Heritage, Assets, and Liabilities in Civil Law

Posted on Sep 7, 2024 in Law & Jurisprudence

Heritage and Assets and Liabilities

I. Concept, Character, and Heritage Classes

CONCEPT:

Heritage can be defined as the set of legal relationships with economic content placed under management and accountability. The concept of heritage helps address issues like:

  1. The concept of inheritance
  2. The idea of a general guarantee that creditors have security for the debtor to meet their obligations, and for the case that this does not happen. The mass of assets that the debtor owns can be claimed by creditors.
  3. When attempting the return of property no longer in the seller’s ownership under the provision of restitution, it involves the replacement of the goods within the set of goods considered in the abstract and establishing a legal connection between the output of a good and the entry of another. This is called Real Subrogation
  4. A person is granted powers of management, administration, or provision in respect of goods or other property they have in common with others.
  5. Sometimes certain groups of assets belonging to the same person may be subject to different areas of responsibility so that a debt can only be effective on some goods and other debts over others.

Assets and liabilities are integrated into equity. There is an interaction between the person and the economic environment that influences their power and duty. Heritage is a sum of properties and loans at a given moment, but from a different point of view, it’s a permanent track of assets and debts in a constant process of change, with effects unrelated to the management and protection of each individual right.

CHARACTERISTICS:

  1. Are creatures of statute and cannot be caused by private will
  2. Present instrumentality for achieving certain purposes
  3. Independence in regard to liability for debts and exclusion of any interference
  4. Unit: All the assets and liabilities are interchangeable within the same property because it reduces to the common value
  5. Identity, in that it is independent of the assets contained within it at a given time
  6. Intransmissibility of heritage as such; what is passed on are the assets that compose it, but never the heritage itself

HERITAGE SCHOOL:

  1. Staff Heritage: The general assets of the person only become evident in abnormal situations (insolvency, absence, etc.). In such situations, it is under separate management division, in whole or in part.

    The code also regulates the presence of masses or cores somehow subject to a special status within the assets of the person, so that the person owns property masses, each of which has a separate legal treatment.

  2. Collective Heritage: When a group of goods belonging to a diversity of people responds to certain types of debts. The assets are allocated to the components of a collective, not singularly, and are shared in parts.
  3. Assets Intended for a Purpose: When law subjects a mass of goods to its own regime, regardless of which its owner can be defined in full in respect of a person/entity.

Heritage Content: The Economic Rights:

Can be individual rights and legal relations. Two types of goods:

  • Those goods capable of satisfying human needs and influencing the behavior of others, to the extent that the satisfaction of self-interest requires the cooperation of others. Includes both material and immaterial things.

These assets can be integrated into a legal relationship in two ways:

  1. Directly
  2. Through the conduct of another person

In general, every type of legal relationship is created, modified, or extinguished by collaboration between two or more people, even if there is sufficient declaration of will or behavior of one. To use goods, we generally look to others. Goods reach our heritage as a result of a legal relationship, and once in our heritage, we can enjoy them directly and immediately (Royal Right) or through the conduct of another person (Obligation Right or Credit).

Special Consideration of Certain Components of Heritage:

Services acquire particular importance in heritage. It is possible for a person (payee) to be entitled to receive from another (the debtor) a particular behavior or service (supply).

In legal terms, benefits relating to the delivery of things do not work the same as benefits or rights that relate to conduct or behavior not connected to concrete things.

The benefits of doing so are linked more closely with the person of the debtor and are not easily transferable. We must distinguish between performance of activity, where the debtor undertakes to diligently develop an activity, and benefits tied to obtaining a particular predetermined outcome.

If the benefit is non-fungible, the conduct of the debtor is irreplaceable, and their death will determine the termination of the relationship. In the case of fungible benefits, a replacement of the debtor is possible.

Because of its special significance and importance in transactions, the presence of money should be emphasized as a heritage element. Money is primarily a measure or unit of account, a medium of exchange for things or services. In valuing debts, money functions as an equivalent for other goods or services. Our law has adopted the principle called Nominalism, where the debtor fulfills their obligation by delivering the fixed number of currency units, regardless of fluctuations in real value or purchasing power.

II. Those Assets

– Goods and Elements in the Legal Sense —

The estate consists of rights and obligations. The rights, which are designated powers or faculties of the person, are the active assets, and the liabilities are the passive assets.

When we talk about property rights, we refer to elements of nature and social life offered to meet human needs. Property can be considered the content or object of cultural heritage.

Assets can be tangible or intangible. Intangible assets are considered property rights. A good or thing must be susceptible to appropriation, as follows from Article 333 of the Civil Code (CC), which refers to the thing being subjected to the will of man. The property should have economic value; it must be capable of valuation.

We must distinguish between things in commerce and things out of commerce, although it seems better to replace this category with the distinction between public and private property, as in Article 338 CC. Public domain things are those belonging to the State or public agencies and are aimed at public service. The assets that belong to the state or other public entity as privately owned property are called patrimonial goods.

The Distinction Between Movable and Immovable:

This distinction only applies to tangible or material property for which there could be a real right. The basic criterion of distinction comes from the nature of things.

  • Movable: Susceptible to displacement
  • Immovable: Fixed assets that are uncontrollable in their spatial situation and are considered major assets of great value.

A classification of goods would now focus on the distinction between production goods and consumption goods. Among the former, we find labor; among the latter, we find capital. Current law has been extended to treat certain types of movable property as immovable property (mortgage of ships, aircraft, etc.).

