учебный год 2023 / de la Mata Munoz, Personal Security

bb) Moment in which a set-offmay be raised

The guarantor may affect a set-off when he has been required to perform payment552 .

Moreover, the guarantor is discharged if the creditor performs his claim vis-a-vis the debtor when he could have affected a set-off. He will also be discharged if the debtor and the creditor have agreed that the creditor will perform the claim that could have been set-off. In this case, the agreement must have taken place when the claims can effectively be set-off553 •

c)Release ofthe guarantor (condonazione/condonaci6n)

aa)In general

The creditor, as direct beneficiary of the guarantee, always retains the power to unilaterally release the guarantor of his obligation554. The accord of the debtor is not necessary but in some cases the creditor and the debtor agree on the release granted in favour of the guarantor555 . In any case, the

guarantor does not participate in the decision but he merely needs to be informed556•

The discharge of the guarantor by virtue of such a release does not affect the underlying obligation (art. 1238 Italian CC and art. 1190 Spanish CC). The principal debtor is still liable for the whole debt, also in the case the guarantor is only released for a part of the debt.

bb) Effects ofthe release in case ofco-guarantee

The effects of the release of one co-guarantor vis-a-vis the other coguarantors are specifically governed by art. 1239 par. 2 Italian CC557 and art. 1850 Spanish CC558 • According to these provisions the release of one

552Fragali/Scialoja/Branca, 456; Guilarte, 353; Carrasco, Cordero and Marin, 233.

553Jimenez Mancha, 576.

554Guilarte, 406 ff.

555App. Brescia 29 November 1962, BBTC, 1963, II, 62; Moreti, La fideiussione, 178 ff. ; Giusti, 260.

556Moretti/Nicita/Visa/li, 178.

557Art. 1239 par. 2 Italian CC: "The release granted to one of the sureties, does not

discharge the rest but for the part of the discharged surety. (...)". ("La remissione accordata a uno dei fideiussori non libera gli altri che per la parte del fideiussore liberato.

( ...)").

558 Art. 1850 Spanish CC: "The discharge of one of several guarantors by the creditor without the consent of the rest benefits all to the extent of the part of the guarantor discharged". ("La liberaci6n hecha por el acreedor a uno de los fiadores sin el consentimiento de los otros, aprovecha a todos hasta donde alcance la parte del fiador a quien se ha otorgado").

146 Chapter 2: The contract ofguarantee

guarantor benefits all the co-guarantors on a pro rata basis unless they have previously consented559 to a variation560.

These provisions only apply provided: a) it is a case of co-guarantee (as different to a plurality of independent guarantees). The guarantors must have agreed to act together to guarantee the same debt in relation to the same debtor. If the guarantees have been agreed as independent from each other, the release of one of the guarantors will not affect the position of the others561 ; and b) the co-guarantors have not consented. The co-guarantors only benefit from the release of one of them if they have not agreed. If all guarantors consent to the release of one of their number, then they all remain liable for the total debt (art. 1239 par. 2 in fine Italian CC562 and art. 1859 Spanish CC563) . The right of regress (regreso/regresso) among co-

guarantors as set in art. 1954 Italian CC564, is deemed to have been renounced if one of the co-sureties has consented to the release565 • If some of

the co-guarantors give their consent to the release, this provision will be applicable to them. Consequently, those guarantors who did not consent to the release of one co-guarantor are released from their obligation while those who consented are not benefited by the release.

No special form is required for the release. Thus an oral agreement would be binding but is not recommended due to the difficulties of proof.

559Also according to Portuguese case law: RL Coimbra 28 February 1989, CJ XIV, I,

69.According to § 774 par. 2 juncto § 426 par. 1 German CC, the release of one co-

guarantor follows the proportional release of his co-guarantors. See Horn/Staudinger, on § 774, no. 49.

