Mihai Ionescu-Balea, Attorney-at-law
Eva-Cara Costache, Attorney-at-law
Abstract
A promissory note represents a payment and credit instrument frequently used in commercial transactions, having the legal value of an enforceable title. But what happens when it is refused for payment or issued without sufficient funds? In such circumstances, the holder of the instrument is not left without legal protection, but rather has at their disposal a series of legal mechanisms designed to ensure debt recovery.
The study examines the applicable legal framework, primarily the provisions of Law no. 58/1934 and the regulations issued by the The National Bank of Romania, highlighting both bill-of-exchange procedures (direct action, recourse action, and bill enforcement) and extra-bill remedies, such as the causal action or unjust enrichment claim. It also presents the main defenses that an enforced debtor may invoke, including opposition to enforcement and the requirements concerning the drawing up of the protest.
Through this analysis, both the creditor’s rights and the debtor’s procedural safeguards are clarified, outlining a comprehensive perspective on the legal consequences arising from the refusal of payment of a promissory note.
I. Definition, importance and regulation
In Romania, the promissory note is regulated by a series of legal norms enacted in the 90`, regarding the concept of the bill of exchange. The promissory note is a type of bill of exchange and, although the bill of exchange is no longer widely used in the current economic circuit, the legal provisions applicable to it also apply to the promissory note. For the purpose of this article, all references to the concept of bill of exchange within the law are solely those applicable and adapted to the legal regime of the promissory note.
The promissory note represents an enforceable title, whereby a person undertakes to pay a specific sum of money at maturity to another person or to the latter’s order. Most often, the instrument is presented to the credit institution where the issuer of the promissory note holds an account.
The specificity of the promissory note derives from the abstract legal relationship, which is completely autonomous from the underlying contract between the parties based on which the promissory note was issued or transferred.
In other words, once issued, the promissory note becomes severed “becomes severed” from the contractual relationship between the parties and has an independent existence.
For these reasons, the promissory note is widely used as a payment instrument and even more frequently as a credit instrument.
The legislation regulating the promissory note consists of the provisions of Law no. 58/1934; the NBR (National Bank of Romania) Regulations regarding the interpretation and enforcement of the provisions of Law no. 58/1934, specifically: Regulation no. 6/1994, Regulation no. 7/2023, Technical Norm no. 7/2008, and the provisions of the Civil Procedure Code.
II. Means of fund recovery from a dishonoured promissory note
The beneficiary of the promissory note has at their disposal two sets of legal procedures they may utilize in the event of a refusal of payment by the credit institution at maturity, namely:
- Exchange law procedures;
- Non-exchange law procedures.
1. Exchange law procedures available to the creditor for recovery of funds from a promissory note
Exchange law procedures are based on the abstract exchange relationship, provided that all specific conditions of the exchange mechanism are met, in accordance with Pt. 320 lit. c) of NBR Regulation no. 6/1994.
By corroborating the applicable legal provisions, it results that the beneficiary of the promissory note has three exchange actions at their disposal: the direct exchange action, the action of recourse, and the exchange execution.
a. Direct exchange action
The direct exchange action represents the main mechanism through which the beneficiary applies to the court with an action against the principal debtors to satisfy their claim right inscribed in the promissory note.
The principal debtors in this action are the issuer and their avaliste, as evidenced by the provisions of art. 106 in conjunction with art. 47 of Law no. 58/1934. Furthermore, Pt. 266 of NBR Regulation no. 6/1994 states that:
“The exchange action against the acceptor and, respectively, their avalistes constitutes a direct exchange action.”
Moreover, the exchange action is considered a common law lawsuit, requiring no special conditions, the only limitation in exercising it being compliance with the statute of limitations.
NBR Regulation no. 6/1994: “Pt. 265. – In exchange matters, the principal obligor is the acceptor. For the exercise of the exchange action against them, the fulfilment of any exchange-law condition is not required, except for that regarding the exchange prescription.”
Given the formal character of the Promissory Note, it is evident that, to be invoked, the title must be valid and contain specific mentions, as provided by the provisions of art. 106 in conjunction with art. 1 of Law no. 58/1934:
- The denomination of “promissory note” inserted in the title;
- The unconditional promise to pay a determinate sum of money at maturity;
- The name of the issuer;
- The date and place of issuance;
- The maturity date;
- The place of payment;
- The name of the beneficiary to whom or to whose order payment must be made;
- The signature of the issuer.
