учебный год 2023 / de la Mata Munoz, Personal Security

b)The right to set up the debtor's defences

aa)In general

The guarantor may also set up any debtor's defences which are inherent in the debt, but not those that are purely personal to the debtor (art. 1945 Italian CC369 and art. 1853 juncto art. 1824 and art. 1845 Spanish CC). This rule is a consequence of the ancillary nature of the guarantee. The guarantor may discuss about the existence, legitimacy, validity, extent, modalities, subsistence and extinction of the principal debt370.

The right to set up the debtor's defences is a right iure proprio371 and not in the name of the debtor. This means that the guarantor does not depend on the debtor or his previous behaviour to use his defences, which may be set up also without agreement or even against the will of the debtor (also if the latter has expressly or tacitly renounced to set up them)372 • Otherwise the debtor could afterwards set up his defences against the performing guarantor and refuse to pay him back the debt already paid to the creditor. Moreover, it is in the spirit of the guarantee that the creditor may not get from the guarantor what he cannot obtain from the debtor.

bb) Exception: the defense by reason ofminority or disability of the debtor

The guarantor may not set up the debtor's defence of disability or minority to avoid the performance of his guarantee obligation (art. 1945 Italian CC and art. 1853 Spanish CC). Such defences are purely personal to the debtor. Hence he is the only legitimate person to set them up against the credi-

369Cass. 29 March 1996 no. 2909, FI, 1996, I, 1621; Cass. 20 August 1990, no. 9719, FI, 1993, I, 2171; Cass. 1August1991 no. 8475, Arch. Civ., 1992, 2, 160.

370Lacruz, 517; Reyes, 165; Cass. 16 November 1971, no. 3284, GC, 1972, I, 35. See also: Cass. 20 September 1971 no. 2627, FI, Rep. 1971 voce fideiussione e mandato di credito, no. 26; Cass. 20 June 1978 no. 3078, FI, 1979, I, 1, 1836. Regarding the guarantee of a credit account, see: Cass. 29 October 1998 no. 10808, FI, Rep. 1998, voce Fidei-

ussione e mandato di credito, no. 35, 36 and 45; Cass. 11 September 1997, no. 8989, Arch. Civ., 1997, 1198; Cass. 11 March 1996, no. 1978, GC, 1997, I, 2591; App. Cagliari, 5 December 1987, GC, 1989, I, 2159.

371 Also in Roman Law: Digest 44, 1, 19: "omnes exceptiones quae reo competunt, fideiussori quoque, etiam invito reo, competent". Cass. 22 January 1958 no. 131 , FI, 1959, I, 456.

372 Cass. 20 July 1967 no. 1861, GC, 1968, I, 324: "[.. .] evalido anche nei confronti del fideiussore, in relazione all'autonomo suo diritto di difesa, che si concreta nella facolta di opporre al creditore tutte le eccezioni che spettano al debitore principale, comprese quelle che quest'ultimo non puo piu proporre, non potendo il comportamento omissivo di costui pregiudicare il diritto di difesa del fideiussore".

tor. The debt itself remains unaltered and consequently the guarantee obligation shall not be affected.

The wording of art. 1945 Italian CC is different to that of the Spanish equivalent provision (art. 1853 Spanish CC). While Italian CC precisely limits the exception to the debtor's defence by reason of disability, Spanish CC uses a wider expression, excluding the defences "purely personal of the debtor". The divergence is merely formal since this expression is construed

as meaning exclusively the defences of minority and disability373. By contrast, the vices in the consent are not seen as included in the rule374, as they

are a case of general default, inherent to the debt375• Logically, the only case in which it is really justified that the guarantor remains liable even if the debtor is discharged is the case of a minor or disabled debtor. In these both cases, the debtor must be protected by the law in such terms that neither the creditor nor the guarantor can compel him to pay the debt. Also only in these cases it is justified that the guarantor assumes a wider risk than the debtor and suffers a worse situation. The knowledge of the guarantor about the minority or disability of the debtor does not play any role in this respect, as it does in neighbouring countries like Switzerland or

Portugal (see art. 492 par. 2 Swiss Code of Obligations and § 632 Portuguese CC376).

