The defences and remedies of the surety

Abstract

The aim of this thesis, as the title suggests, is to examine the defences which may be raised by the surety when sued for payment by the creditor and the remedies which the law affords to the surety. It is not the purpose of this thesis to examine the entire institute of suretyship. However, I felt it necessary to examine the principal characteristics of the contract of suretyship, particularly its accessory nature, since such characteristics have an impact on the type of pleas and remedies which may be relied on by the surety. Another preliminary issue which required examination is the distinction between simple suretyship and suretyship in solidum since the array of defences available to the surety depends on whether he is jointly and severally bound with the principal debtor. Part I of this thesis examines those pleas which may only be raised by the simple surety. These are the benefit of discussion which is discussed in Chapter 1 and the benefit of division which is discussed in Chapter 2. Part II examines those pleas which may be raised by both the simple surety and the surety in solidum. The surety, like any other contracting party, may raise pleas which are personal to himself. He may therefore raise any plea which tends to negative his own obligation as distinguished from the principal obligation (Chapter 3). However, due to the accessory nature of the contract of suretyship, the surety may also raise pleas which appertain to principal debtor but by way of exception he is precluded from raising pleas which arc purely personal to the principal debtor (Chapter 4). Chapter 5 examines the eccezione di surrogazione which is another plea which may be raised by both the simple surety and the surety in solidum. Chapter 6 passes on to examine whether the surety may plead his release consequent to an extension of time granted by the creditor to the principal debtor. Part III of this thesis focuses on the actions which the surety is entitled to exercise. If the surety is unable to raise any plea and is compelled to pay the debt, he may recover the sum he has paid from the principal debtor. Chapter 7 examines the action for relief and the action of subrogation which may only be exercised after the surety has paid the debt. However, in certain special cases where the surety's right to relief may be endangered, the surety may proceed against the principal debtor even before paying the debt by virtue of the action for indemnification (Chapter 8). Chapter 9 analyses the remedy of the surety who has paid the debt against co-sureties. This chapter also examines the differences and similarities in the legal position of co-debtors in solidum and co-sureties in solidum. In the concluding part of this thesis I have proposed a number of amendments to the provisions of our Civil Code regulating suretyship. The purpose of the proposed amendments is to give greater protection to the surety without impairing the availability of credit and to address certain questions which have not been catered for by the legislator or which, although covered by law, have been the subject of conflicting interpretations.