With order no. 15695 published on June 5, 2024, the Court of Cassation clarifies the qualifying elements of the purpose loan contract, thereby defining the characteristics of the institution.
The case at the center of the order originates from the failure to admit a claim arising from a purpose loan contract to the list of liabilities. The delegated judge deemed the contract null and void due to the "misappropriation of the funds disbursed."
Against this decision, the creditor filed an opposition to the state of liabilities under Article 98 of the Bankruptcy Law. However, the Court of Appeal also agreed with the classification of the loan as a purpose loan and confirmed its nullity due to a "deviation from its concrete purpose." The court noted that the loaned funds were not used for the purpose stated in the contract but to cover an overdraft at the lending bank.
The creditor appealed the Court's decision to the Court of Cassation, arguing the violation and incorrect application of Articles 1418 and 1813 of the Civil Code. Specifically, the loan contract stipulated that the "loan [...] must be used by the borrowing party fully and exclusively for the implementation of the proposed investment program," which particularly involved the purchase of a business branch of another third-party company.
According to the appellant, this provision was not sufficient to qualify the loan as a purpose loan, as the specific clause regarding the use of the funds should involve the interest of both the borrower and the lender. The appellant added that the clause specifying the allocation of funds for a specific interest of the financed party is merely an "externalization of the reasons for the contract" and does not affect its validity under Article 1418.
Accepting the appeal for the correctness of the reason presented, the Supreme Court reiterated the defining features of the purpose loan contract, clarifying that "the loan can be qualified as a purpose loan only when the allocation clause involves the direct or indirect interest of the lending institution. The indication of the reasons for which the loan is granted, not accompanied by a specific contractual program aimed at their realization, is not sufficient for such a qualification."
Thus, the Court found the lower court's actions erroneous for not verifying the existence of an interest of the lender in achieving the purpose.
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