Viewpoint | Liability for Guarantee in Hybrid Guarantee

Published:

2022-09-28

The dispute 1. the internal recovery right in the mixed guarantee. 1. Affirmative argument (1) The right of recovery of the guarantor in article 700 of the Civil Code: the natural derivation of the equality of property security and human security. Affirmation Scholars believe that: 1. According to the Civil Code guarantee interpretation, the people's court may use the provisions of the Civil Code on guarantee contracts when hearing cases of security disputes over goods provided by third parties. According to article 700 of the Civil Code, after the guarantor assumes the responsibility of guarantee, there is both a right of recovery against the debtor (which is a nascent right) and a right of subrogation against the creditor, which means "the right of the creditor to the debtor". Then this subrogation right can be seen as a statutory concession of claims. Thus, a non-contractual debt relationship arises between the guarantor and the debtor. In accordance with article 468 of the Civil Code, the provisions on claims and debts arising on the basis of contracts are applicable, as well as the provisions of article 547 of the Civil Code on the transfer of claims and the provisions on the change of rights. A security interest can be regarded as a subordinate right, on the basis of which the guarantor enjoys a security interest and can recover from other guarantors. (2) the principle of fairness said The principle of fairness holds that, as a creditor, it has the right to choose the guarantor or guarantor to be liable in the event that the debtor is unable to pay off the debt, but the choice of whom depends on the creditor's own decision. If the mixed co-guarantors are not allowed to recover from each other, then some of the guarantors will bear full responsibility, while others do not need to bear any responsibility, which is obviously not in line with the requirements of fairness and justice. (3) Joint debt said. Some scholars draw on German law and try to establish the right of recovery through joint and several debt certificates. That is, the hybrid guarantee is consistent with the general provisions on joint and several obligations set out in the German Civil Code, and the right of mutual recourse is considered to be between the guarantors through the determination of the internal relations of the joint and several debtors in the German Civil Code. Some scholars also believe that since the various guarantors guarantee the same debt, they have a common purpose, thus presuming that they are related to each other, combined with the internal relationship between the debtor, the existence of the right of recovery. In China's judicial practice, there are also courts based on the original guarantee interpretation of the provisions of the joint and several debt theory to make decisions. (4) The claim of subrogation. Scholars of the subrogation claim argue that the guarantor who assumes responsibility can be seen as paying the debtor's debt. Since the debt is extinguished by a third party on behalf of the liquidation, the original creditor's claim has been legally transferred, at which point the new creditor becomes the guarantor who has fulfilled the security obligation. At this point, the guarantor who has assumed the liability for the guarantee may require the other guarantor to pay off (only to the extent of its own payment). 2. Rebuttal of Negative Theory (1) The "equality of physical security and human security" does not justify mutual internal recourse. First of all, the point of view of "the equality of property security and human security" is to consider the creditor's right of choice, that is to say, the creditor can choose to be liable by the guarantor, or by the property guarantor. However, the right of recovery between the guarantor and the guarantor is the internal relationship between the two, and it is illogical to conclude that there is an internal right of recovery between the guarantor through the equality of the property and the person. Moreover, the principle of equality always runs through the field of private law, and if the relationship between the two is equal, it can be concluded that there is an internal right of recourse between the guarantors, which is contrary to the general law of the development of private law and does not conform to the connotation and original intention of the principle of equality. (2) Specific performance based on the principle of fairness The understanding of the principle of fairness should be comprehensive and should not be confined to 1.1, otherwise it is easy to lead to one-sided understanding or misinterpretation. Based on the principle of fairness, the negative view is that, on the one hand, both the guarantor and the guarantor, when creating security for others, should understand the consequences and risks of their actions, when the guarantor assumes responsibility, can only choose to recover from the debtor, and there is no other remedy. If it is not possible to recover from the debtor, it is at its own risk; on the other hand, if the guarantor wants to reduce or avoid the risk that the debtor will not be able to repay, it should be specifically agreed by written contract or other means before the security is created. (3) Inadequacies in the application of the theory of joint and several obligations Joint and several debts are obviously aggravating the obligations of a party and should be agreed upon by the parties or provided for by law. In a mixed guarantee, there is no law that provides for the application of the joint and several debt theory to the joint guarantor. Secondly, according to the principle of autonomy, the parties did not agree on joint and several debts, and the joint and several debts began to talk about. It is worth noting that, within the affirmative, there is also a negative view of the theory of joint and several obligations and that the guarantor and the guarantor in rem are each separately responsible in terms of external relations, the former being the limited liability of rem and the latter being the unlimited liability of man, and that there should be no real joint and several relations between the two in different fields. Thus, the relationship between the guarantors does not conform to the structure of the joint and several obligations themselves. (4) Reflections on the theory of subrogation claims Neither in terms of the debt to which it is directed nor in terms of the meaning of the guarantor's liquidation, it cannot be concluded that the guarantor who liquidated the debt is liable to the creditor on behalf of the other guarantor. The reason is that the guarantor's act of paying off the debt is actually taking responsibility for the debtor, that is to say, the guarantor who has assumed the liability for security has the legal status of a creditor against the debtor. No other guarantors of the debtor are involved. In other words, this only involves the relationship between the guarantor who has assumed the security liability and the debtor, and there is no relationship between the guarantors. 