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The general right of lien is the cornerstone of the legal system protecting creditors. This mechanism, which is sometimes misunderstood, ensures a balance between the security of transactions and the rights of debtors. Its practical application raises many questions that merit analysis.
The legal framework of the general right of lien
The general right of pledge, although fundamental, is only one aspect of the securities under french law. It is governed by two fundamental articles of the Civil Code, essential pillars of the law of obligations:
- Article 2284 of the French Civil Code states that: ". Any person who has entered into a personal obligation is bound to honour that obligation in respect of all his movable and immovable property, both present and future."
- Article 2285 of the Civil Code specifies that: ". The debtor's property is the common pledge of his creditors and the price is distributed among them by contribution, unless there are legitimate grounds for preference between the creditors."
This right arises automatically, without any particular formality, by the simple fact of the obligation contracted. It even exists without the knowledge of the debtor in certain cases such as business management (Fasc. 1680: SECURITIES - Common rules, §8).
The scope of the general right of lien
The right of general pledge extends to the entirety of the debtor's assets. It includes :
- All moveable assets (cars, bank accounts, etc.)
- All immovable property (houses, land, etc.)
- Tangible and intangible assets (patents, copyright, etc.)
- Assets present at the time the obligation arises
- Future assets that will subsequently form part of the debtor's estate
This distinctive feature separates it from conventional security interests, which generally relate only to a specific asset.
The limits of the general right of lien
Despite its seemingly unlimited scope, the general right of pledge contains a number of important restrictions.
Legal unseizability
Certain assets are not subject to the general right of pledge by express provision of the law. Article L. 112-2 of the Code of Civil Enforcement Procedures sets out a list of assets that cannot be seized, including :
- Clothes
- Foodstuffs
- Heating equipment
- The work tools necessary for the personal exercise of the professional activity
This protection also extends to certain sums of money such as part of remuneration for work (article L. 3252-2 of the French Labour Code) or copyright (article L. 333-2 of the French Intellectual Property Code).
A special case concerns sole traders. Article L. 526-1 of the French Commercial Code states that ". the rights of a natural person registered in the national register of companies to the property in which his or her principal residence is located are automatically exempt from seizure by creditors whose rights arise in connection with the person's professional activity." . This automatic protection of the principal residence provides an effective shield against professional creditors.
Seizure-proof agreements
The general right of pledge may also be limited by agreement. Case law has validated this possibility in an important ruling (Cass. 1re civ., 15 Feb. 1972, no. 70-12.756). A creditor may therefore contractually agree not to pursue certain assets of the debtor.
For sole proprietors, article L. 526-1 paragraph 2 of the French Commercial Code allows the exemption from seizure to be extended to other real estate assets by means of a notarial declaration published in the real estate register (Fasc. 1680, §16).
The tools of the unsecured creditor
Ordinary creditors (known as "unsecured creditors") are not totally helpless. There are three main ways in which they can preserve the effectiveness of their general lien.
Oblique action
Under article 1341-1 of the French Civil Code, an action oblique allows a creditor to exercise rights and actions that the debtor neglects to use. The creditor then acts in the debtor's name to bring assets into the debtor's estate.
Example: if a debtor does not claim a sum owed to him by a third party, his creditor may act in his place to obtain payment.
Pauline action
Article 1341-2 of the Civil Code authorises creditors to challenge acts performed by their debtors in fraud of their rights. This action makes it possible to annul an act of impoverishment carried out in fraud of the creditor's rights.
For example: a debtor who sells an asset at a derisory price to a relative in order to avoid being pursued by his creditors may have the sale cancelled by the court.
Action for a declaration of simulation
Based on article 1201 of the Civil Code, this action enables the creditor to demonstrate that an apparent deed conceals a different legal reality. In this way, the creditor can have assets that were only fictitiously removed from the debtor's assets reintegrated into the debtor's assets.
For example, a debtor who simulates the sale of a property even though he remains the true owner may see this simulation revealed by a vigilant creditor.
The law of competition between unsecured creditors
In the absence of specific security, all unsecured creditors are subject to the law of competition. Article 2285 of the Civil Code establishes the principle of equality between these creditors. In the event of a shortfall in assets, unsecured creditors are paid in proportion to their respective claims, regardless of the priority of their rights.
However, there are exceptions to this principle. Certain legal mechanisms allow an unsecured creditor to partially escape this rule, such as the legal set-off provided for in article 1347 of the Civil Code. This automatically extinguishes two reciprocal debts up to the amount of the smaller one, giving the creditor priority in payment. It is also essential to understand how specific sureties can be used to obtain preferential rankingThis changes the hierarchy of creditors.
A recent ruling by the Court of Cassation (Cass. com., 13 Dec. 2023, no. 22-19.749) provides an important clarification: a creditor to whom the non-seizability of the principal residence is unenforceable may, even after closure of the liquidation proceedings on grounds of insufficient assets, pursue his claim on the property. This decision reinforces the importance of properly qualifying debts and understanding their origin.
The general right of pledge remains highly technical. Its nuances and exceptions often justify the intervention of a legal expert. legal advice to optimise its management, on both the creditor and debtor sides, in particular by understanding and implementing specific securities offering superior protection.
Sources
- Civil Code, articles 2284, 2285, 1201, 1341-1, 1341-2, 1347
- French Commercial Code, article L. 526-1 et seq.
- Code of Civil Enforcement Procedures, article L. 112-2
- French Labour Code, article L. 3252-2
- Intellectual Property Code, article L. 333-2
- Cass. 1re civ., 15 Feb. 1972, no. 70-12.756
- Cass. com., 13 Dec. 2023, no. 22-19.749
- Fasc. 1680: SECURITY - Common rules, JurisClasseur Roulois
- Fasc. 752: SECURITY OF FURNITURE. - General presentation and classification, JurisClasseur Droit bancaire et financier
- Art. 2329 - Fasc. unique: SECURITY OF FURNITURE. - General presentation and classification, JurisClasseur Civil Code
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