In a recent decision, the full bench of the Federal Supreme Court (STF) ruled in favor of implementing extrajudicial procedures for the loss of possession and ownership of assets in cases of breach of contractual obligations. The provisions cover both the search and seizure of movable property and the execution of mortgage guarantees on real estate.
The Supreme Court jointly ruled on three Direct Actions of Unconstitutionality (ADIs), filed by entities representing court officials and judges, which challenged the constitutionality of points of the Legal Framework for Guarantees (Law 14,711/2023).
The points in question concern the extrajudicial mechanisms created by the Law, such as: (i) consolidation of ownership in fiduciary transfer of movable property; (ii) extrajudicial search and seizure; (iii) extrajudicial execution of credits secured by mortgages; and (iv) extrajudicial execution
of real estate collateral in a joint effort by creditors.
Thus, the main arguments presented by the entities involved the claim that seizing assets without prior judicial intervention would violate fundamental rights, such as the right to human dignity, property, privacy, and private life. It was also argued that this measure would violate the principles of due process, full defense, jurisdictional reserve, and the right to be sued by the competent authority.
However, Justice Dias Toffoli, reporting judge for the cases, presented the prevailing argument, arguing that the new mechanisms do not harm the parties involved, since they are carried out by impartial agents. The justice also emphasized that the procedures ensure notification of the debtor, offering them the opportunity to settle the debt or demonstrate that the collection is undue. Finally, he emphasized that if the dispute persists, the Judiciary can still be contacted.
The only dissenting opinion was from Justice Carmem Lúcia, who clarified that any infraconstitutional rule that provides for the enforcement of debts through extrajudicial procedures, including search and seizure, violates the principle of the right to private property, as well as the guarantee of the inviolability of privacy and private life.
From this perspective, the measures approved by the Supreme Court seek to streamline debt recovery and relieve the burden on the Judiciary, but require caution in their application to avoid violating fundamental rights.
Link to STF lawsuits:
ADI 7600 – https://portal.stf.jus.br/processos/detalhe.asp?incidente=6845229
ADI 7601 – https://portal.stf.jus.br/processos/detalhe.asp?incidente=6846515
ADI 7608 – https://portal.stf.jus.br/processos/detalhe.asp?incidente=6865956
Aline Rossi | aline@nascimentomourao.adv.br
Coordinating Partner of the Strategic Litigation practice, specializing in Civil Procedural Law and Contracts.
Matheus Selaibe de Souza | matheus.souza@nascimentomourao.adv.br
Attorney in the Strategic Litigation practice.
