LexInter | June 26, 2002 | 0 Comments

THE COURT OF CASSATION, COMMERCIAL CHAMBER

On the appeal brought by Transfact, a public limited company, whose registered office is Tour Facto Cedex 88, 92988 Paris la Défense,

in cassation of a judgment rendered on May 30, 1997 by the Paris Court of Appeal (25th civil chamber, section B), in favor of the French Foreign Trade Bank, whose registered office is 21, Boulevard Haussmann, 75009 PARIS 9th , to the rights of which comes the Natexis Bank,

defendant in cassation;

The plaintiff invokes, in support of its appeal, the single plea of ​​cassation annexed to this judgment;

Means produced by the SCP Célice, Blancpain and Soltner, lawyer with the Councils for the company Transfact.

SINGLE MEANS OF TERMINATION

The judgment under appeal is criticized for having ordered the TRANSFACT Company to pay SA BANQUE FRANCAISE DU COMMERCE EXTERIEUR the sum of 490,236.27 francs with interest at the legal rate as of February 13, 1992.

FOR THE REASONS THAT the parallel contractual relations which have been established between the BFCE and the companies LA PATISSERIE EUROPEENNE and ALLIANCE PLUS on the one hand, and these two companies and the factoring company TRANSFACT on the other hand, on different legal bases, with regard to the mechanism of mobilization of receivables by “Dailly” transfer slip and that of the factoring contract, followed each other at intervals of one month, without the factoring contract, the most recent, replacing the “Dailly” transfer agreement or expressly affects its field of application; that the exclusivity clause contained in the general conditions of the assignment contract could not have the effect of nullifying or reducing the scope of the previous contract concluded with the BFC E; that this bank was besides advised by the company TRANSFACT, February 11, 1991, of the existence of contracts of factoring and of the specificity of their field of application; that the absence of reaction from the BFCE to the request addressed to it by the TRANSFACT company cannot be understood as a waiver by the bank of its rights in its capacity as assignee of the claims of the companies LA PATISSERIE EUROPEENNE and ALLIANCE PLUS; that the TRANSFACT company cannot invoke the unenforceability of the disputed transfers by alleging the interposition of the transferor insofar as it does not appear from any document submitted to the discussions that the co-contracting companies of the TRANSFACT company gave instructions to their buyers, precisely and individually, make their payments exclusively, in the hands of the latter; nor can it be claimed by the TRANSFACT Company that the BFCE manifested any bad faith in its regard by mobilizing the disputed invoices after the notification which was made to it of the signing of the factoring agreements, since the TRANSFACT Company itself had taken care to indicate to it in its letter of February 11, 1991 that the scope of its contract covered only part of the clientele, only the collections made by the TRANSFACT Company, which are the ‘the subject of the BFCE’s dispute concerns invoices that have not been acquired by the factoring company, but which remained the property of the transferee bank following the agreement of November 26, 1990; that their collection could only be carried out by virtue of the mandate provided for in the factoring contract, allowing the registration, in the member’s current account, of invoices not included in the conventional subrogation mechanism; that the TRANSFACT company, whose quality of credit institution is indisputable, cannot invoke the indivisibility of the current accounts of its members nor their debit balances to oppose the return of the disputed sums, insofar as the BFCE is unrelated to the legal relationship existing between TRANSFACT and the companies LA PATISSERIE EUROPEENNE and ALLIANCE PLUS; that the management by TRANSFACT of the accounts of factoring of its members includes the collection of invoices acquired by the factor as well as that of invoices received spontaneously from the clients of its co-contracting parties; that it follows, in fact, from article 7 of the general conditions of the factoring contract that “your current account will be credited in particular with the amount of invoices whose ownership has been transferred to us, as well as the sums that we may possibly receive in payment of unsupported invoices, which we will then be deemed to have cashed as agent “; that if, in receiving these last collections, the TRANSFACT company acted by virtue of the ancillary mandate contained in the factoring contract and which cannot be dissociated from it, it can however only be retained that the company of factoring intervened in the same way as a receiving credit institution, simple bookkeeper; that it has, indeed, cashed the disputed funds that to ensure the balance of operation of the account of its clients, within the limits and for the execution of the factoring contract; that it cannot therefore oppose the request for restitution of the BFCE and avail itself of the contractual obligations weighing on it in application of articles 1937 and 1993 of the Civil Code; that the TRANSFACT company, in its capacity as simple agent of the member companies, is required to respond to the consequences of a possible dispute over the ownership of the debts thus collected; that indeed,

1 °) ALORS THAN the assignments of receivables operated under the terms of the law of January 2, 1981 are not opposable to the credit institution receiving the payment of said claims in the event of interposition of the assignor; that in its pleadings of appeal (concl. served on October 23, 1995, p. 7 and concl. served on January 9, 1997, p. 7), the factoring company TRANSFACT had argued, in supporting documents, that its members, the companies LA PATISSERIE EUROPEENNE and ALLIANCE PLUS, intervened by advising their buyers by circular of the existence of the factoring contract that they had concluded with the company TRANSFACT and of the obligation to pay all their invoices into the latter’s hands so that these companies had contributed directly to ensuring that the payment of their invoices reached it; that thus by affirming that the company TRANSFACT had not contributed to the proceedings any document from which it emerged that the contracting companies of the latter had given instructions to their buyers to make their payments exclusively in the hands of the company TRANSFACT so that the latter could not invoke the unenforceability of the transfers granted to the BFCE under the terms of the law of January 2, 1981, the Court of Appeal distorted the conclusions of the company TRANSFACT and violated Article 4 of the new Code of Civil Procedure.

