Scriptural money, which represents the funds held in our bank accounts, accounts for the overwhelming majority of money in circulation. However, its underlying legal nature remains a source of doctrinal debate with considerable practical consequences, particularly in the context of debt collection procedures. When a creditor has to seize a bank account, what is he really seizing? Is it money, like banknotes, or simply a claim that the account holder has against his bank? This complex problem, far from being purely theoretical, has a direct impact on the effectiveness of enforcement procedures and the legal certainty of transactions, a major objective of our payment system.
Introduction to the controversy: the legal nature of scriptural money in question
At the heart of enforcement law, attachment for payment is a key procedure enabling a creditor to obtain payment of a sum of money owed by the debtor, by seizing assets held by the debtor with a third party. The question of the nature of these funds, when they are held in a bank account, is a major legal controversy that arises at more than one level.
Cashless money in the modern economic and legal landscape
In our massively bank-based economy, which relies on a complex banking system, fiat money (notes and coins) represents only a tiny proportion of wealth. Almost all money exists as a medium for accounting entries in the banks' books: this is scriptural money. More than 92 % of the money supply has no physical existence and circulates by means of book entries, the work of an almost total dematerialisation. This economic reality has forced the law to adapt, particularly in terms of enforcement procedures. For a creditor, his debtor's main source of wealth is usually his bank accounts. The effectiveness of debt collection therefore depends directly on the ability to capture this intangible wealth.
Attachment: a mechanism at the heart of the debate
Article L. 211-1 of the French Code of Civil Enforcement Procedures (Code des procédures civiles d'exécution) allows a creditor in possession of a writ of execution to seize "the debtor's claims for a sum of money that is liquid and due". When it is carried out in the hands of a credit institution by a judicial commissioner, it targets the debtor's assets in his account. This is where the problem arises: if we follow the letter of the text, the procedure relates to the restitution claim that the customer (seized debtor) has against his banker (seized third party). This apparently straightforward qualification has far-reaching implications and has divided the doctrine. The current controversy over the nature of scriptural money cannot be fully understood without going back to the genesis of the immediate attribution effectwhich was at the heart of the 1991 reform of enforcement procedures.
Opposing doctrinal theories: money claim or real money?
The doctrinal debate on the nature of scriptural money pits two radically different visions against each other. Each model has direct consequences for the understanding and scope of the attachment procedure.
Scriptural money as 'money': the vision of Christian Mouly and other authors
An influential part of the doctrine, led by Christian Mouly, argued that scriptural money should not be reduced to a simple claim. According to this view, "the terms of the law should not be taken literally". The real object of the seizure would not be the personal right, but the sums of money themselves, the scriptural money existing on the account. To justify this position, Christian Mouly argues that scriptural money is "very close to a tangible thing". Its purpose is to be converted into cash at any time, and it circulates by means of a series of entries, electronic or otherwise, which are similar to a tradition (the physical delivery of a good). From this point of view, the credit balance in an account is not simply a personal right against the bank, but a real thing, a quantity of money individualised by its entry in the account.
Cashless money as a 'claim': the interpretation of article L. 211-1 of the Code of Civil Enforcement Procedures
On the other hand, another part of the doctrine, represented in particular by Roger Perrot and Philippe Théry, adheres to a stricter reading of the texts. For these authors, depositing money in a bank results in a transfer of ownership to the banker. The depositing customer loses ownership of the funds and becomes the holder of a simple restitution claim. Scriptural money is therefore not money in the proper sense, but a "money claim". This analysis is based directly on the wording of art. L. 211-1 of the Code of Civil Enforcement Procedures, which explicitly refers to the seizure of "claims". The seizure-attribution therefore relates to the customer's right against his bank. This view, although less intuitive, is considered more rigorous. It emphasises that in the event of the bank's bankruptcy, for example, the depositor does not have a right to claim specific funds but is merely a creditor, even though he benefits from a guarantee via the deposit guarantee fund, illustrating the personal nature of his right.
Legal consequences of the classification of scriptural money
The distinction between "debt" and "money" is not simply a school debate. The classification adopted has direct repercussions on the seizure regime and the security of transactions.
