Suretyship (Ius Commune)
by Sonja Meier
1. Forms of personal security, terminology
Assuming personal liability for another’s debt played an important role in Roman law. The harsh approach to personal execution under Roman law meant that personal securities offered creditors more protection than they do today. The Roman law of real security was, in contrast, comparably underdeveloped. Furthermore, the widely accepted social duties arising from friendship (amicitia) included standing surety for each other when requested to do so. The two older forms of suretyship, sponsio and fidepromissio, were superseded by the fideiussio under classical law, which, after it had been adopted by the ius commune, became the basis of the modern European law of suretyship. Both Roman law and the ius commune also had forms of personal security which were similar to suretyship, eg the mandatum qualificatum, as well as special forms of suretyship, eg promissio indemnitatis or fideiussio fideiussoris (rear suretyship). All these transactions, as well as the guarantee, the assumption of debt (transfer of obligation), the co-debtorship for security purposes and the giving of real security for another’s debt were covered by the umbrella term intercessio: to stand in for another’s debt. The common historical tradition has led to a remarkable similarity in the European laws of suretyship. Even the English law of personal security, whose ‘contract of guarantee’ is the equivalent of suretyship on the Continent, was influenced by Roman law, partly directly and partly through the law merchant (lex mercatoria).
Already under classical Roman law, a suretyship was created by means of a contract between the surety and the creditor; the original debtor did not have to be involved. The surety obliged himself by way of stipulatio, a formal verbal agreement, which in post-classical times was documented in a deed. As the ius commune no longer used the stipulatio, but instead held any contractual agreement between parties to be binding (freedom of contract), a contract of suretyship did not require any particular formalities. This rule was often changed by national legislatures in order to protect the surety, either by requiring that the contract of suretyship be in writing (eg in England and Prussia), or by formal requirements applicable to all contracts whose subject matter was above a certain value (eg in France).
3. Accessory character
The old Roman forms of suretyship were already dependent, to a certain extent, on the validity of the secured obligation. This idea was developed into the principle of accessory liability of the surety under the ius commune, which, however, had certain exceptions. In principle, suretyship required the existence of a valid main obligation, which could also take the form of a future or conditional debt (condition and time term); even natural obligations were sufficient. The surety could not be liable for more, or be liable more strictly, than the main debtor. If a surety did take on a more extensive obligation, opinions varied as to whether the whole transaction was void, whether the suretyship was to be upheld to the extent that it corresponded to the original debt, or, especially where the surety knew of the invalidity of the original debt, whether a different transaction (eg a guarantee called promissio indemnitatis) was to be implied.
In principle, the extinction of the main obligation, eg through performance, novation or confusio, also led to the extinction of the surety’s liability. Further, the surety could invoke the defences of the main debtor, eg that the obligation had been created by an act of fraud, or was without legal ground; the same applied to the defences of illegality, res iudicata or prescription. A waiver of these defences by the main debtor had no effect on the surety. Under the ius commune, the surety was also able to exercise certain rights of the main debtor, in particular the right to avoid the contract on which the obligation was based or the right to set off the obligation against an obligation owed to the main debtor. However, the surety could not avail himself of defences concerning the main debtor’s person, in particular his (in)ability to pay. If the debt was discharged in insolvency proceedings or if it could not be enforced due to the debtor’s status as a prisoner of war, the surety remained liable as the suretyship was supposed to cover precisely these kinds of situations. The personal defences not available to the surety also included a personal release (pactum de non petendo in personam) and sometimes also the main debtor’s minority.
Under Roman law, the surety was liable for mora (delay) and probably also for culpa (fault) of the debtor. Under the ius commune, it was disputed whether the surety was always liable for subsequent changes to the original obligation resulting from breach of contract, or whether this required a specific undertaking by the surety. Modifications of the main obligation as a result of a subsequent agreement between the debtor and the creditor did not affect the surety’s liability.
