Contemporary Problems of Social Work
Protection of property rights of bona fide purchaser
Автор/Author: Gevorkov V.S.
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Domestic civil law, that over the past three decades has undergone the process of fundamental reform, nevertheless did not find a clear approach to the problem of protection of property rights of bona fide purchasers. Due to the lack of proper understanding and legal basis for the protection of own rights, today bona fide purchaser is the most vulnerable participant in civil commerce. The specific mechanisms for the improvement of legal regulation for the protection of rights of a bona fide purchaser have never been developed in the scientific community. As a consequence – a quite contradictory jurisprudence was established in our country. From this position, in the framework of this paper it is reasonable to conduct a comprehensive analysis of the problem under investigation, with the identification of the features of its origin, current situation and proposing ways for further development.
Any protection of the rights of bona fide purchasers was absent in the Roman private law. Guided by the formula «Ubi rem meam invenio, ubi vindico» (from Lat.
"Where I find my thing there I vindicate it"), the owner had the unlimited right to claim his property, regardless of conditions of disposition. And although there were exceptions to the general rule, when the property in favor of the purchaser was alienated by the state, that in its turn did not have the ownership right it was recognized as the property of the person that accepted it, however, this situation has been hindering the development of trade relations. Therefore, the opposite principle of the German customary law «Hand muss Hand wahren» (from Deutch "The hand is responsible for the hand") has evolved in medieval jurisprudence, by virtue of which the owner had the right to reclaim at least only the property which he lost against his will. If the property was voluntarily entrusted by him to someone, he was deprived of the opportunity to reclaim the property from a bona fide purchaser, although he was entitled to claim damages from unauthorized transferor. The modern vindication model formed on the basis of this principle, optimally combining the conflicting interests of the owner and a bona fide purchaser, was accepted by all legal systems of Roman-Germanic legal family.
Article 8 of the Constitution of the Russian Federation regulates the recognition and equal protection of private, state, municipal and other forms of ownership. Specifying the protection of private property at the head of the list, the legislator stated that human rights and freedoms are the supreme value of a democratic state, and their recognition, observance and protection is the responsibility of the state. At the same time, clause 3, art. 55 of the Constitution of the Russian Federation and part 2 clause 2, art. 1 of the Civil Code of the Russian Federation provides for the possibility of limiting civil rights under federal law in order to protect the constitutional order, morality, health, rights and lawful interests of other persons, provision of national defense and security of the state. From this perspective, the guarantees of the rights of bona fide purchaser, referred to in Article 302 of the Civil Code at the same time limit and violate the rights of the original owner.
From the content of the art. 302 of the Civil Code of the Russian Federation follows that bona fide purchaser is a party to the civil commerce, who did not know and could not know that the property acquired by him was deprived by the person who had no right to perform this action. Etymologically, the term "bona fide" comes from the words "clear conscience" and can be interpreted as "truthful, honest, strictly God-fearing in action", "honestly performing own duties ...". К.И. For example, K.I. Sklovsky, defines integrity as a state of person's will, which is characterized by lack of knowledge of any objective and legal obstacles for the achievement of objectives pursued by him for the acquisition of private law. However, the legislator's indication to the wording "could not know" means that just passive purchaser's ignorance of the objective or legal obstacles is not enough, and therefore in the definition of good faith should be pointed out that in the period prior to the acquisition, the person shall also effect the active steps to identify circumstances that violate the rights of third parties. These actions would ensure the legitimacy of his rights on the purchased property and minimize the risk of subsequent disposal. In particular this applies to compliance with all requirements of the legislation in force for the conclusion of the transaction, such as: conclusion of an agreement in writing with an indication of all material conditions, including the real value of the property, confirming the compensatory nature of the transaction. In addition, a set of activities preceding the acquisition, shall include the acquisition of information on registered rights and encumbrances on the alienated piece of property, previous related transactions, checking the legal capacity of the seller, or the powers of his representative acting by proxy, drawing up an acceptance certificate, state registration and insurance against risks of loss of property rights. It should be noted that no safeguards will be unnecessary, since the presence of at least one circumstance allowing judging the acquisition of property from an unauthorized transferor, knowing to the person may serve as a basis for challenging the transaction. Thus, the bona fide purchaser shall mean a person who, for objective reasons does not have sufficient knowledge about the circumstances preventing the acquisition of rights by him, despite the exercise of due diligence and prudence.
