Suretyship

In many cases where a person wished to obtain credit the other party would agree to grant credit only if security for the discharge of the debt was provided.

Roman law recognized two basic forms of security: real security, in terms of which a thing was offered by the debtor or a third party as security and the creditor was granted a real right in respect thereof; and personal security or suretyship, in terms of which a person agreed to be personally liable as surety to the creditor for the payment of the debt. The various aspects of real security have already been discussed in the chapter on the law of property. In the present discussion attention is directed to suretyship in general.

Suretyship arose when a third party (the surety) entered into a contractual relationship with a creditor whereby he bound himself to the latter for performance of another person's debt. In this way the creditor, besides his personal right against the principal debtor, acquired a second personal right against the surety.^{^[900]}

Suretyship could be created informally or formally. An informal way of establishing suretyship was the so-called mandatum pecuniae credendae, which arose when a mandatary was instructed to lend money to a third person. This mandate invoked the obligation on the part of the mandator to secure the mandatary against loss or damage resulting from the third party's failure to repay the loan. In this case, the mandator placed himself in the position of a surety to the mandatary and thereby was liable if the principal debtor did not comply with his obligations.^{^[901]}

The usual method for constituting a formal suretyship involved stipulatio, in terms of which the person who was to be surety promised the creditor to assume the same obligations and liability as the principal debtor.

The earliest forms of suretyship by stipulatio in Roman law were sponsio and fidepromissio, which were distinguished by the form of words employed by the stipulator-creditor in addressing the intended surety. These forms of suretyship were in most respects governed by the same rules, except that the sponsio was available only to Roman citizens.^{^[902]} However, both were subject to a number of limitations: they could only be employed when the principal obligation itself was created by stipulatio; the obligation of the surety died together with the person who undertook it and, in all cases, was extinguished 2 years after it was established; and where there was more than one surety for the same debt, each was liable only for his pro rata share of the debt, even if one or more of his co-sureties were insolvent. These limitations, although largely beneficial to the surety, restricted the scope and usefulness of sponsio and fidepromissio thereby rendering them unattractive to creditors. Thus, during the later republican age fideiussio emerged as a third form of suretyship that was also created by stipulatio and not subjected to any of the above-mentioned limitations.^{^[903]} This form of suretyship, available to both Roman citizens and foreigners (peregrini), gradually superseded the two older forms to the extent that it evolved as the only form recognized in the time of Justinian’s reign.

Unlike the earlier forms of suretyship it replaced, the fideiussio could be employed to secure any obligation, irrespective of the manner in which it was created. Furthermore, this suretyship was not subject to a limitation period and the relevant obligation passed to the surety's heirs.^{^[904]} Since the surety (fideiussor) was burdened with the same obligation as the principal debtor, if there was more than one surety the creditor could claim the full debt from any of them. A person who bound himself as surety was in all respects regarded as a joint principal debtor, and the creditor could choose against which of the two he wished to proceed against for recovery of the debt.title="">^{^[905]} If the creditor opted to act against the surety, the latter could have recourse to all the defences open to the principal debtor insofar as such defences were not linked to the person of the debtor himself.^{^[906]} The surety who discharged the debt could recover from the principal debtor by means of the actio mandati contraria on the basis of a presumed agreement of mandate between him and the debtor.

Although initially fideiussio was far more favourable to the creditor and disadvantageous to the surety than the two older forms of suretyship, over time the legal position of the surety was significantly improved through several measures that introduced certain benefits (beneficia) in favour of the surety. The first of these was the ‘benefit of division' (beneficium divisionis) introduced in the era of Emperor Hadrian (first half of the second century ad).

This applied when more than one person had assumed the position of surety for the same debt. If one of them was sued by the creditor, he could demand that the latter should divide his claim pro rata among the solvent sureties so that each surety could be liable for only a certain portion of the debt.^{^[907]} In the early years of the Empire, a further important development introduced the ‘benefit of cession of actions' (beneficium cedendarum actionum). By means of this device, a surety could demand that the creditor who wished to claim payment from him should first cede all remedies he might have against the principal debtor to him. This arrangement furnished the surety with a recourse against the principal debtor and any co-sureties, and thus considerably improved his position.^{^[908]} Finally, reference should also be made to the so-called ‘benefit of excussion' (beneficium excussionis or ordinis)^{^[909]} introduced in the time of Justinian. If the creditor proceeded against the surety, the latter could employ this device and demand that the creditor should first sue the principal debtor. If the debtor could not perform, the creditor could claim from the surety.^{^[910]} It should be noted that in the classical period creditors were unwilling to first sue the principal debtor, unless they were assured of his solvency, as the litis contestatio (joinder of issue) in an action against the debtor extinguished the obligation and thus released the sureties. Justinian abolished the consumptive effect of the litis contestatio in cases where there was more than one debtor and thereby rendered the beneficium excussionis possible.^{^[911]}

In the early Principate period measures were introduced designed to protect women willing to bind themselves as sureties or become involved in a similar legal act. The jurist Ulpianus relates that Augustus and Claudius issued edicts that prohibited women from ‘interceding’ for their husbands, i.e.

undertaking liability for their debts.^{^[912]} This prohibition was extended by the senatus consultum Velleianum (c. ad 46), which stipulated that a woman was not permitted to assume liability for another person (intercedere pro alio) by standing as surety, granting real security or undertaking other legal obligations.^{^[913]} If she did so, the relevant transaction was not deemed void but she could raise the exceptio senatus consulti Velleiani as a defence against any claim arising therefrom. This exception was inadmissible, however, if the woman had benefited from such transaction.^{^[914]}Finally, Justinian issued a law that declared invalid any agreement whereby a wife bound herself as surety for her husband or accepted a legal obligation in his favour, unless it was clear that such agreement was in her own interest.^{^[915]}

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Source: Mousourakis G.. Fundamentals of Roman Private Law. Springer, 2012.— 366 p.. 2012

Suretyship

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