When an asset is not in your hands, recovering it can be a tricky business. Visit attachment and the input-apprehension are legal tools for recovering movable property. But these procedures come up against various obstacles that can compromise their effectiveness.
Obstacles linked to property rights
The rule that "in the case of movable property, possession is equivalent to title".
Article 2276 of the Civil Code sets out a fundamental principle: "In the case of furniture, possession is equivalent to title".. This rule protects the owner of movable property by conferring a presumption of ownership. It is a powerful bulwark against claims.
For this rule to apply, possession must have certain qualities:
- Be effective (physical possession of the property)
- Not be in a precarious situation (which excludes situations involving deposits, rentals or loans)
- Be free from vices such as equivocation or secrecy
- The possessor must be acting in good faith
The Court of Cassation reiterated this last criterion in a ruling of 23 May 2000: the possessor must be convinced that he is acquiring the property from the true owner.
Exceptions to the rule
There are two main exceptions to the protection of article 2276 :
- In the event of loss of the asset
- In the event of theft
In both these situations, the claim remains open for three years from the date of loss or theft. The claimant does not have to show that the possessor acted in bad faith.
Proof of bad faith
Since good faith is presumed (article 2274 of the Civil Code), the burden of proving bad faith lies with the claimant. Proving bad faith can be complicated. Bad faith presupposes that the possessor knew that he was acquiring the property from a person who did not own it.
Impact of insolvency proceedings
Collective proceedings (safeguard, reorganisation, judicial liquidation) create a restrictive framework for seizures.
Suspicious period and invalidity of precautionary measures
Under Article L.632-1, I, 7° of the French Commercial Code, protective measures taken after the date of cessation of payments are null and void. A seizure and claim carried out during this period is therefore vulnerable.
In a decision dated 18 February 1999, the Cour de cassation (French Supreme Court) ruled that a seizure and reclaim is a compulsory execution measure prohibited by the opening judgment.
Stopping individual prosecutions
Article L.622-21 of the French Commercial Code halts or prohibits all enforcement proceedings, including thedelivery or restitution order to obtain a writ of execution on both movable and immovable property after the opening judgment.
This therefore precludes a seizure-claim after the commencement of insolvency proceedings. On the other hand, this rule does not prevent the exercise of a revendication action, as provided for in articles L.624-9 et seq. of the French Commercial Code.
The specific claims procedure
In the event of insolvency proceedings, creditors wishing to recover an asset must follow a specific procedure:
- Submit an amicable claim within three months of publication of the opening judgment
- If the procedural bodies refuse within one month, refer the matter to the juge-commissaire within the following month.
This three-month period is fixed in advance. Failure to comply will result in the action being time-barred.
The retention of title clause: a major advantage
The retention of title clause provides effective protection for the seller. Defined in Article 2367 of the Civil Code, it In this context, the term "suspends the transfer effect of a contract until full payment of the obligation which constitutes its consideration" is used..
In the event of insolvency proceedings, article L.624-16 of the French Commercial Code facilitates the reclamation of goods sold with retention of title. Case law has validated the seizure and reclamation carried out by a creditor holding such a clause, even when the debtor is the subject of insolvency proceedings (CA Lyon, 26 February 2003).
Impact of excessive personal debt
Suspension of enforcement proceedings
If a case of overindebtedness is accepted, enforcement proceedings against the debtor's assets are suspended and prohibited (article L.722-2 of the French Consumer Code).
This suspension takes effect until approval of the conventional recovery plan, until the decision imposing measures, or until the judgment opening the personal recovery proceedings.
Special features of the personal recovery procedure
Article L.742-7 of the French Consumer Code stipulates that, in the event of personal recovery with judicial liquidation, the opening judgment suspends enforcement proceedings until the closing judgment.
There is still some debate as to whether the seizure of a claim falls within the scope of this suspension. Article R.722-5 of the Consumer Code, by the generality of its terms, seems to include it in the prohibition.
Options for action despite over-indebtedness
The Douai Court of Appeal (9 March 2017, no. 16/02076) ruled that it does not fall within the jurisdiction of the over-indebtedness judge to order lessees to return a vehicle. It is then up to the lessor to proceed by way of seizure and attachment.
This decision suggests that certain actions to recover assets remain possible even in a situation of overindebtedness, particularly when they are based on property rights.
Other special situations
Fungible assets and identification problems
Fungible goods pose a particular challenge: how do you claim a good that is interchangeable with others of the same kind?
Case law considers that "if the fungible nature of a property does not in itself prevent it from being claimed, the claim can only be successful insofar as the property in question has not been confused with others of the same kind". (Com. 25 March 1997, no. 94-18.337).
Individualisation is therefore a necessary condition for claiming fungible property.
Goods incorporated into other goods
The incorporation of one item of property into another also poses a problem. Article 2370 of the Civil Code provides that the incorporation of a movable subject to a retention of title into another asset "does not preclude the rights of the creditor where such property can be separated without suffering damage"..
Case law allows claims where the substance of the item has not been altered, in return for compensation for any work carried out (Com. 17 May 1988).
Holders of special privileges
Certain creditors benefit from privileges that facilitate claims:
- The lessor of a building has a lien on the furnishings of the rented premises (article 2332, 1° of the Civil Code).
- The seller of unpaid furniture may reclaim the goods sold within eight days of delivery (article 2332, 4° of the French Civil Code).
Family heirlooms and heirlooms
The Court of Cassation has recognised the right of family members to reclaim family heirlooms (Civ. 2e, 29 March 1995, no. 93-18.769). This special right makes it possible to prevent the alienation of property that is of patrimonial and moral value to the family.
Other specific assets such as aircraft, pleasure yachts or ship's documents may be subject to special claim procedures.
Given the complexity of these asset recovery procedures, the support of a lawyer specialising in enforcement procedures is often essential to secure your rights and maximise your chances of success.
Sources
- Civil Code: articles 2276, 2274, 2367, 2370
- French Commercial Code: articles L.622-21, L.624-9, L.624-16, L.632-1
- Consumer Code: articles L.722-2, L.742-7, R.722-5
- Code of civil enforcement procedures: articles R.222-17 to R.222-25, L.222-1, L.222-2
- Court of Cassation, Commercial, 25 March 1997, No. 94-18.337
- Court of Cassation, 2nd Civil Division, 18 February 1999, No. 96-21.218
- Court of Cassation, Commercial, 23 May 2000, No. 98-13.134
- Court of Cassation, 2nd Civil Division, 29 March 1995, No. 93-18.769
- Lyon Court of Appeal, 26 February 2003, no. 02/06030
- Douai Court of Appeal, 9 March 2017, no. 16/02076
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