The absence of any of these mentions, except for the place of payment, place of issuance, and maturity date, entails the nullity of the Promissory Note and paralyzes its capacity to be enforced by its beneficiary.
Regarding the mechanism of the availing, there is a defining feature of credit titles in general, and of the promissory note in particular, namely the role of the avaliste within the exchange mechanism and the identical procedure the beneficiary undergoes to enforce against the avaliste.
Thus, according to art. 106 in conjunction with art. 35 of Law no. 58/1934, the aval is an independent obligation from the issuer’s payment obligation, whereby the beneficiary acquires a new debtor who may be sued in the same manner as the issuer, either simultaneously or prior to pursuing the issuer.
The legal provisions are mirrored by secondary norms, thus, according to Pt. 203 of NBR Regulation no. 6/1994:
“The avaliste has an identical obligation, with the same content and extent as the guaranteed obligation, being the guarantor of a signatory of the bill.”
The High Court of Cassation and Justice also ruled in this regard, holding in a decision that the beneficiary of the promissory note is entitled to prioritize enforcement against the avaliste, stating:
“According to art. 106 in conjunction with art. 35 para. (1) of Law no. 58/1934, the avaliste is bound in the same manner as the person for whom they guaranteed. If the aval was given for the drawee, the avaliste holds a direct obligation just like the drawee, and the holder shall exercise the direct exchange action/exchange execution against them.
Consequently, the holder of the promissory note may also proceed against the avaliste for the recovery of the outstanding debt.
This was the procedure followed by creditor D. S.R.L., who seized the enforcement body with the request for approval of forced execution against debtor C. (the avaliste of the promissory note), and not against the issuer of the enforceable title, debtor B. S.R.L.[1]“
Regarding extinctive prescription, the exchange action may be exercised within a statue of limitation period of three years calculated from the maturity date of the promissory note, as provided by art. 106 in conjunction with art. 95 of Law no. 58/1934.
b. Action of recourse
In case of non-payment upon presentation (at maturity or at most two days after this date), since there are no available funds in the issuer’s account, the beneficiary of the Promissory Note may turn their attention to the endorsers and their avalistes by introducing an action of recourse, an exchange action with a subsidiary character.
The subsidiary character of the action of recourse is confirmed by jurisprudence, which, in a case, admitted the appeal on the grounds that the beneficiary wrongly proceeded with priority against the endorser, specifically stating that:
“The transfer of all rights arising from promissory notes occurs primarily between the issuer of the note, as principal obligor, and the endorsee, as the final beneficiary of the sum inscribed in the title.
Consequently, the endorser, as an obligor in recourse, holds a subsidiary liability towards the issuer of the promissory note. Their guarantee obligation arises subsequently to the unequivocal refusal of the issuer to honour the payment obligation assumed by issuing the commercial securities.[2]“
However, the existence of the exchange action of recourse is conditional upon the fulfilment of certain specific conditions, which will further allow the creditor to execute any solvent endorser of the promissory note, without observing the order in which they became obligated.
Execution against avalistes functions similarly, they have an obligation identical and of the same extent as the person for whom they personally guaranteed the promissory note, being included in the same recourse procedure.
Supporting these observations are the provisions of art. 106 in conjunction with art. 52 of Law no. 58/1934, which provide that:
“The holder may proceed against all these persons, individually or collectively, without being bound to observe the order in which they became obligated.
The action initiated against one of the obligors does not prevent proceedings against the others.”
This approach appears normal considering that the endorsers and their avalistes, ultimately, guaranteed that the promissory note would be paid by the issuer at the moment they transferred the Note further to the final beneficiary who bears the burden of drawing up the protest for non-payment.
This aspect is also highlighted by the case-law, which confirms the nature of personal and subsidiary guarantee of the endorsement operation, stating:
“Thus, considering the guarantee effect of the endorsement according to art. 17 of Law no. 58/1934, the endorser assumes the obligation to guarantee the acceptance and payment of the bill by the drawee. This means that if the drawee refuses acceptance and payment of the bill, the endorser will be personally held to pay the sum of money provided in the title.
