Viewpoint... Analysis of the right of recovery after the guarantor's compensation.

In view of the guarantor B after the debt repayment of several recovery rights, the author now from the following aspects of the analysis:

Regarding the guarantor B after assuming the responsibility of the guarantee, whether the collateral of A and D can be paid first, its essence is a mixed joint guarantee situation, the problem of mutual recovery between the guarantors. In response to this problem, the the People's Republic of China Guarantee Law (hereinafter referred to as the Guarantee Law), the Supreme People's Court on the application<中华人民共和国担保法>Interpretation of Certain Issues (hereinafter referred to as the "Judicial Interpretation of the Guarantee Law"), the "the People's Republic of China Property Law" (hereinafter referred to as the "Property Law"), the "Minutes of the National Court Civil and Commercial Trial Work Conference (issued in November 2019)" (hereinafter referred to as "The Minutes of the Nine People's Conference"), the "the People's Republic of China Civil Code" (hereinafter referred to as the "Civil Code") and the "Supreme People's Court on Application<中华人民共和国民法典>The Interpretation of the Guarantee System (hereinafter referred to as the Judicial Interpretation of the Guarantee System) is provided.

China's "Guarantee Law" issued in 1995 and the "Judicial Interpretation of Guarantee Law" issued in 2000, as the earliest legal provisions and judicial interpretations to make systematic norms of guarantee, are of great significance to the analysis of China's guarantee system. For more than 20 years since the implementation of the Guarantee Law, the meaning of joint guarantee has not been defined, and only article 19 of the Judicial Interpretation of the Guarantee Law provides for joint and several joint guarantees,"When two or more guarantors provide guarantees for the same debt at the same time or separately, if each guarantor and the creditor do not agree on a share of the guarantee, it shall be recognized as a joint and several joint guarantee."For the so-called mixed joint guarantee in theory, China has provisions in Article 38 of the Judicial Interpretation of the Guarantee Law."Where the same claim has both a guarantee and a security in ream provided by a third party, the creditor may request the guarantor or the guarantor of the ream to assume the security liability. If the parties have not agreed on the scope of the guarantee or the scope of the security in ream or the agreement is unclear, the guarantor that has assumed the security liability may recover from the debtor or may require the other guarantors to pay off their share."On this basis, the Judicial Interpretation of the Security Law establishes the rules of recovery in mixed joint security, that is, in the case of mixed joint security, there is no agreement or unclear agreement on the share between the guarantors, the recovery can be made from other guarantors.

After the promulgation of the Property Law in 2007, the relevant guarantee systems stipulated in the Guarantee Law and the Judicial Interpretation of the Guarantee Law have been revised, and in accordance with the provisions of Article 178 of the Property Law, it is determined that the Property Law takes precedence over the Guarantee Law and the Judicial Interpretation of the Guarantee Law. Article 176 of the Property Law provides that,"If the secured creditor's right has both the security of the property and the security of someone, if the debtor fails to perform the due debt or the situation of realizing the security right agreed by the parties occurs, the creditor shall realize the creditor's right in accordance with the agreement; if there is no agreement or the agreement is not clear, and the debtor himself provides the security of the property, the creditor shall first realize the creditor's right on the security of the property; if a third party provides the security, the creditor may realize the claim on the security of the property or require the guarantor to bear the responsibility of the guarantee. After the third party providing the guarantee assumes the liability for the guarantee, it has the right to recover from the debtor."During the implementation of the property law, there are two different views in judicial practice. One view is that Article 176 of the property law provides for the basic subsequence of the guarantee liability in the mixed guarantee, that is, the third party providing the guarantee has the right to recover from the debtor after assuming the guarantee liability, but it does not provide for the mutual recovery between the guarantors in the mixed joint guarantee. The other view is that, article 176 of the Property Law does not provide for the right of mutual recovery between guarantors, which should be interpreted as the absence of such a right, and a third party that has assumed security liability under the law has only the right to recover from the debtor and not the right to recover from other guarantors. After searching the relevant cases of the China Judgment Instrument Network, there are more cases of holding the second view in legal practice, and the author also recognizes the second view, that is, after the third party providing the guarantee assumes the responsibility for the guarantee, there is no right to recover from other guarantors.

