{"id":27604,"date":"2023-09-23T08:34:46","date_gmt":"2023-09-23T08:34:46","guid":{"rendered":"https:\/\/legalblog.ie\/?p=27604"},"modified":"2024-01-09T21:54:01","modified_gmt":"2024-01-09T21:54:01","slug":"rights-v-debtor-others","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/rights-v-debtor-others\/","title":{"rendered":"Rights v Debtor &#038; Others"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/rights-v-debtor-others\/#Indemnity_from_Debtor\" title=\"Indemnity from Debtor\">Indemnity from Debtor<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/rights-v-debtor-others\/#Action_v_Debtor\" title=\"Action v Debtor\">Action v Debtor<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/rights-v-debtor-others\/#Rights_Exercisable\" title=\"Rights Exercisable\">Rights Exercisable<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/rights-v-debtor-others\/#Amounts_Recoverable\" title=\"Amounts Recoverable\">Amounts Recoverable<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/rights-v-debtor-others\/#Contribution\" title=\"Contribution\">Contribution<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/rights-v-debtor-others\/#Contribution_Issues\" title=\"Contribution Issues\">Contribution Issues<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/rights-v-debtor-others\/#Securities_Contribution\" title=\"Securities &amp; Contribution\">Securities &amp; Contribution<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Indemnity_from_Debtor\"><\/span>Indemnity from Debtor<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There is an implied right of indemnity for the guarantor against the guaranteed\/principal debtor.\u00a0 This may be varied by an express right of indemnity. Until the guarantor has paid the creditor, the rights of indemnity are not a debt owed to the guarantor.<\/p>\n<p>A person cannot make himself a creditor by volunteering to discharge another\u2019s obligations.\u00a0 It seems, however, that a guarantee given without a prior request makes the guarantor entitled to be reimbursed by the debtor if he can bring himself within the general principle which enables a person who is compelled to make a payment for the benefit of another and for which that person is liable and obtains the benefit, may recover payment from that person.<\/p>\n<p>When the creditor has a right to immediate payment from the guarantor, the guarantor may require the principal debtor to pay the amount guaranteed in order to relieve him of his obligations, even though the creditor may not have demanded from him.\u00a0 This principle applies even though the guarantor has paid nothing under the guarantee.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Action_v_Debtor\"><\/span>Action v Debtor<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If the principal debtor fails to pay, the guarantor may obtain an order to compel him to do so.\u00a0 It is not necessary that the creditor has refused to sue in order to obtain relief.<\/p>\n<p>A guarantor may take action against the debtor and creditor to declare that he is relieved from further liability under the guarantee where this is the position as a matter of law.<\/p>\n<p>The guarantor may have a right of damages against the principal debtor if he has a collateral promise from the principal debtor to pay the creditor on the due date.\u00a0 The guarantor must pay any sum recovered to the \u00a0creditor, if he has not been paid.\u00a0 If the debtor later pays a creditor even when overdue, he will not recover any substantial damages.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Rights_Exercisable\"><\/span>Rights Exercisable<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A guarantor for a company&#8217;s debt may present a petition for winding up as a contingent creditor.\u00a0If a guarantor pays the seller of goods, he may exercise the right of stoppage in transit in the name of the seller.<\/p>\n<p>Where the guarantor pays on foot of the guarantee, he has a right of action against the debtor.\u00a0 He may not bring his right of action forward by paying prematurely.\u00a0 Payment would include where payment is procured by way of enforcement and realisation of execution.\u00a0 The giving of a bond or security is not equivalent to payment.<\/p>\n<p>By the Mercantile Law Amendment Act 1856, a guarantor who pays the creditor is a specialty creditor if the contract under which the original liability arose was made under a deed. A guarantor who pays off a preferential debt in bankruptcy or other insolvency process has the same priority as the creditor.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Amounts_Recoverable\"><\/span>Amounts Recoverable<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The guarantor&#8217;s right to indemnity is a right to recoup \u00a0the amount paid to the creditor with interest.\u00a0 The guarantor may also recover any further damage he incurs as a result of being obliged to pay under the guarantee.<\/p>\n<p>A guarantor who settles the debt for which he and the debtor are jointly liable may only recover the amount settled and paid.\u00a0 The guarantor may not recover from the debtor in respect of the statute barred sums or sums in respect of a fraudulent, void or unlawful claim.<\/p>\n<p>A guarantor may recover costs paid in defending actions taken by a creditor if he undertook the defence with the authority of the debtor or reasonably defended the matter in the interests of the debtor. If, however \u00a0he incurs unreasonable costs or defends for his own benefit, he may not recover the costs, or any amount unreasonably incurred.<\/p>\n<p>A guarantor who has paid on foot of a guarantee may take independent proceedings or may join as a \u00a0third party in proceedings brought by the creditor.