The CC classifies real estate into four categories:

  1. Buildings by Nature: Article 334.1 and 8 CC (land, mines, slag)
  2. Properties by Joining: Article 334.1, 2, and 3 (buildings, roads and buildings attached to the ground, trees, plants and hanging fruits while they are tied to the land, and everything attached to a building and stationary)
  3. Fixtures: Article 334.4, 5, 6, 7, and 9. They are subject to use or ornamentation on buildings or in a permanent legacy, as well as tools and utensils used by the owner of the property for the industry or business conducted in a building or land, farms or nurseries, and also animals and dikes intended to remain at a fixed point.
  4. Properties by Analogy: Article 334.10 CC. They are by nature intangible, or rights. Administrative concessions, easements, and other interests in land.

The CC considers in Article 335 movable property to be any property subject to appropriation not included in the previous chapter and all that can be transported from one point to another without affecting the property to which it was linked. Article 336 CC lists a number of goods considered furniture.

Distinction of Things by Virtue of Their Qualities:

  1. Fungible and Non-fungible: Fungible things are interchangeable and are considered according to their number, weight, or measure. They are referred to in Article 337 CC.
  2. Generic and Specific Things: The specific thing is determined individually; the generic thing is determined through its membership in a particular genre. The distinction is important for the regime of compliance with obligations or for the transfer of risk.
  3. Consumable and Non-consumable Things: Under the term “fungible” are defined consumable goods, those which cannot be used without being consumed according to their nature. Although it is considered wasting a thing, money remains physically unchanged.
  4. Divisible and Indivisible Things: A purely legal criterion. A thing is qualified as divisible when the parties resulting from the division will provide things of the same kind as the whole and with a value proportional to it. The thing is indivisible either because the law forbids it or because separating it into parts destroys it as such, or the parts become different in nature than the whole.

    The distinction is highlighted when there are rights on the thing from different operators in joint tenure or community. You cannot demand the division of the common thing; you can only do it when it is unfit for its intended use and has to be sold, and its money distributed, if the thing is essentially indivisible.

The Relationship Between Things:

  1. Distinction Between Simple Things and Composite Things:
    • Simple: The one with natural or artificial unity so that, although it is possible to distinguish fragments, these do not form a unity.
    • Composite: Those that are a unit but in which many pieces are distinguishable within them, which, before and outside of the whole, have their own individuality. It is not divisible when it belongs to several owners who want to leave the community, as it would be useless. It has to be sold, and its price distributed.
  2. Universality: The combination or plurality of things that makes them subject to the same legal treatment. It distinguishes between a universal fact and a universal by law.
    • In fact: An aggregate of material things created by man.
    • Of law: An aggregation of things, tangible or intangible rights, verified by law (inheritance).
  3. Principal Thing and Accessory Thing:

    An accessory thing is subordinate to another, for which it fulfills a certain function. The CC determines that when you cannot determine which of these two items is the principal, the one with the higher value or volume shall be deemed as such if both are of equal value.

    The law incorrectly calls the most important thing the principal thing and the less important thing the accessory thing. However, when there is a principal and an accessory thing, the principal is considered the most important. Only when it is not possible to establish the importance based on a ratio of incidental nature must we consider the value or volume.

  4. Integral Parts and Belongings:
    • Integral parts are elements of the compound or complex thing in question and are not susceptible to independent rights, nor separate performance from the thing to which they are incorporated.
    • Belongings are fixtures. The membership relation can be classified as an incidental nature relationship, established by an act of destination. The membership relation can occur between building and furniture or between two pieces of furniture. It is established through an act of destination by the owner of the principal thing and (presumably) the thing that will be the belonging. This relationship can be destroyed by an act of decommissioning.

  • The Fruits

Concept:

Fruits are the various profits and benefits obtained from a thing or heritage. Article 355 CC provides a classification to distinguish between natural fruits, industrial fruits, and civil fruits.

  • Natural fruits are the spontaneous productions of the earth and the offspring and other animal products.
  • Industrial fruits are those produced by cultivation or labor.
  • Civil fruits are the rent of buildings, land lease price, and the amount of perpetual or lifetime income.

Characters:

  1. Incidental Nature: The fruit is a utility produced by the parent thing and is subordinate to it. This characteristic becomes important when the ownership of the producer thing and the right to the benefit are separate.
  2. Repeatability: The fruit is likely to be obtained from the parent thing for a long time.
  3. Periodicity: The fruits are regular productions but are not obtained at regular and constant intervals.
  4. Utility: The fruit is all that constitutes income, the increase in assets obtained as usual.
  5. Conservation of Substance: The fruits are things that are produced without altering the substance of the parent thing. The parent thing remains valid.
  6. Enforcement of the Economic Destination of the Thing: The fruit must be obtained according to the economic destiny freely chosen by the owner or agreed upon with them.

Acquisition of the Fruit:

The natural and industrial fruits are collected, meaning they are separated from the parent thing, or according to what is stated in Article 451 CC.

While pending collection, they are considered property by incorporation, so they follow the fate of the principal thing.

The acquisition of ownership does not require a special act of apprehension, but the fruit’s independence from the parent thing determines the time of acquisition of ownership.

Civil fruits are produced day by day. The amount to be received is divided by the number of days that the possession lasted.

Expenses:

Any person who receives the fruits has the obligation to pay the expenses incurred by a third party for harvesting and conservation.

This provision reflects a principle of justice and fairness that has three consequences:

  1. The criterion for payment of expenses is governed independently of the good or bad faith of the person who produced, collected, or retained the fruits and observes the legal standard for the objective fact of spending.
  2. The recipient of the fruits must pay necessary expenses but not voluntary expenses that have increased the value of the parent thing.
  3. Although the article does not specify quantitative limits, it is implied that excessive spending should be excluded.