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When a wife is not responsible for her husband’s debts

Mr Justice Anthony Ellul ruled on 1 November 2013 in the case Emanuel Spiteri vs. Francis and Marthese Mifsud, that the wife is not responsible for her husband’s commercial debt, since there was no joint and several liability, when they ended the community of acquests.

19 November 2013, 12:00am
Emanuel Spiteri filed a court action against the Mifsud couple claiming he had sold €23,179.24 of stock to them between 1995 and 1997. Francis Mifsud had promised to pay. Mrs Mifsud knew of the debt.

Marthese Mifsud pleaded that the debt was time barred and also that she and her husband had entered into a contract on 23 January 1997 where they separated their assets. Francis Mifsud also claimed that the debt is time barred.

The Court analysed the evidence produced where Francis Mifsud ran Heavy Duty Aluminium Works and the plaintiff sold the aluminium to him, but never dealt with his wife. The separation of assets contract states Francis Mifsud was responsible for all the debts of the community of acquests and Mrs Mifsud was indemnified, if she is asked to pay. Mr Justice Ellul pointed out that Article 1089 of the Civil Code stipulates that there is no joint and several liability if this is not expressly agreed upon. 

On the other hand Article 115(1) of the Commercial Code states: 'In commercial obligations, co-debtors are, saving any stipulation to the contrary, presumed to be jointly and severally liable'.

However, Article 1324 of the Civil Code addresses the cases when there exists a community of acquests and a debt is created by one of the spouses in the exercise of his business. Then Article 1330 of the Civil Code states that when the community of acquests does not cover the debt, the parafernal property of that spouse that did not contract the debt should not be attacked. The Court concluded that in this particular case, there is no joint and several liability amongst the Mifsuds. The Court further explained that the payments made by Francis Mifsud were not done on behalf of his wife and it seems that his wife did not authorise any payments to be made on her behalf. Mrs Mifsud never admitted to being a debtor of Spiteri's.

Marthese Mifsud had explained that in 2008 she had met the defendant with her husband. In their conversation Francis Mifsud claimed that he owes Spiteri money, but much less, but she offered to pay €100 per month which was refused. It seems that this conversation took place in front of a person who was not called as a witness and therefore, the plaintiff failed to prove interruption of prescription. 

The Court disagreed with the defendants that claimed that the action is time barred under Article 2148 of the Civil Code, since the product sold was not merchandise. The Court quoted previous judgements that this article refers to products that are sold and consumed day to day, which in this case was not. The aluminium was a raw material used for manufacturing.

Another plea was filed under Article 2156 (f) the Civil Code, in that the debt was time barred since the debt arose from a commercial transaction. Spiteri and Francis Mifsud did not continue with this commercial relationship for some time and a judicial letter was filed on 23 January 2009. However, Francis Mifsud admitted in Court that he owed Spiteri a sum and that on 3 September 2007 he had paid Lm20 on account. On the other hand due to the reasoning the court made with regard to Marthese Mifsud, it accepted the plea and declared the action time barred limited to the claim against her.

The Court examined the invoices, which were signed by the defendant and his employee. Mr Mifsud insisted that he paid all cash sales, however the plaintiff had original cash sales, which if paid had to be at the defendant not at the plaintiff. This indicates that these were not paid. The Court concluded that the amount due was €16, 719.13 since not all invoices were presented in Court.

Mr Justice Ellul ordered Francis Mifsud to pay €16,719.13  to Spiteri and further declared Marthese Mifsud not to be responsible for the claim.

Malcolm Mifsud is a partner at Mifsud & Mifsud Advocates

 

 

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