Plaintiff got married in April 1980. In September 2003, plaintiff found out that defendant had bound himself to stand as a guarantor in solidum and consented to the registration of a general hypothec on all his belongings in November 2004, to make good together with the principal debtor and the other guarantors for the payment of a loan granted by a bank to the principal debtor of Lm650,000. Plaintiff claimed that at the time of the registration of the general hypothec in question, the matrimonial regime that regulated the marriage was that of the Community of Acquests.

Note: Article 1322 of the Civil Code confirms the powers of administration of both spouses without distinction. 1993 Amendments reformed the Law introducing equality of spouses in many areas of civil life. While before, administration of the Community of Acquests was solely entrusted to the husband, today ordinary administration of the Community is vested in either spouse in Article 1322(1). The Law gives no definition of such, but provides an exhaustive list of acts of extraordinary administration in Article 1322(3) which vest jointly in the two spouses without distinction. Any other act not listed is deemed to be, by elimination, an act of ordinary administration. The idea of joint consent was introduced as an expression of equality between spouses. The Legislator however also thought of practicality and this can be observed in the Law in the distinction between ordinary and extraordinary acts and when one of the spouses exercises a business, trade or profession.

Plaintiff claimed that the signing of such general hypothec fell within the ambit of Article 1322(3)(h) and (b) of the Civil Code which in essence reveals such act as being one of extraordinary administration and hence requires the consent of both spouses:

1322(3) Acts of extraordinary administration are the following

(b) acts constituting or affecting hypothecation of property;

(h) the contracting of any suretyship;

The consent of one spouse does not suffice in such a case. Plaintiff claimed to have never given her consent and hence such an act was annullable by virtue of Article 1326 of the Civil Code and her assets should have been protected. Plaintiff and her husband had been separated de facto for more that 12 years and a separation judgement was passed on 30 November 2004, from which the husband filed an appeal which is still pending.

Plaintiff asked that the Court declare such obligations which her husband undertook, as having no effect on the Community of Acquests and to revoke and annul the guarantee and the general hypothec in favour of bank.

Defendants quoted a very controversial Article in the Civil Code in their line of Defence: Article 1324 states:

1324. Normal acts of management of a trade, business or profession being exercised by one of the spouses, shall vest only in the spouse actually exercising such trade, business or profession even where those acts, had they not been made in relation to that trade, business or profession, would have constituted extraordinary administration.

This Article allows for the situation where despite an act being by nature one of extraordinary administration, nevertheless, once it forms part of the normal acts of business of a spouse, the latter may carry out such act without the consent of the other spouse.

Plaintiff claimed that her husband was not a debtor or anything of the sort of Company A and although he was a director of Company B, he did not need to give such a guarantee since this company had no relations with Company A.

The loan was initially given by one bank and was later taken over by another. Plaintiff claimed that in both cases she had not given her consent. She also explained further that she wanted the guarantee to be annulled only insofar as it affected the Community of Acquests.

The Court quoted the relevant articles in the Civil Code:

1321(1) All the property which the spouses or one of them possess or possesses shall, in the absence of proof to the contrary, be deemed to be part of the acquests.

(2) Any property, however, which may have come to either of the spouses under any title anterior to the marriage shall not be included in the acquests, notwithstanding that such spouse may have been vested with the possession of the property only after the marriage.

1319. The right of each of the spouses to the Community of Acquests shall, saving any other provision of the law, commence from the day of the celebration of the marriage and terminate on the dissolution thereof.

1322(1) The ordinary administration of the acquests and the right to sue or to be sued in respect of such ordinary administration, shall vest in either spouse.

(2) The right to exercise acts of extraordinary administration, and the right to sue or be sued in respect of such acts or to enter into any compromise in respect of any act whatsoever, shall vest in the two spouses jointly.

Although defendant claimed that such a guarantee was done in pursuance of trade, business etc., it was felt that his involvement in the principal debtor company was not sufficient to argue that such an act fell within the realm of Article 1324. No proof was brought to show the husband’s actual role in Company A.

Prior to 1993, before the amendments to the Code, the wife’s consent was not necessary and any husband could enter into any contracts which would ultimately burden the Community of Acquests. However, since the load agreement was renewed in 2003 with a bank, although the bank was taking over a pre-existing loan, plaintiff’s consent at that point, according to the 1993 amendments, should have been requested.

The Court stated that the guarantee affected both immovable and movable property since plaintiff’s husband had entered into a general hypothec which in essence is a personal guarantee present and future, movable and immovable. Since the act was an extraordinary act of administration, plaintiff’s consent should have been demanded and obtained.

The Court agreed and delivered judgement to the effect that such a guarantee should have no effect on the Community of Acquests to the extent

of plaintiff’s share within such community.