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Gorvell Law Shoal Library
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A COMPLETE COURSE OF INSTRUCTION

FRENCH LANGUAGE,

Which obviates entirely all necessity for leaving England
to acquire the Parisian Accent.

NEW FRENCH SCHOOL BY M. LE PAGE,

Professor of French in London.

“The sale of many thousands, and the almost universal adoption of
these clever little books by Mons. Le Page, sufficiently prove the public
approbation of his plan of teaching French, which is in accordance
with the natural operation of a child learning its native language.”

THE FRENCH SCHOOL.— Parr I.

L'ECHO DE PARIS; being a selection of Familiar Phrases which a
person would hear daily if living in France. With a Vocabulary of the
‘Words and Idioms. Twenty-first Edition, with additions and numerous
Woodcuts. In 12mo, neatly bound in cloth. Price 4s.

“‘ Mons. Le Page’s excellent work has, we are happy to perceive, run
through several editions with all the celerity it deserved. His book is
decidedly the best we have seen for aiding the instruction of English
children in the rudiments of the French language, inasmuch as it
approaches nearest to that best of all methods, familiar conversation.”

Morning Post.

A KEY TO THE EOHO DE PARIS.
By Mons. LE PAGE.

THE FRENCH SCHOOL.—Parr II.

GIFT OF FLUENCY IN FRENCH CONVERSATION: a Set of
Exercises for the Learner-of the French Language, calculated to
enable him, by means of practice, to express himself fluently on the
ordinary Topics of Life. With Notes. Highth Edition, improved,
12mo, neatly bound in cloth, price 8s.

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highly appreciated ; no books are better adapted to give the pupil a
complete command of words and phrases, and a correct knowledge of
the language; the arrangement is natural and judicious. — Atlas.
LE PETIT CAUSEUR;

Or, FIRST CHATTERINGS IN FRENCH; being a Key to the Gift.
of French Conversation. By Mons. LE PAGE, Author of ‘“ L’ Echo?
de Paris,” &c. The Key gives the correct translation of the French,i
thereby showing which is the proper expression for every topic of life.
New and Improved Edition. Price 1s. 6d.

THE FRENCH SCHOOL.—Parr III.

THE LAST STEP TO FRENCH; or the Principles of French Grammar
displayed in a series of Short Lessons, each of which is followed by
Questions and Exercises; with the Versification. Seventh Edition.
12mo, neatly bound in cloth. Price reduced to 8s. The Three Parts
bound in One Volume. Price reduced to 9s.

“M. Le Page’s tabulation of the verbs is as complete as it is good:
his syntax is lucid and scholarlike, and his Exercises are well gra-
duated, and likely to exercise the student’s mind with his memory.”

Gentleman's Magazine.

‘To schools and private teachers these volumes must be invaluable.”

Monthly Review.

LONDON: EFFINGHAM WILSON, 11, ROYAL EXCHANGE.

 

 

duvex to The Cimes Helwspaper.
9d. Monthly.
‘Tes TIMES NEWSPAPER circulates more extensively

and widely than any newspaper in the kingdom, and its influence is
greater than that of any paper in the world-—beyond comparison. Its
- present sale ig somewhere over 50,000 daily ; but for every thousand persons
who buy The Times, there are a hundred thousand who read it, and derive
their political and general knowledge from its pages. Z
The Times is a daily paper. But is it merely this?’ Whence do politicians
derive their texts? Whence do Governments gather the indications of out-
ward movements? and wherein do the vast multitude see mirrored the
features and the acts of Governments? To which paper does the author
turn for information? To what pages must the future historian look for
the facts of the present day? Whence will be derived the history of that
mighty war of which we have as yet witnessed only the disastrous com-
mencement ?
The Monarch—the Peer—the Minister—the Member of Parliament—the
Banker—the Merchant—the Tradesman—gather many of the impulses of
their daily life from the pages of The Times,

LONDON: HOULSTON & STONEMAN, 65, PATERNOSTER ROW;
And all Booksellers.
THE

MERCANTILE AND BANKRUPT
LAW OF FRANCE:

A PRACTICAL TREATISE
ON THE

LAWS AND REGULATIONS WHICH GOVERN COMMERCIAL TRANSACTIONS
IN FRANCE; AND ON THE PROCEEDINGS IN FAILLITE
' AND BANKRUPTCY.

Specially designed for the Dae of Merchants and Traders.

BY

 

“T hope our two nations will always remain united as they are now, in peace as in war,

. I think it will be for the welfare of the whole world and for their own prosperity.”—Speech

of the Emperor Napoleon ILI. in answer to the Address of the Corporation of Dover on his
landing, 16th April, 1856,

LONDON:
EFFINGHAM WILSON, ROYAL EXCHANGE.
1855.
BI7397

LONDON:
SAVILL AND EDWARDS, PRINTERS, CHANDOS-STREET,
COVENT-GAEBDEN.
TO THE RIGHT HONOURABLE (

Sa je jong: OM
ke Oe

SIR FRANCIS GRAHAM MOON, Barr,”

LORD MAYOR OF LONDON.

My Lorp,

Your elevated position as Chief Magistrate of
the first commercial city in the world naturally points
to your Lordship as the proper person to whom the
present brief treatise on French Mercantite Law
should be inscribed. May your Lordship receive this
mark of respect, as a grateful recognition, on our part,
of your eminent and successful labours and instru-

mentality in cementing the cordial alliance between

our two nations.
We have the honour to remain,
My Lord,
Your Lordship’s most obedient servants,

THE AUTHORS.
PREFACE.

Art the present moment, when France so cor-
dially invites the co-operation of our manufac-
turers to contribute to the splendour of the
Great Exhibition of the Industry of Nations,
fixed for the present month, it has appeared
useful to us to enlighten our fellow-citizens on
the nature and extent of the rights which
foreigners enjoy in France for the protection of
their commerce. We are convinced that a suf-
ficient knowledge of these rights can only tend to
encourage the commercial transactions which
this Great Exhibition is sure to open more than
ever between ourselves and our neighbours on
the other side the Channel.

We learn every day more and more how
pleasing and communicative are the military
vill PREFACE.

habits and manners of our valiant allies. It is
surely not less interesting to us to study the
habits and customs of their commerce, which,
we may fearlessly assert, have the advantage
that they are of remarkable simplicity.

Many of our merchants and manufacturers
limit their operations with France from a vague
apprehension of difficulties which in reality have
no existence. We shall esteem ourselves happy.
if in this brief treatise—which recommends itself
more particularly by its conciseness—we suc-
ceed in convincing them that the commercial
laws of France afford greater protection to the
merchant than those of any other country in the
world.

It is not our intention here to write an elabo-
rate treatise on commercial law, nor to give a
comparative synopsis of the commercial laws
of the two countries. Our great object has
been more especially to avoid those numerous
quotations of law texts, and of the formule of
acts, which only tend to swell the size of a
volume, and interpose difficulties in the way of
reference and research.
PREFACE. ix

Moreover, works of science, properly so termed,
are but too apt to raise and bring on discus-,
sion. We do not claim for this brief treatise the
title of a scientific work. We would rather wish
it to be considered as a useful book, confining our-
selves, as we do, simply to facts and results. The
merchant, whose time is too valuable to be spent
in reading elaborate technical disquisitions, will
find a book of this description most valuable
for reference and guidance in all business trans-
actions.

Our great object has been to arrange the
principles of law and the customs of commerce
which guide the French Tribunals in the con-
sideration and decision of the litigations to which
the commercial operations between English and
French merchants may give rise. We have more
especially dwelt upon the position in which the
bankruptcy cf a French merchant places his
creditors.

We are thus enabled to proceed in the present
work by way of affirmative propositions and
positive rules, since we are convinced that every
one of them will be found fully supported and
x PREFACE.

borne out by the great legal authorities and juris-
consults of France,—as the interpreters of whom
we offer ourselves,—and between whom and the
public we shall always be happy to serve as
intermediators.

HENRY DAVIES,
14, Buckingham Street, Strand,

EMILE LAURENT,

24, Cité Trévise, Paris.

May, 1855.
CONTENTS.

CHAPTER I.
GENERAL RIGHTS.

Distinction made by the French law, in commercial suits,
between a French subject and an alien, 1. Provisional
arrest of the alien debtor, and provisional seizure of his
goods and chattels, 2—4. :

CHAPTER II.
OF SALES AND PURCHASES.

Contracts of sale, 5. Brokers, 6,7. Sale of real estate, 7.
Sale of ships, 8,9. Sale of stock, 9. Time-bargains,
9,10. Sale of articles in course of manufacture, and sale
of commodities upon trial, 12. Aleatory, or contingent,
sales, 12,13. Commercial travellers, and representatives
of mercantile houses, 14—17. Sale and transfer of debts,
17,18. Earnest, 19. Essential intrinsic conditions to
establish the validity of a contract, 19. Errors and
Frauds, 19—22.

CHAPTER III.
TRANSFER AND DELIVERY OF THE ARTICLE SOLD.

Delivery of the thing sold, 23—25. Identification of the
thing sold, 25. Difference between livraison and déli-
xil

CONTENTS.

vrance, 25—27. Examination of the goods and veri-
fication of alleged defects, or differences, 27, 28. Repu-
diation of the bargain, 29. Time of delivery, 30. Con-
sequences of non-delivery, 30, 31.

CHAPTER IV.

WARRANTY BY THE VENDOR.

Caveat emptor, 32. Warranty against latent defects in the

thing sold, 32. Consequence of breach of warranty
32, 33. Absence of warranty in forced sales by public
auction, 33. Redhibitory defects in horses, 33. Actions
against contractors of buildings, &c., on the ground of
defects of construction, or of the use of unsound mate-
rials, 34.

CHAPTER V.

CARRIAGE BY LAND AND BY WATER.

Way-bills and bills of lading, 35. Liabilities of carriers,

36—38,

CHAPTER VI.

ON PAYMENT.

Time, place, and mode of payment, 39—41. Payment of

interest for debts overdue, 41, 42. Solidarity, 43, Gua- '
rantee of debts by third parties, 44. Exhausting the .
goods of a debtor, 44. Allegation of release from debt,
44. Loss of vouchers, 45. Statute of limitations, 45, 46.
CONTENTS. xiii

CHAPTER VII.

ON BILLS OF EXCHANGE AND PROMISSORY NOTES.

Definition of a bill of exchange, 47-49. Indorsement, 50.
Acceptance, 51. Protest, 51, 54—58. Provision, 52, 53.
Joint responsibility of drawer, acceptor, and indorsers,
53. Aval de garantie, 54. Loss of bills of exchange, 58,
59. Letter of re-exchange, 59 —60. Return account, 60.
Promissory notes, 60—62. Notes payable to bearer, 62, 63.
Notes payable at the domicile of a third party, 63.
Mandates, 63, 64. Effect of notice of return without
costs, placed upon commercial effects 64—66. Stamp
duties on draughts, &., 66. Statute of limitations
respecting actions at law on effects of commerce, 67, 68.

CHAPTER VIII.

OF FACTORS, OR COMMISSIONNAIRES.
Duties, rights, and liabilities of factors, 69—71. Factor’s
lien upon the goods consigned to him, 71, 72.

CHAPTER IX.

OF THE OPENING OF A CREDIT, AND OF LOANS
ON PLEDGE.

Lien upon goods for advance of money on the same, and
contracts of pledge, 73—75.

CHAPTER X.

OF MARINE INSURANCES, AND INSURANCES BY LAND.

- Contracts and policies of insurance, 76—78.
XIV CONTENTS.

CHAPTER XI.

OF THE LAW OF PARTNERSHIP, OF COMMERCIAL
ASSOCIATIONS, AND PUBLIC COMPANIES.

Anonymous societies, 79—81. Joint-stock companies, 81, 82,
Partnership, 82. Copartnery, 82, Anonymous societies,
joint-stock companies, and partnerships are bound to
publish their rules, 83, 84. Office of arbitrators in
disputes between associates of a commercial company,
84, 85.

CHAPTER XII.

OF COMMERCIAL SUITS, AND OF THE COMPETENT
TRIBUNALS.

Composition and jurisdiction of Tribunals of Commerce,
86, 87. Employment of counsel, 87. Proceedings
before the Tribunal of Commerce, 88—90. Judgment
by default, 88. Opposition to a judgment by default,
88, 89. Judgment after hearing of both parties, 89,
Appeal to the Imperial Court, 90. Provisional execu-
tion of judgment, 90, 91. Composition of the Im-
perial Courts, 91. Decrees of the Imperial Courts, 92.
Appeal in error to the Court of Cassation, 92. Com-
position of the Court of Cassation, 92, 93. Court of
Requests, 93. Civil Court, 93. Tierce opposition and
requéte civile, 94, 95.

CHAPTER XIII.

OF LAW-SUITS AND PROCEEDINGS.

Seizure of the goods and chattels of the debtor, and attach-
ment of his person, 96. Limitation of the term of
CONTENTS. XV

imprisonment for debt, 97. Preferential debts, 98—100.
Attachment of money in the hands of third parties, 100.
Mortgage for judgment debts, &., 100.

3 CHAPTER XIV.

OF LAW CHARGES AND EXPENSES.

Fees of public officers, 101. Counsel’s fees, 101. Registra-
tion duty on contracts of sale, and on bonds, 102. Duty
on judgments, 102. Stamped paper, 102. Expense of
attaching and imprisoning the person of the debtor,
103. Law to enable indigent persons to sue in forma
pauperis, 103.

CHAPTER XV.

OF FAILURES AND BANKRUPTCIES.

Essential difference between the French and English bank-
rupt laws, 104. Fixing the date of the suspension of
payment, 105, Validity of bond fide transactions
entered into during the interval ‘between the suspen-
sion of payment and the adjudication of bankruptcy, 105,
Transactions which are invalid if entered into during
such interval, 106. Distinction between failure and
bankruptcy, 107. Simple bankruptcy, and fraudulent
bankruptcy, 107. Filing of balance-sheet, 107. Adju-

‘ dication of bankruptcy, 107—109. Protection, 109.
Office of syndics, or assignees, 110—114, 119, 120, 123.
Office of judge-commissioner, 110, 112, 114, 115, 123.
Office of the registrar of the Court, 112,115. Periods
allowed for the production of titles of debts and claims,
113. Bordereau, or summary account, 113. Proof of
debts 114,115, General meeting of creditors, 115. Com-
‘Xvi

CONTENTS.

position, or concordat, 115—119. Union of creditors,
119. Rights of preferential and secured creditors, 120,
Right of revendication, 120, 121. Rights of the bank-
rupt’s wife, 121—123. Audit of the accounts of the
syndics, 123. Distribution of the estate, 123. Lia-
bilities of the bankrupt after the dissolution of the
union, 123. Rehabilitation, 124.
FRENCH MERCANTILE

AND

BANKRUPT LAW.

CHAPTER I.
GENERAL RIGHTS.

ALIENS enjoy before the French Tribunals of Commerce
the same rights as French subjects ; and the same prin-
ciples of law which apply to the latter apply equally to
the former.

The quality of alien makes no difference in the

position of a litigant in France, no matter whether as
plaintiff or as defendant.
' In one respect, however, the French law makes, in
the preliminary proceedings of a suit, a distinction.
between a French subject and an alien, both as regards
the person and the goods and chattels of the latter.

When a French subject claims a debt, no matter of
what amount, of the’ alien, and produces in support of
his claim written evidence, either of a nature held to be
conclusive, such as a note of hand or an acknowledg-
ment of debt signed by the debtor, or of a character to
raise a strong presumption in favour of the claim, such
as a bill or invoice extracted from the claimant’s books,
the French Tribunal will, upon application, grant a.

B
2 FRENCH MERCANTILE LAW.

warrant of apprehension against the person of the
alleged alien debtor, unless the latter has an establish-
ment in France. The court will also, under the same
circumstances, grant the claimant authority to seize
and hold in pledge for his protection, the goods and
chattels of his alleged alien debtor.

The alien may in such cases obtain the release of
his person or goods, by paying into Court a sum of
money equal in amount to the alleged debt. The
Court will, under certain circumstances, be satisfied
even with a smaller amount being deposited.

But if the alleged alien debtor, on his part, can show
to the satisfaction of the Court that the pretended
creditor is not sufficiently responsible, and that the
proof of the alleged claim is defective, the Court will,
in the interest of the alien debtor, call upon the French
creditor also to give proper security.

Thus, where a Frenchman from motives of malevo-
lence wrongfully claims a debt of an alien, putting him
to grave inconvenience, by arresting his person or
seizing his goods, the injured party is safe to obtain a
just reparation, inasmuch as thé Tribunal will inflict
damages in proportion to the injury suffered.

This is so well known in France, that we may safely
assert, without fear of any well-founded contradiction,
that there are many instances of Frenchmen having
had to pay heavy damages in consequence of unjust
and vexatious claims preferred against aliens.

The warrants of apprehension or of seizure are
granted by the judge (who is the president of the Civil
Tribunal, specially appointed for that purpose by the
law), in the absence of the debtor, but the latter can
GENERAL RIGHTS. 3

always, of right, demand to be immediately brought
before the judge, and to raise the question of reciprocal
security, should he desire it. Consequently, no arrest
of the person or seizure of the goods is ever actually
consummated without a previous hearing of both
parties before the judge.

The authority of the judge is absolute in the above
cases. However, if the arrest of the person or the
seizure of the goods of the alien debtor has been
effected in an irregular manner, and not in conformity
with the proper forms and rules of the law, the aggrieved
party may the same day, or the day after, move the
Civil Tribunal to annul the proceedings, and the de-
cision pronounced by the Tribunal on this motion, may
be referred for revision to the Imperial Court of
Appeal, which will give judgment in a few days, and
again from the decision of the Imperial Court an
appeal lies to the Supreme Court of Cassation ; but the
judgment of this latter Court is not so promptly given.

The provisional arrest of the person of an alien
debtor and the seizure of his goods are called conser-
vatory measures.

The independence and integrity of the French
judges are proverbial, and there is so wide a distance
between the judge and the litigants, that no occult
influence can be brought to bear upon the decisions of
the former.

Such are, on the one hand, the only exceptional
weapons which the laws of France place in the hands
of the French creditor against an alien debtor, and on
the other hand, the protective dispositions which the
same laws have made in the interest of the alien debtor,

B2
4 FRENCH MERCANTILE LAW

who is thereby effectively protected from all wrongful
molestations and vexatious claims.

Arrest of the person of a debtor, and provisional
seizure of his goods and chattels, may also be resorted
to, on the part of an alien creditor, against a French
subject, but only under certain conditions,—viz :

The personal arrest can only be effected after the
alien has obtained a judgment which constitutes him
creditor of a sum exceeding 200 francs, or £8 English
money, and the provisional seizure of goods only if the
debtor is a hawker, or perambulating dealer, or if he is
about to remove his furniture and goods.

The requisite permission to take the latter measure
(seizure of goods and chattels), is obtained, as already
stated, by application to the judge.

To sum up, the only difference which exists between
the rights of French subjects against .aliens and those
of the latter against the former, consists in the pro-
visional arrest of the debtor granted to the French, and
refused to the alien creditor.

We have deemed it advisable in the first place to
point out this exceptional difference, that we may with-
out restriction or impediment enter upon the conside-
ration of all the other parts and branches of the law
which apply equally and without distinction to French
subjects and to aliens.

After these preliminary remarks we will now suc-
cessively discuss the various forms of transactions which
may take place between French and English merchants,
and point out the rules which govern them, and the
rights which are conferred thereby on all parties.
CHAPTER II.

OF SALES AND PURCHASES.

Every individual of full age may trade in France.

The period of full age is fixed at twenty-one years,
and the proof of it is established from personal record.

An infant, or minor of eighteen, may also trade with
the sanction of his father; or if an orphan, of his
guardian or guardians, which sanction requires to be
given in certain forms prescribed by law.

The English laws admit the same rules and prin-
ciples.

The proof of a contract of purchase or sale is esta-
blished either by written documents, or by the testimony
of witnesses.

Those conditions of sale which have not been ex-
pressly stipulated in the contract are determined by the
general law, and in case the latter should be silent
on the poimt by the usages or customs of trade.
Accordingly, to constitute a regular contract of sale,
it suffices that the vendor and purchaser have agreed
upon

1. The subject matter of the sale,

2. The price to be paid for it.

If, therefore, the thing sold is materially known and
identified by the two parties, it suffices to designate it
by name ; but if, on the contrary, the thing sold does
not actually exist in the form of a determinate specific
6 FRENCH MERCANTILE LAW.

body, it is necessary to state its nature and quantity,
and also, as far as possible, its quality.

If the quality of the article is not expressly described
in the bargain, it suffices that it be fair and merchantable. |

The want of proper description of an article having
several distinct. qualities, does not annul the contract ;
and we shall see, in the chapter on the Delivery of
Goods, what consequences may result from an omission '
of the kind.

Nor need the price be fixed at the moment of the
bargain ; it suffices that a certain mode of settling it
shall be clearly specified in the contract: thus, a sale
or purchase may be validly effected by stipulating that
the price to be paid for the thing sold is to be settled
either by valuation by competent persons, or by the
current quotations of the market.

The books of a merchant or trader are evidence
against him, and the adverse party has always the right
to appeal to them in proof of the conditions of a sale or
purchase.

Tf, on the contrary, a merchant or trader tenders his
own books in support of a statement of his relative to
the conditions of a contract of sale, they are not
admitted as conclusive evidence, but merely constitute
a simple presumption in his favour, which requires to
be corroborated by other circumstances. _

There are in the principal cities and places of com-
merce in France sworn brokers, whose business it is to
act as agents in the effecting of sales or purchases.
Their functions are the same as those of the English
brokers.

In cases of dispute between buyers and sellers, the
OF SALES AND PURCHASES. q

declaration of a sworn broker, even though supported
by the production of his books containing the regular
entries of the commercial operations in which he has
taken part, is held in law insufficient to establish the
existence of a sale or purchase.

The law having imposed on brokers the obligation
to write in duplicate the details of every bargain made
through their agency, and to get it signed by both
parties; nothing can supply in the way of evidence the
absence of this written contract.

The simple testimony of a broker is therefore, in
some measure, of less weight than the evidence of a
third party upon whom the law has imposed no-special
obligation.

The guiding principle of these rules is based on the
necessity that both the contracting parties should be
fully and clearly resolved upon the terms of the con-
tract and the completion of the bargain.

