Serwis Komorników Sądowych

Enforcement against Movables

The object of enforcement are movables, material objects which are neither real estates nor their component parts. Movables do not signify liquids, gases in free condition (unless they are in closed vessels), fossils which are subject to mining law, nor personal goods, intangible goods of intellectual nature (e.g. literary, scientific, artistic work, inventions, trade marks), various types (electric, nuclear, light, heat) of power. Animals living in the wild (land and water animals and birds) are not movables, either, as they are not things. Other animals are considered movables in enforcement proceedings unless they are appurtenances of real estates. A component part of a movable cannot be a separate object of enforcement. It is possible to enforce against movables, which make up a part of co-ownership.

Enforcement against movables is the task of enforcement officer, who acts by the District Court, in whose region the movable is held at the moment the application is submitted. An alternative competence is provided (art. 844 § 2 of the CCP) together with competence arising from election (art. 8 § 1 of the L.E.O.). A change in the place where the movable is held during enforcement proceedings has no impact on an enforcement officer's competence.

Enforcement against movables is composed of the following:

1) attachment,

2) sale,

3) division of the amount obtained through enforcement against movables.

Enforcement officer seizes movables through entering them into a seizure protocol. In the protocol, he states the place and time when the movable was seized, identifies persons, who participated in the act, takes down comments to the proceedings of the acts, and in particular, the debtor's comments on third parties' rights to movables seized with indication of their addresses, he identifies movables seized noting their distinguishing traits and values, he makes a mention on the protocol having been read out, he has those attending sign the protocol or mentions the reason why it was not signed and affixes his own signature. The movable is seized the moment the enforcement officer signs the protocol. The enforcement officer is obliged to serve a copy of the protocol to the debtor and these co-owners of the movable seized who are not debtors. Together with the seizure document, the enforcement officer serves the debtor with a notification of enforcement proceedings being started.

Debtor's movables, which are held by the debtor are subject to seizure notwithstanding the legal relation, which is a basis for their possession. Debtor's movables are subject to seizure also when they are held by the creditor (e.g. when the creditor has a movable thing to which he has a right of pledge) or when they are held by third parties if the latter express their consent for the movables to be seized, admitting that they make up the debtor's property or when a particular provision allows for such seizure. In the case when the third party refuses to grant his consent for the seizure or does not admit that the movable is the debtor's property, the creditor may initiate an action for the seizure of the debtor's right for delivery of a thing (art. 905 of the CCP). The debtor is obliged to notify the enforcement officer on the rights of third parties to movables seized and to give their addresses. The enforcement officer notifies these persons on seizure (art. 847 § 2 of the CCP).

The movables being seized, the enforcement officer assesses the movables attached based on his own knowledge and experience, entering the value of each thing seized separately into the seizure protocol. In case, the enforcement officer has no expertise in a given branch, he may avail himself of an expert's opinion. When the creditor or debtor raises objections against assessments, the enforcement officer appoints an expert. The value assessed by the enforcement officer while seizing movables is liable to objections, which shall be reported to the enforcement officer and entered into the seizure protocol.

While seizing, the enforcement officer shall not seize more movables than necessary to satisfy the creditor's dues and the enforcement costs. Going in excess of this principle will give the debtor the right to request enforcement from the remaining assets be suspended (art. 799 § 2 of the CCP). No movables exempted from enforcement (art. 829-839 of the CCP) shall be seized. No movables shall be seized if it is obvious that the amount obtained from them shall not exceed enforcement costs (art. 824 § 1 point 3 of the CCP).

The creditor has the right to request attachment take place at his presence. The creditor's absence does not interfere with attachment. The debtor's participation is not necessary while seizing. In case of the latter's absence, the enforcement officer shall adopt one or two witnesses unless there is a risk that the lapse of time necessary to find witnesses will make the enforcement impossible. The enforcement officer places a sign showing attachment on the movables seized. The movables seized may be seized again to satisfy subsequent creditors. A new seizure is valid starting from the moment when it is noted in a seizure protocol. The same principles are applied during any subsequent seizure.

The creditor may request the movables seized be verified pursuant to the protocol. Verifying the movables, the enforcement officer ascertains it in the seizure protocol, marking differences between the first protocol and the condition existing when the verification is carried out.

The seizure has such effect that any dispositions of the movables made after the seizure have no impact on further course of proceedings and enforcement against the movable seized may be carried out also against its acquirer. This stipulation does not infringe provisions on the protection of acquirers in good faith (art. 848 of the CCP). Through seizure of movables, a debtor does not lose the rights to the object seized to which he is entitled. The debtor bears penal liability for concealing, removing, transferring, burdening or else damaging seized property or property liable to be seized with the purpose to make impossible the fulfilment of either a court judgment or a decision of any other state body, (art. 300 § 2 of the P.C.).

