In this brief article, we shall take a look at the legal concept of disputed credit in the light of the recent judgment from the Supreme Court number 464/2019, dated 13th September, within the framework of a lawsuit claiming the recognition of the retrospective right over a disputed credit.
Article 1535 of the Spanish Civil Code, with regard to the transmission of credits, establishes that:
“In the event of sale of a disputed credit, the debtor shall be entitled to extinguish said credit by reimbursing the assignee of the price paid, any costs incurred and interest on the price from the date on which it was paid.
A credit shall be deemed disputed from the time that a response to the claim relating thereto is filed.
The debtor may exercise his right within nine days, as from the moment of the assignee’s claim for payment.”
In this particular case, entity A granted a loan to the claimants – natural persons – in 2011, which was not paid. In 2013, said entity filed a court claim, and upon the enforcement of the judgment an agreement was reached for the payment of the debt in monthly instalments over a number of years.
In 2014, entity A transferred the credit to entity B, whereupon, in 2015, the claimants filed a lawsuit for the retrospective right on the disputed credit against entity B.
The claim was admitted in first and second instance, and the right of the claimants to recuperate from entity B the credit bought from entity A was declared, extinguishing the credit by reimbursing the price to the assignor (entity A).
Entity B filed a cassation appeal alleging the breach of Supreme Court case law regarding the interpretation of article 1535 of the Civil Code regarding the concept of disputed credit (Supreme Court Judgment 149/1991 of 28th February 1991; 192/2006, of 28th February 2006; 976/2008, of 31st October 2008).
Specifically, the appellant-defendant argued that the assigned credit may not be considered disputed, given that when the assignment of the credit occurred a final judgment had already been issued, and during the enforcement phase an agreement had been reached for the payment of the debt.
In its recent judgment, the Supreme Court explains that article 1535 of the Spanish Civil Code establishes the first day from which a credit may be deemed disputed (as from the moment of responding to the claim, or when the term for responding has precluded, where appropriate), but the last day is not defined. For the sake of determining said final date, the court recalled its judgment 690/1969 of 16th December, which placed the final date as when the judgment or judicial resolution that declares the certainty and enforceability of the credit becomes final, or as soon as the process ceases in some other way, such as a transaction, as in the case in question.
Therefore, it dismisses the action for the retrospective right over a disputed credit, given that the assigned credit lacked a disputed nature when the assignment occurred, since its existence, enforceability and amount had already been determined in a final judgment.
Carla Villavicencio
Vilá Abogados
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31st October 2019