The observations made in the preceding passages of
this chapter, apply equally, and without distinction, to
merchandise, goods and chattels, and real estate, with
this single exception, that the proof of the sale of real
estate cannot be established by witnesses if the value
exceeds 150 francs.

However, the acquisition of real estate is. attended
with a series of formalities essential to the free posses-
sion of the property acquired, and as transactions of
this nature are out of the usual line of commercial
operations, we shall not discuss the subject here, but
confine our remarks entirely to goods and merchandise.

Unquestionably, commercial speculations may often
also embrace sales and purchases of land, but on this
8 FRENCH MERCANTILE LAW.

subject we think it the wiser course to refer our readers
to the works treating more especially of the acquisition
and administration of real estate.

There is one kind of property of an exceptional
character as regards its sale or purchase—viz., ships, or
sea-going vessels, which must not be confounded with boats
or barges employed in inland navigation. The distinc-
tion to be made between these two different classes of
vessels does not depend entirely upon the line on which
they respectively navigate, for both are found frequently
in the same waters, more particularly since a regular
packet service has been established between London
and Paris.

The mere fact of a vessel navigating more or less
habitually the open sea, is of itself sufficient to consti-
tute her a sea-going vessel. All vessels of the kind
must, at the time of their launch, be entered on the
registers of the French Navy, and especially attached
to some seaport. Upon such registration of a vessel a
certificate of Francisation is granted. A vessel of
the kind can only be commanded by a Frenchman,
and every individual of the crew must be entered on
the Navy list: foreign sailors are admitted only under
certain fixed regulations.

Boats or barges may be properly defined as vessels to
which the navigation of the high seas is interdicted.
These conveyances are, indeed, also subjected to certain
regulations in the interest of the public safety and the
proper administration of lakes, canals, and rivers; but
as far as the sale and purchase of them is concerned,
they are not treated in any way different from ordinary
moveablea,
OF SALES AND PURCHASES. 9

Whereas ships, or sea-going vessels are held to be
chattels of an exceptional character which can be owned
by Frenchmen alone, and transferred only with certain
peculiar formalities. Any instrument or deed, fraudu-
lently executed, to elude this absolute prohibition, is
held to be null and void, and involves the parties to it
in unpleasant responsibilities.

There is a peculiarity, which we must here mention,
relative to the sale and purchase of stock in the public
funds quoted at the French Stock Exchange.

Transactions in the Funds can only be made through
the medium of a stock-broker specially appointed for
that purpose, and in accordance with certain rules
prescribed by the Government.

A person may, however, undertake to sell or purchase
a certain amount of stock in the public funds, to be
delivered at a certain fixed period; and an engagement
of this kind, made in the usual form of contracts of
sale and purchase, will be held valid, but simply in
so far as to expose the, vendor to an action for damages
at the suit of the vendee; but the engagement does not
confer upon the latter a title of purchase leading to the
possession of the promised object.

We have to make here a general observation con-
cerning a certain class of contracts of sale and purchase,
both as regards goods, or merchandise, and stock in
the public funds, which are called “ time-bargains.”

Operations of this nature are validly contracted in.
the same mode as fixed bargains, but on condition
always that it is the intention of the contracting parties
to consummate them by the actual delivery and accep-
tance of the objects sold and bought.
10 FRENCH MERCANTILE LAW.

Speculation bargains, on the contrary, which are
simply intended to lead to the payment of the difference .
between the price stipulated in the bargain and the
actual price or value of the article on the day fixed for
its pretended delivery, are formally prohibited, as con-
stituting a gambling or wagering transaction, which
cannot be set up as a cause of action in a French Court of
Law. However, voluntary payments for the compound-
ing of differences are always permitted and held valid.

A serious difficulty arises when the Tribunals are
called upon to decide whether a time-bargain submitted
to their consideration belongs to the class of bond fide
contracts, which are valid in law, or to the category of
gambling or wagering transactions, which are legally
null and void.

The following are the invariable rules which guide
the French Courts in the decision of this question :—

If it can be clearly established that the one of the
contracting parties who pleads the nullity of the time-
bargain, was, at the time the latter was made, from the
nature of his business, his connexion, and his standing
in point of fortune, in a position (if the vendor) to fur-
nish the article sold, or (if the purchaser) to accept it, the
bargain is held to be a bond fide transaction, and the
protesting party is adjudged to carry it into effect. So
the good faith which ought to govern all commercial
transactions requires. In the contrary case, the contract
is pronounced to be null and void, because the one of
the contracting parties is held to have known the pre-
carious position of the other, and cannot pretend that

he really intended the bargain as a serious and bond fide
transaction.
OF SALES AND PURCHASES. 11

The nullity of a bargain is pronounced also if it
appears on the face of it that the thing sold or bought
cannot possibly be furnished, as would be the case, for
instance, with the sale of a quantity of a peculiar kind of
merchandise exceeding that which the contracting parties
knew to exist in the market.

It has often happened that on the day appointed
for the performance of a bargain, the one of the con-
tracting parties, called upon to carry his part of it into
effect, has alleged, and even shown, that the other
party had deceived him at the time the bargain was
made as to his true position, so that the party claim-
ing the performance of the contract is only enabled to
fulfil his part by reason of the benefit to be reaped
from it; whilst, had the event turned out otherwise,
so that he would have been a loser instead of a gainer
by the transaction, he would have been unable to carry
his part into effect. Now although this situation of
affairs may appear contrary to equity, as the chances for
the two parties are not equal, it is only with the greatest
circumspection that the Tribunals admit this plea to pre-
vail, as it is deemed necessary, as much as possible, to
maintain and enforce the performance of all commercial
transactions that may be entered into, and as it would
be a most inconvenient and dangerous practice to permit
inquiries into the position of merchants and traders.

But the case is very different if an imputation of the
kind is made between the day of the bargain and the
time appointed for its performance. In that case the
Tribunal does not hesitate to compel the party whose
solvency is questioned to give .security, so as to
guarantee the performance of his part of the bargain.
12 FRENCH MERCANTILE LAW.

In case one of the parties to a bargain should be-
come a bankrupt before the expiration of the time fixed
for the completion of the contract, the Tribunal will
compel the Syndic to give security, if that officer, when
called upon to declare his intentions, intimates, on be-
half of the body of creditors, that the completion of
the contract is insisted on.

There are sales which become perfect and complete
only after the fulfilment of certain conditions, such as,
for instance, the completion, to the purchaser’s satisfac.
tion, of the article ordered of the vendor, or a prelimi- »
nary trial by the purchaser.

As a matter of course, the purchaser is fully entitled
to rescind the sale, if the completion of the work fails to
satisfy his reasonable expectations, or if, in the second
case, he does not approve the article upon trial.

A purchaser who has reason to complain of badly
made articles might sue for damages, if it were shown
that the vendor has, in his workmanship, been guilty
of neglect or of fraud.

We have to speak here also of aleatory, or contin-
gent, sales, i.¢., such the completion of which depends
upon the passing of some uncertain event or events.

Contracts of this nature, which are of frequent
occurrence in the higher walks of commerce, and more
particularly in sea-port towns, should always be con-
strued and performed with scrupulous precision; for
this reason they are invariably made in writing.

Particular attention must be paid, in these docu-
ments, to clearly define the nature and extent of the
eventualities upon which the bargain is made to depend.
For example, in a case of sale of goods on board a ship
OF SALES AND PURCHASES. 13

on its passage, all the circumstances that may bear upon
the case, such as the name of the vessel, the port of
destination, the expected time of arrival, &c. &c., must
be carefully set forth.

If the vendor intends simply to cede an expectation,
he must state this very clearly. A merchant who sells
goods on board a certain vessel upon a simple intima-
tion on the part of his correspondent that the loading
will be effected, exposes himself to the risk of having to
pay damages, if in the contract he speaks of the load-
ings as an accomplished fact, and it should actually not
take place.

The proper line of conduct to be pursued in opera-
tions of this kind may be briefly laid down as follows:

To be careful, in drawing up the contract, not to
omit mentioning any circumstance of a nature to inform
the contracting parties as to the real situation of the
articles sold; and after the bargain is made, to do
nothing, directly or indirectly, to influence in any way
whatever the eventualities contemplated by the con-
tracting parties.

It is impossible to foresee and specifically provide in
the clanses of a contract against all the numerous events
and casualties that may arise, more especially in the
sea trade; but the intention of the contracting parties
should be so clearly expressed in the instrument of sale
and purchase as to embrace in a general way every
possible contingency.

We shall devote a separate chapter to the Rights and
Duties of Factors, or Commission Agents, through the
medium of whom sales and purchases of goods are fre-
quently made. But here is the proper place to offer a
14 FRENCH MERCANTILE LAW.

few remarks on the intervention of commercial tra-
vellers and representatives of commercial houses.

Commercial travellers are persons sent by the prin:
cipals or chiefs of houses with instructions to offer
for sale, or to buy, goods in the different places of
commerce.

Representatives of mercantile houses are persons
stationed in places more or less distant from the prin:
cipal house, and acting as deputies or delegates for the
same.

These two classes of commercial agents stand re.
spectively in a different relation towards their principals ;
but in their dealings and operations of sale and purchase
with third parties their respective position is identically
the same.

Commercial travellers are mandatories or deputies in
the true acceptation of the word, and their acts can only
be binding on their principals within the limits of the
mandate or authority entrusted to them. Any act of
theirs exceeding these limits is invalid. Great care
must therefore be taken, before accepting their agency
and interposition, to ascertain the exact extent and
limits of the authority entrusted to them.

There is no special form prescribed by which
authority to buy or sell in the name of the firm is con-
ferred upon commercial travellers. The authority to
do so is claimed in some cases upon the strength of
letters addressed by the principal to the traveller, or
upon the faith of simple notes ; occasionally there may
be a formally executed document. In transactions
with commercial travellers, parties must therefore
always be more or less strict and careful with regard
OF SALES AND PURCHASES. 15

to the nature and extent of the authority possessed by
these agents, according to the greater or less import-
ance of the transaction.

In the general usages and customs of commerce, the
exhibition of samples and of the private mark or card
of the firm is of itself sufficient to show the authority
of the traveller to do business within the limits of the
ordinary transactions of commerce, and on the usual
conditions.

But all affairs exceptional from their importance or
from the nature of the conditions, require on the part
of the traveller the production of some especial autho-
rity or power given to him by his principal.

In bargains made with commercial travellers, difficul-
ties will often arise, chiefly from differences of opinion
regarding the mode of performance and the interpre-
tation to be put upon the conditions as intended by the
traveller, and as understood by the other party.
Merchants will often neglect to demand from travellers
a written memorandum of the terms and conditions of
the transaction between them; and it is by no means
rare to find that the account of a transaction trans-
mitted by the traveller to his principal, differs essen-
tially from the memorandum of the party with whom
the bargain has been made.

In cases of dispute the Tribunals decide against the
principal whose traveller has neglected to insist on a
written memorandum, on the ground that no one can
claim the performance of a contract upon a mere
ex parte statement ; and indeed it is very desirable
that all contracts of sale and purchase should be made
by written agreements in duplicate.
16 FRENCH MERCANTILE LAW.

It sometimes happens that a customer, after having
concluded a bargain with the traveller, entertains doubts
respecting the extent of the authority possessed by the
party with whom he has made the bargain, and that he
addresses himself accordingly to the head of the firm, '
in order to obtain from the latter the ratification of the
contract. This is a very proper way of guarding
against any future misunderstanding, and if a demand
of the kind elicit no reply from the principal of the
house to which it is addressed, the trader who has made
it is justified in construing the silence on the part of
the former into a refusal to be bound by the act of his
agent.

There is a distinction to be made also between com-
mercial travellers authorized to make actual sales, and
travellers who simply call to collect orders of commis.
sion of purchase. Thus, for instance, the principal
manufacturing towns of France, such as Lyons, Lille,
Rouen, do not generally deal directly with the trade,
but usually deal with commission agents, who send
their travellers to distant places to solicit orders. It
will be readily understood that transactions entered into
with agents of this class have not the same character as
bargains made with an ordinary commercial traveller.
Indeed, a properly authorized traveller who has actually. :
sold certain merchandise in the name and on behalf of
his principal, has made a definitive contract, which the
customer is not at liberty to repudiate; buyer and
seller being alike definitively bound by it; whereas, on
the contrary, as the traveller of a commission agent,
who solicits orders for his principal, simply takes and
receives a commission or mandate to buy, the party

wert
OF SALES AND PURCHASES. 17

giving that commission is always at liberty to retract it,
as long as the order has not yet received a commence-
ment of execution. In one word, no one is held de-
finitively bound by a mere order of purchase, as it is
an acknowledged principle that the mandate may always
be retracted so long as it remains unexecuted.

It must be stated here that, for the same reason, the
head of a house of commission is not rigorously bound
by the reception of the order which his traveller may
collect, and that he may always plead impossibility
of execution, as we shall explain more in detail in the ’
chapter on Commission Agents.

It is necessary also to remark briefly on the sale an
transfer of debts.

The difficulties which creditors sometimes apprehend
in the realization of their claims, induces them fre-
quently to cede or sell them to third parties.

The sale of a debt can be validly effected only
through the medium of a contract signed by the parties,
and enrolled at a duty of one per cent.; or by a deed
authenticated before a notary public.

These sales, which are called assignments of debts,
take effect against third parties only after due notice of
the transfer has been given to the debtor. No other
mode of cession is admitted, and the notice to the
debtor alone puts the purchaser in lawful possession of
the claim ceded.

Once in legal possession of the claim, the purchaser
succeeds to all the rights of the original creditor. How-
ever, there are certain personal rights or privileges
which do not always go along with the claim, or which
rise after the cession. Thus, for instance, where an

&
18 FRENCH MERCANTILE LAW.

English creditor sells a claim upon a Frenchman to
another Frenchman, the position of the vendee is iden.
tically the same as that of the vendor. But if the
debtor were a foreigner residing in France, the pur-
chaser of the debt would acquire by the cession the
exercise of the personal right which every Frenchman
possesses to demand the arrest of the debtor before
judgment, and on the other hand a Frenchman having
a claim upon a foreigner residing in France, were he to
cede the same to another foreigner, the latter would not
acquire by that cession the right of having the debtor
arrested before judgment.

There is an exception made also as regards a certain
class of debts—viz., disputed debts. The purchaser of a
disputed claim, that is, a claim which is the object of
a lawsuit, is bound to accept payment by the debtor
of the exact sum which he has paid for the cession of
the debt, together with interest and the cost of the
deed of cession, in full of all demands. The payment
of this sum releases the debtor definitively from all
obligation, no matter how large the original debt may
have been.

This mode of release is open also to coheirs against
the purchaser of rights of succession which are still
undecided.

These two exceptions have been created in a spirit of
morality, to check speculators who might feel inclined
to turn to their personal advantage the difficulties inse-
parably connected with a lawsuit, or the division of an
estate between coheirs.

There are certain articles of which the sale and pur-
chase is rarely completed at once, as the purchaser may
OF SALES AND PURCHASES. 19

wish to consult some third party not present at the
time, or to reserve to himself the right of inspecting and
examining the article once more before he definitively
concludes the bargain. Objects of the kind are, for
instance, costly stuffs, gems and precious stones, objects
of art, &c. &c.

As the holder of sich articles may lose the oppor-
tunity of selling them during the delay asked by the
intending purchaser, it is usual to stipulate the deposit
of a certain sum of money by the purchaser, which is
called earnest.

In transactions of this kind when earnest has been
given, both parties are equally at liberty to withdraw
from the bargain, but only on the following conditions :
the party having given earnest to forfeit the same; the
party having received earnest to repay double the
amount deposited.

The preceding explanations apply more particularly
to the form of bargain and to the subject matters of
sales and purchases. We will now proceed to specify
the intrinsic conditions essential to establish the validity
of a contract.

As good faith ought to be the fundamental basis of
every convention or agreement, there can be no legally
valid bargain (no matter in what form it may be drawn
up), except with the free consent of the contracting
parties.

The consent of a party to a bargain is not free if it
has been given in error, or obtained by surprise or
fraud, or if it has been extracted by violence.

The Tribunals are omnipotent to decide as to the
existence of errors or fraudulent devices.

c2
20 FRENCH MERCANTILE LAW.

Still the plea of error can be admitted only under
certain circumstances—viz. :

1. When the error has been common to both parties,

2. When the error committed by one of the parties
is so self-evident that the other party must have per-
ceived it, but has chosen to leave it unnoticed, with a
view of turning it to his own advantage. '

We will illustrate these principles by a few examples,
which may serve to render them more clearly intel-
ligible to the reader.

Examples of Error.

A sells B 5000 bags of coffee, which he declares in
the instrument of sale to have arrived the day previous
in port on board the ship Adéle. This vessel, which
both parties have visited, contains only 500 bags of
coffee, and, from her tonnage, cannot possibly contain
a larger quantity. It is evident, therefore, that there
is in this transaction a manifest error common to both
parties, who have set down in the contract of sale 5000
instead of 500.

In this case the Tribunal will, on the motion of
either of the contracting parties, unhesitatingly reduce
the number of bags to 500.

The same decision will be given if it can be proved
that one of the contracting parties had perceived the
error, without calling the attention of the other party
to the fact.

But if the ship Adéle was on the high seas at the
time the bargain was made, and A had sold to B by
mistake 5000 bags of coffee, B not knowing the tonnage
of the vessel, and really intending to purchase 5000
OF SALES AND PURCHASES. 91

bags, the bargain will be held valid to the full extent
of the 5000 bags, and the vendor must complete that
number or pay damages to the purchaser.

It is clearly apparent in this latter case that the
error which A has committed is altogether personal,
and the consequence of this error cannot rightly fall
upon the purchaser, B, who really intended to buy 5000
bags, and calculated upon receiving them.

As an example of fraudulent practices let us take the
following :

Three ships laden with coffee are consigned by A, of
Havannah, to his factor or correspondent, B, at Havre.
A writes at the same time to B to inform him that the
coffee harvest has been bad, and that he can only for-
ward one cargo. B, believing this statement to be
true, consents to purchase at a high price the only cargo
‘so announced. On the arrival of the three vessels, B
protests against the bargain, on the ground that he
could have bought the coffee at a lower rate had he
known the actual abundance of the article.

Tt is evident that A has deceived B, and that he has
had recourse to fraudulent representations for the pur-
pose of selling his coffee to greater advantage. The
Tribunals would not hesitate, on the motion of B, to
annul the bargain.

Or it may be that the purchaser, B, writes to A,
that ten vessels laden with coffee have in the last week
arrived at Havre, and that the price of coffee has fallen
in consequence. ‘This information induces A, who had
till this hesitated to part with his coffee at the low
price offered for the same by B, to accept the offer made.
But some time after he learns that B has deceived him
22 FRENCH MERCANTILE LAW.

as to the arrivals of the ships laden with coffee. If he
complains of the fraud thus practised upon him, and
refuses to deliver the coffee sold by him to B, the
Tribunals will pronounce in his favour.

But if, on the contrary, A has in the first place’
applied to B to ask the latter for information respecting
the state of the arrivals in the port, and the chances of
a rise or fall in the price of the article, the misrepre-
sentations of B in answer to A’s questions will not of
themselves suffice to justify the repudiation on the part
‘of A of a bargain which may have been entered into in
consequence of the correspondence. Unquestionably,
in a moral point of view, B’s conduct in not strictly
adhering to truth in his reply to the questions asked
by A must be held to be indefensible, but he* cannot
legally be charged with fraudulent practices.

To express it briefly, a fraudulent character is im-
parted to a misrepresentation by the fact of the party
who makes it volunteering the false information, with
the intention of deceiving the party to whom it is made;
but if the latter, by any act of his own, has invited the
deception, the laws of France hold, that any transaction
arising In consequence is not necessarily tainted math
fraud.

These remarks, and the illustrations of the principles
which we have adduced, will, we trust, prove a suffi-
ciently safe guide to the British merchant in transactions
of this nature.

There are, in the Sprains of commerce, an infinite
number and variety of shades of error and deceit, which
may be safely left to be dealt with as they deserve by
the good sense and discrimination of the community.
CHAPTER III.
SIRANSFER AND DELIVERY OF THE ARTICLE SOLD.

Tae conditions of sale of any commodity generally
embrace also those of the delivery, and the particular
circumstances which either of the parties may wish to
provide for. In cases where the contract is silent on the
conditions of the delivery, &c., the following are the
general rules of the law :—

The delivery is to be made by the vendor at the
place where the subject matter of the sale was lying at
the time the bargain was completed. Ifthe thing sold
was at that time in the warehouse of the vendor, the
delivery must be made at the door of that warehouse.

The expenses incurred for keeping and managing the
thing sold, up to the time when the purchaser takes
possession, fall on the vendor.

Certain kinds of goods are subject to special rules of
delivery, which depend apes. the general or local usages
of commerce.

A cargo of goods sold on board a vessel must be
delivered at the egress of the dock. Goods sold in port,
with conditions of weighing, must be delivered in the
scales. If they are sold in bond, before the payment
of the duty, the delivery is effected by the simple
identification of the goods, and the declaration of the
transfer of ownership in the register.

A crop of grain, &c., must be conveyed by the vendor
to the side of the public road.
24 FRENCH MERCANTILE LAW.

When the vendor undertakes .to convey the goods :
sold on board a ship, he is only bound to deliver them °
in front or over against the vessel, taking a receipt for
the same from the captain, who alone is entrusted with
the duty of loading. If the merchandise is of such
bulk and weight that its conveyance on board requires
the aid of certain apparatus or engines specially adapted
for that purpose, and erected in some part of the port,
the delivery is effected on the spot where such loading
engine or apparatus stands.

If the merchandise is of a nature to require to be
put in a sack or wrapper, or in a cask, the vendor has
to furnish the same, and the value is included in the
price.

It often happens in the case of liquids sold for con-
sumption, such as wine, oil, liquors, &c., aud also of
grain, flour, and other provisions, that. the vendor
reserves to himself the property of the cask or sack used;
in cases of this kind the purchaser may keep these
objects for a reasonable time, to enable him to transfer
the contents to vessels of his own.

The merchandise must be delivered in good outward
condition as regards the cover or wrapper.

We have already stated, in our previous chapter on
Sales and Purchases (page 6), that in cases where the
quality of the wares or merchandise sold is not specified
in the contract of sale, it suffices that the article be fair
and merchantable, that is to say, that it be sound, with-
out any deterioration, and in a good state of preserva- -
tion; in fact, such as it is usual to bring into the.
market.

