Fiducia in the new Romanian Civil Code.
Initially, fiducia was a real contract in Roman law, starting with the beginning of the classical era, together with mutuum (a form of loan for perishable goods), the pledge, commodate, and deposit. Fiducia was a contract consisting in the alienation of a good, followed by a convention through which the receiver of that good was obliged to return it at a fixed term. There were two types of fiducia, fiducia cum creditore (a real contract consisting in the guarantee of a debt by transferring the property of a good by the debtor to his creditor. The creditor was obliged to return the good when the debt was paid) and fiducia cum amico (a loan based on trust) (Cocos, Magureanu, 2012: 108). Fiducia was not isolated from the solemn means of transmitting the property, but was an indivisible juridical operation, inscribed on mancipatio or on in iure cessio, meaning it could not be separated from them. As a result, the debtor was competing with other creditors of his creditor and was able to obtain only a fraction of the value of the goods that he was giving as a guarantee, even if he was paying his debt in full.
We must note however, that the fiducia introduced in the New Civil Code, in 2011, does not originate from Roman law, but from the French institution which, at its turn is inspired by the trust, an institution specific to Anglo-Saxon law. Even if fiducia in Romanian law is greatly inspired by the French civil code (art. 2011-2030), it shares some elements with the trust, regulated, for example by the Civil Code of Quebec (art. 1260-1370). There are numerous similarities between "fiducia" and the "trust," however the differences between them prevent us from considering the two terms as synonyms for the same juridical institution (for example, in order to create a trust, the sole manifestation of will of the constitutor will suffice, while fiducia will always originate from a written contract).
Prior to the regulation of this institution in our New Civil Code, there was no stipulation regarding fiducia, in Romanian law, excepting the Law nr. 51/1995 regarding the profession of lawyer. According to art. 3 of this Law, the lawyer was having the possibility to place and capitalize certain assets that were given to him as a deposit by his clients.
2. The Separation of Patrimony
Fiducia is based on another institution, also new for our legal system. According to the New Civil Code [art. 31, para. (2)] the patrimony may be divided or appropriated to a purpose, but only to the extent provided by law (similar to art. 2 of the Civil Code of Quebec). Every physical or juridical person has the right to a patrimony, composed of the rights and the obligations that the person has. Art. 31 of the New Civil Code (NCC), para. (3) enumerates as patrimonies by appropriation: fiduciary patrimonies; patrimonies affected to the exercise of an authorized profession; other patrimonies determined by law. The administrators of the patrimonies have the obligation to maintain the distinction between these patrimonies and their own patrimony. As a result, the personal creditors of the administrators will not be able to seize the goods that are part of the patrimony that is being administrated. This separation, in recent doctrine is considered as being somewhat similar to the separation stipulated by the former Civil Code (art. 781), that was preventing the confusion between the patrimony of the deceased and his successors (Barsan, 2013: 5). However we must underline the fact that it is now possible, according to art. 31 of the NCC, to separate patrimonies, as an inter-vivos juridical act, as opposed to the former Civil Code, where such an operation could have only be made for mortis causa, meaning it was not possible to separate a patrimony or to transfer a part of it (rights and obligations) as a result of a contract.
3. Definition and Characteristics of Fiducia
According to art. 773 of the NCC, fiducia is a juridical operation by which one or more constitutors are transferring real property rights, rights of claim, guarantees or other patrimonial rights, or a group of such rights, present or future to one or more fiduciaries, who exercise such rights with a given purpose, to the benefit of one or more beneficiaries. These rights constitute a distinct patrimonial mass, separate from the other rights and obligations that the fiduciaries have.