It is reasonable the proclamation of the principle of good faith as a fundamental principle of civil law and the principle of mandatory for all participants in civil commerce, in art.1 of the Civil Code of the Russian Federation, Especially because this category is well-known for domestic legislation. For example, in some cases, the inability to use the analogy of the law to determine the rights and obligations shall be compensated using the requirements of reasonableness, fairness and integrity. (clause 2, art. 6 of the Civil Code of the Russian Federation). Clause 5, art. 10 of the Civil Code of the Russian Federation assumes, that the limits of the exercise of civil rights shall be defined on the basis of a bona fide of participants of civil relations.
In domestic civil law the consolidation of such a principle has been previously discussed. Thus, A.A. Chukreev determines the principle of bona fide as the responsibilities of the participant of civil relations to take care of the rights and legitimate interests of other participants of property commerce by using his rights and performing his duties. L.V. Shchennikova proposed to include this principle in the list of principles of civil law, the observance of which, according to the author, is necessary in the exercise of subjective civil rights and duties. "Bona fides – she writes – is respect and loyalty to the assumed obligations, the own honesty and trust in someone else's integrity." According to I.B, Novitskiy, "on the etymological meaning bona fide hides such elements as: knowledge about the other person, about his interests; knowledge related to the well-known benevolence; element of trust, confidence that the moral foundations of the commerce are taken into account that each person in its behavior relies on them." G.N. Amfiteatrov considered bona fides as excusable misconception (ignorance, ignorance of the facts), but the essence of it he seen in determining the degree of required care of participant in civil commerce.
The importance of bona fide availability in the actions of the purchaser cannot be overestimated, in the end; the court satisfaction of vindication requirements of the non-owing owner depends on the circumstance. According to clause 1, art. 302, if the property is acquired for value from a person who had no right to alienate it, of which the purchaser did not know and could not know (bona fide purchaser), the owner has the right to reclaim the property from the purchaser when the property is lost by the owner or the person to whom the property was transferred into possession by the owner, or stolen from one or the other, or withdrawn from their possession against their will in another way. An exception is the cash and securities that cannot be claimed from a bona fide purchaser (clause 3 of Art. 302 of the Civil Code of the Russian Federation). Within the meaning of these provisions, the court shall determine that the property is excluded from the possession of the person to whom it was transferred into possession by the owner, in view of these circumstances, and that the purchaser has purchased the property for value and did not know and could not know that the property was acquired from a person who was not entitled to the alienation thereof. In this regard, it is clear that in order to eliminate the uncertainty in the appurtenance of the ownership right, it would be appropriate to supplement art.
302 of the Civil Code by the provision on the transition of property right to a bona fide purchaser in cases where vindication is impossible.
The bona fide purchaser protected by the provision of art. 302 of the Civil Code of the Russian Federation for a long time remained defenseless against restitution (clause 2 art. 167 of the Civil Code of the Russian Federation) – the so-called action of enforcement of implications of an invalidated transaction, as a result of which the transaction on the alienation of disputable thing was invalidated due to the lack of transferor’s authorization and the purchaser was deprived from the thing acquired by him for value. In dealing with such disputes the arbitration courts were guided by the decision of the Plenum of the Supreme Arbitration Court of the Russian Federation dated 25.02.1998, No. 8, which explained: "If the owner run a claim on declaration of the purchase and sale transaction and on the return of the property transferred to the buyer as invalid, and in the resolution of the dispute it will be determined that the buyer meets the requirements imposed on a bona fide purchaser, the claims for the return of the property shall be dismissed." However, the courts of general jurisdiction, not taking into account a bona fides of the purchaser, widely used restitution and returned property to its original owner, and a bona fide purchaser was deprived of the purchased property, without having a real opportunity to protect his ownership interests by collecting the amount of the paid purchase price and other damages from the seller, who at the moment has spent the proceeds from the sale of an apartment. By the order dated 21.04.2003 No.6-P "On the case on the constitutional review of the provisions of clauses 1 and 2 of art. 167 of the Civil Code of the Russian Federation with a view to claims of citizens O.M. Marinicheva, A.V. Nemirovskaya, Z.A. Sklyanova, R.M. Sklyanova and V.M. Shiryaev" the Constitutional Court of the Russian Federation confirmed the impossibility of seizure of a thing by restitution from the person, meeting the requirements of art. 302 of the Civil Code of the Russian Federation. In addition, the Court concluded that the protection of the rights of the owner, who is not a party to the transaction, is possible only by settlement of the vindication claim. The grounds provided by the art. 302 of the Civil Code of the Russian Federation, entitling to reclaim the property from a bona fide purchaser (gratuitousness of acquisition of the property by a bona fide purchaser, withdrawal of property from the possession of the owner against his will, etc,) are needed for such claim.
