Bankruptcy Law

The question of the transfer of the retention of title clause appears when the rights and actions attached to the contract containing it are transferred to a third party. This situation rises in particular when the debtor finances the purchase of the property by taking out a loan. Can the lender of funds, who is himself in arrears, invoke the benefit of the clause to claim the property it encumber …

Action in revendication by the subrogee

The question of the transfer of the retention of title clause appears when the rights and actions attached to the contract containing it are transferred to a third party. This situation rises in particular when the debtor finances the purchase of the property by taking out a loan. Can the lender of funds, who is himself in arrears, invoke the benefit of the clause to claim the property it encumbers? The answer is yes, provided the conditions for subrogation are met.

In accordance with Article 1346-1 of the Civil Code, “contractual subrogation occurs on the initiative of the creditor where he receives payment from a third party and subrogates that third party to his rights against the debtor”. Subrogation, which must be express, must be agreed at the same time as payment, unless the subrogating party, in an earlier act, has expressed the intention that his co-contractor should be subrogated to him at the time of payment. The concomitance of subrogation and payment may be proved by any means and may be established in particular where the seller with reservation of title who subrogates has expressly manifested, even if in an earlier document, his intention to subrogate the lender of funds in the benefit of the retention of title clause at the very moment of payment .

The effect of contractual subrogation is to invest the subrogated third party not only with the original claim, but also with all the advantages and accessories of that claim, such as the retention of title clause intended to guarantee payment . Thus, the retention of title clause duly agreed between the buyer in insolvency procedure and the seller, which constitutes security for the seller's claim, may be transferred as an accessory to that claim to the seller's bank by means of a bill of exchange accepted by the debtor .

The Court of Cassation, which accepts that the action in revendication may be brought by the moneylender, who is subrogated to the rights of the seller with reservation of title , does not make the bringing of the action conditional on the due date of the debt of which the retention of title clause is an accessory, but only on its existence .

The validity of the conventional subrogation clause of the moneylender in the seller's retention of title clause appeared to be called into question by an opinion of the Court of Cassation, which held that it was deemed unwritten where it falsely led the borrower, who became the owner of the property as soon as the price was paid to the seller, to believe that the security interest had been validly transferred . Fortunately, this much-criticized solution, based on the current Article L. 212-1 of the Consumer Code, does not apply to insolvency proceedings, since a few months later, the Court of Cassation once again accepted the subrogation of the lender of funds in the rights of the seller with reservation of title, in order to guarantee repayment of the loan through the reclamation of the property, acquired with the borrowed funds, from the purchaser subject to receivership procedure .

Cass. 1re civ., 28 May 2002, LawLex202100003383JBJ (LJ).

Cass. com., 15 March 1988, LawLex202100003369JBJ (LJ); Cass. com., 20 April 2017, LawLex202100001670JBJ (RJ).

Cass. com., 11 July 1988, LawLex202200000166JBJ (LJ).

Cass. com., 15 March 1988, LawLex202100003377JBJ (RJ).

Cass. com., 20 April 2017, LawLex202100001670JBJ (RJ).

Cass. avis, 28 November 2016, LawLex202000001689JBJ.

Bankruptcy Law

533. Action in revendication by the subrogee

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

533. Action in revendication by the subrogee

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise