The Oblique Action in the Civil Transactions Law and in the Egyptian Civil Code
The law affords several securities and means to ensure that a debtor performs his obligation. A creditor enjoys two kinds of security over his debtor. First, the general security over all his assets: the creditor is entitled to obtain his debt from them, whether those assets were in the debtor's patrimony when the creditor's right arose or were added to it afterwards, it being enough that they exist at the time of enforcement. All creditors stand equal in this security, and the creditor has no right of pursuit in it. Second, the particular security, which bears upon a determinate asset of the debtor and is established for the benefit of one creditor, as with a mortgage or a judicial charge: the holder of the particular security takes priority over others, and has a right of pursuit should the debtor's assets pass out of his hands to another.
The debtor's assets are therefore the object from which his debt is obtained. Article 234 of the Egyptian Civil Code and Article 181 of the Civil Transactions Law both provide that all a debtor's assets stand as security for the discharge of his debts, and that all creditors are equal in that security save one who holds a right of priority under the law. A creditor may enforce his rights against the debtor's assets, whether by specific performance or by compensation. Among the means the law provides a creditor for obtaining his money out of the debtor's patrimony is the oblique action.
The oblique action
This is an action a creditor brings against his debtor's debtor, claiming his debtor's rights. He brings it in his character as creditor of the debtor, joining both the debtor and the debtor's debtor, and seeking judgment in the debtor's favour so that he may satisfy his own debt out of it. The oblique action is thus a legal institution entitling a creditor to exercise, in his debtor's name, that debtor's rights where the debtor has not exercised them himself. Its purpose is to preserve the security against the debtor's neglect in exercising the rights he holds, a neglect which might leave his assets insufficient to discharge his obligation toward the creditor. The institution amounts to a legal representation of the debtor by the creditor in exercising his right where the debtor has not done so.
Article 235 of the Egyptian Civil Code provides:
1. Every creditor, even where his right is not yet due for performance, may exercise in his debtor's name all that debtor's rights, save those attached particularly to his person or not capable of attachment.
2. A creditor's exercise of his debtor's rights is admissible only where he proves that the debtor has not exercised those rights and that his failure to do so would cause his insolvency or increase it. Formal notice to the debtor is not required for the exercise of his right, but he must be joined as a party to the action.
Article 182 of the Civil Transactions Law provides:
1. Every creditor, even where his right is not yet due for performance, may exercise his debtor's rights, save those attached particularly to his person or not capable of attachment, where the debtor has not exercised those rights and where this would lead to his debts exceeding his assets.
2. Formal notice to the debtor is not required for the creditor's exercise of his rights; but where an action is brought in the debtor's name, he must be joined in it.
3. The creditor is treated as his debtor's representative in exercising his rights, and every benefit accruing from that exercise forms part of the debtor's assets and stands as security for all his creditors.
The conditions on which an oblique action is admissible
All of them return to one essential idea: that the creditor have a legitimate interest.
One: that the creditor's right exist and be free of dispute.
The right exists whether it is suspended upon a condition or subject to a term, and whether the condition or term is suspensive or resolutive. A contingent right does not suffice, such as an heir's right in his predecessor's assets. It is not required that the right be due for performance, established by an enforceable instrument, or of known amount: a person harmed by an unlawful act may bring an oblique action even where his right is of unknown amount. Nor is it required that the creditor's right precede the debtor's right that is the subject of the oblique action.
Two: that the foundation of the action be present, namely regard for the creditor's immediate legal interests.
This requires that the debtor has refrained from claiming his right, whether from bad faith or from negligence. Once the creditor has evidence that his debtor has held back from moving to claim his right, thereby causing his insolvency or increasing an existing insolvency, he may resort to the oblique action. He is not confined to a passive role of watching and supervising the debtor, but takes the matter in hand himself. Insolvency here means actual insolvency, not legal insolvency, which requires a judgment declaring it. The creditor must prove that insolvency when bringing the oblique action; it is enough that he prove that the lapse of the right that is the subject of the action would cause the debtor's insolvency or increase it.
The creditor is not required to give the debtor formal notice, despite the delay and inaction with which the debtor is charged. But although the creditor may sue a third party in his debtor's name without formal notice, he must join the debtor as a party when bringing the action, failing which the opposing party may plead its inadmissibility. Both the Egyptian Civil Code and the Civil Transactions Law lay down this requirement. A party may also intervene in the action, or be joined by the court, so that the judgment binds him as it binds the remaining creditors without their being joined, the debtor representing them. In that case he may not have the action dismissed on the ground that he was not joined at the outset.
Three: that the creditor have an interest in bringing the oblique action.
That is, that the right forming the subject of the action be capable of attachment, and that it not be burdened by debts ranking ahead of his own to the point of exhausting it. A creditor may not interrupt prescription over property mortgaged to another, for in that case the debtor and the possessor may plead the inadmissibility of the action for lack of interest.
Four: that the right forming the subject of the action not be attached to the debtor's person or incapable of attachment.
Rights attached to the person — those arising from matters of personal status, such as maintenance — may not be claimed by a creditor through an oblique action. A creditor may not establish a filiation that would enrich his debtor, nor claim maintenance on his behalf. The same rule applies to a pecuniary right carrying moral considerations, such as compensation for moral harm where the creditor does not seek it: the creditor may not in that case claim it from his debtor through an oblique action.
Five: that what the creditor exercises in his debtor's name be a right and not a mere faculty.
A creditor may not exercise a faculty through an oblique action — such as accepting an offer addressed to the debtor, or terminating one of his contracts.
The effects where the conditions of the oblique action are met
The creditor may claim all his debtor's rights, whether personal — rights whose object is money, a thing, an act or a forbearance — or real, such as ownership, usufruct or an easement.
The effect of the judgment in the action
The creditor's representation of his debtor in an oblique action is a legal representation distinguished by being for the benefit of the representative rather than the principal, and confined to exercising the right rather than disposing of it. Despite that representation the debtor must still be joined; the creditor may not compromise the right; and the procedure of the oblique action is no substitute for enforcement. The effect of the judgment in an oblique action, as the explanatory memorandum to the Egyptian Civil Code lays down, is to bring what is collected into the debtor's patrimony and to attach it to the general security of the creditors. Representation would have implied no need to join the debtor — the principal — as a party to the action; but this action is confined to exercising the right without disposing of it. Hence a further effect attaches to the debtor: he retains the right the creditor exercises on his behalf, because the creditor is no more than his representative, and the rule is that a principal remains free to dispose of what another exercises on his behalf.
Although the oblique action does not always profit the creditor, since the remaining creditors share with him, the codifier has afforded him another, direct action in which he takes for himself the right his debtor holds against others. This is provided for in particular cases: the lessor against the sublessee (Article 596 of the Egyptian Civil Code), and the subcontractor and the workmen against the employer (Article 662 of the Egyptian Civil Code). In these cases the creditor brings the action in his own name, joining his debtor and his debtor's debtor and seeking to compel the latter to render what he owes to his own creditor, who is the debtor of the party bringing the action. This differs from the oblique action: where the creditor brings it in his own name rather than his debtor's, seeking judgment for himself rather than for his debtor, it is treated as the exercise of a direct right of his own and not as an oblique action. (Cassation, 9 May 1991.)