You paid as surety: you recover from the debtor with interest from that day

They are Articles 1489 to 1492 of the Civil Code of 2020: what the paying surety recovers, the notice it must give, the defences the debtor may raise against it, and the six cases where the surety may attach property or demand guarantees.

Sureties that have paid for the debtor, or that want protection before paying, under a suretyship contract governed by the Puerto Rico Civil Code.

• The surety that performs its prestation is subrogated in the creditor’s rights.Verified against the official source
• In asking for reimbursement it may also demand the interest from the day of payment and the losses suffered in making it.Verified against the official source
• If the surety compromised with the creditor, it may not ask the principal debtor for more than it actually paid.Verified against the official source
• The surety must notify the principal debtor of the payment it has made.Verified against the official source

• The record of the payment and its date: the interest Article 1489 grants runs from that day.
• The record of the notice to the principal debtor, which Article 1490 requires.
• The record of the compromise with the creditor, if any: it limits what you may ask the debtor for.
• The granting date of the suretyship: the four years of Article 1492(d) count from there.

1. 1

   Step 1: You paid: you step into the creditor’s place

   Article 1489: the surety that performs its prestation is subrogated in the creditor’s rights. It is not that a fresh, bare claim is born: you inherit the position of the one who was collecting.

2. 2

   Step 2: And you recover three things, not one

   The same article: in asking for reimbursement of what it paid, it may also demand the interest from the day of payment and the losses it suffered in making the payment. What was paid, the interest and the losses.

3. 3

   Step 3: Interest runs from the day of payment

   Not from when you claim against the debtor nor from when they refuse: from the day you paid. The Code fixes no rate here, and this guide sets none.

4. 4

   Step 4: If you negotiated a discount, the discount is the debtor’s too

   Closing of 1489: where the surety has compromised with the creditor, it may not ask the principal debtor for more than it actually paid. You do not collect the face amount if you paid less.

5. 5

   Step 5: Tell the debtor you paid

   Article 1490, one line: the surety must notify the principal debtor of the payment it has made. The article fixes no deadline, no form, and does not say what is lost by failing to.

6. 6

   Step 6: Why that notice weighs

   Article 1491: the principal debtor may invoke, against the surety, the defence that the latter paid without its consent. The Code does not say that giving notice cures that defence — they are two separate articles and are not expressly linked — but it does show why talking to the debtor before paying, not only after, matters.

7. 7

   Step 7: And the debtor raises against you what it had against the creditor

   The same article: and all the defences it had against the creditor. Stepping into the creditor’s position, you also take on its exposed flanks.

8. 8

   Step 8: If the debtor already paid, you claim from the creditor

   Closing of 1491: where the principal debtor has satisfied the prestation before the surety, the surety may only demand from the creditor the restitution of what it paid. The target of the claim changes, so it is worth checking before paying whether the debtor already did.

9. 9

   Step 9: You also have tools before paying

   Article 1492: the surety has the right to attach the debtor’s property or to demand other guarantees in six situations. Worth underlining something the article does not condition: none of the six requires the surety to have paid yet.

10. 10

    Step 10: The first three: you are sued, it falls due, or the promised time passed

    Subsections (a), (b) and (c): where payment is demanded of it judicially; where the obligation is due; and where the debtor bound itself to release it within a determined time and that time has passed.

11. 11

    Step 11: The fourth: four years from signing

    Subsection (d): where four years have passed from the granting of the suretyship, save where it has a longer term. It is its own clock, different from the five years this chapter uses in two other places and with other consequences. The Code does not relate them, and this guide does not merge them.

12. 12

    Step 12: The last two: the debtor takes risks or leaves

    Subsections (e) and (f): where the debtor assumes risks other than those of the ordinary course of its business, wastes its property or gives it as security for other operations; and where it wishes to leave Puerto Rico without leaving sufficient property to pay the debt.

13. 13

    Step 13: What this section does not carry

    It fixes no interest rate, does not describe how the attachment of Article 1492 is obtained or before whom, does not define "other guarantees", sets no deadline or form for the notice of Article 1490, and does not say what is lost by omitting it. None of that is here.

Reimbursement and the attachment of Article 1492 are litigated before the Court of First Instance; the Code names no agency for this chapter and describes no attachment procedure.

• Paying without first checking whether the debtor already paid: in that case you may only claim from the creditor.
• Paying without the debtor’s consent: it is a defence Article 1491 grants them against you.
• Not notifying the principal debtor of the payment you made, as Article 1490 orders.
• Not documenting the payment date: interest runs from that day.
• Claiming the face amount from the debtor when you compromised with the creditor for less.
• Forgetting you may also claim the losses suffered in making the payment.
• Believing you must pay before you can attach: Article 1492 does not require it.
• Letting the four years of subsection (d) pass without using the right it opens.
• Applying subsection (d) to a suretyship with a longer term: the article excludes it.

These are the government pages this guide is based on.

• Poder Judicial de Puerto Rico

  Poder Judicial

  bvirtualogp.pr.gov