A husband married under separation of property (séparation de biens) received land through a gift-partition (donation-partage, a lifetime gift that divides assets between beneficiaries) and paid the equalising payment (soulte) owed to his brothers and sisters with the proceeds of the sale of a property jointly owned by his wife and her mother. At his death, the wife claims against the estate: on the whole equalising payment, or only on the share paid with her own funds? In a reported decision of 18 January 2017, the First Civil Chamber of the Cour de cassation (the French supreme court for civil matters) chose the second answer. For the valuer, the claim is computed only on the share paid with the wife’s funds, not on the whole equalising payment.
The facts
A man married under separation of property died on 2 July 2006. He left his wife, their son and three children of a first union, who sued the wife and the son for partition; one of them died during the proceedings and his three children joined the case voluntarily.
Under a gift-partition of 12 February 1958, the deceased had received land and paid his brothers and sisters an equalising payment of 26,000 francs. That sum came from the sale of a property jointly owned (bien indivis) by his wife and her mother. The wife claimed a sum on that account.
By a judgment of 9 November 2015, the Pau Court of Appeal recognised her claim against the estate, to be valued by the following formula: amount of the equalising payment (26,000 francs), multiplied by the current value of the property in its condition on the day of acquisition, 12 February 1958, and divided by the value of the property acquired, house and land, according to the gift-partition. It held that the husband’s use of that sum to pay a personal debt made him his wife’s debtor up to the profit he derived from it, “regardless of the relations that may have existed between her and her mother as to the final division between them of the sale price of their property” (translated from the French). A main appeal and a cross-appeal were lodged.
The decision
Having dismissed the other grounds, the Cour de cassation allowed the first ones, under articles 1469, paragraph 3, 1543 and 1479, paragraph 2, of the French Civil Code (Cass. 1re civ., 18 January 2017, appeal no. 16-12.391, reported). It criticised the Court of Appeal for ruling as it did, “whereas the subsisting profit had to be determined according to the proportion in which the funds provided by the wife, to the exclusion of any that may have been provided by her mother, had contributed to paying the equalising payment that enabled the allocation of the land”.
The judgment was quashed, but only insofar as it held that the wife holds a claim against the estate to be valued by that formula; the case was remitted to the Bordeaux Court of Appeal.
The articles cited fit together: article 1543 subjects claims between spouses under separation of property to the rules of article 1479, whose second paragraph refers, unless the parties agree otherwise, to the third paragraph of article 1469; the claim then cannot be less than the subsisting profit (profit subsistant) where the funds were used to acquire, preserve or improve a property that is found, on the day of liquidation, in the debtor spouse’s estate. The decision says nothing of the mother’s possible rights: her funds are simply excluded from the computation of the wife’s claim.
What this changes for valuation
A proportion applied to the current value. Between spouses under separation of property, the claim is therefore computed like compensation between spouses (récompense): not the sum paid, but the fraction of the property it financed, applied to the value of the property on the day of liquidation. The Court of Appeal’s formula follows that structure. The same reasoning applies where the community paid the equalising payment for a bare ownership received by gift-partition, or to separate property partly sold.
In the numerator, only the creditor spouse’s funds. The quashing turns on this point: the Court of Appeal had credited the wife with the whole equalising payment, although part of the sale price of the jointly owned property could belong to her mother. Applied to the formula, the rule replaces the amount of the equalising payment with the share actually paid with the wife’s funds. If that share were only half, the claim would be halved compared with the Court of Appeal’s computation. The division of the price between the wife and her mother, which the Court of Appeal treated as irrelevant, thus becomes an input of the computation.
The documents to gather. To establish the proportion, the report relies on the deed of sale of the jointly owned property, each co-owner’s share, the actual division of the price and the record of the payment. Where these documents are incomplete, the valuer presents several reasoned proportion hypotheses, and the judge retains the one the evidence establishes. The valuer quantifies; whether the funds belonged to the spouse or came from a third party is for the judge to decide.
Two values of the property, one to be reconstructed. In the Court of Appeal’s formula, the denominator is the value of the property acquired according to the 1958 gift-partition, and the current value is taken in the property’s condition on the day of acquisition; article 1469, paragraph 3, refers to the day of liquidation. The Court censures the formula only on the share of the wife’s funds, without endorsing the rest, which falls with the quashed part and goes back before the Bordeaux Court of Appeal. The Court’s reasoning mentions land, the formula a house and land: to apply a formula of this kind, the report first describes what was received in 1958, from the deed, the plans and the land register (cadastre) of the time, then values it by comparison with recent sales of similar properties.
Two neighbouring questions. The prior question, claim or contribution to the expenses of the marriage, is dealt with in the article on the capital contribution to the jointly owned home. Whether a home lent free of charge to an heir must be brought back to the estate (rapport successoral) is a separate question, which the Cour de cassation rules out for a loan for use: see Loan for use of a home: no indirect advantage to bring back.
What the valuer takes from it
- The claim of a spouse under separation of property whose funds paid the equalising payment of a gift-partition cannot be less than the subsisting profit: the fraction of the property funded with that spouse’s money, applied to the property’s value on the day of liquidation.
- Only the creditor spouse’s funds enter that fraction; those of a third party, however close, are excluded.
- The report documents the division of the price between the spouse and the third party, or presents several reasoned hypotheses.
- The decision does not settle the other terms of the Court of Appeal’s formula: the report identifies what was received and states, for each value, the date and condition of the property adopted.
Further reading
The Market value page describes the assignment, its timescale and its fee. The guide Matrimonial property liquidation in France: which valuation date? and the glossary entries récompense, soulte and date de valeur complement this article. The decision of 11 October 2017 on the loan for use is discussed in Loan for use of a home: no indirect advantage to bring back. On the same theme: Separation of property: paying for the home creates a claim and Compensation: separate property partly sold, the profit is shared. The decision is available on Légifrance.
What next
Did one spouse's funds pay for the other's property, and is a claim to be quantified at partition?
I quantify the share funded by the spouse's money from the deeds and bank records, or under several reasoned hypotheses, then the value of the property received at the date set for the liquidation, for the notaire handling the liquidation or the court.
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