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ART. 502. Notice shall be given to all the creditors by letters from the syndics and advertisements inserted in the newspapers, to appear within forty days, either in person or by attorney before the said syndics, in order to declare to them the nature and amount of their respective demands, and to deliver to them the evidences thereof or deposit them in the registry of the tribunal of commerce. A receipt shall be given to them for the same.

ART. 503. The debts shall be proved in adversary form before the commissioner, in the presence of the syndics, who shall make their objections, if any they have, and the commissioner shall draw up a procès verbal of the whole. This shall be done within the fifteen days next ensuing the expiration of the term limited by the next preceding article.

ART. 504. Every creditor whose debt has been proved and sworn to, may be present at the verification of the debts of other creditors and offer his objections to the proofs already made or to be made.

ART. 505. The procès verbal of verification shall mention the exhibition of the vouchers or evidences of debts, the domicile of the creditors and of their attornies.

It shall contain a summary description of the vouchers exhibited, which shall be compared with the books of the party under failure. It shall mention the erasures or interlineations which may appear in the said books.

It shall declare that the holder of the voucher is a lawful creditor for the sum by him claimed.

The commissioner may, if sufficient cause shall appear, require the creditors to produce their books or an extract therefrom, made by the commercial judges of the place where they reside, by virtue of compulsory process obtained for that purpose; he may also ex officio refer the case to the tribunal of commerce who shall decree on his report.

ART. 506. If the debt be not objected to, the syndics shall sign on each of the exhibits the following declaration.

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ART. 507. Every creditor is bound within eight days after his debt has been duly proved, to swear before the commissioner that the said debt is just and true. (178)

(178) In England, the oath of the creditor is considered as the proof of the debt. In France, it is but a corroboration of other proofs, nor is it permitted to be taken until every controversy is at an end. The commissioner is the judge in the first instance; he hears the allegations and objections of the creditor on the one hand, and of the syndics on the other; and if, after his investigation the question still remains doubtful, he transmits a procès verbal, or statement of the allegations and facts, together with the evidence, to the tribunal of commerce, who finally decides. If the debt is rejected, no further proceeding takes place; if on the contrary it is adjudged to be admissible, the creditor's oath is taken ex abundantia, in order to obtain every possible security against the exhibition of collusive or fraudulent olaims.

ART. 508. If the debt is contested in whole or in part, the commissioner on the requisition of the syndics, may order that the vouchers be exhibited and deposited in the registry of the tribunal of commerce; he may also, without a formal citation, refer the matter to the said tribunal, and adjourn the parties to appear there at a short day, where it shall be heard and determined.

ART. 509. If any controverted facts are to be inquired into by witnesses, the tribunal of commerce may order an inquest to be taken by the commissioner, and may cite all persons to appear before him who are able to give information on the subject.

ART. 510. At the expiration of the terms limited for the verification of the debts, the syndics shall draw up a procès verbal containing the names of all the creditors who have not appeared. The said procès verbal being closed by the commissioner, they shall be considered as defaulters.

ART. 511. The tribunal of commerce, however, on the report of the commissioner, shall decree a further term for the verification of the debts remaining to be proved.

That term shall be limited in proportion to the distance of the place of residence of the defaulting creditor, so that one day be allowed for three myriamètres (18 miles): With regard to creditors residing out of France, the terms prescribed by art. 73, of the code of civil proceedings shall be observed. (179)

ART. 512. Notice shall be given to the creditors of the decree allowing such further time, in the manner and with the formalities prescribed by art. 683 of the code of civil proceedings. Those formalities having been complied with, the non-appearing creditors shall be considered to have been duly notified; nor shall the nomination of the final syndics on that account be delayed.

ART. 513. Those creditors who shall not have appeared, proved their debts and made oath to the truth thereof within the term limited by the decree, shall not be included in the dividends to be made.

