Ruling on guarantees law 57/1968 of the Provincial Court of Alicante.

PROVINCIAL COURT OF ALICANTE

SECTION EIGHT.

COMMUNITY TRADE MARK COURT

ROOM ROLL NO. 4 ( 4 ) 14.

PROCEDURE: Ordinary trial No. 1708 / 12

COURT OF FIRST INSTANCE NO. 5 OF ALICANTE

SENTENCE NO. 26/14

Iltmos.:

President: Mr. Enrique García Chamón Cervera.

Judge: Mr. Luis Antonio Soler Pascual.

Magistrate: Mr. Francisco José Soriano Guzmán.

In the city of Alicante, on the 6th of February of the year two thousand and fourteen.

The Eighth Section of the Provincial Court of Alicante, made up of the Isthmus. The above mentioned have seen the present proceedings, arising from the above mentioned procedure, followed in the Court of First Instance number 5 of Alicante; of which it hears, at the appeal level, by virtue of the appeal lodged by BANCO BILBAO VIZCAYA ARGENTARIA, SA, appellant therefore in this appeal, represented by the Procurator D. CARMEN VIDAL MAESTRE, with the direction of the attorney MARTA NAVARRO VICENTE; the appealed party being Vicente and Zaida, represented by the attorney ENRIQUE DE LA CRUZ Lledó, with the direction of the attorney MARTIN DE LA HERRAN SABICK.

FACTUAL BACKGROUND:

FIRST. In the aforementioned proceedings, of the Court of First Instance No. 5 of Alicante, a judgment was handed down, dated 12 July 2013, which reads as follows: “THAT I STATE IN PARTICULAR the lawsuit filed by the procedural representation of Mr. MARTIN DE LA HERRAN SABICK. Vicente Y DÑA Zaida against BANCO BILBAO VIZCAYA ARGENTARIA SA I must condemn and I order the aforementioned defendant to pay the plaintiff the amount of 66,000 euros, with interest in accordance with the third party law (legal interest on the money from the date of filing of the lawsuit), without express imposition of costs”.

SECOND: The above-mentioned party prepared an appeal against this judgment and, after having prepared it, filed the notice of appeal, which was sent to the other parties. Then, after summoning them, the proceedings were submitted to this Court, where the Roll was formed, and the day 5 / 2 / 14, when it took place, was indicated for deliberation, voting and ruling.

THIRD: In the processing of the present process, in this appeal, the legal norms and formalities have been observed.

BASIS OF LAW:

FIRST: Presentation of the lawsuit and the sentence of appreciation.

In the lawsuit that initiated the proceedings, the purchasers of an off-plan home took action against BBVA, alleging the following facts as grounds for their conviction that, by virtue of the aforementioned real estate purchase agreement, they made various payments on account of the price, which were deposited, by means of a transfer, in the special account opened at BBVA by the developer-seller, HERRADA DEL TOLLO, SL; that said account was the special account in which, in accordance with the provisions of Law 57/1968, the amounts advanced by the purchasers during the construction of the homes were to be deposited; 1 million each, the purpose of which was, inter alia, “to guarantee the amounts paid on account received from the development”, which was the subject matter of the contract; that, despite the signing of these two policies, the seller did not provide them with an individual guarantee certificate or with any insurance policy guaranteeing the return of the amounts paid with interest, as required by the aforementioned Law 57/1968, thereby failing to comply with the provisions of article 3 of the Directive. The seller did not comply with the contractual deadline for the delivery of the property subject to the sale, which is why, being already in a situation of insolvency, they sued before the Commercial Court No. 1 of Alicante for the termination of the contract, which was accepted by a ruling dated July 7, 2009, which sentenced HERRADA DEL TOLLO, SL to pay the buyers the amount of XXXXX euros, plus interest.