If there are different sorts or qualities of the article
TRANSFER AND DELIVERY. 25

sold, and no specific mention is made in the contract of
the exact sort or quality of the article intended to be
bought or sold, the vendor is not obliged to furnish the
first quality, but he is not permitted, on the other hand,
to furnish the worst.

If there is a considerable difference in the respective
values of the several sorts or qualities of the same
denomination of article, the price agreed upon in the
contract may be appealed to as to the exact quality
which the contracting parties intended, the one to sell,
the other to buy.

When the sale of an article which may be prepared
in different ways, or of different sorts or descriptions, is
made to a person who commonly uses only a certain
description of it, it is held that the vendor has impliedly
undertaken to furnish the exact description of the article
which will suit the wants of the purchaser.

In sales of wines and spirits, the strength, or degree,
and the taste, are usually mentioned in the contract.
In cases of omission, the general usages of commerce
are followed; these usages are ordinarily deposed to by
brokers.

The goods should be identified and approved at the
moment of the delivery ; but it often happens that the
identification can take place only long after the delivery.

The term livraison must not be confounded with
délivrance ; the English translation of both is indeed
delivery, but the latter alone corresponds to the English
term, including as it does the actual receipt and accept-
ance by the purchaser. The term livraison signifies
only a partial delivery, which takes place at the moment
when the goods sold pass from the responsibility or
26 FRENCH MERCANTILE LAW.

control of the vendor to that of the purchaser, whereas
the actual delivery takes place at the moment when the ©
purchaser takes actual possession of the goods, or when
he accepts them, though still leaving them in the pos-
session of the vendor.

Example.

A, of London, sells to B, at Havre, 50 casks of oil,
to be delivered on board the ship London, which plies
between the two ports; A consigns the casks to the
custody of the captain of this vessel; this is a partial '
delivery (livraison), in this sense, that the property in |
the oil is henceforth vested in the purchaser, B, and
that any accident happening to it is at his risk. But
it does not amount to an actual and complete delivery,
i.e., an acceptance and taking possession of the goods on
the part of the purchaser, B, inasmuch as he still
retains the right to refuse the goods, if, upon their
arrival, he finds them defective or of an inferior quality.

But if A declines to take upon himself the responsi-
bility of forwarding the goods, and insists upon B ap-
pearing, either by himself or by some properly accredited
agent, to receive the oil on board the ship in the Port
of London, there will, in that case, be an actual and
complete delivery of the oil in London, and the pur-
chaser, B, has no longer the right to object to the
reception of the article on the ground of inferior quality,
or on any other ground whatsoever.

To insure, on the one hand, the responsibility of the
vendor to answer for the quality of the article up to
the time of the actual delivery (délivrance), and, on the
other hand, to protect him from the risks and accidents
TRANSFER AND DELIVERY. 27

of the road, from the time of the delivery of the goods
to the carrier (livraison)—it is indispensable that any
damage or injury that may have taken, place in the
transit should be immediately pointed out and verified
on the arrival of the goods, so that the origin of such
damage or injury may be ascertained, and the liability
fixed upon the proper party.

In the chapter on the Transport and Conveyance of
Goods, we shall specify the formalities to be observed,
and the delays accorded for the same, and also mention
the cases in which carriers may be held responsible for
any damage suffered by the goods entrusted to them
for conveyance.

Here we have to consider only those cases where the
responsibility rests exclusively with the vendor.

If, on the receipt of the goods, the purchaser alleges
that they are of a different description from those
ordered by him, he must immediately, and before the
removal of the goods, take care to have the defects, or
difference, of which he complains, properly verified.

This obligation is incumbent upon the purchaser
more particularly in the case of goods of a nature to
suffer further deterioration during the time that any
litigation, arising from the refusal to accept them, may
last.

Thus, for instance, where corn, fruit, potatoes, &c.,
arrive, affected with disease, or in a damaged condition
from inherent causes, the existence of the disease and
the extent of the damage or injury must be immediately
verified. .

To this end the purchaser makes application to the
President of the Tribunal of Commerce, or, if there is
28 FRENCH MERCANTILE LAW.

no such Tribunal in the place, to a justice of the peace
of the district, requesting the appointment of one, two, -
or three competent persons to examine the goods. The
judge decrees by ordinance, and the examiners appointed
by him being duly sworn, proceed to examine the goods;
they then draw up verbal process of their proceedings
and the results arrived at.

The President of the Tribunal of Commerce of Paris
usually adopts a very wise measure to insure to these
inspections the care and impartiality which the interest
of the absent consigner of the impeached goods demands.
He appoints, in his decree nominating the examiners, a
merchant or trader, whose special duty it is to represent
the absent party ex officio, and accordingly to take care
that the examiners be properly informed and put in
possession, more especially through the medium of the
correspondence on the subject, of all the circumstances
likely to assist and guide them in the performance of
their duty.

If goods consigned from France to some other
country arrive at the place of destination in a damaged
state, and the consignee wishes to have the deterioration
verified by an official imspection, he must apply to the
French consul to nominate the examiners, as it is only
upon the report of persons thus acting under the legal
sanction of that official that the French Tribunals will
act.

Tf, upon inspection, the damage appears to extend
only to a small proportion of the goods, say five or ten
per cent., this does not lead to the cancelling or annull-
ing of the bargain, but simply to a proportional
abatement or deduction in the price agreed upon.
TRANSFER AND DELIVERY. 29

But if the damage affects a considerable portion of
the goods, this is held a sufficient reason for rescinding
the bargain. Here again the usages of commerce must
be consulted to determine the exact limit where the.
purchaser may rightly refuse to be satisfied with a
deduction or abatement in the price proportional to the
deterioration of the article, and may insist upon the
absolute resilation of the bargain.

It is always optional with the purchaser to exercise
his right of repudiation or no. It may be a matter of
importance to him not to let his mill or workshop stand
still for want of material, or to leave his warehouse
without the necessary stock. This consideration may
induce him to prefer an abatement in price to an abso-
lute repudiation of the bargain; only he must signify
his intention with the briefest possible delay, that is,
immediately after the report of the examiners.

The reliance which the Tribunals who are afterwards
called upon to decide the case, place in the reports of
the examiners is not, however, absolute, inasmuch as
the purchaser, and even the official examiners, will often
neglect making due mention of, and inquiry into, all
the facts of a nature to justify the objection. It is,
therefore, always advisable for the consignee to keep,
under such circumstances, a sample of the damaged
goods, under the seal of the official examiner or
examiners, should the requirements of his business not
permit him to keep the entire stock.

Whenever the circumstances are such that the pur-
chaser’ elects to repudiate the bargain, he makes
application to the President of the Tribunal of the
place, or, as the case may be, to the justice of the peace
30 FRENCH MERCANTILE LAW.

of the district, requesting permission to deposit the
repudiated goods either in a public warehouse, or such
private one as the judge may designate. The costs
incurred in this proceeding, the charges for conveying

the goods to the place of deposit, and the warehouse '

rent, &c., fall upon the party who ultimately loses the
suit.

A vendor who neglects to deliver goods to a purchaser
by the time agreed upon in the bargain, is liable to be
sued for damages, if the delay has been prejudicial to

the purchaser ; but it is necessary to give the vendor .

notice of the expiration of the term for delivery ; this
notice may be validly given by letter, and indeed even
that is not necessary in cases where, from the nature of
the merchandise, it ought necessarily to be delivered by
a certain fixed day, after which the purchaser will not
be able to make use of it. This is the case, for instance,
with goods purchased with an intimation that they are
required for a fair, or are to be shipped on board a
vessel which is to sail on a certain fixed day.

As a matter of course, a vendor who fails altogether
to deliver the goods sold by him, is liable to be sued
for damages; and the Tribunals generally inflict a
heavy amount, if it is proved that the vendor refused to
deliver from motives of dishonesty.

In cases where the goods sold, and of which delivery
is dishonestly refused, are deposited in a public ware-
house, or with a third party, the purchaser may even
demand and obtain authorization to seize them.

If the delivery is retarded or rendered impossible by
some inevitable contingency, altogether independent of
the will and power of the vendor, such as war, insur-
TRANSFER AND DELIVERY. 3t

rection, inundation, &c., the vendor is not liable to an
action for damages.

There are some other accidental events of a less
general nature, which may or may not be held to consti-
tute a sufficient excuse for the non-delivery of goods sold.

For example, the vendor of some specific object
which cannot well be replaced, such as an autograph,
an object of art, &c., would be released from his liability
to deliver the said object, if it happened to perish by
fire, shipwreck, or some other accident.

But the case is different where goods that may be
replaced, such as coffee, flour, &c., are accidentally
destroyed before delivery. The vendor is in such cases
bound to deliver to the purchaser the same quantity of
the like goods, no matter the price at which he may
have to procure them.

If the vendor has stipulated for cash payment, he is
not bound to deliver if the amount is not tendered.

Nor will he be bound to deliver goods sold upon
credit in a case where the purchaser has died, or is
notoriously a bankrupt, unless his heirs or repre-
sentatives in the case of death, or the Syndic, in case of
bankruptcy, should offer special bail to guarautee pay-
ment when due.

We shall see in the chapter on Bankruptcy, that the
vendor may, in the event of the purchaser becoming
bankrupt, retake his goods, even after legal delivery of
the same, provided the purchaser has not taken actual
possession of them, either by himself or by his agent.
CHAPTER IV.
WARRANTY BY THE VENDOR.

Upon the principle of caveat emptor, the vendor is not
responsible for any patent defects in the thing sold,
which the purchaser might have readily detected upon
inspection; but he warrants the vendee against all latent
defects in the subject matter of the sale.

The term latent is applied to any hidden faults or
deficiencies in the thing sold which renders it unfit for
the purpose for which it is designed, or diminishes its
value to such an extent that the purchaser would not
have bought it had he been aware of the fact.

The vendor is not allowed to plead his own ignorance
of the existence of such defect or defects in answer to
an action for breach of warranty; but he may free
himself from responsibility, by stating at the time of
the bargain that he declines to warrant the subject
matter of the sale.

The consequences of a breach of warranty are, either
the total abrogation of the contract, or the obligatory
supply of an article fairly answering the description of
the one bargained for; the purchaser may also elect to
keep the defective article upon receiving a proportionate
abatement in the price. It is left to the discretion of
the judge to determine which of these different courses
is to be taken.

There are cases in which the Tribunals will, in
addition to either of the consequences just stated, con-
WARRANTY BY THE VENDOR. 33

demn the vendor to pay more or less heavy damages.
This is done by the judges in cases where the latent
defect has been occasioned by negligence or culpable
speculation on the part of the vendor, and where a
material injury has thereby been inflicted on the pur-
chaser, as, for example, in the case of badly manufactured
tools, or of engines constructed of unsound materials,
which by their breakage or explosion may injure the
workmen, or put a temporary stop to the work.

There is no warranty whatsoever on the part of the
vendor, in cases of forced sales made by public auction,
in obedience to the decree of a court of justice; for
this reason, that the sale is not a voluntary sale, and
that the creditor, in divesting his debtor of the property
in the thing seized and sold, cannot assume to himself
any responsibility whatsoever towards the purchasers of
the goods.

This total absence of all warranty against defects of
whatsoever nature exercises a considerable influence
upon the prices realized at public sales.

A special act passed on the 20th May, 1838, defines
the nature of redhibitory defects, i. e., defects entitling
the purchaser to repudiate the bargain in the sale of
animals. We deem it advisable to enumerate here the
redhibitory defects in horses.

These are: periodical defluxions from the eyes;
epilepsy, or falling sickness ; glanders ; farcy ; diseases
of the chest of long standing ; foundering in the feet of
long standing; immobility or stiffness; pursiness ;
chronic wheezing ; tick, without wearing out the teeth ;
intermittent inguinal hernia, or rupture of the groin ;
intermittent lameness caused by old disease.

D
34 FRENCH MERCANTILE LAW.

According to the before-mentioned act, the demand
of redhibition or dissolution of the sale by the pur-
chaser, on the ground of breach of warranty, must be
lodged with the court within nine days after such sale,

Except in the special case just mentioned of the sale
of horses, the purchaser is not restricted in his right to
sue for breach of warranty, to a certain fixed term after
the completion of the bargain. Still the spirit of the
law demands that an action of the kind should be
brought as speedily as possible after the discovery of
the latent defect or defects, inasmuch as a long-con-
tinued silence on the part of the purchaser is regarded
by the Tribunals as a kind of renunciation of his claims
to redress.

In the matter of the construction of buildings, the
architect and the contractor of the works are open to
an action for damages on the part of the -proprietor, on
the ground of defects of construction, or of the use of
unsound materials ; and this liability continues for ten
years. :

The question has often been discussed before the
French Tribunals, whether the same delay to sue for
breach of implied warranty, which is granted against
architects and contractors, is accorded also against the
constructors and suppliers of steam-engines, hydraulic-
engines, and other stationary mechanical constructions.
Several decisions have been pronounced in the affirma-
tive, and the vendors of engines take therefore now
usually the precaution of limiting their warranty by
express stipulations in a written contract.
CHAPTER V.
CARRIAGE BY LAND AND BY WATER.

yops carried by land or water travel at the risk and
ril of the party in whom the property is vested.

The carriage of goods is effected by several kinds of
comotion.

The identity of the goods carried, and the stipulation
to time, delays, and charges, are set forth in written
struments called, in the case of inland conveyance,
‘tres de voiture (way-bills, or carriers’ invoices,) and in
at of conveyance by sea, connaissements (bills of lading).
Lettres de voiture, or way-bills, are made out in
tplicate, one copy for the consignor of the goods, the
her for the carrier ; connaissements, or bills of lading,
three copies, of which one is given to the master of
e vessel, another forwarded to the person to whom~
e goods are to be delivered at the place of destina-
yn, and the third retained by the consignor for his
mm security. In many cases a fourth copy is also
ken by way of precaution in the event of the others
ing lost. The fiscal laws of France require these
struments to be written on stamped paper, under
malty of a fine.

The law says, bills of lading may be made out to
der. The shipper or consignor of the goods specified
a bill of lading may consequently transfer his right
properly in the same by way of indorsement. The

coe need nae Khaw tha nama of tha navte ta wham
36 FRENCH MERCANTILE LAW.

the right in the goods is transferred, the value given,
and the date of the transaction.

A bill of lading may also be made out to bearer, in
which case the goods are to be delivered to the party
presenting the said bill of lading.

The party who undertakes to carry goods is respon-
sible to the consignor, or to the consignee of the
same, for all injuries sustained by the goods whilst
under his care, excepting only such as result from force
majeure (the act of God, inevitable accidents), or from
defects ‘inherent in the damaged article. He is respon-
sible also for the damage sustained by the owner of
the merchandise by reason of any delay in the trans-
port of the same to its place of destination, except
when such delay is caused by some inevitable accident.

The plea of force majeure on the part of a carrier,
voust be supported by such evidence as the time, the
place, and the circumstances may enable him to collect
and adduce.

In cases where goods have sustained damage or
injury whilst in the possession of the party who has
undertaken to convey them to the place of their desti-
nation, the owner or consignee must, immediately on
the receipt of the goods, and before he pays the freight
for the same, state his claim for compensation to the
competent authorities (the President of the Tribunal of
Commerce of the place, or the justice of the peace of
the district,) and request them to name appraisers to
inspect and estimate the damage suffered by the mer-
chandise, in the same manner as we have explained in
the chapter on Delivery of Goods.

_ The liability to make good any loss or damage which
CARRIAGE BY LAND AND BY WATER. 37

may happen to any goods or merchandise journeying
to the place of their destination falls equally upon the
agent or commissioner who has undertaken to provide
for their safe conveyance, and upon the carrier who
actually effects the transport. Both are jointly and
severally responsible to the owner.

The same joint responsibility extends also to every
one of the carriers whom they may substitute in their
place. However, the latter are held responsible only
for their own acts, and no liability attaches to them,
therefore, if they can prove that the injuries com-
plained of already existed at the time when the goods
were placed in their possession and care.

There are cases where the liability to make good any
loss of, or injury to the goods carried, may even reach
the expeditor or consignor of the same—viz., when the
latter has promised the owner to provide for their safe
and secure conveyance to the place of their destination,
and has selected for the work of carrying insolvent and
untrustworthy agents.

It results from the preceding observations, that the
receipt of the damaged goods, and the payment of the
freight, without protest or reclamation, involves the
forfeiture of all claims for compensation.

The agent commissioned by the owner to receive the
goods at a certain place, for the purpose of forwarding
them to another place, must therefore, if the goods so
consigned to him have suffered damage or injury by the
way, take the proper steps for the interest of the owner
to make the carrier answerable for such damage, since,
by neglecting to do so, he will himself incur the hability
to make good the damage suffered.
38 FRENCH MERCANTILE LAW.

As to the time within which an action may be
brought against a carrier for loss of or injury to goods,
the French law fixes the limits as follows (except as
regards carriage by sea):

In the case of goods dispatched to any place within
the frontiers of France, six months—in that of goods
sent beyond the frontiers of France, one year; both
terms to date, in case of the absolute loss of the goods,
from the day on which they ought to have been delivered,
in the case of damage, from the day on which they were
delivered. ‘

The carriage by sea is regulated by special laws ; the
restricted limits of the present work will not allow us,
however, to enter more fully into this subject, and we
confine ourselves, therefore, here to remark, that all sea-
risks, that is, all casualties beyond the control of the
master or commander of the vessel fall upon the cargo,
which is responsible even to contribute proportionally to
the loss incurred by the jettison, or throwing overboard
of anchors, masts, yards, sails, &c., to prevent shipwreck,
and to the expences incurred by putting into: port for
general safety. Certain formalities are imposed upon the
master or captain of thevessel in proving these casualties.

Claim for compensation for damage ‘or injury to the
goods must be addressed to the captain within twenty-
four hours after the landing of the goods, and the
action must be brought within one month after, as after
that term the Court may refuse to entertain it. -

Lastly, no action is admissible after the lapse of one
year from the time of the vessel’s arriving at the port
of her destination.
CHAPTER VI.
ON PAYMENT.

Tue instrument which constitutes the title or proof of
the claim, indicates usually also the day, place, and
manner of payment.

In the case of an oral agreement, or where the
written contract is silent on the point, payment ought
to be made by the debtor, at his domicile, in specie, at
whatsoever time the creditor presents his bill or account.

There are, however, many circumstances in which a
special mode of payment has been determined either by
the law or by usage.

For example, in the case of the purchase of pro-
visions or articles which the buyer is in the habit of
purchasing at the shop of the dealer, and taking home
with him, payment is made in cash at the dealer’s resi-
dence when the goods are taken away.

In the case of goods which the vendor is in the
habit of offerimg at the purchaser’s residence, payment
takes place at the time when the goods are handed
over to the purchaser.

When a sale is effected on the Exchange, or at a
meeting of dealers and buyers, or through the medium
of letters, the payment should be made at the time and
place when and where the thing sold is delivered.

Usage has sanctioned to some extent payment in
notes of the Bank of France; however, though that
money is now universally admitted and received in com-
40 FRENCH MERCANTILE LAW.

mercial transactions in France, a creditor cannot be
compelled to accept it, as metallic currency alone is a
legal tender in France.

The debtor is not allowed to pay in copper or Dillon
coins (base coins containing a small proportion of silver
to a very large one of copper), except in discharge of
odd money, and to make up any of the fractions of 4
five franc piece.

In cash payments no discount whatsoever can be
demanded, unless in the case of some special agreement
to that effect, or where an established custom can be
pleaded in favour of the demand. In the assertion of
a custom of the kind, the nature of the subject matter
of the sale and the local usages must be had regard to.

The usage established in certain places of com-
merce, which accords to the purchaser a delay for
payment of several days, weeks, and even months,
touches only the traders of the same place, and cannot
be appealed to by strangers.

Where the contract states that the price of the goods
bought is payable in so many days, weeks, or months,
the credit accorded to the purchaser is absolute; but
when the instrument says to de settled in so many days,
weeks, or months, the debtor, in order to obtain the delay
caccorded, must remit to his creditor promissory notes or
bills of exchange, or accept the creditor’s draughts upon
him, either of these instruments being made payable at
the time otf the expiration of the delay accorded.

If the creditor stipulates that the account is to be
settled in bills of exchange, or other negotiable instru-
ments, the debtor is bound to remit to him bills bearing
at least one good name.
ON PAYMENT. Al

The debtor of an account to be settled by bills or
draughts must remit such bills, and he is released only
on the acknowledgment by the creditor of the receipt
of such remittance.

If a creditor refuses to receive the draughts, &c.,
forwarded to him by a debtor in settlement of an
account, he must return them to the latter, and ascer-
tain that they have actually reached him.

If the creditor does not wish to run the risk of the
loss or miscarriage of these draughts, thus refused and
returned by him, he is entitled to inform the debtor by
letter that he holds the draughts at the latter’s dispo-
sition; in which case the debtor is bound to send
for them.

Should the dispute between the parties, as to the
acceptance or non-acceptance of the draughts remitted,
continue up to the time when the bills fall due, the
duty of presenting the bill or bills for payment and
lodging protest in case of non-payment, devolves com-
pulsorily upon the creditor, who remains still the holder
of the securities.

If a debtor were to remit to his creditor bills so
near due that there is not sufficient time left to present
them for payment within the proper term, he would
himself alone be answerable for all the consequences
that might result from his dilatormess or neglect.

The debtor cannot constrain the creditor to accept a
payment on account.

The debtor behindhand in his payments is not by
right liable to pay interest for the time that the pay-
ment is overdue, unless it is formally stipulated so in the

contract ; and even then the creditor is bound to give
42 FRENCH MERCANTILE LAW.

proper notice to the debtor that payment is due; if he
neglects to do so, he is not entitled to claim interest.

We have explained, in the chapters on the Sale and
Delivery of Goods, that this notice may properly and
validly be given through the medium of letters; but in.
the present case as regards the claim for interest, the
French law demands that a legal notice be served on
the debtor by an officer of the Court, called huissier.

If the covenant contains no stipulation as to interest,
the latter counts only from the day that the creditor
has brought his action before the Tribunal.

As regards promissory notes and bills of exchange
(to which we shall devote a separate chapter), the
interest counts only from the day of the protest.*

The French law limits to five years the time for
which accumulated interest can be demanded. This
prescription can only be barred by an action brought
before the expiration of the five years, in which case a
fresh term of the same duration is accorded.

