Judicial Mortgage Inscription on Non-Seizable Property

EN P.

Order the writing of a tailor-made Business law Law case

Free quote online

Law case Format .docx

Judicial Mortgage Inscription on Non-Seizable Property

Download

Read an extract

Themes

Judicial mortgage inscription, declaration of non-seizability, individual entrepreneur, principal residence, professional creditor, creditor rights, non-seizable property, Civil Code Article 2285, Commercial Code Article L. 526-1, hypothecary inscription, creditor protection, right of preference, inalienability clause, mortgage convention, Court of Cassation ruling, seizure prohibition, strict interpretation, general pledge right, recovery procedure, insolvency risk, entrepreneur rights, non-seizability effects, case law, French law, commercial law, property law, creditor interests, hypothecary rights, judicial mortgage, conservation purposes, renunciation of non-seizability, determined creditor, useful rank, sale of non-seizable property, alieniability, entrepreneur protection, lawsuits protection, formalities of declaration, register of public legal character, independent activity, agricultural activity, natural person rights, creditors rights arising from professional activity, derogation from Civil Code, Court of Cassation Commercial Chamber, legitimate strict interpretation, recovery of claim, risk of insolvency, execution judge, release and removal of inscriptions, notarial act, Conservation of Hypothecs, Register of Commerce and Companies, beneficiaries of Article 526-1, meticulousness in determining beneficiaries

Reader
Abstract
Extract

Abstract

Analysis of a court judgment regarding the possibility of a professional creditor inscribing a judicial mortgage on a building declared non-seizable by an individual entrepreneur.

Extract

[...] Court of Cassation, Commercial Chamber September 2016, Nos. 15-14.088 and 15-14.089 - Can a professional creditor operate a certain inscription of a judicial mortgage on a building, in this case the principal residence of an individual entrepreneur, which has previously been the subject of a declaration of non-seizability? - Introduction and analysis Can a professional creditor have the possibility of operating such an inscription of a judicial mortgage on a building, in this case the principal residence of an individual entrepreneur, which has previously been the subject of a declaration of non-seizability? [...]

[...] This residence is subject to an insaisissable right. In the event of a change of residence, this right follows the entrepreneur and applies by right to his new residence. However, avoiding fraudulent attitudes by individual entrepreneurs, the judge has retained that it is the situation of the building on the day of the opening of the collective procedure that must be retained (Cass., com May 2022 n°20-22768). Professional claims are concerned, i.e. debts born from the professional activity of the individual entrepreneur. [...]

[...] 526-1 and following of the Commercial Code, this declaration allows an entrepreneur to reduce the risks of their activity by protecting a building from possible lawsuits by a professional creditor. In this case, two credit institutions had been authorized to inscribe a provisional mortgage on the assets of a debtor, also a merchant. The latter had seized the execution judge of requests for release and removal of these inscriptions, arguing that several plots on which they had been made had been the subject of a declaration of non-seizability by notarial act, published and registered at the Conservation of Hypothecs and at the Register of Commerce and Companies. [...]

[...] The non-seizability is imprescriptible (Cass., com November 2021 n°20-20821). This principle, however, has no effect on professional creditors and the liquidator for collective procedures prior to the entry into force of the law on 8 August 2015 (Cass., com, May 2019 n°18-16097). [...]

[...] As the only conservation measure, it does not directly affect the concerned property and does not constitute a seizure. Therefore, in the name of a legitimate 'strict interpretation' of the declaration of non-seizability, derogatory to the general pledge right of which any creditor benefits by application of Article 2285 of the Civil Code, the Commercial Chamber logically considers that the recourse to the inscription of a judicial mortgage cannot and must not be assimilated to a seizure, prohibited, in any case. [...]

docx