560 In relation to this point the Spanish and the Italian regulation differ from the Austrian and the French regulation. According to art. 1285 and 1287 juncto 1288 French CC, the co-guarantors are either fully or partly discharged upon the release of one coguarantor. Surprisingly, § 1363 sent. 3 Austrian CC sets up that any guarantor is affected by the release of any of his co-guarantors. Accordingly, the release of one co-guarantor is de facto a pactum de non petendo by the creditor. The released guarantor remains liable vis-a-vis his co-guarantors for reimbursement in case they perform.

561Guilarte, 388.

562Art. 1239 par. 2 in fine Italian CC: "If the other guarantors have consent the discharge, they remain obliged for the whole". (,,Tuttavia se gli altri fideiussori hanno consentito la liberazione, essi rimangono obbligati per l'intero").

563Art. 1.850 Spanish CC: "The discharge of one of several guarantors by the creditor without the consent of the rest, ( ...)". ("La liberaci6n hecha por el acreedor a uno de los fiadores sin el consentimiento de los otros (...)").

564Art. 1954 Italian CC: "If more than one person has acted as guarantor for the same debtor and for the same debt, a guarantor who has paid has recourse against the coguarantors for their respective shares". (,,Se piu persone hanno prestato fideiussione per un medesimo debitore e per un medesimo debito, ii fideiussore che ha pagato ha regresso contro gli altri fideiussori per la loro rispettiva porzione.(...)").

565Pellegrini/D 'Amelio/Finzi, 142 and Perlingieri, Manuale, 249.

gation is created. However the co-guarantors are not thereby discharged567 unless they are joint and severally liable568 .

4. Confusion

Confusion as a direct cause of the extinction of the guarantee may occur between the guarantor and the debtor or between the guarantor and the creditor.

a) Confusion between the guarantor and the debtor

In Italy a guarantee remains valid and is not extinguished upon the confusion between guarantor and debtor if it is the case that the creditor may have an interest in the continued existence of the guarantee (art. 1255 Italian CC569). By contrast, the possibility of confusion between the guarantor and the debtor is not included in the Spanish regulation of confusion. Art. 1192 and art. 1193 Spanish CC treat the case of confusion between the party who owes the performance of an obligation (posici6n deudora) and the party to whom that performance is owed (posici6n acreedora). But both the debtor and the guarantor are liable for the same obligation; both are "debiting parties". The case of the confusion of two debiting patrimonies is not specifically regulated within the Spanish CC. However the guarantee shall be considered extinguished upon the confusion of the guarantor and the debtor. Different reasons justify this statement: i) the extinction of the guarantee is a logical effect of the advent of confusion. If this is not the case then the same person would be rendered as being liable for the same debt by reason of two different obligations; ii) moreover, according to the general principles of the law of the guarantee, nobody can guarantee his own debt with a personal guarantee. This is exactly the scenario that would arise if there was a case of confusion between the guarantor and the debtor; iii) lastly, the extinction of the guarantee by the advent of confusion between debtor and guarantor has also been held to be implicitly contained in art. 1848 Spanish CC570 (which is paralleled by art. 1926571 of the former Italian CC of 1865 and art. 2034 French CC). These provisions refer to the

567Guilarte, 335.

568Perez Alvarez, 199 and 209.

569Art. 1255 Italian CC: "If the qualities of guarantor and principal debtor are united in the same person, the guarantee remains in force if the creditor has an interest in its continuations" . ("Se nella medesima persona si riuniscono le qualita di fideiussore e di

debitore principale, la fideiussione resta in vita, purche il creditore vi abbia interese").

570Guilarte, 369.

571Art. 1926 former Italian CC: ,,La confusione che si effettua nella persona del debitore principale e del suo fideiussore, quando divengono eredi l'uno dell' altro, non estingue l'azione del creditore contro colui che ha fatto sicurita pel fideiussore" .

case of confusion between debtor and guarantor, and establish that the subguarantee is thereby not extinguished. If the sub-guarantee is not extinguished, and no reference is made to the guarantee, it can be concluded that the latter has been extinguished as well572 •

However, there are important practical reasons that serve to justify the continued existence of the guarantee. Most of these reasons were considered by Italian scholars under the former CC and provided the reason for the introduction of art. 1255 in the present Italian CC.