The question has often been raised whether the
stipulation of payment in cash with discount, implies, on
the part of the debtor, by way of reciprocity, the con-
dition of payment of interest in case of delay. The
Tribunals appealed to to decide the point, have, in most
instances, pronounced “that the payment of interest
cannot be considered an implied condition, and that it
requires a formal stipulation to make such payment:
obligatory in cases of delay.”

* A protest is a declaration informing the party charged with
the payment of the bill of exchange, and who refuses to pay it
when due, that he will be held answerable for all damages and
expenses; the protest must be notified to the debtor within
twenty-four hours after payment falls due.
ON PAYMENT, 43

Where the debt belongs to several creditors in deter-
minate proportions, settled either by the terms of the
contract, or by decisions of law, each one of the creditors
may separately demand the share to which he is entitled.
If the creditors make a joint demand for payment, they
must also give to the debtor a joint receipt.

If a debt is owing by several debtors, it is equally
distributed between them, unless the contract or the
law should have established a solidarity, or joint respon-
sibility ; in which case every individual debtor would
be held liable for the total amount of the claim, and
the creditor might choose any among them to sue for
the whole debt.

Solidarity, or joint responsibility, exists manifestly in
cases where the cause of the obligation is indivisible, as,
for instance, where several persons purchase jointly a
share or an undivided quantity of goods, or give a joint
indemnity against some risk or loss.

In cases of this kind, the intention of the several
purchasers, or sureties, to incur a joint responsibility, or
solidarity, results evidently from the tenor of the con-
tract, and from the nature of the obligations. But if,
on the contrary, it is stated in the covenant that two
persons, for instance, purchase each of them a certain
quantity of, or promise to pay each of them a certain fixed
sum, it is evident that it was the intention of the parties
to incur only a divided and limited responsibility, and
consequently, that no solidarity exists, and that neither
of the two can be held responsible for more than his
own share.

The heirs of a debtor are not jointly and severally
responsible ; each of them is liable only én proportion to
his share in the inheritance.
44 FRENCH MERCANTILE LAW.

The members of a civil society or association are not
bound by the law of solidarity, but there exists a joint
responsibility, or solidarity, between the several members
of a commercial association.

A debt may be guaranteed by a third party, with or
without solidarity with the debtor. In order to make
the guarantee given a bond in solidarity, and accordingly
to fix the surety with the obligation to pay the debt,
no matter whether the actual debtor has been applied
to or no, and to enable the creditor to elect proceeding
against the surety in preference to the debtor, the bond
must contain an express stipulation to that effect. In
the absence of such stipulation the surety can only be
sued after every means to obtain the amount from the
actual debtor have been exhausted.

Exhausting the goods of a debtor means, to take out
executions against all the chattels, real or moveable,
which the said debtor is possessed of within a certain
circuit from his domicile, and to take the necessary steps
to effect the sale of the same, and the proper division of
the proceeds. But the necessary funds for these pro-
ceedings on the part of the creditor must be supplied
by the surety.

Where there are several sureties, and one of them
has been compelled to discharge the whole debt for
which they were jointly responsible, the one who has
settled the claim may recover from his co-sureties each
one their allotted share.

If a debtor alleges a release from his debt, the burden
of proof lies on him. The production of the instru-
ment or voucher of the claim is only regarded as pre-
sumptive evidence of such release; a receipt alone is
held to be conclusive proof of the discharge of a debt. .
ON PAYMENT. 45

A creditor who has lost the document proving his
claim may, nevertheless, demand payment, if he can
satisfy the Court that he really has a just claim against
the alleged debtor.

If the document lost is a bill or note of hand, or
other negotiable commercial security, the law imposes
certain conditions or formalities upon the creditor, of
which we shall treat in the next chapter.

If a creditor neglects to demand payment of his
claim within a certain time, varying according to the
nature and importance of the debt, the debtor is legally
presumed to be released.

The following list will show the terms of limitation
in the several different cases :—

For sums due to schoolmasters and teachers, for
Six lessons given by the month. To tavern and eating-
Months | house keepers, for victuals supplied. To workmen,

artisans, and labourers, for wages.

¢ For sums owing to physicians, apothecaries, and
surgeons, for their professional visits, operations, &c.
To bailiffs and summoning officers, for fees for serving
One Year ~ writs, &c. To dealers, for goods sold to customers
who are not themselves dealers. To the proprietors
of boarding schools, for the board, &c., of the pupils.
\ To servants hired by the year, for wages.

For arrears of annuities and pensions; rent of

Five houses and lands; interest on loans; and, in general

Years everything payable by the year, or at certain fixed
periods of longer or shorter duration.

For the price of houses, freehold estates, or

Ten and | immovabie chattels, ten years, if the real proprietor

Twenty { resides within a certain distance from the Royal

Years Court in whose jurisdiction the property is situated,
twenty years if he resides beyond that distance.
46 FRENCH MERCANTILE LAW.

After the lapse of these several terms the debt to which
they respectively refer is barred or prescribed, aud the
alleged debtor is released as a matter of right if he
pleads this limitation.

Nevertheless the party whose claim it is endeavoured
to bar by the plea of prescription, is entitled to put the
defendant on his oath on the question to know whether
payment has really been made. This oath may even be
imposed on the widow or the heirs of the alleged debtor.

There is a fixed limit—viz., thirty years, after which
all claims of whatsoever nature are prescribed, and the
party pleading this prescription can no longer be called
upon to take an oath in proof of his having satisfied an
alleged claim.
CHAPTER VII.

ON BILLS OF EXCHANGE, OR DRAUGHTS, AND
PROMISSORY NOTES.

Mosr commercial debts are settled either by bills of
exchange drawn by the creditor on the debtor, or by
promissory notes signed by the debtor to the order of
the creditor, or also by the indorsement and transfer to
the creditor of bills which the debtor happens to have
in his possession.

This chapter, it will thus be seen, treats of matter of
peculiar interest to the merchant.

“A Bill of Exchange,” the French Law says, “ is
drawn at one place upon another place; it is dated, and
states the sum to be paid, the name of the party who
is to pay it (payor), the time and place of the payment,
the nature of the value received, in coin, merchandise,
or by way of account, or in whatsoever manner; it is
signed to the order of a third party, or to the order of
the drawer himself. If the bill is a first, second, third,
or fourth, it must contain a statement to that effect.’

A bill of exchange may be drawn upon one party, bnt
made payable at the residence of another party, &c.

It is of great importance to be particular about the
terms in which a bill of exchange is drawn, because a
contract of this nature comprises the transfer to the
interest of the bearer, of the funds to mect the bill in
the hands of the drawer, and constitutes, with respect to
all who affix their signature to it, no matter whether
48 FRENCH MERCANTILE LAW.

merchants or no, a commercial instrument, which may
involve personal arrest.
A bill of exchange must be drawn on stamped paper.
For greater clearness, we subjoin here a copy of
a French bill of exchange as it ought to be drawn.

 

STAMP.

 

 

 

Bon pour F. 1000.
Paris, le

 

Au il vous plaira payer & A, ou & son
ordre, la somme de Mille francs, valeur recue en marchandise,
Sans autre avis (ou suivant avis),

De votre Serviteur,

[Signé] Tu. & Cis,
A Monsieur D.,

Banquier 4 Dijon.

English Translation.

STAMP.

 

Goop ror 1000 Francs.
Paris (date).

On (or, as the case may be, one month, two
months, etc., after date) please to pay to (name of the party in
whose favour the bill is drawn), or order, the sum of One Thousand
francs for value received in goods. Without further advice
(or as per advice).

From your Servant,

[Signed] Tu. & Co.
To Mz. D.,

Banker at Dijon.
ON BILLS OF EXCHANGE, ETC. 49

Any instrument which does not combine the above
specified conditions, would be considered, as far as the
non-commercial signers of it are concerned, in the light
of a simple promise to pay.

The expiration of a draught, or bill of exchange, is
usually specified to a fixed day. However, custom has
introduced also some different ways of fixing the time
when payment falls due. Thus, a draught may be made
payable one or several months after date; in which case
the expiration is fixed for the corresponding day of the
month indicated; as, for instance, a bill of exchange
drawn on the 15th of March, payable three months
after date, will fall due on the 15th of June. Buta
bill drawn on the 31st day of a month, payable two or
three months after date, will fall due on the Jast day
of the month indicated ; as, for instance, a bill drawn
on the 8lst of December, at two months, will fall due
on the 28th (or 29th, as the case may be) of February ;
and one drawn on the 31st of August, at three months,
will fall due on the 30th of October.

The ancient commercial customs of France allowed
one or several usances or delays for the payment of bills
. of exchange after acceptance. This is no longer the
case. Simple usance embraced a period of thirty days
(the space of time between any day of one month and
the same day of the next).

It often happens that, for the convenience of the
drawer, the payment of the draught is fixed one or
several days, or one or several months, after sight. In
such cases the period of expiration commences to count
only from the day when the drawer writes his visa on the
bill, for which a delay of twenty-four hours is accorded.

E
50 FRENCH MERCANTILE LAW.

Bills of exchange being necessarily made payable to
order, the transfer of them is effected by means of a
declaration written on the back, stating the name of
the party to whom the property in the bill is transferred; °
the value received, and the date of the transaction,
This indorsement must be signed by the party in whom
the property in the bill is vested at the time, or by his
accredited agent or representative. In the common
practice of commerce, the procuration or power of an
agent or representative to act and sign in the name
of the principal, is stated simply by the words per
procuration (by procuration) being written above the
signature. This declaration is not very explicit, and
affords no means of ascertaining whether the procura-
tion is genuine or not. An inconvenience results from
this, which in some cases, has even entailed serious losses
upon merchants and traders. In fact, if a draught were
purloined or embezzled, and negotiated with a forged
indorsement “by procuration,” the real owner would
unquestionably be admitted to prove that the said
draught is his property, and that he never gave autho-
rity or procuration to any person to transfer it.

The holder of the bill would in that case find himself
stripped of the title to its possession, which he thought
to have acquired in the regular way, and his only remedy
would be to bring an action against the pretended
holder of the procuration.

It is always advisable, therefore;that the party to whom
a bill of exchange is transferred by indorsement, should
demand to see the power of attorney or instrument by
which the procuration is conferred. The Bank of
France, the Treasury, and all the large public establish-
ON BILLS OF EXCHANGE, ETC. ol

ments demand the production of the procuration in all
cases where an indorsement purports to be made par
procuration.

The drawee, if he owes the draught, is bound to
invest it with his acceptance, should it be demanded.
A delay of twenty-four hours is accorded him to affix
his acceptance to the draught presented.

The visa of a bill of exchange, of which mention
was made, page 49, must not be confounded with the
acceptance. The visa has for its object simply to fix
the date of the expiration (the day when it comes due),
and involves by no means an obligation to pay. The
acceptance, on the contrary, is a formal undertaking to
pay the amount of the draught, and should invariably be
expressed by the word “ Accepted,” or some equivalent
term written across the bill.

The holder of a draught which is refused acceptance
by the drawee may make declaration of this refusal
by a judiciary act,* called a protest; by this means he
acquires a right to compel the indorser and the drawer
of the protested bill to repay him immediately the
amount, or to give security for the payment when due.

This measure has for its object to prevent the circu-
lation of draughts without proper provision for payment.

An acceptance with restrictive conditions attached to
it, or fixing a more distant date for the expiration of
the draught than the one specified in it, would be held
equivalent to an absolute refusal of acceptance.

An acceptance fixing the expiration at an earlier

*Acte dhuissier—A huissier is a public officer, whose duty it
is to draw up and serve at the residence of the parties concerned,
official judiciary acts.

EQ
52 FRENCH MERCANTILE LAW.

period than in the draught, would be held valid; only
in the case of non-payment, the holder should take
care to have the draught protested, both on the day
when, payment is promised by anticipation, and on the
day when it comes actually due.

We have stated in one of the preceding chapters that
the transfer of a draught confers upon the transferee.a:
right of property in the provision.

We call provision the effects designed by special allot-
ment for the payment of the draught on its expiration.

There is complete provision in the legal sense of the
term whenever the drawee is indebted to the drawer,
at the date of the falling due, in a sum equal to the
amount of the draught. There is also actual provi-
sion in cases where effects, of whatsoever kind, have
been allotted by the drawer to serve for the payment
of the draught, no matter whether such effects have
been transmitted for that purpose to the drawee, or to
any other person.

The provision is only partial when the debt of the
drawer, or the effects allotted for the payment, fall
below the amount of the draught; in which case the
privileged rights of the holder of the draught are
restricted to the actual amount of the provision ; for the
balance the holder retains his remedy against the
drawer and the indorsers.

Should several letters of exchange have been drawn
on a party not holding sufficient provision for the total
discharge of the whole of them, the provision actually”
held by the drawee would be applied to the payment of
the said draughts in the order of the dates which they
respectively bear; the draughts bearing one and the
ON BILLS OF EXCHANGE, ETC. 53

same date would be paid concurrently ; preference of
payment would be given to accepted draughts.

In the case of the non-payment of the draught on its
expiration, it is the interest of the holder to ascertain
what effects have been, or are to be, remitted to the
drawee, to serve as provisiou against the falling due of
the said draught; considering that he may seize these
effects, and lawfully claim them as his own, to the
exclusion of all other persons. This privilege of the
holder of a draught, for which provision has been
assigned, is liable only to one exception—viz., if the
drawer becomes bankrupt after having taken actual
possession of the provision; since in that case the
provision becomes the common property of all the
creditors of the latter.

The drawer, the acceptor, and every one of the
indorsers of a letter of exchange are jointly and severally
bound to pay the amount of the draught to the holder.
They are liable to personal arrest, in case of non-
payment, no matter whether they are merchants or
traders, or not.

This extensive application of so rigorous a measure
as that of personal arrest, is attributable to the fact
that a draught is held, in the eyes of the law, to con-
stitute in itself a commercial operation with respect to
all those who join in it.

There are two exemptions admitted from the opera-
tions of this rigorous measure—viz., in favour of married
and unmarried females who are non-traders, and in
favour of all persons having attained the age of seventy.

A party otherwise unconnected with the draught,
may become solidarily bound with the parties directly
54 FRENCH MERCANTILE LAW.

concerned in it, by guaranteeing payment for one or
several of such parties; this is done by a declaration to
that effect (termed in French, aval de garantie) put
on the face of the draught, or by a separate special
declaration to the same effect, and which should recite
the guaranteed title with great care and minuteness, to
guard against the possibility of doubt, misapprehension,
or error. The party giving the guarantee (aval de
garantie) is held responsible for the payment to the
holder of the draught, in the same way and to the same
extent as the party or parties for whom he has guaran-
teed payment; in short, he is solidarily bound with the
persons guaranteed, and is accordingly even liable to
personal arrest, unless exempted therefrom by either
himself or the parties for whom he is surety, being in
one of the two exceptional cases mentioned above.

In default of payment of the draught by the acceptor
on the day of its expiration, and upon its presentation
by the holder, the refusal of payment is certified by an
act drawn up by a huissier, and which is called a protest.
This act must be lodged at the residence of the debtor,
unless the draught be made payable at some other
place, in which latter case the protest must be lodged
at the place appointed for the payment of the draught.

The form and terms of this protestation are settled
by the law ; the omission of one of the forms prescribed
would annul the act; but the huissier would be respon-
sible for the consequences of his neglect.

If the draught falls due on a Sunday or holiday,
it must be presented on the day previous; and in case
of non-payment, the protest must be lodged on the day
following the Sunday or holiday.
ON BILLS OF EXCHANGE, ETC. 55

The costs of a protest are very inconsiderable, usually
not exceeding six francs (five shillings); when there is
a change of residence of the parties, or the domicile
of the acceptor, or of the party at whose place the
bill is made payable, is a considerable distance from
the town where the huissier resides, an additional
expense of a few francs is incurred.

The fact that the bill has been properly presented
for payment need not be certified, as the law takes it
for granted upon the declaration of the holder. How-
ever, should the latter have failed to fulfil this obligation,
and the fact of such default on his part can be proved,
the consequence might be to saddle him with the
expenses incurred.

It often happens that, in order to avoid the incon-
venience resulting from the protest of an unpaid
draught, the drawer or some of the indorsers indicate,
on the face or back of the instrument, a correspondent
to whom the holder is requested to present the draught
for payment, in case the drawee should fail to discharge
his obligation. Under these circumstances the huissier
is bound to present himself at the domicile of the
parties indicated, either to call upon them for payment,
or to take their answer to his application.

The right of designating parties so to intervene in
case of non-payment by the drawee, is limited to one
party for the drawer and for each of the indorsers. If
several intervening parties should present themselves
and offer to reimburse the holder, the offer of that one
will he accepted in preference who frees most of the
parties concerned from their obligation, and the huissier
is bound to draw up in the interest of that party a
56 FRENCH MERCANTILE LAW.

special act of payment. Thus, for instance, the party
who intervenes and pays for the drawer, obtains the
preference over all others, because he thus liberates also
all the indorsers; and for the same reason, he who
intervenes and pays for the first indorser, takes prece-
dence of those who simply offer to pay for the second
or third indorser, and so on.

The party who has thus paid by intervention, acquires
against the party for whom the payment has been made,
and against all the other parties lable whose names
precede the latter on the bill, an absolute subrogation
in the right of the reimbursed holder.

A delay of fifteen days is granted to the holder ofa
protested draught, to exercise his remedy against the
drawer and the several indorsers ; this delay is extended
one day for every five myriamétres (about thirty English
miles) distance between the domicile of the said drawer
and indorsers and the place where the draught was
made payable. To the indorser who reimburses the
holder the same delay is accorded to pursue his remedy
against the other parties liable; and this delay counts
from the day that payment was made by him. In the
absence of a judiciary act certifying the day when the
payment has been effected, the law allows that day to
be ascertained and fixed by the correspondence on the
subject, or by the evidence of the books of the party.

The delays stated in the preceding passages refer to
draughts drawn in France and payable in France. In
commercial transactions with foreign parts the delays
are much longer, being fixed as follows:
ON BILLS OF EXCHANGE, ETC. 57

Article 166 of the Code de Commerce.

“ Tf letters of exchange drawn in France, and made
payable beyond the continental territory of France in
Europe, are protested, the drawers and the indorsers
residing in France shall be sued within the delays here
subjoined—viz., of two months, in the case of draughts
made payable in the islands of Corsica, Elba, and
Capraja, in England, and in the states bordering on
France ; of four months, in the case of draughts made
payable in the other states of Europe, &c. &c.”

The solidarity existing between the several parties
liable to the payment of the draught, permits the holder
to choose the party among them of whom he may deem
it most convenient to claim reimbursement.

The formality of the protest, and the delays within
which notice must be given of it and reimbursement
sued for, have been. established in the interest of the
drawer and the endorsers, as it was deemed equitable
not to expose them (in case of non-payment by the
drawee) for an illimited period to the suit of the holder.
If no protest has been lodged, therefore, or if the
actions for reimbursement have not been brought
within the proper time, the holder has lost his remedy
against the several parties liable, with the exception of
the drawee.

However, a special condition is imposed upon the
drawer of-a letter of exchange, in case the letter should
not have been accepted by the drawee—viz., to be
exonerated from all responsibility of payment, he must
prove, at his expense, that there was provision at the
date of the expiration of the draught. This condition
58 FRENCH MERCANTILE LAW.

which the law imposes upon the drawer, is so rigorous
that, as a constant rule of law, in cases where the
drawee stops payment, or becomes a bankrupt at the
time of the expiration or falling due of the draught,
the drawer, though he had placed provision in the hands
of the drawee to meet the draught, will yet not be held
exonerated, because that provision has perished by the
fact of the bankruptcy.

It is therefore always the wiser course for the drawer
to look himself to the acceptance of the draughts for
which he has given provision.

The remedy by action against the drawee may always
be had recourse to, no matter whether the draught has
been protested or no, up to the time of the prescription
of the title, of which we shall speak hereafter.

The holder of a letter of exchange, the acceptor of
which is declared bankrupt, may have it protested at
once, to certify that circumstance, and pursue his
remedy against the drawer or the indorsers, who are
called upon either to reimburse the holder or to give
security for payment when the bill falls due.

If an unaccepted draught happens to be lost, the
party to whom it belongs may request the several
indorsers successively, and the drawer, to make and
sign a new draught in his favour, in lieu of the lost one.
If the draught lost bears the acceptance of the. drawee,
the owner can only obtain a new draught by an appli-
cation to the Court, before which he must establish his
right of property in the lost instrument, and which he
must move for a decree authorizing the creation of the
new draught to replace the lost one. The Court then
orders the party making the demand to give security
ON BILLS OF EXCHANGE, ETC. 59

for a period of three years. This security is intended to
protect the parties liable to the payment of the draught
from a second demand of payment, which might be made
upon them by a party in regular possession of the
instrument alleged to be lost.

If, at the expiration of the lost instrument, the owner
has not obtained a new one in the form before pre-
scribed, he is not the less obliged to have an act of
protest notified at the place where the lost draught was
made payable. But he can only demand payment,
either from the drawee or from the indorser, after having
obtained the permission of the Court, and given the
before-stated security ; and let it be well understood,
these acts must be performed by the owner within the
time allotted to him to prefer his claims against the
parties liable to the payment of the draught ; the delays
granted for that purpose have been specified in a pre-
ceding part of this chapter; th® loss of the draught
makes no difference in them.

The holder of a protested letter of exchange who
pursues his remedy against one of the indorsers, or
against the drawer, being obliged to claim at the domi-
cile of the party whom he chooses to fall back upon,
the funds which he has failed to receive at the place
indicated on the draught, could not justly be charged
with the costs incurred in the recovery of his money ;
the law authorizes him, therefore, to draw upon the
indorser or the drawer, a new instrument, termed a
letter of re-eachange (lettre de rechanye, called also, in
French, re-traite). This instrument must always accom-
pany the protested draught and the act of protest ; the
sum for which it is drawn is made up of—
60 FRENCH MERCANTILE LAW.

1. The amount of the protested draught.

2. The cost of the protest and of the stamp of the
new draught.

3. Postage of letters.

4. Bank commission and brokerage.

5. Discount paid for the negotiation of the new
instrument.

A statement of the several items of costs incurred
(called in French compte de retour) must accompany
the letter of re-exchange; this statement must be cer-
tified by a stock-broker on the Exchange of the place
where the protested draught was made payable; and if
there is no stock-broker in the place, by two licensed
dealers.

