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Renunciation of Right and Remission of Debt in Comparative and Israeli Law

  • A.M. Rabello

Extract

Renunciation and remission are not comprehensively treated in the new Israeli legislation. And although the legislature has referred to these terms in the course of its legislation, they are nowhere defined.

The first reference to the terms, chronologically speaking, is in sec. l(c) of the Gift Law, 1968: “A gift may consist in the donor's renunciation of a right against the donee or in the donor's remission of an obligation of the donee towards him”.

In the chapter treating of “Several Debtors and Creditors”, the Contracts (General Part) Law, 1973, provides an enlightening reference to the terms under discussion. Sec. 55(c) states: “If the creditor discharges one of the debtors of the whole or part of the obligation - by way of waiver, remission, compromise or otherwise - the other is discharged to the same extent unless a different intention appears from the discharge”. Thus we have before us a list of terms (renunciation, waiver, remission, compromise, discharge) that often appear in modern codices as factors that terminate a debt by means other than performance.

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1 22 L.S.I. 113.

2 27 L.S.I. 117, at 125.

3 Rabello, A.M., The Gift Law, 5 728-1968 in Commentary on Laws Relating to Contracts, Tedeschi, G., ed., (Jerusalem, 1979, in Hebrew) 66 .

4 Per Silberg, J. in Estate of Finkleslein v. Finklestein (1968) 22(i) P.D. 618.

5 34 L.S.I. 181. We refer especially to the section repealing recourse to English law on the basis of Art. 46 of the Palestine Order-in-Council.

6 It is well-known that Prof. Zeltner was one of the leading proponents of this method, at least insofar as German law is concerned; see Zeltner, , “Thoughts on the Draft Bill of the Contracts (General Part) Law 5730-1970” (1973) 3 Iyunei Mishpat 121, 132 . But this approach is not foreign, within certain limits, also to Barak, A., “The Independence of the New Civil Codification: Risks and Prospects” (1976) 7 Mishpatim 15, at 24 ; Yadin, U., “Again on the Interpretation of Knesset Laws” (1970) 26 HaPraklit 358, at 364 ; Friedmann, D., “On the Interpretation of Modern Israeli Legislation” (1977) 5 Iyunei Mishpat 463 et seq.

7 All sections brought here are as translated in Hooper, C.A., The Civil Law of Palestine and Trans-Jordan, vol. I (Jerusalem, 1933), vol. II (Jerusalem, 1936).

8 This was the view of Prof. Tedeschi, as well, who writes, inter alia: “Other than the Mejelle, there is no law, either in practice or proposed, that grants force to remission as a unilateral act”. Tedeschi, , “Repeal of Mejelle – Background and Timing” (1972) 2 Iyunei Mishpat 458, at 459 . And see Tedeschi, , “About the Gift Law” (1969) 1 Mishpatim 639, at 642 .

9 This is the opinion of Chehata:

“L'acceptation du debiteur n'est point exigée. Il semble cependent qu'elle est toujours présumée … La remise est si bien considerée comme une convention qu'elle est assimilée à un contrat translatif de proprieté … La remise peut revêtir la forme d'une transaction d'une dette, elle, n'est jamais possible que si elle est consentie au débiteur. Elle s'analyse alors en effet, en remise de dette.” Ch. Chehata, , Théorie général de l'obligation en droit musulman hanefite (Paris, 1969) pp. 93 et seq. (I wish to express my thanks to Dr. Yaacov Meron for referring me to Chehata's book). If this is indeed the case, then in Islamic law, as well, we find the same procedure that we find in many other legal systems and that emphasize the consensual nature of remission.

10 See the Repeal of the Mejelle Law, 5744-1984, and see Tedeschi, , “The Centenary of the Mejelle“ (1969) 25 HaPraklit 59 ; Tedeschi, “Repeal of Mejelle,” supra n. 8; Tedeschi, , “Le Centenaire de la Mejellé” (1969) Rev. int. de droit comparé 125 et seq.

11 Maimonides, , Law of Sales 5:11 , Acquisition and Gift 3:2 (in Maimonides, Mishneh Torah).

12 Shulkhan Arukh, Hoshen Mishpat, chap. 241, sec. 2; Herzog, I., The Main Institutions of Jewish Law (London, 3rd ed., 1967) vol. II, p. 230 .

