The lack of funding and the Securities, Rafael Juan Juan Sanjose

exchange law


Cuando las partes son las mismas que las del negocio jurídico subyacente que originó la emisión de la cambial, surge, above the right certificated, the business and therefore causal, They may oppose the exchange debtor defaults those that occurred on the basis of fundamental contract.


The following is the work of Juan Rafael Juan Sanjosé, Alternate Judge of the Provincial Court of Castellón.




The lack of funding and the Securities

Rafael Juan Juan Sanjosé
Alternate Judge of the Provincial Court of Castellón



1.- Introducción.-
2.- The provision of funds as the basis of the payment obligation.-
3.- Except for lack of funding.-
4.- Conclusión.-


1.- Introducción.-

In securities (bills of exchange, checks and promissory notes) There are two payment obligations with different backgrounds and with different consequences, so in this paper, we intend to conduct an analysis of those arguments can perform the required currency at the same time it is certificated, to invalidate all or part of their obligation to pay.

We will focus on the claim by the obligor of those personal exemptions that will link with the creditor claiming the credit in the cambial insert, and more specifically those deriving from infringements by the latter regarding the causal legal contract.

To understand the possibility of alleging breaches, whether partial, Total defective or, you must take the concept of funding, it will be that underlying legal transaction preceding the issuance of the cambial and therefore live with the right certificated own value that sets the title.

That is why the lack of funding may be claimed by the obligor to the claim made by the creditor exchange / causal. But we must clarify regarding this generic exception, They reported that defaults may be either total or defective, partial or late, which will lead to generic objection of lack of funding derived from the specific lack of full compliance (not an exception, so the contract) and partial compliance, defective or late (exceptio non rite adimpleti contractus).

2.- The provision of funds as the basis of the payment obligation.-

Securities, as documents that have built an autonomous and abstract right, independent of the core business which gave rise to the issuance of the cambial, confer, the holder thereof, Reinforced right to obtain payment and therefore protects the legitimate holder of the bill of exchange, check or promissory note, against claims based on the underlying legal contract.

However, not forget that, right next to cartular, and to fulfill the obligation that carries the title insert, still alive obligations that were generated for the parties under the fundamental business. And this is due to the delivery of the cambial as consideration for the obligations of the creditor exchange, It is performed paying for and no for solutes, whereby said causal contract may, on occasion, certificated resurgence over the business itself.

That is why we must take into account the primeval contract where the parties to the underlying legal transaction are the same that make up the claim in which breaches of contract are excepted, virtuality not having such claims once it has entered into circulation the title and it is in possession of a third party who is alien to that underlying business. This is based on Article 67.1 ESA, whereby, exchange debtor may raise against the holder of the bill those issues based on his personal relationship with him, as well as having over previous holders in acquiring the bill if the holder knowingly proceeded to the detriment of the debtor.

Such exceptions will have its greatest significance when the parties to the exchange judgment are the same as those who participated in the causal contract, since otherwise, the principles of autonomy and abstraction that govern the securities will make those arguments unenforceable, except, as expressed in Article 67.1 LCCH that has acted to create awareness of harm to the debtor.

As he points ILUNDAIN MINONDO (1) its effectiveness is relative and that, except in the event the provisions of the last paragraph of Article 67.1 LCCH and oppose the An exception fraud, they will only be able to object against which was part along the defendant in the underlying legal transaction.

For everything I said, we examine the concept of providing funds, or underlying legal transaction and about, ROMANIAN Moxico (2), It provides an overview of the funding from the historical perspective and thus specifies that from an economic point of view consisted value transmission makes the drawer to the drawee, under the same, Letter pay the due date, the drawer being initially conceived as an agent to perform the contract, so it should be provided with funds to meet the request.

