Assignment of Credit for Guarantee Purposes: Commentary on Judgment No. 19358 of 2024

The judgment No. 19358 of July 15, 2024, of the Court of Cassation offers an important clarification regarding the assignment of credit for guarantee purposes. This topic, of crucial importance in the law of obligations, deserves an in-depth analysis to fully understand the legal consequences and the dynamics between assignor and assignee.

The Legal Nature of Credit Assignment

The Court, led by President R. G. A. and Rapporteur F. M. C., reiterates that the assignment of credit can have an exclusive function of guarantee. This means that the assigned credit enters the assets of the assignee and becomes their credit, legitimizing them to enforce both the original credit and the assigned credit as a guarantee, provided that the obligation of the guaranteed debtor is still in force.

  • The assignee can exercise rights over the assigned credits.
  • If the guaranteed obligation is extinguished, the credit would automatically revert to the assignor.
  • No negotiation activity is required for the reassignment of the credit.

Effects of Credit Assignment

A crucial aspect highlighted by the judgment concerns the effects of the assignment. In the event of total or partial extinguishment of the guaranteed obligation, the assigned credit is automatically transferred back to the legal sphere of the assignor, without the assignee having to take further action. This automatic mechanism is similar to that of a resolutory condition, ensuring fluidity in transactions and protection for the assignor.

Transfer of credit for guarantee purposes - Effects - In general - Collection of assigned credit for guarantee purposes - Legitimacy of the assignee - Limits - Extinction (total or partial) of the guaranteed obligation - Consequence - Re-transfer to the legal sphere of the assignor, in the same measure, of the assigned credit - Existence - Operativity - Automatic. The assignment of credit, having a variable cause, can also have an exclusive function of guarantee, resulting in the same effect, typical of ordinary assignment, immediately transferring the right to the assignee, in the sense that the assigned credit enters the assets of the assignee and becomes a credit of theirs, which therefore is legitimized to enforce both the original credit and the one assigned as guarantee, as long as the obligation of the guaranteed debtor persists; however, if there is an extinguishment, total or partial, of the guaranteed obligation, the assigned credit for guarantee purposes, in the same quantity, is automatically re-transferred to the legal sphere of the assignor, with a mechanism similar to that of the resolutory condition, without the need for direct negotiation activity on the part of the assignee for this purpose.

Conclusions

In conclusion, judgment No. 19358 of 2024 represents an important piece in the understanding of the assignment of credit for guarantee purposes. It clarifies the rights and duties of the parties involved, as well as the methods of credit transfer. This ruling of the Court of Cassation not only provides guidance for legal practitioners but also contributes to greater legal certainty in economic transactions.

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