EXTINCTIVE PRESCRIPTION IN THE CASE OF A CIVIL COMPANY

Extinctive prescription

FIRST INSTANCE (REAL ESTATE: Extinctive prescription) :

On 10 October 2002, Mr Gérard L. and his wife, Mrs Valérie M., formed SCI Le Tonneau. The company was registered in the Trade and Companies Register and the share capital was distributed as follows:

-60 % to Mr L.

-and 40 % to Mrs M.. Mr L. was appointed manager of this company.

Under a notarial deed dated 17 January 2003, SCI Le Tonneau acquired ownership of a dwelling house registered under section A no. 281 and a building used as a garage under section A no. 332 located [...] for the sum of EUR 89,000.

On 25 September 2008, Mr L. submitted a petition for divorce.

On 1 August 2012, Mr L. set up EURL Gérard L., taking over the business that had previously been run as a craftsman.

By notarial deed dated 30 September 2013, SCI Le Tonneau, represented by its manager, Mr L., sold to EURL Gérard L., represented by its manager, Mr L., the building used as a garage and registered in section A no. 332 for the price of EUR 8,000. The deed of sale was published in the Land Registry on 16 October 2013.

Judgement :

Mr L. and Mrs M. were granted a divorce in a judgment upheld by the Nancy Court of Appeal.

Under a notarial deed, EURL Gérard L. sold the building used as a garage with adjoining land to Mr Fabio G., his wife, Mrs Corinne M. and Mrs Allison G. for the price of EUR 25,000.

Considering that this transfer was fraudulent, on 11 April 2018 Mrs M. served a writ of summons on SCI Le Tonneau, EURL Gérard L. and Mr L. seeking, on the basis of articles 1832 et seq. of the French Civil Code, under the benefit of the French Civil Code, a declaration that the transfer was fraudulent.provisional enforcementdeclare the sale dated 30 May 2013 between SCI Le Tonneau and EURL Gérard L. null and void, relating to the sale of a building used as a garage located in [...] cadastral section A no. 332, declare the judgment to be common to Mr L., and order them to pay him a sum under Article 700 of the Code of Civil Procedure.

APPEAL (REAL ESTATE: Extinctive prescription) :

L'article 1844-14 of the Civil Code provides that " actions for nullity of the company or of acts and deliberations subsequent to its incorporation shall be barred after three years from the date on which the nullity is incurred" .

This special statute of limitations in company law applies to an action for annulment of a deed of sale based on an irregularity in the resolution authorising the sale.

This is the case here, since the shareholder of the SCI is seeking the annulment of a sale concluded by the company. This was on the grounds that she had not been convened to the general meeting that authorised the sale.

The sale was recorded in a notarial deed dated 30 September 2013. It was published in the Land Registry on 16 October 2013. And the writ of summons was served on 11 April 2018, when the three-year limitation period had expired.

Consequently, the action for annulment of the sale based on the failure to convene the shareholder's general meeting and the failure to comply with the majority required to decide on the sale is inadmissible as time-barred.

On the other hand, with regard to the grounds of nullity of the sale based on ordinary contract law, and therefore subject to the five-year statute of limitations under ordinary law, it should be noted that the sale was concluded on 30 September 2013 and that the writ of summons was served less than five years later, on 11 April 2018. Accordingly, these pleas are not time-barred and are therefore admissible.

Solution chosen:

The claim is unfounded.

The first argument is that the SCI's manager was at fault. He signed the deed of sale in his capacity as manager of the SCI and of the EURL transferee.

However, the partner does not specify the grounds on which the sale could be declared null and void.

Moreover, it does not identify any fault on the part of the SCI's manager in this respect. He was in fact the manager of both companies and was therefore entitled to represent them.

The plea that the sale price was unfair is inadmissible. The two-year limitation period provided for byarticle 1676 of the Civil Code being acquired.

Nancy Court of Appeal, 1st Civil Division, 18 January 2021, RG no. 20/00537