13 Maimonides, , Law of Sales 5:6 .

14 Rashba 40:262.

15 Herzog, supra n. 12, at 229.

16 Arukh HaShulkhan, Hilkhot Matana 241:4 .

17 Herzog, supra n. 12, at 232.

18 Mahaneh Ephraim, Hilkhot Zekhia MeHefker, chap. 11.

19 Smyth (Ross T) & Co. Ltd. v. Bailey, Son & Co. [1940] 3 All E.R. 60, at 70.

20 See Halsbury's Laws of England (4th ed., 1974) vol. 9, para. 571.

21 See Treitel, G.H., The Law of Contract (6th ed., 1983) 83 .

22 “The waiver spoken of in the case is an entire abandonment and dissolution of the contract”, Price v. Dyes (1810) 17 Ves 356, at 364.

23 “To say that a claim is to be waived is incorrect if a right has accrued. It must be released or discharged by deed or upon consideration.” Atlantic Shipping & Trading Co. Ltd. v. Louis Dreyfus & Co. [1922[ 2 A.C. 250, at 262.

24 Brikom Investments Ltd. v. Carr [1979] Q.B. 467, at 488, 491.

25 Halsbury, supra n. 20, at para. 572.

26 L.R. 10 C.P. 598.

27 G.H. Treitel, supra n. 21.

28 Charles Rickards Ltd. v. Oppenheim (1950) 1 K.B. 616.

29 Halsbury, supra n. 20, at para. 574.

30 Chitty on Contracts, Vol. 1: General Principles (London, 25th ed., 1983) 825 .

31 Halsbury, supra n. 20, at para. 594.

32 Preston v. Christmas (1759) 2 Wils 86.

33 Zeltner reaches a similar conclusion concerning English law, in his book The Law of Contracts of the State of Israel (Tel Aviv, 1976, in Hebrew) vol. II, p. 130 : “In such circumstances, there is a fundamental rule concerning recourse to English law that renunciation and remission be effected by contract, a rule that, in English law, derives from the very requirement of consideration.”

34 Carbonnier, J., Droit Civil (Paris, 1974) vol. 4, p. 514 ; H., et Mazeaud, L. J., Lecons de droit Civil, Obligations (Paris, 1973) 1101 .

35 Ripert, G.Boulanger, J., Traité de droit civil (Paris, 1957) vol. II, p. 690 ; J. Carbonnier, supra n. 34, at 514; H. et L. J. Mazeaud, supra n. 34, at 1101. On the theory of Juristic Act (act juridique) in general, see Paton, G.W. & Derham, D.P., A Textbook of Jurisprudence (Oxford, 4th ed., 1972) 315 et seq.

36 Mazeaud, supra n. 34, at 1107.

37 Ibid., at 1102.

38 Raynaud, P., Marty, G., Droit Civil, Les Obligations (Paris, 1962) Vol. I, p. 853 .

39 J. Carbonnier, supra n. 34, at 514.

40 H. et L. J. Mazeaud, supra n. 34, at 1101 et seq.

41 P. Raynaud, G. Marty, supra n. 38, at 853.

42 The German Civil Code, transl. by I.S. Forrester et al. (South Hackensack, N.J., 1975).

43 Larenz, K., Lehrbuch des Schuldrechts, Band I, Allgemeiner Teil, (11th ed., 1976) 217 ; Esser, J., Schuldrecht, Allgemeiner Teil, Band 1, (4th ed., 1920) 179 .

44 Fikentscher, W., Schuldrecht (Berlin, 7th ed., 1985) 207 .

45 Larenz, supra n. 43.

46 On pactum de non petendo see ibid., at 219; Berger, A., Encyclopedic Dictionary of Roman Law (Philadelphia, 1953) 615 .

47 Soergel-Siebert, , Kommentar zum Bürgerliches Gesetzbuch (1967) vol. 2, p. 492 .

48 Cohn, E.J., Manual of German Law (London, 2nd ed., 1968) vol. 1, p. 236 .

49 Palandt, O., Bürgerliches Gesetzbuch (München, 1986) § 397, p. 436 .

50 Also see in the case law, R.G. 72 p. 171; 110 p. 418.

51 R.G. Book 16, p. 1865.

52 Sec. 1360(A) of the B.G.B.; also see sees. 1614, 1615 (E).

53 Palandt, supra n. 49, loc. cit.

54 Berner, , Kommentar zum Schweizerischen Privatrecht, Obligationen, (Bern, 19411945) band VI, p. 604 ; Guhl, Th., Das Schweizerische Obligationsrecht (Zurich, 1972) 268 et seq.

