Civ 1. Arr. 723 Pourvoi 97-21.422 Case UFB Lcabail/Bermond et al. D. 2000, 240 JCP E no. 23 of 08.06.00, p. 898
28 March 2002
Translated by:
Mr. Trevor Brown and Miss Ann Yazikov.
Professor B. S. Markesinis

The Court, at the public hearing of 7 March 2000,Whereas (1) on 21 February 1992, Daniel Bourdillon bought from Sanlaville, a corporation, certain agricultural equipment to be supplied by Fiatgeotech, a corporation, the price to be financed as to an amount of F700.000 by means of a loan by UBF Locabail, a corporation; (2) pursuant to the contract, UFB Locabail undertook to pay directly to Sanlaville the amount of the loan upon receipt of notice from the vendor of delivery of the equipment, subject, in particular, to Daniel Bourdon’s entering into a contract of life insurance to be written by UAP Collectives, whose rights have been assumed by Axa Collectives, who is a party in the case in its place; (3) Daniel Bourdillon having, on 31 March 1992, sent to UBF Locabail the file relating to his adherence to the life insurance policy, Sanlaville, on the following 22 June, sent to UFB the document relating to the delivery of the equipment; (3) in the mean time Daniel Bourdillon died in an accident on 4 June 1992; (4) a disagreement having arisen as to the quality of the equipment delivered, and UFB Locabail having denied that it had to finance the operation, the Bourdillon heirs brought action against the liquidator of Sanlaville and against UFB Locabail for rescission of the sale, and, incidentally, to have UFB ordered to pay to Sanlaville the amount of the loan;

As regards the first argument, in its four limbs:

Whereas (1) UFB Locabail criticises the judgement appealed against (Grenoble, 1 October 1997) for having held that the financing contract entred into by Daliel Bourdillon put it under the obligation to pay the agreed sum to his heirs, while, according to the argument, (a) it is clear from the judgement that, UFB never having handed over to Daniel Bourdillon the funds which were the subject of the loan agreement before the date of delivery, the loan agreement had not been formed, so that the court of appeal has breached Article 1892 of the Civil Code; (b) the loan agreement was entered into on the basis of the personality of Bourdillon since the lender contracted on the basis of the ability of the borrower to reimburse, so that in ordering neverthless UFB to perform the contract, originally entered into with Daniel Bourdillon, for the benefit of the heirs of the latter, the court of appeal has not drawn the legal conclusions from the facts it has found, so breaching Article 1122 of the Civil Code; (c) article 6 of the loan agreement provided that sums not yet reimbursed by the borrower would become immediately due and repayable upon the death of the borrower, and article 10 provided that upon the death of the borrower before the reimbursement of all sums owing to the lender, there would be joint and several liability between his heirs, so that in basing itself upon these clauses which implied that the funds had been already disbursed to the borrower, in order to find an obligation of UFB to pay the funds for the benefit of the heirs, the court of appeal based itself upon an invalid reason, and deprived its decision of legal grounds as regards Article 1134 of the Civil Code; (d) since the funds which UFB had undertaken to pay to Daniel Bourdillon were never handed over to him, the undertaking of the bank could be analysed only as a promise of a loan, of which the non-performance could give rise only to damages, so that in ordering nevertheless UFB to perform its obligation arising out of the promise of a loan by making it pay the sums in question to the successors of Daniel Bouton, the court of appeal has breached articles 1892 and 1142 of that Code;

But whereas (1) a loan granted by a professional in the credit business is not a contract created by delivery (“contrat réel”) (2) the judgement appealed against, which holds that the offer of financing had been signed by Daniel Bourdillon and that the conditions as to the security to be provided were realised, holds, correctly, that UFB Locabail, as a result of this exchange of intentions, is obliged to make payment of the agreed sum; consequently the argument, which is ill-founded in its first limb, is ineffective in the other three limbs,

And as regards the second argument, in its three limbs, as set out in the pleadings and annexed hereto:

Whereas (1) the judgement finds that the lender, who had designed the financing to which the borrower was invited to adhere, had organised a “situation in the void” in which the borrower could, by the actions of the lender, be personally bound without being covered by the insurance in respect of which he had already sent all the documents asked of him; (2) for these reasons, which have not been criticised, the court could deduce the existence of fault by the lender, and has justified its decision in law;

DISMISSES the appeal

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