учебный год 2023 / de la Mata Munoz, Personal Security

b) Principle ofco-existensiveness as a typical characteristic ofthe contract ofguarantee

There is unanimous agreement of the courts69 and the academics70 that the principle of co-extensiveness is a typifying element of the guarantee contract. This is also held to be the case with regard to joint and several guarantees71 . The guarantee obligation is always functionally linked to the principal debt.

In a broad sense every personal security contract, including independent guarantees (indemnities), is accessory to the principal debt. Every personal security is based on the existence of a secured obligation and fulfils a security function (funzione di garanzia/ funci6n de garantia) on which the ancillary character is based. However the meaning of the principle of coextensiveness (accessory character) with regard to the contract of guarantee goes further than the basic, functional link between guarantee obligation and principal debt. The nature and the evolution of the guarantee from the moment it is constituted until its extinction72 are dependent upon the debt. This kind of structural dependency does not exist within autonomous security rights73 • These kinds of contracts are commonly used in practice specifically because of their lack of ancillarity vis-a-vis the secured debt. The principle of co-extensiveness thus actually serves to distinguish traditional guarantees from those independent (such as indemnity)74. In this

69STS 19 june 2008 [RA 2008 no. 4258], STS 5 February 1992 [RA 1992 no. 830]: "A guarantee even if it is joint and several [...] is always an accessory obligation"; also STS 27 June 1941, STS 6 February 1976 [RA 1976 no. 320], STS 19 November 1982 [RA 1982 no. 6550], STS 4 June 1984 [RA 1984 no. 3212], STS 11June1984 [RA 1984 no.3227], STS 31October1984 [RA 1984 no. 5153], STS 26 December 1986 [RA 1986 no. 7799], STS 2 December 1988 [RA 1988 no. 9287], STS 3 March 1990 [RA 1990 no. 1663], STS 4 May 1993 [RA 1993 no. 3403].

70Bo, Contributto, 43; Valenzuela/Nieto and Bonet, 437. For France, Cabrillac and Mouly, 36; for Germany: Horn/Staudinger, on§ 765 no. 18; for The Netherlands: Broek- huizen/Drobnig/Sagel-Grande/Snijders, 92.

71Bo, Contributto, 43.

72SAP Zaragoza 20 April 2007 [AC 2007 no. 270988].

73On autonomous personal security rights see: De Nieto/is, 1 ff. ; Nunez, 1 ff.

74The German Abstraktionsprinzip allowed for the creation of abstract or autonomous security rights beside the traditional accessory rights (Garantievertrag/Biirgschaft). Therefore the distinction between these two kinds of securities came to receive extensive treatment by German authors. See as exemples: Weth , 303 ff.; Boetius, 18 ff. The advantages which are afforded by autonomous securities in certain situations in the practice caused these to become part of the law within non-abstract (causalist) legal systems such as Italy or Spain. In these systems a greater effort to provide theoretical justification was necessary. See a comparative analysis of the different civil law systems with regard to this matter in Calderale, 14 ff.; Bo, Contributo 43 ff. spec. 45 ; Giusti, 33; Carrasco,

tor's liability, either if they are due to modifications agreed between the debtor and the creditor or if the debt has become more onerous. This 1s also seen as a legal limitation of the guarantee's ancillary character81.

bb) Derogation by the parties ofprovisions regarding the principle of co-extensiveness: the guarantees "on first demand"82

Since the ancillarity is a typifying element of the guarantee, the rule which underlies this principle (the need for a valid secured obligation in order to create a valid guarantee83) cannot be derogated without changing the nature of the contract into that of an autonomous security right84. However, the parties to the contract may derogate other provisions which imply the ancillarity of the guarantee. In many cases an "on first demand" clause is included in the guarantee contract. The guarantor thereby waives the right to raise those defenses based on the underlying obligation. The principle of co-extensiveness remains suspended until the moment at which the guarantor provides payment85 . The validity of such a waiver has received theoretical discussion86 and case law has accepted its validity on numerous occasions87. The guarantor retains his right of recourse and reimbursement. Therefore, if the debtor had already paid the value of the guarantee or if the guarantee is void or unenforceable, the guarantor may claim against the creditor for reimbursement on the basis of his guarantee contract. The possibility to agree first demand guarantees implies a limitation of the dependency between the guarantee and the principal debt. All these factors evi-

81 See Reyes, 155 ff.

82 See infra under Chapter 2, D., III., 3., b, dd) Waiver of the right to set up defenses, 106 and under 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.