Article 56 of the Minutes of the Ninth People's Meeting stipulates that,"Where the secured claim has both a guarantee and a security in ream provided by a third party, article 38 of the Judicial Interpretation of the Security Law makes it clear that the guarantor who has assumed the responsibility for the security may require the other guarantor to pay off its share. However, Article 176 of the" Property Law "does not make similar provisions. According to Article 178 of the" Property Law "on" If the guarantee law is inconsistent with the provisions of this law, this law shall apply ", the guarantor who has assumed the guarantee liability shall apply to other guarantors. If the people's court does not support it, except where the guarantor agrees in the guarantee contract that it can recover from each other."After the publication of the Minutes of the Ninth People's Conference, the question of whether there is a right of mutual recovery between the guarantors was further clarified, I .e., in a mixed joint guarantee, only if there is a mutual agreement between the guarantors to recover from each other after assuming the responsibility for the guarantee.

After the promulgation of the Civil Code, with regard to the right of recovery of the co-guarantors in mixed joint guarantees, the Civil Code continued the provisions of article 176 of the Property Law and did not provide for the right of recovery between the co-guarantors. In the Interpretation of Real Rights of the the People's Republic of China Civil Code, the NPC Law Working Committee held that it was inappropriate to provide for mutual recovery between guarantors in the absence of a clear agreement between the parties to assume joint and several guarantee liability, and detailed four reasons for analysis. At the same time, the Supreme People's Court also made it clear in the Understanding and Application of Property Rights of the the People's Republic of China Civil Code that, from the legislative evolution and the point of view of the Property Law and the Minutes of the Ninth People's Congress on this issue, there is no mutual recovery between guarantors in the current mixed joint guarantee. On this basis, Article 13 of the Judicial Interpretation of the Guarantee System provides that"If two or more third parties provide guarantee for the same debt, the guarantors agree on mutual recovery and share, and the guarantor who has assumed the guarantee liability requests other guarantors to share according to the agreement, the people's court shall support it; If the guarantors agree to undertake joint and several joint guarantees, or agree to recover each other but do not agree to share, each guarantor shall share the part that cannot be recovered from the debtor in proportion. If two or more third parties provide guarantee for the same debt, and the guarantors have not agreed on mutual recovery and have not agreed to undertake joint and several joint guarantee, but each guarantor signs, seals or prints on the same contract, and the guarantor who has assumed the guarantee liability requests other guarantors to share the part that cannot be recovered from the debtor in proportion, the people's court shall support it. Except in the cases provided for in the preceding two paragraphs, the people's court shall not support the request of the guarantor who has assumed the liability for security to request other guarantors to share the non-recoverable portion of the debtor."The Civil Code and the Judicial Interpretation of the Guarantee System set the standard of "meaning contact" for the recovery system in mixed joint guarantee. The specific contents include: 1. There is a "mutual connection of intention" between the guarantors, which can only be reflected by a clear agreement between the guarantors, and the basis for recovery at this time is the agreement between the parties; 2. There is a "joint and joint guarantee of intention" between the guarantors, which is reflected by the agreement between the parties, and the basis for recovery at this time is Article 519 of the Civil Code; 3. There is a "joint guarantee of meaning" between the guarantors, which can be reflected in the common conduct between the parties, where the basis for recovery is the reasonable expectation of the common conduct between the guarantors. Recourse to each other occurs only between guarantors who have a meaningful contact, otherwise there is no right to recover from each other.

Specifically in this case, the fact that the loan was secured and the guarantor B's act of compensation occurred before the introduction of the Civil Code. The act of guarantor B's compensation occurred during the implementation of the Property Law. If the provisions of the Guarantee Law and the Property Law are inconsistent, the Property Law shall apply. Whether the guarantor B can recover from the guarantor D and give priority to the mortgage provided by D depends on whether there is an agreement on the order of realization of creditor's rights or an agreement on mutual recovery between B and B. Article 176 of the Property Law shall apply, that is, after the third party providing the guarantee assumes the responsibility for the guarantee, it is only entitled to recover from the debtor, and the guarantor B cannot recover from the guarantor and cannot give priority to the payment of the collateral provided by the guarantor.

