Simonton's Case

2 Mart. 102

• Court: Supreme Court of Louisiana
• Decided: July 1, 1811
• Status: Published

Opinion

By the Court.

It does not appear material in this case, to ascertain the character and validity of the transfer, made by the insolvent to some of his creditors in Philadelphia. Admitting the fairness and legality of it, it is perhaps an obstacle to the cessio bonorum of this territory; for by this trans fer the debtor has deprived hintself of the means of complying with the requisites of our law.

The cessio bonorum is the relinquishment that a debtor makes of all his property to his creditors, when he finds himself unable to pay his debts. Civil Code. 294, art. 166.

In the present case, the insolvent, when he found himself unable to pay his debts, instead of surrendering his property for the benefit of all his creditors, did assign and transfer it all to a few of them. The liberation which the cession operates, is perhaps a reward held out, as an inducement to debtors, fairly to cede their property to all their creditors, and to deter them from sacrificing the interests of all, to the advantage of a few.

The cession, to be valid, must be a serious and fair one. Is that cession a serious and fair one, which is made of nothing at all, of a snuff box, or a few desperate debts, while, a few days before, the debtor, when he found himself unable to pay his debts, disabled himself to make a cession, as the civil code requires, by assigning all his property to one or a few of his creditors ?

By the act of 1808, ch. 16, which received the governor's signature on the 25th of March, an imprisoned debtor may obtain his release, by depo.. sIting in the office of the clerk of the court, under whose. process~he was arrested, all his books and accounts (if he be a merchant or trader) and obtaining an order for the meeting of his creditors, who may examine him on oath, on the state of his affairs, in presence of the court; and should the court be satisfied with the fairness and regularity of his books, and two thirds of his creditors, in number and amount, consent to his discharge, he is to be released from all his debts.

But, if that number do not consent, three commissioners are to be appointed, to investigate the accounts and papers of the debtor; and on their report, the judge may, in his discretion, release him from confinement, on his assigning over all his property.

No debtor may have the benefit of this act, unless he have resided one year in the territory and be in actual custody; nor if fraud be pro~ven against him; nor if, in contemplation of the benefit of this act, he have, within three months previous to his arrest, assigned any part of his effects in trust, or as a donation or gift, mortgaged his property, confessed a judgment, or otherwise disposed of the same: all such assignments, mortgages, confessions of judgment, or giving an undue preference to any one or more creditors, in exclusion of other creditors, are void, unless at the time of such assignment, mortgage, or confession of judgment, he received a bonafide consideration there-

An act of the same year, ch. 17, approved the 31st of the same month, as a supplement to the above, excludes all bankrupts who have disposed of funds, entrusted to them, in deposit, commission, or trust.

By the Civil Code, p. 294, s. 5, which was approved on the same day, the cessio bonorum is defined as the relinquishment which a debtor makes of all his property to his creditors, when he finds himself unable to pay them.

It is dedared subject to formalities prescribed by special laws.

The consent of the majority of the creditors in number and amount, releases the debtor from his debts.

A question presents itself. Do the provisions in the Civil Code, virtually repeal the acts of 1808, ch. 16 & 17? The latter was approved on the same day as the code, and the former probably passed the houses after the code, and was signed by the governor six days only, before the date of the approbation of the code, which, from its bulk, must be presumed to have remained several days in the governor's hands.

We imagine the code repeals neither of the acts cited; that they are some of those special laws, to the formalities of which the cessio bonorum is declared to be subject. Art. 169.

In this view of the case, these acts and the code are to be construed together, being in pan ma-tenia, as forming one law.

THEN, it is impOssible to give effect to the tw~ first acts, unless. the court declare that no debtor can, while in custody, validly make a cessio bono-ruim under the Civil Code-for if a prisoner could, the two first acts would be of no force and effect.

No debtor would ever seek the benefit of these acts, as they require very inconvenient formalities -the debtor must deposit his books, be examined on oath, two thirds of his creditors must agree. If he have violated the trust of a deposit, &c. he is to be excluded. Under the Civil Gode the road is broad and easy a simple cession suffices ; the inconveniency of producing books, and of answering on oath the questions of importunate creditors, is avoided-neither can any objection be appre-hendcd ofi the score of a violation of trust-the concurrence of a majority of the creditors suffices.

Considering, therefore, the two first acts as in force, and the only ones under which a prisoner can procure his discharge, it remains to inquire whether a person, who has not remained one year in the territory, and is therefore excluded from the benefit of these acts, may be relieved by the simple cession under the Civil Code.

If the Court be obliged to say that a person, who has been a resident of the territory upwards of one year, could not successfully have the benefit of a cession under the provisions of the code, it will be difficult for them to say that a stranger could do it. This case appears a casus omissus, for which it is not in the power of the court to pro-z vide a remedy.

Homologation denied.

*

THE insolvent was afterwards relieved by a special act of assembly-June session, 1812.