Spanish jurisprudence has been building a system of warnings against businesses which, under the guise of transfer, pursue guarantee purposes. The prohibition of the commissory agreement (arts. 1859 and 1884 CC) operates as a closing clause: radical nullity of any design that allows the creditor to appropriate the asset “by simple non-payment”, regardless of public realisation and value control. This ratio – of public order – has been applied not only to typical guarantee contracts, but also to indirect transactions that attempt to circumvent it, in particular the simulated sale and purchase with a back-up agreement that disguises a loan (sale at grace). The Chamber has reiterated this in a programmatic manner (STS 34/2012, among others): if the failure to repay the sum lent consolidates the property of the lender, there is forfeiture and nullity ipso iure.
STS 4175/2025 of 22 September makes – by reference to previous decisions – a recapitulation of the jurisprudential doctrine applicable to cases of fiduciary guarantee in loan or financing operations. Under this doctrine, the sale by way of guarantee and the fiducia cum creditore have been progressively read in terms of relative simulation: once the transferring cause has been declared non-existent, the dissimulated business subsists if it meets the requirements of validity; and being – as it is – a valid business (“Martian pact”) it only becomes null and void when its guarantee function incorporates the automatism of private adjudication due to non-payment (this is the “commission pattern” to which precedents such as 16-V-2000, 26-IV-2001, 5-XII-2001, 20-XII-2007 and its recapitulation in STS 34/2012 respond).
In particular, the Chamber itself has vividly described the structure of the letter of grace: simulated purchase and sale (the price is the sum lent) with a clawback agreement: if the borrower does not repay in due time (in the form of not exercising the right of withdrawal), the “buyer-lender” becomes the owner; this is the classic confiscation that arts. 1859 and 1884 CC proscribe.
In the circumstances, the Chamber concludes that the “sale and purchase with repossession” agreed between the parties concealed financing to recover a property in foreclosure; there was no loan strictu sensu (delivery of capital and typical guarantee), but payment by a third party of the debt to suspend the auction. The seller retained possession and exploitation for 18 months, with the right to recover the properties by reimbursing €939,321.45; she did not exercise the right of withdrawal, and the buyer’s ownership was consolidated. In addition to this, a promissory note for 250,000 € was returned and there was no interest, and the buyer could have purchased at auction for the same amount paid to stop the execution.
Succinctly stated, and – as the factual account of the Provincial Court of Huelva elaborates – the facts consisted of the defendant-appellant buying from the plaintiff-appellant a property subject to foreclosure, and the price was distributed between the cancellation of the loan and a surplus that corresponded to the plaintiff. The sale included a clawback agreement, whereby the seller could regain ownership of the property if it returned the purchase price to the buyer after 18 months (during which time the seller retained beneficial possession of the property). After this period had elapsed, the seller did not exercise the right of withdrawal – presumably because she did not have the money to do so – and the buyer consolidated her ownership of the property.
The lawsuit consists of clarifying whether, as the seller-plaintiff-appellant-appellant alleges, there was a simulation in the sale and purchase, and – above all – whether there was a confiscation prohibited by the legal system. The Provincial Court concludes
- 1) that there was a relative simulation, which does not annul the purchase and sale, but rather disciplines it according to the simulated business, which in this case is the financing; and
- 2) that there is no commission agreement since:
- the parties did not foresee the “automatic appropriation” of the property by the lender-buyer-defendant-respondent in the event of failure to repay the amount financed; and
- in any case, in order to appropriate the property, the said party could have taken advantage of the public auction and, in that process, bid and paid the executing bank the amount due, so that “there has been no substantial confiscation, and the loss of the property does not have that origin or original or pure cause”;
- the seller returned to the buyer the promissory note delivered for the excess, and for this reason the Audiencia and the SC inferred that the financing had not been repaid;
The Supreme Court confirms the Provincial Court’s opinion. However, the Supreme Court confirms the opinion of the Provincial Court:
- 1) although we believe that it is clear that we are dealing with a relative simulation, since under the appearance of a purchase and sale, a financial transaction and its guarantee are disguised;
- 2) we also believe that under the revised business structure there is a commissory assumption with sufficient intensity to decree its nullity as prohibited, since there is no need for an explicit automatic appropriation agreement.
- 3) an explicit agreement of automatic appropriation is not necessary; in this case the appropriation occurs – plausibly – due to the impossibility of repurchasing the property by means of repayment of the price received; and that:
- the fact that the property could have been the same and previously acquired at auction by the purchaser in the case in question does not annul the commissory genealogy of the primary business that is transmitted to the subsequent appropriation (due to the lack of repurchase) of the property: even if the purchaser could have appropriated the property via auction, the intentionality of the transfer with repurchase was appropriatory
- The aforementioned case law does not require the financing to be repaid in order to qualify its security as “confiscation”, since this must be deemed to exist when the creditor takes possession or consolidates his dominion – with all the powers that this confers – over the object delivered as security.
The only element that could have avoided the assessment of a “commissory agreement” by application of the jurisprudential doctrine of the “equivalence of results” (among many, STS 440/2012 of 28 June) would have been that the economic valuation of the property substantially coincided with the acquisition value of the property. In such a case, even if there was an original “commissory agreement”, no damage would have been caused to the seller, and this absence of damage would have made the trust business sound.
However, in the absence of the above, we must disagree with the decision of the Supreme Court, which considers that the causal link between non-payment and appropriation is not sufficiently proven. The Chamber insists that the consolidation of ownership derives from the initial transfer and inactivity (non-exercise of the retro), not from the non-fulfilment of a secured debt.
There is, therefore, a mismatch between the economic plausibility of the design (financing of the “rescue of the property” secured with the thing) and the evidentiary standard required by the Supreme Court to activate the prohibition on commission. The business probably concealed secured financing; but there was no conclusive proof that the non-reimbursement would trigger – in itself – the private adjudication proscribed by articles 1859 and 1884 CC. This evidential gap is, strictly speaking, the only thing that separates this case from the commission pattern sanctioned by the Chamber in similar precedents.
In this sense, the appeal to the fact that the financier could buy at auction is a relevant fact, but not decisive on its own: what is decisive is whether, in the specific negotiation iter, the consolidation of the property functionally depended on the non-reimbursement, even if it was given the form of non-exercise of the retro. In the judgment, this functional judgment is subordinated to the evidentiary deficit, and therein lies – in my opinion erroneously – the key to the judgment.