They may nevertheless proceed by way of opposition, until the last dividend is finally made; but all such defaulters, even though they were unknown creditors, shall not participate in the dividends finally closed, which with respect to them shall be considered as irrevocably fixed, and they shall be entirely excluded from the share in the said dividends which they might otherwise have claimed.

(179) Those terms are:

Two months for those who reside in Corsica, the islands of Elba or Capraja, in Great Britain, and the countries bordering upon France.

Four months for those who reside in the other European states.

Six months for those who reside out of Europe, but not beyond the Cape of Good Hope.

And for those who reside in countries situated beyond the Cape of Good Hope,

one year.

VOL. II. Afr.

+2 A

CHAPTER VIII.

Of the final Syndics and their Duties.

SECTION I.

Of the Meeting of the Creditors who have proved their Debts. ART. 514. The creditors whose debts have been proved and admitted, shall be called together by the provisional syndics, within three days after the expiration of the term limited for the known creditors to swear to their respective debts.

ART. 515. The meeting shall be held under the presidency of the commissioner, at such place and on such day and hour as he shall appoint; no other person shall be admitted there, but the acknowledged creditors or their attornies.

ART. 516. The party under failure shall be summoned to attend at the meeting, where, if he has obtained a safe conduct, he must appear in person, and not by attorney, unless with the approbation of the commissioner on sufficient cause shown.

ART. 517. The commissioner shall verify the powers of those who shall appear at the meeting as attornies; the provisional syndics shall render an account in his presence of the state of the failure and of the formalities and proceedings which have taken place: The debtor shall be heard.

ART. 518. The commissioner shall make out a procès-verbal of all and every thing which shall have been said and decided upon at the said meeting.

SECTION II.

Of the Composition, or Compromise. (180)

ART. 519. No compromise can be agreed upon between the creditors assembled at the said meeting and the debtor under fai

(180) The French term is concordat, or traité. It is an agreement between the bankrupt and his creditors, the stipulations of which are various according to circumstances. Sometimes it contains on the part of the debtor a general assignment of all his property, in consideration of a general release from the creditors, or the assignment as well as the release are only partial. Sometimes there is neither assignment nor release, but the creditors grant time to their debtor, in nature of what we call here a letter of license. In short it is a composition or compromise between the parties, on such terms as they may mutually agree upon.

Before the revolution, the bankrupt system of France was extremely simple in principle as well as practice. The creditors, in ordinary cases, were left to agree with their debtor as well as they could, and whatever was concluded upon between the latter and three-fourths of the former was, after being confirmed by a court of justice, (which was always of course when no fraud was shown) made obligatory on the non subscribing creditors. This, with some provisions for extraordinary cases, and for the prevention and punishment of fraud in every case, might be said to comprise the whole of the system established on this subject by the ordinance of 1673. The great minister Colbert, to whom it is attributed, appears to have well remembered in this instance the celebrated answer which he is said to have once received from a deputation of merchants, laissés nous faire.

Not many years afterwards (in the year 1697) an attempt was made to introduce the same system into England, by stat. 8 & 9 W. 3. c. 18.; but although some provision appears to have been made in it for the prevention of fraud it was not,

lure, until the formalities above prescribed have been entirely fulfilled.

No articles of composition can be executed, except with the agreement and concurrence of a majority in number and three fourths in value of the creditors whose debts have been proved, agreeably to the fourth section of chapter VII., otherwise such articles shall be null and void.

ART. 520. The creditors whose debts are secured by pledge, hypothecation or other lien duly entered of record in the proper office, shall have no vote in the deliberations which shall take place on the subject of agreeing to a compromise.

ART. 521. If from the examination of the acts, books, and papers of the insolvent debtor, there shall appear some reason to presume that he is in a state of bankruptcy, no compromise can in such case take place between him and the creditors, and every compromise or composition made under such circumstances, shall be null and void; the commissioner shall attend to the execution of the present provision.