The author adds that the massively subsequent use of bills of exchange as a means of acquiring credit, a new form of funding is generated, which it is not the actual delivery of funds, but it consists of the credit, for any reason, the drawer has against the drawee.
As noted CARBAJO GASCÓN (3) except for lack of funding it will be invoked in relations between drawer and drawee, and so the acceptor (debtor) wields to the creditor (drawer), he seeks payment of the exchange obligations, the nullity of the contract that justified the creation and issuance of the letter, While the extinction of the causal obligation that gave rise to the exchange obligation or the failure by the creditor of the obligations assumed in the fundamental relationship.
In conclusion, the provision of funds, as they are set up trade relations today, will consist of the transmission of the parties of a security that involve the reciprocal obligation of another participant in the legal transaction for a fee, which, and in the present case, will be the delivery of certificated document with consequent obligation to pay the same for the causal required that both it will be certificated exchange once the document delivered.
So that, the obligor must, once he is required, or terms and conditions that reflect the wording of the title are met, realizing the inherent credit cambial, While the first creditor, or the legitimate holder of certificated document, if it has entered into circulation.

As we advanced, the total lack of provision or provision made for insufficient or defective manner by the causal creditor, will cause the obligor can, provided that the cambial in possession of primeval creditor, allege the breach in order to try to avoid the full or partial payment of the consideration due and inserted into the securities, which should be performed by means of the objection of lack of funding (4).

3.- Except for lack of funding.-

The exception to lack of funding is intended to denounce the absence or disappearance of the underlying cause of the security, and therefore the lack of translation by the creditor causal value that produces the obligation of the other contracting to fulfill the commitment inherent cash on delivery of the security.

So, This lack of translation or realization of generating emission obligation of the security, the primeval creditor, It produces this failure of the obligations assumed in the underlying legal transaction.

This makes, Depending on the degree of non-compliance, this causes no underlying cause unenforceability insert in the securities credit, While invoking the nullity of the contract which justified the issuance of the cambial, the extinction of the debtor's obligation, or more generally by the drawer breach of its obligations under this causal relationship.

Lack of funding, and therefore the failure of causal creditor, It is a generic personal exemption (5) as such may be claimed by the obligor either through its specialty total failure, resulting in not an exception, so the contract, or partial, It alleged by exceptio non rite adimpleti contractus, the two exceptions being the subject of doctrinal and jurisprudential controversy when it can be wielded judgment seat of exchange.

By this we mean that the debtor was required to meet the obligation arising from the underlying legal contract, you can attempt to weaken the payment by the objection of lack of funding, generically, but it should concretize based on the caliber of failure when establishing its claims to center the object of debate in court. Which leads to good except for lack of funding is fencing and then determine what kind of failure is reported, or you can choose to directly oppose the exceptio non rite adimpleti or non contractus, like species within the genus which is the lack of funding.

While it is true that the discussion on the possibility of excluding the lack of funding has not been very fruitful in the slope of total failure, focusing mainly confronted positions regarding the partial or defective Failure, the fact remains that the doctrine and jurisprudence have made a hue when studying the exception of funding depending on what type of value is subject title claim.

In this regard ILUNDAIN MINONDO (6), highlights the different treatment that has been given as we are facing a bill of exchange or promissory note and so while in the case of bills never have raised doubts about the possibility of excluding the total breach of the underlying contract between the parties to the same, in the event that the complaint be about a promissory note, the question is different, and so, if it is true that in principle the provincial courts were favored by the dismissal of the objection of lack of funding in the notes (7), based on the incompatibility with the nature of it, which incorporates no more than a promise to pay, against payment mandate is included in the bill of exchange, this controversy was settled with the SSTS of 1 December and 17 April 2006.

In those judgments the High Court it was stated that "... this expression (8) It is broader than the traditional "lack of funding", since it refers, among other circumstances, the absence of underlying cause-the title issued which can be any legal relationship of value between the drawer and the drawee under which it is issued the title or the drawee has consented to the issuance charge- its occurrence or disappearance. This broad notion is applicable only to pay, promise to pay normally justified by the recognition of the existence of a current or future debt of signatory, while forms of providing actual funds, fictitious or authorized in favor of the issuer as causal substrate title whose default generates the disappearance of the causal basis- They are specific to the bill of exchange, which amounts to a mandate directed to a third party payment, and therefore the transfer of rights relating to the provision is only possible in connection with the latter (article 69 ESA ), but not for the note (article 96 ESA , which excludes Article 69 LCCH between applicable to pay)…”

Carbajo GASCÓN (9) shares this vision and thus specifies that certainly does not fit the objection of lack of funding in the note, in the absence of provision in it which is characteristic of securities, of delegatoria structure (10). The notes incorporate an outright promise to pay a bilateral structure, there simply valuta ratio linking the signatory to the policy title and endorsers with endorsees.

