Tradition in Chilean Civil Law

Posted on Oct 15, 2024 in Law & Jurisprudence

When Can Tradition Be Requested?

It is normal for tradition to be carried out immediately after the contract concludes (Article 681). There are three cases in which tradition cannot be requested:

When the title is conditional. The enforceability of the right is suspended.
If there is a pending term for payment of the thing. The effect of the term itself suspends the enforceability of the law (Article 681).
When a judicial decree has intervened under which the thing is retained or seized, the creditor has no right to demand delivery, and the assignor should not make it (Article 1578 No. 2 and 1464 No. 3). In these cases, tradition would have an illegal object and be sanctioned by absolute nullity.

Tradition Subject to Conditions

According to Article 680, paragraph 1, tradition can transfer ownership under a precedent or subsequent condition, provided it is expressed. The form must be agreed upon in the title prior to tradition. For example, a property is donated, and the contract stipulates that the donee must return the property if they marry before a certain age. Another example is an inter vivos trust, where the trustee has control, but subject to precedent conditions.

Normally, the condition should be expressed, but there are exceptions where the condition is implied, as in the tacit subsequent condition of Article 1489. Whether this condition affects tradition is debated. Ruperto Bahamondes argues it does not apply because Article 680 requires the condition to be expressed, thus excluding any implied condition. Most authors, including Peñailillo Alessandri, argue that ownership can be transferred under an expressed or implied condition. If tradition needs a title transferring ownership, and the title is resolved, it ceases to exist. This fulfills the implied precedent condition, so it is logical that tradition cannot survive. If recourse to Article 1489 terminates the contract, tradition would also terminate by applying the principles of resolution. The property would be returned as received under the resolved title, making Article 680 irrelevant.

Tradition Under a Suspensive Condition

The law addresses the scenario where the thing is delivered before fulfilling the condition. Here, the recipient acquires ownership without a new tradition, as it was done early. Claro Solar stated that tradition made under a precedent condition does not transfer ownership because the owner has not detached from it. However, if the uncertain future event occurs, the transfer is made. The domain transfer takes place fully upon the realization of the condition without any subsequent act or expression of will.

Tradition Subject to a Term

Although Article 680 does not consider it, tradition, or rather, the title transferring ownership, may be subject to a term. A suspensive term does not postpone the obligation to carry out tradition. Instead, the tradition is carried out now, but its effects begin on a future date. This is an early tradition, like one made under a suspensive condition, and the retention of title applies similarly. An extinctive term would extinguish the buyer’s ownership on a specific date. This is the case with a trust, where the refund should be made upon the owner-trustee’s death.

Ways to Make Tradition

There are four ways of tradition:

Tradition of real rights on a movable corporeal thing.
Tradition of rights over an immovable corporeal thing.
Tradition of inheritance rights.
Tradition of individual rights.

1. Tradition of Real Rights on a Movable Corporeal Thing

Governed by Articles 684 and 685, this can be real or fictitious. Real tradition is the physical delivery of the thing, allowing the purchaser to apprehend it materially, expressing the will to transfer and acquire ownership (Article 684, item 1). Fictitious tradition uses a symbol or sign representing the thing, placing it under the purchaser’s power. The term “meaning” in this section is crucial. It is a mistake to believe that tradition is always verified through the delivery of the thing, as delivery can occur without the intention to transfer ownership. Such intention is absent in contracts providing only mere possession but present in contracts transferring ownership.

Article 684 lists the following cases:

Allowing the apprehension of a present material thing.
Displaying the traded thing.
Handing over the keys to the place where the thing is stored.
Entrusting the thing to the other party at the appointed place.
The sale, gift, or other disposition where the title holder is a mere holder.
The mere contract in which the owner simply forks.

Tradition of movables by anticipation refers to the real tradition made with the owner’s permission by separating things from the property to which they were attached. Originally, the Supreme Court declared only real tradition under Article 685, excluding fictitious tradition. This differs from Article 571, which addresses the constitution of furniture in advance, not applicable to Article 685. The doctrine has concluded that these articles are not in conflict, as they address different aspects of furniture in advance. Article 571 defines the moment of creation, while Article 685 sets how tradition is carried out.

Limited traditional forms of Article 684. Claro Solar stated that the provision is not exhaustive and does not exclude other ways of making tradition. Some sentences agree. Other authors disagree, arguing that Article 684 refers only to fictitious forms. Pescio argues that fictitious forms, being creations of law, are exceptional.

Comparative value of real and fictitious tradition. It is debated whether both have the same value. Fictitious tradition lacks physical movement of the thing, increasing the likelihood of conflict. The transferor may make tacit tradition and then real tradition of the same thing to different people. Article 1817 solves this problem for sales. The buyer who first takes possession is preferred because they had tradition in their favor. This implies that both forms of tradition have the same value, with priority determined by which occurred first. Foreign authors suggest that real tradition should have more value to protect third parties. Tacit tradition does not inform third parties of the change in the thing’s status; publicity only occurs with real tradition. Thus, the second purchaser, a third party, was not in a position to know they were buying someone else’s property. Protecting them requires giving more value to their real tradition. In Chile, this problem is only relevant to sales and barters, considering Article 1817. It could apply to donations, but lacking a specific rule, applying the rule of sale by analogy seems reasonable.

2. Tradition of Rights Over an Immovable Corporeal Thing

This is done by registering the title in the Real Estate Registry (Article 686), except for servitudes, which are established by public deed where the assignor and purchaser express their acceptance (Article 698). However, urban sewer easements can only be acquired through a public deed registered with the Real Estate Registry (Article 1 of Law No. 6977).

Late Registration in Chilean Law

The Real Estate Conservatory Registry has four legal purposes:

Performance of tradition (Article 686).
Notice of the estate, making its changes, charges, and divisions visible to all. This preserves the history of real estate and allows knowledge of its charges, preventing scams against third parties.
Requirement, guarantee, and proof of possession of real estate:
1. Prerequisite for acquiring possession of property (Article 724).
2. Proof of possession (Article 924).
3. Guarantee to keep possession (Articles 728 and 2505).
In some cases, an act or solemnity of a contract imposed on real estate, such as irrevocable donations (Article 1400), usufruct constitution (Article 767), right of use and habitation (Article 812 compared to 767), trusts (Article 735), census constitution (Article 2027), and mortgage constitution (Articles 2409 and 2410).

Types of Records

Chile operates a personal registry. Two types of registration exist in comparative law: real and personal. Real registration focuses on properties, each with a serial number and a corresponding sheet in the registry. All acts affecting the property are recorded, providing a clear view of its legal status. Personal registration is organized by the names of people affected by each entry. To know the history of a property, one must find the names of previous owners and review their records. Entries are made chronologically in different books.

Another system is the Torrens Act in Australia, where registration proves ownership. The owner presents the property’s background and a plan, which the State reviews. If compliant, two identical certificates are made, one for the owner and one for the registry.

Registration and Transcripts

Documents can be inserted into records through transcription (full copy) or inscription (key extract). The latter prevails in Chile.

Legality of Registration

A key feature of a register is its legality. Legality provides absolute security that registered rights holders have that capacity. It ensures the validity and effectiveness of the acts leading to the inclusion of property in the Register. The registered person must present their titles to the registry, where they are examined. If compliant, the property is registered. German law adopts the principle of legality in its registration system.