Impact on the execution of the attachment order
Since the 1991 reform, seizure-attribution entails the immediate attribution of the seized debt to the benefit of the seizing creditor. From the very first act of attachment, the debt leaves the debtor's assets and becomes part of the creditor's assets. If we consider that the object of the attachment is the claim itself, this effect is a form of forced assignment of the claim. The seizing creditor becomes the new holder of the right of restitution against the bank. The payment made by the garnishee institution to the bank will extinguish both its own obligation to the garnishee debtor and the debt owed by the garnishee debtor to the creditor. If, on the other hand, the seizure is considered to involve money, immediate attribution would be analysed as a direct transfer of ownership of the funds. Although the end result is similar, the nature of the operation differs and may influence the regime of possible challenges.
Abstract nature of the transfer and unenforceability of exceptions
The classification of scriptural money also has implications for the theory of bank transfers. Considering the credit transfer as a transfer of scriptural money, comparable to a "dematerialised tradition", gives it an abstract character. This means that the credit transfer is independent of its underlying cause. Once the transfer order has been executed, the beneficiary has a right of his own to the funds. He or she is protected against any exceptions that the originator might try to raise. This is the principle of the unenforceability of defences, the cornerstone of the defence of the beneficiary's interests and fundamental to the security of payments. The aim is to guarantee the fluidity of economic exchanges: the beneficiary is thus assured that the funds received cannot easily be called into question.
Specificities and challenges of the seizure of bank assets
The seizure of non-cash money presents particular challenges arising from the very nature of bank accounts and the way in which funds are managed in them.
Funds management and segregation on special and professional accounts
The controversy over the nature of bank assets takes on a particular dimension in the case of special accounts. Certain professionals, such as lawyers (via CARPA accounts) or co-ownership managers, are required by their professional code of ethics to open dedicated accounts to receive their customers' funds. These funds do not belong to them. The law requires strict segregation. In the event of a seizure being made against the lawyer or managing agent in a personal capacity, these funds cannot in principle be seized. This protection demonstrates that the law recognises a reality that goes beyond the mere claim: the allocation of funds to a third party is enforceable against the account holder's creditors, which tends to reinforce the idea that the destination of the funds takes precedence over the contractual relationship between the depositor and his bank.
Attachment of joint accounts: a special system
Seizing a joint account raises specific difficulties. The funds deposited are presumed to belong jointly to the joint account holders, each for half. When a creditor of only one of the joint account holders seizes funds, he can in principle only seize his debtor's share. However, this presumption of joint ownership is simple. The seizing creditor, or the non-debtor co-holder, may seek to rebut it by providing proof of the exclusive origin of the funds within the time limit. If the non-debtor co-holder can prove that he or she is the only person to have paid into the account, he or she will be able to obtain release of the seizure for the whole amount after contesting it. The question of proving the origin of the funds is therefore a central issue and illustrates the tension between the formal ownership of the account and the real ownership of the money in it.
Recent case law and future developments
Case law on the nature of scriptural money is relatively stable. It tends to favour the textual analysis of the Code of Civil Enforcement Procedures, qualifying the object of the seizure as a claim. Court rulings confirm the importance of the principle of the unenforceability of exceptions relating to credit transfers, a guarantee for the security of payments. No recent court decision has overturned this doctrinal debate which, although old, remains relevant. Increasing dematerialisation and the emergence of new digital assets could, in the future, fuel new thinking on the 'ownership' of intangible assets and their apprehension by enforcement procedures, at an even more complex level.
The complexity of this controversy and its direct impact demonstrate the importance of sound advice. For all foreclosure-related issues, our expert enforcement lawyers can help you with their expertise. This analysis of scriptural money is part of a wider framework, and it is useful to put it into perspective with the various procedures for seizing money claims each of which presents its own challenges, quite distinct from those of a property seizure, for example.
Sources
- Code des procédures civiles d'exécution, in particular art. L. 162-1, L. 211-1 et seq.
- Civil Code, in particular the articles relating to deposit contracts and ownership.
- Monetary and Financial Code, for provisions relating to banking law, accounts and transfers.
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