In accordance with paragraph 1 of Art. 308.3 of the Civil Code, in case of default by the debtor, the creditor has the right to apply to the court with a demand for the award of the duty in kind. Unless otherwise provided by law for other norms or otherwise follows from the concluded contract. Thus, the general rule is in effect, according to which the creditor may demand the fulfillment of various obligations in kind, including the transfer of things. This is the main subject of our article.
General and special parts of the Civil Code of the Russian Federation
The principle of fulfillment of the obligation in kind is indicated in the general articles of the Civil Code. It is also reflected in the rules, which refer to individual cases. For example, in paragraph 3. of Art. 487 of the Code provides for the case in which the seller, who received a certain amount of money as an advance payment, does not transfer the goods in accordance with the terms. Then the buyer has the right to demand its transfer.
In paragraph 1 of Art. 713 of the Code states that the contractor must provide the customer with a report on what materials were used after completion of the work, and return the remaining material. And Art. 890 of the Code provides for the return to the depositor the same number of things of appropriate quality and type if things with depersonalization were transferred for storage.
Lender's right and difficulties in implementation
All of the above makes it clear that the creditor with different obligations may require the transfer of the thing from the debtor in kind. In this case, the plaintiff needs to prepare for the fact that when trying 3-4 awards for the performance of duties in kind, he may encounter various obstacles, and it is not always possible to overcome them.
Often, the lender has to prove the fact that the debtor really has those things that need to be removed. Until recently, this obligation was valid both in relation to individual things and items of a generic nature.
However, in 2016, the Resolution of the Plenum of the Armed Forces No. 7 was issued, which states that if the debtor does not have an individual thing, the creditor cannot demand its transfer. The Higher Arbitration Court expressed the same position in its explanations at the end of the 90s.
Position of the court when considering cases on the transfer of things
For example, in the Supreme Administrative Court of the Arbitration Court of 1996 No.330 / 96, the court did not satisfy the plaintiff's demand for the transfer of gasoline (in the amount of 1733564 kg), since there was no evidence that the defendant had it. When considering another similar case about the fulfillment of an obligation in kind at the request of the plaintiff, the case was sent for a new consideration in order to establish the fact of the seller’s real ability to fulfill the corresponding obligation (namely, to transfer a ton of wheat).
Often, in practice, the courts considered that it was the plaintiff who needed to prove the fact that the thing was in possession of the respondent. So, in one luggage case, the plaintiff demanded that 12,947 kg of seeds be returned to them earlier. The first instance refused to satisfy the claims. An appeal was then filed, but the court upheld the first decision and noted that there was evidence in the case file that the defendant did not have these seeds. Therefore, the award for the performance of duties in kind did not produce the desired result.
In another case, the cassation court overturned the decisions of previous instances (which refused to satisfy the claims). In this case, a letter from the supplier served as evidence of the lack of goods. The court indicated that if the plaintiff could prove the opposite, then a decision would be made on the award of duties in kind of the defendant.
Justification of the position of judges
Now you need to understand what the courts have in order to adhere to the appropriate position, as well as what other options may be provided.
In paragraph 7 of the above Resolution No. 7, it is noted that it is the court, after studying the case materials, that determines the objective possibility of fulfilling the obligation. So, if it turns out that the defendant does not have the property the claimant is talking about claiming, this is a circumstance that proves the impossibility of its implementation. If the plaintiff knows that the disputed property has passed into the possession of another person, then the latter should be brought in by the court as a co-defendant.
This is stated, for example, in paragraph 32 of the EAS No. 10, as well as in the EAS No. 22 of 2010. If during the trial it turns out that the disputed thing was transferred by the respondent to another person in possession on an interim basis, the latter should be brought in as a defendant on the basis of Part 2 of Art. 46 agribusiness of the Russian Federation. If the plaintiff is the purchaser of the property, and the owner transferred it, for example, for rent or for use free of charge, then this is not an obstacle for the creditor to present the relevant requirements for the performance of the duty in kind. In the case of a loan or lease, ownership will still remain with the borrower and tenant, respectively. This is stated in articles 617 and 700 of the Civil Code.
Types of impossibility to fulfill obligations
Impossibility is subjective and objective. In the first case, the situation appears due to the lack of the possibility of transferring things by the debtor. Moreover, there is no single established concept of subjective impossibility. Due to this, the scope of the term is significantly increasing. In the second case, impossibility is determined for natural or legally justified reasons for each participant, for example, the death of a particular thing.
What to indicate in the contract so that obligations are fulfilled even in the absence of a thing?
