Relying on Matthews, courts in at least two other jurisdictions have reached the same result. See State of Wis. Inv. Bd. v. Hurst, 410 N.W.2d 560 (S.D. 1987); Guaranty Mortgage Co. v. Ryan Supply Co., 363 So.2d 739 (Miss. 1978).
In other words, if the debt is enforced against the surety, he then is entitled to be indemnified by the one who should have paid the debt before the surety was compelled to do so.State of Wis. Inv. Bd. v. Hurst, 410 N.W.2d 560, 562–63 (S.D.1987). Because suretyship is defined in statute and interpreted in our case law as a contractual relationship, we conclude that suretyship is a surety contract as used in SDCL 53–9–6.
Bank, 316 Ark. 60, 871 S.W.2d 338, 341 (1994) (holding lessor who mortgaged leased property to secure loan, on conditionthat it receive the majority of loan proceeds, was a coprincipal rather than a surety); Johnson v. Jouchert, 124 Ind. 105, 24 N.E. 580, 581 (1890) (“One who has received and who retains the consideration or benefit of a contract cannot, in equity, occupy the attitude of a surety.”); Guar. Mortg. Co. of Nashville v. Ryan Supply Co., 363 So.2d 739, 745 (Miss.1978) (concluding appellants' interest was primary when appellants entered into a direct contractual relationship for their own financial benefit); State of Wis. Inv. Bd. v. Hurst, 410 N.W.2d 560, 563 (S.D.1987) (“[A] person who makes a contract for the purpose of securing to himself a benefit rather than for securing to another a benefit, may be classified as a principal.”); Honey v. Davis, 131 Wash.2d 212, 930 P.2d 908, 911 (1997) (“[E]vidence of consideration for an obligation flowing to both obligors belies a contention that either is a surety.”). Guidance as to what constitutes primary liability is provided in our caselaw applying the statute of frauds.
CAL.CIV.PROC. CODE § 744 (West 2006); COLO.REV.STAT. ANN. § 38-35-117 (West 2000); Matter of Spencer, 115 B.R. 471, 477 (D.Del.1990); FLA. STAT. ANN. § 697.02 (West 1994); GA. CODE ANN. § 44-14-30 (West 2006); HAW.REV.STAT. ANN. § 506-1 (LexisNexis 2005); IDAHO CODE ANN. § 6-104 (2005); Egbert v. Egbert, 235 Ind. 405, 132 N.E.2d 910, 918 (1956); IOWA CODE ANN. § 557.14 (West 1992); Hoelting Enters. v. Trailridge Investors, L.P., 17 Kan.App.2d 777, 844 P.2d 745, 749 (1993); Watt's Adm'r v. Smith, 250 Ky. 617, 63 S.W.2d 796, 800 (1933); Midwest Bank v. O'Connell, 158 Mich.App. 565, 405 N.W.2d 201, 203 (1987); MINN.STAT. ANN. § 559.17(1) (West 2000); MONT. CODE ANN. § 71-1-105 (2005); NEB.REV.STAT. § 76-276 (2005); NEV. REV.STAT. ANN. § 40.050 (West 2006); N.M. STAT. ANN. § 48-7-1 (West 2006); N.Y. REAL PROP. LAW § 611(3) (McKinney 1979); N.D. CENT. CODE § 35-03-01.1(1) (2005); OKLA. STAT. ANN. tit. 42, § 10 (2001); OR.REV.STAT. ANN. § 86.010 (West 2003); S.C. CODE ANN. § 29-3-10 (2005); State of Wis. Inv. Bd. v. Hurst, 410 N.W.2d 560, 564 (S.D. 1987); Taylor v. Brennan, 621 S.W.2d 592, 593 (Tex. 1981); UTAH CODE ANN. § 78-40-8 (West 2006); WASH. REV. CODE ANN. § 7.28.230(1) (West 2006); Glover v. Marine Bank of Beaver Dam, 117 Wis.2d 684, 345 N.W.2d 449, 453 (1984); L Slash X Cattle Co. v. Texaco, Inc., 623 P.2d 764, 768-69 (Wyo. 1981). 1 NELSON WHITMAN § 1.5, at 10.
[¶ 15.] Family also claims Carol received benefits from the loan, thus, she is not entitled to the benefits and protections of suretyship accorded by SDCL 56-2-1 and other suretyship statutes. Family contends that State of Wisconsin Investment Bd. v. Hurst, 410 N.W.2d 560 (SD 1987) is controlling. In Hurst, we stated:
" Heinrich, 52 S.D. at 378, 217 N.W. at 634 (citations omitted); 72 C.J.S. Principal Surety, §§ 4, 9 (1987)."State of Wis. Inv. Bd. v. Hurst, 410 N.W.2d 560, 562-563 (S.D. 1987). Although a conveyance made subject to an existing and specified incumbrance does not alone obligate the grantee to pay the mortgage debt, Brown v. Leeak, 52 N.D. 398, 203 N.W. 185 (1925), a grantee who assumes a mortgage debt becomes primarily liable for the debt.
However, the mortgagor can assign away its right to rents and profits. Aetna Life Ins. Co. v. McElvain, 363 N.W.2d 186 (S.D. 1985); State of Wis. Inv. Bd. v. Hurst, 410 N.W.2d 560 (S.D. 1987). A stipulation by the mortgagor agreeing to give his possessory interest in the land or the crops during redemption is also allowable and enforceable.
See Matthews v. Hinton, 234 Cal.App.2d 736, 44 Cal. Rptr. 692 (1965); Guaranty Mortgage Co. v. Ryan Supply Co., 363 So.2d 739 (Miss. 1978); State of Wisconsin Inv. Bd. v. Hurst, 410 N.W.2d 560 (S.D. 1987). Those cases are distinguishable in that each deals with a lessor attempting to assert a surety's defense against the lessee's lender/creditor.