Civil Law Property

Part 2: Classification of Property (or Patrimonial Rights) and of Things

Chapter I: Distinction b/n Real Rights, Personal Rights, Intellectual Rights

S. 1 Real Rights

A. Definition

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  Cantin DEF.: The real right has a thing (res) as its object and establishes a direct and immediate link between the titulary of the right and the thing.
  
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  Jus in re
  
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  “at the top of the organisation of this area of law”
  

B. Characteristics – What is its essence?

1. 
   OBJECT:
   

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  A material thing – immovable or movable (depending on object (art 904))
  
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  A debated question is whether a real right has to bear upon a corporeal / material object.
  
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  Carbonnier – seems to say that materiality is needed.
  
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  Baudouin – says it is possible for non-material thing to be object of real right…but, for our purposes, must be material
  

2. 
   RELATIONSHIP BETWEEN 2 COMPONENTS:
   

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  2 components (titulary of right  why no “person”  titulary of right b/c MUST include ‘the trust’) and the thing
  
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  No intermediary  Autonomous and Direct relationship
  
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  Link is fully there in terms of ‘right of ownership’ (and less so with dismemberment of ownership (where received benefits of the object but do not have right of ownership))
  
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  Chart below
  
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  Titulary may not be prevented from exercise legal right (unless legal incapacity [minor, major person who is unable to act declared by a court])
  
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  Baudouin – opposable to all
  

 REAL RIGHTS GRANT THE FRUIT IN THE OBJECT:

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  When dealing with principle real rights (those giving “fruits” in the sense of profits), the titulary will have the property in hand (physical control). [See art. 1124 CCQ: the usufructuary has the use and enjoyment of the property. This leads to the possibility of leasing (art. 1135): it is not the OWNER who leases here, but the usufructuary.]
  
• 
  Ex. if you own a house and a usufructuary has an interest in it – then he can be the holder of a real right in the property – and can lease it out.
  

 Difference b/n accessory real right (constitutes security that is nec. attached to a claim for which it guarantees performance) and principle real right

S. 2 Personal Rights

A. Definition

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  Defn: Personal rights are also known as “droits personnels”, “droits de créance”, or “jus in personam”.
  
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  It describes a legal relationship between two persons (subjects of law or titularies) whereby one, the creditor, is able to obtain from the other, the debtor, the performance of a service or the execution of a prestation.
  

B. Characteristics

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  Exchange of services is involved
  
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  3 components
  
  • 
    creditor
    
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    debtor
    
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    the prestation or obligation that must be performed by the debtor (to do or not to do something)
    
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  Will appear as asset in creditor’s patrimony and an obligation in the patrimony of the debtor
  
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  Only opposable to one (1)  innopposable
  

C. Essence

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  Personal rights can come in any shape or size. Any obligation not against public order could be a valid one (Art. 1373).
  

Art 1373	The object of an obligation is the prestation that the debtor is bound to render to the creditor and which consists in doing or not doing something. (2) The debtor is bound to render a prestation that is possible and determinate or determinable and that is neither forbidden by law nor contrary to public order.
Art 1374	The prestation may relate to any property, even future property, provided that the property is determinate as to kind and determinable as to quantity.

Case: Ouimet v. Guilbault

Ouimet v. Guilbault [1972] Que C.S.
Facts: Promise of sale signed in 1964 (had transfer happened immediately it would have been a contract of sale (and not a promise of sale) with date of sale to be in the future (1969) 1967, expropriation of land by municipality claim that defendant did not fulfill obligations as plaintiff had rights to the property Issue: Regardless of obligations of defendant at time of expropriation, are they extinct b/c of expropriation (b/c of art 1202 of CCLC) which was attempted to be termed as “force majeur” Decision: For plaintiff. Damages for the loss of right to buy property for $10,700	Ratio: Agreement of 1964 is not considered as transferring property Promise is not a sale as, in a sale, [Contract of Sale (art 1708)] the vendor gives something to the buyer for an amount of money which the buyer obliges himself to pay With promise of sale, the buyer becomes creditor of an obligation to sell  personal right situation Becomes an action in passation of title (see notes below) Defendant was under obligation before obligation became impossible and that the right of the plaintiff is not extinguished
Notes: Obligation of dare – to transfer of ownership Cases can either involve in real action (Person who has real right [ownership has been transferred] to property and wishes to claim that right) which gives way to real right (“petitory action”) Or a personal action (personal rights relationship) (“action in passation of title”  obligation to transfer, transfer has not happened)