The former Italian CC of 1865 (art. 1927), contained the same expression as the current Spanish CC ("debtor's purely personal defences"). The new provision meant a greater accuracy in the wording but not an important change in the meaning of the rule. Also under the former CC the defence referred to in art. 1927 was only that of disability by reason of minority, prohibition or disability of the debtor (inabilitazione) (for instance because of lack of authorisation of the husband if the debtor was a married woman). The defences of voidance or voidability by reason of vices in the

373 There is no case law dealing with this matter. But the meaning of the phrase "purely personal defences" has been deeply discussed by the scholars. It is generally concluded that minority and disability are the only defences contained therein. See for all:

Guilarte, 425 ff.

374By contrast in Switzerland and Portugal the vices in the content of the debtor may also be raised as exception from the guarantor under the condition that he had notice of it at the moment of granting the guarantee (see art. 492 par. 3 Swiss Code of Obligations and art. 632 Portuguese CC).

375Reyes, Fianza, 185.

376Art. 632 par. 2 Portuguese CC: "Sendo, porem, anulada a obriga9ao principal, por incapacidade ou por falta ou vicio da vontade do devedor, nem por isso a fian9a deixa de ser valida, se o fiador conhecia a causa da anulabilidade ao tempo em que a fian9a foi prestada".

consent of the parties were considered inherent to the debt and could therefore also be set up by the guarantor377.

cc) The guarantee ofa co-debt

If the guarantee has been granted for a joint and several co-debt, the guarantor may set up against the creditor the defences of each one of the debtors of the same debt. Also if the debtor who has been asked for performance does not enjoy that defence but one of his co-debtors does, the guarantor may set it up in any case and for the whole debt.

If otherwise, the guarantee has been granted specifically for the debt of one of the debtors, the guarantor cannot set up the defences of the other codebtors, not even if these are joint and severally liable vis-a-vis the creditor. However, according with the rules of co-debt, those co-debtors who are joint and severally liable can set up the defences of all other codebtors. Consequently, the guarantor of any of them may also set up the defences that his own guaranteed debtor has obtained from any of his part- ners. These are objective defences and not the purely personal ones378 •

dd) Waiver ofthe right to set up defenses

(i) Validity ofthe waiver and consequences

It has been controversial in Italy, whether art. 1945 Italian CC is a mandatory provision or it can be waived by the parties by means of the principle of freedom of will. The relevant question is to analyse the consequences of including a waiver to set up defences by the guarantor (clausola solve et repete or senza eccezione or a prima richiesta/clausula solve et repete or a primera demanda).379

The clause solve et repete has been considered valid in the guarantee contract within certain limits: the guarantor would always be entitled to set up the defences regarding the guarantee obligation, as well as the nullity of the principal debt and its extinction380. The guarantor may also set up a defence in the case of fraud or abusive use of the guarantee381 .

The contract of guarantee including a clause solve et repete must always be construed on a case by case basis. It might be the case that the parties wanted to agree a typical guarantee. The waiver to set up the defences

377Giusti, 207.

378Carrasco, Cordero and Marin, 178.

379For Germany see Horn/Staudinger, on § 768, no. 28 ff. 38°Cass. 29 March 1996 no. 2909, FI, 1996, I, 1621.

381Cass. 6 October 1989 no. 4006, BBTC, 1990, II, 1.

mentioned382 (the clause solve et repete) is then void and does not affect the contract383 . However, the parties might have intended to agree an atypical contract; for instance an indemnity (autonomous guarantee; contratto autonomo di garanzia)384 • In such case, the parties may agree conditions which make the liability of the guarantor more severe than that of the debtor since it is not any more a typical contract of guarantee and art. 1941 Italian CC is not applicable any more. Accordingly, it can be considered that the waiver of the right to set up defences transforms the nature of the contract of guarantee into an atypical one, which is valid but different from a guarantee385. The judge must decide case by case whether the contract is a typical guarantee with a void clause or if it is an indemnity386. He must evaluate thereby the objective elements to reconstruct the will of the parties on making the agreement387.

