Tatiane Bagagí Faria
Lawyer at Marcos Martins Advogados
In a recent decision, the Court of Appeals of the State of São Paulo relaxed the rule that assets mortgaged as security for a rural credit bill are unseizable, as provided for in article 69 of Decree Law 167/67, and authorized the seizure of mortgaged assets in favor of a banking institution, on the grounds that unseizability is not absolute when it has been demonstrated that the guarantee will not be emptied.
In the specific case, after the seizure of the property mortgaged by a rural credit bill was granted, the credit cooperative challenged the seizure, claiming that the property was unseizable due to the mortgage in its favor. However, the lower court judge ruled that this impenetrability is not absolute, since the seizure of the mortgaged property would not empty the guarantee granted to the creditor of the rural credit bill, due to the mortgagee’s right of first refusal in the event of a judicial sale of the property.
The credit union then appealed to maintain the unseizability of the real estate owned by the debtor and mortgaged as collateral for the rural credit bill. The TJSP, however, upheld the 1st instance judge’s opinion, on the grounds that a single property can be seized in several proceedings, provided that, in the event of a contest of creditors, the order of preference is respected, which, in this case, is that of the credit cooperative as a secured creditor.
Thus, it was understood that it is possible to relax the rules on the unenforceability of property mortgaged as security for a rural credit bill, provided that there is no risk of it being emptied and that the mortgage creditor’s right of first refusal is respected.
Marcos Martins Advogados is attentive to new developments in the interpretation of the law and in business law, in order to provide adequate and effective advice to our clients.
