The relationship between the secured debtor and  the guarantor does not apply to the beneficiary of the first-demand guarantee. The guarantor can  request the fulfilment of the guarantee if the conditions agreed in the guarantee are met without it being necessary to  have the original document to use it.

A limited  company claimed a payment of €750,000 from Caja Madrid in fulfilment of a  first-demand guarantee securing the  payment of the  deferred  price of the sale of an  immovable property.  The guarantee had been deposited with a  notary.  The day before  the guarantee’s expiry,  the seller had claimed  payment of the price from the buyer, evidencing fulfilment of the  conditions established in the agreement. The buyer did not  pay the deferred price and, on the last day of the payment of the price, it withdrew the guarantee and  returned it to the guarantor. Given the buyer’s non-fulfilment, the seller  requested payment from Caja Madrid,  which claimed that the guarantee had been  cancelled in  financial terms and that the original  document was in its possession.  The  first instance judgment, confirmed under appeal, ordered Caja Madrid to pay the amount of the  guarantee plus interest.  The judgment was appealed before the Supreme Court,  which dismissed the cassational appeal and extraordinary appeal for breach of procedure.

According to the Supreme Court,  the first-demand guarantee should be considered,  despite any differences, to be a personal guarantee (fianza) with certain specifics. Citing  prior case law, the Supreme Court stated that the nature of the first-demand guarantee “is that of  generating an immediate guarantee obligation that loses its classification as  accessory to the main obligation -in contrast to a personal guarantee (fianza)-, in which  the guarantor’s obligation is independent of the  secured party’s obligation and of the  initial agreement (…), so that the guarantor cannot raise before the beneficiary of the  guarantee,  reclaiming payment,  any  exceptions  other than those arising from the  guarantee itself.” The provision of the guarantee by Caja Madrid, and its acceptance by  the beneficiary (the seller) led to a contractual relationship between the two to which the  buyer is not a party. The relationship between Caja Madrid and the buyer does not apply to the beneficiary of the  guarantee,  which  can  reclaim its fulfilment and  render the guarantee effective if  it meets the conditions agreed in the guarantee. In this specific case, it was considered that the  conditions were met to  render the guarantee effective.  Moreover, it was declared that it was not necessary for the beneficiary company to have the guarantee to use it, because this was not agreed in the guarantee. As in the case of  personal guarantees, the principle of the freedom of form governs its granting.