55 Engel, P., Traité des obligations en droit suisse (Neuchatel, 1973) 514 el seq.

56 The Italian Civil Code, translated by Betrams, M., Longo, G.E., and Merryman, J.H. (New York, 1969).

57 Tilocca, E., “Remissione del debito” in Novissimo Digesto Italiano (Torino, 1968), Vol. XV, pp. 389 et seq. ; Trabucchi, A., Istituzioni di Diritto Civile (Padova, 27th ed., 1985) 571 ; Rescigno, P., Manuale del Diritto Privato Italiano (Napoli, 1985) 632 et seq.

58 Cass. 10.5,1967 n. 959, according to which the result of acceptance is to make the remission irrevocable. Another case, Cass. 24.6.1968 n. 2111, attributes the same result to the passage of reasonable time without the debtor's opposition.

59 Stolfi, G., Teoria del negozio giuridico (Padova, 1947) 50 et seq. ; Ferrera, Cariota, Il negozio giuridico (Milano, 1948) 140 et seq. ; Betti, E., Teoria generate del negozio giuridico (Torino, 1950) 293 .

60 Perlingieri, P., Remissione del debito e rinuncia al credito (Napoli, 1968); Idem, Modi di estinzione delle obligazioni diversi dall'adempimenlo, Commentario del Codice Civile a cura di Scialoia e Branca (Bologna, 1975) 168 et seq.

61 See the discussion of the problems and references to the opposing literature in Tilocca, supra n. 57.

62 Arts. 1187-1194: “De la Condonacion de la deuda”. The doctrine also employs other terms, such as Quita, Remision, Renuncia. See Tobenas, Jose Castan, Derecho civil espagnol comun y Foral, (Madrid, Reus, ed., 1978) vol. III, p. 393 .

63 As, for example, delivering the promissary note to the debtor (art. 1187, sec. 1) or delivering the security interest, though in this case the remission is only of the right to hold the security interest and not of the debt itself. See Castan Tobenas, supra n. 62, at 397.

64 This system of presumptions has been subject to criticism under the doctrine, see Castan Tobenas, loc. cit., and see the section concerning the Argentinian code.

65 See Brutau, Jose Puig, Fundamentos de derecho civil (Barcelona, 1959) vol. I, p. 364 . This scholar objects to the very notion of remission for consideration. In his opinion, it is the absence of consideration that characterizes remission.

66 See Castan Tobenas, supra n. 62, at 394.

67 Ibid.

68 See Puig Brutau, supra n. 65, at 362-363.

69 According to Puig Brutau, this assertion is quite weak. The consent of the other party does not characterize remission as even absent consent the remission will be valid as an “implied remission”, see Puig Brutau, supra n. 65, at 363.

70 Art. 632 establishes that a gift of chattels requires the consent of the donee as long as the transfer of the object is not made simultaneously. Under art. 633 a gift of real property requires a notarized protocol. The donee may express his consent in that protocol or in a separate protocol.

71 See the decision in y Maranon, Leon Medina, Leyes Chiles de Espana (Madrid, Reus ed., 1943) 338 . See the criticism of this decision in Puig Brutau, supra n. 65, at 367 and in Castan Tobenas, supra n. 62, at 395.

72 Tedeschi, G., “On the Technique of the Future Legislation in Israel” in Studies in Israel Law (Jerusalem, 1960) 69, at 81 .

73 See sec. 2209 of the Civil Code of Mexico and sec. 1515 of the Civil Code of Uruguay.

74 Sec. 1654 of the Civil Code.

75 Sec. 1517 of the Civil Code.

76 Sec. 1053 of the Civil Code.

77 Sec. 1326 of the Civil Code.

78 Sec. 1282 of the Civil Code.

79 See secs. 868-875 of the Civil Code in regard to renunciation and sees. 876-887 in regard to remission.

80 Borda, G., Manual de Obligaciones (Buenos Aires, 1974) 377 and 382 .

81 Llambias, J.J., Codigo Civil Anotado (Buenos Aires, 1978) vol. II, p. 857 .

82 Sec. 868 of the Civil Code. However in the case of renunciation of proprietary rights it is a unilateral act. G. Borda, Manual, supra n. 80, at 378.