This solution is favoured in Spain, where it has been generally admitted by the scholars388 and case law389 that the guarantor may renounce to his

right to set up defences and in such a case the nature of the contract is modified and converted into a new atypical security right390•

382See supra Chapter 2, C., VII., 5. Validity of the waiver by the guarantor to set up the defence of nullity of the secured obligation. The case of guarantees on first demand, 87.

383Petti, 173 and Giusti, 208 consider art. 1945 Italian CC a mandatory provision which cannot be waived by the parties, as such waiver would become the guarantor's obligation "more onerous" than the underlying obligation (forbidden by art. 1941 Italian CC). Contra: Carrasco, Cordero and Marin, 180 consider that such waiver does not necessarily mean a more onerous obligation for the guarantor than that of the debtor (forbid-

den in art. 1826 Spanish CC).

384STS 12. November 2003 [RA 2003 no. 8408); STS 31. May 2003 [RA 2003 no. 5217) with further reference.

385Cass. 7. June 1991 no. 6496, BBTC, 1992, II, 514; Cass. 16 November 1990, no. 11094, GI, 1991, I, 1, 394.

386Cass. 7. June 1991 no. 6496, BBTC, 1992, II, 514. STS 12 November 2003 [RA 2003 no. 8408): " .. . la determinaci6n de la conceptualci6n judidica correspondiente a un contrato constituye un problema de interpretaci6n del mismo en orden a su calificaci6n, que esta atribuido al juzgador de instancia...".

387See: Cass. 22. Mai 1979 no. 2958, GC, 1979, I, 1892; Cass. Sezione Unite, 1 October 1987 no. 7341, BBTC, 1988, II, 383 commented by Costanza; Cass. 18. November

1992 no. 12341, GC, 1993, I, 1535, commented by Costanza. STS 31 May 2003 [RA 2003 no. 5217] with further reference.

388Guilarte, 429 ff.; Carrasco, Fianza, accesoriedad, contrato de garantia, 210 et sequ.

389STS 24 November 1978 [RA 1978 no. 4173]. In this case, the guarantor does not renounce specifically to raise exceptions but a more general waiver to raise any agreement taken between creditor and debtor. Accordingly, the waiver to the exceptions is also

included.

390 STS 24. November 1978 [RA 1978 no. 4173]; Carrasco, Cordero and Marin, 179.

(ii) Construction ofthe waiver

In any case, a waiver to the rights to set up defences must be construed restrictively. Accordingly, if the clause has been formulated in a wide way, such as "for any defences", it must be considered that the guarantor meant only those defences regarding the underlying obligation and not those defences for his own obligation (for instance, a waiver to set off, without

specifying which claims, means only a waiver to set off the claims of the debtor and not his own claims against the creditor)391 .

Moreover, the right to set up the defence for extinction of the secured obligation is not considered to be included in the waiver, unless expressly established (in which case the contract cannot be considered a guarantee but an independent guarantee)392. Co-guarantors that waive to set up defences coming up from the underlying relationship do not waive, thereby, the defences of the other co-guarantors393. The construction of the waiver must also take into account the nature of the guarantor and his level of ex- pertise with regard to the contract394.

4. Right to make agreements with the creditor

An agreement reached between the guarantor and the creditor is valid but will not be effective against the debtor (art. 1835 par. 1 Spanish CC). The obligation of the debtor vis-a-vis the creditor does not change by agreements between the latter and the guarantor. This is a superfluous provision since it is obvious that the secured debt is not ancillary to the guarantee.

5. Right to remain unaffected by the agreements taken between creditor and debtor

Art. 1.835 par. 2 Spanish CC establishes that the agreements between creditor and debtor on the underlying obligation do not affect the liability of the guarantor, which remains in the original terms.

Actually, according to the general regulation of the guarantee, in case the agreement reduces the liability of the debtor, the guarantor's liability

391Carrasco, Cordero and Marin, 180.

392See supra Chapter 2, C., VII., 5. Validity of the waiver by the guarantor to set up

the defence of nullity of the secured obligation. The case of guarantees on first demand, 87.

393Carrasco, Cordero and Marin, 180.

