Tradition as a Way of Acquiring Ownership in Civil Law

Posted on Sep 9, 2024 in Law & Jurisprudence

III. Tradition

Article 670 CC

Tradition, derived from a verb meaning “doing things outside,” is the most crucial way to acquire ownership. Our right to acquire ownership requires more than just a title, such as a sale. We need a way to acquire it, and the most important way is tradition. Andrés Bello’s Civil Code (CC) departs from French and Roman law in this aspect. Roman law requires both a title and a way to acquire. The most important title preceding any tradition is the sale, but the sale itself doesn’t create ownership. This is evident in real estate. For example, if I buy an apartment and sign a purchase agreement, do I own it? No. The contract creates rights and obligations, such as the seller’s obligation to deliver the property through tradition. In real estate, tradition involves registering the title (sale) in the Real Estate Registry, which establishes ownership.

Tradition is crucial because the most important contract, the antecedent of tradition, is primarily the sale, which we engage in frequently.

In essence, contracts do not create REAL RIGHTS but rather PERSONAL RIGHTS.

Article 670 CC

Tradition is a way of acquiring ownership of things and consists of the delivery that the owner makes of them to another, having on the one hand the power and intention to transfer ownership, and on the other the ability and intention to acquire it.

What is said of ownership extends to all other property rights.

The Dual Legal Nature of Tradition:

  • It is a way to acquire ownership.
  • It is a convention that extinguishes obligations and therefore constitutes a payment. (Payment is a way to extinguish obligations).

Example:

I buy an apartment. We execute a deed, which is the formal act. This creates the seller’s obligation to deliver the property. When we speak of tradition, this delivery by the seller is a convention that extinguishes their obligation to deliver. Ultimately, extinguishing the obligation to deliver means fulfilling it, and fulfilling an obligation is paying. In short: Tradition is a payment.

Analysis of the Definition of Tradition in Article 670 CC:

  • The CC assumes that the person making the tradition is the owner of the thing. This is the norm. When the person performing the tradition is the owner, the legal effect is the transfer of ownership to another (normal effect). However, in our law, the sale of another’s property is valid, and consequently, so is the tradition.

Article 1815 CC

The sale of another’s property is valid, without prejudice to the rights of the owner, and the sale is valid as long as it is not extinguished by the lapse of time.

Example:

If you buy someone else’s property and the tradition is carried out (the CC states that the sale of another’s property is valid, and the professor adds that the tradition is also valid), it does not produce the usual effect of transferring ownership. However, the buyer acquires possession of the thing, and the TRADITION WILL ACT AS A TITLE OF OWNERSHIP, allowing the acquirer, under these conditions where the person making the tradition was not the owner, to acquire ownership through adverse possession.

Explanation:

Tradition requires a title, which is usually a sale. If the seller is the owner and the person performing the tradition is the owner, the usual effect is the transfer of ownership. If the seller is not the owner, the sale is valid, and the tradition is also valid, but it does not produce the usual effect of transferring ownership. However, the buyer acquires possession of the thing, and the TRADITION WILL ACT AS A TITLE OF OWNERSHIP, allowing the acquirer, under these conditions where the person making the tradition was not the owner, to acquire ownership through adverse possession over time.

  • The CC states that one party must have the power and intention to transfer ownership. This power requires:
  • Ownership of the thing: This is ownership, subject to the validity of the sale of another’s property. However, it is normal for the person to be the owner.
    • CAPACITY TO EXERCISE: The person may lack this capacity and must act through legal representation.
    • The thing must be disposable: I own it and have full capacity to dispose of it, but I want to dispose of a right to food. This right is personal, and the tradition is not legal.
    • There are no external factors preventing the tradition: I own it, I have the capacity to exercise, it is not a right that cannot be transferred or sold, but it is a property seized by court order. I have the capacity to dispose of it, but until the seizure is lifted, I would be facing an unlawful purpose. Article 1464 CC.
  • This requires the acquirer to have capacity and intent to acquire. Article 1578 CC. Within the means of acquiring obligations, and specifically within payment (because tradition is ultimately a payment)

