Civil law property final exam notes (robert godin) april 2007



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4 kinds of immovables (old code)


By nature

  • Lands and buildings are immovable by nature

    • This is were the bridge case arose; the question was whether a building was an immovable or not; the SCC determined that anything built which was immovable had the same meaning as “batiment”(Bélair c. Ste-Rose)

    • Nadeau c Rousseau: Furnace as part of the building and the creation of the building given the weather

    • Horn Elevator Limited c. Domine D’Iberville Limit
      ée: whether a company could strip the building and takes the elevators back as they belonged to them; the court held that it would be inconceivable to have a building of that size without the elevators, so they were deemed to be part of the building

    • Cablevision (Montréal) Inc. c. Deputy Minister of Revenue of the Province of Quebec: whether buying this equipment would be subject to taxation under the “Retail Sales Tax Act”, if it was deemed an immovable; the SCC held that since all these wires are attached to poles, you would have to say that the transmission system as a whole was an immovable

      • Interesting contrast to a case of Hydro Quebec in which the electricity transformers were found to not be immovable as they were not necessary for the building to exist

  • In this area the New Code is not that different

    • For something to be immovable by nature it needs to be integrated/incorporated to a building and play an important utility for it

By destination



  • Still significant in France and many civil law jurisdictions, though no longer applicable in Quebec
  • Destination in this context means purpose, the immobilization was attached to the purpose that was given to the object


  • The concept is a legal; fiction as all the objects immobilized never lost their movable nature

    • The accessory follows the principle

  • Art.379 of Old Code: movable things which a proprietor has placed on his real property for permanency are immovable so long as they remain there

  • Art. 380 CCLC gave examples of this: elements embedded in the immovable that could not be removed without breaking the property to which they are attached

  • Industrial, agricultural and commercial activities would make objects immovable by destination arise; not activities in individual’s private homes

    • Equipment without which the land could not be given its proper use

  • Art. 524 of the Code Napoleon envisages two situations in which objects become immovable

    • Those that serve for the exploitation and service of the land

    • Those to which the owner has attached a notion of incorporation into the land

  • Elements of immobilization

    • Identity of the owner: the owner of the movable and immovable should be the same person; in Art. 379 CCLC

    • Unity of exploitation

      • This was particularly important in the case of a hypothec, where a hypothec on an immovable would extend to the movable immobilized by destination

      • If there was a default, the property would not become and empty shell with no use for the creditor

    • Permanency
      • Flexible enough to encompass property that was not physically attached to the land but was crucial to the exploitation of the land


  • In comparing immobilization by destination and nature

    • The concept of identity of the owner was irrelevant in immobilization by nature, though relevant in immobilization by destination

    • In immobilization by nature there needed to be a direct relationship between the property and the movable; in immobilization by destination simply placing and using the object in the property was evidence enough of immobilization

Incorporeal immovables right



  • Still exist in the new code

  • Certain rights have been given the characterization of being immovable

  • There was a list on Art.381 CCLC: emphyteusis, usufruct

    • Also a petatory action art.912 CCLC

    • Art. 374 CCLC all property corporeal or incorporeal is either movable or immovable

Corporeal rights



  • Possession, art.921

  • Code of Civil Procedure allows for movable rights attached to some property to be immobilized when the property is under seizure




Art. 921

Possession is the exercise in fact, by a person himself or by another person having detention of the property, of a real right, with the intention of acting as the holder of that right.

The intention is presumed. Where it is lacking, there is merely detention.



How would an immovable become movable again?


  • Immovable by nature: materials from a construction when demolished would become movable until used again, unless they were destined to go back into the construction


  • A movable by destination became movable again if the destination ever changed

    • E.g. a hotel becoming a residential home

  • Immovable rights: they can become movable though expropriation

What happens under the new Code?



  • In the Act providing for the implementation of the Code there was a substantive article (s.48) that amended the Code (even though it wasn’t an official amendment)

  • Art. 899: Property whether incorporeal or corporeal is divided into movables or immovables, but there is no longer a distinction of the different type of movables

    • While the distinction does not exist in the Code, in practice there is (arts. 900, 901, 903)

    • If something is not immovable, it is movable

    • New category: immovables by attachment, though not found in the Code or legislation (just in judgments or doctrine)

Arts.900 and 901 deal with what we would formerly call immobilization by nature




Art 900

Land, and any constructions and works of a permanent nature located thereon and anything forming an integral part thereof, are immovables.
Plants and minerals, as long as they are not separated or extracted from the land, are also immovables. Fruits and other products of the soil may be considered to be movables, however, when they are the object of an act of alienation.