2. from the legal basic value argument negative theory (I) from the principle of fairness Although both affirmative and negative are based on the principle of fairness, but the starting point is completely different, the starting point of the negative scholars is the principle of fairness and meaning autonomy, since the parties did not pre-set the intention to allow recovery, then it is fair to think that there is no right of recovery between the mixed guarantor. It is certainly argued from the point of view of coordination among the rules that the rule that creditors can choose the guarantor to assume liability at will is not in harmony with the rule that the mixed co-guarantor has no right of recovery from each other. The relationship between the creditor and the guarantor and the relationship within the guarantor have different causes, different value pursuits, different existence mechanisms, and different legal interests behind them. Therefore, there is no so-called incoordination. The judgment of the principle of fairness cannot be concluded simply through a single legal relationship. There can be no limitations. We should proceed from the overall situation and look at the principle of fairness from the perspective of transcending individual legal relations. (II) from the principle of efficiency When there is a legal right of recourse between the guarantors, the legal relationship is complex and the transaction cost is extremely high. The number of parties and do not know each other, access to the basic information of the parties is extremely difficult. Such a cumbersome situation makes it impossible for the guarantor to properly assess the risk of the transaction, and also makes the guarantor and the secured property in a "precarious" situation. As a result, people may no longer provide security because they are unwilling to take great risks, which is not conducive to the development of China's security system and the realization of claims. Therefore, it is more advantageous to think that there is no right of recourse between the guarantors. (III) from the perspective of autonomy The logic in the affirmative and negative statements is that the parties have an expectation of security risk and are willing to take their own risks based on the principle of autonomy. At this time, the law should give sufficient respect to the expected effect of the parties' guarantee. The negative view is that the risk expected by the guarantor is that the guarantor can only recover from the debtor after assuming the guarantee liability, and if the debtor cannot pay off, the guarantor can only bear the risk. After rational analysis, the guarantor anticipates this risk and is still willing to take the risk to provide security for the debtor. At this time, there is no agreement on joint guarantee or mutual recovery. Then the risk should be borne by the guarantor itself. Professor Cui Jianyuan of Tsinghua University pointed out that the guarantor did not mean to agree on sharing and recovery before the guarantee was made, and there was no intention to contact each other. Then when the guarantor assumes responsibility and cannot recover from the debtor, it can only "taste the bitter fruit" and cannot recover from other guarantors, otherwise it is contrary to the spirit of private law of autonomy. It must be said that the view is the opposite: if the guarantor was clearly aware of the existence of other guarantors at the time of the creation of the guarantee, then his thoughts at the time of the creation of the guarantee may be due to the existence of other guarantors, and then I cannot be held fully responsible. It is therefore certain that recovery between guarantors is not a violation of the principle of autonomy of will, but rather an implementation of autonomy of will. The author thinks that the affirmation scholars only pay attention to the "meaning" in the meaning autonomy and ignore the "autonomy". According to the principle of autonomy, it is the party's own choice to make a certain choice out of some consideration, which requires the party's own thinking and judgment. Because of its universal applicability, the law cannot make an appropriate choice for each party in each case. When a guarantee is agreed upon, if there is no agreement between the guarantors, it means that no one between the guarantors has agreed to internal recovery. If the parties intend to have an internal right of recourse in the agreed security, they may agree on the legal relationship and the risk on their own. The universal applicability of the law determines that it should fully respect the parties in real life. It is not possible to create a recovery relationship between the parties, otherwise it is a violation of the autonomy of private law. 3. Interpretation of Article 13 of the Civil Code Guarantee Interpretation (I) respect for autonomy After the promulgation of the guarantee interpretation of the Civil Code, it has become the only basis for solving the problem of internal recovery of mixed guarantee. The provision basically affirms the position of non-recourse within the hybrid security and respects the autonomy of the parties. If there is no agreement between the parties, there is no right of recovery; if the parties have only agreed on mutual recovery but have not agreed on the manner of recovery, the specific manner is supplemented by the principle of autonomy. In general: if the parties have clearly expressed mutual recovery, the court should give respect. As for the manner of recovery not agreed upon by the parties, the proportionality scheme was adopted. (II)'s compromise on affirmation The interpretation of the guarantee system provides for other circumstances in which compensation can be recovered. If "each guarantor signs, seals or prints on the same contract", in this case, the guarantor may recover from the other guarantor after assuming the guarantee liability. This is a compromise that the law certainly says about the right of recovery. If the guarantors sign the same contract and agree that they will provide the guarantee, then the guarantors are no longer in a back-to-back relationship, I .e., they know each other, and it is determined that there is an internal right of recovery, but this idea is worth considering. From a commercial point of view, there is a certain reason for "the same contract can be recovered": whether it is to avoid risks or pay attention to obligations, compared with civil subjects, the ability of commercial subjects is higher than that of civil subjects, and commercial activities pay more attention to efficiency. It is certain that the internal right of recovery is reasonable when the guarantee contract is signed between commercial subjects, but if it is analogized to the civil subjects, the civil subjects will be overburdened. Even if the paragraph is arbitrarily considered to adopt commercial law thinking, the logic between the two is not clear because the Civil Code adopts civil law thinking. China adopts the legislative model of civil and commercial integration, if the law and judicial interpretation does not indicate the use of civil law or commercial law thinking, then only the use of civil law thinking will not harm the interests of other subjects. In general, the Civil Code basically establishes the provision of non-recourse between guarantors, but the compromise in paragraph 2 makes the negation not fully implemented. In summary, the internal recovery right of the hybrid guarantee should be denied. The reason is that respect for the principle of autonomy of the will should not interfere with legal relations between private persons unless it violates the fundamental spirit of the law. Moreover, the negation can better guarantee the realization of creditor's rights, promote the financing, give the parties flexible space to own arrangements, and realize the fundamental purpose of the guarantee system. The mixed common guarantee system is the most important in the guarantee system, and the correct understanding and application of the mixed common guarantee system will make the guarantee system play a greater role in practice. Therefore, in the mixed co-guarantee system, it is considered that there is no right of mutual recovery between the mixed co-guarantors, which protects the interests of creditors and demonstrates the spirit of autonomy.

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