394In Germany the guarantee on first demand may also be validly agreed by a private

person. However this may never be agreed as a part of the general terms and conditions of the guarantee and even the contract was particularly agreed, the "on first demand" clause will not have effect if the guarantor was not aware of its effects and the bank did not properly inform him (BGH 2 April 1998, NJW 1998, 2280 f.; BGH 12 March 1992, NJW 1992, 1446 f.).

can also be diminished, since "the guarantor can obligate himself to less but not to more than the principal debtor" (art. 1826 par. 1 Spanish CC).

If the agreement between creditor and debtor increases in some way the liability of the latter, the guarantor's liability is, according to art. 1835 par. 2 Spanish CC not extinguished (like it is ex lege in other similar cases (art. 1851 and art. 1852 Spanish CC)) but remains only unaltered395 unless he expresses his consent. The guarantor may decide himself in unclear cases whether he prefers to be affected by the agreement or not and is protected from the enlargement of his risk above the agreed terms. On the other hand, the creditor does not need to lose the guarantee because he makes an agreement with the debtor which is a novation of the original contract. It must be noted that these kinds of agreements usually aim at enlarging the chances of the creditor to be paid by the debtor.

The rule in art. 1835 Spanish CC has no precedent in Roman law nor in Spanish historical law. It is neither to be found in the regulation of neighbouring countries but is adopted from the Prussian Code396. It seems to offer beneficial results for both creditor and guarantor. It is applicable to any novation of the secured debt performed by the parties unless the aim of the agreement is the extinction of the debt and unless the specific agreement is explicitly ruled by the law in a different way (like the cases of art. 1849 and 1852 Spanish CC)397. However, the novation must regard the debt secured with the guarantee. For instance, if the agreement instead of changing the conditions of the secured debt, establishes better conditions for the following transactions, the guarantor cannot be affected. It must be construed in each case whether the agreement is a novation of the existing relationship and can therefore also affect the guarantor's liability or if it creates a new and autonomous relationship which does not regard the guarantor398.

E.Relationship between the guarantor and the debtor

I.Introduction

The debtor is not a contracting party of the guarantee. He is usually related to the guarantor so that the latter is disposed to undertake the liability. But this is a factual relationship, which is outside the contract of guarantee. Therefore, the provisions on the guarantee do not specifically rule this re-

395STS 11 November 1981 [RA 1981 no. 4505]; STS 20 June 1989 [RA 1989 no.

4710].

396Garcia Goyena, 909. Guilarte, 203.

397Lacruz, 532.

398Carrasco, Cordero and Marin, 182.

lationship. The only aspect, which is regulated by law regards the grant of remedies to the guarantor in order: a) either to be discharged in case the performance of the guarantee would imply an evident danger of nonrecovery or b) in order to recover the payment he had performed as guarantor. Consequently, the legal effects of the guarantee contract between guarantor and debtor are of two kinds. On one side, the rights of the guarantor before performance of his guarantee (rilevazione/acci6n de cobertura or relevaci6n). On the other, the right of the guarantor who has already performed and is therefore entitled to be refunded or indemnified by the debtor.

II. Duties ofthe guarantor before performance

1. Guarantor's duty to notify the creditor's request or his own intention to perform in order to prevent unjustified enrichment

There is no legal provision that sets up expressly the guarantor's duty to inform the debtor about his performance or his intention to perform. However, such duty is indirectly established since the lack of information is sanctioned by the law (art. 1952 par. I Italian CC and art. 1842 Spanish CC399). According to these provisions, the debtor who has not been informed about the payment may set up upon the guarantor's recourse all defenses that he may have set up against the creditor at the time of the guarantor's payment400. Hence, the guarantor who has not informed the debtor

is sanctioned by the law with the risk of losing the right to reimbursement401.

Furthermore and in any case, the guarantor's duty to inform the debtor is also a direct consequence of the principle of good faith. The debtor can only inform the guarantor about the defenses he may set up if he has notice of the payment. Therefore the guarantor must inform him of his intention to perform. Otherwise, he loses his right to be fully reimbursed, also for the payment that could have been avoided had he set up the defenses.