Under classical Roman law, the creditor could choose whether to sue the debtor or the surety (although custom strictly required him to turn to the debtor first). However, in case of fideiussio (but not in case of promissio indemnitatis or mandatum qualificatum), the action against the main debtor and the action against the surety concerned the same res (ie subject matter in a procedural sense). Because of the principle that the same res could not be litigated twice, bringing an action against one released the other debtor: that is to say, the claim against the second debtor was consumed. The creditor was, however, not overly endangered by this procedural bar, as any action would normally lead to his satisfaction due to the harshness of the Roman law of execution and due to the widely accepted moral obligations between the debtor and the surety. Emperor Justinian abolished the consumption of actions in 531 and, by Novel 4,1 from 535, granted the surety the beneficium excussionis or ordinis, which obliged the creditor first to sue the debtor and attempt execution before he could turn to the surety. However, the creditor could avail himself of real security granted by third parties, or property in the possession of third parties only once he had sued the surety. The beneficium excussionis was adopted by the continental European legal systems, making subsidiarity the identifying feature of suretyship (unlike under the English common law). There were, however, a number of exceptions, eg for commercial sureties, and the beneficium was not available where the debtor had become insolvent or was absent and could only be arraigned with difficulty. Most importantly, the beneficium could be waived, eg by undertaking a solidary suretyship, which seems to have been quite common in practice.
5. Recourse against the debtor
Under Roman law, the ius commune and English law, a paying surety’s recourse claim could be based on the contractual relationship between the surety and the main debtor. This was the case when the surety had obliged himself at the behest of the debtor or where the debtor had consented to the suretyship. The contract of mandate/agency gave the surety a claim for reimbursement, covering the amount paid to the creditor and any other necessary expenses. Under Roman law and the ius commune (but not under English law), a reimbursement claim could also arise from the rules of negotiorum gestio (management of another’s affairs without a mandate), namely if the surety had obliged himself in the debtor’s best interest, but without the debtor having asked him to do so (eg if he was absent). In certain constellations, if there was a mandate or a valid negotiorum gestio, Roman law and the ius commune granted the surety a claim against the debtor to be relieved from his liability even before payment, eg if the debtor was in default or if his pecuniary circumstances had substantially deteriorated.
In addition, the surety, if he was to pay to the creditor, could under Roman law use the exceptio doli in order to require the creditor to cede his claim against the debtor to the surety, a right generalized in Justinian’s Novel of 535. The surety was therefore only obliged to pay to the creditor in exchange for an assignment of the claim against the debtor. This so-called beneficium cedendarum actionum was adopted by the ius commune and also became part of English law. Recourse via the creditor’s claim was important to the surety if he was either lacking a personal right of reimbursement (eg if he had stood surety against the debtor’s will) or if the debt was additionally secured by real security, as the surety could then avail himself of these securities through the creditor’s claim. However, making the surety’s recourse dependent on an act of assignment was considered increasingly unsatisfactory, as to do so meant subscribing to an unnecessarily formalistic view. The requirement of assignment was therefore increasingly disregarded, which ultimately led to a subrogation or cessio legis. Instead of a subrogation, or in addition to it, the surety was sometimes given a personal right to reimbursement that was no longer dependent on proving the existence of a special internal relationship.
However, an assignment, a subrogation, or a cessio legis of the claim against the debtor was no longer possible if the creditor had already released the debtor from his liability or had lost his claim in some other way (eg through late registration during insolvency proceedings). If this occurred, the surety’s recourse was endangered (he could not avail himself of the real securities) or even frustrated (unless he had his own right of recourse). Under the ius commune, the surety was protected by using either the beneficium excussionis or the beneficium cedendarum actionum as a defence against the creditor: the creditor lost his claim against the surety when, due to his fault, an action against the main debtor was no longer possible or when the claim against the main debtor could no longer be transferred to the surety. The details were subject to some debate. For example, it was unclear whether the defence could only be used when the creditor had intentionally given up his claim against the main debtor, or a security right, or also when the creditor had been negligent in pursuing the debtor, ie whether he was subject to a duty of care in relation to the surety.