The guarantee obligation of the endorser is not only towards the endorsee but towards all successive holders of the title. The endorser becomes an obligor in recourse and is jointly and severally liable with all other debtors of the bill.[3]“
As anticipated ut supra, the exchange mechanism in recourse can be activated only if certain conditions are met beforehand, and in this sense, the provisions of Pt. 267 of NBR Regulation no. 6/1994 clarify, providing:
“In regards with the other exchange obligors, to exercise the exchange action against them, the following two mandatory conditions must be met:
a) the ascertainment of the refusal of payment by the principal obligor through a deed of protest;
b) the introduction of the action within the time limit.”
Once one of the persons held liable for the payment of the promissory note through the action of recourse has paid the respective amount to the beneficiary, the payer acquires, in turn, an exchange action of recourse, operating a legal subrogation in rights. Thus, the paying endorser may turn against their [prior] endorsers and may file an action of recourse against them for the entire amount paid and the legal interest on this amount, calculated starting from the date of payment, as provided by art. 54 of Law no. 58/1934.
The endorser’s right of recourse is provided by art. 55 of Law no. 58/1934 which states that: “Any obligor against whom a right of recourse is exercised or could be exercised may require, in exchange for payment, the surrender of the bill and the protest.”
The particularity of exercising the action of recourse consists in the fact that the beneficiary may exercise the action against any or all prior endorsers and/or their avalistes, but the one who paid may turn only against their prior endorsers and their avalistes, not against their endorsee and subsequent endorsees (art. 54 of Law no. 58/1934 uses the notion “their endorsers”), the latter being discharged of exchange obligations by the payment made by their author.
The action of recourse may be exercised against endorsees and their avalistes within a limitation period of one year calculated either from the date of the protest for non-payment or the maturity of the obligation, respectively within a period of 6 months if directed against endorsers, starting from the day the action of recourse was initiated against them or from the day they paid.
c. Exchange execution
The beneficiary of the promissory note has the possibility to capitalize on the claim born from the title also through an immediate enforcement of the promissory note.
According to art. 61 para. (1) of Law no. 58/1934, which mentions that “the bill of exchange has the value of an enforceable title for capital and accessories (…)”, it concludes that the Promissory Note is an enforceable title, both for capital and for accessories, the executory character being activated only at the moment of refusal of payment. Furthermore, Pt. 320 lit. c) of NBR Regulation no. 6/1994 provides that:
“In their exchange actions, the National Bank of Romania and credit institutions shall integrate into the forced execution procedures, taking into account the following guiding elements: the procedure of exchange execution is as follows: based on the bill of exchange reached at maturity and unpaid by the exchange debtor, its holder may request the court for its investiture with the executory formula.”
For the enforcement of the promissory note, two conditions must be met:
- The bill must be valid from a formal point of view;
- The general conditions for exercising the direct exchange action and the action of recourse are met.
In this regard, the case-law has also established in this sense, clearly stating that:
“The Tribunal further retains that exchange execution may be used only if the conditions imposed by law for exercising direct or recourse exchange actions are met.[4]“
Thus, if these conditions are met, the promissory note may be placed under forced execution. Forced execution may take the form of execution against movable or immovable property, according to common law and without the need to start litigation on the merits, as evidenced by the provisions of Pt. 320 lit. g) of NBR Regulation no. 6/1994 which mentions that:
“Execution shall begin with a summons addressed to one or any of the exchange obligors. The summons shall be made according to the rules of procedure in the matter of forced execution. It comprises: the exact transcription of the bill, as well as of the other acts resulting in the amount due. This amount is established by the holder through the act of summons.”
A first step the beneficiary must follow is to address the competent bailiff with a request for forced execution. Subsequently, in accordance with the provisions of art. 61 para. (1) of Law no. 58/1934, the bailiff shall request the execution court for the approval of forced execution, which shall be done through an interlocutory judgment not subject to appeal, according to para. (4) of the same article.