ART. 522. If a composition be agreed to, it must be concluded and signed during the sitting, otherwise it shall be null and void: if it be agreed to by the majority in number of the creditors present, but such majority does not amount to three fourths in value of the whole, the consideration thereof shall be postponed for one week, but no longer.

ART. 523. The creditors, who do not agree to the composition, shall be bound to notify their opposition to the syndics and to the debtor within one week at farthest.

ART. 524. The composition shall be confirmed (181) within eight days after the court shall have decreed on the validity of the opposition. The confirmation shall make it obligatory on all the creditors, and shall secure to each of them a lien on the real property of the debtor, and in consequence thereof, the syndics shall be bound to cause the decree of confirmation to be entered of record at the hypothecation office, unless there be a clause in the agreement to the contrary.

ART. 525. The confirmation of the composition being notified to the provisional syndics, they shall render their final account to the insolvent debtor in the presence of the commissioner; that account shall be debated and closed, and in case of contestation, the tribunal of commerce shall decide. The syndics shall afterwards restore to the said debtor the whole of his property, effects, books, and papers.

however, found sufficiently effectual, and the act was repealed the very next year after its enactment; because, says the repealing statute, many fraudulent practices had been committed by making pretended agreements with persons who were not real creditors, and for greater advantages than what were expressed in such compositions, which practices had, (as there was just cause to fear) occasioned much perjury. Stat. 9 & 10 W. 3. с. 29.

However this may be, the system established by the present code, appears to be a compound mixture of the former law, and of the provisions of the English bankrupt statutes, with the addition of a variety of minute formalities and complicated proceedings, and an inquisitorial interference of the government upon the whole, which savours very little of laissés nous faire.

(181) Homologué, from the Greek ὁμολογίω, assentior. In the Territory of Orleans, where the established bankrupt system is on the French plan, the words, homologate, homologation, have been lately introduced into the English technical language; but we do not think proper to make use of them in this work, because their meaning is sufficiently conveyed by the legitimate words confirm and confirmation.

The debtor shall give to the provisional syndics a sufficient acquittance and discharge, the duties of the commissioners and syndics shall cease, and the commissioner shall make up a procès verbal of the whole transaction.

Акт. 526. The tribunal of commerce may, on account of misconduct or fraud, refuse to confirm the composition, and in that case, the debtor shall be remitted of course to the magistrate of public safety to be prosecuted for bankruptcy, which the magistrate shall be bound to do ex officio.

If the tribunal confirm the composition, they shall declare the debtor excusable and susceptible of being restored to his former rights and capacities, on the conditions expressed in tit. V. entitled Of rehabilitation.

SECTION III.

Of the Union of the Creditors.

ART. 527. If no composition be agreed upon, the creditors assembled shall form themselves into a legal body by a contract of union, which shall be settled by a majority in number of the creditors present at the meeting; they shall appoint one or more final syndics and a treasurer, into whose hands all the monies shall be paid. The provisional syndics shall render their accounts to the final syndics in the same manner as the agents are required to do by art. 481.

ART. 528. The syndics shall represent the generality of the creditors, and they shall proceed to the verification of the bilan, if there be occasion for it.

They shall by virtue of the contract of union and without requiring any other authority, proceed to the sale of the debtor's merchandise, and of all his real and personal property, and to the settlement and liquidation of his debts and credits; the whole shall be done under the inspection of the commissioner, but the debtor needs not be called or made a party to any of these proceedings.

ART. 529. In every case, the necessary wearing apparel, linen, and other movable articles for the personal use of the debtor and his family, shall be returned to him with the approbation of the commissioner on the proposition of the syndics, who shall make a list of the articles so to be returned.

ART. 530. If there is no presumption of bankruptcy, the debtor shall be entitled to receive by way of allowance, for the support of himself and his family, a sum of money out of the proceeds of his estate; the syndics shall propose the amount thereof, which shall

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