    • The notion of permanent nature is new and is certainly not very clear


    • The notion of integral part and utility is defined in art.901



Art 901

Movables incorporated with an immovable that lose their individuality and ensure the utility of the immovable form an integral part of the immovable.

An interesting in case about this was the one of Service Diron



  • The supplier of a garage which had a hydraulic lift had not been paid and this raised this question whether this article was a movable or immovable

  • The court found that the lift was not embedded into the building and for the utility of the building as required by arts. 900 and 901; the Caisse Populaire had not shown that the hypothec extended to this object

Art.903 deala with what we would formerly call immobilization by destination




Art. 903

Movables which are permanently physically attached or joined to an immovable without losing their individuality and without being incorporated with the immovable are immovables for as long as they remain there.

Art. 903 brings forth a new and peculiar concept



  • Is the equivalent of the old concept of immovables by destination, though this concept does not exists anymore; should not be used

  • The movable does not partake part to the identity of the immovable as before

In the implementation of the new code the transitory statute contains a substantive article that clarifies what this concept means (should have been included in the civil code)


  • S.48 of the transitory provision: Only those movable referred to in art.903 which serve the utility of the immovable, are to be considered immovables

  • So, s.48 of the transitory provision MUST be read with art.903 in part of the use and interpretation of this article

Why was immobilization by destination removed?



  • The legislature felt that immobilization by destination had gone too far

  • More importantly, the legislature felt that one of the historical reasons why immobilization by destination had been created was to be able to hypothecate a movable with an immovable when it was an essential part of it used as a unity of exploitation

    • Under the new code there is hypothecation of movables under a separate provision and it is possible to create security on it

    • While this is now possible under these provision, they do not serve the same purpose and immobilization by destination; the regulations are much more strict and more steps need to be taken

There is no longer a relationship to identity of ownership



  • Before the owner of the movable and immovable had to be the same

  • There is nothing in art.903

There are new concepts introduced in this article



  • Permanently physically attached or joined

    • There has to be a degree of relationship sufficiently strong that goes beyond the simple placing of one movable on an immovable

    • It must help create the immovable characteristic of the immovable
  • S.48: the movable must not be used for enterprise or the pursuit of activities


    • But what does this really mean?

    • This is problematic, because man y buildings are built for a specific article that takes place in it

There is an exception to art.903 for property that is under lease Art.1843



  • The legislature had to do this because there is nothing in art.903 that talks about identity of ownership

    • What is a lease? Instead of buying equipment you go to a leasing company who buys the equipment from the manufacturer

      • [Note] Two things will not be in the exam, leases (credit-bail) and hypothecs

  • There is no protection for installment sales, though these sellers are protected elsewhere




Art. 1843

Property that is the subject of a leasing even if attached or joined to an immovable retains its movable nature for as long as the contract lasts provided it does not lose its individuality.

There is also a limitation for hypothecs art.2672



  • Though this articles is almost redundant since hypothecs are usually created surrounding a business setting

  • Movable hypothecs don’t apply to private property




Art. 2672

Movables charged with a hypothec which are permanently physically attached or joined to an immovable without losing their individuality and without being incorporated with the immovable are deemed, for the enforcement of the hypothec, to retain their movable character for as long as the hypothec subsists.

Yet another interesting exception




Art. 2796

Where a movable property is incorporated in an immovable, the movable hypothec may subsist as an immovable hypothec, notwithstanding the change of nature of the property, provided it is registered in the land register; it is ranked according to the rules set out in the Book on Publication of Rights.




  • This is complicated because if the immovable is owned by a different person that the owner of the movable, then all of a sudden she will be charged with someone else’s hypothec

Art. 571 of the Code of Civil Procedure



  • Movables which are immovable by virtue of art.903 can only be seized with the immovable to which they are attached. They may be seized separately by a hypothecary creditor of the movable as long as it doesn’t belong to the owner of the immovable

  • But, then what was the purpose of the immobilization?



Summing up art.903 and related articles

  • The movable has to be physically attached or joined without being incorporated or loosing it individuality and for the purpose of insuring utility of immovable

  • Not used for the operation of enterprise or pursuit of activities

  • Not the object of credit-bail and not charged by hypothec
    • If it is charged with a hypothec it can be seized separately by hypothecary creditor who holds the security, or by any other creditor when the property is owned by someone else other than the owner of the immovable

Cases


Complicated divorce (Construtek G.B. Inc.
c. Laforge)
Construction case shows the absurdity of this concept (Axor Construction c. 3099-220 Québec Inc.)

