Reserve of ownership clause and sub-purchaser

January 29th 2016

In the context of insolvency proceedings, the creditor company asserted a claim, through a reserve of ownership clause, for the unpaid goods or, failing that, their price, from the sub-purchasers.

The Cour de cassation, in a decision dated November 3, 2015 (no.13-26811), accepted the claim for the payment of the price.

The Court considered that “the price that had not been paid, or settled in value or compensated between the sub-purchaser and the debtor on the date of opening the insolvency proceedings of the latter” may be claimed and that, more generally, the same shall apply for “the goods resold which have not been paid either before or after the start of the insolvency proceedings”.

Nevertheless, the Cour de cassation censored the Court of Appeal which had ordered the return of the goods. In this regard, it gives full effect to Article 2276 of the French Civil Code, which sets forth that with regard to movables, possession implies ownership. The reserve of ownership clause may not oblige the sub-purchaser to hold the goods at-will on behalf of the defaulting debtor.

This solution of the Cour de cassation is fully in line with its previous case law. Nonetheless, it at least recalls a solution that could be useful at a time where the issue of claim recovery is very relevant and shall set the limits.

Nevertheless, in practice, the difficulty shall be the eventual risk of having to identify the sub-purchasers.

Raphaël Oualid