Article 3 of the "Several Provisions of the Supreme People's Court on the Application of the Time Effect of the Civil Code of the People's the People's Republic of China of China" (Fa Shi [2020] No. 15, referred to as the "Provisions on the Time Effect of the Civil Code") stipulates:"Civil dispute cases arising from legal facts before the implementation of the Civil Code, where the laws and judicial interpretations at the time did not provide for but the Civil Code did, may apply the provisions of the Civil Code, except for those that significantly derogate from the legitimate rights and interests of the parties, increase the legal obligations of the parties or deviate from the reasonable expectations of the parties."In this case, the fact of borrowing and guarantee occurred in 2010, and the fact of guarantor B's compensation occurred in 2019, all before the implementation of the Civil Code. However, the legal provisions and judicial interpretations such as the Guarantee Law and the Property Law have not made clear provisions on "whether the guarantor enjoys the creditor's rights over the debtor after paying off the debts" and "whether the guarantor enjoys the priority of compensation over the collateral provided by the original debtor, the case belongs to the case of" civil dispute caused by legal facts before the implementation of the Civil Code, which was not stipulated by the law and judicial interpretation at that time but stipulated by the Civil Code ", and there is no situation of" obviously derogating from the legitimate rights and interests of the parties, increasing the legal obligations of the parties or deviating from the reasonable expectations of the parties "as stipulated in Article 3 of the provisions on the temporal validity of the Civil Code.

Article 178 of the Property Law provides that, in the absence of an express agreement, if the debtor provides security in rem itself, the creditor shall first realize the claim in respect of the security in rem. It can be seen that in the case of the existence of the debtor's own property insurance in the mixed joint security, the property insurance established by the debtor itself should be used to pay off the debt in priority. Article 700 of the Civil Code"After assuming the responsibility for the guarantee, the guarantor may, unless otherwise agreed by the parties, recover from the debtor and enjoy the rights of the creditor against the debtor."Article 18, paragraph 2, of the Judicial Interpretation of the Guarantee System provides that"The same claim has both security in rem provided by the debtor itself and security provided by a third party, and the third party who has assumed the security liability or liability may take the security interest provided by the debtor in its own rem."It can be seen that article 700 of the Civil Code and article 18 of the Judicial Interpretation of the Security System continue the above-mentioned legislative attitude, which clearly stipulates that the guarantor has the right to recover from the debtor after compensation and has the right of priority in the payment of the collateral provided by the debtor. The relevant provisions of the "Property Law", "Civil Code", and "Judicial Interpretation of the Guarantee System" on the guarantor's "enjoyment of the creditor's rights to the debtor" after compensation not only guarantee the realization of the guarantor's right of recovery, but also safeguard the legitimate rights and interests of the guarantor who performs in good faith., And it guarantees the realization of the creditor's claim as soon as possible while promoting the guarantor to assume the guarantee responsibility.

In summary, the guarantor B shall apply the Civil Code and the Judicial Interpretation of the Security System after compensation, and may subrogate the rights of the creditor against the debtor, including the subordinate rights of the creditor against the debtor. It should be noted that the guarantor's subrogation to the debtor's security interest is limited to the security provided by the debtor in its own property, I .e., in this case, the guarantor B has the right to recover from the debtor and has priority in the payment of the collateral provided by debtor A.

When the guarantor assumes the responsibility for the guarantee, it forms a new debt relationship with the debtor, and the debtor shall be obliged to pay the guarantor the amount of the payment. The debtor has an obligation to pay the guarantor the amount of the payment from the time of the guarantor's payment, and if it fails to pay in a timely manner, the guarantor loses the possibility of using the funds to obtain other income, I .e. the guarantor has incurred a loss of appropriation of the funds. Therefore, the guarantor claims to the debtor that the loss of funds is reasonable. In this case, if Debtor A fails to repay the compensation to Guarantor B in a timely manner, causing a loss of capital occupation to Guarantor B, the scope of the right of recovery exercised by Guarantor B shall include, in addition to the principal and interest of the principal debt actually paid by it, the loss of interest on the compensation, I .e. the loss of capital occupation.