FAMILY OWNERSHIP AS A MEANS TO PRESERVE THE INVESTMENT VALUE OF INHERITED ASSETS
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Abstract
This study investigates one of the methods for preserving the investment value of inherited assets : the family ownership system. This system, enshrined in Articles 738 to 742 of the Algerian Civil Code, represents a specific form of co-ownership. Unlike ordinary co-ownership, it is established by agreement, not by law, and is temporary rather than permanent. This agreement among family members defines the conditions and regulations that distinguish it from ordinary co-ownership.
Family ownership also has a distinct management structure. The manager enjoys broader authority compared to their counterpart in ordinary co-ownership. Additionally, the legislator imposes restrictions on the disposition of assets by co-owners to ensure the system's longevity and achieve its intended goals.
The benefits of regulating family ownership are evident across various investment domains, including agriculture, real estate, commerce, and industry. This system safeguards the unity of land, businesses, and factories, preventing their fragmentation upon the testator's death. Consequently, it preserves the investment value of these inherited assets. To achieve this objective, the legislator permits the family ownership system, enabling the co-ownership to endure for an extended period while restricting partnership solely to the heirs.
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References
Order No. 75-58 dated September 26, 1975, including the Civil Code, Official Gazette No. 78, issued on September 13, 1975. Amended and supplemented, Articles 737 to 742.
Egyptian Civil Code: Law No. 131 of 1948 issuing the Civil Code, Egyptian Official Gazette of the Egyptian Government, issued on Ramadan 22, 1367 - July 29, 1948, No. 108 repeated extraordinary number.
Jordanian Civil Code: Law No. 43 of 1976 on January 1, 1977.
-Swiss Civil Code: of December 10, 1907 (Status as of January 1, 2021).
-Italian Civil Code: Royal Decree No. 262 of March 16, 1942 approving the text of the Italian Civil Code (codification).
Meaning the independence of the partner in his share of the money that fell to his lot. See Ahmed Khaldi, the division between Islamic law and Algerian civil law in the light of the jurisprudence of the Supreme Court and the Council of State, Dar Huma, Algeria, p. 200.
Abd al-Razzak al-Sanhouri, The Intermediary in the Explanation of the Civil Code (The Right of Ownership with a Detailed Explanation of Things and Money), Part 8, Dar Ihya al-Turath al-Arabi, Beirut - Lebanon, p. 1043. The explanatory memorandum can be consulted, Collection of preparatory work for the Egyptian Civil Code, Dar al-Kitab al-Arabi Press, Cairo, part 06, p. 152
Ali al-Khafif, Property in Islamic Law with a Comparison to Positive Law, Dar al-Fikr al-Arabi, Egypt, 1996, p. 132.
Belhadj Al-Arabi, Real Rights in Algerian Law in the Light of Judicial Jurisprudence, A Comparative Study, Dar Houma for Printing, Publishing and Distribution, Algeria, 2016, p. 185
.Text of Article 739 of the Algerian Civil Code: "It is permissible to agree on the creation of ownership for a period not exceeding fifteen years. However, each partner may request the court to authorize him to withdraw his share of this ownership before the expiration of the agreed-upon period if there is a strong justification for that.
Article 737 of the Algerian Civil Code: "Co-owners of common property may not request its division if it is clear that the purpose for which this property was created is that it should always remain undivided. "
Bessam Suleiman Al-Abaji, "The Comparative Study of Family Property", Dar Al-Hamed for Publishing and Distribution, Amman, 2008, p. 90.
Meriem Touati, “The Legal System of Shared Ownership”, Dar Al-Kitab Al-Hadith, Cairo, 2015, p. 39.
Anwar Talba, "Shared Ownership", Al-Maktab Al-Jami'i Al-Hadith, Alexandria, 2017, p. 7.
Ibid., p. 7.
Meriem Touati, op. cit., p. 37. Supreme Court Decision No. 50937 dated 09/05/1990, Judicial Journal, Algeria, No. 02, Year 1991, p. 32. It states: "It is legally established that the roofs and shops used for common interests are common parts in built and unbuilt real estate, owned in common by all joint owners. Therefore, any judicial decision to the contrary is an error in the application of the law, " application of Article 745 of the Algerian Civil Code.
