What facts should be related to good faith when acquiring from an unauthorized person?
Author of the article: JUDr. Lukáš Dořičák, LL.M., MBA, ARROWS (office@arws.cz, +420 245 007 740)
Good faith is a central concept in the acquisition of an unjustified right, but the question is to what facts that good faith is to relate. Act No. 89/2012 Coll., the Civil Code, as amended (hereinafter referred to as the "CCC"), provides in Sections 1109 and 1111 that the acquirer's good faith must exist with respect to the transferor's authority to transfer the ownership right.[1] In contrast, Section 1110 of the NCC does not contain an explicit statement of the fact to which good faith relates.
However, I agree with Dobrovolná's view that good faith in the transferor's authority to transfer title should be required by analogy, also in view of the nature of the business activity based on the sale of used movable property.[2] The same conclusion in relation to Article 169 § 1 of the Civil Code is also mostly advocated by the Polish legal doctrine[3] (albeit in relation to bad faith).[4] However, there is also a minority opinion in Poland[5] , according to which good faith (or bad faith) refers to whether the transferor is the owner or not. Such an approach would, for example, preclude the acquisition of title from a commission agent if the transferee knew that the transferor was not the owner but believed that he was a commission agent entitled to transfer the property in his own name.
The Czech legislator did not go down the path of listing, even if demonstratively, individual typified facts that point to the acquirer's bad faith, unlike, for example, the Austrian legislator.[6] However, since the German Civil Code is in many respects based on the provisions of the CCC, § 368 CCC can be relied upon for the specific facts giving rise to a reasonable suspicion of the acquirer's good faith. These may include, for example, the special nature of the item (e.g. an item that does not occur in ordinary trade - a family antique), a conspicuously low price, known characteristics of the predecessor (e.g. a dealer in stolen goods), the predecessor's trade and other suspicious circumstances. [7]
The good faith of the purchaser may also be excluded by circumstances relating to the place where the contract was concluded (e.g. the place where the stolen goods are usually sold), the time (e.g. outside the normal business hours of the shop), but also many other factors. As a rule, it will not be possible to conclude that there is no good faith from a single isolated fact as set out above, but several such facts will have to be taken in conjunction with each other.[8]
The good faith belief in the transferor's authority may relate to different facts depending on the specific case. The basic premise and starting point is that the transferee must believe that the other party to the contract has the right to transfer title to the property, whether or not he is the owner. Most often, however, the bona fide acquirer believes that the other party is the owner and is not restricted in any way in its power of disposition. If the transferee knows (or ought to know and could have known) that the transferor does not have title to the thing transferred, he must justifiably but mistakenly rely on another fact from which he inferred the ius disponendi of the transferor.
In the case of an indirect representation, the transferee must be satisfied on the basis of objective facts that the representative has the authority to transfer the title. Thus, if the transferee assumes that he is entering into a contract with an authorised commission agent, he must be in good faith as to the previously concluded commission contract between the owner (as principal) and the transferor (as commission agent), whereby the commission agent has undertaken to procure the matter (sale of the property) on his own behalf for the principal and is therefore entitled to transfer the property in question. Conversely, however, good faith as to the gratuitous nature of the commission contract will not be required, since a gratuitous commission contract will be assessed precisely as a simple instruction in the form of an indirect agency. If these conditions are fulfilled, the acquirer may acquire title even if this notion does not correspond to reality (e.g. a commission or assignment contract is absolutely void). The same applies to other forms of indirect representation.
In the case of direct representation, it must be taken into account that good faith is assessed in relation to "the other party's right to transfer the ownership right", but the direct representative - unlike the indirect representative - does not represent the other contracting party, on the contrary, it is the represented non-owner (unauthorised transferor) itself, as it is the latter who is entitled to the rights and obligations arising from the conclusion of the contract (e.g. he is entitled to the payment for the transferred item, etc.). A bona fide acquisition is thus realised in cases where the transferor (the represented party) is in fact neither the owner nor the person entitled to transfer the thing, but the transferee assumes the opposite from objective facts. Or, in situations where an otherwise direct agent transfers the thing on his own behalf (he acknowledges that he is the owner or indirect agent - the other authorized party to the contract), when he is not, but the transferee is justified in believing otherwise.
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