We have stated that the interest on the amount of
a draught lawfully runs from the day of the protest.
But interest on the gmount of the costs incurred, or
specified in the statement accompanying the letter of
re-exchange, is due only from the day that an action
for payment has been brought.

The indorser who has re-imbursed the holder of a
protested draught, in consequence of a return account
(compte de retour), and has repaid him the costs incurred,
cannot, on his part, draw a new letter of re-exchange
and make a fresh return account of his own costs, as
the principal debtor of the draught cannot be compelled
to pay these costs more than once.

On Britis to OrpER (Promissory Norss).

The settlement of a debt is also often effected by
means of a bill signed by the debtor to the order of
ON- BILLS OF EXCHANGE, ETC. 61

the creditor, and which is called a Jill to order, or a
promissory note (billet & ordre).

Article 187 of the French Code of Commerce says:
“ All that has been said here above with regard to letters
(bills) of exchange, and concerning the expiration,
endorsement, solidarity, guarantee (aval de garantie),
payment, payment by intervention, protest, rights and
duties of the holder, re-exchange, and interest, applies
equally to bills to order ( promissory notes).

Article 188.

“A bill to order (promissory note) is dated; it
states the sum to pay, the name of the party to whose
order it is signed, the time when payment is to be made,
the value (consideration) which has been furnished in
cash, in merchandise, by way of account, or in whatso-
ever other manner.”

Form of a vill to order.

Bon pour F. 1000.
Paris, le 10 Decembre, 1850.

Au 10 janvier prochain, je paierai 4 Monsieur A, ou & son
ordre, la somme de Mille Francs, valeur recue en marchandises,

[Signed]

English translation.

Goop For 1000 Francs.
Paris, the 10th Dec., 1850.
On the 0th January prox., I promise to pay to Mr. A, or his
order, the sum of One Thousand Franes, for value received in
goods.

[Signed]
62 FRENCH MERCANTILE LAW.

There exists, nevertheless, a notable difference between
a letter of exchange and a bill to order; it is this :—

We have stated that a properly drawn letter of
exchange, or draught, constitutes of itself an operation
of commerce with regard to all persons affixing their
signatures to it, with the exception of non-trading
married or unmarried females. It is not the same with
a billet & ordre; this latter constitutes an act of com-
merce only when signed for a commercial cause.

This is an important difference, on account of the
readier and more prompt jurisdiction of the Tribunals of
Commerce, which is specially and exclusively reserved
to deal with commercial affairs, and more particularly
on account of the personal arrest to which every debtor
for a commercial cause is liable.

Provision is of course out of the question in a case
of a billet & ordre, which in reality is only a simple
acknowledgment of debt on the part of the signer.

The letter of exchange and the Jdillet & ordre are the
only effects of commerce which the French law mentions.
The silence of the law with regard to other effects also
used in commercial transactions, proves that it is deemed
desirable to see these other effects done away with, as
being more injurious than useful to the public interest.
We must, however, say a few words on the subject of
each of these effects, which are, le billet au porteur (note
payable to bearer), le billet & domicile (note made pay-
able at the domicile of a third party), and le mandat
(mandate).

The notes payable to bearer (billets aw porteur) have
almost entirely disappeared from the commercial market.
Not being drawn to order, they do not constitute a
ON BILLS OF EXCHANGE, ETC. 63

negotiable title ; they simply engage the signer towards
the party who has had manual delivery of them; and
the inconveniences resulting from the loss of such effects
are no doubt the cause of their gradual disappearance
from commercial transactions.

The billet a domicile differs from the common billet
a ordre (promissory note) only in this much, that it is
made payable at the domicile of a third party. It is
in frequent use with persons living out of the towns
where they have their commercial dealings. The fact
of their being signed in one place and made payable in
another, presumably invests them with the character of
a commercial operation. However, this presumption
falls to the ground, if evidence to the contrary is
adduced on the part of the signer.

The mandat (mandate, draft, order) is a species of
bastard letter of exchange, containing usually the
words non acceptable. This fact—viz., that the drawee
is freed from the obligation of accepting, leads to the
presumption that there is no provision. This descrip-
tion of instrument is therefore but little patronized
>by traders; a mandate, indeed, enjoys only the same
limited confidence which is bestowed upon the simple
billet & domicile. The Courts have decided that where
the exemption from acceptance is not inserted in the
mandate, the latter combines all the elements constitut-
ing a letter of exchange, as it contains the several con-
ditions required—viz., 1. a drawer; 2. a drawee; 3. a
party in whose favour the instrument is drawn ; and 4.
that it is drawn in one place and made payable in

another ; and that it consequently has the same effect
as a letter of exchange, and confers upon the holder the
64 FRENCH MERCANTILE LAW.

same rights. Be this as it may, however, we class this
description of instrument among those which it will
be found the more prudent course to eschew, as the
parties concerned are exposed to the chance of an
adverse judiciary interpretation and ruling.

Two observations of great practical utility find their
proper ‘place here, as they apply equally to all instru.
ments of commerce of whatsoever description.

The first of these observations relates to the notice,
retour sans frais (return without costs), which is
frequently put upon commercial effects.

This notice upon an instrument of commerce is of a
nature to create just apprehension in the mind of the
merchant, to whom the law has so imperatively pre-
scribed the formalities to be observed in cases of
non-payment of a letter of exchange or a note to order.

In the opinion of men best able to form a judgment
on the subject, the custom of placing upon draughts, &.,
a notice exempting from costs, is most prejudicial to
the best interests of commerce, because it opens the
market to a quantity of paper signed by persons without
substance.

Be this as it may, the Courts, in consideration of the’

fact that this practice, however so objectionable in
principle, is an established custom, have ruled that the

notice of retour sans frais put upon a letter of

exchange, &c., is valid, and that it exempts the holder
of a document of the kind from the obligation ‘to
perform certain formalities involving costs.

The duties and rights of the holders are, in this
respect, as follows :

The holder of a draught, &c., bearing a notice of
ON BILLS OF EXCHANGE, ETC. 65

retour sans frais, repeated by all the indorsers, is at
liberty, in case of non-payment, to have the draught, &c.,
protested or not, as he thinks proper. If he has it
protested, the costs of the protest must be repaid to
him, notwithstanding the notice on the draught. But
he cannot draw a letter of re-exchange, nor send a
return account (compte de retour); and he must have
the draught presented to the several indorsers, and to
the drawer, without charge for the huissier, or even for
postage.

If, relying upon the notice of retour sans frais,
the holder omits to have the draught protested, none of
the indorsers can object to his ulterior proceedings on
the ground that there has been no protest ; nor on the
ground of a default of notification in a case where a
protest has been lodged.

It is hardly necessary to observe that if the notice
of retour sans frais has not been repeated by all the
indorsers, the holder should proceed in the regular
way, just as if none of the parties to the instrument
had put any notice to the effect on it, in order that he
may retain his remedy against all the parties, and not
restrict it to those who may have put the notice on
the bill.

Any party venturing to add a notice of the kind
to any other signature but his own, would lay himself
open to serious consequences, as such an addition would
be looked upon in the light of an alteration of the
draught.

Thus, the course to be pursued by the holder of a
bill, &c., bearing a notice of retour sans frais is toler-
ably plain ; still, we say, in common with many French

F
66 FRENCH MERCANTILE LAW.

writers on the subject, the safer and wiser course always
is to abstain altogether from commercial instruments
bearing a notice of the kind.

The second observation relates to the absolute neces.
sity of drawing letters of exchange, &c., in France on
stamped paper alone.

The stamp duties on draughts, &e. ., are fixed as
follows :—

For draughts of 100 franes and less 5 centimes (3d.)
% above ' 100 fr. and up to 200 fr., 10 » (Id).
” ” 200 ” 300 ,, 15 ”
” » 300 ” 400 ,, 20 ,,
” » 400 ” 500 ,, 25,
” ” 500 ” 600 ” 30 ”
” ” 600 ” 1000 », 50 ”
35 » 1000 8 2000 ,, 1 fr.
: » 2000 4 3000 ,, 1 fr. 0c.
» 3000 ,, 4000 ,, 2 fr.

and so on in proportion to the sum, adding 50 centimes
for every 1000 francs.

Letters of exchange, &c., drawn in other countries on
unstamped paper, or on paper marked with another than
the French stamp, must have the special French stamp
impressed upon them, before they can be in any way
negotiated in France.

The French stamp offices are of very easy access.

Infringements of the stamp act are punished by a
double fine—viz., five francs fifty centimes for every
ove hundred francs of the amount of the draught,
inflicted upon the drawer or acceptor, and the same
sum upon the holder. If the instrument has been
drawn in some other country, the fine is paid by the
party who has first negotiated it.
ON BILLS OF EXCHANGE, ETC. 67

These fines are considerable, and a commercial docu-
ment is so important an instrument, that surely no
sensible merchant will incur the attendant risks for
the sake of saving the trifling stamp duty.

All actions at law to obtain payment of an effect of
commerce or negotiable security of whatsoever form,
are prescribed after five years, counting from the day
that the protest has been lodged or should have been
lodged, or from the day of the last judiciary act in the
case.

The term judiciary act (acte judiciaire) is employed
by the law courts, but there is some vagueness about
it; we will therefore give a definition of it: taken in
connexion with other legal expressions, it signifies suit,
or action at law, not followed by a definitive judgment.

To resume, then; the holder of any negotiable com-
mercial instrument loses his remedy at law against all
parties liable to the payment of the same, if he allows
five years to elapse from the day after the expiration
without bringing his action, or if, after bringing his

. action at law, he neglects fur more than five years to
follow it up.

But the parties pleading the statute of limitations are
bound to affirm by oath, if challenged to do so by the
plaintiff, that they have satisfied the claim, or that they
are no longer indebted.

Where the statute of limitations is pleaded by the
widow or heirs of any of the parties liable to the
payment of the bill, such widow or heirs must affirm
that, to the best of their belief, there is nothing due.

This oath is taken either before the tribunal where
the affair is pending, or by special delegation before one

F2
68 FRENCH MERCANTILE LAW.

of the justices of the place where the party resides to
whom the oath is tendered.

This rigorous prescription demanded by the necessities
of commerce, applies, as we have said, only to negoti.
able commercial securities, that is to say, to regular
letters of exchange, or any other document created by
merchants or traders for the purposes of their dealings,
or by any other person for 2 commercial cause.

As regards draughts signed for a cause reputed non-
commercial, they are subject to a limitation of thirty
years.

With regard to letters of exchange coming from
foreign parts, the law of the country where they are
made payable determines the period of their limitation,
Thus, the English statute of limitations fixing six years
as the term of prescription, a party having accepted in
London a letter of exchange made payable in that city,
can plead the statute of limitations only after six years,
instead of five, even though the acceptor should be a
Frenchman, and the action be brought before the French
Tribunals.*

* Judgments delivered at Paris, on the 26th March, 1836, and
7th February, 1839.
CHAPTER VIII.
OF FACTORS (COMMISSIONNAIRES).

Mercuants that make it their special business to buy
or sell goods on commission for others, are called
factors (commissionnaires).

The name commissionnaires is given also to agents
who simply undertake to effect the transport of goods.
However, as all that it is useful to know on the subject
of these latter has already been stated in a preceding
chapter, we confine our observations here to the functions
and acts of the factors.

The factor entrusted with a commission to buy or
sell goods represents his employer in an absolute
manner; but his commission presents this peculiar
feature, that he acts ostensibly in his own name, instead
of that of his employer, and that accordingly the third
parties dealing with him are often actually left in igno-
rance even of the name of the real purchaser or seller.

There are also commercial associations, or companies,
trading under a firm, engaged in the commission line.

The duties of the factor may be briefly summed up
as follows :—

To act to the best of his ability in the interest of his
principal, and to turn to the sole benefit of the latter
all the advantages resulting from the operation entrusted
to him. Any arrangement tending to confer some private
advantage upon the factor, unknown to the principal, is
a fraud.
70 FRENCH MERCANTILE LAW.

The duty of the principal, on the other hand, is to
bear the unfavourable results of the operation, and,
under any circumstances, to indemnify the factor for all
the risks which he runs, and for all expenses incurred
by him in the execution of his commission. He must
pay him, moreover, the amount of the commission stipu-
lated ; if no agreement has been made, the amount of the
commission is determined by the custom of the place. :

The factor has also the right to claim payment of
interest on all advances made by him.

The factor is responsible to his employer for the
faults committed by him in the execution of his com-
mission ; and, consequently, he is bound to make good
any loss or damage that way result from such faults.

It would be difficult to give a clear and complete
definition of the nature of the facts that may be held to
constitute fanlts; we must therefore confine ourselves
here to some general indications on the subject. Pal-
pable negligence on the part of the factor in the execu-
tion of the orders received by him would constitute a
fault. It is also held to be a fault if the factor, finding
himself at the time when the order arrives precluded
from executing it, fails to inform his employer imme-
diately of the fact. The factor is also in fault if
he departs from the established rules and usages of
commerce, and the operation suffers in consequence
thereof.

But mere deficiency of ability or expertness on the
part of the factor will not constitute a fault. It is the
employer’s business to select his agent among the most
able.

The factor, who entrusts to another party the execu-
OF FACTORS. | 71

tion of the orders received by him, is responsible for
the acts of his substitute.

To constitute a perfect contract of commission, it is
indispensable that the factor should have accepted the
order given to him; no one can be called upon to
execute an order which he has not accepted.

A contract of commission may be proved in the same
way as all other acts of commerce—viz., either by deed
drawn up before a notary, or by a signed agreement, or
by the correspondence on the subject, or even by the
depositions of witnesses.

In order to encourage the commission business, which
presents unquestionable advantages in a commercial point
of view, and also to facilitate the transit business with
other countries, the law grants the factor, for the reim-
bursement of his advances, a lien on the amount of the
goods consigned to him, no matter whether for sale or
simply in transit.

However, to entitle the factor to claim the privilege of
a lien, it must be established that he has been authorized
to make advances, and that the merchandise is, on the
day that he exerts his privilege, in his possession, or, at
least, at his disposition, in another place than the con-
signer’s warehouse. The reason for this condition is,
that the possessor of merchandise may turn the fact of
such possession to account as a means of sustaining or
enlarging his credit, and that, to entitle a third party
to a lien upon any merchandise, the proprietor of the
latter must have given up possession of the same in
favour of this third party. It is not necessary, however,
that the expedition of the goods should actually have
taken place at the time the advances have been made ;
72 FRENCH MERCANTILE LAW.

it suffices that the proprietor should have promised to
expedite them.

The factor has no lien upon goods forwarded to him
for advances made upon former consignments. Even if
the proprietor of the goods should grant him permission
to recover in this way his former advances upon the
last consignment, his claim might be contested by the
other creditors.

The only way to secure a lien on these goods for
advances made upon former consignments, would be by
a deed of pledge ; of which we shall speak in the next
chapter.
CHAPTER IX.

OF THE OPENING OF A CREDIT, AND OF
LOANS ON PLEDGE.

We have just stated, in the preceding chapter, under
what circumstances the factor is entitled to a lien upon
the goods or merchandise consigned to him, in respect of
any money or negotiable security advanced on the same.
We will now proceed to state how a similar lien upon
goods or merchandise may be acquired, independent of
any contract of commission.

Any person may advance money, or open a credit, to
the proprietor of goods or merchandise, and may
acquire, in respect thereof, a special lien on such goods
or merchandise, which will serve as a full protection
against all claims on the part of other creditors. To
this end it suffices to draw up a deed before a notary, or
even a simple written agreement, stating,

1. The sum advanced or promised.

2. The nature, quantity, and marks or ciphers, if any,
of the object deposited as a security for the advance.

This deed or writing must of necessity be registered.
The goods or merchandise so deposited as security must
remain in the possession of the creditor, or of a third
party agreed upon.

If the debtor fails to repay the debt at the time
appointed, the goods or merchandise deposited as security
are assigned for the payment of the principal and
74 FRENCH MERCANTILE LAW.

interest. But the sale of the pledge can only be effected
after the creditor has given due notice to the debtor,
and obtained the permission of the judge, who usually
decrees a sale by public auction. However, the Court
may also, at the creditor’s demand, decree that he (the
creditor). shall be permitted to appropiate the pledge to
his own use, and hold it as his own property, at a price
fixed by appraisement.

Every agreement which provides that, in case of
failure of payment at the proper time, the thing pledged
shall pass to the creditor, without such previous autho-
rization and sale or appraisement, is null and void. Of
course, if after the expiration of the term, the creditor
and the debtor (if still solvent) choose to come to an
understanding on the point, they are at liberty to settle
it any way they may deem convenient. The object of
this provision of the law is simply to prevent the creditor
profiting by the indigence of his debtor, and imposing
upon the latter onerous and oppressive conditions, which
might enable the lender, in case of failure of repayment,
to possess himself of the pledge at alow price. But when
the loan has been made, and the term fixed for its
repayment has expired, there is no longer any ‘occasion
for the interference of the law to protect the debtor,
and the parties may be left at liberty to act in the
matter as they please. ,

The registration duty on contracts of pledge for
advances on goods and chattels moveable is one per cent.
on the amount advanced. However, by a law passed
in the year 1830, an exception is made in favour of
merchants borrowing on merchandise and other effects
OPENING OF A CREDIT, ETC. 75

of commerce; in this case the duty is reduced to
lfr. 10c. (11d). But parties wishing to claim this reduc-
tion of duty must take care to draw up the contract of
pledge with the greatest precision, so that it may fully
bear out its commercial character.
CHAPTER X.
OF MARINE INSURANCES, AND INSURANCES BY LAND.

Tue extensive relations of commerce existing between
France and England, have long since made the merchants
and traders of the two nations fully acquainted with the
respective usages of the two countries in the matter of
insurances, and which, with a few slight differences,
may be said to be the same in both. The most
striking difference consists in the prohibition made by
the French law, to insure the amount due for the freight
of the cargo of a vessel, and also any expected profit on
such cargo. This prohibition has its ground in the
wish of the law always to interest the owners of the
vessel and of the cargo, and the captain, or master, in
the safety of the vessel, as a contrary interest might
lead to the most fatal consequences.

The two leading principles in a contract of insurance
are:

1. The thing insured must exist in kind at the time
the contract is made, and must be actually placed in
peril.

2. The contract of insurance can never be made the
object of a benefit for the insured.

The law requires that contracts of marine insurance
shall be made in writing; they may be entered into
and arranged between the parties themselves, and
MARINE AND LAND INSURANCE. 77

simply signed by them, without the ministry or authen-
tication of any public officer. The contract must
contain the date, the time of the day, the name and
quality of the parties, the name of the captain, or
master, the description of the goods, and their estimated
value, the port of embarkation and of destination, the
places where the vessel will touch at, if they are known,
the amount insured, the stipulated premium, and all
other conditions agreed between the parties. It is
customary to provide for the chance of difficulties
arising, and to submit these to the decision of arbi-
trators, or referees, in order to avoid the necessity of
having recourse to the ordinary Tribunals.

Contracts of this kind are generally made in France
through the medium of insurance-brokers, who are
specially appointed for the purpose. However, as we
have already intimated, the parties to the insurance
are at liberty to enter into the contract without the
ministry of these officers.

There are no special regulations for land insurances
against loss by fire, devastations of war, inundation, and
other scourges ; nor for inland navigation insurances.

The usages which obtain in insurances of this kind
are borrowed mostly from the principles of the law on
marine insurances, and the Tribunals admit also the
same principles whenever there is analogy of position
and possibility of application.

The ministry of insurance-brokers is rarely employed
in land insurances. The companies provide special
forms of policies ready drawn up beforehand.

The circumstance that such policies of insurance are
78 FRENCH MERCANTILE LAW.

prepared beforehand by the companies, and contain
accordingly always a number of stipulations to the
advantage of the latter, predisposes the Courts, in cases
of dispute, but little in favour of their pretensions, when
they are not grounded on a very clear law text.
CHAPTER XI.

OF THE LAW OF PARTNERSHIPS, OF COMMERCIAL
ASSOCIATIONS, AND PUBLIC COMPANIES.

Tue vast industrial undertakings which are springing
up every day, and more especially the construction of
railways, bring the English nation constantly in contact
with the commercial associations existing in France;
this chapter is therefore of peculiar interest. As
the restricted limits of the present work compel us to
be as brief as possible on this important subject, we
shall confine ourselves here to examine and treat of the
rights of third parties in relation to commercial asso-
ciations, and the rights of shareholders in all public
companies.

There are several kinds of commercial associations or
companies in France, which are founded respectively
upon essentially different principles, and differ also
greatly in their respective organization.

We will now proceed to examine successively these
several kinds of associations, and discuss the distin-
guishing and characteristic features of each of them.

1. The anonymous society (la société anonyme) is con-
stituted under the patronage and with the special autho-
rization of the Government. It presents itself and trades
under a denomination indicative of its object, and does
not mention the name of any of the parties interested
in it. Companies of the kind are, for instance, la com-
80 FRENCH MERCANTILE LAW.

pagnie des glaces de St. Gobin (the Mirror Company of
St. Gobin) ; la compagnie d’assurances générales (the
General Assurance Company) ; la compagnie du chemin
de fer du Nord (the Northern Railway Company), &e.

The principal characteristic of anonymous companies
is, that they are composed of partners bound simply
each to pay in the stake which he has undertaken to
furnish, and are represented by managers or directors,
personally irresponsible in respect of the debts or
liabilities of the company.

Third parties doing business with such companies,
have accordingly no other security or guarantee for the
advances made by them to the said companies than the
capital and effects possessed by the latter.

It is on account of this irresponsibility of the
directors and managers’ that an anonymous company
can only exist with the sanction of the Government,
which, in the general interest of third parties, makes
proper inquiries into the actual existence of the capital
which the company professes to possess, and upon the
strength of which it invites public credit, and also mto
the integrity and honesty of the managing directors.

Independent of these precautions, the Government
appoints one of its agents to watch the operations of
every anonymous company, and compels the directors
to deposit at the record office of the Tribunal of Com-
merce, and at the Prefecture of the Department, a dupli-
cate of the annual inventory, that every person interested
may be enabled to inspect it.

The authorization of the Government may always be
withdrawn. ‘The revocation involves the dissolution
and liquidation of the company that has incurred it.
LAW OF PARTNERSHIPS, ETC. 81

‘ As the leading principle upon which these associa-
tions are based affords parties a means of trading
incognito, and more especially without incurring any
personal liability, persons of rank and station are
induced to join in industrial enterprises. The accession
of such persons, on the other hand, inspires confidence
to capitalists, and thus are formed those vast undertakings
which we have named.