For the first time the bona fide purchaser had an opportunity to legalize his ownership right by the introduction of changes to the art.
223 of the Civil Code, that provide the creation of his ownership right to real property since its state registration, except for the cases
stipulated by art. 302 of the Civil Code when the owner has the right to reclaim such property from a bona fide purchaser.
Another problem of the issue under investigation is the protection of bona fide purchaser in the event of reclaim of his property by the owner according to the rules of Article 302 of the Civil Code, which resulted in the bona fide purchaser remains without the acquired property and without money paid on account of the property. The European Court of Human Rights by judgment in the case of "Gladyshev against Russia" dated December 6, 2011 has expressed the principled position on the issue under investigation, acknowledging the violation of Article 8 of the Convention for the Protection of Human Rights and Fundamental Freedoms (hereinafter – the Convention) and Article 1 of Protocol 1 to the Convention, that expressed in non-compliance with the applicant's right to respect for his habitation and his deprivation of property. According to the circumstances of the case, the applicant purchased the apartment where she lives with her son. The seller of apartment, V, in turn, bought it from E, who acquired the ownership of the apartment by privatization. Due to the availability of information that E. acquired the apartment by deceptive means, the residential department filed a claim for recognition of the contract of privatization and all subsequent transactions involving the apartment as invalid. The applicant filed a counterclaim for her recognition as a bona fide purchaser. By the decision of the District Court dated July 9, 2009 it was found that "... the privatization of the apartment by E. was fraudulent." With regard to the applicant, the court found that she is a bona fide purchaser within the meaning of Article 302 of the Civil Code of the Russian Federation. However, since the apartment, being privatized fraudulently, was withdrawn from the ownership of the city – its lawful owner – against his will, the applicant was deprived of the ownership right to the apartment and the apartment was returned to the city. The court ordered the eviction of the applicant without compensation or offer of alternative accommodation. ECHR stated the following position: "... Any interference with the property should not only be legal and have a legitimate purpose, but also satisfy the requirement of proportionality. As repeatedly stated by the Court, a fair balance between the needs arising from the common interests of society and the need to protect fundamental human rights must be set ... The necessary balance will not reached, if the person concerned bears an individual and excessive burden ... ". Noting that the ownership of the applicant to the apartment was declared invalid "... in connection with fraud in the procedure by which the apartment was privatized by a third party as a result of the detection of forged documents ...", the European Court focused on the fact that "... these procedures were carried out by authorities in the exercise of the state power. » The European Court noted that the fact of forgery could be identified on the stage of solving the problems with registration of E. at place of residence and privatization of the disputed apartment. According to the European Court, "... there was nothing preventing the authorities responsible for documents of E. relating to registration, social rent and privatization, to verify the authenticity of the documents before meeting her needs. Exactly the state has exclusive competence to determine the conditions and procedures, by which it disposes of its assets to persons who, as it believes, have a right, as well as exclusive competence to supervise the compliance with these conditions. Moreover, subsequent transactions related to the apartment also had to be legalized by the state ... i.e. under the procedure designed to ensure additional security of the holder of the right to property. «The European Court concluded on the violation of the Convention, as "applicant's rights under Article 8, have been completely excluded from the mind when it came to a maintenance of balance between her personal rights and interests of the city ..." and ordered that "the respondent State is to ensure.....full recovery of the applicant's title ... to the apartment and the abolition of the decision on her eviction. »
However, this single case is the exception to the rule, since in the vast majority of cases, when the original owner is a natural person, in practice, the court takes his side. In this context the decision no. 10/22 of the Plenum of the Supreme Arbitration Court of the Russian Federation and the Plenum of the Supreme Court of the Russian Federation (hereinafter — the Decision no. 10/22), as well as the decision of the Plenum of the Supreme Arbitration Court of the Russian Federation no. 54 dated 11.07.2011 "On some issues of resolution of disputes arising from real estate contracts, which will be created or acquired in the future "(hereinafter — the Decision No. 54).