Article 32 of the Algerian Civil Code: "A person's family consists of his relatives, and relatives are all those who have a common origin. " This corresponds to Article 34 of the Egyptian Civil Code. This text is different from the text in the Swiss Civil Code, which defines family as "the spouses and their descendants"
Gidoum Bouzian Aman, "The System of Joint Assets between Spouses in Family Law", Master's Thesis, University of Algiers 01, Season 2013/2014, p. 24.
Nadia Foudhil, “The Company of Assets in Algerian Law”, Diwan of University Publications, Algeria, (3rd ed.), p. 35.
Bessam Al-Abaji, op. cit., p. 94. Muhammad Azmi Al-Bakri, “Shared Ownership”, Dar Mahmoud, Cairo, 2016-2017 first edition, p. 12.
Ahmed Mahmoud Khalil, "Management and Disposal of Common Property", Al-Maktab Al-Jami'i Al-Hadith, Alexandria, 2016, p. 71.
Mouhamed Wahid al-Din Siwar, "The Right of Ownership in Itself in Civil Law", Dar Al-Thaqafa, Amman - Jordan, (2nd ed.), 2010, p. 181.
Nadia Fawzi, op. cit., p. 54. See Articles 577 and 554 of Decree No. 75/59 dated 26/09/1975 concerning the amended and supplemented Commercial Code.
Abd al-Razzak al-Sanhouri, op. cit., p. 1046.
In the Egyptian Civil Code, Article 851, the phrase "they agreed to include it in this ownership" was added.
Article 32 of the Algerian Civil Code: "A person's family consists of his relatives, and relatives are all those who have a common origin. " This corresponds to Article 34 of the Egyptian Civil Code.
See in this sense al-Sanhouri, op. cit., 1048. Abdul Moneim al-Badawi, "Explanation of Civil Law in Original Real Rights", Dar Al-Kitab Al-Arabi, Egypt, (2nd ed.), 1956, p. 223.
Al-Sanhouri added: "The first thing is to take the family in the sense that is familiar in people's talk, so the members of the family include the wife and the husband, and the in-laws can be included if there is a justification for that," op. cit., p. 1048. See also Anwar Talba, op. cit., p. 421.
Preparatory Work Collection, Vol. 6, p. 152.
Anwar Talba, op. cit., p. 421.
See Mouhamed Wahid al-Din Siwar, op. cit., footnote 02, p. 177. And also Bessam Majid Suleiman Al-Abaji, op. cit., p. 63.
Swiss Civil Code Art 336: Relatives may agree to create an undivided estate, either by leaving all or part of an inheritance in it or by putting other property into it.
Bessam Majid Suleiman Al-Abaji, op. cit., p. 64.
Pierre Tour, Henri Descheneaux, the Swiss civil code Editions polygraphique, Zurich, Year 1950, p. 249.
Bessam Majid Suleiman Al-Abaji, op. cit., p. 65.
Text of Article 722: "Each partner may request the division of common property unless he is forced to remain in common by virtue of a text or agreement. The division may not be granted by agreement for a period exceeding five years. If this period is not exceeded, the agreement shall be executed in favor of the partner and his successor in title."
Ismail Ghanem, Original Real Rights (Right of Ownership), Dar Abdullah Wahba, Cairo, Part One, 1959, p. 327. See also Abdul Moneim Al-Sada, op. cit., p. 260.
See Abd al-Razzak al-Sanhouri, op. cit., p. 1050.
Swiss Civil Code Art 338:
Undivided ownership is agreed upon for a fixed term or for an indefinite period.
In the latter case, it may be denounced by each co-owner with six months' prior notice.
If it is an agricultural holding, denunciation is only admissible for the usual spring or autumn term.
-Florence Guillaume, Transfer of hereditary shares and suspension of inheritance partition, Schulthess Juristische medien AG, Zurich-Basel-Geneva, 2014, p. 319.
Bessam Majid Suleiman Al-Abaji, op. Cit. p. 79.
-Claude CONVERS, Director-Conservator of the Geneva Land Registry, Property, Text revised and adapted in November 2005 by A.-E. Fahrni, and in May 2014 by E. Seppey, p. 13. https://www.vd.ch/territoire-et-construction/registre-foncier/consultation-du-registre-foncier
Swiss Civil Code Art 343/02: Undivided ownership ceases:
-by the expiration of the time for which it was constituted, unless it is tacitly extended
Text of Article 338 of the aforementioned Swiss Civil Code, paragraph 3. Agricultural custom dictates that one must wait until the harvest has been gathered. This condition was deleted in the report of the Egyptian Senate, justified as follows: "because the custom referred to by the law has not yet been established, and if it is established in the future, there will be nothing to prevent its application." Preparatory Work Collection, Part 06, p. 184. See Abd al-Razzaq al-Sanhuri, op. cit., footnote 4, p. 1051.
