Libro IV · Título II Capítulo XII. Del contrato de fianza y del reafianzamiento

The provisions of this chapter shall apply to the sureties granted by surety companies authorized in accordance with the law.

The surety shall be recorded in a policy that shall contain:

1º.The place and date of its issuance.

2º.The names and domiciles of the surety company and of the principal.

3º.The designation of the beneficiary.

4º.The mention of the guaranteed obligations and the amount and circumstances of the guarantee.

5º.The signature of the surety company, which may be handwritten or replaced by print or reproduction.

In the absence of a policy, the surety shall be proved by the confession of the surety company, or by any other means, if there is prima facie written evidence.

The surety company shall be bound jointly and severally and shall not enjoy the benefits of order and excussion.

If a surety is granted to answer for the conduct of a person, the beneficiary may demand payment when it proves, by any means and without need of a judicial declaration, that the principal has incurred the act or the omission provided for in the contract.

The surety company may require the principal or the counter-guarantor to secure payment to it only:

1º.When false data have been provided about the solvency of the principal or of the counter-guarantor.

2º.If a real counter-guarantee was created and the value of the property decreases in such a way that it becomes insufficient to cover the amount of the guaranteed obligation.

3º.If the debt becomes due or its payment is judicially demanded.

4º.When five years elapse, if the obligation has no stated maturity date or this does not derive from its own nature.

For the purposes of this article, the surety company may attach property of its debtors. The attachment shall be maintained until the surety company is released from its obligation or sufficient counter-guarantee is created.

The beneficiary must demand payment of the surety in writing with supporting grounds, and the surety company shall be in default if it does not pay within the following time limits.

1º.Ten days in sureties where there is no re-suretyship.

2º.Thirty days, where there is re-suretyship.

Any agreement that sets a time limit different from the one indicated in this article, or a rate different from the legal rate for default interest, shall be null.

The obligations of the surety company shall not be extinguished because the creditor does not judicially require the debtor to comply with its obligations, nor because the proceeding brought against the debtor is not prosecuted.

If the creditor grants an extension or forbearance to its debtor, it must communicate this to the surety company within the following five working days. At any time the surety company may cover the debt and demand its reimbursement from the debtor, without the debtor being able to invoke against the surety company the forbearance granted by the creditor.

Failure to give timely notice of the first extension or the granting of a subsequent one without the consent of the surety company shall extinguish the surety.

Under the re-suretyship contract, a surety company undertakes to pay to another, in the proportion stipulated, the amounts that the latter owes to the beneficiary of a surety.

The re-surety company is obliged to provide funds to the surety company as soon as the latter communicates to it that it has been required to pay by the beneficiary of the surety, and that it is going to proceed to make the payment.

The lack of timely provision shall make the re-surety company liable for the damages it causes to the surety company.

The re-surety company that pays the surety company shall be subrogated to the latter's rights against the principals and counter-guarantors.

In co-suretyship, the co-surety companies shall not enjoy the benefit of division, unless otherwise agreed.

The actions of the beneficiary against the surety company and those of the latter against the counter-guarantors and re-surety companies shall be time-barred after two years.

In matters not provided for in this chapter, the rules of the reinsurance contract shall apply to re-suretyship, to the extent they do not conflict with it.