On the basis of these facts, the plaintiff maintains that the defendant bank has incurred a double source of liability:

a) The first, which would arise directly from the aforementioned bank guarantee policies, since through them it undertook to guarantee the return of the amounts paid on account, it being irrelevant, from this perspective, whether or not the individual guarantee certificate was issued.

b) The second, which would derive from the fact that the seller had not required the guarantee of return of the amounts paid on account, failing to comply with the obligation established in Article 1.1.2, in fine, of Law 57/1968, which indicates that “for the opening of these accounts (the special ones) or deposits the bank or savings bank, under its responsibility, shall require the guarantee referred to in the previous condition”.

The decision handed down at first instance, after making a perfect summary of the claim and reply in the Factual Background, upheld the claim on the grounds, to put it briefly, that BBVA admitted the deposit of the amounts paid on account by the plaintiffs without requiring the seller developer to provide the relevant guarantee or surety insurance, thus failing to comply with its obligation under the aforementioned article of Law 57/1968; non-compliance which, in accordance with the wording of the provision (which speaks of “under its responsibility”), and in accordance with repeated case law (with reference to the Huesca SAP of 28 December 2012 and the Burgos SAP of 25 October 2012), gives rise to an obligation to comply with the obligations laid down in that Law vis-à-vis the purchasers of the homes.

SECOND.

The appellant bank does not dispute in its appeal, in a manner consistent with the position held at first instance, that the amounts paid by the buyers were paid into a special account (for the purposes of Law 57/1968) or that it did not have two general or collective policies (called by the parties a Coverage Policy for the Limit of Bank Guarantees) whose purpose was to guarantee the amounts paid on account, received for the development in which the now plaintiffs were acquired.

Firstly, the decision of the Court of First Instance was challenged on the grounds that articles 1 to 3 of Law 57/1968 were infringed, since the ruling condemned the bank for alleged negligence, “for not insuring the amounts that were being paid into the special account opened at the bank”.

This statement is not correct. At no time did the ruling base the conviction on a negligent act by the bank, but on a failure to comply with a legal duty, which entails legal liability. The breach was that of not having required the developer (who had opened a special account at that bank to receive the amounts advanced by the purchasers) to have guaranteed the return of the amounts paid on account, by means of an insurance contract or guarantee.

Article 1 of Law 57/1968 provides that housing developers who wish to obtain cash payments from purchasers before or during construction must meet two conditions:

a) The first is to guarantee the repayment of these amounts, plus a certain amount of interest, by means of an insurance contract or joint and several guarantee provided by a bank, in the event that construction does not begin or does not come to a successful conclusion for any reason within the agreed period; and

b) The second, to receive these amounts advanced by the purchasers through a banking institution, where they must be deposited in a special account.

However, the aforementioned article 1, in the desire to protect home buyers in such cases, also involves the financial institutions where such special accounts are opened, establishing an obligation for them: to demand, “under their responsibility, the guarantee referred to in the previous condition”, that is, to demand, under their responsibility, that the developer has guaranteed the return of the amounts paid into the account.

This means that the bank should not allow the special accounts to be opened or deposits made into them without first ensuring that the developer has assumed the legal obligation to guarantee the return of the sums paid on account.

And that legal obligation is established “under the responsibility” of the financial institution, which cannot be interpreted in any way other than making it liable for damages arising from failure to comply with that duty; more specifically, for damages that might be incurred by purchasers in the event that, because the legally required guarantees have not been provided, they are unable to obtain reimbursement of the sums paid in advance.

In this sense, and as reasoned by the very recent judgment of the AP of Malaga of 11 June 2003, “… does not exempt from the responsibility claimed in accordance with the provisions of Article 1 of Law 57/1968, there being a series of correlative obligations, and so while the promoter is imposed the obligation to channel the advances through a special account and to guarantee them by means of a guarantee or surety insurance, the banking institution is imposed, under its responsibility, to require the constitution of the guarantees to allow the opening of the account”.