The social capital is mostly divided into negotiable
shares, or shares to bearer, in order to interest a greater
number of persons in the success of the undertaking.
These shares are quoted in the Paris Stock Exchange ;
speculation lays hold of them, and makes of these readily
transferable securities a new element of public credit.

To sum up, an anonymous company constitutes a
moral entity vivified by a fiction of the law, and repre-
sented by the managing directors. The ‘latter alone
transact the business of the company with third parties,
and accordingly they are the only parties to be proceeded
against in case of dispute.

2. La société en commandite (joint-stock company—
a company consisting of responsible active and irrespon-
sible sleeping partners). This differs from the preced-
ing in the following points :—1. It does not require
the sanction of the government, and may be constituted
by any body, by virtue of an authenticated deed before
a public notary, or even by a simple agreement signed
by the parties. 2. The managers of the company are
personally liable for all its debts and engagements, no
matter what their amount or importance ; they are even
liable to imprisonment for such debts. 3. The company
must adopt a firm, comprising the name or names of

G
82 FRENCH MERCANTILE LAW.

the manager or managers. The other, non-managinge
partners, called commanditaires (sleeping partners), are
free from all liability to third parties, beyond the
amount of capital respectively invested by each of them
in the concern; but this freedom from liability is
enjoyed by them only on the imperative condition that
they remain entire strangers to the management of the
‘company, which they can never represent, not even by
procuration. The effect of this prohibition being to
completely isolate the commanditaires, or sleeping part-
ners, from the company, they may consider themselves,
in respect of all commercial relations, as totally uncon-
nected with the firm, and may trade with it in every
way in the character of independent third parties.

8. La société en nom collectif (association in a
collective name—partnership). This differs essentially
from the two preceding.

All the partners are jointly and severally responsible
for all the debts and engagements of the company, even
though the names of all of them need not necessarily
appear in the firm. The contract of partnership setting
forth the rules of the association must be registered.

4. Finally, there is still another kind of commercial
association recognised in France—viz., what is called
participation (joint speculation, or copartnery). This
consists simply ‘in two or several persons joining in
one or several determinate commercial speculations.
Such associations are familiarly called, in France, comte
a demi, between two persons; comte a tiers, between
three persons, &c.

Different from the three preceding classes, this sort
of association does not constitute a corporate body or

 
LAW OP PARTNERSHIPS, ETC. 83

entity (étre moral). Every one of the parties joined
in it may make his arrangements with third parties for
his own personal interest, and is held liable only for the
engagements personally contracted by him.

We have to make here a most important remark
relative to the sociétés anonyme, en commandite, and
en nom collectif. The law imposes upon these associa-
tions the publication of their rules within a fortnight
after the date of their formation, both by extract affixed
at the Tribunal of Commerce, and by insertion in
certain journals specially designated. In default of such
publication, the precise terms of which are prescribed
by the law, every partner or member of the association
may at any time demand the dissolution of the social
contract. This apparently exorbitant right has a very
legitimate cause, having for its object to ensure the
publication of acts which it is important for the public
to kuow in order to guard against fraudulent manoeuvres
that might be resorted to if a solvent individual were
permitted to conceal his partnership in a public or
commercial company, and then in times of difficulty put
forward in his stead some insolvent individual as the
party ostensibly liable.

As this provision of the law is expressly intended
to protect the public against fraudulent manceuvres on
the part of the partners or shareholders of the company,
the formalities of registration and publication only affect
the position of such association, but not that of third
parties ; consequently, the absence of a contract of asso-
ciation, or the default of registration or publication, of
course can never be taken advantage of by the company
in its dealings with third parties. The latter have

G2 :
84 FRENCH MERCANTILE LAW.

always their remedy against the company and every
one of its constituent members, no matter whether the
said formalities have been fulfilled or not; bearing
always in mind, however, that the simple commanditaire,
or sleeping partner, is liable only to the extent of his
investment, or the number of shares subscribed for by
him, provided he has taken no part whatsoever in the
management of affairs.

By a singular exception, all disputes arising between
associates of a company, in matters concerning the
latter, are submitted to arbitrators, who constitute a
species of private jurisdiction distinct from that of the
Tribunals.

The arbitrators are named as follows :

Each party designates an arbitrator on his part. If
one of the parties refuses to name an arbitrator, the
Tribunal of Commerce appoints one ex officio. If
several parties have the same interest in common in the
matter, they agree between them upon the nomination
of a single arbitrator; if they cannot come to an under-
standing on the point, the nomination is left to the
Tribunal of Commerce.

If the arbitrators so appointed cannot agree upon
their decision, they must call in another gentleman to
act as umpire, who will, after hearing the statements of
the arbitrators, give his award in the case.

This truly paternal jurisdiction affords an immense
advantage. It enables the parties to state in the quiet
retirement of the cabinet, the grievances which have
given rise to the dispute, and which are mostly of a
private nature ; and it facilitates the examination of
books of account, the production of which is often
LAW OF PARTNERSHIPS, ETC. 85

indispensable. On the other hand, however, it presents
also some inconveniences. Thus, it often happens that
each of the parties names for arbitrator a friend who
feels much more inclined to act as an advocate in the
case than as a judge, so that the third arbitrator, or
umpire, who thus finds himself placed between two
extreme opinions, and has not heard the question
discussed from the beginning, is not in a position to
* fully and correctly understand and appreciate the case
which he is called upon to decide, nor can he implicitly
rely upon the impartiality of the two arbitrators.

To remedy this grave inconvenience, the associates
of a company generally agree, in cases of dispute, to
‘refer the matter from the beginning to ¢hree arbitrators,
who hear thus all three the whole of the statements
and arguments brought forward on both sides. In
default of unanimity, the decision of the majority is
given as the award of this Court of Arbitration.

The consequence of this mode of proceeding is, that
the third arbitrator, being a stranger to the contending
parties, exercises from the beginning of the discussion a
salutary influence upon the other two arbitrators, and
thus the parties may expect an impartial decision,
unbiassed by any personal consideration.
CHAPTER XII.

OF COMMERCIAL SUITS, AND OF THE COMPETENT
TRIBUNALS.

Havine laid down in the preceding chapter, as briefly
as possible, the general principles which, either in the
form of actual rules and regulations of law, or in that
of established usages, govern commercial transactions in
France, we have now still to indicate the competent.
Tribunals to have recourse to, and describe the proper
form and manner of proceeding in commercial suits.

The French Tribunals of Commerce are the compe-
tent Courts to apply to in all cases of dispute between
French or foreign merchants or traders, provided, of
course, the commercial operations which have given rise
to the contention have taken place in France; for it
will be readily understood that the Tribunals of a country
will grant redress only on account of such commercial
transactions as have taken place in that country, and
under the protection of the laws there established.

We have stated, in the chapter on General Rights,
that the only distinction which the French law makes
between a French citizen and an alien, is, that it permits
the former, if he has to claim of the latter a civil or
commercial debt, to have his alien debtor arrested before
judgment, and his goods and chattels seized, as a pro-
visional precautionary measure, unless the said alien
debtor gives such security as the Court may deem sufli-
COMMERCIAL SUITS, ETC. 87

cient. Whereas the same permission is not granted to
an alien‘creditor against a French debtor, except after an
adverse judgment given by the Court against the latter.
(See page 4.)

The Tribunal of Commerce is composed of a President
and several Judges, elected by the merchants of note of
the district in which the Court holds its sittings.

The President and the Judges must be chosen from
among merchants who have been established in business
for at least five years. The Judges must be at least
thirty years old, the President at least forty.

The President and at least two Judges are’ neqored
to constitute a Court.

The Judges elected are appointed to the office by the
' Emperor, if they possess the qualifications demanded
by the law, and also the moral qualifications which
every magistrate or public officer is presumed to
possess. *

The sittings of the Court are held at fixed days and
hours. They are public.

The parties are at liberty to plead their own cause,
or to entrust the care and defence of their interests to
whomsoever they may choose to depute, by power of
attorney, to appear in their stead.

The obvious advantage of a proper experience of the
Court and a thorough knowledge of the law, generally
induces parties to put their case in the hands of a counsel
or advocate. The general prevalence of this custom of
employing counsel in commercial suits has led, in Paris,
and in certain great cities of France, to the establish-
ment of special advocates, who are called agrées.

The formalities. to be observed in bringing before
88 FRENCH MERCANTILE LAW.

these Courts the suits that fall within their cognizance
are very simple.

The plaintiff calls the defendant to appear before the
Court, by means of a summons, which must be served
upon the said defendant by an officer of the Court
(Auissier), at least one day before the day appointed for
the hearing. If the distance from the Court to the
residence of the party summoned exceeds three myria-
métres (about eighteen miles), an additional delay of
one day is granted, and so on for every three myria-
métres additional distance. The delay is considerably
increased in the case of defendants residing beyond the
frontiers of France; thus a delay of two months is

accorded in the case of defendants residing in England,

or in any of the countries bordering on France.

The summons is usually served at the place of resi-
dence of the defendant. But in the case of defendants
residing beyond the frontiers of France, the service is
made at the bar of the Procureur Impérial of the district
in which the Tribunal of Commerce holds its sittings.
That magistrate has instructions to forward the sum-
mons, through the diplomatic channel, to the hands of
the party to whom it is directed.

If the party summoned fails to appear on the day
appointed, the Court, on the demand of the plaintiff,
pronounces default against the defendant, and, after
hearing plaintiff’s case, either proceeds to give judgment
immediately, or appoints a future day for that purpose.
This is what is called judgment by default.

The party against whom judgment has been given by
default, has the right to put in opposition to that judg-
ment by a simple notice served upon the plaintiff by
COMMERCIAL SUITS, ETC. 89

a huissier, together with a fresh summons to reappear
before the same tribunal, within the proper delays fixed
by the law. This opposition, which may be put in up
to the very moment of the execution of the judgment
by default, has the effect of absolutely suspending the
force of the latter. The Tribunal subsequently either
affirms, or modifies, or annuls its first decision, by a
new judgment which is called jugement contradictoire,
i.e., Judgment pronounced after the hearing of both
parties. Should the party making opposition still fail to
present himself before the Court, to support the grounds
of his opposition (which indeed is often the case, as
the step of putting in an opposition to a judgment by
default is commonly resorted to by debtors for the
purpose of gaining time), the tribunal pronounces a
second judgment by default, which is equivalent to a
full judgment (jugement contradictoire), and against
which the measure of putting in an opposition cannot
again be resorted to.

The right of putting in an opposition to a judgment
by default ceases from the day that the party cast has
declared his assent to the same, or else when execution
has been suffered to take place without opposition.
Execution is considered to have taken place when the
condemned party has been arrested, or when his furni-
ture or goods have been seized, and sold with his know-
ledge ; or lastly, when the seizure of one or several of his
estates or possessions has been officially notified to him.

The decisions pronounced by the Tribunal of Com-
’ merce after the hearing of both parties (jugements con-
tradictoires), and in cases of waiver or forfeiture of the
right of opposition, also those by default, are final in
90 FRENCH MERCANTILE LAW.

all cases where the sum or value in dispute. does not
exceed 1500 francs (sixty pounds sterling). But when
the sum or value in dispute exceeds 1500 francs, or is
indeterminate, or where the action is brought to decide
a question of principle, or of competence, or the legality
of a personal restraint, &c., the said decisions are only
judgments in the first instance (en premier ressort), and
accordingly are subject to appeal.

Every decision in the first instance may be appealed
against by the party condemned. The appeal from
decisions of the Tribunal of Commerce lies to one of
the Imperial Courts.

The delay granted for interjecting appeal against a
decision in the first instance is three months, counting,
in the case of a jugement contradictoire, or judgment
after hearing both parties, from the day when the said
judgment has been duly notified to the party appealing;
and in the case of a judgment by default, from the day
when opposition to it has ceased to be admissible.

The appeal is likewise notified to the respondent
by au acte d’huiss‘er (a notice served upon the latter by
the proper officer). Should the intending appellant
have voluntarily submitted to the execution of the
judgment of the Tribunal of Commerce, an appeal on
his part is no longer admissible. We say voluntarily,
because there are cases in which the Tribunal of Com-
merce will decree provisional execution of the judgment,
notwithstanding the interjection of an appeal ugainst that
judgment ; and, of course in such cases, the party con-
demned being compelled to submit to the execution of
the judgment, his right of appeal cannot be impaired
by such compulsory submission.
COMMERCIAL SUITS, ETC. 91

Provisional execution is generally decreed by the
judges de premier ressort, or of the lower Court, 1, if
the claim in litigation rests upon an undisputed title,
2, if the plaintiff is notoriously solvent.

Provisional execution of a judgment in matters of
commerce may always be demanded and obtained, on
condition of the party demanding such execution giving
security to the full amount of the sum or value in
litigation, with interest.and costs.

We have already had occasion to state, in the chapter
on Letters of Exchange and other effects of commerce,
that security may be given, either by paying the sum
required into Court, or by a person notoriously solvent
entering into a recognizance to the required amount,
in due form, at the clerk’s office of the Tribunal of
Commerce.

There are twenty-eight Imperial Courts (Cours
Impériales) in France. They are composed of gentlemen
of the legal profession, selected from among the most
eminent members of the bar, and appointed for life by
the Emperor.

No Imperial Court can sit, composed of less than six
Judges and the President.

The difference which exists between the first ses
in a commercial suit, and the judges of the Court before
whom the appeal from the decision of the Tribunal of
Commerce is heard, is at once apparent. The former
are experienced merchants, and are for that very reason
the fittest men to judge correctly in commercial litiga-
tions; whilst the superior knowledge of the laws and their
proper application possessed by the latter, ensures that
strict adherence to the spirit of the law by which all
92 FRENCH MERCANTILE LAW.

legal decisions, no matter whether in commercial beige
tions or otherwise, ought to be guided.

The pleadings and arguments in a case brought before
the Imperial Court, on appeal from the decision of the
Tribunal of Commerce, are gone over anew in that
Court, and the case is judged de novo, as if the former
‘decision were not in existence.

The decisions pronounced by the Imperial Courts are
called arréts (decrees), and are to be executed without
delay. Against those given by default, an opposition
may be put in, in the same way and form as against
judgments by default of the Tribunals of Commerce.

An appeal in error to the Court of Cassation lies
against any of the decrees (arréts) pronounced by the
Imperial Courts, but only if such decree contains some
vice or defect of form, or some provision or disposition
contrary to the prescriptions or to the application of the
law.

The Court of Cassation is a single and supreme Tri-
bunal, which holds its sittings at Paris. The judges
are appointed by the Emperor; they are selected from
among the most eminent members of the Bench. Their
mission is to watch over the correct application and
interpretation of the law, in all judiciary decisions
pronounced by the Courts.

Whenever a final decision or judgment (arrét en
dernier ressort), delivered by any of the Courts, violates
the law, it may immediately be sent before the Court
of Cassation, either by the party aggrieved, or, if none
of the parties complain, ex officio by the Minister of
Justice, for the better protection of the pure adminis-
tration of the law.
COMMERCIAL SUITS, ETC. 93.

One section of the Court of Cassation, called Chambre
des Requétes (Court of Requests), and which sits com-
posed of at least fourteen judges, examines the appeal
in error, and decides whether a violation of the law is
apparent or not on the face of the judgment appealed
against. If the Chamber of Requests decides this
question in the negative, the appeal is at once dismissed,
but if the decision is in the affirmative, the appeal is
admitted, and sent for discussion before another section
of the Court of Cassation, which is called Chambre Civile
(Civil Court).

Before this latter Court the parties are viltuitted 6 to
plead by counsel.

If the Court, after hearing the parties, dismisses the
appeal, the decision of the Court below is affirmed.

If the Court decides in favour of the appellant, it
quashes the judgment of the Court below, and refers
the parties to another Imperial Court, which then hears
the cause de novo, and pronounces a new decision.

It may happen that the second Imperial Court
decides in the same sense as the first whose judgment
has been reversed by the Court of Cassation, and that
the parties refer this second decision again to the
latter, which examines it in the same way as the first.
If the Court of Cassation sees cause for it, it reverses
the judgment of the second Court also, and refers the
matter for final decision to a third Imperial Court,
-which is bound in its judgment to apply the principles
of law, specially laid down for its guidance by the
ruling decision (arrét) of the Supreme Court.

The decisions of the Court of Cassation are absolute,
neither subject to opposition, nor to appeal. A delay
94 FRENCH MERCANTILE LAW.

of three months from the day of the notification of the
judgment is granted for an appeal to the Court of
Cassation.

An appeal from a judiciary decision, and a writ of
error, are ordinary ways of procedure. There are two
other means of redress, which are called extraordinary
—viz., la tierce opposition (opposition by a third party),
and la requéte civile (civil request).

These two means of redress are pursued before the
same courts which have pronounced the decision, and
under the following circumstances :

Any party who finds a judgment or judiciary decree
in its consequences prejudicial or injurious to his
interests, and who has not been called in the case, or
made a party to it, may protest against such judgment,
or decree, by way of tierce opposition.

Any judgment or decree that has become final, may
be attacked, by way of civil request (par voie de requéte
civile), by the parties condemned (Article 48 du Code de
Procédure Civile):

“|, If there has been personal fraud.

“2. If the forms prescribed on pain of invalidity have
been violated, &c.

“3. If decisions have been given on matters not
demanded.

“4. If more has been awarded than was demanded.

“5. If the judgment omits to pronounce on the
leading counts and points of the suit.

“6. If the Court deciding (en dernier ressort) has pro-
nounced opposite judgments between the same parties,
and on the same arguments. —
COMMERCIAL SUITS, ETC. 95

“7. If one and the same judgment contains contra-
dictory dispositions.

“8. Ifina case where the law enacts that a communi-
cation be made to the Public Prosecutor (aw Ministére
Public), sach communication has been omitted, &c.

“9. If the Court has judged upon the faith of docu-
ments which have since the delivery of the judgment
been discovered or asserted to be forged or spurious.

“10. If since the delivery of the judgment, docu-
ments of a decisive character in the case have been
recovered, which had been kept back by the adverse
party.”

It will thus be readily seen that these extraordinary
means of redress are essentially protective.

The proceeding called tierce opposition is intended
to protect third parties from being injured indirectly
by the consequences of a lawsuit to which they are
strangers.

The proceeding called civil request (requéte civile), is
intended to protect the parties to a suit from involun-
tary errors on the part’of the judges, and also from the
effects of fraudulent devices that might be resorted to
to influence the decision.

A statement of the formalities required to be observed
in having recourse to these two means of redress, though
not very complicated, would yet involve a number of
theoretical details and observations, which would swell
the size of this volume without an adequate object.
Parties who may have occasion to resort to either of
these proceedings, had better consult a French advocate

on the subject.
CHAPTER XIII.
OF LAW-SUITS AND PROCEEDINGS.

Partizs adjudged to pay a debt incurred on account of
a commercial transaction are compellable thereto by
the seizure and sale of their furniture, effects, mer-
chandise, and all their real and personal estate, and
also by personal arrest and imprisonment. But before
these executive measures can be carried into effect, noti-
fication of the judgment, or decree of condemnation,
and order to pay, must be served upon the condemned
party.

The seizure of the goods and chattels of the party
condemned, and the attachment of his person, may
be effected one clear day after service of the order of
payment. But as regards his real estate, or houses
and lands, a clear month is allowed to elapse after the
service of the order of payment, before the creditor is
permitted to seize.

The notification of the order of payment must indi-
cate by which way of execution the prosecuting creditor
intends to proceed—viz., whether by seizure, sale, or
imprisonment. Where it is intended to resort to the
latter measure (imprisonment of the debtor) the notifi-
cation of the judgment and order to pay is served by
an apparitor (Awissier) specially appointed by the judge.

The duration of imprisoment for debt is limited by
the law, as follows :— .
LAW-SUITS AND PROCEEDINGS. 97

Law of the 17th April, 1882.

Article 5. “ The imprisonment for a commercial debt
ceases by right after a term of one year, when the
amount of the judgment debt is under 500 francs ; after
two years, when it is under 1000 francs; after three
years, when it is under 3000 francs; after four years,
when it is under 5000 francs; and after five years,
when it is 5000 francs and above.”

Article 6. “The imprisonment ceases also by right
on the day the debtor enters his seventieth year.”

The sale of goods and chattels or merchandise dis-
trained is effected by public auction, in a place appointed
for the purpose: the produce of the sale is applied to
the payment of the debt, principal and interest.

The sale of real estate seized for debt, is also effected
by public auction, and the produce equally applied to
the payment of the debt, principal and interest; but
the auction in this case takes place before the Civil
Tribunal* of the place where the estate is situated.

If at the time when the produce of the sale is to be
handed over to the execution creditor, there exist other
creditors, the claims of these latter to the sum realized
are all placed on the same footing with that of the
former, at whose suit the sale has been effected; the
execution creditor has a prior, or privileged claim, only
for the costs incurred by his suit. Every creditor has
a right to examine and ascertain the genuineness of the
claims of the other creditors.

_ * For the power, &c., of the Civil Tribunal, we refer to the
! .chapter on General Rights, where we have had occasion to
speak of it, whilst treating of the provisional vee of

alien debtors in France.
H
98 FRENCH MERCANTILE LAW.

There are, however, certain privileged debts which
obtain payment in preference to all others. These
preferential debts are defined by the law as follows :—

Article 2101 of the Code Civil.

« Preferential debts on all chattels in general are
those enumerated here below; they claim payment in the
order here following :—

“J, Law charges.

«2, Funeral expenses.

«3, Expenses of the last illness.

“4, Servants’ wages for the year expired, and what
is due of the current year.

“5, Provisions supplied to the. debtor, or to his
family,” &c. &c.

Article 2102 of the Code Civil.

“The following are preferential debts on certain
classes of goods and chattels :—

“1, The rent due for a house, farm, field, garden, &c.,
is paid in preference to all other claims out of the pro-
ceeds of the sale of the year’s harvest, or of the fruits,
or of the furniture, or of the house or farm, &c., rented.

«2. In the case of loans on pledge, the creditor, or
pledgee, has a lien upon the pledge to the amount of
the advance made on the same.

“©3. The depository of a chattel has a lien upon the
same for all expenses incurred in its safe-keeping.

“4, The price due for articles of furniture is a lien
upon the same, if they remain still in the possession of
the debtor, &c.

