In the context of insolvency proceedings against natural persons not engaged in economic activities (so-called consumer bankruptcy), the legislature provided for an exception from Article 173 Act dated 28 February 2003 – Bankruptcy law, which confers on the syndication the power to liquidate the bankrupt property, which is a mass bankruptcy.
According to Article 49112 bankruptcy laws, the syndication may in writing authorise the bankrupt to sell movable property belonging to the bankruptcy estate. This reduces the costs of the proceedings and allows the unsuccessful to obtain a higher selling price.
Content of the authorisation and its expiry
The power of attorney given to the fallen person may constitute a generic power of attorney, and therefore include the power to perform a specific or specific legal act, i.e. to perform a specific legal act. A declaration of will may be given in any form and shall be made by unilateral legal action of a authorising nature.
At the same time, the legislator did not reserve the rigor of annulment of the legal act in the event that the administrator failed to maintain the written form given to the unsuccessful.
Consequently, the written form for a unilateral legal act, which is to grant authorisation to a fallen person to sell movable property forming part of the bankruptcy mass, gives rise only to an ad probation effect, i.e. for evidence purposes[1].
Importantly, the mandate of the syndicate may also include competence for the fallen person to conclude a contract for the sale of movable property with himself.
As a general rule, such consent should be based on the content of the mandate of the Syndician, but in point (e) the instalment is stressed that it may also result from the legal relationship underlying the power of attorney, the so-called basic ratio[2].
The Syndicate may at any time revoke the mandate of the fallen and it does not require justification, just make a declaration of will to the fallen. The legal effects of such a declaration of will will arise at the time of its submission and when it reaches a failed one in such a way that it can become acquainted with its content. The fallen can also waive authority.
In the event of the termination of the mandate for any reason, the fallen person is obliged to return to the syndicate a document which authorized him to sell the movable property which is a component of the bankruptcy. This aims to protect the bankruptcy mass by excluding the possibility of recourse to the expired power of attorney by the fallen person third for further legal acts on behalf of the former power-holder.
Operation of the fallen one without fixing or exceeding its fixing limits
This situation is regulated Article 103 KC, which regulates the legal implications of the action of an alleged proxy known as a false procurator.
Under Article 103 The KC legislator normalized the legal consequences of the action of the alleged proxy (falsus procurator), i.e. a person who at the time of the conclusion of the contract as a proxy had no authority at all or exceeded its scope.
Performing a legal act by a fallen person without the authority referred to under Article 49112 Bankruptcy laws will occur when the authorisation of the syndicate was not granted at all or was invalid. On the other hand, you can talk about exceeding the limits of the mandate in the case of an activity not covered by the mandate.
In order for the alleged proxy to act to be valid, it must be confirmed by the person on whose behalf it acted. Until then, we are dealing with a so-called limping legal act, as the validity of this agreement remains suspended until the person on whose behalf the contract was concluded does not agree to its conclusion.
The Syndication should assess whether the legal act carried out by the fallen person is in accordance with the interests of bankruptcy. The person who has entered into a contract with the fallen person shall set a time limit for the syndication to confirm the legal activity he has performed.
If it is confirmed, the agreement has been valid since its conclusion (ex tunc), i.e. the confirmation has retroactive effect. If the legal act is not confirmed in due time, the entire agreement shall be ineffective from the time of its conclusion.
In this situation, the party who has concluded a contract with the falsus procurator has a return claim of what the alleged proxy received in the performance of the contract and for compensation of damage.
Only a person who, at the time of the conclusion of the contract, did not know of the lack of power of attorney or of exceeding its limits may request the refund of an undue benefit.
Effects of the sale of movable property by the fallen
Sale of movable property by a fallen person under authorisation granted by a syndicate on the basis of Article 49112 bankruptcy law has direct effect on the syndicate and has effect on enforcement sales. The acquirer of mobility becomes the owner of things without any burden, but he is not entitled to warranty claims for defects of things.
[1] Dr. Przemysław Wołowski, ILO 2021, No 21
[2] For example, M. Pilich [in:] Civil Code. Comment. T. I. General section, p. 2 (Article 56-125), under J. Gudowski, 2021, Lex/el, comm. to Article 108, cited 7.