On February 3rd, 2010, the French Cour de Cassation – in effect, France’s most senior court for cases of this kind – delivered a judgment on the law applicable to what, in the continental system, is known as ‘moveable property’ and which, loosely the same as what, in the Anglo-Saxon system, is known as ‘personal property’. Basically, this case is about what happens to ‘things’ as opposed to land or buildings. This is only the fourth time the Court has dealt with this issue in the last hundred years or so.
This case is of considerable importance to anyone who has dealings with France.
In 2000, a French born painter living in New York had provided the defendant with 7 of his paintings.
In 2005, the painter died.
In 2006, the defendant then took the paintings to France and set about to selling them by public auction.
In 2007, the widow of the painter sought an order from a French court in order to ‘’attach’ the paintings before the sale. This would, in effect, have prevented the sale. The order was granted, but the the defendant applied to set aside the attachment.
The French court ruled in the defendant’s favour.
The widow then appealed to the Paris court of appeal, which dismissed the appeal. She then appealed to the Cour de cassation.
The basic issue in the case was who was the legal owner of the paintings.
Was ownership transferred in New York by a valid gift, or simply by the defendant being the possessor of the property for long enough to give ownership rights?
The Cour de cassation confirmed its former precedents and held that French law alone governs issues of property for moveables situated in France.
Under French law – Article 2279 0f the Code Civil – a person who holds moveable property and thinks, in good faith, that he is the actual owner of that property, becomes the actual owner of the property.
In this case, this meant that article 2279 had applied since the property had reached French soil.
The widow argued that, under American law, it was up to the beneficiary to show that he had received the paintings as a gift, and that mere possession would not transfer ownership to the holder of the property.
The Cour de cassation replied that, whatever might have been the case in America, given that French law had applied since the goods had reached France, article 2279 was enough of a basis to rule that ownership had been transferred by now.
This case is important in a number of ways buy, in particular, it reaffirms that French law governs the ownership of moveable property whilst that property is in France.
For our mobile clients, this gives rise to the very practical risk that their car or their jewellery, clearly the property of A under US or UK law, could be the property of B whilst that property is located in France and the tests of ownership laid down by French law are applied.
As ever, it is not a question of whether the tests set out in French law are better or worse than than the tests used in the UK or US. It is the fact that they are different and that those differences, to the unwary, can create both risk and lost opportunity.