2 °) WHEREAS the factoring company which, in application of a mandate contained in the factoring contract, registers the amount of an invoice not included in the mechanism of conventional subrogation to the current account of its client necessarily acts in dual quality of agent and custodian of its client, as a receiving credit institution, simple account holder, and not as the owner of the receivable; that this was the case with the factoring company which, in application of article 7 of the general conditions of the factoring contract allowing it to receive, as agent of its clients, sums in payment of invoices not taken in factoring charge, had entered in the current account of the companies LA PATISSERIE EUROPEENNE and ALLIANCE PLUS payments corresponding to receivables assigned to the BFCE in accordance with the DAILLY law; that in deciding otherwise, the Court of Appeal violated by false application article 7 of the factoring contract and by refusal to apply articles 1937 and 1993 of the Civil Code.

3 °) ALORS THAN the agent is required to make reason to the principal of all that he received by virtue of his power of attorney even though what he would have received would not have been due to the principal; that in addition the depositary undertakes to return the deposited thing to the person in whose name the deposit was made, that in this case the factoring company TRANSFACT which had received the disputed payments in the name and on behalf of the LA PATISSERIE EUROPEENNE and ALLIANCE PLUS, which were recipients in accordance with the ancillary mandate contained in the factoring contract, was therefore not required to return to BFCE to which the receivables, to which these payments corresponded, had been assigned according to the terms of the law of January 2, 1981; that by deciding on the contrary that the TRANSFACT company could not

4 °) WHEREAS the deposit contract uniting the company TRANSFACT to the companies LA PATISSERIE EUROPEENNE and ALLIANCE PLUS had for cause the delivery of funds by the debtors in settlement of their claims and not the transfer of ownership of these claims; that the TRANSFACT company, in its capacity as depositary, does not have to worry about the origin of the funds credited to the current account of its members, the mere fact that the disputed debts had left the patrimony of the companies PATISSERIE EUROPEENNE and ALLIANCE PLUS for having been previously sold to the BFCE could not therefore deprive the said deposit contract of cause; that thus by asserting that the deposit contract under which the

THE COURTYARD,

Whereas, according to the judgment under appeal, that the Transfact company has, on the basis of a collection mandate of which it was the holder for receivables not included in the discount applied for other receivables under the factoring contract Binding it to the companies La Pâtisserie européenne and Alliance plus, which have since been put into receivership, collected invoices which had previously been transferred, in accordance with the terms of the law of 2 January 1981 to the French Bank for Foreign Trade (BFCE) and that the latter had mobilized; that the sums received were registered by the company Transfact to the credit of the current account opened in its books in the name of its two members, whose balance was debit; that the company Transfact refused to the BFCE the restitution of funds;

On the single plea in its third branch:

Having regard to articles 1134, 1937 and 1993 of the Civil Code;

Whereas to order it to return to the BFCE the sums paid by the debtors assigned, the judgment retains that the company Transfact, the institution receiving these payments, credited to the current account of the companies La Pâtisserie Européenne and Alliance plus in its books, was not justified in opposing to the BFCE, the principle of the indivisibility of the current account, nor its role of “simple bookkeeper”, whereas it had collected the disputed funds only to ensure the balance of the functioning of the accounts of its customers, within the limits and for the execution of the factoring contract;

Whereas, by so ruling, while the Transfact company had received the disputed payments in the name and on behalf of the companies La Pâtisserie européenne and Alliance plus, which were the recipients, to credit them to their current account, so that ‘it was not held to restitution towards the BFCE, the court of appeal violated the aforementioned texts;

And on the single means taken in its fourth branch:

Having regard to articles 1131 and 1919 of the Civil Code;

Whereas to rule as he did, the judgment still retains that the previous assignment of the disputed debts had deprived of cause the deposit contract under which their collection could be considered by the company Transfact;

Whereas by ruling thus, while the cause of the deposit contract is the delivery of the thing which is the object, the court of appeal violated the aforementioned texts;

FOR THESE REASONS, and without there being any need to rule on the other complaints:

BREAK AND CANCELED, in all its provisions, the judgment rendered on May 30, 1997, between the parties, by the Paris Court of Appeal; returns, consequently, the cause and the parts in the state where they were before the aforementioned judgment and, to be done right, returns them before the court of appeal of Orleans;

Orders Natexis Bank to pay the costs;

Said that on the diligence of the Attorney General near the Court of Cassation, this judgment will be transmitted to be transcribed on the sidelines or following the broken judgment;

On the report of Ms. Collomp, adviser, the observations of the SCP Célice, Blancpain and Soltner, lawyer of the company Transfact, of the SCP Bachellier Potier de La Varde, lawyer of the French Foreign Trade Bank, the conclusions of Mr. Jobard , Advocate General, M. LECLERCQ, senior adviser, acting as president.

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