The Study Of Guarantor’s Right Of Recovery In The Mixed-Joint Guarantees

In the guarantee liability,since only the principal debtor undertakes the ultimate liability,both the guarantor and the guarantor on the goods can recover from the principal debtor after fulfilling the guarantee liability.However,in the case where a third person acting as a guarantor and the other third person as a guarantor on the goods coexisting on the same claim,the dispute over whether the guarantor who paid the debt could recover from other guarantors has not been uniformly determined.The mixed-joint-guarantee means that two or more different types of guarantees coexist in the same creditor’s right,including the coexistence of personal guarantee and mortgage guarantee,the coexistence of personal guarantee and pledge,and the coexistence of all three kinds of guarantees.The legislation,academic world,and judicial practice have all failed to reach a unified conclusion on the precise concept of mixed-joint-guarantee.Most scholars have accepted the term “mixed-joint-guarantee”,but others still refer to such guarantees as “the concurrence of personal guarantee and guarantee on the goods” or “the coexistence of guarantee in person and guarantee in rem” in their discourses.We can see that the above expressions only describe the appearance of the mixed-joint-guarantee,they fail to come up with a definition based upon its nature.In a broad sense,the mixed-joint-guarantee includes any two or several different types of guarantees that can be coexisted on the same creditor.The narrow sense of the mixed-joint-guarantee refers solely to the coexistence of guarantee on the goods and personal guarantee provided by a third party.This kind of guarantee consists of both the nature of real rights and the nature of creditor’s rights,which makes the legalrelationship among parties more complicated than the single-typed joint guarantee,and makes it pretty difficult for the legislation and judicial practice to keep a balance between the interests of relevant parties.The mixed-joint-guarantee in this paper only refers to its narrow sense,i.e.the joint guarantee of personal guarantee and guarantee on the goods provided by a third party.This paper has three chapters besides the introduction and the conclusion.The first chapter analyses the current disputes about the right of recovery among mixed-joint-guarantors in judicial practice and the academic world in China.Through analysing the court judgments of relevant cases,the author puts forward the main issue and dispute of controversy in the judicial practice and the core view the academic community has on this issue.At present,there are two kinds of judgments in the judicial practice in China for such cases as to whether the mixed-joint-guarantor could recover from other guarantors.One thinks that the mixed-joint-guarantors can recover from each other,and the other thinks that they can only get recourse from the principal debtor.In the case of “Shandong Baifu Logistics Co.,Ltd.v.Beijing Datang Fuel Co.,Ltd.”,the Supreme Court determined that the liability of guarantee in rem provided by the debtor is absolutely prioritised,the liability of guarantee in rem provided by the third party is prioritised over the the liability of guarantee in person.Based on this premise,the mutual right of recourse among mixed-joint-guarantors is denied.Local courts have different opinions in similar cases.For example,the Ningbo Intermediate Court ruled that Article 176 of the “Property Law” only stipulates that the guarantor on the goods has the right to recover from the principal debtor after he fulfilled the obligation,but it does not clarify that the mentioned guarantor cannot recover from other guarantors.Therefore,the applicable law on this issue should still be the “Guarantee Law” and the “Judicial Interpretation of Guarantee Law”.Nanjing Intermediate Court,on the other hand,reached the same conclusion as the Supreme Court on one similar case.The dispute between the academic circles and the judicial practice on the issue is intensified after the promulgation of the “Property Law”.It is difficult for scholars with affirmative and negative views to reach a unified opinion.Those who hold negative views,represented by Mr.Hu Kangsheng,believe that the internal rights of recovery within the mixed-joint-guarantors need to be clearly stipulated by the parties to assume the joint liabilities.Otherwise,the legislation should not recognise suchright for the following reasons:First,there is no legal relationship among the guarantors,therefore the recognition of such right is contrary to the legal principle.Second,the guarantor should recover from the principal debtor,the mutual recovery among guarantors could only increase the unnecessary judicial procedure because after other guarantors assumed their share,they still need to claim to the principal debtor.Third,it can be assumed that the guarantor knows the risks of providing the guarantee,the effort to avoid such risk should be made when making the guarantee agreement,rather than seeking mutual recourse afterwards among guarantors.Forth,it is not practical for guarantors to recover from each other.The scholars in favour of such right believe that it is inevitable to recognise such right because of the equal legal status of personal guarantee and guarantee on the goods;also mixed-joint-guarantors can be presumed to undertake joint liabilities,so the guarantee liability of each guarantor is proportional;the guarantor who is asked for recourse is responsible for his own share;the silence of Article 176 of the“Property Law” is not a denial of such right;and the denial of such a right could lead to moral hazard.The second chapter discusses the rationality of affirming the internal right of recourse within the mixed-joint-guarantors by studying the aspects of the legal interpretation and the legal basis.Firstly,Article 176 of the “Property Law” does not mean the negation of such right.Secondly,Article 12 of the “Guarantee Law” and Article 75 of the “Judicial Interpretation of Guarantee Law” respectively affirm the right of the guarantor or mortgagor to recover from the debtor and other guarantors in the joint guarantee and joint mortgage.According to the systematical interpretation,if Article 176 of the“Property Law” is interpreted as negating the internal right of recovery among the mixed-joint-guarantors,it will lead to conflicts between the recovery rules within the guarantee law,which will undermine the unity within the legal system.According to the “same level theory” proposed by German scholar Larenz,the establishment of the joint debt relationship does not require the same legal cause or the same purpose between the debtors,the joint liability forms as long as the obligations of the debtors are on the same level.In the mixed-joint-guarantee,all guarantors only assume intermediate responsibilities,their obligations are on the same level and forms joint liability,therefore they have the right to recover from each other.In the mixed-joint-guarantee,each guarantor joins the debt and assumes the guarantee liability as a third party according to the guarantee contract.Therefore,the guarantor qualifies as “the third party with interests”.Based on the guarantee contract,the guarantor and the debtor has guarantee legal relationship,and according to the provision of the “Property Law”,the “Guarantee Law” and the "Judicial Interpretation of Guarantee Law”,guarantors have right to recover from the debtor.Since all the factor of “the third party payment” is fulfilled,the debt paid by guarantor does not inevitably vanish,the creditor’s right transfers to the guarantor who has fulfilled the debt by law.As the new creditor,such guarantor can claim from the original debtor and other guarantors.On the basis of the above research,the author draws the conclusion that the internal recovery right among mixed-joint-guarantors exists.The third chapter details the exercise of such right on the premise of the above chapters.There is also considerable disagreement in the determination of the share of responsibilities between different types of guarantors in the mixed-joint-guarantee.One view is that the guarantor and the guarantor on the goods are equal in status and both guarantee the settlement of the same claim,therefore the debt should be shared equally.Another point of view is that the guarantor who assumes unlimited liability with all responsible property and the guarantor on the goods who bears limited liability within the limit of the value of the guaranty shall not share the liability equally,and the share between the two shall be based on the ratio between the debt and the value of the guaranty.The author believes that the second view is more in line with the principle of fairness,it is also the general theory of the current academic circles.With regard to the exercise of the right of recourse among mixed-jointguarantors,the author thinks that the guarantor can only claim for recovery when he assumes liability beyond his share,and when the sum of the guarantee liability is greater than the amount of the main debt.The calculation of the amount of liability should consider the ratio between liability promised by each guarantor to the total amount of responsibility assumed,and then multiply the total amount of the debt.Since the guarantee provided by the debtor is on the different level from the guarantee liability provided by the third party,and since the principal debtor cannot recover from the guarantors,therefore the guarantee provided by the debtor should beexcluded when calculating the share of guarantee liability.