But, clarifies the author, that does not mean, however, you can not exception in, in the case of pay, the lack or absence of cause, when the relationship of the underlying legal transaction valuta underlying the issuance of the cambial.

That is why today most provincial courts allowed, without major repair, the plea of ​​lack of funding in its meaning of "absence or removal of the cause of the title", covering both the invalidity of the contract, as the breaches of the, and therefore it is perfectly alegable exchange in the field of trial.

Having settled the existing controversy both doctrinal, as case law on the admissibility of the generic exception of lack of funding regarding the note, I must say that this exception, in their specialty total failure, is peacefully accepted by all sectors doctrinal enforceable judgment seat of exchange (11).

Another thing is what happens to the partial or defective breaches of obligations according to the fundamental legal transaction, controversy which continues until today and that is the main object of study of this work, It is very different both doctrinal different opinions as jurisprudence about the issue exceptio non rite adimpleti contractus.

4.- Conclusión.-

For everything I said, and conclusion, although the principles of autonomy and abstraction of securities, when the parties involved in the credit claim they carry rigged, They are the same as those that were part of the underlying agreement that led to the issuance of the cambial, surge, above the right certificated, the business and therefore causal, They may oppose the exchange debtor defaults those that occurred on the basis of fundamental contract, without prejudice to such derogations third parties in good faith, that once circulated cambial, They have become legitimate holders thereof.

These defaults must be opposed by the objection of lack of funding, in his specialty total failure it is not disputed by the doctrine in their ability to claim the seat of judgment exchange, contrary to what happens to those partial compliance or defective, they have been and remain controversial, both doctrinal and jurisprudential, in the sense of its claim in the special trial created ad hoc for claiming securities.

Juan Juan Rafael Sanjose

Alternate Judge of the Provincial Court of Castellón.



(1) ILUNDAIN MINONDO, M.P., "Judgment Exchange- Problems in its application – Reasons for opposition exchange – Causal exceptions ", Digital Training Notebooks, General Council of the Judiciary 2011, No.. 8, pp.. 146-178.

(2) ROMANIAN Moxico, J., Exchange and Cheque Act - Analysis of Doctrine and Jurisprudence, 6ª ed., And. Aranzadi, S.A., Low cizur (Navarre) 2002, p. 570.

(3) Carbajo GASCÓN, F., "Judgment Exchange. Problems in its application – The cause and representation in currency securities ", Digital Training Notebooks, General Council of the Judiciary 2011, No.. 8, pp.. 60-102.

(4) We say it should be done through the objection of lack of funding since although it is true that in the field of declaratory judgments, you might consider unjust enrichment action upbraiding the plaintiff seeking to recover the securities, or even by an exception pluspetición, judgment seat of exchange, that is what concerns discussed in the present work, this option will not be possible, and we must stick to the underlying cause of the lack of legal business by the opposition based on the lack of funding.

(5) Based on the provisions of Article 67 LCCH when you set the enforceability of "personal relations" between the parties to the contract causal.

(6) ILUNDAIN MINONDO, M.P., "Judgment Exchange ..., on. cit.

(7) In the same way you pronounce Soto Vazquez, R., Opposition Manual Exchange, And. Wives, Granada 1992, p. 435, when he says that "since the note assumed (and supposed, according to the article 531.8º repealed CC) a kind of acknowledgment of doubt that the commitment to pay is assumed directly by the drawer title, Clearly there is no question at all of lack of funding as a reason for opposing the payment thereof ".

(8) "Personal relationships" referred to in Article 67 ESA.

(9) Carbajo GASCÓN, F., "Judgment Exchange ..., on. cit., pp.. 60-102.

(10) Bills of exchange and checks.

(11) So you do see J. NAVARRO BONET, Currency judgment debtor and opposition. Doctrine, jurisprudence and forms, And. The Law, Madrid 2004, p. 622, asserting that even authors under the legislation repealed by the LCCH denied the admissibility of a case of invalidity for lack of funding no longer recognize their eligibility among the causes that are included in art. 67.1 ESA, as is the case VICENT CHULIÁ, F., Critical compendium of Commercial Law, II, And. Bosch, Barcelona 1990.


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