S. 3 Comparison b/n Real Rights and Personal Rights

1. 
   Both Are Patrimonial Rights
   

2. 
   The Object of the Right
   

Object of a real right  is necessarily an object that is determined/specific – must be a thing that exists

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  Eg. Contract of sale of a house yet to be built  cannot be considered a contract of sale. Does not exist yet. Is only a promise to be sold when built.  at time of contract buyer is merely a creditor and therefore there are risks if the contractor becomes insolvent
  

Object of personal right  the obligation/prestation can be undetermined at the time of the contract and still be binding on part of the debtor provided that it is determinable by the terms of the contract (see art 1373, 1374)

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  Eg. Agreement for services to administer the rental of an immovable  price is labelled as being % of rental income of the immovable. Amount of price is not determinable by the terms of the contract but will be determined when rental takes place
  

3. 
   Limited/Unlimited in Number
   

Personal Rights: Are unlimited in number. Left to the imagination of the parties and only confined by public order.
Real rights: There are a limited number of real rights  but not as limited as one might think

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  Art 1119 lists a number (not exhaustive) of them.
  

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  Can also have Real Rights created by statute:
  

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  Forest Act, Mining Act and Act Respecting Lands in the Public Domain
  
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  Art. 87 in the Forest Act (p. 59) provides that if the state grants rights here, they are (immovable) real rights. Same for the Mining Act.
  

The Forest Act contemplates the granting of rights in forest lands by means of “forest management permits”:

art. 2: no one may carry on a forest management activity unless holding a forest management permit.

art. 87: the rights vested in an agreement holder by a forest management permit are immovable real rights.

The Mining Act also creates immovable real rights:

art. 8: mining rights conferred by claims, mining exploration licences, mining leases, mining concessions, etc are immovable real rights.

art. 9: every real and immovable mining right constitutes a separate property.

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  Art. 34, 2^nd paragraph, of the Act Respecting the Lands in the Public Domain (p. 54) seems to suggest that the rights granted are not “ownership”.
  
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  Art. 49 of the same act (p. 56) seems to create a real right: although the word “lessee” is used, there is a direct relationship, and nobody has to give the “lessee” his/her right.
  

The Act Respecting the Lands in the Public Domain governs the concession of public lands to individuals:

art. 26: the Minister shall prepare and keep a public land register (the “Terrier”), registering every alienation, acquisition, servitude, location or occupation right as well as every transfer, renewal, and revocation or rights or leases.

art. 34: the Minister may sell lands under his authority which form part of the public domain, and may grant rights in such lands in the same manner.

art. 37: the Minister may transfer gratuitously land under his authority by the issue of Letters Patent, for purposes of public utility.

art. 38: at the end of 30 years from the date of the Letters Patent, the conditions and restrictions attached to a gratuitous transfer cease to apply, and the transfer becomes irrevocable.

art. 39: the holder of the Letters Patent must inform the Minister if he wishes to use the transferred land for a purpose other than that specified in the Letters Patent.

art. 47: the Minister may lease any land under his authority.

art. 49: the lessee of the land may institute any action or suit against a person occupying the land illegally or trespassing, and may also recover all damages suffered.

4) Opposability of Real Rights and innopposability of Personal rights

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  Easily misconstrued
  

Personal right – Not opposable to all  creditor may only claim debt from debtor and nobody else

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  Really relates to definition of legal situation
  
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  Double face of the personal right  Debtor and Creditor
  

Real right  relationship with material object and not another person  so that it is opposable to everyone – Not too meaningful to say that everyone must respect that right
5) Moveable or Immovable Character:

- A real right may be movable or immovable: they deal with corporeal things which are either fixed or not.