Article 1578 CC

Payment made to the creditor is void in the following cases:

1. If the creditor does not have the administration of their property, except as it is proven that the thing paid has been used for the benefit of the creditor, and as this profit is justified under Article 1688;

2. If the court has seized the debt or ordered to withhold payment;

3. If paid to an insolvent debtor in fraud of creditors to whom a competition has been opened.

According to Article 1578, the capacity required in the acquirer is the capacity to manage, which is not the same as having the capacity to exercise. It is the ability to manage one’s property. Therefore, if the creditor is not able to administer their property, the payment made is NULL, and there would be no tradition.

Capacity to Manage: For example, since 1989, women have been fully capable. Before that year, married women under the conjugal partnership regime were relatively incompetent and had their husbands as legal representatives. However, even if a woman is fully capable and we are dealing with a married couple under the community property regime, the husband manages not only the community property but also the woman’s private property. Or if the tradition is carried out by a minor (relatively incapable) or an insane person (completely incapable).

REQUIREMENTS OF TRADITION:

1. Subjective: Presence of an Assignor and a Buyer:

The assignor is the one transferring ownership, and the buyer is acquiring ownership. As a convention, tradition can also be carried out through representatives, who can be legal or conventional (i.e., through an agent or a trust agreement). This means that either the buyer or the assignor can be represented. For example, a parent can represent a minor child, a guardian can represent an insane person, etc. Representation is a form of legal act. The CC even addresses the case of forced sales by auction. Who is the assignor in this case? When a property is brought to auction, it is represented by THE JUDGE, who acts as its legal representative. Representation in tradition operates as described in Article 1448 CC and Article 671 CC (which defines the assignor and the buyer).

2. As tradition is a convention, there must be a will in both the assignor and the buyer:

Will is the faculty that allows us to do or not do something. Since tradition is a legal act, a convention that extinguishes obligations, it requires both the assignor and the buyer to have a will that is externalized, serious, and not corrupted (free from error, duress, and fraud).

However, there are two important rules:

  • Article 672 CC. For the tradition to be valid, it must be made voluntarily by the assignor or their representative.

A tradition that was initially invalid because it was not made with the will of the assignor or their representative will be retroactively validated by the ratification of the person who has the power to dispose of the thing as owner or owner’s representative.

It was stated that there must be a will in both the assignor and the buyer. Here, the CC addresses the first case, “the will of the assignor.” Article 672 says “was invalid,” meaning that there is a defect of nullity, and it notes that this defect is invalidity “will have been done without the assignor or buyer.”

When a legal act lacks will, it would be doctrinally nonexistent. However, since the highest penalty in our law is absolute nullity, we would be dealing with an absolute nullity. But it can be validated by ratification, as absolute nullity can be overturned by time (10 years). An absolutely null act cannot be ratified by the will of the parties; it cannot be sanitized. Therefore, Andrés Bello made a mistake! If we interpret the rule literally, we would be dealing with a nullity, an absolute nullity, which can be ratified by the will of the parties (which would overturn all the theories of nullities). So the rule has been interpreted as follows: we are not dealing with a NULL act but rather with an unenforceable act, an act that is ineffective due to the lack of involvement of the true owner, who can ratify the sale. That is, nothing prevents the owner (the real owner) from ratifying this unenforceable act.

(The sale of another’s property is valid, therefore the tradition is also unenforceable, but the true owner can ratify this act, unless they have asserted their rights.)

The same applies when viewed from the perspective of the buyer:

  • Article 673 CC: Tradition, to be valid, also requires the consent of the buyer or their representative.

But the tradition that was initially invalid because it lacked this consent is retroactively validated by ratification.