\u00a0 It may be based on express indemnity where it exist or the implied indemnity above.\u00a0The liability of the guarantor may be the subject of a set-off and counterclaim.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Contribution\"><\/span>Contribution<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A guarantor who has made paid more than his share of a common liability, may obtain contribution from his co-guarantors, if they are bound jointly and severally or severally or by the \u00a0same or different instruments and whether or not when they became bound, they knew that the other was co-guarantor or not.\u00a0 This arises from equitable principles.\u00a0 The substance of the position will prevail over form.<\/p>\n<p>The right of contribution does not arise where the parties are not subject to a common debt.\u00a0 There is no general principle that requires a person to contribute to an expenditure, simply because he has received a benefit from it.\u00a0 Where persons are liable by different instruments for different parts of a debt due from the same principal, the guarantee may be separate.<\/p>\n<p>The right of contribution may be negated where one person has become a co-guarantor at the request of another co-guarantor on the undertaking of the other co-guarantor to indemnify him against all loss.\u00a0 These are circumstances where it can be implied that as between them, only one is to be liable.<\/p>\n<p>There is no right of contribution against a person who became guarantor on condition of another signing as co-guarantor, when the condition was not fulfilled or where the person seeking to enforce it, has been guilty of fraudulent concealment.\u00a0 However, a co-guarantor is not under any greater obligation.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Contribution_Issues\"><\/span>Contribution Issues<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The right to contribution after payment, \u00a0arises when the guarantor has paid more than his proportionate amount of the common liability.\u00a0The right of contribution may arise before or after the guarantor has fulfilled the guarantee.\u00a0 However, prior to the enforcement of guarantee, it is theoretical only.\u00a0 He may prior to payment by action against his fellow guarantors force him to contribute towards liquidation of a common liability.\u00a0 He may obtain a declaration of\u00a0 his own right of contribution.<\/p>\n<p>A guarantor may recover contribution notwithstanding that he has paid voluntarily and without threat of proceedings.\u00a0 He must pay from his own funds.\u00a0 Where he pays with the assistance of a third-party to whom security for the guaranteed debt are assigned by the creditor, both are treated as one and the guarantor must bring into account monies received in relation to the sureties.<\/p>\n<p>The amount recoverable is determined by the number of solvent sureties.\u00a0 Where each is liable for the same amount, they should contribute equally.\u00a0 If not equally liable, they should contribute proportionately relative to the amount for which they were liable.<\/p>\n<p>Where guarantors are liable by separate deeds in unequal amounts, none of them may be called to contribute beyond that for which he is liable under the terms of his own deed.<\/p>\n<p>Interest is recoverable by the guarantor on \u00a0the sum due for contribution from the date when he has paid the creditor.<\/p>\n<p>The costs incurred by a guarantor in defending his claim is not part of the contribution unless he has authorised in so doing or in defending the action is a prudent and reasonable course.<\/p>\n<p>In claiming contributions, a guarantor must give credit, for anything received from the principal debtor by way of security or indemnity.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Securities_Contribution\"><\/span>Securities &amp; Contribution<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A guarantor who has paid more than his proportion on a common liability may have the creditor&#8217;s rights and securities assigned to him whether or not satisfied for the purpose of obtaining the contributions.\u00a0 This also includes securities received from co-sureties and he may accordingly recover contribution.<\/p>\n<p>He is entitled to the benefit of securities which have been taken by another co-guarantor to indemnify himself against the common liability and also of a judgment obtained against the debtor by the creditor and the sureties.<\/p>\n<p>A co-guarantor takes and brings into account what he receives by way of counter security from the principal debtor. It does not matter whether the other sureties were aware of such counter sureties.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-27604\" data-postid=\"27604\" class=\"themify_builder_content themify_builder_content-27604 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Indemnity from Debtor There is an implied right of indemnity for the guarantor against the guaranteed\/principal debtor.\u00a0 This may be varied by an express right of indemnity. Until the guarantor has paid the creditor, the rights of indemnity are not a debt owed to the guarantor. A person cannot make himself a creditor by volunteering [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[374],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/27604"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=27604"}],"version-history":[{"count":5,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/27604\/revisions"}],"predecessor-version":[{"id":30519,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/27604\/revisions\/30519"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=27604"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=27604"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=27604"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}