Or the most recent of the Burgos P.A., of 9 September 2013 (Rapporteur: Mr. ILDEFONSO BARCALA FERNÁNDEZ DE PALENCIA), whose preclassified pronouncements, which this Court shares, are reproduced below:

“Liability of the financial entity for non-compliance with Law 57/68.

Article 1 of Law 57/1968 of 27 July on the collection of advance payments in the construction and sale of housing provides

“Individuals and legal entities promoting the construction of housing other than official protection housing, intended for home or family residence, on a permanent basis or for seasonal, accidental or circumstantial residence, and who intend to obtain from the assignees deliveries of money before starting construction or during it, must comply with the following conditions

First: To guarantee the return of the amounts delivered plus six per cent annual interest, by means of an insurance contract with an insurance company registered and authorised in the Register of the Subdirectorate-General for Insurance or by a joint and several guarantee provided by an entity registered in the Register of Banks and Bankers, or a savings bank, in the event that the construction does not commence or does not come to fruition for any reason within the agreed period.

Second – To receive the amounts advanced by the purchasers through a bank or savings bank, which must be deposited in a special account, with separation from any other type of funds belonging to the developer and which may only be used for the services derived from the construction of the homes. To open these accounts or deposits, the bank or savings bank, under its responsibility, will require the guarantee referred to in the previous condition”.

The second condition clearly establishes the responsibility in which the financial institutions in which the anticipated amounts are deposited can incur if they do not require the corresponding insurance or guarantee from the developer. This is clear from the words “under their responsibility”, and it cannot be understood that such a warning is used if the lack of guarantee or insurance does not imply any responsibility. The phrase means that the financial institution must require the existence of the guarantee at the time the account or deposit is opened. If it does not demand it, or if it opens the account in spite of the fact that it has been established that it does not exist, it will have to answer for the detrimental consequences that follow for the person who made the deposit, and who in the end would have been the beneficiary of the guarantee. This does not mean that the financial entity must guarantee the return of the amounts; the guarantor may be any entity that fulfils the requirements established in the first condition. Nor is responsibility necessarily followed by the mere opening of the account without a guarantee, since responsibility will arise when the buyer wants his money back. However, if the buyer exercises his right to a refund, which cannot be done due to lack of guarantee, the bank where the deposit was made will be liable. That is why it is possible to open the account where the advances are deposited without a guarantee, but it will be at the risk of the financial entity, which means the phrase “under its responsibility”.

The appellant is not right when she argues that the only thing that the second paragraph of Article 1 of Law 57/68 obliges her to do is to take out a general insurance contract with the developer. The wording of the provision is clear, the obligation is to ensure that the return of the amounts is guaranteed in the legal way. Incidentally, the argument is contradictory, since if the bank considers that it has fulfilled its duty by verifying that the guarantee was agreed (the two policies signed with it), it would have to admit its responsibility on the basis of these policies.

It has been proved, and admitted by the appellant, that the developer took out two policies with her (called bank guarantee limit cover) which were intended, as expressly stated in them, to guarantee the amounts paid on account received from the Santa Ana development in Jumilla. These “guarantee lines” (as they are called in the clauses) were to enable the developer to request from the bank the provision of guarantees in general, within the limits set, and the obligation of the banks to provide them, in accordance with the stipulations. From this perspective, it is striking that the bank did not devote a single line of its appeal (nor of the reply to the claim) to explaining why, once this line of guarantees had been agreed, the individual guarantees were not issued in favour of the buyers in question, without anything being said about the other guarantees of the development. Therefore, and this is what is relevant for the purposes at hand, the bank was perfectly aware that the individual guarantees had not been issued, under the general policy. It is therefore clear that it is also responsible from this point of view, since, we reiterate, it is contradictory to claim that its obligation ceased when it checked that the policy had been concluded (with that same entity), since it already guaranteed the return of the amounts, and then did not grant, in an unexplained manner, the individual guarantees. The bank, therefore, continued to receive, without any hesitation or objection, deposits in the special account, knowing that it had not granted or issued the individualized guarantees in favor of the incoming buyers, and therefore its responsibility must be born, in the terms concerned, since with its actions, in violation of the law, the legitimate expectations of protection that the law grants to purchasers of off-plan or construction housing were being defrauded, in which the banks that profit from these operations are also involved.