3. A Title Prior to Tradition:

Existence of a title that transfers ownership. What kind of title? Those that by their nature serve to transfer ownership. The CC provides examples, such as the sale, the exchange (which involves exchanging one thing for another), the gift (in which one party agrees to deliver something and the other party accepts it without acquiring any obligation). Any antecedent of tradition requires a title that transfers ownership. But there are many more, such as the contribution of ownership to a company, the loan, the quasi-usufruct, the irregular deposit, the payment in kind, and the transaction when it concerns an uncontested object.

Regarding:

  • The contribution of ownership to a company: A company is a contract where the parties agree to contribute something with the intention of sharing the profits that arise from it. Contributions to a company are usually money, but sometimes tangible movable or immovable property is contributed. Example: We form a real estate company and contribute a property to it. This contribution of ownership is a title that transfers ownership. Why? Because I contribute that property, and the company, which has its own legal personality, becomes the owner of that property. It will be registered in the CBR on behalf of the company. Therefore, the contribution of ownership to a company is a title that transfers ownership.
  • Loan: It is a title that transfers ownership. Example: I ask for a bank loan, and the bank gives me $1,000,000. They give me the money, and I acquire ownership of that money. Therefore, it is a title that transfers ownership.
    • Quasi-usufruct: (Usufruct is discussed in terms of property rights, which are divided when the right of ownership is split. We can find ourselves in the presence of usufruct: I retain bare ownership and grant the right to use and enjoy. Usufruct applies to non-fungible things. That is, if I grant a usufruct over real estate, the usufruct is temporary, and there will come a time when I will have to return that real estate. It is said that usufruct is a title of mere possession of the thing given in usufruct. But if the enjoyment applies to consumable things, for example, I grant a usufruct over a certain amount of wood to a person, then the title of usufruct becomes a title that transfers ownership because that person will become the owner of that amount of wood, even though I will have to return the same amount of wood later. They become the owner). Quasi-usufruct is a title that transfers ownership.
    • Irregular deposit: It is a title that transfers ownership. The irregular deposit is important because it is part of the banking business. Example: I deposit $1,000,000 in my checking account. The money is there as a deposit. There is no checking account contract, so the bank must have it available for when I withdraw the money. However, it is a title that transfers ownership because it applies to a fungible thing like money. Therefore, the bank becomes the owner of that money, without prejudice to making it available to me in that bank account.
    • Payment in kind: This is a form of payment. Example: I commit to delivering a motorcycle with certain characteristics, but when the time comes to pay, my buyer agrees that instead of that motorcycle, I will deliver a latest model motorcycle. This is a payment in kind. What is payment in kind? A title that transfers ownership.
    • Transaction: The transaction concerning an object that is not in dispute. It is a title that transfers ownership. The transaction is a contract whereby the parties end a dispute that is pending in court or any legal proceedings. It is important to note that it can be used to avoid going to court. Therefore, it has two forms: to end a lawsuit that has already begun or to prevent one that could be started. This means that a transaction involves mutual sacrifices by the parties. For example, in this transaction contract, if we were litigating over the ownership of a specific property and we reach a compromise, this simply means that one of the parties withdraws their claim and some kind of compensation is agreed upon. In this case, there is a transfer of ownership. But if the transaction concerns an object that is not in dispute, there is another object that is in dispute and is registered on page X, Issue X: that is the object of the lawsuit, and we reach a compromise with a party that will keep a vacant lot on the outskirts of Temuco. What is the transaction about? It is about an object that is not in dispute, and therefore the transaction constitutes a title that transfers ownership. If the agreement is reached on the specific property, it will be a declaratory transaction, not a title that transfers ownership, when the transaction concerns an object that is not determined.

We said that tradition is a convention, which requires will. What does the CC say about what happens when there is an error? The CC states that for the validity of tradition, there must be no error as to the identity of the species to be delivered, the person to whom delivery is made, or the title. This error refers to a defect, but in some aspects, it repeals the general principles regarding error, where:

a) Article 676 CC. It is also required for the validity of the tradition that it does not suffer from error as to the identity of the species to be delivered, or the person to whom delivery is made, nor as to the title.
If only the name is mistaken, the tradition is valid.

