Cour de cassation française, 26 Avril 2000 — priority conflict between the seller under title retention and the assignee of the resale claim

Abstract

The French Cour de Cassation delivered on 26 April 2000 a decision dealing with the priority conflict between a seller under title retention and the assignee, pledgee or subrogee of the claim of the purchaser who re-sold the goods. The Court granted priority to the former, relying on the argument that the latter could not acquire more rights than these belonging to the re-seller. The decision is closely related to the principle of “real subrogation” (“tracing”), which exists of the substitution in the object of a proprietary interest. Indeed, the priority conflict as mentioned only arises if the proprietary right of the original seller under title retention is maintained on the claim out of the resale. This implies the substitution of the originally sold assets by the claim out of the sub-sale as object of the proprietary right. The decision witnesses of the possible far reaching consequences of real subrogation within the field of security law. The judgment is analysed in the following comparative comment from the perspective of French, German, English, Dutch and Belgian law.