Swiss Civil Code Art 27:
No one may, even partially, renounce the enjoyment or exercise of civil rights.
No one may alienate his or her freedom, nor prohibit himself or herself from using it to an extent contrary to law or morals.
Abd al-Razzaq al-Sanhuri, op. cit., p. 1043. And also Anwar Talba, op. cit., p. 422. And also Bessam Majid Suleiman, op. cit., p. 67.
Amar ALOUI, FONCIER, EDITION HOUMA, ALGER, 6th edition, year 2011, page 135.
Mouhamed Azmi al-Bakri, Encyclopedia of Fiqh, Law and Legislation in the New Civil Law (Right of Ownership), Dar Mahmoud, Cairo, Volume 11, p. 813.
Article 126 of the Algerian Family Law states the reasons for inheritance, which are: marital relationship. Article 127 states that the right to inherit is established upon the death of the testator, either in reality or by judgment. Article 128 sets out the general conditions for the right to inherit.
Abd al-Razzak al-Sanhouri, op. cit., p. 1048.
A gift is a transfer of ownership without consideration and is made during one's lifetime. It is one of the contracts of donation. See Belhadj Arabi, op. cit., p. 290.
A will is a disposition of the estate to be added to what is after death, so its effect does not take effect in the lifetime of the testator. See Nabil Ibrahim Saad, op. cit., p. 561.
Possession is a material fact consisting of actual control over a thing that may be dealt with, and is capable of producing legal effects. See Belhadj Arabi, op. cit., p. 374. Dr. Daraa Hamad also stated that it is: "Actual control over a thing with the intention of acquiring ownership or another real
Abd al-Moneim Al-Sada, op. cit., p. 259. See also Abd al-Razzaq al-Sanhuri, op. cit., p. 1049.
Definitions of subrogation: (it is the substitution of one person or thing for another in a legal relationship). See Xavier Mond, The legal subrogation of the insurer under the Civil Code: History, developments and procedural aspects, Memory presented to the Faculty of Higher Studies with a view to obtaining the degree of Master of Law (LL.M.) , business law option , Faculty of Law, University of Montreal, 2016, p. 10.
Abd al-Razzak al-Sanhouri, op. cit., p. 251-252.
Dr. Mahmoud Sabry Al-Joundi referred to this type of solution and called it "contractual solutions" and added that traditional theories and modern theory agree on the permissibility of agreeing on real solutions while taking into account three restrictions: 1- the agreement does not violate a legal rule, 2- the substitute property is suitable to be subject to the same legal system as the replaced property, 3- the will is valid and present according to the general rules. See Mahmoud Sabry Al-Jundi, A Look at the Rules of Real Solutions, The Jordanian Journal of Islamic Studies, Vol. 05, No. 03/B, 2009, p. 205.
Abd al-Razzak al-Sanhouri, op. cit., p. 269.
Mouhamed Wahid al-Din Siwar, op. cit., p. 140.
Abd al-Moneim Al-Sada, op. cit., p. 261.
Anwar Talba, op. cit., p. 214.
See Ahmed Mahmoud Khalil, op. cit., p. 73.
Mahmoud Sabry Al-Joundi, op. cit., p. 206.
Perhaps this is what prompted al-Sanhuri to restrict the manager's authority in unusual management acts in this matter by saying: "The manager does not have the power to make changes to the ownership of the family itself by replacing some of its property with other property. All he has is the power to modify the purpose for which the property was created, not the property itself," despite his acknowledgment of the issue of real solutions in family ownership as previously mentioned, since real solutions amount to a disposition. , which is an act that requires the unanimity of the partners. Abd al-Razzaq al-Sanhuri, op. cit., p. 251 and p. 1057.
Mouhamed Wahid al-Din Siwar, op. cit., p. 179. See also al-Sanhuri, The Intermediate Explanation of Civil Law (Right of Ownership with a Detailed Explanation of Things and Property), Part 08, the same reference, p. 1057.
Abd al-Razzak al-Sanhouri, op. cit., p. 1057.
Ahmed Mahmoud Khalil, op. cit., p. 74.