Viewpoint... Joint guarantee is not equal to joint debt-The Civil Code guarantee issue is confusing.
Published:
2021-08-13
Viewpoint... Joint guarantee is not equal to joint debt-The Civil Code guarantee issue is confusing.
The General Principles of Contracts of the Civil Code confirm the debt of shares (claims and debts) and joint and several debts (joint and several claims and joint and several debts), which are joint and several in the case of joint and several debts, and in the case of joint and several debts. At the same time, the Civil Code adds the content of "guarantee contract" to the "typical contract" in the contract, and there are general guarantee and joint liability guarantee in the guarantee contract, which leads to a question: when there are more than two guarantors who bear joint and several liability with the debtor on the same creditor's right, is there a joint and several relationship between the guarantors? If so, when? How can the guarantors recover?
Confusing situation 1: There are multiple guarantors who are jointly and severally liable with the debtor on the same debt, and the guarantee contract is signed separately, and one of the guarantors assumes all the guarantee liability, and has the right to recover from the other guarantors?
In such a case, the guarantor 1.2.3 is a joint and several liability guarantee, and any one of the guarantors is required to assume all the debts to the creditor, forming a joint and several debt with the debtor. However, because their guarantee contracts are concluded separately, there is no possibility of agreement between the guarantors on internal relations, and when such a joint guarantee exists, it is assumed that the guarantor 1, even if it assumes full responsibility for the guarantee, has no right to require the guarantor 2.3 to assume a corresponding share, but can only recover from the debtor.
Confusing situation 2: There are multiple guarantors who are jointly and severally liable with the debtor on the same debt, and the guarantors sign the same guarantee contract, but it is not determined whether the internal debt is a share or a joint debt, one of the guarantors assumes full guarantee liability, and has the right to recover from the other guarantors?
In this case, the three guarantors all sign the seal on the guarantee contract as one party to the guarantee contract, forming a common guarantee. Creditors can claim their rights to the guarantor according to the guarantee share agreed in the contract, but if there is no agreement on the guarantee share, the creditor can request any guarantor to bear the guarantee responsibility within the scope of the guarantee. Article 699 of the Civil Code stipulates this external relationship.
However, the contract of guarantee does not provide for recovery between the guarantors and whether it is a joint and several joint guarantee. How to deal with it? In view of the fact that the parties sign on the same contract, the guarantors are clear about the secured obligation, which can be presumed to be joint and several. The judicial interpretation of the Supreme People's Court on the application of the civil code on the guarantee system is the same as the aforementioned view, stipulating that "if the guarantor who has assumed the guarantee liability requests other guarantors to share the non-recoverable portion of the debtor in proportion, the people's court shall support it." That is, assuming that guarantor 1 assumes full liability for the guarantee, it has the right to recover from the guarantor, but because the parties have not agreed 2.3 share, it has the right to require the remaining guarantors to share in proportion.
Confusing question 3: Is the effect of a creditor's exercise of rights against only one guarantor on the other guarantors? Will there be a "de-insurance"? What are the adverse effects on creditors?
Where there are several guarantees on the same obligation, there may or may not be a joint and several debt relationship between the guarantors (with the right to recover from each other).
In the absence of a joint and several debt relationship between the guarantors, the creditor's exercise of the rights of some guarantors is naturally less effective than other guarantors, resulting in the "de-insurance" of some guarantors ". Further consideration, in the case of joint and several debt relationship between the guarantors, is the creditor's exercise of rights against some guarantors in accordance with the law as effective as other guarantors? For example, if the creditor only claims rights against the guarantor 1, what is the legal status of the guarantor 2.3? Is it to be released or to continue to be joint and several?
Many people will associate this issue with the Supreme People's Court's judicial interpretation of the statute of limitations, "For the cause of the interruption of the statute of limitations for one of the joint debtors, the effect of the interruption of the statute of limitations for other joint debtors should be determined." However, the guarantee period and the statute of limitations is a different system, the guarantee period is to determine the guarantor to assume the responsibility of the guarantee period, the creditor only in the guarantee period in accordance with the law to the guarantor to claim the right, can require the guarantor to assume the responsibility of the guarantee, otherwise the guarantor's guarantee liability is eliminated. Unlike the statute of limitations, which only requires the creditor to claim the right, the significance of the guarantee period is to make the guarantee liability in a contingent state a definite guarantee obligation, thus requiring not only the creditor to claim the right, but also the guarantor to know that the creditor is claiming the right. The guarantee period is a constant period and no interruption is applicable.
According to article 520 of the Civil Code, in the case of joint and several debts, only the six acts of performance, set-off, withdrawal, exemption, mixing, and delay in payment of the debt are effective for other debtors. According to the opposite interpretation, in a joint guarantee, the creditor's act of claiming rights to some of the guarantors in accordance with the law is also less effective than the other guarantors. So, thinking carefully is extremely frightening?! As a creditor does not claim rights against other joint and several liability guarantors, which may lead to the consequences of disinsurance. The Interpretation of the Supreme People's Court on the Application of the Guarantee System under the the People's Republic of China Civil Code makes it clear that "if there are two or more guarantors for the same debt, the people's court will not support the creditor's claim that it has exercised its rights to some guarantors within the guarantee period on the grounds that it has exercised its rights to other guarantors in accordance with the law."
It is worth noting that in the case of a joint and several debt relationship between the guarantors, the creditor fails to exercise its rights to some of the guarantors in accordance with the law during the guarantee period, while the other guarantors recover from the guarantors who no longer bear the guarantee liability according to the law, according to the provisions of Article 519, paragraph 2 of the Civil Code, considering that the consequence is caused by the creditor's behavior, and the creditor's failure to claim rights against some guarantors during the guarantee period results in the release of its security liability, which is essentially an act of release from the guarantor's liability, and according to the provisions of article 520, paragraph 2, of the Civil Code, the creditor shall be released from the liability of other guarantors to the extent that the creditor is released from the debt of the guarantor. The Interpretation of the Supreme People's Court on the Application of the Guarantee System in the the People's Republic of China Civil Code holds the same attitude: "There are more than two guarantors for the same debt, and the guarantors have the right of recourse to each other. The creditor fails to exercise its rights to some guarantors in accordance with the law during the guarantee period, resulting in other guarantors losing their right of recourse after assuming the guarantee responsibility. The people's court shall support other guarantors who claim exemption from the guarantee responsibility within the guarantee within the scope."
It follows that, as a creditor, a security right is not exercised at will, but should be asserted against all guarantors during the period of security provided by law. Otherwise, the consequences of "de-insurance" will result, and other guarantors will be exempted from liability within the corresponding scope, which will also result in the non-realization of the claim. In the case of a guarantor, a separate contract of guarantee would result in non-recourse between the guarantors. These issues are detailed, trivial and complex, but they will produce significant changes and adjustments in rights and obligations, and there is a need for clarification.
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