REPRESENTATION OF SAS

Court of Cassation
Commercial Chamber

N ° of appeal: 98-23324
Published in the bulletin
President: M. DUMAS
FRENCH REPUBLIC

IN THE NAME OF THE FRENCH PEOPLE

Whereas, according to the judgment under appeal (Montpellier, November 24, 1998), that the simplified joint stock company OCP Distribution (the OCP company) delivered supplies to EURL Trévillot, operator of a pharmacy, over a period covering the financial years from 1992 to 1994; that, the 25 September 1996, the EURL Trévillot was put in receivership; that the general manager of the company OCP declared the debt and, invoking the benefit of a retention of title clause, claimed ownership of the stock of goods still in possession of the EURL Trévillot and the resale price of the goods due by the health insurance fund under the third party payment; that, by ordinance of April 9, 1997, the judge-commissioner rejected the request of society OCP; that the commercial court confirmed this order; that the Court of Appeal declared the action inadmissible;

On the first plea:

Whereas the judgment under appeal is criticized for having declared the claim action by the company OCP inadmissible, then, according to the means, that by not showing that the order of the first president designating Mrs. Annie X … to ensure the presidency had been rendered during the first fortnight of the month preceding the judicial year during which the proceedings of the court of appeal took place violated articles 213-6 and 213-7 of the Code judicial organization;

But given that the formalism of article R. 213-6 of the Code of judicial organization did not have to be respected since the replacement referred to in the present case concerned a presidency of a chamber, and not the replacement of the first chairman within the framework of the specific functions assigned to him; that the provisions of article R. 213-7 having been respected, the means is unfounded;

And on the second means, taken in its three branches:

Whereas the judgment under appeal is still criticized for having declared the claim action by the company OCP inadmissible, then, according to the means:

from which it emerged that both the chairman and the managing director had the power to proceed with declarations of debts and claims, that is to say to introduce any legal action; that retaining that this deliberation does not allow to conclude that the two leaders each exercise a power of equal representation, since it recalls that “however” the president is invested with the most extensive powers to act in all circumstances in the name of the company, thus indicating compliance with the statutory and legal provisions, granting the sole chairman the power of representative of the company, that this provision presented as being in conformity with article 12 of the bylaws can only have a meaning look of it,

2 / that article 12 of the articles of association indicated that the company was managed by a college of at least two managers including a chairman and a managing director, “the chairman represents the company with regard to third parties and is vested with the powers more extensive to act in all circumstances on behalf of the company within the limits of the corporate purpose. However, as internal regulations, the company is jointly managed by the entire college of directors “; that the fourth resolution of the extraordinary general meeting of July 19, 1995 indicated that the chairman and managing director “will have, in accordance with article 12 of the bylaws, the most extensive powers, which they can use together or separately to represent the company in its relations with third parties and in particular to contract and commit it for all acts falling within the corporate purpose. However, in accordance with the law, the chairman represents the company with regard to third parties and is vested with the broadest powers to act in all circumstances on behalf of the company within the limits of the corporate purpose “; these provisions that both the CEO and the chairman had the widest powers to represent the company in its relations with third parties and in particular to take legal action; that by affirming that these provisions do not however allow the conclusion that the two directors each exercise equal power of representation when

3 / that in any event, considering that the fourth resolution of the extraordinary general meeting of July 19, 1995 did not make it possible to affirm that the two directors, chairman and chief executive officer, each exercise equal power of representation, therefore that it recalls that “however” the chairman is vested with the most extensive powers to act in all circumstances on behalf of the company, thus marking compliance with the statutory and legal provisions granting the chairman the sole power of representative of the company, that this provision, presented as being in conformity with article 12 of the articles of association, can only have a meaning with regard to it,granting a power of direction to the college of the executives by way of internal regulations to deduce from it that the request for claim presented by the company OCP, represented by Mr. Claude Y …, general manager, not invested with the power of representation of the company , which belonged to the president, in accordance with the articles of association and the legislative provisions, and inadmissible, the court of appeal which does not specify in what way the fact that the two leaders had the power to represent the company in accordance with article 12 of the articles of association that these leaders had the power of direction as internal regulations did not legally justify its decision with regard to Article 1134 of the Civil Code;not vested with the power of representation of the company, which belonged to the president, in accordance with the articles of association and the legislative provisions, and inadmissible, the court of appeal which does not specify how the fact that the two directors had the power to represent the company in accordance with article 12 of the articles of association meant that these directors had the power of direction by way of internal regulations did not legally justify its decision with regard to article 1134 of the Civil Code;not vested with the power of representation of the company, which belonged to the president, in accordance with the articles of association and the legislative provisions, and inadmissible, the court of appeal which does not specify how the fact that the two directors had the power to represent the company in accordance with article 12 of the statutes meant that these directors had the power of direction as internal regulations did not legally justify its decision with regard to article 1134 of the Civil Code;article 12 of the articles of association meant that these leaders had the power of direction by way of internal regulations did not legally justify its decision with regard to article 1134 of the Civil Code;article 12 of the articles of association meant that these directors had the power of direction by way of internal regulations did not legally justify its decision with regard to article 1134 of the Civil Code;

But whereas it follows from the provisions of article L. 227-6 of the Commercial Code that the simplified joint stock company is represented, with regard to third parties, by its sole chairman;

that the judgment, which made an exact application of this text, does not incur grievances of the means; that it is not founded in any of its three branches;

FOR THESE REASONS :

DISMISSES the appeal;

Orders the company OCP Distribution to pay the costs;

Having regard to article 700 of the new Code of Civil Procedure, condemns the company OCP Distribution to pay the EURL Pharmacie Annick Trévillot the sum of 2,250 euros;

Thus done and judged by the Court of Cassation, Commercial, Financial and Economic Chamber, and pronounced by the President in his public hearing on July 2, two thousand and two.