«5, An innkeeper, or hosteller, has a right of lien
LAW-SUITS AND PROCEEDINGS. 99

upon the goods and chattels which the traveller or guest
brings with him to the inn, in respect to the payment
of the reckoning due for the entertainment supplied.
“6, A carrier has a lien upon the goods and chattels
carried, for the payment of his hire, and of the accessory
expenses incurred in the conveyance of the goods,” &c.

“Article 2108 of the Code Civil.

“The following are the liens, or preferential debts,
upon land and real estate :—

“1. The vendor of an estate has a lien upon the same
for the payment of the purchase-money, &c.

“2. The parties supplymg the money for the pur-
chase of an estate, house, field, &c., have a lien upon
the same, &c.

“3. The co-heirs of an estate have a lien upon the
chattels immovable belonging to the same, as a gua-
rantee of the division of the property made or agreed
upon between them, &c.

“4. The architects, contractors, masons, and other
workmen employed in the building, re-building, or
repairing of ‘houses, canals, or any other structures
whatsoever, have a lien upon the same.

“5. The parties who have advanced money for the
payment or reimbursement of the workmen, &c., have
a lien for the same upon the building, &c., constructed.”

Beside the afore-mentioned measures of prosecu-
tion and execution, there are others, which are simply
intended to secure payment of the debt; such are
attachment of moneys in the hands of third parties, and
judicial hypothecation (hypothecary inscriptions, or entries,
on the lands and tenements of the debtor).

H2
100 FRENCH MERCANTILE LAW.

Every person having obtained a judgment of con-
demnation against a debtor, may, by virtue of the said
judgment, attach all moneys due to the said debtor by
third parties, and then make application to the Civil Tri-
bunal* for a special judgment, ordering the said moneys
so attached to be handed over to him in payment of
his claim. If the same moneys are attached by several
creditors, the claims of all of them are placed on the
same footing, as we have already stated before.

Every person holding a judgment of condemnation
against a debtor may have the amount of his claim
entered as a charge upon the lands and tenements which
the said debtor possesses jj France. This mortgage or
hypothecation establishgs allen, or privilege, in favour

   
     

Court. Where several chayges have been entered upon
the same property, they ake priority respectively,
according to the order in which they stand; however,
only after tke preferential claims, or liens, enumerated
above. (Art. 2103 of the Code Civil.)

These measures (attachment of moneys and hypo-
thecation) may be effected even before judgment of
condemnation has been obtained, if the creditor holds
a voucher of the debt, such as a promissory note (billet
@ ordre), a letter of exchange, an acknowledgment
signed by the debtor, &c.; and finally, they may be

effected also by virtue of the permission of the Court,
* See Note, p. 97.
   

CHAPTER XIV. ™ ret

OF LAW CHARGES AND EXPENSES.

From the extreme simplicity of the forms of procedure
in commercial suits in France (see chapter XII.), the
law charges and expenses incurred in such sutts, and in
the execution of the judgments obtained, are very
moderate, which is a capital point in favour of the
interests of commerce.

In principle, justice is dispensed gratuitously, in ihis
sense, that the judges are paid by the Government.

The judges of the Tribunals of Commerce receive
no remuneration whatsoever. Their functions are of a
purely honorary character.

The emoluments or fees of the public officers (attor-
heys, notaries, apparitors, &c.,) charged with the ma-
nagement of law-suits, or with the service of notices,
summonses, and other law processes, are very moderate,
and are regulated by a tariff, under the inspection of
the judges.

‘Counsel’s fees are not fixed. The client who con-
sults a counsel or advocate, or engages him to plead his
cause before the Tribunal, hands over to him a fee,
proportionate to the importance of the case and the
talent of the man. Disputes never arise on this point.

The society of advocates or barristers, wishing to
secure for their profession perfect independence and
liberty of action, recognises the principle that every
102 FRENCH MERCANTILE LAW.

one of its members is presumed to afford his profes.
sional services gratuitously, and cannot, therefore, main.
tain an action for remuneration for the same. It never
happens that clients take an unfair advantage of this
circumstance.

The most important charges connected with the pro-
ceedings in a suit are those imposed by the Government
in the shape of duty, and which are proportionate to
the amount awarded by the judgment of the Court, and
in certain cases even to the amount claimed by the
plaintiff. The following remarks will serve as a guide
in this respect.

Legal proceedings to enforce a bargain or payment
of a bond can be commenced only if the bargain or
contract of sale or bond has been provisionally regis-
tered. The registration duty is two per cent. on the
total amount of the sum involved, in the case of contracts
of sale; one per cent. in the case of bonds. On a bank-
ing account (comte de banque) the duty is two per cent.;
on a promissory note (billet & ordre) half per cent.; on
a letter of exchange, quarter per cent.

A duty of one-half per cent. is levied besides on the
amount awarded by the judgment of the Court, no
matter for what cause, except it be in the shape of
damages, in which case the duty is raised to two per
cent. on the amount of the sum awarded.

Judgments disposing of disputed points without
decreeing payment of a sum of money, are subject to a
very trifling fixed duty, varying from two to five francs.

The stamped paper used in law-suits is also subject
to a moderate duty. There are different sizes of
stamped paper, which vary in price from 70 centimes

(7d.) to 1 frane 25 centimes (Is).
LAW CHARGES AND EXPENSES. 103

These duties constitute the law charges invariably
_ decreed by the Court, and which fall on the losing
party. However, the plaintiff, or prosecutor, must
always advance them, except in case of inability from
indigence.

The costs incurred in the execution of the judgments
of the Courts are moderate, and are also regulated by a
fixed tariff.

The expense of attaching and imprisoning the person
of a debtor is about 200 francs (£8 sterling). The
maintenance of the debtor in prison costs about 25
francs per month, which the detaining creditor is obliged
to pay.

Upon the whole, the law charges and expenses
incurred in commercial suits in France, are by no means
heavy, and it happens very rarely indeed that the dread
of the law expenses will induce a creditor to refrain
from the prosecution of his rights.

The government, in its solicitude for the indigent,
has lately proposed and carried a law enabling indigent
parties to sue in formd pauperis, that is, without bemg
obliged to make the least advance for law charges and
expenses.

The public officers and the government have their
remedy for their fees, and for the costs and charges
incurred, afterwards, against the losing party, if that
party is solvent.

It has ever been the custom of counsel in France to
give gratuitous advice to the poor.

In the next and last chapter, we intend to discuss the
law of bankruptcy, and the exceptional position in which
a declaration of bankruptcy places the debtor and his
creditors.
CHAPTER XV.
OF FAILURES AND BANKRUPTCIES.

Tur paramount importance of the subject of this our
last chapter, compels us to enter into somewhat larger
developments than we have done in any of the preceding
chapters ; still we shall endeavour to be as concise as
possible.

The French law relative to failures and bankruptcies
differs essentially in its fundamental principle from the
English and American bankruptcy laws, inasmuch as it
provides that the creditors have a claim, not only on
the estate possessed by the insolvent trader at the time
of the bankruptcy, but also on the property which he
may acquire at some future period; and that the bank-
rupt (failli) shall be held discharged from his debts and
liabilities only by paying them in full.

The only favour which the French law grants to the
bankrupt, is a provisional protection from arrest, in
certain cases, and permission, with the consent of the
majority of the creditors, to compound for his debts, by
the payment of dividends thereon, proportionate to his
means present and to come, and by such composition
to secure for his person and property protection from
all process. However, this partial release, or discharge,
obtained by means of an arrangement, or composition
(concordat) with the creditors, does not re-establish the
insolvent trader in all the rights and privileges which
FAILURES AND BANKRUPTCIES. 105

he has forfeited by his failure ; these he can regain only
by payment in full of all his debts and liabilities.

Having thus stated the ruling principle of the French
bankruptcy law, we will now proceed to discuss the
chief provisions of that law.

The trader-debtor who stops payment is in a state of
bankruptcy ; this state is held to exist virtually, and
with all its consequences, even before the adjudication
which declares it officially.

As the fixing of the exact period when the insolvent
debtor stopped payment is of considerable importance,
particularly as regards the appreciation of the acts done
by the debtor previous to the official declaration of the
bankruptcy, the adjudication fixes this date provisionally.

We say provisionally, because at the time of the
adjudication some uncertainty may still exist regarding
the actual position and conduct of the bankrupt, who is
often interested in concealing them. It is, therefore,
left open to any of the parties interested to demand the
rectification of that date, if cause be shown for the same.
The right of demanding such rectification ceases after
the expiration of the periods allowed for the proof of
debts.

In the interval between the time when the insolvent
trader has stopped payment, and the official declaration
or adjudication of bankruptcy, the said trader may con-
tinue his business, and all transactions really and bond
fide entered into during such interval will be held valid,
provided the person “having any such intermediate
transaction with the bankrupt, was not aware at the
time of the fact of his having stopped payment.
106 FRENCH BANKRUPT LAW.

The great difficulty in such cases is to prove the
reality and dona fides of the transaction. The following
remarks may in some measure serve as a guide in this
respect :—

1. There are certain transactions which the law
declares to be fraudulent, if entered into during the
interval between’ the suspension of payment and the
adjudication of bankruptcy, and which are accordingly
prohibited, and held to be null and void.

Article 446 of the Code de Commerce says :—

“ Are null and void as against the estate the follow-
ing transactions if entered into by the debtor since the
date fixed by the Court as that of the suspension of
payment, or within ten days immediately preceding that
date: All transfers and conveyances of property, real or
personal, without a valuable consideration ; all payments,
whether in cash, or by transfer, sale, set-off, or other-
wise, for debts not yet due; all payments made other-
wise than in cash, or effects of commerce (negotiable
securities) for debts due; all mortgages and liens by
way of pledge on the property of the debtor, on account
of debts previously contracted.”

2. As regards other transactions, not comprised in
the above enumeration, the person demanding their
bemg declared null and void by the Tribunal must
prove that they are of a fraudulent character.

After the day of the adjudication, or official declara-
tion of bankruptcy, the bankrupt can no longer dispose
of any of his property or goods in any way whatsoever,
FAILURES AND BANKRUPTCIES. 107

all his estate, real and personal, vests in the syndic or
syndics, for the benefit of the creditors.

The bankrupt who removes, conceals, or embezzles
any part of his estate, commits a felony, which is termed
in France, fraudulent bankruptcy. The insolvent trader
who has squandered his estate by misconduct, extrava-
gance, or hazardous speculation, is deemed guilty of a
misdemeanour, which is termed simple bankruptcy. For
the offence of fraudulent bankruptcy the insolvent
trader is liable to be sent to the hulks (¢ravaux forcés) :
for the offence of simple bankruptcy he is liable to
imprisonment in a. house of correction.

The preceding remarks show the distinction which
the French law makes between failure and bankruptcy,
and the protection afforded by it to creditors against
dishonest debtors. We shall here omit altogether from
consideration that part of the subject which the French
law calls more specifically “bankruptcy,” and confine
our observations exclusively to the subject of failures
properly so termed in France, but to which, in con-
formity with the English practice, we will henceforth
apply the name of bankruptcies.

The trader who finds himself in a state of insolvency,
must within three days after suspension of payment,
file a declaration to that effect in the registry of the
Tribunal of Commerce of the district in which he
resides. This declaration must be accompanied by a
statement of his debts and assets, which is termed a
balance-sheet (bilan). Upon the filing of this balance-
sheet the trader is adjudged a bankrupt by the Court.

If an insolvent trader fails to state his position
108 FRENCH BANKRUPT LAW.

to the Court, and file his balance-sheet, any one of his
creditors may demand an adjudication of bankruptcy
against him; and the Court may even pronounce such
adjudication ex officio, that is to say, even in the
absence of a petition to that effect.

In cases where an adjudication of bankruptcy is thus
hostilely demanded against a trader-debtor, and the latter
opposes the granting of such adjudication, difficulties
may arise as to the proper appreciation of the facts
constituting the suspension of payment, and the suffi-
ciency or insufficiency of the cause shown in support
of the petition. The Tribunals have in this matter a
discretionary power. We will here briefly state the
general spirit and intention of the law which guides
the decision of the Courts in disputed cases of the kind.

The mere refusal of a trader-debtor to meet some of
his engagements is not of itself sufficient to constitute
an act of bankruptcy. Such refusal may arise from an.
infinite variety of purely accidental causes, such as, for
instance, an error in the account, a voyage, a serious
dispute, &e. The error is rectified, the voyage termi-
nates, the dispute is settled, funds that were tempo-
rarily tied up become again available, and the liability
is ultimately discharged. In all such cases there is no
actual suspension of payment, and the Court will pro-
nounce in favour of the trader against whom adjudi-
cation of bankruptcy is demanded. But on the other
hand, the Court will not stay the issuing of the adju-
dication upon idle and frivolous grounds.

It happens sometimes that suspension of payment is
openly declared only at the time of the death of the
debtor, in which case the law will still grant an adjudi-
FAILURES AND BANKRUPTCIES. 109

cation of bankruptcy against the deceased, but only if
the state of suspension of payment shall have virtually
existed before the demise of the trader, and not have been
occasioned by that event. This is a wise distinction, as
there are many traders who die solvent, and would have
been able to meet all their engagements had death not
stopped their career. It will surely be admitted that
the issuing of a fiat of bankruptcy under such circum-
stances, would be an act of injustice, and that the
provisions of the law which enacts that, to justify a
petition for adjudication of bankruptcy, the state of
suspension of payment must have been manifest before
the demise of the, trader, are both merciful and wise. In
the same spirit the law has also provided that the right
of demanding an adjudication of bankruptcy against the
estate of a deceased trader shall absolutely cease one
year after the day of the demise of the latter.

The official declaration of the failure of a trader must
be posted up at the hall door of the Tribunal which
has pronounced the adjudication, and advertised in
certain public journals specially nominated for that
purpose, in order that no person may pretend ignorance
of the fact of such fiat of bankruptcy having been issued.

The judgment declaring the bankruptcy orders the
provisional arrest of the bankrupt, and his detention in a
prison for debtors; or it simply appoints a special
officer to watch the person of the bankrupt.

However, if the bankrupt bears a good character,
‘and the balance-sheet filed by him is deemed satisfac-
tory, the Court may, by a special order, termed sauf-
conduit (protection), exempt him from the operation of
these rigorous proceedings.
110 FRENCH BANKRUPT LAW.

Forthwith upon adjudication of bankruptcy, all the
estate, real and personal, of the bankrupt, is immediately
vested in the Court, and the administration and realiza-
tion of the estate, and the necessary proceedings and
operations in the bankruptcy, are confided to one or
several syndics (assignees), who are to give sufficient
security, and are appointed to act under the supervision
of a judge of the Tribunal of Commerce, specially
charged in this behalf, and who is called Judge-Com-
missioner. These syndics immediately draw up an exact
inventory of the estate, and proceed to the verification
of the debts, as will be hereinafter explained.

It sometimes happens that the syndics are empowered,
during the time occupied in the necessary proceedings
and operations in the bankruptcy, to provisionally carry
“on, within the limits of the available estate, the busi-
ness of the insolvent trader, with or without the
assistance of the latter. Thus they may keep open the
shop or establishment of the bankrupt, purchase the
requisite stock, order the completion of articles in pro-
gress of manufacture, &c.

This provision of the French bankruptcy law is
intended chiefly to keep up, as much as possible, till
the final winding-up of the accounts, the value of the
bankrupt’s stock-in-trade, plant, manufactured articles,&c.
The careful supervision which the judge-commissioner
exercises, and the regularity with which the accounts
of the syndics are generally kept, leave little room for
those abuses that otherwise might attend such provi-
sional administration of the bankrupt’s estate.

Having thus briefly enumerated the consequences
resulting to the msolvent trader personally from an
FAILURES AND BANKRUPTCIES. 111

adjudication of bankruptcy against him, we will now
proceed to state the effect of such adjudication in what
concerns more particularly the interests of the creditors.

From the instant the adjudication is pronounced,
payment may at once be demanded of all debts due to
the bankrupt, no matter what may be the period of
their falling due, or the extent of credit originally given.

From the day of the adjudication, interest ceases to
run on any debts due by the estate, save on those which
are guaranteed by a pledge yielding interest; on these
the interest continues to be paid to the creditors so
secured.

The owner of the premises occupied by the bankrupt
and where his business or trade is carried on, must
suspend for one month all proceedings for the recovery
of any rent that may be due, to enable the syndics to
_realize the requisite funds for the payment of such rent.
However, in cases where the lease expires in the course
of the month, the landlord may exercise his rights
‘immediately.

The creditors’ right of action against the bankrupt
for the recovery of their debts ceases from the day of
the adjudication, since the bankrupt is then divested of
all property. Privileged or secured reditors, however
(ch. XIII. p. 98), retain a special right of action in case
the syndics, or assignees, fail to settle with them.
‘True, it is not usual for secured creditors personally
to realize the value of the objects on which they have a
lien ; in most cases they leave it to the syndics to effect
the sale of such objects, and receive from their hands
the amount of their claim ; still, it is incontestable that
should the syndics delay such sale or realization, the
112 FRENCH BANKRUPT LAW.

secured . creditors may themselves proceed to effect it,
in the presence of the syndics duly invited to attend.

All law-suits concerning the bankrupt must be brought
against the syndics who represent him. In the same
way, all actions undertaken in the interest of the estate
against third parties, must be brought at the instance
of the syndics.

The Court may, if the judge thinks proper, autho-
rize the bankrupt to join in such actions.

The syndics are bound to deliver to the judge-com.
missioner, within a fortnight after their appomtment, a
memoir, or summary report, setting forth the apparent
condition of the estate, the principal causes of the
failure, the circumstances attending it, and the prin-
cipal features which it presents. This report is for-
warded by that magistrate to the Procureur Impérial,
one of the chief law officers of the Crown, who examines
it, and decides whether society has an interest to inquire
into the conduct of the bankrupt, and whether there is
cause to proceed against him for acts of simple or
fraudulent bankruptcy.

Immediately after the inventory is taken of the
estate and effects, the syndics proceed, with the aid of
the books of the bankrupt, and of all the papers and
documents of which they have taken possession, to
verify the balance-sheet filed by the bankrupt. Should
the latter not have filed a balance-sheet, the syndics
prepare one, and deposit it in the registry of the Tri-
bunal of Commerce.

With the aid of the information contained in the
balance-sheet, the registrar of the Court invites, dy
letter addressed to every individual creditor whose name
FAILURES AND BANKRUPTCIES. 118

appears in that document, and by advertisement in
some public journal or journals, specially designated to
that end, the creditors of the estate to deposit in the
hands of the syndics appointed the titles of their
debts and claims, and the papers or documents in support
of the same. A term of fourteen days (quinze jours)
is allowed to the creditor for the production of such
titles, &c.

To creditors residing abroad a longer time is allowed
for this purpose, in proportion to the distance of the
country in which they reside; in the case of creditors
residing in England, the time allowed is two months.
However, this extension of time in favour of foreign

‘creditors, and which may be as much as one year.in the
' case of those residing in countries very far off, does not
delay the operations in the bankruptcy, which are pro-
ceeded with after the expiration of the first fortnight.

The titles of the debts or claims must be accompanied
by a summary account (dordereau résumé) written on
French stamped paper, in the form here annexed :

 

TIMBRE IMPERIAL.

: Bordereau de la créance de M. A,
35 centimes.,

demeurant 4

dans la faillite du sieur B, marchand,
etc. ... . demeurant 4.

 

 

 

(Désigner ici la nature et la somme de la eréance.)
(St c'est un compte courant le copier tout au long.) -

Dater

Et signer
I
114 FRENCH BANKRUPT LAW.

 

 

 

 

Translation.
STAMP, Amount of the debt claimed by Mr. A,,
35 centimes. of
against the estate of Mr. B., merchant, &c.,
of

(State the nature and amount of the debt.)
(If it is an account current, copy tt in extenso.)
Date
Signature

The syndics proceed to examine the several claims as
they are sent in to them. If they find such claims to
be real and bond fide, and that they agree with the
writings and statements of the bankrupt, they admit
them by a declaration to that effect, written either on
the instrument itself, or on the account (bordereau)
‘accompanying it. However, that admission of debt is
definitively settled only in the general meeting of the
creditors specially called for that purpose. In cases
where the syndics dispute the validity of the title by
virtue of which a creditor prefers a demand against the
estate, the judge-commissioner examines into the case,
and endeavours to bring about an arrangement between
the parties; if he fails in this, he sends the latter (the
syndic, or syndics, and the creditor whose demand is
disputed) before the Tribunal of Commerce. The
decision given by that Court is either final, or subject
to appeal, according to the importance of the matter in
FAILURES AND BANKRUPTCIES. 115

dispute. We have explained in chapter XII. the manner
of procedure before the several Courts to which recourse
may be had in commercial suits.

Every creditor inserted in the balance-sheet, or who
has proved his debt, is entitled to oppose before the
judge-commissioner, or before the Tribunal of Com-
merce, the admission of the debts claimed by others.
But by way of precaution, to guard against idle or
vexatious opposition, the law provides that the party
so opposing shall pay the costs of the proceeding, if the
decision goes against him.

After the debts and demands have been properly
verified, the creditors are called upon, either personally
or by agent, to affirm on oath, before the judge-com-
missioner, the truth of their respective demands. Ifa
creditor refuses to swear to the truth of his debt, his
demand is rejected.

Within the three days after the time prescribed for
the affirmation of the debts, the registrar of the Tri-
bunal invites the creditors whose debts have been duly
verified and sworn to, to meet, under the presidency of
the judge-commissioner, for the purpose of hearing the
report of the syndics on the actual state of the bank-
ruptcy, receiving the proposal of the bankrupt, and
deciding whether he deserves the favour of a composi-
tion (concordat) at their hands.

As the decision of a majority of three-fourths in iain,
and a simple majority ( majority of one) in number of
the creditors present, is held binding on all creditors, it
will at once be seen how important it is to every
one of them to attend this general meeting. The
law has for this reason provided that disputed debts

12
116 FRENCH BANKRUPT LAW.

shall be provisionally admitted whilst the matter is
pending before the Tribunal, so that the claimant
may participate in the deliberations of the meeting of
creditors.

Foreign creditors will, therefore, always do well to
anticipate the time legally allowed for the production of
their claims, and, by the speedy proof of their debts,
place themselves in a position to participate in the
important deliberations and decision of the general body
of creditors.

