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Case:
Cour de cassation, First Civil Chamber, (pourvoi no. 03-17839)Bull.civ. 2006,I. no. 6, p. 5
Date:
10 January 2006
Translated by:
Tony Weir
Copyright:
Professor B. S. Markesinis

The assignee of a debt may exercise all the actions attaching to it which were vested in the assignor at the time of the assignment. Accordingly, where the security for the debt assigned had been lost by the act of the very notary who originally documented and registered it, the assignee became personally entitled to all the benefits attaching to the debt, including the right to sue the notary, and was thus entitled to intervene in the lawsuit brought against the notary by the assignor;

As anyone with an interest in a lawsuit may intervene on appeal even if neither present nor represented at first instance, the court of appeal was entitled to find that an assignee had a sufficient interest in intervening in a claim for damages against the notary whose professional negligence had caused the loss of the securities previously attaching to the loan which he himself had documented;

An agreement to assign may include not only any debt but also any action against a third party, provided that such debt, right or action is in commerce and there is no legal bar to their transfer. Thus in the absence of any specific statutory restriction, the transfer of a right to claim damages for professional negligence is not contrary to ordre public;

On 5 and 12 May 1989 the firm of notaries Bonnet-Clerc (SCP) drew up documents attesting the opening of a  credit of 4 million francs in favour of the firm Soprotour by the regional branch of the credit agricole mutual of Guadeloupe (CFCAM), the loan being for a development project; to secure this facility a plot of land of over 99 acres  (AZ no. 164) was mortgaged and  registered as a conventional mortgage  valid until 10 April 1995; on 7 December 1990 a further loan of 1.5 million francs was agreed, the documents being drawn up by the same firm of notaries, and  a conventional mortgage was registered on 3 June 1991 and renewed on 3  December 1993; this mortgage related to the same land but covered only lots 29 to 50 which were not built on, and the earlier mortgage was never renewed; on 28 October 1994 Soprotour was placed in judicial liquidation; on 10 January 1996 Farmimmo sent the liquidator a formal document dated 25 November 1995 indicating an assignment to it by CFCAM of certain debts due to it from Soprotour; that from February to June 1997 the court officer ordered the transfer of lots 2, 4, 10, 23 and 24 of the mortgaged site which had been built on, for a total price of FF 1,255 million, as agreed between the parties; in July 1999 Farmimmo as assignee sued SCP and its insurer, claiming compensation for the loss resulting to it from SCP’s failure to ensure the proper registration and renewal of the mortgages; when the trial judge rejected the claim, Farmimmo’s successor, NACC, of its own motion joined the appeal, and  in the judgment under attack (Basse-Terre, 2 June 2003) SCP and its insurer were held jointly liable to pay NACC the sum of €191,323, 52 against its total loss which will be determined once Soprotour’s  liquidation is concluded;

First:

SCP  (the firm of notaries) and its insurer criticise the judgment for giving two different reasons for allowing NACC to join in the appeal and press its claim against them, namely that NACC was an assignee and that NACC was suing for its own supposed personal loss, which left it unclear what the basis of its decision was and rendered it impossible to discover whether NACC had a claim of its own for damages or was suing as assignee of Farmimmo; accordingly its decision lacked a legal basis as required by article 12 of the new Code of Civil Procedure;

But given that an assignment vests the debt in the assignee along with all the actions appertaining to the debt which were available to the assignor at the time of the assignment; that the judgment below states that Farmimmo assigned its claim after the judgment at first instance had been rendered, that the assignment gave the assignee a personal right to use the claims transferred including any accessories  such as the securities or rights of action attaching to it as a result of the loss to it of those securities, thereby entitling it to claim compensation for its own loss;  so that the decision below was legally correct.

Secondly,

Given that the judgment below is criticised for allowing NACC to intervene on the appeal when, allegedly, its claim against the notary was for a loss personal to itself, as opposed to the loss suffered by Farmimmo as asserted by it at first instance, so that in permitting NACC to intervene when its claim had not been tested by the judges of first instance, the court of appeal violated article 554 of the new Code of Civil Procedure;

But given that it is licit for those who were neither parties  nor represented at first instance to intervene in an appeal if they have a proper interest in so doing and their intervention is sufficiently connected with the claims of the parties; given that the court of appeal found that the intervention of NACC was aimed at obtaining judgment against SCP for breach of its professional duties as notary for compensation for the loss resulting from their negligence in causing the loss of the securities for the loan afforded by CRCAM,  and held, within its sovereign power, that this connection was sufficient;  so that this complaint is ill-founded.

Thirdly,

Given that the notary firm SCP complains that it was held liable, along with its insurer, to pay NACC €191,323.52 against the loss to be ascertained when the liquidation of Soprotour is completed, whereas, they say,

1. the document of the assignment to NACC as sub-assignee of the debts due to the crédit agricole arising from its loan to Soprotour expressly made mention of the fact that the mortgage given as security for the 1989 loan had not been renewed, and that the mortgage given as security for the 1990 loan had been registered only partially, so that it was wrong and contrary to article 1382 Code civil to hold the notary liable without inquiring, as requested, whether any loss suffered by NACC was causally attributable to the notary’s act, seeing that it had acquired, in full knowledge of the facts and probably at lesser cost, a claim lacking any security opposable to a third  party;

2. that in any case the assignment of a claim for damages in tort is contrary to ordre public and void, so that the court of appeal violated article 6 and 1108 Code civil in granting the claim of NACC when it was clear from the documents before it that the assignment to the claimant was of a claim for damages in tort against a ministerial officer and its insurer, and therefore contrary to ordre public;

3. that in any case and in the absence of some contrary provision  the claim against a notary charged with the original or renewed registration of a mortgage remains vested in the party injured by the notary’s negligence even if the underlying debt is assigned elsewhere, so that in holding the notary and his insurer liable without responding to the request to verify whether there were an express clause confirming the assignment of the claim against the notary  the court of appeal violated articles 1134 and 1165 Code civil;

But given first that the court of appeal was not bound to make inquiries which were futile in view of its finding that the assignee of the debt and its securities was bringing an action vested in it personally as a result of the assignment; secondly, that an agreement to assign may cover not only any debt but also any action against a third party, provided that none of the assets transferred are non-transferable by their nature or by a special statute, and that consequently there was nothing contrary to ordre public in the assignment of a claim for professional negligence; and finally that since the assignment of the debt had the effect of transferring at law all the accessories of the debt, in particular the claims for damages attached to it, the court of appeal had no need to ask whether the assignee could point to a clause expressly transferring the claim for damages; that this complaint is entirely baseless;

 

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