.

In this chapter, unless the context requires a different definition, "surety" includes endorser, guarantor, drawer of a draft which has been accepted, and every other form of suretyship, whether created by express contract or by operation of law.

Revisor's Note

Section 34.01, Business & Commerce Code, states that the defined terms have the meanings defined "unless the context requires a different definition."

That limitation is omitted from the revised law because the defined terms are used consistently in the revision in the context to which the

definitions apply.

Revised Law

SUIT ON ACCRUED RIGHT OF ACTION.

When a right of action accrues on a contract for the payment of money or performance of

an act, a surety on the contract may, by written notice, require the obligee to without delay bring a suit on the contract.

A surety who provides notice to an obligee under Subsection (

a) is discharged from all liability on the contract if the obligee:

is not under a legal disability; and

does not:

bring a suit on the contract during:

the first term of court after receipt of the notice; or

the second term of court if good cause is shown for the delay; or

prosecute the suit to judgment and execution.

(Bus. & Com. Code,

Sec. 34.02.)

Source Law

SURETY MAY REQUIRE SUIT ON ACCRUED RIGHT OF ACTION.

When a right of action has accrued on a contract for the payment of money or performance of

an act, a surety on the contract may require by written notice that the obligee forthwith sue on the contract.

A surety who gives notice to an obligee under Subsection (

a) of this

section is discharged from all liability on the contract if the obligee

is not under legal disability; and either

fails to sue on the contract during the first term of court after receiving the notice, or during the second term showing good cause for the delay; or

fails to prosecute the suit to judgment and execution.

Revisor's Note

Section 34.02, Business & Commerce Code, refers to a requirement imposed on an obligee of a contract to bring suit on the contract "forthwith" in certain circumstances.

The revised law substitutes "without delay" for "forthwith" because the terms have the same meaning in this context and "without delay" is more modern.

Revised Law

PRIORITY OF EXECUTION.

If a judgment granted against two or more defendants finds a suretyship relationship between or among the defendants, the court shall order the sheriff to levy the execution in the following order:

against the principal's property located in the county where the judgment was granted;

if the sheriff cannot find enough of the principal's property in that county to satisfy the execution, against as much of the principal's property as the sheriff finds; and

against as much of the surety's property as is necessary to make up the balance of the amount shown in the writ of execution.

The clerk shall note the order to the sheriff on the writ of execution.

(Bus. & Com. Code,

Sec. 34.03.)

Source Law

LEVY FIRST ON PRINCIPAL'S PROPERTY.

If a judgment granted against two or more defendants finds a suretyship relation between or among them, the court shall order the sheriff to levy the execution

first, against the principal's property which is located in the county where the judgment was granted;

second, if the sheriff cannot find enough of the principal's property in the county to satisfy the execution, against so much of the principal's property as he finds; and

third, against so much of the surety's property as is necessary to make up the balance of the amount shown in the writ of execution.

The clerk shall note the order to the sheriff on the writ of execution.

Revised Law

SUBROGATION RIGHTS OF SURETY.

A judgment is not discharged by a surety's payment of the judgment in whole or

part if the payment:

is compelled; or

if made voluntarily, is applied to the judgment because of the suretyship relationship.

A surety who pays on a judgment as described by Subsection (

a) is subrogated to all of the judgment creditor's rights under the judgment.

A subrogated surety is entitled to execution on the judgment against:

the principal's property for the amount of the surety's payment, plus interest and costs; and

if there is more than one surety, both the principal's property and the property of the cosurety or cosureties for the amount by which the surety's payment exceeds the surety's proportionate share of the judgment, plus interest and costs.

A subrogated surety seeking execution on the judgment under Subsection (

b) shall apply for execution to the clerk or court.

The execution shall be levied, collected, and returned as in other cases.

(Bus. & Com. Code,

Sec. 34.04.)

Source Law

SUBROGATION RIGHTS OF SURETY.

A judgment is not discharged by a surety's payment of it in whole or

part if the payment is compelled or, if voluntarily made, is applied to the judgment because of the suretyship relation.

A surety who pays on a judgment as described in Subsection (

a) of this

section is subrogated to all of the judgment creditor's rights under the judgment.

A subrogated surety is entitled

to execution on the judgment against the principal's property for the amount of his payment, plus interest and costs; and

if there is more than one surety, to execution on the judgment against both the principal's property and the property of his cosurety or cosureties for the amount his payment exceeded his proportionate share of the judgment, plus interest and costs.

A subrogated surety seeking execution under Subsection (

b) of this

section shall apply for it to the clerk or court, and execution shall be levied, collected, and returned as in other cases.

Revised Law

OFFICER TREATED AS SURETY.

An officer has the rights of a surety provided by

Section 43.004 if the officer is compelled to pay a judgment in whole or part because of the officer's default.

An officer does not have the rights of a surety provided by

Section 43.004 if the officer:

does not pay over money collected; or

wastes property that is levied on by the officer or is in the officer's possession.

(Bus. & Com. Code,

Sec. 34.05.)

Source Law

OFFICER COMPELLED TO PAY ON JUDGMENT TREATED AS SURETY.

An officer has the rights of a surety provided in

Section 34.04 of this code if compelled to pay a judgment in whole or part because of his default.

An officer who fails to pay over money collected, or who wastes property levied on by him or in his possession, does not have the rights of a surety provided in

Section 34.04 of this code.

80C327(2) JJT

CONFORMING AMENDMENT.

Subchapter B,

Chapter 65, Civil Practice and Remedies Code, is amended by adding

Section 65.017 to read as follows:

Revised Law

CIGARETTE SELLER, DISTRIBUTOR, OR MANUFACTURER.

In addition to any other remedy provided by law, a person may bring an action in good faith for appropriate injunctive relief if the person sells, distributes, or manufactures cigarettes and sustains a direct economic or commercial injury as a result of a violation of:

Section 48.015, Penal Code; or

Section 154.0415, Tax Code.

(Bus. & Com. Code,

Sec. 35.49.)

Source Law

OTHER REMEDIES.

A person who sells, distributes, or manufactures cigarettes and who sustains direct economic or commercial injury as a result of a violation of

Section 154.0415, Tax Code, or

Section 48.015, Penal Code, may bring an action in good faith for appropriate injunctive relief.

The remedy provided by this

section is in addition to any oth