Obligation of the guarantee to fulfill the obligation of the debtor to the creditor

INTRODUCTION

This legal opinion analyzes the Judgment of the Appellate Court Skopje, TSZ no.569/21 dated 10.06.2021, which, in a procedure following an appeal filed by the plaintiff (the creditor), modified the Judgment of the Basic Civil Court Skopje, 52 PL1-TS no.1341/19 dated 02.12.2020.The judgment of the Appellate Court Skopje, is analyzed from the aspect of the guarantor's obligation towards the creditor, to fulfill a valid and due obligation of the debtor.

FACTS OF THE CASE

The plaintiff is a trading company whose priority activity is the production of soft beverages and the production of mineral water and other bottled water, while the first defendant is a trading company whose priority activity is other services for preparing and serving food.
Based on the Contract for purchase and sale of products, which was concluded on 08.02.2013, the plaintiff, as the seller, and the first defendant, as the buyer, entered into a debtor-creditor relationship, the subject of which was the purchase and sale of beverages from the seller's production range, for the purposes of the buyer.
According to Article 2, paragraph 1 of the Contract for the purchase and sale of products, it was stipulated that: “The contracting parties agree that during 2013, the Buyer will buy, and the Seller will sell and deliver beverages from the production range of the Seller.”, according to Article 3 , it was stipulated that: “The buyer agrees that the purchase price of the products subject to this agreement shall be determined according to the valid prices specified in the official price list of the Seller at the time of delivery of the products to the buyer.”, while in accordance with Article 5, paragraph 1 of the Agreement , it was stipulated that: “The contracting parties agree that the payment of the delivered products shall be made via bank transfer within 10 (ten) days counted from the day of handing over the products.”.
Pursuant to Article 8 of the Agreement for the purchase and sale of products, the person M.V., the second defendant in the procedure, who at the time of concluding the Agreement, was the manager of the first defendant, agreed that by signing the agreement: “.... agrees and guarantees the fulfillment of all the Buyer's obligations arising from this contract with all his personal immovable and movable property in his ownership.”.
The contract was signed by the plaintiff, as the seller, the first defendant, as the buyer, and the person M.V., as the guarantor.
On 15.05.2019, the plaintiff, to authorized Notary from Skopje, submitted a Proposal for the issuance of a decision for a notary payment order based on a reliable document, in which he requested that the two defendants be jointly liable for the main debt arising from the Consignment note/invoice no.7753100070 dated 13.12.2018, in the amount of 32,476.00 denars and Consignment note/invoice no.7753100166 dated 28.12.2018, to pay him an amount of 46,082.00 denars, with legal penalty interest, based on which authorized Notary, from Skopje, issued a Decision on the issuance of a notary payment order, NPN no.1701/19 dated 05/17/2019.
Dissatisfied with the Decision to issue a notary payment order, the second defendant filed a timely objection, in which he stated, among other things, that with the Agreement for the purchase and sale of products, which was concluded on 08.02.2013, he agreed to be liable only for the obligations of the first defendant arising from that agreement, which indisputably referred to the trade of beverages that occurred during 2013, i.e. that he is not liable for, nor did he guarantee to undertake, the obligations owed by the first defendant to the creditor based on the sale of beverages that occurred during 2018 year, for which period the invoices subject of the procedure refer. In addition, the second defendant stated that with the Contract for purchase and sale and share transfer, which on 16.02.2018, he and the person I.A., as the sellers, concluded with the person D.S., from Skopje, as the buyer, sold and transferred their share in the first defendant to the person D.S., who, in accordance with Article 7 of the Contract, undertook to conclude annexes to the contracts in which the aforementioned sellers are contracting party as a joint debtor - guarantor payer, and instead of the sellers, as a contracting party joint debtor - guarantor payer, will become the buyer.
On the other hand, after the adoption of the Decision on issuing a notary payment order, NPN no.1701/19 dated 17.05.2019, in the period from 03.07.2019 to 30.07.2019, the first defendant paid the main debt to the plaintiff owed from the invoices mentioned above.
Based on the objection submitted by the second defendant against the Decision on issuing a notary payment order, NPN no.1701/19 dated 17.05.2019, before the Basic Civil Court Skopje, the case 52 PL1-TS no. 1341/19 was filed, in which the plaintiff, after the payment made by the first defendant, withdrew the claim in reference to the main debt and specified it, in a way that requested the court to oblige the defendants to pay him only the legal penalty interest for late payment of the debt.
On 02.12.2020, the Basic Civil Court, Skopje, made Judgment 52 PL1-TS No. 1341/19, in which it adopted the objection of the second defendant, terminated the Decision on the issuance of a notary payment order, NPN No. 1701/19 dated 17.05.2019, and rejected the specified claim of the plaintiff, as unfounded, with the explanation that: “In the specific case, by signing the Contract for purchase and sale of products, the defendant agreed to guarantee the fulfillment of the buyer's obligations based on the sale of beverages incurred only during the year 2013 for which the contract was concluded. It is indisputable that the business relationship between the buyer and the seller was tacitly continued after the end of 2013, however, it cannot be considered that the guarantee given by the defendant extends to the period after 2013, because the guarantee cannot be tacitly extended. Namely, in order to establish such an obligation, there must be a written guarantee statement in which the obligation will be clearly defined and to which the guarantee applies. Therefore, considering that by signing the Contract for purchase and sale of products, the defendant accepted to be liable only for the obligations based on the sale of beverages incurred during 2013, and did not provide a new guarantee statement for the period after 2013, in a situation where the debt in question stems from invoices issued in 2018, for which obligations the defendant does not guarantee, the court rejected the claim as unfounded.”
Dissatisfied with the decision of the first-level court, the plaintiff filed a timely appeal against it, while the first defendant filed an answer to the appeal, after which a case was filed before the Appellate Court Skopje under TSZ no.569/21.
On 10.06.2021, the Appellate Court Skopje, issued Judgment TSZ no.569/21, in which it adopted the plaintiff's appeal, modified the Judgment of the Basic Civil Court Skopje, 52 PL1-TS no.1341/19 dated 02.12.2020,in a way that rejected the objection of the second defendant as unfounded, terminated the Decision on issuing a notary payment order, NPN No. 1701/19 dated 17.05.2019, and adopted the specified claim of the plaintiff.
In the explanation of its decision, the Appellate Court Skopje stated that: “Regarding the question whether the defendant M.V., from Skopje, can be considered a guarantor of the obligations of the main debtor, incurred after 2013, ..... the provision of Article 1043 paragraph 4 of the ZOO should be taken into account according to which the guarantor for an obligation arising from a trade agreement is liable as a guarantor payer ..... In the event of the existence of a commercial agreement as in the case, the guarantor for the obligation arising from the trade agreement is liable as a guarantor payer, if nothing else has been agreed upon ..... In accordance with Article 1036 of the ZOO, the guarantor commits to the creditor with the guarantee agreement that he will fulfill the valid and due obligation of the debtor, if he does not do so and the warranty agreement binds the guarantor only if the warranty statement is given in writing, in accordance with Article 1037 of the ZOO ..... Taking into account that the concluded Contract for purchase and sale of products on 08.02.2013 between the buyer and the seller was tacitly extended even after the end of 2013, and the defendant, according to the Contract, guaranteed the fulfillment of all the buyer's obligations arising from this contract, in this particular case, the joint liability of the defendant on the basis of a given written guarantee statement cannot be excluded, thus the given guarantee binds the defendant also in relation to the obligations that for the debtor - the buyer resulted from the issuance of the defendant's consignment notes/invoices and its legal penalty interest, where the invoicing was performed for the sale of goods and this type of invoicing corresponds to the subject of the concluded Agreement dated 08.02.2013.”.

