In the context of some recent cases Costaș, Negru & Asociații has dealt with, some questions regarding the object and extent of seizure have been under scrutiny. More specifically, we will try to determine what the third party’s obligations are and for what damage it can be held liable.
Seizure is one of the methods of enforcement conferred by law on the creditor to satisfy claims to which he is entitled and is defined as an indirect procedure offering the possibility to pursue money, securities or other movable property.
Seizure implies, before all, from a procedural point of view, a notification of the attachment. The content of the attachment notification is regulated in paragraphs (2), (3), and (4) of Article 783 of the Civil Procedure Code. Essentially, the attachment notification informs the third party subject to the attachment about the prohibition to pay the debtor sums of money or movable assets that they owe as of the date the attachment notification was communicated or that they will owe subsequently to the communication of this notification. This immediate freezing order of sums of money, securities, or other movable assets owed to the debtor is limited quantitatively. However, it should be noted that the subject of the attachment, when the third party is a credit institution, is not the bank account itself but the creditor balance of these accounts, including future receipts that would credit the account.
The legislator aims to underline the importance of seizure immobilization as the first step of the seizure mechanism once established. This immobilization must operate instantly, right from the moment the seizure order is communicated. Immobilization represents a key moment in the seizure establishment procedure because without it, the seizure loses its effectiveness, thus undermining its fundamental purpose. In this case, the seizing creditor is forced to resort to other legal avenues, such as validating the seizure according to the relevant legal provisions, as stipulated in articles 790 and 792 of the Civil Procedure Code.
If the third party being seized ignores the consequence of immobilization and, therefore, allows, for example, in the case of bank seizure, the debtor account holder to carry out operations that diminish the amount referred to in the seizure order, these operations are ultimately consummated, and the account can be emptied entirely or partially of the funds that were in it at the time the seizure order was communicated.
Such conduct is obviously liable to incur the liability of the third party being seized in the validation procedure, but this procedure is only triggered because immobilization is, until the end, a material aspect that depends on the attitude of the third party being seized. In other words, the liability of the third party being seized in the validation procedure is determined by how they manage the immobilization of the sums of money or movable property they hold on behalf of the debtor.
The validation request of the seizure is the action through which the creditor, the debtor, or the executor requests the court to validate/certify a seizure that the third party being seized refuses to execute, so that the latter can be enforced instead of the debtor.
When formulating a lawsuit whose object is the validation of the seizure, it must be considered that there will always be at least two pre-existing legal relationships. The first legal relationship is between the seizing creditor and the debtor, and the second legal relationship is between the seizing debtor (who has the quality of creditor in this relationship) and the third party being seized (who has the quality of debtor in this relationship).
Regarding the procedural quality of the seizing creditor and the debtor, these result undoubtedly from the very existence of the enforceable title on the basis of which the seizure is instituted, however, regarding the procedural quality of the third party being seized, this is determined by the existence of a legal relationship between the seizing debtor and the third party being seized.
In other words, the passive procedural quality of the third party being seized creates for them a passive position, which enjoys the presumption that they owe nothing, since the burden of proof lies with the creditor according to the principle of actori incumbit probatio.
In the event that it is found that the third party being seized acted in bad faith when refusing to fulfill their obligations regarding the execution of the seizure, by the decision to admit the validation request of the seizure, the court may impose on them a fine ranging from 2,000 to 10,000 lei. This will not be done when the refusal of the third party being seized to fulfill their obligations to deposit/pay the immobilized sums, although unjustified, was based on pertinent interpretations regarding the traceability of the sums or other aspects that do not outline the idea of bad faith, but only of simple fault.
By Decision no. 8/2016, the High Court of Cassation and Justice emphasized that the refusal of the third party being seized to execute the seizure may be equivalent to a non-recognition of the debt, so that the seizing creditor and the debtor, as parties to the enforcement legal relationship derived from the enforceable title, justify the interest in formulating the seizure validation request. During this procedure, which takes the form of a civil trial, the court has the obligation to verify, on the merits, the existence of the obligational relationships between the parties, in order to issue a seizure validation decision. From this perspective, it must be considered that the validation stage of the seizure primarily entails the transfer of the seized debt from the debtor’s assets to those of the seizing creditor, a necessary assignment when the third party does not fulfill the obligations established by law in their favor, and which constitutes the legal basis for the direct enforcement of the third party’s assets, to the extent necessary to achieve the sums for which validation has been ordered, and which constitute the enforceable title of the seizing creditor against the third party being seized.
The seizure validation decision represents an action to establish rights. By this, a new legal relationship is created between the third party being seized and the seizing creditor. Execution against the third party being seized can only be carried out within the limits of the sums they were required to deposit or pay. Thus, the third party being seized has the prior obligation, born at the moment of the seizure order communication, to immobilize any sums of money entering the debtor’s account and is liable for the damage caused only within the limits of the sums they failed to block from the moment they had the opportunity to do so. Under no circumstances can they be held liable with their own assets for anything exceeding these sums.
The rights-transfer effect of the seizure validation decision does not extinguish the creditor’s right of claim against the debtor, as we are not facing novation with a change of debtor, nor a payment in kind (datio in solutum). Therefore, the effect of the validation decision is not the replacement of the creditor’s claim against the seizing debtor with that which the latter has against the third party being seized, but the seizing creditor acquiring a new direct debtor in the person of the third party being seized, within the limits of the amount they are required to deposit or pay. In the event that the creditor fails to satisfy their claim through the execution of the validation decision against the third party being seized, they may revert to other enforcements against the seizing debtor.
Regarding the legal basis for obliging the third party being seized, who made the payment into the debtor’s hands after the seizure was established, it has been shown that this constitutes tortious civil liability. The third party being seized will be liable for the damage caused to the creditor by making the payment while ignoring the obligation to immobilize.
Consequently, following the seizure validation, the third party being seized may be obliged to pay the creditor only the equivalent of the actual damage suffered by the latter as a result of the failure to establish the seizure.
For instance, in these circumstances, the Argeș Tribunal has deemed that, in the event where enforcement is carried out on the debtor’s salary, considering the imperative provisions of Article 460 of the Civil Code, the prejudice caused to the seizing creditor by the third party’s failure to establish the seizure can only consist of the portion of the debt that could have been collected by the creditor from the garnished salary, for the period during which the debtor was employed by the third party, starting from the date of the seizure establishment communication and until the termination date of the debtor’s employment contract.
Mutatis mutandis, we are of the opinion that the same reasoning applies in the case of credit institutions acting as third parties subject to seizure and against whom a seizure validation decision is pronounced. Execution against the third-party subject to seizure can only be carried out within the limits of the sums they were required to deposit or pay to the debtor. The third party subject to seizure cannot be held liable for the solvency of the debtor unless they have expressly assumed such a guarantee obligation.
This article was prepared, for the blog of the civil society of lawyers Costaș, Negru & Asociații, by Mr. Paul Buzea (Arad Bar Association).
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