The enforcement officer transfers the movables seized under somebody's care or has movables taken to a storage area. The enforcement officer may leave the movable seized under the care of the debtor or of a person at whom the movable was seized or who held this movable (caretaker). The enforcement officer supervises the care over the movable and at any moment, for any important reason may transfer the thing under the care of another person. The enforcement officer bears liability for damages and with it jointly the Treasury of State pursuant to art. 769 of the CCP for any damage arising from lack of due diligence in the choice of caretaker. The caretaker is to store the movables in such a manner as to ensure their maintaining of value, to deliver the movables at the enforcement officer's request, at the joint request of the parties or at a court judgment, and to notify the enforcement officer of the intended changes of place of storing movables. The caretaker is liable to the parties for any damage incurred as a result of improper care (art. 857 § 1 of the CCP). Caretakers have the right to use the thing under their care in an ordinary manner, in accordance with its economic designation, if care is carried out by the debtor or a member of his family living together with him, and the third party under whose care the enforcement officer left the debtor's movables seized. Neither the creditor if the thing was delivered to him to take care of it, nor a caretaker who is not a debtor or a member of the latter's family is entitled thereto. The caretaker has the right to reimbursement for expenses for storage and to remuneration for care.

However, neither the debtor nor a member of his family has any right to remuneration when they hold the movable nor has the third party at whom the movable was seized. The function of caretaker is over, the moment the adjudication to the highest bidder comes into force.

Another stage of enforcement against movables is their sale. It cannot take place earlier than on the seventh day following the date of movables' seizure. An exception refers to movables, which are easily deteriorated or when care over them or their storage would cause excessive costs as well as when livestock has been seized, and the debtor refused its consent to have it under his/its care (art. 864 § 2 of the CCP). The sale of such movables may take place directly after seizure.

The C.C.P. provides for three forms of sale:

1) sale to entrepreneur, who deals in second-hand movables,

2) commission sale,

3) sale by public auction.

Unused movables seized, designated for trading shall be sold by the enforcement officer at the request of any party to an entrepreneur dealing in such movables (art. 865 § 1 of the CCP). The enforcement officer determines with him the conditions of sale, time and place of sale and the manner of movables handing over. Movables are sold by the enforcement officer to the entrepreneur at wholesale prices or, if there are not any, at prices lower by 25% from their estimated value. If the entrepreneur refuses to buy offered movables, the enforcement officer notifies the creditor thereof. If the creditor does not submit a request for a commission sale, the enforcement officer sells movables in a public auction.

Seized movables, not mentioned in art. 865 of the CCP, are liable to commission sale as well as those which are not mentioned therein but were not sold in the mode of this provision. The application of this form requests a motion of the creditor, and the enforcement officer is bound thereby. In case of such a motion lacking, the enforcement officer sells movables by way of an auction. The sale price of the movables seized is determined for commission sale as at estimated value adopted in the seizure. If the movables are not sold by the commission agent within one month, the commission agent has the right to reduce the sale price by 25%.

Movables which are not included in the disposition of art. 865 of the CCP (e.g. second hand things) and for which a motion for a commission sale was not submitted are sold on a public auction similarly to those unused movables which were not sold by an entrepreneur who deals in their trading. Principles and modes for a public auction are determined in the R.E.O.A. (§ 80-105).

