The insurer is bound to indemnify the insured who has fraudulently entered into possession of the insured thing – Insurance


After taking possession of it on September 29, 2015, the purchaser of a used vehicle had waited almost three months to have it registered and insured, on December 28 of the same year, the date on which an invoice attesting to the payment of the balance of the sale price had been delivered to him. Three days later, on the night of December 31, this vehicle was accidentally set on fire on the public highway. The insurer refused compensation, on the grounds that the insured was the de facto concealer of the said vehicle, which was allegedly diverted to the detriment of a Polish rental company and then sold to it for a price much lower than the market price. While the trial judges had agreed with him, the Court of Appeal considered justified his refusal “to compensate the loss of a vehicle acquired under fraudulent conditions, on which its insured would have eminently questionable rights” (Bastia, Feb. 12, 2020, No. 19/00027), the Court of Cassation exercises its censure in a decision favored by the Bulletin.

Recalling that it follows from Articles L. 121-1, paragraph 1, and L. 121-6, paragraph 1, of the Insurance Code that insurance relating to property is an indemnity contract and that any person having an interest in the preservation of a thing can make it ensured, and of article 1134, become 1103, of the civil code that contracts legally formed take the place of law for those who made them, the second civil chamber judges inoperative the reason based on the quality of the underwriter-insured’s possession of the damaged vehicle in order to consider that it was the insurer’s responsibility to perform the indemnity obligation it was bound towards the latter.

This solution is not new. In a judgment of April 25, 1990 (no. 88-17.699 P, Lellouch vs/ Presence Insurance (Company)D. 1991. 20 , obs. A.Robert ; RGAT 1990. 891, note J. Kullmann; RCA 1990, No. 259), the first civil chamber had already considered that the insurer guaranteeing a vehicle against theft could not invoke the precarious and equivocal nature of its possession by the insured to refuse to indemnify it, by affirming that “the qualities of the possession of the disputed vehicle were irrelevant, since [le possesseur de celui-ci], having an interest in its preservation, had had this vehicle insured for its own benefit, which was not claimed by anyone against it”. More recently, it was from the point of view of proof that the second civil chamber held that the benefit of a guarantee against the theft of a vehicle was not subordinated to the quality of owner of the latter but only to that of insured (Civ. 2e, 15 Jan. 2015, no. 13-27.109: RCA 2015, no. 136, note H. Groutel; RGDA 2015. 160, note A. Pélissier).

Referred to in each of these judgments, the three aforementioned texts seem to us to command such a position.
On the one hand, Article L. 121-6, paragraph 1, of the Insurance Code effectively allows “any person having an interest in the preservation of a thing” to have it insured. The taking out of a property insurance contract is therefore only authorized for its sole owner, nor even for the sole holders of a right – real or personal – bearing on it; it is subject only to the existence of such an interest. However, “the user of a vehicle, and more generally of an asset, whether he is the holder, possessor or owner, has an interest in the conservation of this asset. […]. He is, in fact, exposed to the risk of no longer being able to use the asset if an event affecting it occurs” (A. Pélissier, note above). The benefit of insurance is therefore not to be discerned in the existence of a legal relationship between a person and a thing, but “in the effect that the realization of the risk may cause with regard to the economic situation of the insured” (J. Kullmann, note above, p. 892). The commented judgment thus constitutes an opportunity to recall that French law adopts an economic conception of insurance interest (for a comparison between the French understanding of this notion and that of various foreign laws, see spec., Mr Provost, The notion of insurance interest, pref. F. Leduc, LGDJ, coll. “Bible. dr. assured », t. 51, 2009; L. Mayaux, The main questions of insurance lawLGDJ, Lextenso, 2011, nbone58 s.). Moreover, Article L. 121-6 does not require, unlike its counterpart applicable to non-terrestrial insurance (C. insur., art. L. 171-3), that this interest be legitimate, the subscription of a terrestrial insurance contract relating to a stolen thing is definitively allowed to its thief or receiver.

Note, however, that if the existence of such an interest authorizes the subscription of an insurance contract, it does not presume its validity. In particular, when the thing insured has been acquired in doubtful circumstances, the contract insuring it remains liable to be canceled for the illegality of its content. Such a sanction, however, presupposes the demonstration by the insurer, at least of the theft or misappropriation of the thing before the conclusion of the insurance contract, or even of the will of the subscriber, at the time of the subscription of the contract, to achieve a claim. in order to collect the indemnity – depending on whether this hypothesis is linked to the illegality of the stipulations or of the contractual purpose (on this question, applied to the old notions of object and subjective cause, see A. Pélissier, previous note .). These conditions echo the context of this case. Not only had the vehicle in question been acquired, to use the terms used by the trial judges, in “obscure circumstances”, resulting from the time lag between taking possession of it and its registration and insurance, because that the declaration of transfer referred to a registration certificate indicating neither its date nor its number, and the absence of justification, by the insured, of the alleged payment of installments in cash. But still the disaster had occurred only three days after the subscription of the insurance contract. Nevertheless, suspicious circumstances not being worth proof – the accidental nature of the fire of the vehicle was not moreover not discussed in this case –, the insurance contract should here be considered as validly concluded.

Hence, on the other hand, the intervention of the two other texts referred to. A legally formed contract must actually be executed under Article 1134, now 1103, of the Civil Code, and the execution of a damage insurance contract presupposes, in the event of a claim, compensation for the insured. by the insurer in accordance with article L. 121-1 of the insurance code. The insured, even having fraudulently come into possession of it, is thus entitled to demand performance of the insurance contract and, even more so, to receive the insurance indemnity. The latter cannot, moreover, be validly claimed by the owner of the thing insured (in his sole capacity as owner at least, see in this sense, Civ. May 25, 1943, DC 1944. 25, note A. Besson; JCP 1943. II. 2498, note P. Lerebours-Pigeonnière; RGAT 1944. 30), in the case of a third party to the insurance contract whose claim cannot relate to the insurance indemnity ( Civil 1D, 9 Dec. 1997, no. 95-17544, RGDA 1998. 137, note L. Mayaux; v. equal. on this point, A. Pélissier, prec. note).

Therefore, in addition to being justified textually, and although likely to be discussed from the point of view of morality (see in this sense J. Bigot [dir.], Treatise on insurance law, t. 3: The insurance contract2e ed., LGDJ, 2014, No. 413), the solution adopted here proves to be consistent with the economy of the insurance contract, since by paying his premiums, the subscriber-user of the insured thing has contributed to insurance transaction.

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