RULE

During the delivery of the Judgment of the Basic Civil Court Skopje, 52 PL1-TS No. 1341/19 dated 02.12.2020 and the Judgment of the Appellate Court Skopje, TSZ no.569/21 dated 10.06.2021, the courts applied the provisions of Article 1036, article 1037 and article 1043, paragraph 3 of the Law on Obligations.
According to Article 1036 of the Law on Obligations (Official Gazette of the Republic of Macedonia no.18/01, 04/02, 05/03, 84/08, 81/09, 161/09 and 123/13), it is provided that: “With the guarantee agreement, the guarantor commits to the creditor that he will fulfill the valid and due obligation of the debtor, if the latter does not do so.”
According to Article 1037 of the Law on Obligations (Official Gazette of the Republic of Macedonia no.18/01, 04/02, 05/03, 84/08, 81/09, 161/09 and 123/13), it is provided that: “The guarantee agreement binds the guarantor only if he made the guarantee statement in writing.”
Pursuant to Article 1043, paragraph 3 of the Law on Obligations (Official Gazette of the Republic of Macedonia no.18/01, 04/02, 05/03, 84/08, 81/09, 161/09 and 123/13), it is provided that: “If the guarantor has committed himself as a guarantor-payer, he is responsible to the creditor as the main debtor for the entire obligation and the creditor can demand its fulfillment either from the main debtor, or from the guarantor or from both at the same time (solidary guarantee).” while according to paragraph 4, it is provided that: “The guarantor for an obligation arising from a commercial contract is liable as a guarantor-payer, if nothing else has been agreed.”.

ANALYSIS OF THE JUDGMENT

The Appellate Court Skopje, by passing the Judgment, TSZ no.569/21 dated 10.06.2021, establishes a negative judicial practice in relation to the obligation of the guarantor towards the creditor, to fulfill a valid and due obligation of the debtor.
Namely, from the content of the judgment, it can be determined with certainty that the Appellate Court Skopje based its decision on an extensive interpretation of the provision of Article 1037 of the Law on Obligations, which is not in accordance with the letter of the law, in such a way that the obligation of the guarantor towards the creditor, for the debtor's obligations, extended it to instances where the guarantor has not given a written guarantee statement.
This is if it is taken into account, that with the passing of the Judgment, TSZ no.569/21 dated 10.06.2021, the Appellate Court Skopje determined that the statement of guarantee for the obligations of the first defendant to the plaintiff, which the second defendant gave in writing and which referred to the purchase and sale of beverages from the plaintiff's production range, during 2013, tacitly continued to be valid together with the tacit extension of the contract, i.e. with the tacit extension of the first defendant (the debtor) and the plaintiff (the creditor), to trade in goods that correspond to the goods that were the subject of the Contract for  purchase and sale of products, although according to Article 1037 of the Law on Obligations, it is stipulated that the guarantee agreement binds the guarantor only if he made the guarantee statement in writing, which means that by signing a guarantee for the fulfillment of precisely defined obligations from a precisely defined contract, the guarantor cannot under any circumstances guarantee the obligations of the debtor, which will arise after the termination of the validity of the contract, i.e., that the guarantee cannot be given, nor extended tacitly and therefore, bind the guarantor.
In view of the above, it undisputed that with the passing of the Judgment of the Appellate Court Skopje, TSZ no.569/21 dated 10.06.2021, the legal certainty of the persons who in commercial contracts agree to be liable for the obligations arising for the debtor is called into question from the contracts itself, that is, the period of time in which the guarantor is liable for the obligations of the debtor and when he is released from the obligation to fulfill the obligations of the debtor is questionable.