A Legal Analysis to the Manner of Directors Board Members’ and Executive Manager’s Fiduciary Possession of Joint Stock Company’s Property | ||
| پژوهش حقوق خصوصی | ||
| Article 4, Volume 12, Issue 45, January 2024, Pages 119-148 PDF (640.55 K) | ||
| Document Type: Research Paper | ||
| DOI: 10.22054/jplr.2024.69379.2704 | ||
| Author | ||
| Ahad Gholizadeh Manghutay* | ||
| Associate Professor at the Department of Law, Faculty of Administrative Sciences and Economics, University of Isfahan | ||
| Abstract | ||
| Bill Amending a Part of the Commerce Act 1969 (BACAI) is ambiguous about the manner of directors board members’ and executive manager’s fiduciary possession of joint stock company’s property. Commerce Act in other companies deems manager’s possession of company’s property as agent’s possession of principal’s property. But, although agent’s possession of principle’s property is fiduciary and fault-based, it is unknown whether in case the company’s property suffers damages, manager (agent) is responsible unless he proves his innocence (diminished fiduciary possession) or he is not responsible unless the principle proves his fault (intensified fiduciary possession). Besides, in case of any doubt, which kind overrules? Further, dividing responsibility manner among various responsible persons such as directors’ board members and executive manager needs some discussion. Dividing fiduciary possession into diminished and intensified is a result derived from amalgamation of stages of truth and established judicial situation, i.e., from amalgamation of civil evidence with commerce law. There are clear signs for it in Commerce Act. This research shows that the Legislature as in the Commerce Act has deemed agent’s possession of company’s property as diminished fiduciary possession; in the BACAI as well it has not principally changed its mind in respect to directors board members’ and executive manager’s possession into intensive fiduciary possession but annual audition and financial clearance have disrupted possibility of applying the diminished fiduciary possession. In case responsible persons were more than one, responsibility would be divided proportionally and if there was no reason to the contrary, proportions would be equivalent. Obviously, determining manner of board members and executive manager’s possession can respond to a variety of issues about manner of their responsibility. Separation of fiduciary possession into diminished and intensified and setting the diminished fiduciary possession as principle is also helpful in this case, and in the first step, it determines that board members or executive manager are plaintiff or respondent of the lawsuit. Obviously, intensified possession in which responsibility continues to be based on fault should not be confused with guarantors possession in which liability is not based on fault. Although fiduciary possession can be converted into guarantors possession, and moment of this conversion can be determined by resorting to the principle of the lateness of the event. Diminished fiduciary possession, including customer’s possession, mortgagee’s possession and tenant’s possession may also become intensified due to unwanted staying of property at the possession of fiduciary; As we can see in the non-delivery of the cargo from the transport operator, the non-appointment of the successors of the board members with the expiration of their term of office, or in exercising the right of bailment of the transport operator. In fact, just knowing that the responsibility of board members and executive managers is based on fault has not been enough to respond to the relevant issues. The legislator considers fiduciary possession of an attorney (or representative) to be a diminished fiduciary possession, i.e. the attorney is liable for the property he has been entrusted with unless he proves his innocence. Therefore, Commerce Act too considers the manager's possession on the properties of different types of companies, including limited liability, general partnership, limited partnership, joint stock partnership, and proportional liability partnership as diminished fiduciary possession. In the 1968 amendment bill and the Cooperative Sector Act, despite the inconsistencies in the amendment bill, the legislature has not promoted its view on the members of the board of directors and the executive manager’s possession to intensified fiduciary possession but annual audits and account clearances have impaired the possibility of applying diminished fiduciary possession In such a way that after auditing and approving the balance sheet and profit and loss account for each year, for that year possession is considered as intensified fiduciary for the board of directors and executive manager, that is, they are assumed to be clean for that year unless their dishonesty and culpability are proved. This can also be extended to the companies contained in the Commerce Act. In the event of a multiplicity of responsible persons, responsibility will be proportional and in the absence of the opposite reason, proportions would be equal. There is no funding support. | ||
| Keywords | ||
| Directors’ Board Members; Executive Manager; Possession; Diminished Fiduciary Possession; Intensified Fiduciary Possessio | ||
| References | ||
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