Subsequently, a series of formalities must be completed, formalities that can constitute a real obstacle for the beneficiary of the promissory note in obtaining the sum inscribed in the title; we limit ourselves only to listing the respective formalities which will form the subject of the analysis in Section IV:
- Drawing up the protest for non-payment, an a priori condition for exercising the action of recourse;
- The Payment Summons, forwarded by the bailiff to inform the debtor regarding the intention to proceed to exchange execution;
- Challenge to execution, possibly formulated by the exchange debtor provided that only exceptions regarding the validity of the title are invoked;
- Suspension of forced execution, ordered at the court’s discretion and subject to a limited number of cases.
2. Non-exchange law procedures available to the creditor for recovery of funds from a promissory note
Non-exchange law means represent subsidiary actions, designed as safety nets to which the beneficiary of the promissory note may resort to recover the claim, which are in turn divided into: the causal action and the action for unjust enrichment.
a. The causal action related to a promissory note
At the basis of the issuance of the promissory note lies, in principle, a legal relationship previously established between two signatories, usually a contract in consideration of which the promissory note was issued, termed by law: the underlying relationship (also known as the fundamental relationship). Since the parties already hold the capacity of debtor or creditor by virtue of preceding legal acts, the bill functions as an instrument through which debts arising from these initial relationships are executed and liquidated (payment instrument) or as an instrument placed at the creditor’s disposal to be used in case the debtor fails to fulfill their contractual obligations (credit instrument).
Often, the existence and dynamics of the legal relations within the underlying relationship have no significance on the legal situation created by the issuance of the promissory note, because, as foreshadowed in the introduction, through the issuance and transfer of the promissory note, abstract obligations arise, detached from the causes that gave birth to them.
Moreover, precisely based on the division existing at the level of these two relationships (underlying relationship and exchange relationship), the issuance/transfer of a promissory note will not lead to the extinguishment of the underlying relationship. The latter relationship will exist and, in distinct circumstances, will be activated when the exchange relationship suffers.
Thus, the causal action will be qualified as a non-exchange action, a common law action based strictly on the fundamental relationships between the beneficiary of the note and their debtor (the one from whom they received the title), to which the beneficiary of the promissory note will resort when the autonomous exchange obligational relationship can no longer be exercised.
In this sense, the provisions of art. 64 of Law no. 58/1934 state:
“If a causal action derives from the relationship that gave rise to the issuance or transfer of the bill, it remains valid including regarding its issuance or transfer, unless a novation has intervened.”
NBR Regulation no. 6/1994 clarifies this provision, stating that:
“Pt. 332 – The holder of the claim, resulting from the fundamental relationship underlying the issuance of the bill, may exercise, in addition to an exchange action, a causal action as well. The causal action is the action that the holder of the claim expressed in exchange form may exercise in connection with the fundamental relationship, according to the legal regime governing it.”
The case-law character is outlined by jurisprudence, which provides that:
“Non-exchange actions, namely, the causal action, according to art. 64 of Law no. 58/1934, are exercised based on the fundamental relationship, the obligational relationship that determined the issuance of the promissory note, according to the rules governing the respective obligational relationship.
Therefore, the causal action based on the fundamental relationship is, in fact, a common law action, and the common law action is, from the perspective of Law no. 58/1934, a causal action (art. 64). (…)
(…)The merits of the requests formulated within the causal action are subject to common law provisions, according to Point 332 of NBR Norm 4/1996.[5]“
Since the causal action is based on the fundamental relationship that generated the issuance/transfer of the Promissory Note, it means that there can be as many causal actions as there are fundamental relationships. From here, the following effect further detaches: unlike the exchange action, which allows pursuing every exchange debtor, the causal action confers the right to turn only against a limited number of persons, respectively only against one’s own exchange debtor.
Conditions necessary for exercising the causal action:
- According to art. 64 para. (2) of Law no. 58/1934, the beneficiary must prove the protest in order to preserve the right of recourse;
- The promissory note must be valid;
- According to art. 64 para. (3) of Law no. 58/1934, the beneficiary of the promissory note has the obligation to return the title to the debtor of the bill, by depositing it at the registry of the competent court, proving at the same time that they have fulfilled the necessary formalities for preserving against the debtor the rights of recourse that may belong to them and to which they could resort;
- The statute of limitation for this particular action has not expired; the limitation period will be that incident to the fundamental relationship.