Firstly, confusion renders the same person as being the guarantor and the debtor in relation to the same debt. However he might be liable by virtue of two different titles (the debt on the one hand and the guarantee on the other). Such duplication of title is only justified if there are practical reasons that make it convenient573 . The creditor may have a substantial interest in retaining the title of the guarantee despite the confusion between the guarantor and the debtor574 • This situation might arise if the guarantor has granted additional securities (real security interest). If the guarantee is extinguished upon the occurrence of confusion then all additional guarantees will be extinguished with it and the creditor will lose a supplementary right575• Another typical situation in which the duplication of title is convenient and beneficial for the creditor, is that which is present when the guaranteed debt is invalidated by reason of the lack of capacity of the debtor. The guarantee for such debt remains valid according to art. 1945 and art. 1939 Italian CC and art. 1824 par. 2 Spanish CC. The guarantor is not entitled to set up the defences that are available to the debtor. In this instance the creditor could chose to avail himself of the existing guarantee and avoid the eventual utilisation of defence ex parte debitoris576 .

In consequence of the consideration of these practical issues, the Italian legislator of the current civil code, introduced art. 1255 Italian CC5771578.

572 This would be in accordance with Roman law: Digest 46.3 93.2 and 46.3.95.2 and

3.

573 Fragali/Scialoja/Branca, 457 ff ; Delgado, Elementos de derecho civil, 530;

Guilarte, 370; Gonzalez Porrai, 394 ff; Abril Campoy, 301; Cicu, 182 ff.: "Nulla vieta che la medesima persona sia obbligata per due diversi titoli ad una medesima prestazione, se una ragione giuridica essista per dare rilevanza a tale duplicita di titolo, e quindi se vi sia concreta utilita alla persistenza di essi".

574See Sesta, 2 f.

575This case was explicitly content in art. 1926 former Italian CC: "La confusione che si effettua nella persona del debitore principale e del suo fideiussore, quando divengono eredi l'uno dell'altro, non estingue l'azione del creditore contro colui che ha fatto sicurta pel fideiussore". See Ravazzoni, La fideiussione, 45; Rescigno/Bozzi, 266.

576See Sesta, 2 ff.; Giusti, 259; Campogrande, 579; Perlingieri/Sialoja/Branca, 438; Guilarte, 371; Carrasco, Cordero and Marin, 237; Perez Alvarez, 221.

577Art. 1255 Italian CC: "If the same person becomes surety and principal debtor of the same debt, the guarantee keeps alive, while the creditor may have an interest in it"

The rationale of this provision is to prevent the creditor from being the recipient of damages that are caused by reason of the confusion of the debtor with the guarantor. The creditor should have the same opportunity of obtaining performance before and after the confusion of those parties has taken place579 . The practical importance of the regulation of this matter is manifest. The absence of such regulation in the Spanish CC is clearly disadvantageous. The introduction in the Spanish CC of a provision to facilitate the subsistence of the guarantee upon the confusion of the guarantor and the debtor should be encouraged.

b) Confusion between debtor and one ofthe joint and several co-guarantors

The confusion between the debtor and one of the joint and several coguarantors does not affect the guarantee580.

c) Confusion between the creditor and the guarantor

The guarantee is extinguished upon the event of confusion between creditor and guarantor. This conclusion can be directly deduced from the wording of art. 1253 Italian CC581 and art. 1192 par. I Spanish CC582• These are general provisions that establish the extinction of any obligation upon the occurrence of confusion between debtor and creditor. The guarantor is also a debtor and one cannot be creditor for one's self, not even if the obligation is of an ancillary nature. The security function of the guarantee vanishes upon this confusion. Accordingly, the debtor may not set up any defenses against the creditor that the debtor may have raised against the guarantor after payment has been affected by the latter. The creditor will

("Se nella medesima persona si riuniscono le qualita di fideiussore e di debitore principale, la fideiussione resta in vita, purche ii creditore vi abbia interesse").

