The seizure and sale of movable property, the ultimate enforcement procedure, is rarely a smooth ride. While its objective is simple - to enable a creditor to recover his debt by selling his debtor's assets - its progress can be punctuated by complex incidents. Whether they are raised by other creditors, by the debtor himself or by third parties, these events transform a seemingly simple measure into a veritable strategic journey. Controlling these incidents, whether they are extrajudicial or take the form of legal challenges, is crucial. The stakes are high: from the very validity of the seizure to the ownership of the goods, every stage can be called into question, making the assistance of a legal advisor essential. lawyer specialising in enforcement proceedings often essential for navigating this technical environment.
Introduction to incidents of seizure and sale of movable property: typology and legal framework
Before analysing in detail the incidents that may occur, it is essential to master the global procedure for seizure and sale of movable propertyThis method of enforcement is governed by the French Code of Civil Enforcement Procedures (hereinafter CPC exéc.). This method of enforcement, governed by the Code of Civil Enforcement Procedures (hereinafter CPC exéc.), enables a creditor in possession of a writ of execution to have his debtor's movable property seized with a view to selling it and paying himself out of the proceeds. It is precisely during this process that complications can arise.
The two categories of incident: extrajudicial and judicial
There are two main categories of seizure and sale incidents. The first, extrajudicial, takes place without the intervention of a judge. It mainly concerns competition between creditors, who seek to join proceedings that have already begun in order to assert their rights. The second, which is judicial in nature, covers disputes brought before a judge. Article R. 221-40 of the CPC exéc. designates the Juge de l'Exécution (JEX) as the judge with exclusive jurisdiction to settle these disputes, whether they concern the validity of the seizure, the ownership of the assets or their seizability.
The role of the enforcement judge (jex): powers and limits
The Enforcement Judge is the central figure in enforcement proceedings and a key authority in our judicial system. His exclusive jurisdiction, which is a matter of public policy, gives him the power to settle all difficulties relating to enforceable titles and disputes arising during enforcement. In matters of seizure and sale, the court ensures that the rights of all parties are respected. He can therefore cancel an irregular seizure, order the return of property belonging to a third party or declare that certain items of furniture are exempt from seizure. His jurisdiction is central not only in movable property matters, but also in the context of the foreclosureThis is another branch of enforcement law. However, there is a fundamental limit to its powers, namely the intangibility of the title and the authority of res judicata: it can neither modify nor call into question the court decision on which the proceedings are based, and its control is limited to the legality of the enforcement measures.
Extrajudicial incidents: opposition-junction and addition of seizure
When a creditor initiates a seizure, other creditors may wish to join the proceedings to preserve their chances of recovery. The Code of Civil Enforcement Procedures organises this participation extrajudicially, mainly by means of opposition-junction and addition of seizure, in order to avoid a disorderly and costly multiplication of proceedings.
Opposition-junction of creditors: principle and conditions of access
The adage "seizure upon seizure is not valid" lays down a clear principle: it is forbidden to make several seizures and sales on the same assets. To enable other creditors to take part in the distribution of the price, the law has introduced the opposition-junction. This mechanism authorises a creditor, who is also in possession of a writ of execution recording a liquid and payable debt, to "piggyback" on a seizure that has already begun. To do this, the creditor must first serve a summons to pay on the debtor, which constitutes a formal notice to pay. The opposition must be formalised before the report on the verification of the seized assets, which is a subsequent step in the procedure, otherwise it will be inadmissible.
Procedural procedures and effects of opposition-joinder
How this is done depends on the situation. If the second creditor's bailiff is aware that a seizure is already in progress, he will draw up a notice of opposition and joinder directly, which will be served on the debtor and the first seizing creditor. If he learns of this at the time of the seizure, he converts his own seizure report into a notice of opposition. The main effect of this is that all creditors, initial distrainor and opposing creditors, will share in the distribution of the proceeds of the sale. The original distraining creditor retains control of the proceedings. However, if he proves negligent, any opposing creditor may, after an unsuccessful summons, take his place and continue with the sale. This is the mechanism of subrogation, provided for in art. R. 221-46 of the CPC exéc.
Adding entries: the complementary inventory
The opposition-junction may be accompanied by a complementary seizure, formalised by an additional inventory. This option, which is available to both the opposing creditor and the first distrainor, enables the seizure to be extended to other assets of the debtor that have not yet been inventoried. The effect of this addition is to open up a new period of one month, during which the debtor may attempt an amicable sale of the newly seized assets. The forced sale by public auction of these assets is therefore deferred, unless the debtor agrees to separate the sales, or the JEX gives its authorisation in order to avoid delaying tactics.
Legal disputes: nullity, ownership and seizability of assets
Incidents of seizure and sale are not limited to the competition of creditors. Substantive disputes may be brought before the Enforcement Judge by the debtor or by a third party, calling into question the seizure-sale procedure itself or seeking to remove certain assets from its grip. The remedies available in the case of seizure and sale are similar to, but also differ significantly from, those available in the case of mechanisms for contesting an attachment for paymentanother common enforcement procedure.
