Not such an ace up your sleeve: the promissory note as a means of pressure

The use of promissory notes in the business world remains a common practice, especially as the court procedure for asserting claims on the basis of a promissory note is much faster than the ‘standard’ assertion of claims on the basis of a civil trial. Therefore, all the more willingly, in the situation of a dispute with a business opponent, the holder of a promissory note may try to use it as one of the tools of pressure in a confrontation, especially when such a dispute is conducted on multiple fronts (civil, criminal and other).

Above all, we must remember what a promissory note is used for, under what conditions it may be filled, and consequently when we may be exposed to criminal liability for its unauthorised filling, as well as claims based on it.

In the circumstances of the case I am discussing, a sharp dispute arose between the existing partners, which resulted in a number of counterclaims as well as the filing of notices of possible criminal offences with the law enforcement authorities. This was due to the fact that the existing partners had worked closely together. This, in turn, meant that they knew each other’s strengths and weaknesses well and used this knowledge against each other without inhibition. When the balance of power tipped in favour of the client, his litigation opponent decided to use the blank promissory note, which had been hidden away in a drawer, as another tool. A tool which, as it later turned out, caused more problems than potential benefits for its holder.

Note that a blank bill of exchange (also known as an incomplete bill of exchange) serves, among other things, as a means of securing a claim. In essence, it is a blank bill of exchange signed by the debtor, at least one element of which is not completed (e.g. no indication of the amount). Most often, however, the promissory note shows only the debtor’s signature and an obligation to pay.

Reaching for this instrument came as somewhat of a surprise to the client, as it related to a contract entered into years ago, in the client’s belief – long executed. Moreover, the client lived in the belief that the bill of exchange, as agreed by the parties at the time, had been destroyed. However, this was not the case and the disclosure of the existence of the promissory note became highly problematic, all the more so as a payment order was quickly issued by a civil court, on the basis of which the plaintiff (the client’s litigation opponent) was able to enforce its entire claim even before the end of the civil trial. Given that the promissory note amounted to many millions of zlotys, a quick reaction was necessary.

In this situation, it was necessary to analyse the documentation related to the blank promissory note issued by the client. It turned out that the blank bill of exchange was issued as security for the performance of an obligation, and the possibility of filling it was subject to certain conditions. Bearing in mind that the mere filling of a blank bill of exchange in a manner inconsistent with the will of the issuer (as defined by law) may give rise to criminal liability, it was necessary to clarify the relationship between the client and his legal opponent and, consequently, to establish precisely when the blank in question could be filled in light of the documents presented (contract, bill of exchange agreement).

It soon became apparent that, while the promissory note had been completed formally correctly, questions were raised about the provisions of the promissory note agreement and the contract itself. This formed the basis for a notice of possible criminal offence, especially as the client’s opponent had already managed to obtain a payment order on the basis of the criminally filled bill of exchange. In this context, it is worth remembering that also the public prosecutor – if he perceives grounds for doing so – can demand the commencement of civil proceedings in any case and, if such proceedings are already underway, can take part in them.

It also came to light that the client’s opponent had gone too far in filling out the blank promissory note. By checking the client’s documents, it was established that, firstly, the blank promissory note was issued as security for a contractual penalty in the event of the client’s failure to fulfil a specific obligation. Furthermore, the blank bill of exchange could only be filled after the fulfilment of the specified condition and after the expiry of the deadline. While the question of the fulfilment of the customer’s obligation – due to its nature – could not be determined precisely and was the axis of the dispute, the fulfilment of the other requirements for the filling of the blank promissory note could be determined strictly.

However, the emphasis should have been on verification by the law enforcement authorities of whether the requirements to fill the promissory note, which were obvious in nature, had been fulfilled. The making of these findings by the law enforcement authorities ultimately allowed the promissory note creditor to be charged.

These findings, in combination with a number of behaviours of the client’s opponent undertaken in the exercise of its alleged right under the promissory note (e.g. the manner and circumstances in which it was filled, correspondence with the client), made it possible to establish that the perpetrator intended to use the promissory note in such a criminal manner and not merely to obtain payment of a contractual penalty. Ultimately, the civil proceedings on the promissory note ended with the dismissal of the claim, while the client’s previous litigation opponent ended the adventure with the filling of the blank promissory note by bringing an indictment against him.

In summary, a bill of exchange (blank bill of exchange) is intended to serve a specific economic purpose, most often specified in the bill of exchange declaration, including as security for the performance of obligations. However, it is not permissible to use a bill of exchange in a completely arbitrary manner, to fill it against the will of the issuer, and ultimately to treat it solely as an instrument of pressure, which may lead to criminal liability.