To fully restore the property status of a bona fide purchaser, which took place before the contract with the unauthorized transferor, the bona fide purchaser shall be able not only to return funds transferred to the unauthorized transferor, but also to recover damages from him. This situation in the current legislation was not explicitly resolved. In theory, two basic ways of protection of bona fide purchaser are offered:
- application of consequences of invalidity of the transaction (the so-called restorative requirement, Art. 167 of the Constitutional Code of the Russian Federation);
- application of the rules on liability of the seller in case of withdrawal of goods from the buyer (the so-called seller's responsibility for eviction, Art.
460-462 of the Civil Code).
The application of the consequences of invalidity of the contract as a way of protection of a bona fide purchaser has significant drawbacks. First of all, the restitution is bilateral and unauthorized transferor is entitled to request from a bona fide purchaser the property alienated to him, despite the fact that the property has been reclaimed by the owner from a bona fide purchaser. Secondly, the restorative requirement allows a bona fide purchaser to recover only the purchase price from the unauthorized transferor but not the losses that may be significant.
In addition, in accordance with clause 1 of the Decision No. 54 of the Supreme Arbitration Court of the Russian Federation the absence with the seller of the ownership right at the time of conclusion of the contract of sale, although prevents the state registration of transfer of ownership to the buyer, but is not the basis for recognition of the contract as null and void. It appears from this that despite of the absence of registered ownership of the seller, subject to the compliance with other requirements of the law the real-estate contract o is and shall remain valid. Despite the explanation of the Supreme Arbitration Court of the Russian Federation, in the jurisprudence it is preserved the tendency of recognition of the contract concluded by unauthorized transferor, as the null and void transaction, with reference to the provisions of Articles 168, 209 of the Civil Code of the Russian Federation. In this the jurists come from the lack of such person's authority to order, which is the sole prerogative of the owner.
According to the analysis of civil law, dedicated to the sales contract, such agreement has the legally binding nature, since it binds the seller's obligation to transfer the property to the ownership of the buyer and the obligation of the latter to pay for the property. In this case, the purchaser's right of ownership does not arise since the conclusion of the contract, but since the delivery of the thing or state registration of rights, unless required by law.
The position of D.O. Tuzov on the possibility to conclude the binding contract by the seller who at the time of its conclusion may not have ownership right to the alienated property and to purchase it at the time of execution of the contract is also noteworthy. This approach is supported by the clause 2, art. 455 of the Civil Code of the Russian Federation that allows for the possibility of concluding a contract of sale of goods, as available from the seller at the time of conclusion of the contract, or created or acquired by the seller in the future.
If at the time of transfer of the thing there will be no seller's ownership right, the transfer of ownership will be invalid due to seller's lack of regulatory power. However, the validity of the contract for the disposal of property is not disputable, since regulatory power at the time of its conclusion is not required. This fact allows the purchaser of such property to protect his rights by applying liability for eviction of the seller unauthorized to alienation. The seller's obligation to compensate the losses borne by the buyer, at the seizure of goods by third parties, is expressly provided for by art. 460, 461 of the Civil Code of the Russian Federation.
Thus, in the availability of the conditions to meet the vindication claim, the only way to balance the interests of the owner and a bona fide purchaser is the recognition of a liability agreement as valid and the transfer of property as invalid. On the one hand, the bona fide purchaser gets the legal right to file claim for damages to the unauthorized transferor, on the other — the owner is entitled to demand his thing by virtue of the invalidity of the transfer of property and lack of property rights with a bona fide purchaser.
