SC GC determines whether the procedure for filing claims by the testator's creditor against the debtor's heirs in accordance with Art. 1281 of the Civil Code of Ukraine applies if the debtor died during the proceedings

If the death of the borrower occurred during the consideration of a court case on the claim of a creditor against the borrower for the purpose of debt recovery, the rules of the general procedure for the creditor of the decedent to assert claims against the heirs pursuant to Art. 1281 of the Civil Code of Ukraine shall apply to such legal relations, and the heirs who have accepted the inheritance shall take part in the proceedings as legal successors of the relevant party to the proceedings on the basis of Art. 55 of the Civil Procedural Code of Ukraine.

If the creditor misses the deadlines for filing claims against the heirs of the debtor who have accepted the inheritance, as provided for in Part 2 of Article 1281 of the Civil Code of Ukraine, the creditor is deprived of his rights to claim both under the main obligation and under an additional obligation - a guarantee, which cannot exist separately from the main obligation.

This was the conclusion reached by the Grand Chamber of the Supreme Court in a case on loan debt recovery.

In the case at hand, the bank and the borrower entered into a loan agreement, and in order to secure the borrower's obligations, the bank and the borrower's husband and a private company entered into surety agreements.

Due to improper performance of obligations under the loan agreement, the bank sent a demand for repayment to the borrower and guarantors, and subsequently filed a lawsuit.

During the proceedings in 2014, the borrower died. In 2016, the court ruled that her legal successor should be involved in the case.

The court of first instance dismissed the claim on the grounds that the deadline set by Article 1281 of the Civil Code of Ukraine had been missed, as the bank had learned of the borrower's death in February 2015, but had not filed a claim against her heir. The court also dismissed the claim against the guarantor based on Article 523 of the Civil Code of Ukraine, as the guarantor did not agree to secure the heir's performance of the obligation after the debtor was replaced by the heir. Instead, the court of appeal concluded that the bank had not missed the deadline for the creditor to file a claim against the heirs under Part 2 of Article 1281 of the Civil Code of Ukraine and partially satisfied the claim.

Based on the results of the consideration of the case, the Grand Chamber of the Supreme Court concluded that the provisions of Article 1281 of the Civil Code of Ukraine do not contain any special reservations regarding the procedure for satisfying the creditor's claims if the debtor's death occurred after the claim was filed against him during the court proceedings.

Therefore, if the death of the borrower occurred during the consideration of a court case on the claim of a creditor against the borrower for the purpose of debt recovery, the rules of the general procedure for the creditor of the decedent to assert claims against the heirs pursuant to Art. 1281 of the Civil Code of Ukraine shall apply to such legal relations, and the heirs who have accepted the inheritance shall take part in the proceedings as legal successors of the relevant party to the proceedings on the basis of Art. 55 of the Civil Procedural Code of Ukraine.

The creditor may claim against the debtor's heirs who have accepted the inheritance in accordance with the requirements of Article 1281 of the Civil Code of Ukraine in one of the following ways 1) directly to the heir; 2) indirectly - through a notary at the place of opening the inheritance (outside Ukraine - through a consulate).

An analysis of the provisions of Part 1 of Article 559 and Parts 2 and 4 of Article 1281 of the Civil Code of Ukraine leads to the conclusion that if the creditor misses the deadline for filing a claim against the heirs of the debtor who have accepted the inheritance, the creditor is deprived of the right to claim both on the basis of the main obligation and on the basis of an additional obligation (guarantee), which cannot exist separately from the main obligation.

In the present case, the bank learned of the opening of the inheritance after the debtor's death no later than 3 February 2015, as the bank's representative stated in a request to the court for information from the notary's office on the inheritance case. However, the bank, as a creditor, did not file any claim against the debtor's heirs within the time limit stipulated in Part 2 of Article 1281 of the Civil Code of Ukraine, and only on 29 February 2016 filed a procedural request with the court to involve the successor in the case.

Thus, the SC GC concluded that the plaintiff's claims for recovery from both the heiress of the deceased borrower and the guarantor should be dismissed on the grounds that the creditor's right to recover was lost due to the failure to comply with the time limit specified in Part 2 of Article 1281 of the Civil Code of Ukraine.

Resolution of the Grand Chamber of the Supreme Court of 9 October 2024 in case No. 638/1046/14-ц (proceedings No. 14-12цс24) - https://reyestr.court.gov.ua/Review/122302691.

This and other legal opinions of the Supreme Court are available in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.