The impact of the Special Appeal selected by the STJ as a representative case of controversy
The Superior Court of Justice (STJ), by admitting Special Appeal No. 2,209,895/SP as a representative case of controversy, has reignited the debate on revenue garnishment in civil enforcement proceedings. Although a long-standing topic among legal scholars, the matter remains sensitive as it involves balancing the effectiveness of enforcement with the preservation of business activity.

At the core of the controversy is whether revenue garnishment may be applied even when other enforcement measures have not been exhausted. The Code of Civil Procedure (CPC), in establishing the preferential order for asset seizure (Art. 835), ranks revenue garnishment tenth on the list.

The issue in this case is whether that order can be relaxed, especially in situations involving financially distressed companies whose ongoing operations may be at risk. The STJ’s ruling, by treating this as a representative case, may define the limits and applicability of such a measure.

The appeal challenges a decision that authorized garnishment of a company’s revenue without a genuine prior attempt to locate other assets owned by the debtor company.

For revenue garnishment to be appropriate, other asset location measures must first be pursued by the creditor. This is crucial to avoid making enforcement excessively burdensome for the debtor. Furthermore, it is not enough to merely exhaust the asset types listed in items I to IX of Art. 835 of the CPC. The following requirements must also be met:

• Proof that no other assets are available to secure the debt or that the identified assets are difficult to liquidate;
• Appointment of an administrator responsible for outlining the methods of administration and payment;
• Setting a percentage that does not jeopardize the company’s economic activity (principle of least onerous means).

In this context, it is crucial to highlight the teachings of Humberto Theodoro Junior:

Revenue garnishment appears in tenth place in the order of preference under Article 835. Thus, if there are free assets of a lower grade, garnishing a company’s revenue should not be considered, as it can compromise working capital and hinder the continuation of regular economic activity. Therefore, appointing a custodian administrator is required to develop a payment plan for judicial approval. This avoids undermining the solvency of the debtor company.

In other words, even partial revenue garnishment must not be applied indiscriminately and cannot be enforced by a simple court order requiring a fixed percentage to be deposited in a judicial account—without realizing that, without working capital to sustain operations, the company has no chance of surviving in the market.

It is important to stress that revenue garnishment has often been granted without proper observation of the procedure laid out in Article 866 of the CPC.

In practice, judges often authorize a fixed percentage to be garnished from the debtor company’s revenue without prior accounting analysis by a court-appointed administrator. This contradicts the requirement that such a measure must be based on a thorough assessment of the company’s real financial capacity so as not to interfere with its normal operations.

Failure to comply with the legal standard not only breaches the law but also compromises the company’s continuity and, ultimately, the recovery of the creditor’s claim in the enforcement action.

The legal provision clearly states that revenue garnishment must be applied with great caution and in a way that does not impede the debtor company’s activities. Although legally permitted, this measure must not put the company’s commercial viability at risk.

The impact of designating Special Appeal No. 2,209,895/SP as a representative case will be both immediate and far-reaching, offering legal certainty to all parties involved in enforcement proceedings and, most importantly, providing guidance to courts on how to approach similar cases.

Although enforcement should aim to serve the creditor’s interest, judges are not bound solely by that interest and must also protect the debtor’s constitutional and fundamental rights. Therefore, there is no room for interpretations contra legem or in malam partem, based solely on a formal interest in satisfying the enforcement order.

As such, revenue garnishment inherently involves a conflict between the creditor’s right to enforce a claim and the debtor’s right to invoke the principle of least onerous means to avoid asset seizure that could cripple their business.

The principle of preserving the social function of the company, enshrined in Article 170 of the Federal Constitution, is one of the key reasons for limiting revenue garnishment. Considering both the principle of least onerous means and the preservation of the company’s social function, it is clear that revenue garnishment should be reserved as a last resort—ultima ratio—when there are no other assets available to satisfy the debt.

This understanding was recently affirmed by the São Paulo State Court of Justice:

Enforcement of Extrajudicial Title – Claims of Excessive Garnishment and Motion to Revoke Revenue Garnishment – Valid Grounds

Given that real estate assets were already seized in the enforcement case, the lack of evidence showing their insufficiency to cover the debt renders premature any request to reinforce the garnishment by seizing the company’s revenue—especially since this is an exceptional enforcement measure.

The decision was overturned, and the revenue garnishment was revoked.

(Court of Appeals of São Paulo – Case No. 2115747-90.2025.8.26.0000, Jaboticabal, Rapporteur: Walter Fonseca, Judgment Date: 06/04/2025, 11th Civil Chamber, Publication Date: 06/04/2025).

The STJ’s case law must therefore clarify that revenue garnishment cannot be applied automatically or generically. It requires a detailed analysis of the company’s financial condition and of the potential impact on its recovery.

In conclusion, the selection of Special Appeal No. 2,209,895/SP as a representative case of controversy marks a milestone in a potential new interpretation and application of revenue garnishment in Brazil’s legal system. The Superior Court will now have the opportunity to reaffirm the principles outlined in STJ Theme No. 769, addressing their applicability in both tax enforcement cases, governed by Law No. 6,830/80, and in private law disputes.