First of all we must note that fiducia is more than a contract, but a complex juridical operation, as fiducia can be created not only by contract but also by law (as opposed to the trust that can be constituted by a judge). This is the reason why this juridical institution is regulated in the NCC, title IV, at articles 773-791 and not at title IX, section designed for contracts. The fiduciary patrimony is distinct from the patrimonies of the fiduciaries. However we cannot assert that there are two patrimonies, but one patrimony that has two distinct divisions. The reason for this is the fact that the NCC still defines patrimony as the totality of rights and obligations that a person has and that can be valued in money [NCC, art. 31, para. (1)]. In conclusion, a person cannot have two patrimonies, or two "totalities" of rights and obligations. Also, the notion of "transfer" that the NCC uses may lead to a series of confusions regarding this new institution. It is clear that the NCC does not refer to a change of property, as the word "transfer" seems to imply, because according to art. 32 of the NCC, the transfer of rights and obligations from one patrimonial division to another does not constitute alienation.
According to the NCC (art. 775--similar to the French Civil Code), the contract of fiducia will be void if its purpose is to achieve an indirect liberality for the beneficiary. This interdiction aims to prevent the use of fiducia in order to elude the legal stipulations regarding donations and wills, especially the rules regarding the successional reserve, but also in order to stop the debtor to circumvent payment towards his creditors.
4. The Content of the Fiduciary Contract
The NCC (art. 779) stipulates that, under the sanction of nullity, the fiduciary contract must mention: the real property rights, the claim rights, the guarantees and any other patrimonial rights that are being transferred; the duration of the transfer that cannot exceed 33 years; the identity of the constitutor/constitutors and of the fiduciary/fiduciaries; the identity of the beneficiary/beneficiaries, or at least the rules that allow them to be determined; the purpose of the fiducia and the extent of the powers the fiduciary/fiduciaries has/have.
Also, under the sanction of nullity, the contract of fiducia and all its later modifications must be registered, in one month following its completion, to the competent fiscal body or at the competent authority of the local public administration. Whenever the fiduciary patrimony includes real estate goods, registration to the land Registry is required, under the same sanction mentioned above.
In order for fiducia to become binding to third parties, the contract must be registered with the Electronic Archive of Security Interests in Movable Property.
5. Parties of the Fiduciary Contract. Rights and Obligations
A. The constitutor
The constitutor is the person or the legal entity that can create the fiducia. Any person (physical or juridical) can be constitutor, if he has the exercise capacity (or if he appoints a representative).
The constitutor has the following obligations: to authenticate the contract or it will become void; to stipulate in the contract the rights and the obligations regarding the fiduciary patrimony, the duration of the transfer, the identity of the constitutor, of the fiduciary and of the beneficiary, the purpose of the fiducia and the powers that the fiduciary has; to remunerate the fiduciary, although the contract does not necessarily have an onerous character; to comply with the conditions of making the contract public, as presented supra at section 4.
B. The fiduciary
The NCC limits the fiduciaries to two categories (the enumeration of the NCC is limitative, in conclusion no other person or institution may become fiduciary): credit institutions, investment companies, financial investment services companies, insurance and reinsurance companies; lawyers and public notaries.
The main reason behind the limitation of fiduciaries to these two specific categories is to prevent tax evasion and money laundering. Such a complex juridical operation (similar with the trust), could be used in order to cover up illicit operations. Both the financial institutions and the lawyers and public notaries are, or at least should be holders of public confidence and subjected to rigorous supervision by various state institutions.
The fiduciary has the following obligations: to register the contract at the competent authority and to comply with all the other requirements in order to make the contract public, opposable to third parties; to specify is quality of fiduciary, whenever he acts on the behalf of the fiduciary patrimony; to answer before the constitutor/s and the beneficiary/ies for his administration, at their request.
The goods that are part of the fiduciary patrimony can be seized only by the creditors that have a right connected with these goods, or by the creditors of the constitutor that have a real guarantee over the goods, guarantee that has become opposable to third parties before the fiduciary fund was constituted. The NCC (art. 786) stipulates however the right to seize fiduciary goods, that other creditors of the constitutor may have, but only based on a definitive court order that rules on the dissolution or the unenforceability of the fiduciary contract. The creditors will only be able to seize the goods that are part of the fiduciary contract, excepting the situation when the fiduciary contract stipulates the obligation of the administrator of the fiduciary patrimony or of the constitutor to be responsible for a section or for the entire fiduciary passive. In this case, the active of the fiduciary patrimony will be seized firstly and afterwards, if it is necessary, the assets of the administrator of the fiduciary patrimony as stipulated in the contract.
