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the outstanding claims against B’s customers. The claims belong to the insolvency estate and can be executed against.

(b) The first way by which A might have a right to the claims owed by C1--C5 to B, is to transfer the cars to B on a commission (undisclosed) agency basis. If so, the claims vest directly in A, and A may separate the claims in B’s insolvency: s. 57 of the Commission Agency Act (Kommissionslagen, 1914). However, it must be a true commission agency, which presupposes that the agent, B, has a right to return unsold goods.24 Such constructions are commonly used in Sweden to overcome the restrictions imposed on reservations of title. The claims could also be assigned or charged to A (see case 5).

f i n l a n d

(a)The retention of title clause is invalid as against the creditors of B, if B had the right to resell the cars in the ordinary course of business, before he or she has paid the price to A. Therefore, the unsold cars would belong to the insolvency estate of B and the same would be true of the claims owed by the customers of B. It would, therefore, be the insolvency administrator who would be entitled to claim the price from C1--C5.

(b)The situation of A would have been improved if the prerequisites of commission, i.e. undisclosed agency, were met. Then A, as the principal, would have been entitled to collect the claims which would have been regarded as the result of his or her agent’s activities in selling his or her principal’s property.25

Comparative observations

Case 6 supplements case 5 by examining the situation where the claims against the sub-purchasers still exist. For a number of jurisdictions, namely Germany, Austria, France and Belgium, this can make a material difference; whereas for the others, the analysis remains the same.

24Håstad, Sakrätt rörande lös egendom 147 ff. and SOU 1988:63 with NJA 1945, 406 and other cases.

25The prerequisites have been discussed above: see Finnish report, case 5(c).

Part (a)

According to German, French and Belgian law, A’s simple retention of title is extended to the claims arising out of the sub-sales by way of a statutory provision, not by private agreement. The dogmatic foundations are, however, different. In French and Belgian law, A’s right to the claims against B’s customers rests on the principle of real subrogation, whereas in German law, § 48 InsO is a special remedy for a creditor whose rights have been frustrated by an unlawful transaction. There is also a difference in respect of the prerequisites: in German law, the buyer’s entitlement to resell the goods renders § 48 InsO inapplicable whereas the same entitlement would be irrelevant under French and Belgian law.

If we compare the situation in case 5 to that in case 6, the crucial event for sellers under French and Belgian law is the payment of the price by the sub-purchasers. If payment is made before the commencement of insolvency proceedings, the money irretrievably belongs to B’s insolvency estate. Under German law, the crucial event is the mixing of the funds. If the seller has not entitled the buyer to resell the goods, he can claim the money paid by the sub-purchasers pursuant to § 48 InsO even if it has been paid to B before insolvency, as long as the money is still distinguishable from B’s other assets. In practice however, the result will often be the same, as buyers under retention of title do not normally separate the money they receive from sub-purchasers of those goods to which title is retained.

With the exception of Portuguese and South African law which, as we have seen in case 5, protect the seller who has reserved ownership even as against good faith purchasers, all other systems under consideration conclude that A has no more rights than those of an insolvency creditor. He can claim no right in the cars nor to the claims that B’s insolvency estate still has against C1--C5.

Part (b)

Case 6 is the typical situation where, under German, Greek and Austrian law, proceeds clauses confer upon the seller an effective and at the same time practical security right against non-payment. German and Greek law both allow the security assignment of future claims without requiring any publicity; Austrian law requires no more than an entry into the books of the creditor which, according to a predominant but not

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undisputed opinion,26 may be performed even before the identity of the debitor cessus is known. Also Denmark gives effect to proceeds clauses without notification provided that the requirements of credit consignment are adhered to.

The security assignment of claims or the taking of a charge over the proceeds of sale is also possible, in principle, in a number of other European jurisdictions. However, the requirements as to formalities and publicity (notification, registration) render it impossible to assign or charge future claims where the legal foundation has not yet been laid (see Italian, Dutch and Scots law), or such requirements render the transaction too costly to be practical (England, Ireland). As a result, reservation of title which extends to the proceeds of sub-sale is only practised in Germany, Austria and Greece. In Belgium, although a charge over future claims is possible, it is not practised in connection with a retention of title.27 Likewise, the new Spanish legislation of 1999 which provides for the assignment of future debts does not seem to be of use in cases like the present. In Sweden and Finland, the requirement of notification of charges over claims renders it impossible to have a perfected charge before the customers are known. The registered enterprise charge comprises future claims, and the registration fee for the enterprise charge is not regarded to be deterrent. However, sellers can only rarely take advantage of an enterprise charge, since the first priority will usually already be in the hands of the buyer’s bank.

In Sweden and Finland, goods are often transferred to a retailer with an entitlement for the retailer to sell the goods ‘on the producer’s account’, which means that the retailer shall be entitled to return unsold goods and be obliged to pay a fixed price after the sale to the third party has been completed. In such cases, the producer may be regarded as the principal under an undisclosed commission agency arrangement; he is therefore entitled to the claims against the retailer’s customers without any publicity. Such an arrangement may be possible in other jurisdictions, as for example the Italian report to case 5 points out, but it will rarely be used where other solutions exist since sellers usually do not want to carry their buyers’ economic risks.

26See supra, Austrian report, case 5(c).

27For the possible reasons see supra, case 5, comparative observations, part (c)(vii).