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LAW OF OBLIGATIONS
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Under a contract of surety of any type, in exchange for furnishing real
security, the suretymay request that the court suspend the debt enforcement
proceedings against him until all pledges have been foreclosed and a
definitive certificate of loss has been issued against the principal debtor
or a composition of bankruptcy agreement has been concluded with the
creditors.
Where the principal obligation may not fall due without notice being
served by the creditor or the debtor, the time limit for the surety does not
commence until the date on which he receives such notice.
Defenses.
Pursuant to Article 591 TCO, the surety is entitled and
obliged to plead against the creditor all defenses open to the principal
debtor or his heirs which are not based on the insolvency of the principal
debtor. Suretyship for obligations that are not binding on the principal
debtor owing to error or incapacity to make a contract or for time-barred
obligations, are not included in the scope of this provision.
Where the principal debtor waives a defense that is open to him, the
surety may nevertheless plead it.
Where the surety makes payment due to not knowing the existence
of the defenses open to the principal debtor, he will have the right to
recourse. On the other hand, where the principal debtor proves that the
surety knew or should have known these defenses, the surety forfeits his
right of recourse to the extent that such defenses would have released him
from liability if he asserted them.
Creditor’s Duty of Diligence and Duty to Release Documents and
Pledges.
Pursuant to Article 592 TCO, where the liens and other securities
and preferential rights furnished when the surety contract is concluded,
or subsequently obtained from the principal debtor for the specific
purpose of securing the claim under surety, are reduced by the creditor to
the detriment of the surety, the latter’s liability is decreased by an equal
amount. Claims for restitution of the over-paid amount are reserved.
Moreover, in the case of contracts of surety for the performance of
official and civil service obligations, the creditor may not request the debt
from the surety as a result of his failure to supervise the employee as required
or to act with the diligence that could reasonably be expected of him.