Once they have chosen between the exchange action and the causal action, the holder of the promissory note can no longer revert on their choice, as mentioned in Point 334 of NBR Regulation no. 6/1994:
“If the creditor has exercised one of the two actions, the causal one or the exchange one, they will no longer be able to exercise the other.”
The case-law confirms these legal provisions, clearly mentioning that:
“Under these conditions, when the creditor’s forced execution was annulled within the exchange execution action, the re-exercise of a causal action is inadmissible. According to the provisions of Point 334 of NBR Framework Norm 4/1996, the simple exercise of one of the two actions, either the causal action or the exchange action, attracts the impossibility of formulating the other action, regardless of the solution pronounced in the action.[6]“
However, in the jurisprudence of the courts, it has been established that this prohibition is no longer incident when, without exercising two paths in parallel for the recovery of the same claim, the beneficiary of the Note exercises the two actions for different amounts of the claim, which they cannot satisfy through a single action:
“Therefore, the introduction of a causal action (such as the one forming the subject matter of the present case) is mandatorily subject to conditions whose rationale is determined by the necessity of avoiding the possibility of double execution of the obligation.
However, in the case at hand, it is found that the action submitted for judgment does not seek the execution of the same obligation concomitantly through two enforceable titles , as long as the promissory note issued by the appellant was partially annulled regarding the sums representing delay penalties, being maintained only for the principal debt (which is not the subject matter of the present dispute). The plaintiff is therefore entitled to capitalize on their right to the payment of penalties owed by the defendant, within a common law action, as long as they no longer hold an enforceable title for the requested sums, the present action being fully admissible.[7]“
b. Action for unjust enrichment
Unjust enrichment is a non-exchange action to which the beneficiary of the promissory note will resort when they have lost both the exchange actions and the causal action, representing a last resort solution.
However, unlike the causal action, the beneficiary of the note may exercise the action for unjust enrichment against the issuer, endorsers, and all avalistes who have enriched themselves to the detriment of the beneficiary of the promissory note, as mentioned in art. 106 in conjunction with art. 65 of Law no. 58/1934:
“When the holder has lost the exchange action against all obligors and has no causal action against them, they may exercise against the drawer, acceptor, or endorser an action for the payment of the sum with which they have enriched themselves without cause to their detriment.”
Moreover, considering the reasoning of the regulation, the object of the action without cause will be limited only to the sum of money with which the debtor has enriched themselves to the detriment of the beneficiary of the promissory note.
A series of conditions must be respected to be able to exercise this non-exchange action, as provided by Pt. 342 of NBR Regulation no. 6/1994:
- The existence of an exchange title, based on which its beneficiary could have exercised the exchange action;
- The beneficiary of a bill has lost the exercise of the exchange action or execution against all obligors without having at their disposal even the exercise of a causal action;
- The enrichment of the exchange debtor to the detriment of the creditor; effective enrichment of the debtor resulting from the loss by the beneficiary of the Promissory Note of the exchange action and the non-existence of a causal action is envisaged.
Finally, we mention that the action for unjust enrichment may be introduced within a limitation period of one year, which begins to run from the date on which the exchange actions were lost.
III. What defences can the executed party Invoke based on a promissory note?
a. Drawing up the protest for non-payment
At the moment the beneficiary presents the promissory note for payment and it is refused, the beneficiary will have to draw up a protest (an act with authentic character according to art. 49 of Law no. 58/1934) for non-acceptance of payment through the bailiff, public notary, lawyer, or through the court, according to Art. 66 of Law no. 58/1934.
Also, the refusal of payment may be ascertained:
- Either by the refusal mention of the paying credit institution dated and written on the bill, comprising the day when it was presented, as stipulated under art. 463 para. (2) let, b);
- Or by the refusal mention of the drawee credit institution dated and written on a copy of the refused bill, certified by it, in case of loss of the original on the banking circuit and comprising the day when it was presented.
Drawing up the protest for non-payment has as its foundation bringing to the knowledge of the endorser the fact that the issuer could not pay at maturity and, additionally, certifying this fact through an authentic act. By ascertaining the protest, the law aims to preserve the rights of the beneficiary of the promissory note to exercise their action of recourse.