83Art. 1939 Italian CC and art. 1824 par. 2 Spanish CC.

84Relazione al Codice Civile Italiano, no. 759; Valenzuela/Nieto and Bonet, 438;

Petti, 73. See infra under 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.

85 Valenzuela/Nieto/Bonet, 439. In Germany see BGH 23 January 1997, WM 1997, 656 ff.; BGH 24 November 1983, NJW 1984, 923 f.; BGH 2 May 1979, BGHZ 74, 244 ff. See also for Germany Drobnig/Sagel-Grande/Snijders, 13: "Alle eben erwahnten Einreden, die dem Burgen bei seiner lnanspruchnahme zunachst verschlossen sind, kann er, nachdem er an den Glaubiger geleistet hat, gegen diesen nachtraglich geltend machen".

86In a negative way Petti, 75. In a positive, see Valenzuela/Nieto/Bonet, 439.

87Cass. 21April1999 no. 3964, Riv. not., 1999, 1271. See also Cass. 19. March 1993 no. 3291 cited by Petti, 73. STS 31 May 2003 [RA 2003 no. 5217] with further references.

dence that the degree of dependency may be significantly limited without changing the nature of the contract88 •

3. The secondary nature ofthe guarantee

Another typifying feature of the guarantee in Italy and Spain is the secondary nature of the guarantee obligation vis-a-vis the principal debt (sussidiarieta/subsidiariedad). There has been a certain level of controversy regarding this concept. Some legal authors refer it to the securing function of the guarantee and consider it an essential feature of the contract while other scholars identify it with the benefit of discussion, which is a natural (not essential) feature of the guarantee.

The guarantee is a reinforcing contract to be answerable for the debtor's obligation. The liability of a guarantor is essentially an obligation to make good the deficiency or loss that results from the debtor's default to perform his obligation. In this sense, the liability of the guarantor is secondary to that of the debtor, who always remains primarily liable for the debt. The performing guarantor substitutes the debtor in giving satisfaction to the creditor and he has the right of reimbursement against the principal debtor. This places the guarantor in a secondary position either if the guarantee obligation is secondary (meaning the guarantor may raise the benefit of discussion) or if it is joint and several. In both cases the guarantee performs a back up function in relation to the debt. This phenomenon is known in academic theory as "principio di sussidiarieta"/"principio de subsidiariedad". It makes it possible to distinguish the joint and several guarantee from the joint and several co-debt. Co-debtors are liable to the same degree and for the same debt. In contrast, a guarantor performs his own guarantee obligation, which is clearly secondary with regard to the creditor. The secondary nature characterizes every guarantee irrespective of whether the guarantor's liability is joint and several or secondary. In this sense it is considered to be an essential distinguishing feature of the guarantee89.

However, some legal authors90 relate the guarantee's secondary nature directly to the benefit of discussion (the rank of payment assumed by the guarantor). A guarantee is secondary if the guarantor is liable only upon the default of the debtor. Consequently, joint and several guarantees are in their opinion not secondary, since the creditor may first require payment from the guarantor, who must perform his guarantee obligation also if the

88Briganti, 147 ff. STS 31 January 2005 [RA2005 no. 963].

89Ravazzoni, 181 ff.; Fragali, L'inerzia del creditore, 744; Guilarte, 23; Lacruz, 503 .

90In Italy, on the former Civil Code: Campogrande, 40; Bo, Contributo, 46. In Spain: Albadalejo, 325; Puig Pena, 484; Diez-Picazo, Fundamentos, 415. In Germany:

Horn/Staudinger on§ 765 no. 17.

42 Chapter 2: The contract ofguarantee

debtor has not been requested for payment and his goods are sufficient to cover the debt.

The guarantee is only secondary if the guarantor holds the benefit of discussion (ex lege in Spain and most other countries91 , or by agreement of the parties, in ltaly92). According to this conception, the secondary character of the guarantee cannot be defined as being an essential feature of this contract. The term "secondary" is commonly used in this sense, as contrary to joint and several.