Multiple sureties securing the same obligation, whether jointly or separately, had already been common under Roman law. With regard to the older types of suretyship (sponsio and fidepromissio), a statute divided the obligation between the sureties, making them debtors in part. The rules of fideiussio, however, and in that tradition also the rules of the ius commune, allowed the creditor to demand the entire amount from each co-surety. Co-sureties were thus often regarded as solidary debtors (solidary obligations) under the ius commune. However, this liability for the entire amount was mitigated by 2nd-century imperial legislation: the co-surety from whom the creditor demanded payment could require the creditor to divide up the unpaid amount amongst all of the solvent co-sureties. This beneficium divisionis was adopted by the ius commune (but not by the English common law). As the division had to take place only amongst those sureties who were solvent at the time when the creditor brought his claim, the risk of insolvency of a co-surety remained with the sureties, while the creditor had the burden of pursuing each solvent co-surety for his share. In practice, it seems that most sureties waived the beneficium divisionis and were thus ordinary solidary debtors.
If a co-surety had paid the entire sum that was owed (because he had not raised the beneficium divisionis or had waived it) and the main debtor was insolvent, the question of recourse against the other sureties arose. Under Roman law, there was no apportionment amongst co-sureties, unless there was a special contractual relationship between them. A paying surety could, however, require the creditor not only to cede his claim against the main debtor, but also to cede his claims against the other sureties, thereby enabling the paying surety to have recourse against these other sureties. In the same way, the assignment, subrogation or cessio legis under the ius commune included the claims against co-sureties. Recourse was thus available by using the creditor’s claims; in some parts of Europe the co-sureties were even granted an independent right of recourse against each other.
7. Female sureties
The Senatusconsultum Vellaeanum, dating from the 1st century AD, barred women from any kind of intercessio for another’s debt, whether by way of suretyship, assumption of debt, co-debtorship for security purposes or granting real security. The idea was presumably to protect women, not versed in commercial transactions, from the dangers of taking on burdens which were of no personal benefit to them. There were numerous exceptions (eg if the woman was acting in her own interests, or if the creditor did not know that it was an intercession), which were even extended under post-classical law. However, in 556 AD, Justinian forbade any intercession by wives for their husbands’ debts unless the loan was used for the benefit of the wife. Both the rule of the SC Vellaeanum and the ban on intercession in favour of husbands were adopted by the ius commune, although it appears that they were only of limited practical importance. Both defences could be waived under specific circumstances (usually after judicial advice had been given) and did not apply to female merchants. However, the main reason for their lack of importance was that wives were often liable for their husbands’ debts under matrimonial property law anyway. Because of the changes in the perception of women, the defences for female sureties came under increasing criticism in the 18th century and were gradually abolished by statute.
Wilhelm Girtanner, Die Buergschaft nach gemeinem Civilrechte, vol I (1850) and vol II (1851); Heinrich Hasenbalg, Die Bürgschaft des gemeinen Rechts (1870); Ralph Slovenko, ‘Suretyship’ (1964–65) 39 Tul L Rev 427; Société Jean Bodin (ed), Les Sûretés personelles, Deuxième partie: Moyen age et temps moderne, Recueils de la Société Jean Bodin pour l’histoire comparative des institutions, vol 29 (1971); Philip K Jones, ‘Roman Law Bases of Suretyship in Some Modern Civil Codes’ (1977–78) 52 Tul L Rev 129; Reinhard Zimmermann, The Law of Obligations (1996) 114 ff; Hans-Peter Haferkamp, ‘Bürgschaft’ in Mathias Schmoeckel, Joachim Rückert and Reinhard Zimmermann (eds), Historisch-kritischer Kommentar zum BGB, vol III (forthcoming 2012).