Do you know what´s the difference?
Both the surety and the endorsement are waranties of satisfaction of a certain credit. Both garantors undertake to honor a certain debt if the original debtor does not do so.
But the similarities stop there. The endorsement is an institute concerning foreign exchange securities (or credit securities), and was initially regulated by the Commercial Code of 1850. Currently, articles 897 and following of the Civil Code of 2002 deal with the endorsement and its consequences. Conceptually speaking, the guarantee is an exchange act by which a person (guarantor) undertakes to pay a security bond under the same conditions as the original debtor.
The surety is a kind of personal guarantee given in contracts as a whole, not just in securities.
Civil Code, 2002. Art. 818. By the guarantee contract, a person guarantees to satisfy the creditor an obligation assumed by the debtor, in case the latter does not fulfill it.
The main difference between the two institutes lies in the responsibility of the third party (guarantor), where, in the case of the endorsement, both the principal debtor and the guarantor are jointly and severally liable for the established debt, and can be triggered at random. In the surety, as a general rule, there is a peculiarity called “order benefit”, where the guarantor has the right to demand that the original debtor be required first to pay the debt. It is called “subsidiary liability”.
Civil Code, 2002. Art. 827. The guarantor demanded for the payment of the debt has the right to demand, until the dispute is disputed, that the debtor’s assets be first executed.
Single paragraph. The guarantor who claims the benefit of order, referred to in this article, must nominate the debtor’s assets, located in the same municipality, free and clear, as many as are sufficient to resolve the debt.
It is worth noting that the Civil Code of 2002 also brought the need for urgent granting (authorization from the spouse) for a person to provide bail or surety, except in the absolute separation of assets.