578 Also art. 509 par. 2 Swiss Code of Obligations. French and German CC do not have a specific provision on this matter but the legal solution given in the legal practice of these countries is coincident; the guarantee does not extinguish: Simm/er, 593 and

Horn/Staudinger, on §765, no. 224.

579 Perlingieri/Scialoja/Branca, 438.

58°Carrasco, Cordero and Marin, 237 f.

581Art.1253 Italian CC: " When the qualities of debtor and creditor are united in the same person teh obligatin is extinguisehd and third persons who have given a guarantee for the debtor are discahrged" ("Quando le qualita di creditore e di debitore si riuniscono nella stessa persona, l'obbligazione si estingue, e i terzi che hanno prestato garanzia per

iidebitore sono liberati".)

582Art. 1192 par. 1 Spanish CC: "The obligation shall be extinguished when the status of creditor and debtor are merged in the same person''. ("Quedara extinguida la obligaci6n desde que se reunan en una misma persona los conceptos de acreedor y de deudor").

ask the debtor to accomplish performance in his capacity as a creditor and not as a guarantor who has affected performance and then asks for reimbursement583. However, if the guarantor has accomplished performance before the confusion has taken place, the guarantor/creditor has the right to seek reimbursement against the debtor584.

d) Confusion between the creditor and one ofthe guarantors in the case ofa plurality ofindependent guarantees

A debt may be secured by a plurality of guarantees, with each guarantee bing separately constituted in relation to the whole debt (the so called plurality of guarantees that exist independently from each other). In this situation the extinction of one guarantee by confusion between creditor and guarantor does not affect the other guarantees.

e) Confusion between the creditor and one ofthe co-guarantors

In the case of a co-guarantee there must be a distinction made as to whether or not the co-guarantors are joint and severally liable or severally liable i.e. mancomunidad.

aa) Co-guarantors that are separately liable (mancomunidad)

In a co-guarantee mancomunada (several liability), each co-guarantor is liable for his corresponding part of the debt and the creditor can only require that each guarantor affects performance with regard to his particular portion of the debt. In this situation a confusion between the creditor and one of the co-guarantors does not affect the other co-guarantors. The other co-guarantors remain liable for their corresponding part of the debt vis-a- vis the creditor (that is now the co-guarantor that has entered into confusion with the creditor) (art. 1194 Spanish CC)585.

bb) Co-guarantors that are joint and severally liable (solidarieta/ solidaridad)

If the confusion occurs in relation to one of the joint and several coguarantors (co-fianza solidaria), it is debatable whether the guarantee remains valid for the other co-guarantors, or if it is extinguished and all the co-guarantors are thereby discharged.

583See Abril Campoy, 282 ff.

584Carrasco, Cordero and Marin , 236.

585Guilarte, 366.

152 Chapter 2: The contract ofguarantee

Some scholars586 consider that the co-guarantee is extinguished by confusion between the creditor and one of the co-guarantors. This view is based on the Spanish regulation of the co-debt, which these writers apply to the co-guarantee. In contrast to other European regulations587• Spanish law holds that the confusion between the creditor and one of the joint and several co-debtors serves to extinguish the whole debt (eficacia colectiva y no parcial/Gesammtwirkung der Konfussion) (art. 1143 Spanish CC). The application of this provision together with art. 1145 and art. 1146 Spanish CC allows concluding that the confusion between the creditor and one of the joint and several co-guarantors extinguishes the guarantee.

However, although certainly a number of similarities can be found between the co-guarantee and the co-debt, there are also differences. The guarantee is an ancillary obligation and not the principal one. It can thus be said that if a guarantee served to secure a principal debt, then there is no reason to hold that if one of the guarantors becomes a creditor then the guarantee is extinguished588· The obligation of the guarantor affected by the confusion is of course extinguished, but the debt will continue to exist after the confusion. The principal obligation remains valid and existent. All other co-guarantors have agreed to the guaranteeing of the debt and there is no reason for this protection not to continue.

