The reservation of onwership in the event of exoneration of the unsatisfied liiability to the bankrupt buyer in the second chance law

Abstract

The reservation of title in contracts on movable property, constitutes a condition to the transfer of ownership in case of deferred payment of the price. This agreement has a guarantee function, but it is not a real right over another’s property. The retention of title agreement, to be effective, does not need to be registered in the Registry of Personal Property, but the registration gives it “erga omnes” effectiveness, attributes to the guaranteed credit a special privilege in the event of bankruptcy of the buyer, and attributes to the seller the special recovery action, although it is temporarily suspended in the event of bankruptcy. The retention of title agreement does not confer on the seller the right of separation ex iure domini in case of bankruptcy. In express bankruptcy proceedings without mass, in which the debtor is exonerated from the unsatisfied liability, the debt with the seller or financier will be extinguished, but the seller has the right to recover the property immediately. The reservation of title, unlike the pledge without movement of vehicles, does not prevent the debt from being exonerated from unsatisfied liabilities in bankruptcy proceedings without mass, according to the majority of the jurisprudence collected in this work. But the exoneration of the unsatisfied liability must be conditional on the return of the financed good, based on the general principle of good faith law. At the same time, in the event of non-return of the property, the selling/financing entity must be able to request the revocation of the exoneration of unsatisfied liabilities The seller with reservation of ownership, with the resolution of the commercial court that certifies the exoneration of the unsatisfied liability, has the right to cancel in the Registry of Movable Property, and therefore in the Traffic Registry, the sale registered in favor of the buyer, if this has been agreed in the contract. To facilitate the registration cancellation of the buyer’s rights in the Movable Property Registry and in the Traffic Registry, it would be advisable to agree on it conventionally and provide for this consequence in the official models, subjecting it to approval by the DGSJFP of Ministry of Justice.