To sell movables at a public auction, the enforcement officer determines the date of the auction, maintaining at least one week between the date and the publication. The enforcement officer notifies the public on the auction by a notification, which is served to the parties, the caretaker of movables seized and hung up in the building of the district for the place of sale. The auction is in form of public bidding. The public bidding shall start in the time determined in the notice on auction, however, not later than two hours afterwards. Any infringements to this principle will mean that the auction shall not take place. In such a case, the enforcement officer indicates a subsequent date for the auction. It is sufficient for the auction to take place if at least one bidder attends. There are persons who must not participate in the public bid. They are: the debtor, the enforcement officer, their spouses, the enforcement officer's children, the staff of the commission shop where the auction takes place, the persons who are present at the auction as officials, as well as a receiver of bankruptcy assets when the public auction refers to a component of bankruptcy assets. The starting price amounts to three fourths of the estimated value on the first auction date, and on the second date it amounts to a half of the estimated value. The enforcement officer summons bidders to offer bids. The offered price stops being in force the moment when another participant offers a higher price. The bidding is held until there are offers with a higher price. The last bid being repeated three times with a simultaneous, "who offers more", finishes the movable auction in case there are no further bids. The auction is completed by knocking down. Granting the knocking down, the enforcement officer notifies those attending that the movable has been sold to a defined person for a defined price and this is ascertained in the seizure protocol. At the moment of knocking down, any benefits arising from the movables belong to the acquirer. Both the creditor and the debtor have the right to complain against the knocking down which is reported in the auction protocol. The court's decision issued after consideration of the complaint on refusal to knock down causes it that the auction is deemed as not having taken place. And the price paid is liable to reimbursement. In such a case, the enforcement officer starts the auction once again. The enforcement officer acts similarly when the acquirer renounces its right to acquire the movable. The acquirer is obliged to pay the price immediately after knocking down the acquisition to him. When the price is higher than 500 PLN, he is obliged to deposit at once one fifth of the price but not less than 500 PLN and then pay the rest by noon of the following day. Failure to pay the purchase price in time (its total or its remainder) causes it that the acquirer loses the right arising from knocking down, and is excluded from any further auction. If the acquirer does not pay in time the rest of the price payable on the day following the auction, the enforcement officer determines the date of another auction, on terms and conditions of the first auction. The enforcement officer collects an amount which responds to one tenth of the purchase price from the acquirer who has not paid in time the price or its part, towards which the amount already paid by the acquirer is credited. Costs related to the auction are covered from the amount collected from the acquirer and any possible surplus is transferred to the Treasury of State. The court determines this question at the enforcement officer's request.

The transfer of the ownership right to the acquirer takes place after knocking down comes into force and the whole price is paid (art. 874 of the CCP). The acquirer becomes the owner of a movable with no charges. There are no claims arising from the warranty for physical defects and legal defects of the movable. No objections may be raised against the acquirer as to the validity of the acquisition. The movable is issued to the acquirer by the enforcement officer if he is its holder. When the movable is held by the debtor or caretaker, the acquirer requests they deliver it to him. If any of them refuses to deliver the movable, then the enforcement officer at the request of the acquirer initiates proceedings for the delivery of a movable and starts to take it over. Movables which were not sold and not taken over by the creditors are given back to the creditor after the decision on enforcement discontinuation has become valid.

If the first auction of movables does not take place within two weeks from the date the enforcement officer informed him that the first auction has not taken place, the creditor may request the enforcement officer to determine the date of another auction or he may take over the property of a part or of all movables which were to be auctioned for a price which is not lower than the starting price (three fourths of the estimated value). The enforcement officer shall comply with the declaration on movables taking over if the creditor pays the whole price or declares that he sets off the claim enforced with the purchase price. At the moment he submits his request, the creditor may take over the movable as his own also after the second auction, within two weeks after being notified by the enforcement officer that the second auction did not take place, for a price not lower than the starting price (a half of the movable estimated value).

The creditor who takes part in the auction may set off his/its enforced claim against the purchase price when he is the only enforcing creditor. If the enforcement is carried out also by other creditors, they may also set off their claims against the purchased price, if the purchased price is sufficient for their full satisfaction and for covering of enforcement proceedings cost.

After the decision on discontinuation of proceedings against movables unsold or not taken over as own comes into force, the enforcement officer returns it to the debtor. If the debtor does not collect the movable, it is transferred to the State as its property in accordance with the provisions of the Decree of 18th September 1954 on Liquidation of Uncollected Deposits and Uncollected Objects (Journal of Laws no 41, item 184).

In the enforcement proceedings carried out pursuant to the provisions of the Regulations issued by the Minister of Justice on 2nd August 1991 On Manners of Enforcement of Fines, Penalties, Court Fees and Costs of Proceedings (Journal of Laws No 77, item 339) pursuant to § 7, movables attached which were not taken over are sold by the enforcement officer at a price determined on his own, however, not lower than one half of the estimated value of these movables. If such a sale does not come into force, the enforcement officer sells movables attached at a price determined on his own to a proper social organization which conducts educational, cultural or charitable activities.

The sum gained from enforcement against movables is divided, and this is the last phase of proceedings which takes place only when the sum gained from the enforcement is not sufficient to satisfy all creditors (art. 1023 § 2 of the CCP). The sum obtained is deposited by the enforcement officer in court deposit to be divided (art. 852 § 1 of the CCP). The enforcement officer who conducts enforcement against movables makes a division plan of the sum obtained in the form of a decision.

Zbigniew Merchel

Exchange rates of 2010-07-29

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