NOTES
Another Step Towards Immoveables Being Objects
of Commercial Operations
“An immoveable cannot be the object of a commercial operation.”
Although the courts and writers have created exceptions narrowing
the application of this rule and recent judgments have shown tenden-
cies to entirely disregard it in the face of the reality that real
estate developers deal in land in the same way as ordinary traders
entering into commercial operations,’ it cannot, nonetheless, be de-
nied that the principle is still basically a part of the law of Quebec.
This is so despite the fact that there is, in Quebec, no text of law
providing for it.
What then is the reason for the rule? In my article on the subject,
written in 1965,2 I mentioned that the reason given is that immove-
ables are said to be incapable of circulation, this being, along with
speculation and entremise, one of the elements characterizing a
commercial operation. 3 I went on to suggest, however, that not only do
immoveables actually circulate (through mutations of ownership and
delivery by the handing over of title deeds), 4 but that the true
source of the principle lay in history and tradition.,
In the earlier part of the feudal period in France, there was
no trade, the towns had withered away, and feudal law, being a
system of land law in which contract had no place, reigned supreme.
When trade was reborn, it was centred in towns built by the mer-
chants who obtained independence from the local lords and created
their own commercial law.
When royal power and legislation came once more to the fore
during the decline of the feudal system, the French kings enacted
laws in the commercial sphere. They did not, however, succeed
in bringing unity to the civil law (this unification had to await
1 Gamma Realty Ltd. v. Brummer, [1962] C.S. 607 (Pr~vost, J.), Colonia
Development Corporation v. Belliveau, [1965] B.R. 161 (notes of Owen, J., at
p. 166).
2Can an immoveable be the object of a commercial operation?, (1965), 11
McGill L.J. 310.
3 Ibid., p. 312.
4 Ibid., pp. 312-31.
5 Ibid., pp. 313 et seq.
N~o. 2]
NOTES
the codification of 1804), with the consequence that the civil and
commercial law remain separate in France to this day, regulated
respectively by the Civil Code and the Code de Commerce and
administered by separate civil and commercial courts. Because land
fell within the realm of the civil law, operations concerning im-
moveables were excluded from the jurisdiction of the commercial
courts. Thus article 631 of the Code de Commerce states that the
commercial courts have jurisdiction over actes de commerce, and
until recently, article 632 declared that
La loi rfpute actes de commerce:
Tout achat de denrges et marchandises pour les revendre, soit en nature,
soit apr~s les avoir travaill~es et mises en oeuvre, ou m6me pour en louer
simplement l’usage.6
While the foregoing text did not expressly exclude immoveables,
its very presence, coupled with the force of tradition arising from
the feudal system of land tenure, and the effect of separate civil
and commercial courts explains why immoveables have always been
regarded in France as only susceptible of being objects of civil
operations.
In Quebec, there has never been the same degree of justification
for the principle. The Code de Commerce, with its reference .to
denrges et marchandises, is not part of our law, we do not have
separate civil and commercial courts, and there was never the same
divorce between transactions involving land and commercial oper-
ations. It may be that the only reason why we have applied the
rule that immoveables cannot be the object of commercial oper-
ations is that we tend to turn to French doctrine for guidance
when seeking a solution to a Quebec legal problem, and the French
authors were naturally writing about French and not Quebec law.
In the conclusion to my article,7 I suggested that our courts
abolish the principle, since it never really belonged to our law, since
questions as to the advisability of retaining it were being raised
in France, and since there was no justification for extending the
protection of the civil rules to a trader just because he happened
to be dealing in real estate and not moveables.
Considerable added weight has now been given to the movement
to abolish the principle by a 1967 amendment to the Code de Com-
merce,8 by virtue of which the second paragraph of article 632,
being the one that referred to “denrges et marchandises”, has been
6 Italics added.
7 Loc. cit., p. 333.
8 Enacted July 13, 1967, and came into force on Jan. 1, 1968.
McGILL LAW JOURNAL
[Vol. 14
replaced by several new paragraphs, so that the article as revised
now reads as follows:
Art. 632. La loi rdpute actes de commerce:
Tout achat de biens meubles pour les revendre, soit en nature, soit
apr~s les avoir travaill4s et mis en oeuvre;
Tout achat de biens immeubles en vue de lea revendre;
Toutes op6rations d’interm~diaire pour l’achat, la souscription ou ]a
vente d’immeubles, de fonds de commerce, d’actions ou parts de soci6t~s
immobilibres;
Toute entreprise de location de meubles;
Toute entreprise de manufactures, de commission, de transport par
terre ou par eau;
Toute entreprise de fournitures, d’agence, bureaux d’affaires, 4tablisse-
ments de ventes i l’encan, de spectacles publics;
Toute operation de change, banque et courtage;
Toutes les operations de banques publiques;
Toutes obligations eritre n~gociants, marchands et banquiers;
Entre toutes personnes, les lettres de change. 9
Thus the inappropriateness of the rule that an immoveable
cannot be the object of a commercial operation has finally been
officially acknowledged by the French legislature.’ 0 In Quebec, this
principle has never had the benefit of recognition by legislation.
The way would now appear to be clear for the courts of Quebec
to declare that immoveables may be the objects of commercial
operations.
John W. DURNFORD. ‘
9 Italics added.
10 See the comment by Alfred Jauffret, (1967), 20 Rev. trim. dr. comm. 748.
* Professor of Law, McGill University.