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  In order for it be fully effective (if immovable) must be registered or publicized (art 1455, 2934-2938))
  

- The Personal Right is said by law to be MOVABLE (this is a construction of the law).
6) Preference and Suite : Terre et Simler: Driot Civil: Les biens

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  Real right includes le driot de suite: (should the debtor alienate the property) allows holder of right to assert his rights over he who subsequently becomes proprietor of the property or aquire another real right on that new property Eg. Hypothec not paid off and immovable sold, Bank can seize immovable from new owner.
  

 Personal rights do not include le driot de suite

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  Real right includes le droit de preference: guartantees to the holder of the real right the priority to be paid before other creditors in the case of insolvency of the debtor in the distribution of the price of the object
  

 Personal right does not include driot de preference.
7) “Accessory real rights” are not property, but legal causes for preference:

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  HYPOTHECS – DEFINED: (cantin thinks it should be “accessory to the real right)
  
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  Art. 2660 – “A hypothec is a real right on a movable or immovable property made liable for the performance of an obligation. It confers in the creditor the right to follow the property into whosoever hands it may be, to take possession of it or to take it in payment, or to sell it, or cause it to be sold and, in that case, to have a preference upon the proceeds of the sale ranking as determined in this Code.”
  
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  In principle, any property non labelled unseizable by law can be the object of a hypothec, although it is traditionally found only with immovables.
  
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  Art. 2661 – “A hypothec is merely an accessory right, and subsists only as long as the obligation whose performance it secures continues to exist.”
  
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  These two together make it an ACCESSORY REAL RIGHT – not a full real right but a legal cause for preference.
  
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  Art 2733 - A hypothec does not divest the grantor or the person in possession, who continue to enjoy their rights over the charged property and may dispose of it, subject to the rights of the hypothecary creditor.
  

Legal Cause for Preference – Art. 2647 - “Prior claims and hypothecs are legal causes of preference” – called a real right just to bring it into the proper regime for ranking! A registered hypothec will have an effect similar to a hybrid real/personal right, and the person with a hypothec will be able to sell the property in the state that it was in at the time of registration.
8) Option of Abandonment

“Faculté d’abondon”  Feature of principal real rights

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  Means that titulary of real right is able to abandon real right without consent of anyone (art 935) – “A movable without an owner belongs to the person who appropriates it for himself by occupation. An abandoned movable, if no one appropriates it for himself, belongs to the municipality that collects it in its territory, or to the State.”
  
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  If it is a dismemberment that is abandoned, automatically reconstituted into bare ownership
  
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    Usufruct (art 1169)
    
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    Servitude (1185)
    
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    Emphyteusis (1208)
    
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  For personal rights  Not possible unilaterally
  

Creditor, should he wish to renounce credit, must get consent of debtor (release of an obligation (art. 1687-))

Eg. Piece of land where owner has real right on that land but also has debtor/creditor situation w/ regards to that immovable A buys from X (immovable – published) in 1980 B (neighbour on one side) has servitude of view (real right) on this lot from X in 1975 (published) C acquires usufruct on land from A in 1985 D (neighbour on other side) has servitude of passage from A in 1990  A cannot ask for revocation of B’s servitude of view  While usufruct lasts, D cannot use servitude of passage as it was not A’s right to give said servitude. (not opposable to C)  Should D get servitude of passage from C it will last the length of the usufruct] Now, add ordinary creditors of A (personal relationships) E is creditor of A 1975 F creditor of A in 1980 G creditor in 1996 H creditor in 2002  A becomes insolvent in 2003  None of creditors could prevent A from accumulating new obligations E, F, G, H will get funds from insolvency  proceeds of sale of property will be shared among them as they are all equal creditors (ordinary creditors) Now, change situation E is creditor in 1975 F (financed purchase of land by A from X) obtained a hypothec (or guartanee  which is a driect relationship b/n the loaner and the land itself) of 1980 Hypotec must be registered (let’s say there were In example for $75,000 G is creditor in 1996 H in 2002 Art 2647  Hypothecs are considered preference  “Prior claims and hypothecs are the legal causes of preference.” So, say property is sold for $200,000. F will get all $75,000 and the rest will be split b/n E, G, H