83 Sec. 869.

84 Sec. 1789 of the Civil Code.

85 Thus it may be that there is no difference between a case where A gives a sum of money as a gift and where A lends money to B and later waives his right to repayment: G. Borda, supra n. 80, at 381; Llambias, J.J., Benegas, P. Raffo, Sassot, R.A., Compendio de Derecho Civil, (Buenos Aires, 1976) 535 .

86 The same rule appears in regard to gifts, sec. 1789.

87 See the case law brought in J.J. Llambias, Codigo, supra n. 81, at 872.

88 In Argentina, as in many other countries, the doctrine basically claims that remission can be only gratuitous. Where there is consideration, we may speak in terms of, e.g., transaction, or novation, or datio in solutum.

89 Sec. 885.

90 Clearly, the norm does not rule out the possibility of other cases of implied remission.

91 Sec. 878, which is based upon sec. 1282 of the Napoleonic Code. The norm had already been the subject of criticism in France: G. Ripert, J. Boulanger, supra n. 35, at 692. In Argentina, it was recommended that both presumptions be repealed and that the rules of renunciation and remission be unified. See: Llambias, J. J., Tralado de Derecho Civil, Obligaciones, (Buenos Aires, 1977) vol. III, p. 171 .

92 The Netherlands Civil Code, Book 6: The Law of Obligations. Draft Text and Commentary, edited by the Netherlands Ministry of Justice (Leyden, 1977).

93 Text at p. 36 and Commentary at p. 234.

94 U. Yadin, supra n. 6, at 365.

95 A. Barak, supra n. 6, at 21.

96 But it should be noted that this term vitur was translated as waiver in sec. 55(c) of the General Contracts Law, as we have already seen above. The term is similarly translated in sec. 12 of the Family Law Amendment (Maintenance) Law, 1959 (13 L.S.I. 73). And in light of this we examined the meaning of waiver in English Law.

97 Amina Abed et al. v. Nemni et al. (1983) 37(ii) P.D. 606, at 615.

98 17 L.S.I. 193.

99 22 L.S.I. 107.

100 We entirely agree with the decision of the Supreme Court in Mizrahi v. State of Israel (1986) 40(iii) P.D. 163 et seq. This case may be viewed as one wherein “a person acted due to the necessity of the circumstances and not-due to the weighing of the commercial value, which is like a waiver of the remainder of the debt.” per Goldberg, J.

101 Ben-Haim v. Cohen (1980) 34(i) P.D. 564, at 570.

102 Winter, Greenwald and Others v. A. Pfeffer (1970) 24(ii) P.D. 541, at 548.

103 Cf. Z. Zeltner, supra n. 33, at vol. I, p. 79; A.M. Rabello, supra n. 3, at sec. 51. And cf. Tilocca, Remissione del Debito, supra n. 57, at 412 et seq.

104 On the burden of notice see recently: Tedeschi, G., “Burden and Frustration” (1987) 16 Mishpatim 335, at 353 et seq.

105 And cf. Estate of Wessner et al. v. Gutman et al., (1975) 29(i) P.D. 315 per Berinson, J.

106 Santoro-Passarelli, , Dottrine generali del Diritto civile (Napoli, 1959) 121 et seq. ; Rescigno, P., Studi sull'accollo (Milano, 1958) 120 et-seq. ; ManigK, , Das rechtswirksame Verhalten (Berlin, 1939) 279 .

107 By this we reject the theory of Allara, Le fattispecie estintive del rapporto obbligatorio, (Torino, 1952) 254 , according to which rejection of remission is “a type of renunciation of the remission”. As opposed to this view, see Ferri, L., Rinunzia e rifiuto (Milano, 1960) 20 et seq.

108 See also Shalev, G., “Promise, Estoppel and Good Faith” (1987) 16 Mishpatim 295, at 321 .

109 Maimonides, , Laws of Acquisition and Gift 3:3 .

110 Rescigno, P., Incapacitá naturale e adempimento (Napoli, 1957) 117 .

111 Thus in Italian law, P. Rescigno, ibid., at 119 et seq.: for Israeli law, cf. Englard, I., The Capacity and Guardianship Law, 5722-1962, in Commentary on Laws Relating to Contracts, Tedeschi, G., ed., (Jerusalem, 1972, in Hebrew).

112 Secs. 34-38 of the Contracts (General Part) Law, 1973, and see Shalev, G., Contracts for the Benefit of a Third Party, in Commentary on Laws Relating to Contracts, Tedeschi, G., ed., (Jerusalem, 1977, in Hebrew).