  • A building that was designed to be an arena, though it served a different function during the summer

  • One person supplied boards to the arena and the question was whether the boards had been immobilized

  • Do the boards contribute to the utility for the building as a building, or are they part of the activities and enterprise that are to be carried out in the building?

    • For the majority, if you are going to define the utility in a broad way, then it must include the boards under art.903

    • The dissenting judge does not find they contribute to the creation for the building, and were there purely for the use of the activity

  • There was a legal hypothec that would allow the supplier of the boards to take action against the owner of the building

    • The legal hypothec in favour of the supplier was maintained

Other case in of the Ville de Montréal c. 2313-1329 Québec Inc


Note on the transition

  • When these articles were adopted under the “immediate effect” of the CcQ, there was a significant impact

  • In the transitional rules, while all new rules applied to the existing situation, some time was given to creditors to adjust to the new legislation, S.134
  • Hypothecs of property which by the new law have changed in nature must to conserve their rank be published in the appropriate registrar in the next 12 months following the implementation of the CcQ


  • In harmonizing policy when the new Code come into effect, many terms needed to be changed and adjusted



Art. 904

Real rights in immovables, as well as actions to assert such rights or to obtain possession of immovables, are immovables.

This deals with the idea of incorporeal immovables



  • These are real rights, which are considered immovables

    • E.g. a hypothec




Art. 2695

Hypothecs on the present and future rents produced by an immovable and hypothecs on the indemnities paid under the insurance contracts covering the rents are considered to be immovable hypothecs.
Such hypothecs are published in the land register.

The old code had 15 articles dealing with movables 383-393, now we only have three




Art. 905

Things which can be moved either by themselves or by an extrinsic force are movables.


Art. 906


Waves or energy harnessed and put to use by man, whether their source is movable or immovable, are deemed corporeal movables.



Art. 907

All other property, if not qualified by law, is movable.

  • If you can’t meet the tests of immobility as set out in arts.901-903 or s.48, then the object has to be deemed movable

A few other distinctions are made



  • Property being consumable and fungible or it being communal

Certain things are consumed by use: consumable



  • This affects the formation of contracts

  • E.g. usufruct: if a thing is consumable then the usufruct belongs merely to the owner

  • Usually in usufruct, the property that is used must be preserved

    • Art.1127




Art. 1127

The usufructuary may dispose, as though he were its owner, of all the property under his usufruct which cannot be used without being consumed, subject to the obligation of returning similar property in the same quantity and of the same quality at the end of the usufruct.
Where the usufructuary is unable to return similar property he shall pay the value thereof in cash.



  • It is the same case in the defitnion of loan art.2314


Art. 2314

A simple loan is a contract by which the lender hands over a certain quantity of money or other property that is consumed by the use made of it, to the borrower, who binds himself to return a like quantity of the same kind and quality to the lender after a certain time.

Others are fungible: they belong to a class of things



  • Deals with things that are not necessarily individualized or particularized

  • This is important when you buy things in bulk where the moment of identification happens when the transfer takes place and the title passes

    • E.g. books

      • If you buy a copy of a book then it only becomes identified once you obtain it

      • However, if the book is unique, then it has a particular identity and whoever has placed an order on this product, should get that specific book




Art. 1453

The transfer of a real right in a certain and determinate property, or in several properties considered as a universality, vests the acquirer with the right upon the formation of the contract, even though the property is not delivered immediately and the price remains to be determined.
The transfer of a real right in a property determined only as to kind vests the acquirer with that right as soon as he is notified that the property is certain and determinate.

Choses communes and biens sans maitre


  • These things belong to no one


  • Res comunis – chose communes: thins belongs to everybody

  • Res nullius – biens sans maitre: thing that have no master


Res communes


Art. 913

Certain things may not be appropriated; their use, common to all, is governed by general laws and, in certain respects, by this Code.
However, water and air not intended for public utility may be appropriated if collected and placed in receptacles.

  • Be careful about the word appropriation

    • In French appropriation means become owner of something

    • Appropriation is more related to being give a destination

  • Something designed for everyone’s use, of which no person can become an owner

  • A common example is water, air

E.g. Water



Art. 981

A riparian owner may, for his needs, make use of a lake, the headwaters of a watercourse or any other watercourse bordering or crossing his land. As the water leaves his land, he shall direct it, not substantially changed in quality or quantity, into its regular course.
No riparian owner may by his use of the water prevent other riparian owners from exercising the same right.




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