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TITLE IV.

Of Bankruptcy.
CHAPTER I.

Of Simple Bankruptcy.

ART. 586. Every merchant in a state of failure, coupled with any of the circumstances herein after mentioned, SHALL be (198) prosecuted for and may be convicted of the offence of simple bankruptcy, to wit:

1. If his household expenses, which he is bound to enter in his day-book, month by month, are adjudged excessive. 2. If it be proved that he has wasted considerable sums in gaming, or in enterprises entirely depending upon chance. 3. If it appear, from his last inventory, that his effects or means of payment being 50 per cent. less than the amount of his debts, he has borrowed considerable sums of money, and if he has re-sold goods at a loss or below the market price.

4. If he has issued or indorsed bills or notes to an amount equal to three times that of his property or effects, according to his last inventory.

ART. 587. A merchant in a state of failure MAY be (199) prosecuted for simple bankruptcy and convicted thereof,

If he has not made in the registry of the tribunal of commerce the declaration required by art. 440.

If, after absconding or departing from the place of his usual residence, he has not appeared in person before the agents and syndics, within the periods limited by law, unless prevented by legal impediments.

If the books which he exhibits are not regularly kept, even though the irregularities should not induce any presumption of fraud; or if he keeps back any of his books. If, being a member of a partnership, he has not conformed to the rules prescribed by art. 440.

ART. 588. Cases of simple bankruptcy shall be tried and determined by the tribunals of correctional police, on the complaint of the syndics, or of any of the creditors, or on the official information of a competent magistrate or law officer of the government.

ART. 589. The costs of prosecution in cases of simple bankruptcy shall be borne by the creditors, if the proceedings have been instituted on the complaint of the syndics.

(198) Shall be prosecuted. This article is imperative, and makes it the indispensable duty of the public officers to prosecute those who appear to have been guilty of any of the acts that it describes; while the subsequent article (587) leaves it in their discretion to prosecute or not, according to circumstances, in the cases therein mentioned. The same distinction between the cases in which the party may be, and those in which he shall be prosecuted, is made in the next chapter concerning fraudulent bankruptcy.

(199) See the preceding note.

ART. 590. If on the complaint of a creditor, he shall pay the costs if the party be acquitted; and if convicted, the said costs shall be paid by the creditors.

ART. 591. The imperial attornies are bound to appeal from all judgments of the tribunals of correctional police; if, from the facts appearing in the course of the investigation, they have discovered that there is sufficient ground to prosecute the culprit for fraudulent bankruptcy. (200)

ART. 592. The tribunal of correctional police, at the same time that they declare the party guilty of the offence of simple bankruptcy, shall, according to the circumstances of the case, sentence the convicted party to imprisonment for a term not less than one month, and not more than two years. (201)

The judgments shall be moreover posted up, and published in a newspaper; agreeably to the directions of art. 683 of the code of civil proceedings.

CHAPTER II.

Of Fraudulent Bankruptcy.

ART. 593. Every merchant in a state of failure, coupled with any of the circumstances herein after mentioned, SHALL be convicted of the crime of fraudulent bankruptcy, to wit:

1. If he has returned fictitious losses and expenditures, and
does not satisfactorily show how he has disposed of all the
moneys that have come to his hands.

2. If he has fraudulently kept back any sum of money, cre-
dit, merchandise, or other personal property.
3. If he has made any fictitious sales, gifts, or negotiations.
4. If he has by fraud and collusion made fictitious creditors,
either by means of false book entries, or of authentic or
private acts, or instruments of writing made without
consideration.

5. If he has violated his trust, by applying to his own use
moneys, negotiable paper or merchandise, which he had
received by virtue of a special authority from another per-

(200) This is called an appeal à minima, that is to say, à minimâ ad majorem panam, and may be brought in all cases, in which the prosecuting officer presumes that a punishment proportioned to the nature of the offence has not been inflicted by the first sentence.

If from the evidence the party appears to have been guilty of a higher offence, than that for which he stands indicted in the inferior court, the charge against him is varied in the court above, so as to agree with the facts that appear in proof.