An aspect which has not received any academic treatment is that of whether the remaining co-guarantors are held to be liable for the total amount of the guarantee or only for their corresponding part of the total amount. The confusion of creditor and guarantor is an accidental event for which none of the parties is responsible. It may benefit the guarantor concerned but it should not serve to damage all the other co-guarantors. Therefore, it is to be concluded that the guarantee remains valid but only in relation to the part which exists with regard to the co-guarantors that are not affected by the confusion. The same result is achieved by the analogous application of art. 1239 par. 2 Italian CC and art. 1850 Spanish CC. According to these provisions the discharge can be granted by the creditor to one of the co-guarantors. Such a discharge serves to benefit all the other

586 Caffarena Laporta, 255; Perez Alvarez, 220; Abril Campoy, 288; Carrasco, Cordero and Marin, 238. Contra: Guilarte, 366.

587§ 425 par. 2 German CC as ammended by the reform of the law of obligation 26.11.2001 ("Einzelwirkung der Konfusion"): "(1) Andere als die in den§§ 422 bis 424 bezeichneten Tatsachen wirken, soweit sich nicht aus dem Schuldverhiiltnis ein anderes ergibt, nur flir und gegen den Gesamtschuldner, in <lessen Person sie eintreten. (2) Dies gilt insbesondere von der Kundigung, dem Verzug, dem Verschulden, von der Unmoglichkeit der Leistung in der Person eines Gesamtschuldners, von der Verjahrung, deren Neubeginn, Hemmung und Ablaufhemmung, von der Vereinigung der Forderung mit der Schuld und von dem rechtskriiftigen Urteil". See Seiler/Erman, on § 425, nos 1 ff.

588Guilarte, 366, 367.

co-guarantors by discharging them of liability in respect of the part that corresponds to the guarantor discharged.

If the co-guarantors were liable for different percentages of the total debt, each one remains liable for his corresponding portion.

cc) Confusion between co-guarantors

The confusion between two co-guarantors does not affect the guarantee. The guarantee remains valid. The co-guarantor that is affected by the confusion is liable for the two parts of the guarantee (or the sum of the percentages of liability assumed by both) vis-a-vis all other co-guarantors.

dd) Exception to the confusion

According to art. 1192 par. 2 Spanish CC589, the confusion based on inheritance does not have any effect if the inheritor has accepted the inheritance "a beneficio de inventario"; i.e. the inheritor wishes to keep his patrimony separate from the patrimony he obtains by inheritance.

5. Prescription

As with any other obligation, the guarantee may be extinguished on the basis of prescription. The prescription of the guarantee does not necessarily concur with that of the debt. The terms of the prescription of the guarantee are not interrupted if the prescription of the debt has been interrupted by "non-judicial claims of the creditor or private acknowledgements of the

590

debtor" (art. 1975 Spanish CC ) . The principal debt will remain valid and enforceable for a longer period than the guarantee. This also holds true in the Italian context591 . This rule aims to protect the guarantor from the possible effects of simulated non-judicial agreements between the debtor and the creditor, which would act to interrupt the prescription of the debt and, as a consequence, would also extend the guarantor's liability592 •

589 Art. 1192 Spanish CC: "The obligation shall be extinguished when the status of creditor and debtor are merged in the same person. An exception is made in the case where confusion takes place by virtue of inheritance, where the inheritance is accepted under benefit of inventory". ("Quedara extinguida la obligaci6n desde que se reunan en una misma persona los conceptos de acreedor y de deudor. Se exceptua el caso en que esta confusion tenga lugar en virtud de titulo de herencia, si esta hubiese sido aceptada a beneficio de inventario").

590 Art. 1975 Spanish CC: "The interruption of prescription against the principal debtor by judicial demand of the debt is also effective against the guarantor; however, the interrumption arising from extrajudicial claims of the creditor or private acknowledgments of the debtor shall not prefudice the guarantor".

591See Petti, 225.

592Manresa, 952 ff.