Challenges to the validity of the seizure: grounds for invalidity and conditions
The debtor may apply to have the seizure declared null and void on the grounds of formal or substantive irregularities. Formal defects relate to non-compliance with the formal requirements for documents (summons to pay, seizure report) or the rules governing service. For such a nullity to be declared, the claimant must prove that the irregularity is prejudicial to him or her, in accordance with the ordinary law on nullities in the Code of Civil Procedure. Substantive defects are more serious: they may result from the absence of a writ of execution, the fact that the claim is time-barred or the creditor's lack of standing. In these cases, proof of a grievance is not required. The action for nullity must be brought before the sale of the property, otherwise the claim will be null and void.
Disputes over ownership of seized assets: action for seizure and revendication
Assets belonging to a third party are often seized at the debtor's home. In such cases, the third party may bring an action for segregation in order to have his or her right of ownership recognised and to have the goods removed from the scope of the seizure. This action must be brought before the sale. The main difficulty for the third party is proving ownership, as article 2276 of the Civil Code establishes a presumption of ownership in favour of the possessor of the item. If the sale has already taken place, the action for distraction is no longer possible. The owner can only bring a claim against the buyer, which only has a chance of success if he can prove that the buyer acted in bad faith at the time of the auction. The debtor, on the other hand, cannot bring an action for diversion, but can seek to have the seizure of property that he does not own declared null and void.
Challenges to the seizability of assets: unseizable assets
In order to preserve the debtor's dignity, the law makes certain assets exempt from seizure. Case law and article R. 112-2 of the CPC exéc. draw up a list of these assets, which include those necessary for the life and work of the debtor and his family (clothing, bedding, foodstuffs, professional tools). If the judicial commissioner (formerly a bailiff) has seized any of these assets, the debtor may contest their seizability before the JEX. This action must be brought within one month of service of the attachment order. It has the effect of suspending the proceedings in respect of the assets concerned until the judge's decision.
Complex interactions: repossession, collective proceedings and overindebtedness of individuals
A seizure and sale does not take place in a vacuum. It can be affected by other procedures that radically alter its course, such as an earlier protective measure, the opening of collective proceedings (receivership or judicial liquidation) for a company, or the filing of an over-indebtedness file by an individual.
Competition between seizure for sale and seizure for safekeeping
When a seizure and sale is initiated, it may be concurrent with a seizure and sale. prior seizureThe specific rules governing coexistence and conversion must be mastered. Unlike the situation between two seizures and sales, a seizure for the purpose of execution may involve assets that have already been seized for safekeeping. In this case, the court commissioner must serve the seizure for sale report on the conservatory creditor (art. R. 522-12 CPC exéc.). The seizing creditor may then proceed with the sale. If they obtain a writ of execution, the conservatory creditors will be able to assert their rights when the sale price is distributed.
Impact of the nullity of the suspect period on incidents of seizure and sale
The opening of a receivership or liquidation proceedings against a professional debtor immediately suspends all individual legal proceedings, including an ongoing seizure and sale. What's more, it opens the "suspect period", which runs from the date of cessation of payments until the opening judgment. Acts performed during this period may be annulled. Article L. 632-1 of the French Commercial Code lists de jure nullities, which apply to acts that are abnormal in nature, such as security interests (mortgages, pledges) granted to guarantee an older debt. Article L. 632-2 refers to optional nullities, which concern acts such as payments of debts that have fallen due, which may be annulled if the creditor was aware that the debtor was in a state of cessation of payments. Abnormal payments or third-party notices, which fall within the scope of the attachment procedureIn accordance with this text and the jurisprudence of the Cour de cassation (French Supreme Court), these decisions may also be challenged if they were made during this sensitive period.
The over-indebtedness procedure for private individuals in the face of seizures and sales
For an individual debtor, the filing of an over-indebtedness application, if it is deemed admissible by the commission, has radical effects. Under article L. 722-2 of the French Consumer Code, a provision of public order, the decision to accept an application automatically suspends and prohibits all enforcement proceedings in respect of non-maintenance debts. A seizure and sale in progress is therefore immediately halted, and no new measures may be taken. The suspension of enforcement proceedings is a direct consequence of the admissibility of the case, perfectly illustrating the interaction between over-indebtedness and foreclosure and the primacy of measures for dealing with financial difficulties faced by individuals. This suspension lasts until the adoption of a recovery plan or a personal recovery judgement, which may result in the cancellation of debts.
Handling incidents of seizure and sale of movable property requires in-depth knowledge of time limits, procedural forms and interactions with other branches of law. Given the technical nature of the applicable rules, whether to challenge the validity of a seizure or to join existing proceedings, the advice of a lawyer specialising in enforcement proceedings is often essential if you are to defend your rights effectively. Our firm is at your disposal to analyse your situation and define an appropriate strategy.
Sources
- Code of civil enforcement procedures (version in force on the date of publication)
- Commercial code
- Civil Code
- Consumer Code
- Case law of the Court of Cassation (in particular decisions in the Bulletin civil, or "Bull civ.")
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