As simple bankruptcy is triable by the tribunals of correctional police, and fraudulent bankruptey by the criminal tribunals, and of course by jury, since that rode of trial still subsists in France in ordinary criminal cases, it is to be presumed, that the appeal is but the formal mode of transferring the cause from one tribuual to the other, where it is to be proceeded in de novo, and the party being brought into the Superior Court, may be indicted there anew for any crime or offence within its jurisdiction.

(201) The same penalty is imposed on simple bankrupts, by the penal code,

art. 402.

son, or which had been deposited into his hands for safe keeping, or to be applied to some specific purpose.

6. If he has purchased real or personal property by means of a borrowed name.

7. If he has secreted his books.

ART. 594. A merchant in a state of failure MAY be prosecuted for fraudulent bankruptcy and be convicted thereof,

If he has kept no books, or if his books do not exhibit the real state of his debts and credits.

If, having obtained a letter of license, he has not appeared in person, when legally summoned.

ART. 595. Cases of fraudulent bankruptcy shall be prosecuted ex officio before the tribunals of criminal jurisdiction, by the imperial attorneys and their deputies, either on the strength of public notoriety or on the denunciation of the syndics, or of one of the creditors.

ART. 596. If the party accused be convicted of the crimes mentioned in the preceding articles, he shall suffer the pains and penalties of fraudulent bankruptcy as provided in the penal code. (202)

ART. 597. Those who shall be convicted of aiding and abetting a fraudulent bankrupt, in the concealment of the whole or any part of his real or personal property, or of having consented to appear as fictitious creditors of such bankrupt, and who at the time of proving their pretended debts, shall have persevered in asserting them to be genuine and true, shall be considered as accomplices of the fraudulent bankrupt, and shall suffer the same punishment.

ART. 598. In addition to the punishments prescribed by law, the accomplices of fraudulent bankrupts shall moreover be adjudged,

1. To restore to the creditors the property, rights, and claims fraudulently subtracted.

2. To pay to the said creditors, by way of damages, a sum of money equal to the amount of which they had attempted to defraud them.

ART. 599. The sentences of the courts of criminal jurisdiction against bankrupts and their accomplices shall be posted up and published in a newspaper, agreeably to the directions of art. 683 of the code of civil procedure.

CHAPTER III.

Of the Administration of the Bankrupt's Estate.

ART. 600. No civil rights or claims whatever (except those mentioned above, art. 598) shall be brought forward or decided

(202) The penalty imposed by the penal code on fraudulent bankrupts, is that of hard labour for a limited time. Pen. Cod. Art. 402. It cannot be for less than five years, nor more than twenty. Ibid. Art. 19. Exchange agents or brokers, convicted of simple bankruptcy, are sentenced to the same punishment; and if they have been guilty of fraudulent bankruptcy, they are condemned to hard labour for life. See above, Note 42.

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upon, in prosecutions for simple or fraudulent bankruptcy, or in any way be intermixed or blended with such prosecutions, or the judgments that shall be given therein; (203) but all such rights and claims shall be and remain distinct and separate; and all the provisions of this law relating to the estate and property of insolvent debtors, shall be carried into execution in manner as herein directed; nor shall the tribunals of criminal jurisdiction or correctional police take or draw to themselves in any manner the cognizance thereof, by way of original suit, appeal, removal, or otherwise.

ART. 601. The syndics of each bankruptcy shall nevertheless, be bound to deliver to the imperial attorneys and their deputies, all the papers and documents, and to give them all the information that they shall require.

ART. 602. The documents, papers and vouchers, delivered by the syndics, shall, during the pendency of the suit, be deposited in the registry, in order to be communicated to whom it may be proper; such communication shall take place on the requisition of the syndics, who may make private extracts from the said documents, or demand official extracts or copies thereof, which shall be delivered by the register.

ART. 603. The said documents, papers and vouchers, shall, after judgment, be returned to the syndics, who shall give a sufficient discharge for the same, such only excepted, as the court shall or. der to remain deposited of record.

TITLE V.

