Wrong right

Fri 20 October 2023, Philippe Ropenga Estate planning

Your understanding of French law has improved since you started reading Alacriter's blog. You know that French property law is not all about legal title. The numerus clausus on property rights enables people to combine them to foster dispassionate relationships despite the nonexistence of trusts in French law.¹ Usufruct comes from Roman law and protects the quiet enjoyment of a given piece of property by a person who is not the owner. The liquidation of simultaneous rights to a piece of property can be problematic since indivision usually arises² unless rights are held by the same legal entity such as a company³. You know that the French Cour de cassation that is the supreme court that deals with civil, commercial, and criminal cases sometimes follows a reasoning that restates a legal rule in a sharp and clear way.⁴

Let us see that the person who has the legal title is not always entitled to bring a compensation claim against someone who enjoyed it without title.

Spouses established their domicile in a piece of property that they owned under indivision although it was enjoyed by the mother of the husband under usufruct.⁵ This situation creates a potential conflict of enjoyment since only the widow has the right of quiet enjoyment while the spouses have no right of enjoyment at all. Please note that usufruct has been used for centuries i.a. as a mean to protect the widow. A widow often enjoys a piece of property under usufruct and receives its income. This cassation case does not mention whether usufruct has been attributed to the surviving spouse in the context of succession planning.

Everyone seemed to accept this potential conflict of enjoyment until the spouses who had the legal title to the piece of property decided to divorce. A lower judge decided in 2014 that the husband had the right to enjoy the property at his own costs until divorce. This is a temporary situation that may give right to compensation if the divorce judgement states so. Following the divorce judgement issued in 2016, the ex-wife started legal proceedings in 2018 and claimed compensation for the time when her then husband enjoyed the piece of property. The Court of Appeal found that the only fact that the spouse had been deprived of enjoyment justified the compensation.

The Cour de cassation had to answer the following question:

What rights fall within the scope of the compensation mentioned by Article 815-9 of the French civil code?

The Cour de cassation, i.e. the supreme court that deals with civil, commercial, and criminal matters has ruled that the Court of Appeal had misapplied the said Article. The indemnity compensates the loss of income from the piece of property. The highest court has also found that appeal judges should have applied Article 582 of the French civil code because of the usufruct. This Article states i.a. that the person who has the usufruct is entitled to the income derived from the piece of property. The logical conclusion is straightforward: a spouse who is a co-owner of a piece of property under usufruct cannot claim compensation for the loss of income that she is not entitled to.

In brief, a usufruct may have consequences that can be overlooked when the origin of rights is not checked.

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