The beneficiary is not considered part of the fiduciary contract. Any person can be beneficiary, as the law does not stipulate any limitation. In conclusion, even the constitutor or the fiduciary can be, at the same time, beneficiary in the fiduciary contract. Accepting this assertion, the question that arises is: can a single person cumulate the quality of constitutor, fiduciary and beneficiary in the same contract? The law does not stipulate any limitation in this regard and ubi lex non distinguit nec nos distinguere debemus. However we should note that the essence of the contract implies a confidence in another person, entrusting a person with the powers that only the proprietor has, regarding the fiduciary patrimony. Accepting that a single person could cumulate the qualities of constitutor, fiduciary and beneficiary simultaneously, could pose a serious danger to the nature of the fiduciary contract itself, to the legal security of the contracts and would give the possibility to engage in illicit activities, under the guise of a fiduciary contract.
C. Does fiducia institute a new type of property?
There have been some controversies regarding the nature of the right that the fiduciary has in fiduciary contracts. Specifically if this new institution introduces a new type of property or the fiduciary is only an administrator. When enumerating the means of acquiring property, the NCC (art. 557) refers to convention, inheritance, accession, acquisitive prescription, occupation, tradition, court ruling, administrative act and other ways if they are strictly regulated by the law. Discussions regarding the nature of the right of the fiduciary are mainly caused by the use of the term "transfer," while defining fiducia (art. 773). Also, according to the NCC, in the legal relationships between the fiduciary and the third parties, it is considered that the fiduciary has full powers over the fiduciary patrimony and that he can act as a unique and genuine holder of those rights, excepting the cases when the third parties had knowledge of the limitation of such powers. It is important also to underline the fact that the regulations regarding fiducia are supplemented with the general principles governing administration of goods. Also not everyone has the legal possibility to become fiduciary, but the two categories enumerated in a limitative matter by the law (financial institutions, lawyers and public notaries), and there is a patrimonial division between the personal patrimony of the fiduciaries and the fiduciary patrimony. In all cases, the rules that are governing the publicity of rights will be obeyed, or the juridical acts will be nullified. In other words, even if the fiduciary has, according to contract or the law, the powers that a proprietor would have, he does not act under the belief that he is the proprietor, he cannot invoke acquisitive prescription or instantaneous prescription (for movable property) as a way to gain property over the fiduciary patrimony. The fiduciary will be held responsible for the damages caused by his acts of conservation or administration of the fiduciary patrimony (NCC, art. 787). Finally, the fiduciary patrimony will be transferred to the beneficiary or to the constitutor, if the beneficiary is absent, in maximum 33 years. In conclusion, fiducia is not a new type of property, as the constitutor will still have the nude ownership of the fiduciary patrimony. The constitutor only "delegates" some of his powers as proprietor, in order to ensure the effectiveness of the contract, somewhat similar with the rules governing the mandate. The transfer of the fiduciary patrimony operates only at the moment when the contract is completed, moment when the transfer of ownership can operate and not the moment when a new or a specific type of property is being born.
Barsan, Comeliu (2013), Drept civil. Drepturile reale principale in reglementarea noului Cod civil. Bucharest: Hamangiu.
Cocos, Stefan, Alexandra Florin Magureanu (2012), Drept roman. Sibiu: Psihomedia.
*** Civil Code of Quebec
*** French Civil Code
*** New Civil Code
ALEXANDRU FLORIN MAGUREANU
Spiru Haret University
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|Author:||Magureanu, Alexandru Florin|
|Publication:||Contemporary Readings in Law and Social Justice|
|Date:||Jan 1, 2014|
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