Cour de Cassation Chambre Civile. Case Faillite Guiches v. veuve Baradat et Autres
20 July 1908
Translated by:
J T Brown
Professor B. S. Markesinis


Regarding the first ground:

Given that

(1) the judgement under attack, after having analysed the agreement of 13 January 1900 between Mr. Guiches, since declared bankrupt, and certain of his creditors, the defendants in the application for review, finds that (a) with regard to the nature of the agreement and the intention of the parties finds

“(i) these arrangements, with regard both to their basic elements and their form, do not amount to a company/partnership and it would be contrary to the intention of the parties to impose upon the said creditors a status and obligations which they are not shown to have accepted”;

(ii) regarding the contributions to a company/partnership which it is claimed were made: “(aa) the creditors did not divest themselves of the monetary claims they had against Guiches in order to contribute them to a company/ partnership;

(bb) when they sold to Guiches the securities which he held on their behalf they did not stipulate or accept a change in the nature, subject or extent of their rights:….

(ccc) even if they agreed to be reimbursed only out of future profits, they in no way relieved their debtor of the obligation to discharge himself as against them by means of the payment he would make on their behalf of the amount of these debts into a capital fund (“fonds social”);….

(ddd) as for Guiches, he did not divest himself in favour of a company/partnership of his banking house, of which he retained the untrammelled control; (eee) with regard to the sharing of profits and losses: “given the conditions in which they agreed to participate in the profits, up to 30%, it is not shown that this clause might have had, in the intention of the parties, any other aim than to procure for the creditors a complement to their legitimate interests;”

(2) in law the contract forming a company/partnership requires, as essential conditions of such formation, the intention of the parties to join together in such an entity, contributions effectuated in order to create working capital (“fonds social”), and , finally, a sharing in the profits and losses of the business (Articles 1832, 1853 and 1855 of the Civil Code);

(3) consequently, in the light of the findings of fact set out above, the judgement could, by an interpretation, which cannot be called into question, of the circumstances of the case and the intentions of the parties, find that the agreement of 13 July 1900 did not contain the elements which make up a limited partnership(“société en commandite”);

DISMISSES this ground;

Concerning the second ground:

Given that (1) the judgement under attack finds, on the one hand, that (a) “ the arrangements entered into on 13 July 1900 between Guiches and certain of his creditors did not have either as their aim to lead Guiches to indulge in speculative ventures contrary to the law or as their result to abuse the good faith of other creditors, present or future”; (b) the judgement adds: “even if it were the case that Guiches was able to abuse the confidence of certain creditors and procure credit for himself by persuading them of the existence of a limited partnership (“société en commandite”) between himself and the creditors who signed the agreement of 13 January 1900, it is not shown that the latter participated, or imprudently allowed themselves to be involved, in these manœuvres, and there has been produced no proof or reasoned submission in this respect”; (2) in the light of these findings the court of appeal could refuse to hold the defendants liable pursuant to Articles 1382 et. seq. of the Civil Code;

FOR THESE REASONS dismisses…..

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