2. Duty ofthe guarantor to set up the debtor's defences

The guarantor must set up the debtor's defenses against the creditor if he had notice of them. This is not expressly contained in the civil codes as a duty but the lack of performance is sanctioned by the law as the debtor

399The same is valid according to art. 647 Portuguese CC and§ 1361 Austrian CC.

400In other countries, like France, Belgium, Luxemburg (art. 2031 CC) and Greece (art. 859 CC), the guarantor who does not inform the debtor about payment losses auto-

matically his claim for reimbursement.

401 See STS 4 March 2003 [RA 2003 no. 1822]. See Chapter 2, D., III., 3. The right to set up defences (eccezioni/excepciones), 103.

may set up against the guarantor the defenses that he could have set up against the creditor (art. 1952 par. 2 Italian CC and art. 1840 Spanish

. The debtor must prove that the guarantor knew about the defenses.

III. Rights ofthe guarantor before performance

1. Guarantor's right to be informed about payment performed by the debtor

There is no legal provision that sets up the specific duty of the debtor to inform the guarantor about the payment he has performed to the creditor403 • However, the guarantor who has not been informed about the debtor's performance and pays the creditor again may claim for reimbursement and the debtor cannot deny payment. The debtor keeps his right against the creditor for unjustified enrichment. In this respect the guarantor must diligently facilitate the provision of information or he loses his right of recourse against the debtor404.

2. Guarantor's right to request for release

a) Jn general

The rights available to the guarantor before he has performed are established in art. 1953 Italian CC405 and art. 1843 Spanish CC406• These provisions grant the guarantor a right to request either for release or for supplementary security upon the circumstances listed. A preventative remedy is hence granted to the guarantor in order to preclude too high a risk. Therefore the rules are only applicable before the guarantor has performed407 or

if he has paid in advanced a debt which was agreed with a time limit (according to art. 1841 Spanish cc)4°8•

402See under Chapter 2, E., IV., 3., d) Defences of the debtor against the claim for reimbursement, 128.

403Such duty is explicitly contained in art. 646 Portuguese CC. See Chapter 2, E., III.

1.Guarantor's right to be informed about payment performed by the debtor, 111.

404STS 4 March 2003 [RA 2003 1822].

405Art. 1953 reproduces the wording of art. 1919 of the former Italian CC of 1865.

406According to Spanish case law, art. 1843 CC is only applicable to personal guarantors and not for the grant of real securities (STS 6 October 1995 [RA 1995 no. 7022]).

Contra: Carrasco, Cordero and Marin, 277.

407Cass. 13 March 2002 no. 6808 (www.dirittonotariale.it). STS 21 October 2003 [RA 2003 no. 7517]. After having performed, the remedies are others (subrogation, reimbursement). Accordingly, the payment by the guarantor extinguishes his right to be dis-

charged.

408 See: Carrasco, Cordero and Marin, 276.

The request for release and that to obtain supplementary security are different claims. The guarantor may renounce only to one of them or to both.

b) Guarantor's right to claim for release

Every guarantor has the right to ask for previous release. It does not make any difference whether the guarantee is remunerated or not. The guarantor who has been remunerated also has the right of reimbursement and associated rights (rights which aim to protect the reimbursement)409 •

An exception is made in Spain for the guarantor who granted in his own interest. It is considered that he is not worthy of special protection, and therefore he does not enjoy the right to be released410•

The discharge of the guarantor according to art. 1953 Italian CC and art. 1843 Spanish CC can take place in two different ways. The guarantor may be effectively released from his liability (rilievo per liberazione/ liberaci6n)411; or if full release is not possible, the debtor may provide enough

In Italy and Spain, the claims (release and security) may be set up until the debt is performed414. Moreover, claims are cumulative. If the guarantor tries one claim without success, he can subsidiarially try the other415 • In any case, both options are rarely exercised in the practice. In general, the more factual option is that of granting security416. But even this is difficult

409Casanova, 189 ff.; Cian/Trabucchi, on art. 1953, 2246 f..

410SAP Sevilla 25 November 1999 [AC 1999 no. 2249]; Casanova, 184; Carrasco,

Cordero and Marin, 277.

411Cass. 13 June 1984 no. 3538, GC, 1985, I, 99.