Review:

1. 
   both types of rights are patrimonial;
   
2. 
   there is a double face to the personal right (debtor-creditor);
   
3. 
   the nature of the object of the real right is important: it must be specified and material;
   
4. 
   the number and variety of real rights are limited; and
   
5. 
   the distinction between movable and immovable rights is applied to real and personal rights, with the law declaring personal rights to be movable.
   
6. 
   Opposability if Real Rights and the Inopposability of Personal Rights
   
7. 
   “Accessory real rights” are not property, but legal causes for preference:
   

S. 4 Intellectual Property

(909, 458, 1612)
A – Definition

Cantin Defn: Intellectual rights describes the relationship b/n a person or a subject and a creation or a product of the intellectual activity of that subject

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  Permits subject to draw economic benefit from that creation
  
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  Ghestin  rights over immaterial works
  
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  Baudouin text: From the human spirit
  

B – Object of an Intellectual Right

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  Abstract, immaterial (eg. Idea, process, design, image, expertise, good will)
  
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  Must not confuse object with the support of that object (may buy a book (physical thing) but do not own intellectual content)
  
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    Ghestin - Distinction made in text: Artist has authorship of photo but not right to the image of the person in the photo (right to privacy and right to image of the person depicted)
    

C – Characteristics

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  It is a Patrimonial right as it does not fit criteria in Art 3 of CCQ
  

Why are these patrimonial rights at all?

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  Ghestin noted that the alongside the intellectual rights that the law protects such as copyright, patent, etc….) are MORAL RIGHTS (so-called “Droit d’auteur”) which are extra-patrimonial
  

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  Therefore two aspects:
  
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    One is the copyright, right to make money from work
    
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    One that doesn’t transfer with sale of book  MORAL RIGHTS
    

1. 
   Right of divulgation: to decide timing when work will be shown to public
   
2. 
   Right of withdrawal or repentance: can withdraw from circulation
   
3. 
   Right of paternity or attribution: name used to identify as author
   
4. 
   Right of integrity: work remains in a state in which the author decided to make it known to the public
   

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  Even if a copyright is sold, moral rights remain (these are linked to the creator, like personality rights.)
  
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  These moral rights, according to the Copyright Act, are NON-TRANSFERABLE (seems extra-patrimonial in nature).
  

2 aspects therefore seem contradictory: 1) exclusivity (patrimonial in nature); and 2) the moral aspect (outside the patrimony, and remaining with the creator).

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  This comes from a historical Common vs. Civil difference:
  
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  Common – more purely commercial – Lockean…
  
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  Civil – Hegelian view (the artistic work is somehow infused with the creator’s personality…) gave rise to the “Droits D’Auteurs.” This has been affirmed as not being dependent upon the legislature as well.
  

D - Jurisdiction

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  Federal law covers copyright
  
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  But Federal statutes were based on American Copyright legislation and therefore did not provide for Moral Rights UNTIL recently when they were incorporated.
  
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  Art 13(3) of Copyright legislation provides that “if the author is an employee, the copyright belongs to the employer”  This does NOT come from civilian tradition as in Civil:
  
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    First titulary is owner of creation
    
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    Necessarily a physical person
    
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  CCQ and provincial law will be applicable if/when the Federal Legislation does not cover certain issues
  

E – Real or Personal Right or a Category on its own??

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  Real rights have effect on material objects – IR not material object (even though there is direct relationship b/n object and subject of right like IR)
  
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  Personal rights are b/n two persons – IR opposable to all.
  
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  Therefore  Third type of right
  
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  Ghestin says that the object of this type of right is sufficiently different that they are worthy of their own classification – AND he notes that nothing is gained by labelling them as real rights. But under pressure – it seems they are closer to real rights.
  