If a refusal of payment has occurred, and the beneficiary has not drawn up the corresponding protest within the term provided by law, then the latter forfeits the right to exercise their right of recourse, remaining however with the possibility of pursuing the principal debtors.
Thus, if payment was refused by the issuer and the beneficiary wishes to turn against the endorsers, then within four working days from the refusal of payment, they must notify their endorser about the drawn-up protest. When a notification is made to a signatory of the Promissory Note, the same notification must be made, within the same term, to their avaliste as well.
Between the last endorsee and the rest of the endorsers, a new cascading notification mechanism called notice will function, where each endorsee will have to notify their endorser regarding the refusal of payment within two working days from the date they receive their own notification until the last endorser is reached, according to art. 50 of Law no. 58/1934.
This mechanism is also provided by Pt. 281 of NBR Regulation no. 6/1994 which mentions:
“The notification procedure regarding the drawing up of a protest for non-acceptance or non-payment of the bill shall traverse the reverse path that the title traversed. Thus, the holder of the bill who drew up the protest will have to notify this fact to their endorser and the drawer, within the four working days following the protest or the day of presentation, if the clause ‘without expenses’ was inserted.”
Lack of notification, unlike lack of protest, does not prevent execution through the exchange mechanism, but the one who did not notify may be held liable for damages caused by the lack of notification.
The mandatory nature of drawing up the protest and the legal effects determined by it are also established by case-law which mentions that:
“It is true that the provisions of art. 48 let. a) of Law no. 58/1934 provide that the holder of a bill of exchange/promissory note may exercise rights of recourse against the endorsers, the drawer, and the other obligors, at maturity, if payment has not taken place, however, the law requires that the refusal of acceptance or payment be ascertained through an authentic act (protest for non-acceptance or non-payment), which must be carried out within the time limits provided by art. 49 (which impose a limit of two working days from maturity, which in the case at hand was on 30.03.2017) and under the conditions provided by art. 66-73 of the law.
In the event of failure to perform these formalities within the time limits provided by law, the provisions of art. 58 para. (1) let. b) and para. (2) of Law no. 58/1934 become applicable, according to which, after the expiration of the time limits fixed for drawing up the protest for non-acceptance or non-payment, the holder forfeits their rights against the endorsers, against the drawer, and against the other obligors, with the exception of the acceptor.
This principle is detailed by the Framework Norm no. 6/1994 of the National Bank of Romania, which at Pt. 309 provides: ‘In the following situations, the holder of a bill of exchange forfeits their rights against the persons liable in recourse: (…)
(…) b) in case of failure to draw up the protest for non-acceptance or non-payment;
By these facts, the holder, although losing the action of recourse, does not lose, however, the direct action against the acceptor nor against their avaliste.’
Consequently, presentation for payment and drawing up the protest for non-payment are formalities of a nature to preserve exchange rights against recourse debtors (such as the endorser).[8]“
b. The exchange summons
Subsequent to the approval of forced execution, but before the commencement of tracking any asset, under the sanction of absolute nullity of the entire procedure, the bailiff will have to communicate to the debtor the exchange summons, which must comprise, according to art. 61 para. (6) of Law no. 58/1934, “the exact transcription of the bill or the protest, as well as of the other acts resulting in the amount due”.
In the matter of the promissory note, the exchange summons differentiates itself from the common law summons provided by art. 667 of the Civil Procedure Code, since Law no. 58/1934 has the character of a special norm, being mandatory in all cases of enforcement of a credit title provided by Law no. 58/1934 and derogates from the common law provisions.
The exchange summons is an initiating act of execution, as the case-law also mentions:
“Also, in agreement with the first instance, the tribunal retains that the exchange summons is not a preliminary act to starting forced execution, as long as the possibility of formulating the ‘challenge to execution’ against it is provided, which leads to the conclusion that it represents an initiating act of execution.[9]“
At the same time, jurisprudence retains the essential function of the summons, placing the debtor in default and warning them, noting the importance of this act which represents a formality with the role of guaranteeing the debtor’s rights:
“The exchange summons has the nature of a notice of default, with the aim of affording the person against whom the credit title is asserted the opportunity to express their position regarding its validity by way of exchange opposition. Only after this opportunity is afforded to the debtor may forced execution proceed. If the exchange summons were to cease to exist, the time limit for the exchange opposition could not run, which would imply a grave prejudice to the debtor’s rights, by rendering them unable to defend themselves by way of invoking exchange exceptions.[10]”
Specifically, given the mandatory nature of the exchange summons and the rationale of placing the debtor in default through it, it is concluded that, in most cases, the bailiff will order the fulfilment of both.