412Cass. 13 March 2002 no. 6808 (www.dirittonotariale.it): "Prima del pagamento, e solo prima, poiche, - in effetti - dopo il pagamento c'e solo la surrogazione e il regresso" il fideiussore nei cinque casi previsti dall'art. 1953 c.c. puo, pertanto, esercitare a sua scelta contro il debitore principale o l'azione di rilievo c.d. per liberazione o l'azione di rilievo c.d. per cauzione".

413Other European countries, also grant the possibility to choose between discharge and grant of security (§ 775 German CC, art. 648 Portuguese CC).

414By contrast, in Germany granting security instead of guarantor's relief is only possible when the debt is not due and payable (§ 775 par. 2 German CC: "If the principal

obligation is not yet due the principal debtor may give security to the guarantor instead of relieving him" ("Ist die Hauptverbindlichkeit noch nicht fallig, so kann der Hauptschuldner dem Burgen, statt ihn wu befreien, Sicherheit leisten"). See Horn/Staudinger, on § 775, no. 15.

4 15 Cian/Trabucchi, on art. 1953, 2246 f. ; Carrasco, Cordero and Marin, 279.

416 Guilarte, 299; Simler, no. 613. In Austria, the grant of security to the guarantor is the only possibility established in the law(§ 1364 sent. 1 and § 1365 juncto § 1373 ff. Austrian CC).

in practice since a debtor in a bad financial situation will not easily find alternative security rights.

c) Conditions for release

aa) General condition

A valid release can only take place if the debtor agreed upon the guarantee or at least had notice of it417. The guarantee must not have been granted against the debtor's will418 . This condition is not explicitly established in the law419 • However, release or grant of supplementary security increases the debtor's costs. He should not cover them if he has not consented to the guarantee. Correspondingly, the guarantor may request relief if the guarantee was granted as a result of a debtor's mandate or as a negotiorum gestio, upon the conditions established by law. In these frequent cases the debtor not only consents but even promotes the granting of guarantee. In Germany, the right to be released before performance is specifically limited to those guarantees, a) which have been assumed by reason of a debtor's mandate or b) if the guarantor has the rights of a mandatory against the debtor under the provisions relating to management without mandate (negotiorum gestio) because of the assumption of the guarantee (§ 775 par. 1 German CC420) . By contrast, in Italy and Spain, the right to request for previous release is not limited in this sense. This means that also guarantors, who have granted guarantee without mandate, may be discharged un-

der the circumstances established by the law. In Germany, however, an implicit mandate shall be enough (§ 670 and § 683 German CC)421 .

417 Lacruz, La causa, 754; Carrasco, Cordero and Marin, 277. Contra: Guilarte, 245. 41 8 Casanova, 182.

419 Austrian CC contains explicitly this aspect in § 1364: "Durch den Verlauf der Zeit, binnen welcher der Schuldner hatte zahlen sollen, wird der Burge, wenn der Glaubiger auf die Befriedigung nicht gedrungen hat, noch nicht von seiner Burgschaft befreit; allein er ist befugt, von dem Schuldner, wenn er mit <lessen Einwilligung Burgschaft geleistet hat, zu verlangen, <lass er ihm Sicherheit verschaffe. Auch der GHiubiger ist dem Burgen insoweit verantwortlich, als dieser wegen <lessen Saumseligkeit in Eintreibung der Schuld an Erholung des Ersatzes zu Schaden kommt".

420 § 775 par. 1 German CC: ,,If the guarantor has assumed the guarantee by reason of a mandate by the principal debtor, or if he has the rights of a mandatory against the principal debtor under the provisions relating to management without mandate because of the assumption of the guarantee, he can demand from him release from the guarantee:" ("Hat sich der Burge im Auftrage des Hauptschuldners verburgt oder stehen ihm nach den Vorschriften uber die Geschaftsftihrung ohne Auftrag wegen der Obernahme der Burgschaft die Rechte eines Beauftragten gegen den Hauptschuldner zu, so kann er von diesem Befreiung von der Burgschaft verlangen:"). See Horn/Staudinger on art. 775, no. 1 ff.

42 1 Horn/Staudinger, on art. 775, no. 3.