Credit Recovery | Brazilian Superior Court of Justice Authorizes the Sale of Movable Property Fiduciary Alienated Without Debtors Prior Notice: 3 Key-Points for Creditors

The Brazilian Superior Court of Justice (STJ) ruled that, in a case of contractual default, the fiduciary creditor may sell movable property pledged as collateral without prior notice to the debtor.

The dispute took place in a monitoring action, based on bank credit notes. Due to the debtor’s default on the installments, a search and seizure action was filed, with the removal and deposit of the assets pledged in trust. Subsequently, given the insufficient sale price of the seized assets, a monitoring action was filed to collect the remaining balance. The fiduciary debtor then filed an opposition, arguing the lack of extrajudicial notice of the sale of the assets and the sale at a low price. 

After analyzing the case, STJ recognized that:

1. The fiduciary sale of movable property is governed by Law No. 4,728/65 and Decree-Law No. 911/69. Article 2 of Decree-Law No. 911/69 categorically allows the fiduciary owner to sell the movable property to third parties, regardless of auction, public auction, prior appraisal, or any other judicial or extrajudicial measure. In the current scenario, specifically regarding the sale of the property, the requirement of a prior act not provided for in the legal text is not justified.

2. Any questions the debtor may have regarding the sale procedure of the asset must be addressed through an action for the rendering of accounts, as per the final part of the Article 2 of Decree Law 911/69, as amended by Law 13.043/2014, which added the requirement for “due rendering of accounts” by the creditor after the sale of the asset and application of the price to the payment of their debt.

3. Prior notification is only required in cases of real estate sales, governed by Law No. 9.514/97, which, in Article 27, § 2º-A, expressly provides for the need to notify the debtor of the dates, time, and location of the auctions.

The recent STJ decision reinforces the legal certainty of the fiduciary sale of movable assets for creditors. By waiving the requirement for prior notification of the debtor for the sale of the asset after consolidation of ownership, the court aligns the case law with the letter of the law, specifically Decree-Law No. 911/69. STJ also clearly distinguishes the procedural rules applicable to movable property from those required for real property, where prior notification is expressly provided for by law.