Everyone is familiar with the story of the dashing Musketeers – Porthos, Athos, Aramis and d’Artagnan- and their inspirational motto. At the end of his adventures, one member of this famous band retired in order to marry the widow of a wealthy French lawyer, for whom the rallying cry might well have had a different significance.
A large part of what many lawyers do on a day-to-day basis involves the creation, modification or enforcement of obligations. Obligations come in myriad shapes and sizes, but amongst the most fundamental is the simple debt. Lawyers are accustomed to categorising obligations, including debts, according to whether they are joint, several, or joint and several in nature.
Under English common law, the presumption is that an obligation contracted by debtors together is a joint (or, depending on the circumstances, a joint and several) debt. In other words, if Porthos lends £100 to Athos and Aramis, as far as English law is concerned Athos and Aramis are each liable to repay up to the full £100 (although it goes without saying that Porthos cannot recover more than £100 in total). Therefore, if Aramis dies, disappears or becomes bankrupt, Athos may have to find the whole repayment sum himself. Athos would have an equitable right to obtain a contribution from Aramis or his estate for his “share”, but this will be worthless if there are no assets to enforce this right against. Importantly (for him), Porthos does not need to concern himself with arrangements between Athos and Aramis: he can take judgment and enforce against one or both, as he pleases, and leave it to his fellow Musketeers to sort matters out between themselves afterwards. This is all subject to the terms of any agreement which may have been concluded in respect of the original loan, but it does represent the default position (admittedly, in somewhat simplified terms).
Contrast the position under civil law systems (such as in France). Assuming Porthos makes the same loan to Athos and Aramis, and nothing is agreed to the contrary, the general presumption is that the obligations to repay are several in nature. Accordingly, Athos and Aramis are each obliged to repay their £50 share, but neither can be compelled to pay anything in excess of that, whatever happens to the other Musketeer.
Modern Guernsey law is heavily influenced by common law doctrines and developments, but there are still areas in which its civil law origins are clearly visible. This is especially so in the fields of property law and inheritance but it is also true in the law of contract. Although nearly every modern Guernsey contract will be drafted in the English language, the primary sources of contract law are still essentially French. In Guernsey, assuming the parties had not agreed anything to the contrary, the civil law analysis of the obligations which had been created would apply. This is one reason why Guernsey lawyers are careful to specify in the agreements they draft whether a debt or other obligation affecting more than one party is joint, several, or joint and several in nature.
Similar considerations hold true for obligations arising under guarantee and indemnity agreements. For example, Porthos might agree to lend Athos £100, with Aramis standing surety for the debt. In that case, there is no doubt that Athos owes £100 as principal debtor: but what if he fails to repay the loan? Porthos will call on the guarantee provided by Aramis, whose position under Guernsey law may be affected by a customary law right called the droit de discussion.
The droit de discussion is a right to compel the creditor, in this case Porthos, to “discuss” the debt with the principal debtor (Athos) before calling on the surety (Aramis) to fulfil his obligations as guarantor. In this context, “discussing” the debt means that Porthos must have recourse to Athos’s assets first, before trying to recover the amount of the debt (or any balance) from Aramis. Until Porthos has exhausted his rights against Athos’s assets, he is not able to sue Aramis under the guarantee. If Porthos does attempt to sue prematurely, Aramis can raise the droit de discussion as a defence and the action will be stayed, or even struck out.
The position is further complicated where there is more than one guarantor. If Porthos lends £100 to Athos and both Aramis and d’Artagnan agree to stand surety, then another customary law right comes into play. This is the droit de division, which is a right available to individual debtors to force their creditor to divide a debt between them. Assuming the principal debtor Athos has no assets, then Aramis and d’Artagnan are both liable on the guarantee they have provided: but each is entitled to ask Porthos or, failing his agreement, the judge, to divide the £100 liability between them. Again, assuming nothing has been agreed to the contrary, the liability will be apportioned as to £50 each. This is very different to the position under English common law, where Porthos could sue either Aramis or d’Artagnan for the full £100, and leave them to sort out an apportionment between themselves afterwards.
In these respects, Aramis and d’Artagnan are clearly in a better position under Guernsey law than they would be in England, and Porthos’s position is correspondingly the worse. At least, that is the situation in theory. In reality, there are certain legal and practical limitations which come into play and which cut down the debtors’ customary law rights.
From the legal perspective, even under Roman law the droit de division did not apply where one of the co-guarantors had become insolvent, and this was carried forward into Normandy and therefore also the Guernsey legal system. Guernsey customary law then extended this principle so that the right is not available where one of the co-guarantors has left the jurisdiction. Accordingly, if d’Artagnan has run out of money or gone to England, Aramis will still have to find the full £100 himself. The justification for such limitations appears to be that, while justice demands there be some degree of equal treatment between joint debtors in Guernsey, this does not justify putting the creditor to undue inconvenience or expense in ensuring he is repaid in full.
Modern drafting practice also cuts down the scope for customary law rights to raise their heads. As they can be excluded from a transaction by express agreement of the parties, provided the words of the agreement are clear enough to achieve this, creditors will - or should - always insist that these rights are waived as a condition of entering into the transaction in question. For this reason, any properly drafted guarantee which is governed by Guernsey law or which includes a Guernsey party will contain a clause which expressly excludes the droit de division, the droit de discussion and all other rights of a similar nature (various French and Guernsey sources refer to these rights by different names).
Nevertheless, creditors and draftsmen are not always as careful as they might subsequently wish they had been, with the result that these rights do still occasionally come before the court today. Some might assume that, because the language of modern Guernsey law is undeniably English, local judges and lawyers look at contracts through essentially English eyes. This is not always the case by any means – so tous pour un, un pour tous!