V.Similarities between the guarantee and other related legal instruments

1.Guarantee and assumption ofdebt

The assumption of debt is a general term which refers to the different cases in which one person assumes the debt of another person93 . As the guarantor assumes94 the debtor's liability vis-a-vis the creditor, the guarantee can be considered a type of intercession. There are other forms of assumption of debt, not all of which possess a guaranteeing function: a) "discharging assumption of debt", by means of which the debtor is substituted by a third person, and b) "cumulative or reinforcement assumption of debt", by which the original debt is not altered, but the creditor's right is re-ensured with a new debt95 •

The discharging assumption is not a form of liability for the debt of another person. The debtor is substituted by a new party, which becomes thereby the main debtor. There is a change in the subjective structure of the credit relationship.

91 The guarantee was conceived as secondary (in the sense that the guarantor has ex lege the benefit of discussion) in Roman Law since the times of Justinian. The French CC, and subsequently also Spanish CC and the former Italian CC adopted this model, which was also followed by most other guarantee regulations: art. 2021-2024 French, Belgian and Luxembourgian CC, art. 1830 to art. 1833 Spanish CC; § 771 and § 772 German CC, art. 1355 Austrian CC, art. 7: 855 par. 1 Dutch CC; art. 194 1-1944 Civil Code of Quebec, and art. 3045 and 3048 Civil Code of Lousiana; art. 63 8 Portuguese CC; art. 855 Greek CC. The parties may also agree to the joint and several liability of the guarantor and the debtor. This possibility is also explicitly established in art. 1822 par. 2 Spanish CC.

92In contrast to Spanish Law and to the Common and Civil Law traditions the Italian CC of 1942 renders the guarantor as being ex lege joint and severally liable with the debtor (art. 1944 par. 1). According to art. 1944 par. 2 Italian CC the parties can however agree that the guarantor shall not be bound to pay before the remedies against the principal debtor are exhausted.

93See 21 March 1996 [RA 1996 no. 2234].

94Also if the guarantee obligation is different from the debt, the guarantor assumes de facto the debtor's liability or a part of it.

95Roca Puig, 188 f.

By contrast, cumulative assumption refers to the case of one person assuming the liability for the debt of another person. The performance of the credit is guaranteed by adding a new obligation to the original one between the creditor and the debtor. In this respect, various legal instruments may be distinguished: 1. assumption of performance; 2. adherence to the debt; 3. guarantee; 4. mandate to provide credit. In all of these structures the principal debtor remains liable to the creditor. Certain of the similarities that exist between each one of them and the guarantee can result in a degree of confusion. A comparison may therefore be useful in this respect.

2. Guarantee and assumption ofperformance

a) In general

A third person may assume the obligation to perform the debtor's obligation vis-a-vis the creditor (assumption of performance). This might take place either by delegation of payment by the debtor (delegazione di pagamento/delegaci6n cumulativa) or by initiative of the third person (espromissione/expromisi6n).

b) Assumption ofperformance (delegazione di pagamento/asunci6n de cumplimiento)

Art. 1269 Italian CC96 regulates the case in which the debtor delegates the duty to make payment to a third person. In assuming the obligation, the third party agrees to perform the debt of another person (assumption of performance). This agreement only occurs between the original debtor and the third party. There is no contribution from the creditor. The relationship between the latter and the debtor is not altered97.

This contract could easily be confused with the contract of guarantee. In both cases the principal obligation remains unaltered (regarding subject and object) and the creditor's position is secured by the agreement. But there are distinguishing features. First, in the assumption of performance the guarantor has agreed with the debtor to fulfill the obligation of the latter. Therefore in the event of the agreed contingency, the guarantor performs the debtor's obligation. By contrast, if a guarantee has been agreed the guarantor performs his own obligation, which is different to the principal debt.

96 Art. 1269 Italian CC: "Delegation of payment. If the debtor has delegated a third person to make payment, such person can bind himself to the creditor, unless the debtor has forbidden it. The third person delegated to make payment is not bound to accept the obligation even if he is a debtor of the delegor. Usage to the contrary is accepted".

97 De Maria/Franzoni, 868.