The error refers to the species to be delivered, meaning that there is no error or misconception about the facts or the right concerning a thing or a person. What happens when there is a fundamental error? That is, when this error concerns the identity of the species on which the tradition is being carried out. For example, if I know that one party thinks they are buying a TV and I give them a computer screen, this error vitiates the tradition. This provision also states “or of the person to whom delivery is made.” Does error in the person vitiate consent? In general terms, it does not vitiate consent unless the person is the main reason for the celebration of the act or contract. But here: THE ERROR IN THE PERSON VITIATES THE TRADITION. In summary: in general, error in the person does not vitiate consent, but in this case, it DOES. There can also be no confusion as to the title (this is also a fundamental error). For example, one party believes they are making a donation, and the other party says that it is only being delivered as a loan. In this case, there is confusion as to the title, which also invalidates the tradition.

Article 677 CC. The error in the title overrides the tradition when one party understands it to be a transfer of ownership, such as when one party intends to deliver by way of loan and the other party intends to receive a grant, that is, when both parties assume titles that transfer ownership but are different, as if one party understands it to be a loan and the other a donation.

4. Delivery, which is different in the case of movable property, real estate, personal rights, or legal universals (inheritance):

  • THE TRADITION OF OWNERSHIP AND OTHER REAL RIGHTS OVER MOVABLE PROPERTY.
  • THE TRADITION OF OWNERSHIP AND OTHER REAL RIGHTS OVER REAL ESTATE.
  • THE TRADITION OF OWNERSHIP AND OTHER REAL RIGHTS OVER PERSONAL RIGHTS.
  • THE TRADITION OF OWNERSHIP AND OTHER REAL RIGHTS OVER INHERITANCE.

1. THE TRADITION OF OWNERSHIP AND OTHER REAL RIGHTS OVER MOVABLE PROPERTY (Tangible Property)

Article 684 CC

The tradition of a tangible movable must be made by one party to the other to transfer ownership, and this transfer must be represented by one of the following:
1. Allowing the apprehension of a materially present thing;
2. Symbolic delivery;
3. Handing over the keys to the barn, warehouse, chest, or any place where the thing is stored;
4. Taking charge of making the thing available to the other party at the agreed place; and
5. By the sale, donation, or other evidence of sale given to the person who has the movable as beneficial owner, lessee, pledgee, depositary, or any other non-ownership title, and by the mere contract in which the beneficial owner, borrower, lessee, etc., becomes the owner.

What are tangible movable properties? Things that can be transported from one place to another, either by themselves or by an external force. Example: A tangible movable thing that moves by itself is an animal. A tangible movable thing that requires an external force is a chair, a car, etc.

The tradition of tangible movable property is carried out as follows: One party (assignor) transfers ownership to another party (buyer). (This is the general rule in tradition).

The CC is more explicit and states that the transfer of ownership from one party (assignor) to another (buyer) can be materialized through acts or deliveries that can be symbolic. That is, they can be material or symbolic.

    • Material:

– Allowing the apprehension of a materially present thing (Article 684 No. 1). Example: I sell a pencil to a person, agreeing on the price. We enter into a sales contract, which is consensual (requires only consent). However, the seller must deliver the pencil. How is the delivery carried out? One party transfers ownership to the other (Article 684 No. 1).

    • Symbolic:

– Symbolic delivery (Article 684 No. 2)

– Handing over the keys to the barn, warehouse, chest, or any place where the thing is stored (Article 684 No. 3). Example: When selling a car, the tradition is carried out by handing over the keys.

– Taking charge of making the thing available to the other party at the agreed place. Example: I buy all the wheat production from John Doe and tell them to put the wheat in the silos on my property. The seller is instructed to put the thing in the agreed place.