The law lays down no particular conditions on which
the proposal of the bankrupt to his creditors is to be based.
The nature of such proposal greatly depends upon per-
sonal considerations, and upon the circumstances of the
case, and varies accordingly ad infinitum. In most
cases, however, the insolvent trader asks his creditors to
remit a part of their claims, and promises to discharge
the remainder in fixed instalments, at stated periods.
If three-fourths in value and one more than half in
number of the creditors consent to accept the proposal
made by the bankrupt, the latter resumes possession of
his estate and effects, and continues his business as
before, on the sole condition of paying the promised
instalments.

If the bankrupt who has so compounded with his
creditors subsequently fails to keep his promises, and
neglects to pay his instalments at the appointed periods,
the creditors may have him deprived of the benefit of
the composition, by an application to that effect made
before the Tribunal of Commerce. If the application
is received, the Tribunal orders the resumption of the
operations in the bankruptcy, and re-appoints syndics,
FAILURES AND BANKRUPTCIES. 117

who take possession again of the estate and effects of
the bankrupt, verify the new debts, and take proper
cognizance of the modifications which have meanwhile
taken place in the old debts. The renewed proceedings:
in the bankruptcy are carried on before the judge-
commissioner, in the same manner as stated above.

In cases of the kind ‘the insolvent trader is still per-
mitted to make another proposal of composition, since
it is possible that the non-fulfilment of his promises:
under the first arrangement may have arisen from his
having undertaken obligations too heavy for him to
fulfil. Should the insolvent trader again fail to keep
his engagements under the new arrangement, he defini-
tively forfeits thereby the benefit of such arrangement,
and the further proceedings in the case are then con-
ducted in the manner hereinafter stated (see page 119).

If the circumstances of the failure have destroyed
the commercial position of the insolvent trader, and it
is impossible for him to continue his - business, he
usually offers to his creditors, by way of composition,
the cession to them of all his estate and effects, and a
small dividend besides, to be paid either from the
private means of his family, or out of his future earn-
ings. In such cases the creditors entrust to one or
several commissioners, who usually are the late syndics,
the office of realizing the assets ceded to them, and
rateably distributing the proceeds among them.

Privileged creditors are excluded, on pain of forfeiting
their right of privilege or lien, from all participation in
the deliberations on the arrangement to be made with
the bankrupt.

The latter provision of the law is intended to secure
118 FRENCH BANKRUPT LAW.

identity of interests in the creditors who vote on the
question of the composition to be accepted from the
bankrupt. Any creditor who receives from the bank-
rupt any undue advantage, as an inducement to assent
to the composition offered by the latter, commits thereby
a misdemeanour, which may be punished by fine and
imprisonment (Law of 1838).

The composition (concordat), though assented to by
the creditors, requires still for its definitive completion
the sanction (homologation) of the Tribunal, which, after
hearing the report of the judge-commissioner, considers
whether such sanction shall be given, in the interest
of the creditors and of commercial morality.

If the Tribunal decides that the arrangement shall
receive its sanction, it pronounces a decree to that effect,
and declares the arrangement binding on all creditors
of the bankrupt; im the same decree the Court absolves
the bankrupt from all blame, and certifies that his failure
has arisen from unavoidable losses and misfortunes.

If, on the other hand, the Court is of opinion that
the creditors have been: misled in the matter of the
composition, and that the proposal made by the insolvent
is not satisfactory; or, if the Court holds that the
bankrupt does not deserve the indulgence which the
creditors are willing to extend to him, it may refuse its
sanction, in which case the arrangement (concordat) is
annulled.

The insolvent trader who has been found guilty of
the misdemeanour of simple bankruptcy, is not neces-
sarily precluded thereby from the right of a compo-
sition with his creditors. But this favour is absolutely
refused to the insolvent trader who has been adjudged
guilty of the crime of fraudulent bankruptcy.
FAILURES AND BANKRUPTCIES. 119

These provisions of the law show how fully both the
general interests of society and the private interests of
the creditors are protected.

If the creditors reject the proposal of their debtor, or
if the arrangement assented to by them is subsequently
annulled by the Court, the creditors are by the simple
fact of such rejection or annulment, constituted into a
kind of body-corporate, termed in the French Bank-
ruptcy Law wnion, for the joint protection of their
rights and claims upon the estate and effects of the
bankrupt.

The union is fully established by the decision of the
meeting of creditors which rejects the proposal of the
debtor, or by the judgment which annuls the proposed
arrangements. It is represented by syndics, designated
by the creditors, and appointed by the Tribunal.

These syndics proceed to collect the estate, real and
personal, of the bankrupt. They then distribute the
total proceeds rateably among the creditors, keeping
in hand a sufficient sum to pay a dividend to those
foreign creditors who have not yet proved their debts,
but who are still within the legal period allowed them
for the production of their vouchers. After the expi-
ration of the legal periods, the sum kept back is defi-
nitively distributed among the creditors.

The syndics are commissioned also to collect the
estate and effects which the bankrupt may have acquired
after his failure, no matter in what manner, and to
distribute the proceeds among the creditors; but they
are bound to admit to the benefit of such distribution
any new creditors that may then exist.

In the case of the bankruptcy of a commercial com-
pany, the syndics, besides collecting the assets of such
120 FRENCH BANKRUPT LAW..

company and distributing the proceeds among the
creditors, have to collect also the personal estate of
every individual partner, and to distribute the several
‘proceeds concurrently between the creditors of the
company and the respective personal creditors of each
partner.

But, before proceeding to any distribution of the
estate, the syndics are imperatively called upon to
arrange about the rights of the preferential creditors ;
of the creditors secured by pledge or mortgage; of parties
claiming the restitution of commercial securities or goods
transmitted to the bankrupt under certain peculiar
circumstances presently to be explained ; and also about
the rights of the bankrupt’s wife.

In chapter XIII, page 98, we have given a list of the
several creditors who have a legal privilege or lien upon
the estate, real or personal, of their debtor. In chapter
IX. we have indicated those creditors who are regularly
secured by a pledge. We have now to add here that
the intervening bankruptcy of the debtor does not in
any way alter or vary the privileged position of the said
creditors; and that should the syndics of the union
neglect to pay any such creditor the amount of his
. debt, he may demand permission of the Court to sell
the object pledged to him as security, and pay himself
out of the proceeds, handing over the surplus, if any, to
the syndics.

As regards the right of revendication, or claiming
the return of commercial effects or goods transmitted
to the bankrupt under certain peculiar circumstances,
the following are the provisions of the law:

The principal who has transmitted to the bankrupt,
FAILURES AND BANKRUPTCIES. 121

previous to the adjudication, commercial securities, &c.,
with instructions to cash them, and apply the proceeds
to some particular purpose, may claim the return of
such documents, if they continue still in the portfolio of
the bankrupt. The consignor who has forwarded goods
to the bankrupt for sale on commission, may demand
the return of such goods if they remain still unsold ;
or, if sold, but not yet paid for, he may demand pay-
ment of the price to be made direct to himself.

Lastly, the unpaid vendor is entitled to recover and
retain possession of the goods expedited to the bankrupt,
so long as the said goods are in transitu, and have not
been actually delivered at the warehouse of the bank-
rupt or at that of his agent. But the unpaid vendor
can no longer exercise his right to recover and retain
possession of the goods if the purchaser has sold them
whilst in transitu, on a bill of lading or carrier’s
invoice.

The syndics may always, if they think proper,
oppose the retaking of the goods by the unpaid vendor,
by paying him the price agreed upon, or giving security
for the payment of the said price when due. This course
is usually taken if the goods have risen in value.

The rights of the wife of the bankrupt are usually
determined by her marriage-settlement ; in default of
such settlement, they are determined by the Code
Napoléon.

The following are the provisions of the law in this
respect :—

The wife of the bankrupt retakes in kind the real
estate which she has brought to her husband, and also
the real estate that may have since come to her by
122 FRENCH BANKRUPT LAW.

inheritance, or donation, or have been bequeathed to
her by will.

She retakes also the real estate that may have been
acquired in hér name, with moneys derived from inherit-
ance, donation, or testamentary bequest, and of which
the source has been recorded by an authentic deed.

She retakes, likewise, the moveables (articles of fur-
niture, objets mobiliers) which she has brought to her

ppusband, provided such articles are described in her

marriage-settlement ; and also the moveables that may
have come to her by inheritance, donation, or testa-
mentary bequest, provided such moveables are mentioned
in an authentic deed.

She preserves a right of legal hypothecation, or lien,
on the estates possessed by her husband on the day of the
marriage, or which have come to him since by inherit-
ance or by way of gift. But she has no right of lien
upon the real estate purchased by her husband since the
marriage. This latter provision of the law is intended
to prevent the fraud of ¢raders purchasing with the
moneys of their creditors estates as a means to ensure
the reimbursement of their wife’s dower.

As regards the claims the wife may have against her
husband for moneys which she has brought to him,
either at the time of the marriage, or since, she has no
lien whatsoever, and must present herself as a creditor
of the estate exactly on the same footing as all the
other creditors. All particular benefits granted to her
by the husband at the time of the settlement, and the
gifts since made to her by him, are invalid, and can no
way profit her after his failure.

In all cases the judge-commissioner may authorize
FAILURES AND BANKRUPTCIES. 123

the assignees of the estate—as is indeed almost inva-
riably done—to restore to the wife of the bankrupt
her own wearing apparel and that of her children, and
also the indispensable articles of furniture.

When the whole of the estate is collected, a general
meeting of the creditors is held, under the presidency
of the judge-commissioner, and in presence of the
bankrupt, to receive and audit the accounts of the
syndics.

The costs of the proceedings in the bankruptcy and
the fees of the syndics are deducted from the produce
of the estate, and the balance remaining is then rateably
distributed among the creditors.

With the audit of the accounts of the syndics, and
the distribution of the assets, the union of the creditors
is dissolved.

From this time forward every creditor regains his
right of individual action against the bankrupt, and
may proceed against him for the recovery of the balance
of his debt, by all legal means, not even excepting per-
sonal arrest. And to these attacks on the part of his
creditors the bankrupt remains exposed for a period of
thirty years.

The insolvent trader who has obtained the favour of
a composition is evidently in a better position than he
to whom this favour has been refused, since the former
is freed from his debts on the sole condition of paying
certain dividends at stated periods; whilst the latter
remains exposed for a period of thirty years to the
attacks of his creditors. Still, the moral stigma that:
attaches to the name of bankrupt is the same for both,
and they are both equally deprived of their civil rights.
124 FRENCH BANKRUPT LAW.

The only way left open to traders who have had the
misfortune to fail, to remove the stain of bankruptcy
from their name, and to regain their civil rights, is to
pay their debts in full, both capital and interest.

Tn that case the Imperial Court, upon the production
of the receipts, solemnly pronounces a decree of rehabi-
litation, which restores the former bankrupt, relieved
from all imputations on his conduct, to an honourable
position in society.

In concluding this chapter we may observe that the
exercise of the right of creditors, French or foreign,
against an insolvent debtor, is most simple and easy.

Those creditors who are on the spot are not obliged
to incur the least expense, of whatsoever nature, to
prove their debts, obtain the admission of them, and
share in the distribution of the estate.

The creditors who are not on the spot, and the
foreign creditors, may appear by deputy authorized by
letter of attorney (procuration), which costs only a few
francs.

We trust that this summary of the provisions of the
Commercial Law of France, and of the usages connected
with it, may answer the purpose for which it is intended,
and which we have stated in the Preface. We beg
to remind our readers that we promised them a com-
pendium of the law, free from all technical dissertations
and disquisitions, and such as may suffice for the
requirements of international commerce. We shall feel
pleased indeed, if it is allowed that this promise of ours
has been redeemed by the briefness, clearness, and
precision of the present little work.
INDEX.

Acceptance of bills of exchange, 51
——., exemption from, 68
Accounts, audit of, 128
Acquisition of real estate, 7
Acte d'huissier, 51
—— judiciaire, 67
Adjudication of bankruptcy, 108
Agent commissioned to receive goods,
liability of, 37
-Agréés, 87
Aleatory sales, 12
Aliens, rights of, 1
Alien creditors, rights of, 4
—— debtors, provisional imprisonment
of, 2

 

. provisional seizure of goods
of, 2

Annulment of bargains, 11

Anonymous society, 79, 83

Appeal against judgment of Tribunal
of Commerce, 90

Arbitration, court of, 84

Arbitrators in disputes arising between
associates of a company, 84

Arrét en dernier ressort, 92

Arréts of the Imperial Courts, 92

Assignees, 110, 119

Associations, commercial, 79

Attachment of moneys in the hands of
third parties, 99 a

of person of debtor, 96

Auction, public, forced sales by, 33

Audit of accounts, 123

Aval de garantie, 54

Average, general, 38

Balance-sheet, filing of, 107

Bank of France notes, payment in, 39

Bankruptcies, 104

Bankrupt law, difference between the
French and: English, 104

 

 

Rankrupt, rehabilitation of, 124
Bankrupt’s wife, rights of, 121
Bankruptcy, adjudication of, 108

of commercial companies, 120

, fraudulent, 107, 119

, functions of the registrar of the
court, 112, 115 4

, Jud ge-commissioner in, 110

, simple, 107, 118

Bargains, annulment of, 11

Bargain, repudiation of, 29

Bilan, 107

Billet & domictle, 62

Billet au porteur, 62

Bills of exchange, 47

, acceptance of, 51

, definition of, 47

» expiration of, 49

, form of, 48

, guarantee of payment by third
parties, 54

exchange, indorsement of, 50

, joint responsibility of drawer,
acceptor, and indorsers of, 53

, liability to personal arrest for
non-payment of, 53

, loss of unaccepted, 58

, payment of, by intervening
parties, 55

, &c., stamp duties on, 66

, &c., time within which actions
may be brought upon protested, 67

, transfer of, 50

, visa of, 49, 61

Bills of lading, 35

, loss or miscarriage of, 41

— to order, 60

Bond in solidarity, 44

Books of trader, evidence against him, 6
Bordereau, 113 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
126

Breach of warranty, consequences of, 32
Brokers, 6
, insurance, 77
Carriage, 35
—— by sea regulated by special
laws, 38
Carriers’ invoices, 35
, liabilities of, 36
Cassation, Court of, 92
Caveat emptor, 32
Chambre Civile, 93
Chambre des Requétes, 93
Civil Tribunal, jurisdiction of, in cases
of arrest of the person or seizure of
the goods of an alien debtor, 3
Commanditaires, 82
Commerce, Tribunal of, 87
Commmercial associations, 79
companies, bankruptcy of, 120.
suits, 86
travellers, 14
Commission, what constitutes a perfect
contract of, 71
Commissions of purchase, 16
Commissionnaires, 69
Companies, public, 79
Company, joint-stock, 81, 83
Competent tribunals in commercial suits,
86
Composition, 115, 116, 118
, annulment of, 118
Compte & demi, 82
a tiers, 82
de retour, 60
Concordat, 115, 116, 118
, annulment of, 118
Connaissements, 35
Consignor of goods, liability of, 37
Contingent sales, 12
‘ Contract of commission, what consti-
tutes a perfect, 71
of insurance, 76
Contracts of pledge, 73
Contractors of buildings, &c., liable to
action for damages, on the ground of
defects of construction, or of the use
of unsound materials, 34
Copartnery, 82
Counsel, employment of, in commercial
suits, 87
Counsel’s fees, 101
Court of arbitration, 84
of Cassation, 92
Courts, Imperial, 91
Court of Requests, 93

 

 

 

 

 

 

 

 

 

 

 

 

INDEX.

Credit, opening of a, 73

Creditor cannot be constrained to accept
payment on account, 41

Creditors, alien, rights of, 4

, preferential, rights of, 120

, secured, rights of, 111, 120

, general meeting of, 115

Debt, imprisonment for, limitation of,
97

Debtors, alien, rights and liabilities of, 2

Debtor, exhausting the goods of, 44

- , seizure of goods and attachment
of person of, 96

Debts, preferential, 98

—, proof of, 114

, Sale of, 17

Defects, latent, in goods sold, 32

, redhibitory, in horses, 33

Delivery of goods, 23 ©

, time of, 30

Délivrance, 25

Description of the thing sold, 6

Discount, none allowed in cash pay-
ments, 40

Distinction between livraison and dé.
livrance, 25

Distribution of the estate, 123

Draft, 63

Draughts, 47

, expiration of, 49

, loss or miscarriage of, 41-

Duty on judgments, 102

, registration, on contracts of sale
and on bonds, 102

Earnest, 19

Error, examples of, 20

Errors, surprises, and frauds, 19

Estate, distribution of, 128

, inventory of bankrupt’s, 110

, real, acquisition of, 7

Exchange, bills, or letters of, 47

Execution creditor has a preferential
claim for the costs incurred, 97

Exhausting the goods of a debtor, 44

Expeditor of goods, liability of, 37

Expense of attaching and imprisoning
the person of a debtor, 103

Expiration of bills of exchange, 49

Factors, 69

. duties of, 69

Factor’s lien, 71

Failures, 104

Fees of counsel, 101 2

—— of public officers, 101 ‘

Force majeure, plea of, 36

 

 

 

 

 

 

 

 

 

 

 
INDEX.

Forfeiture of claim for compensation for
injury to goods, 37
Fraud, examples of, 21
Fraudulent bankruptcy, 107, 119
General average, 38
meeting of creditors, 115
rights, 1
Guarantee of a debt by a third party, 44
Homologation of proposals of composi-
tion, 118
Horses, redhibitory defects in, 33
Huissier, functions of, 51
Hypothecary inscriptions, 100
Hypothecation, 100
Identification of the goods sold, 25
Imperial Courts, 91
, arréts, or decrees of, 92
Imprisonment for debt, expense of
, attaching and imprisoning the person
of a debtor, 103
Imprisonment for debt, limitation of, 97
Indorsement of bills of exchange, 50
Insurance-brokers, 77
Insurances, 76
Insurance, contract of, 76
—, policies of, 77
Interest on debts overdue, 41
, Stipulation of payment in cash
with discount does not imply the
condition of payment of interest in
ease of delays, 42
Joint responsibility of several pur-
chasers or sureties, 43
Joint-stock company, 81, 83
Judge-commissioner, 110
Judgment by default, 88
, duty on, 102
Jugement contradictoire, 89
Lading, bills of, 35
Latent defects in goods sold, 32°
Law charges and expenses, 101
.—— of partnership, 79
—— suits and proceedings, 96
Letters of exchange, 47
Lettre de rechange, 59
Liabilities and rights of sureties, 44
Liability of agent commissioned to re-
ceive goods, 37
of expeditor or consignor of
goods, 37
Limitation of time in action against
debtors, 45
Tiwraison, 25
Loans on pledge, 73 __
Loss of unaccepted draught, 58

 

 

 

 

 

 

 

 

127

Loss of vouchers, 45

Mandat, 63

Marine insurances, 76

Memorandum, written, required of bar-
gains made between the traveller of
a house, and the vendor or purchaser,

15

Non-delivery of goods sold, 30

Note payable to bearer, 62

payable at the domicile of a third
party, 63

Notice to debtor that payment is due,
42

Opening of a credit, .73

Opposition to judgment by default, 88

Opposition, tierce, 94

Participation, $2

Partnership, 82, 83

slaw of, 79

Partners, sleeping, 82

Payment, 39 e

on account, creditor cannot be

constrained to accept, 41

in notes of the Bank of

France, 39

, time, place, and manner of, 39

Pledge, stipulation of forfeiture of
pledge in contracts of, invalid, 74

» contracts of, registration duty

on, 74

, loans on, 78

Policies of insurance, 77

Preferential debts, 98

Prescription of action on effects of com-
merce, 67

Proceedings in forma pauperis, 103

Procuration, 50

Promissory notes, 60

note, definition of, 61

, form of, 61

Proof of debts, 114

Protection, order of, 109

Protest of bills of exchange, 51, 54, 55

Provision, 52

Public companies, 79

Real estate, acquisition of, 7

Receipt the only conclusive proof of
discharge of debt, 44

Re-exchange, letter of, 59

Redhibitory defects in horses, 33

Registration duty on contracts of sale
and on bonds, 102

Rehabilitation, 124

Release, alleged, from debt, 44

Representatives of mercantile houses, 14

 

 

 

 

 

 

 

 

 
128

Repudiation of bargain, 29

Requétes, Chambre des, 98

Requéte civile, 94

Retour sans frais, 64

Re-traite, 59

Return account, 60

without costs, 64

Revendication, right of, 120

Rights of bankrupt’s wife, 121

, general, 1

of preferential creditors, 120

Sale of articles in course of manufac-

ture, 12

— of articles on trial, 12

—, conditions of, 5

—, contract of, 5

— of costly stuffs, gems and precious
stones, and objects of art, 19

—— of debts, 17

— of goods distrained,.97

— of liquids, 24

— of ships, 8

— of stock, 9

— of wines and spirits, 25

Sales and purchases, 5

——, contingent, 12

——, forced, by public auction, 33

Secured creditors, rights of, 111, 120

Seizure of goods of debtor, 96

Ships, sale of, 8

Simple bankruptcy, 107, 118

Sleeping partners, 82

Société anonyme, 79, 83

en commandite, 81, 83

en nom collectif, 82, 83

Solidarity, bond in, 44

of several debtors, 43

Stamp on paper used in law-suits, 102

duties on bills of exchange, &c.,

 

 

 

 

 

 

 

66

THE

 

‘INDEX.

Statute of limitations respecting actions
on protested effects of commerce, 67

Stock, sale of, 9

Suits, commercial, 86

Sureties, liabilities and rights of, 44

Suspension of payment, fixing the date
of, 105

Syndics, 110, 119

Tierce opposition, 94

| Time-bargains, 9

 

of delivery, 30

— within which an action may be
brought against a carrier, &c., for
loss of, or injury to goods, 38

— within which the holder of a pro-
tested draught may exercise his re-
medy against the drawer and the
indorsers, 56

Title of debt, loss of, 45

Transfer of bills of exchange, 50

and delivery, 28

Tribunal, Civil, jurisdiction of, in cases
of arrest of the person or seizure of
the goods of an alien debtor, 3

of Commerce, 87

, sanction of proposals of compo-
sition, 118

Tribunals, competent, in commercial
suits, 86

Union of creditors, 119

Usances, 49

Verification of alleged defects or differ-
ence in goods received, or of injury
or damage done to the same, 27

Visa of bills of exchange, 49, 51

Vouchers, loss of, 45

Warranty, 32

. breach of, 32

Way-bills, 35

 

 

 

 

END.
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