Case: Diffusion YFB v. Les Disques Gamma

Diffusion YFB inc. v. Les Disques Gamma Ltée et Socan [1999] C.S.
Facts: Artist signed contract in 1996 with Gamma where Gamma gets ½ royalties on all artists songs to a certain amount. Artist goes bankrupt After the bankruptcy, he sells the exclusive right of the exploitation of his musical creations to a different company, Diffusion YFB. DG brings YFB to court in order to claim its share of royalties on songs produced by the artist after his bankruptcy and after the birth of his new K relationship with YFB. Issue: Is income provided by the exploitation of a song not yet created included in the bankruptcy? (ie, are these rights in the patrimony?) Can the author grant to a 3^rd party the right to exploit future creations? Can Gamma have rights to work not yet created Can, by way of contract, a person sell rights to exploit future creations?	Decision: In favour of Gamma – The contract between the artist and DG is valid, and is unaffected by the artists bankruptcy. DG may recover its portion of royalties from songs crated by the artist after his bankruptcy.– personal rights not Real rights Ratio: Without any Canadian Law and only one case found in English law, Judge refers to art 1374 which says that a prestation can be made on all assets including those to come. 1374: The prestation may relate to any property, even future property, provided that the property is determinate as to kind and determinable as to quantity. Considers intellectual Property through the rule of future obligations  personal right  Here Judge sees it as an obligation and not Real rights BUT…. Contract is valid though the object does not yet exist  gives effect to the contract immediately upon creation of the work – not possible with real rights and art 1453. Cantin As is not the case in Personal Rights, there is no obligation to create (were it personal right there is an obligation of the debtor – here Lapointe under no ob to write music)
Notes: Had he used 1453, would have lead to negative answer  but there is no object Trustee nor anyone else will be able to create works to be sold  author not under any obligation to produce Different solution from Real rights and from Personal Rights

Other Types of Intellectual Rights: Goodwill

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  Assets created by the professional activity of a person
  
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    When business is sold some part of price has to do with GOODWILL
    
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    Good will considered to be an asset
    

Goodwill: - Is it always freely transferable when business or enterprise is sold

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  What is the nature of that asset (it is intangible)
  
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  Must be careful as privacy issues if deal with selling of Doctor’s practice  Giving files may violate confidential info, privacy and other legislation. Patient must agree to give files to new Doctor
  

Case: SOQUIA v. Robert Libman

Société Québecoise d’iniatives agro-alimentaires (SOQUIA) v. Robert Libman [1998] C.A.
Facts: MLA of Quebec (opposition member) asks SOQUIA for financial records of a private company (Socomer). Both SOQUIA and a Ministry of the gov’t refused – said was confidential info of a legal person. Issue: Is the right to privacy of financial statements of a legal person considered an extra-pat right?	Decision: SOQUIA has the right to refuse to hand over financial records Ratio: Per art 300-302, confidentiality of financial records is an extra-patrimonial right to privacy

Cantin on SOQUIA

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  Case deals with issue of privacy of a legal person  but is it privacy issue?
  

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  Is confidentiality issue but is not extra-pat in nature  this case goes too far as should be in Intellectual rights
  
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  Not right to characterise financial statement as privacy – they are confidential but are they really privacy?? Not according to Cantin Cumyn
  

S. 5 Observations on the use of Terminology

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  Right: covers any subjective right, any right that a person may claim or exercise  includes personal and property (extra-pat and pat)
  
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  Property: (fr. Bien not propriété) Includes real rights, personal rights, intellectual rights (patrimonial rights)
  
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  Thing: Material object, object of a real right or a principle real right.
  
  • 
    In old code was “chose” now it is “bien”
    
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  Ownership: (fr. Propriété – one species of property – principle real right) Right on a material object (not include intellectual property)
  
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  Personal right: (droit de creance) debtor-creditor relation – permits a creditor to obtain a prestation (performance of an obligation) from his debtor
  
  • 
    (DO NOT confuse with personality rights which are extra-pat)
    
  • 
    Not a personal servitude (dismemberment of real right)