– By the sale, donation, or other evidence of sale given to the person who has the movable as beneficial owner, lessee, pledgee, depositary, or any other non-ownership title; The Romans called this CONSTITUTUM POSSESSORIUM. Example: I am leasing a movable property (a backhoe). I have possession of the thing, but I sell it. It was said that contracts create rights and obligations and do not transfer ownership. However, in this case, it does transfer ownership because I have the thing under a mere possession title, but now I have a title that transfers ownership, which is the sale. Since I already have the thing, I do not need to deliver it again. I simply have to acknowledge that I am selling it, and since I have sold it, I have to deliver it. Therefore, in this case, the title that transfers ownership is created when I have the thing under a mere possession title.

– And by the mere contract in which the beneficial owner, borrower, lessee, etc., becomes the owner. This is the reverse of the previous situation, where the owner of the thing is the beneficial owner, meaning that the other party retains bare ownership, or the borrower is me. I am the owner, and I have lent the thing for use, and the other party becomes the owner, or the lessee. For example, I am the owner of the bulldozer, but I remain as the lessee, and the other party becomes the owner. It is the reverse of the previous situation.

2. THE TRADITION OF OWNERSHIP AND OTHER REAL RIGHTS OVER REAL ESTATE

What are buildings? They are things that cannot be transported without being destroyed.

A property can be classified as real estate by:

  • Adhesion: The soil, land.
  • Destination: In this case, things that are not naturally real estate are considered real estate by law because they are permanently attached to the land or are permanently intended for the use, cultivation, or benefit of a building. They are considered immovable property, but they are not actually immovable. For example, a building consists of many movable things, and because they are permanently attached to the land, they are considered real estate.

How is the tradition of real estate carried out? (Considering only real estate by nature) By registering the title in the respective Real Estate Registry. Whether the title is a sale, a donation, an exchange, a transaction when it concerns an uncontested object, a contribution of ownership to a company, and so on (provided it is real estate).


PURPOSE OF THE CONSERVATORY REGISTRATION

    • It is the only way to carry out the tradition of real estate and the real rights incorporated in them.
    • It gives publicity to ownership. Anyone can consult the registry, but what gives it the character of being effective against third parties? The prohibition, the registration of prohibitions (but) the prohibition of acts and contracts, the registration of the judgment that declares ownership by adverse possession.
    • It preserves the history of the property.

Registration is:

REQUIREMENT, PROOF, GUARANTEE, AND POSSESSION OF REAL ESTATE

Requirement: Article 724 CC. Because possession of real estate is acquired by registration, and there is no other way.

  • Proof: Article 924 CC. The only way to prove ownership of real estate is by registration in the CBR registry.
  • Guarantee: Article 728 CC. Because the registration of real estate is valid against acts of seizure of building materials. The only way to lose possession acquired by registration is through the cancellation of the registration.

Ownership is proven by adverse possession. Registration is proof of ownership. Regular ownership: 5 or more years. And if it is irregular possession, it is 10 years (over time).

Another purpose of the conservatory registration is that registration constitutes the solemnity of certain events:

It is also said that registration is the solemnity for the establishment of a usufruct over real estate. This is not true.

It is said to be the solemnity for a mortgage. This is not true.

This is not true because the registration of the mortgage and the registration of the establishment of a usufruct constitute the tradition of these rights, not their solemnity.

In all these cases, the conservatory registration constitutes the tradition of these rights. It is not a solemnity or a ceremony, but the tradition of the property right in the case of a trust, the right of usufruct when it applies to real estate, the mortgage when it applies to real estate, etc.

In none of these cases is registration a solemnity.

Articles 1409 and 1410 CC. According to these articles, it is noted that the solemnity of mortgages is the public deed. But if read literally, it would seem that registration is also the solemnity of a mortgage. However, it is important to understand that: REGISTRATION IS THE TRADITION OF THE RIGHT OF MORTGAGE. Article 2409 CC. Article 2410 CC.

The CBR is not a censor. The CBR must register public instruments related to the constitution of encumbrances, the transfer of property rights, the constitution of prohibitions. The CBR must take a passive role, but sometimes the registrar departs from this passive role and may refuse to make a registration. If the CBR refuses to register, then it is possible to appeal to the courts. Example: The CBR refuses to register because the boundaries are unclear.