For a wonder, a negligible amount of bona fide purchasers, who were deprived of the purchased property by the vindication claim, file with the court actions to unauthorized transferors for compensation of damages. Although as practice shows, such claims shall be satisfied without fail. For example, the Moscow City Court pointed out that the claims of a bona fide purchaser of the apartment for damages in an amount equivalent to the market value of the apartment, are justifiably satisfied. In case of the owner's withdrawal of property from the bona fide purchaser, the seller is obliged to reimburse all incurred losses to bona fide purchaser. Similar conclusions can be found in other judicial acts of courts of general jurisdiction.
In this sense the conclusions of the Eighth Appellate Court, which, dismissing the claim of the Ministry of Property Relations of the Omsk oblast for the recovery of land parcels from a bona fide purchaser, are indicative and were based on the lack of feasibility from a bona fide purchaser to subsequently recover damages from unauthorized transferor, who at the time was excluded from the Unified State Register of Legal Entities, for which reason the satisfaction would violate the legal rights of a bona fide purchaser..
In conclusion, it should be noted that the protection of the bona fide purchaser rights without exaggeration, is one of the pressing problems of modern Russian civil law and requires compliance with a reasonable and fair balance between the interests of all participants in civil commerce. Currently, there are favorable conditions for the formation of judicial practice, allowing greater use of rules of eviction to protect the bona fide purchaser in the reclamation of any property by the owner. A scientific principles formulated in this paper can be used in the further scientific development of the issues involved in order to improve the civil law.
 Dahl V. Explanatory dictionary of the living great Russian language. M., 2011. Vol. 1. P. 445.
 Ozhegov S.I. Dictionary of Russian language / edited by Professor I. Y. Shvedova. M., 2014. P. 150.
 Sklovskiy K.I. application of the norms of a good conscience in civil law of Russia // Economy and law. 2002. N 9. P. 81.
 N. V. Rabinovich “the Invalidity of Transactions And its Consequences”. L., 1960. p. 106-107; S. G. Shevtsov “Sale of Property Unauthorized Person”: : Synopsis .... PhD in Law Мoscow, 2004. p. 8; S. Kuzina “problems of Protection of the interests of bona fide Purchaser” // // Economy and law. 2006. No. 8. p. 115.
 See: A.A. Chukreev A.A. Integrity in the system of the principles of civil law // Journal of Russian law. 2002. N 11. S. 103.
 Shchennikova L.V. Principles of civil law: achievements of the civil law and zakonodatelnye effect // Scientific notes: interuniversity collection of scientific papers. M., 2002. Vol. 2. P. 58
 Novitskiy I.B. Principle of a good conscience in the project contractual law // Bulletin of civil law. 1996. N 6. P. 65.
 Voronoy V. Integrity as a civil law category // the Law. 2012. N 6. P. 29
 Federal law dated 30.12.2004 N 217-FZ "On amending article 223 of the Civil code of the Russian Federation and Federal law "On state registration of rights to immovable property and transactions with it" [Electronic resource] // Consultant Plus [Offic. page]. URL: http://base.consultant.ru/cons/cgi/online.cgi?req=doc;base=LAW;n=51008 (reference date: 15.02.2015).
 A review of the jurisprudence of the Supreme Court of the Russian Federation for the second quarter of 2012 (Overiden the Presidium of the Supreme Court of the Russian Federation of 10 October 2012) [Electronic resource] // Supreme court of the Russian Federation [Official. website]. URL: http://schschsch.wsrf.ru/Sewed.PHP?ID=8197 (reference date: 15.02.2015).
 The resolution of Plenum of VS Russian Federation No. 10 of the Plenum of the Russian Federation No. 22 dated 29.04.2010 "On nekotorykh issues arising in judicial practice in disputes related to the protection of property rights and other eternal rights".
 The concept of regulatory authorities quoted. by the book: Aces D. O. Restitution when the invalidity of transactions and the protection of bona fide purchaser in Russian civil law. M., 2007, P. 185.
 Ibidem p. 190.
 The definition of the Moscow city court dated 12.11.2010 in case No. 33-34591.
 ex: determine the St. Petersburg city court dated 05.07.2011 No. 33-8997/2011, dated 16.05.2011 No. 33-6966, from 14.04.2011 No. 5342, the Moscow city court on 24.01.2011 by case number 33-1625
 Postanovlenie Vosmogo arbitrazhnogo apellyatsionnogo suda ot 08.09.2011 po delu № A46-412/2011.