113 19 L.S.I. 58.

114 In our opinion, the section of the Succession Law should be given a restricted interpretation and it should not be deemed to include gifts of future property. As regards renunciation, where there are results that are in part inter vivos and in part mortis causa, the rules of gifts or of succession will apply accordingly. See also Rabello, The Gift Law, supra n. 3, at 49, and section 6 of Report on Gifts (Civil Code Revision Office) (Montreal, 1975): “‘A gift which takes effect partly inter vivos and partly on the death of the donor is subject to the rules governing gifts and those governing wills, according to the circumstances’. This Article is based on the second part of Article 77. It makes no mention of ‘future property’, an unclear concept which authors identify only as being the opposite of ‘present property’. This concept is made superfluous as a result of Article I”. On the problems arising today in the identification of future property in Quebec, see Roch, H., Donations, testaments, legs, executeurs testamentaires in: Traité de droit civil du Québec (Montreal, 1953) vol. 5, p. 114 et seq.

115 Rabello, The Gift Law, supra n. 3, at 47 et seq.

116 Tedeschi, G., “Duty of Maintenance in Israel Civil Law” (1975) 6 Mishpatim 242, at 247 et seq.

117 As for renunciation by a minor, the provision of sec. 20(3) of the Capacity and Guardianship Law, 1962 (16 L.S.I. 106) should also be kept in mind.

118 Rabello, The Gift Law, supra n. 3, at 37 et seq.: Procaccia, U., Bankruptcy Law and Civil Legislation in Israel (Jerusalem, 1984, in Hebrew) 129 et seq.

119 C. 7.75; D. 42.8.

120 I wish to express my thanks to the committee chairman, Prof. A. Barak, for allowing me to quote the Draft.

121 See the commentary to sec. 7 of the Contracts Law in Shalev, G., Formation of Contract, in Commentary on Laws Relating to Contracts Tedeschi, G., ed., (Jerusalem, 1978, in Hebrew) 55 et seq. Among the examples brought by Prof. Shalev of offers that only benefit the offeree is an offer to discharge a debtor of his debt (p. 56). However, Shalev's distinction between such an offer and a gift leaves some doubts in light of sec. l(c) of the Gift Law.

122 See the discussion of this point in Rabello, The Gift Law, supra n. 3, at 83 et seq.

123 See supra n. 8.

124 We refer to the literature mentioned above. Generally, the term renunciation is used in regard to proprietary rights, such as mortgages, while remission is used in regard to obligation.

125 We should emphasize that despite the dogmatic difference (unilateral as opposed to bilateral act), in fact there is no difference between the two provisions. On the basis of sec. 3 of the law, the remittor's notice to the debtor is, in fact, sufficient, and we have already concluded that as regards the debtor, the creditor's notice becomes effective immediately upon its coming to the debtor's notice. Similarly, we have already concluded that the rejection operates ex tune, just as is proposed in the case of a unilateral act. Even at present, renunciation is realized after the creditor's notice to the debtor taken together with the presumption of consent! Nevertheless, it is possible that there would be differences insofar as the date of realization of the renunciation itself, the possibility of withdrawing the renunciation, the question of the death of either the debtor or creditor, the question of the debtor's capacity, etc. Clearly the legislature did not intend to bring about changes in these matters.

126 We should emphasize that Israeli law recognizes a large number of unilateral juristic acts, such as: recission due to mistake (sec. 14 of the Contracts Law), duress (sec. 17) and extortion (sec. 18); a beneficiary's notice of rejection of a right that is his under a contract to the benefit of a third party (sec. 35); appropriation of payments (sec. 50); choice between alternative obligations (sec. 51); setting off (sec. 53); recission of a contract for breach (sec. 7 of the Contracts (Remedies for Breach of Contract) Law, 1970 (25 L.S.I. 71)); creation of agency by the principal's authorization of the agent (sec. 3 of the Agency Law, 1965 (19 L.S.I. 231)); etc. See A. Barak, supra n. 6. The matter requires further examination and study.

127 I wish to thank Dr. Hanina Ben-Menahem, Mr. Pablo Lerner, Dr. Renée Sanilevic and Mr. Ram Shamgar for their assistance in seeking the comparative sources.

* Montesquieu Professor of Comparative Law and Legal History, Faculty of Law, The Hebrew University of Jerusalem.

Renunciation of Right and Remission of Debt in Comparative and Israeli Law

  • A.M. Rabello

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