In the text of the contract on the alienation of property, clauses can be stipulated to ensure that the duties include not only the transfer of the thing, but also its manufacture or acquisition in advance. Then its non-performance may be due, for example, to the unwillingness of the debtor to carry out preparatory measures for the transfer of things. Of course, during the trial it turns out that he does not have the appropriate property. However, if we consider this case with the approach described above, then such circumstances would be the basis for the refusal to award the performance of duties in kind. And if there are appropriate clauses in the contract, the fact that the debtor does not have a thing will not become an unavoidable obstacle to fulfilling his obligations, in contrast to the loss of a thing or the absence of goods on the market, for example.
Another solution can be found if one is based on the fact that subjective impossibility arises only when the efforts that the debtor had to take to get the result are beyond the scope of the agreements. Then the compulsion to fulfill the obligation in kind will mean that the debtor is obliged not only to fulfill the relevant obligations, but also to direct his efforts to acquire goods on the market. These actions are evaluated by the court, which in this case is based on the principles of reasonableness and reasonableness, and also proceeds from the obligations stipulated by the contract.
Types of things on which the fulfillment of duties depends
The classification of things into certain individual or generic things can be used as a presumption of the absence or presence of the obligation on the debtor to prepare for the transfer. If we are talking about a specific individual thing, then he is obliged to transfer it, unless otherwise proven. In the case of a generic item, he initially must take action to acquire it in the market.
In order to get rid of this obligation, it should be proved that the necessary actions to fulfill the obligation in kind are outside the obligations stipulated by the contract. In this regard, there is a subjective impossibility.
Revision of a car replacement court
A similar position is indicated in the Armed Forces of the Armed Forces of 2012 No. 17, which deals with cases of protection of consumer rights. Clause 4 of the document states that if a consumer demanded to replace a product with defects with a product of the same brand (which has already been discontinued, its delivery is no longer carried out, etc.), then according to Art. 416 of the Civil Code, the seller's obligation to make a replacement ceases due to the inability to do so. But the buyer has the right to demand another, specified in paragraph 1 of article 18 of the Law of the Russian Federation "On Protection of Consumer Rights" No. 2300-1, as well as art. 503 of the Civil Code. Proof of the fact that replacement is not possible lies with the seller.
According to this provision, the Sverdlovsk Regional Court (in case No. 33-10813 / 2011) decided in favor of the plaintiff to replace the car, indicating that the defendant did not provide evidence of the discontinuation of vehicles of the corresponding configuration.
In arbitration courts adhere to a similar position. For example, in 2015, in the case of case No. 40-136582 / 2014, the AC MO decided to enforce the obligation in kind by the debtor to produce and transfer goods in accordance with the annex to the contract, which was signed by both parties. In other cases, the defendant's arguments about the absence of the relevant property from him may be rejected, on the basis that the obligation must be fulfilled through the creation or acquisition of goods. Only after that, further transfer to the creditor is possible.
Features of the transfer of ancestral things
The same is indicated in paragraph 23 of Resolution No. 7 (mentioned above). In accordance with it, the fact that there is no clan thing that the debtor is obliged to transfer to the creditor does not exempt from the performance of obligations in kind. If it can be purchased from 3 persons. This is stated in paragraphs 1 and 2 of article 396, as well as paragraph 2 of article 455 of the Civil Code.
It turns out that today, with the requirement to transfer the clan item in kind, the fact of its absence is insufficient to refuse to satisfy the claim. In this case, it is the debtor who must prove the fact that it is impossible to purchase the corresponding thing from 3 persons.
Possibility of a fine and compensation claim
The argument that awarding the transfer of things with generic attributes is unenforceable is easy to question. So, in addition to fulfilling the obligation in kind, the plaintiff may petition to impose on the debtor the obligation to pay a fine to the creditor. In addition, if the decision has not been executed for a long time, the plaintiff may petition for the replacement of the fulfillment of the obligation in accordance with the procedure provided for in Articles 171, 324 of the Code of Arbitration Procedure.
However, he has the right to request compensation for the value of property that was not transferred, based on market prices at the time of application. But this does not mean that the court will unequivocally satisfy this claim of the plaintiff.
Seed Transfer Court Case
The Armed Forces of the Russian Federation in the case No. A03-20581 / 2012 issued a ruling on the abolition of the increase in value to the market size, indicating that the corresponding price will not restore the rights and interests of the claimant. In addition, he noted that, having taken the relevant decision, the previous court had not restored the plaintiff's right to an equivalent monetary replacement. The possibility of buying a set amount of similar goods was not confirmed by the case materials. The plaintiff's claims consisted of transferring the set amount of seeds, so the court’s reference to change the essence of the decision was incorrect.
As a result, the rights of the claimant were not simply not restored, but also forced him to file a new lawsuit. And this, in turn, contradicts the principles of the effectiveness of justice and the economy of procedural actions.
Conclusion
From the article we learned about what it means to fulfill an obligation in kind, how this principle is applied and what obstacles may appear in the way of its implementation. In addition, we learned about the positions of the judges on this issue.
If you have your own experience, for example, in protecting your rights or an opinion on the above, you can leave comments on the article for discussion.