c. Opposition to execution
Based on art. 62 para. (1) of Law no. 58/1934, subsequent to the communication of the summons to execution, the exchange debtor has at their disposal a reduced term, of only five days from the communication of the exchange summons, within which they will be able to formulate an opposition to execution, which is in fact a challenge to the summons of execution.
The opposition to execution is introduced at the execution court, being settled according to the norms of the Civil Procedure Code, the exchange debtor being able to oppose to the beneficiary only exceptions regarding the nullity of the title.
This challenge to exchange execution represents a legal mechanism distinct from the common law challenge of the execution.
The case-law clearly evokes the functions of the opposition to execution:
“The distinction between opposition to execution and challenge to execution does not lead to the conclusion that the existence of the former excludes the formulation of the latter, but the grounds that can be invoked are different. The domain of the common law challenge is limited only to execution acts subsequent to the exchange summons. Formal defects of the exchange title, exceptions based on personal relationships between the holder of the bill and the debtor, but also procedural ones linked to the absence of conditions for accessing exchange execution, may be invoked only via the special challenge provided by art. 62 of Law no. 58/1934, respectively the former exchange opposition.[11]“
Due to its distinct function, the exceptions the debtor may invoke within the opposition to execution are limited, concretely:
- Exceptions of nullity, targeting the lack of mandatory elements on the note (form, forged signature, lack of mandate);
- Personal exceptions, targeting the commercial relationship between parties (vices of consent, non-compliance with the contract underlying the issuance of the note);
- Procedural exceptions, targeting irregularities such as non-possession of the note in original, lack of uninterrupted chain of endorsements, or lack of protest.
Formulating the challenge does not suspend execution, except when the debtor does not recognize their signature, inscribing themselves in forgery proceedings, or when they do not recognize the power of attorney. Therefore, cases where forced execution begun based on a promissory note is suspended are limited. Compared to the wording of the text, the request for suspension could not be conditioned on the payment of a bail.
IV. Conclusion
The analysis of the phenomenon of refusal of payment of promissory notes reveals a persistent vulnerability in commercial dynamics, confirmed by the high incidence of statistically reported cases. However, the current legislative framework offers multiple possibilities for recovering the claim inscribed in the title, guaranteeing the security of the commercial circuit.
Among the available mechanisms, exchange execution distinguishes itself incontestably as the optimal instrument for the creditor’s interests, characterized by avoiding litigation on the merits and passing directly to forced execution based on the promissory note, which represents an enforceable title.
In essence, although the risk of non-payment is inherent to the market, the correct choice and implementation of legal mechanisms ensure the rapid recovery of claims, thus validating the function of the promissory note as an energetic and efficient payment instrument.
[1] ICCJ, Decision no. 394/2021 from February 18th 2021, available on https://www.scj.ro/.
[2] Ploiești Court of Appeal, Decision no.1548/2009 from Novembre 5th 2009, available on www.sintact.ro.
[3] Bucharest Tribunal, Decision no. 1275/2013 from May 10th 2013, available on www.sintact.ro.
[4] Bucharest Tribunal, Decision no. 2288/2021 from May 5th 2021, available on www.sintact.ro.
[5] Bucharest Court of Appeal, Decision no. 95/2011 from January 20th 2011, available on www.sintact.ro.
[6] Ibidem.
[7] Cluj Court of Appeal, Decision no. 427/2020 from September 21st 2020, available on www.sintact.ro.
[8] Bucharest Tribunal, Decision no. 2288/2021 from May 5th 2021, available on www.sintact.ro.
[9] Ibidem.
[10] Bistrița District Court, Sentence no. RJ 62g853872/2022 from February 2nd 2022, available on www.sintact.ro.
[11] Slobozia District Court, Sentence no. RJ 9d24d4357/2025 from November 24th 2025, available on www.sintact.ro.