Of Rehabilitation. (204)

ART. 604. All petitions for the rehabilitation, or restoration to his former rights of a merchant who has been in a state of failure, shall be addressed to the court of appeals of the circuit in which he resides.

ART. 605. He shall be bound to annex to his petition the acquittances and other documents or vouchers, proving that he has paid the whole of his debts with interest and costs.

ART. 606. The attorney general of the court of appeals, to whom the petition shall be communicated, shall send copies thereof certified by himself to the Imperial attorney of the civil tribunal and to the president of the tribunal of commerce of the place or district wherein the debtor resides; and if the debtor has removed to another place since his failure, then also to the tribunal of commerce of the district where it took place, and shall require them to collect all the information in their power concerning the truth of the facts set forth in the said petition.

(203) In the courts of civil law, civil and criminal proceedings are often blended together, and the same sentence which condemns the party to punishment, not only awards restitution and damages to the injured party, but many incidental matters merely of a civil nature are often decided upon in a criminal proceeding. On the other hand, when a suit is brought, as we would say, on the civil side of the court, and criminal matter appears to result from the facts or evidence in the cause, a criminal prosecution is instituted, quasi, as a branch of the original suit, and that is called procéder à l'extraordinaire.

(204) See above, Note 40.

ART. 607. The imperial attorney and the president of the tribunal of commerce, shall in consequence thereof, see that a copy of the said petition remain posted up for the space of two months, in the halls where the respective courts hold their sittings, at the public exchange, and in the hall of the municipal council, and the substance thereof shall be inserted in the newspapers.

ART. 608. Any one of the creditors who shall not have been fully paid his debt with interest and costs, or any other interested party, may while the petition remains posted up, file their objections in the registry against the rehabilitation prayed for, together with the vouchers in support thereof, if any they have; the objecting creditor, however, can never be a party in the suit for rehabilitation, but this is not to be understood to operate in any manner to the prejudice of his other rights.

ART. 609. The aforesaid period of two months being expired, the imperial attorney and the president of the tribunal of commerce, shall separately transmit to the attorney general of the court of appeals, the information which they shall have collected, the objections which shall have been made, and the facts which may have come to their own individual knowledge respecting the conduct of the petitioner; they shall also give their advice on the subject of his petition.

ART. 610. The attorney general of the court of appeals shall, upon a review of the whole, cause a decree to be made, admitting or rejecting the prayer of the petitioner; if it is rejected, it can never again be brought forward.

ART. 611. If the rehabilitation is granted, the decree shall be transmitted to the imperial attornies and presidents of the several tribunals to whom the petition was previously sent. Those tribunals shall cause the same to be read in open court, and to be entered among their records.

ART. 612. Those who have been guilty of stellionate, (205) fraudulent bankrupts, persons convicted of theft or swindling, and those, who being accountable to others, such as guardians, administrators, trustees and depositaries, shall not have rendered or settled their accounts, shall not be admitted to the benefit of rehabilitation.

ART. 613. A simple bankrupt, after suffering the punishment to which he has been sentenced, may be admitted to the benefit of rehabilitation.

ART. 614. A merchant who has failed can never appear on the public exchange, until he hasobtained a decree of rehabilitation.(206)

(205) See above, Note 195.

(206) Many other disabilities, though not mentioned in this Code, are yet imposed by the French law on merchants in a state of failure or bankruptcy, until they are restored to their former rights by the decree of a competent tribunal. They are incapacitated from holding any civil office, Ord. 1673. Tit. 9. Art. 15. Jousse, 175.-In all the constitutions which France has successively adopted since the revolution, there is a clause to the same effect; and that of 1799, which is said to be now in force, as far as it has not been altered or modified by organic senatus consulta, contains this express clause: "The exercise of the rights of a French " citizen is suspended by bankruptcy or failure, par l'état de débiteur failli, Const. 1799. Art. 5. They are moreover disabled from being exchange agents, brokers, testamentary executors, trustees, or guardians; and every letter of attorney made to a person who afterwards becomes bankrupt, does by this kind of civil death become null and void. Jousse 182.

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