THIRD.

The appellant entity reiterates, as a last resort, that until the individual guarantees are requested and issued, “the guarantee policy does not guarantee any amount in advance for the purchase price of a buyer’s home”.

This question has already been answered on the previous basis. The allegation is nothing more than the obvious recognition of the incorrect action of the banking entity, which should (if its thesis is admitted) be perfectly aware that the general policy does not imply, without the individual guarantees, any guarantee for the buyers, which implies the avoidance and corruption of the tuition system designed by the law under analysis. This is all the more true when, as we have said, neither the bank has given any explanation as to why the guarantees were not issued, nor has it proved any activity aimed at preventing the special account from continuing to be replenished with the income which, according to it, was not guaranteed, since either the planned individual guarantees were not requested or were not issued.

In view of the foregoing, and without the need for further disquisition, referring in the remainder to the decision under appeal, we shall dismiss the appeal.

FOURTH.

In accordance with the provisions of articles 394 and 398 of the LEC, in the event of a total rejection of an appeal, the costs will be imposed on the party that has had all of its claims rejected, without this court finding that the issue raised presented serious doubts of fact or law.

FIFTH.

In accordance with article 208.4 LEC, every resolution will include the mention of whether it is final or whether there is a possibility of appeal against it, with expression, in this case, of the appeal that is appropriate, of the body before which it should be presented and of the time limit for appeal.

In the case in question, as it is a sentence dictated in an ordinary trial processed in accordance with its amount, and being lower than the one foreseen in art. 477.2.2 LEC , it cannot be appealed in cassation, so the sentence dictated by this Court is final.

This pronouncement is made without prejudice to the fact that, if the party who is unfavourably affected by it (art. 448 LEC) considers that some type of appeal is possible against this resolution, it can be presented in the form and manner legally established, in which case the appropriate resolution will be dictated.

SIXTH.

In accordance with the fifteenth additional provision, number 9, of the LOPJ , introduced by LO 1/2009, of November 3, in case of confirmation of the appealed decision, the appellant will lose the deposit that would have constituted the appeal against it.

HAVING REGARD to the aforementioned provisions and other provisions of general and relevant application, being the rapporteur of this Judgment, which is issued on behalf of HM. The King and by the authority conferred by the Spanish people, in the exercise of judicial power, Judge Francisco José Soriano Guzmán, who expresses the opinion of the Chamber.

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JUDGEMENT:

WE JUDGE : That with the dismissal of the appeal filed by the representation of BANCO BILBAO VIZCAYA ARGENTARIA, SA against the sentence issued by the Court of First Instance No. 5 of Alicante, dated July 12, 2013, in the ordinary trial orders No. 1708 / 12, we must confirm and uphold that resolution, imposing on the appellant the costs of this appeal.

It is agreed that the deposit constituted by the appellant(s) or contestant(s) whose appeal/challenge has been rejected will be lost.

This judgment must be legally notified and, at the appropriate time, the original documents must be returned to the Court of origin, which will acknowledge receipt of them, accompanied by a literal certification of this resolution for the appropriate purposes of executing what has been agreed, and another will be added to the roll of appeal.

This resolution is final and there is no right of appeal against it, in accordance with the legal grounds of this judgment.

Thus, by this our Judgment, ruling on appeal, we pronounce, send and sign it.

PUBLICATION: The previous sentence was read and published on the day of its date, and the Speaker was Mr. Francisco José Soriano Guzmán, with the Court holding a public hearing on the day of the date. I certify.