As for movable property, there are certain movable properties that follow this registration system, not in the CBR but in other agencies, due to their value. The law, in these cases, gives them the same value as real estate. Example: Motor vehicles. Contracts are consensual, even though they are usually formalized in notarial deeds (the vehicle is individualized, the price is set, the buyer pays the price). The sales contract is taken and registered in the Motor Vehicle Registry, not the CBR, but it is under the responsibility of the Civil Registry. The registration of a motor vehicle in the Motor Vehicle Registry of the Civil Registry means that there is a presumption of ownership (but it is simply a legal presumption).

Other movable properties that follow this registration system are: ships. There is a registration system managed by the Coast Guard, where ships are registered with a registration number. This registration creates a presumption that the person registered as the owner of a ship is the owner.

The same applies to aircraft, and the registration system is managed by the Directorate of Civil Aviation.

In horse racing, racehorses have a registration system called the studbook.

The tradition of easements can apply to real estate, but registration in the CBR is not required for their tradition.

The tradition of easements is carried out by means of deeds, and the law states that it can be the same act or contract where the easement is established. This is an exceptional case.

3. THE TRADITION OF OWNERSHIP AND OTHER REAL RIGHTS OVER PERSONAL RIGHTS

Article 699 CC

The tradition of personal rights that one individual grants to another is carried out by the delivery of the instrument made by the transferor to the transferee.

Article 1901 CC

The assignment of a personal credit, by whatever title it is made, will not have effect between the transferor and the transferee except by delivery of the title.

The tradition of personal rights is carried out by the delivery of the instrument made by the transferor to the transferee. (This is perfect).

Example: Assignor, who is the creditor, and transferee, who acquires the credit.

4. THE TRADITION OF OWNERSHIP AND OTHER REAL RIGHTS OVER INHERITANCE

Inheritance is a legal universality, a diverse set of assets. Inheritance is acquired:

  • Normally: by succession upon death. The heirs acquire the deceased’s property.
  • But it can also be acquired by prescription, and this happens when the heir has obtained actual possession of the inheritance (5 years). However, there is a merely formal heir who does not have actual possession but essentially has this legal universality, which is the inheritance. How is inheritance acquired by prescription in this case? It is acquired by prescription after 10 years. Article 704 No. 4 CC (which refers to the apparent heir). Therefore, if the apparent heir obtains actual possession, it serves as a title to acquire by prescription after five years. Article 1269 CC.

It can also be acquired by tradition. How is the right to inheritance acquired by tradition? One thing must happen: the deceased must die. After the deceased dies, we can talk about the tradition of inheritance rights, and this happens when one of the heirs transfers their inheritance rights to another heir. When we speak of the tradition of inheritance, we are referring to inheritance rights concerning the entire estate or a share of it. We can NEVER talk about the tradition of inheritance rights before the deceased dies because agreements on future inheritance are prohibited (they are illicit).

Article 1801 CC

The sale is said to be perfect from the moment the parties have agreed on the thing and the price, with the following exceptions.

The sale of real estate, easements, and ground rents, as well as the sale of hereditary succession, are not considered perfect before the law until a deed has been granted.

So, how will the acquisition of this inheritance be carried out? By tradition. And how is the tradition of inheritance rights carried out? By any means, I suppose. And what will be the title? The sale, in our example, where the children transfer all their inheritance rights to their mother by means of a deed.

Inheritance is a diverse set of assets, a legal universality. When the tradition of inheritance takes place, and it is stated that PEDRO, JUAN, and DIEGO transfer all their inheritance rights from their mother, Clotilde, and within these inheritance rights there is real estate, what should be done with the deed of transfer of inheritance rights? The deed should be taken to the CBR, and the registrar should be asked to make a marginal note, regardless of the registration of ownership of the property that is part of the inheritance, stating that the inheritance rights with respect to this property were transferred on date XXXX. This is a practical solution, as there is a legal vacuum in this area.