to the creditor a right of preference in the value of this real property, without, however, prejudicing in any manner his general right in all the other property.

Hence it follows, that a mortgage creditor who cannot be paid wholly, or in part, out of the value of the property mortgaged, ought to come in with the other creditors to take his dividend for what remains due to him.

But here a difficulty arises when the first mortgagee shall have received a part of his claim from previous payments out of the personal estate, if the value of the mortgaged property be more than sufficient to discharge the residue, ought the surplus to go to the second mortgagee? or ought the simple contract creditors first to have a deduction from it, of the amount previously paid to the first mortgage creditor?

The project which is now presented to you proposes some alteration on this point, in regard to what was the ancient practice, at least in a great part of France.

It has been considered that the payments made to the first mortgage creditor, were only a kind of advance made by the mass of contract creditors-an advance which ought to be reimbursed from the value of the real property mortgaged, when it proved to be more than sufficient to discharge the claim of the first mortgagee.

In the ancient system of mortgages, when they were concealed and founded upon an authentic obligation, or a judgment, a creditor might in good faith consider the mortgaged property of his debtor as a certain pledge for the payment of his debt; in truth, his hopes were often frustrated by the successive discovery of a crowd of creditors unknown to him: this was a radical defect in the system, which happily no longer exists.

In this state of things, it would have been hard, and perhaps unjust, to deprive this creditor of the value of the property which constituted his pledge, under the pretext that the creditor who preceded him had been paid in full, or in part, out of the personal estate of the debtor; he had no knowledge of this first

mortgage, and he had, consequently, just grounds to believe that his pledge was a security for his debt.

It is not the same at the present day; mortgages are special and public; a mortgage creditor has no lien except upon the property particularly pledged to him, and the mortgage of which must be registered in such a manner as to give publicity to his right, and inform all who may have claims upon it that the property is already pledged wholly or in part.

The creditor who comes after is no longer deluded. When the property is evidently engaged for a sum equivalent to its value, he who would still accept of it as a pledge would be extremely imprudent; we must indeed presume that such cases will rarely happen.

This change in legislation has necessarily produced another, in the regulations respecting the rights of creditors, in cases of failure.

The second mortgagee cannot count upon the efficacy of his pledge, until after the full payment of the first, out of the mortgaged property; he has, then, no right to complain, if the exercise of his right be restrained to what remains after that pay

ment.

Thus, the first mortgage creditor having received a part of his demand at the expense of the mass of simple contract debts, the latter must be reimbursed out of the value of the mortgaged property when it exceeds the amount due on the first mortgage.

These are the rules established in the project, rules which appear to accord with equity, which in no manner change the legitimate hopes of posterior mortgagees, and which protect all the rights of the simple contract creditors, who, almost always, in failures, are the most deeply interested, and the most unfor

tunate.

In regulating what concerns mortgage creditors, we could not lose sight of the other classes; it was necessary to provide, that the dividends be promptly made, that payments be made only un

der the superintendence of the commissioner, on the presentment of the titles, and with valid acquittances: this is the object of Chapter X.

A single article in this chapter may require a short explanation; it is article 127.

It permits, by the general consent of the creditors, a composition for the sale or transfer of the debts due to the insolvent, and the causes of action accrued to him, which have not been collected or enforced.

In failures, there are often outstanding debts, due to the insolvent, which are not easily collected, either because they are disputable, or because the debtor is not perfectly solvent; much time and expense would be necessary for a collection, which is often, indeed, uncertain. Prosecutions of this nature are much more easily carried on by an individual, than by assignees, who would almost always expend more than the sum recovered: the general interest of the creditors requires, that the assignees should terminate their business as soon as possible, and that they should be able to transfer claims, the prosecution of which would be either too long or too difficult.

But this rule may be liable to abuse, against which it is necessary to guard. The assignees cannot treat for the transfer of debts of this description, except under the authority of the tribunal of commerce, and it is particularly necessary that the insolvent should be present: he has a deep interest in opposing disadvantageous compositions of this kind, since he is constantly bound to his creditors as long as they remain unpaid.

I shall say only a word on the subject of Chapter XI. of the mode of selling the real estate of the bankrupt.

It must be sold under the authority of the commissioner, and in the mode prescribed by the Code Napoleon, for the sale of the property of minors; it suffices to observe to you, that by this mode, there will be expedition and economy in an operation formerly so tedious and expensive.

The interest which unfortunate creditors inspire, has, however, induced us to adopt yet a new precaution, in order to ensure the full value of the personal property sold. Every creditor shall have a right to bid during the eight days which immediately follow the adjudication. It was, however, necessary to regulate the exercise of this right, and not to discourage buyers by the prospect of bids which would be only made to raise the price of the articles.

No bid shall be received, if it be under the tenth part of the price of the thing set up.

I hasten to come to the last subject which I have undertaken to discuss the rights of wives, in cases of failure.

It is but too true, that a great portion of the failures which have afflicted commerce, in these latter times, have been occasioned by great imprudence or alarming dissipation.

It has been too often forgotten, that the prosperity of trade must be founded, not only upon good faith, but upon economy-and upon order, without which there can be no economy.

Real credit always depends upon the opinion which good conduct and intelligence inspire. Who are the men who have acquired great reputation in trade; whose signature, respected to the very extremity of the globe, made their orders executed with a punctuality which sovereigns themselves could not always command?

Individuals, whose beginning was obscure, who, by continued labours, happy conceptions, prudent combinations, profound meditations on their profession, and above all, by a constant modesty, an unalterable loyalty, have obtained the confidence of every civilized nation.

God forbid that I should be supposed to entertain the thought that these estimable men have no successors! but truly, what do we now most frequently behold?

Men, who embark in their profession with the grossest carelesness; who carry with them an avidity incompatible with deli cacy; who think to obtain credit by concealing a real deficiency

of means, under the deceitful appearance of a chimerical ease; who commence by ruining themselves, in order to be enabled to drag along with them, into the abyss of disgrace, others equally imprudent.

I know, gentlemen, that the laws alone are not, perhaps, adequate to arrest entirely these disorders; and that when opulence, destitute of merit, still obtains consideration which merit without opulence cannot reach, few persons have force enough to resist the current which drives them along.

This, however, is the evil, for which it is necessary

remedy; and what means more efficacious to obtain it, than to make the good conduct of the husband concur with the interest of the wife, to call in aid of morals the influence of the sex, who can never have too great a one, when they are not unmindful of the virtues which render them so estimable in society, and which are also their most durable charms!

It is in this spirit that the articles on the rights of wives have been meditated. Too often a merchant, in marrying, has acknowledged a large marriage portion with his wife, which he never received; either because he wished to hold out the illusion of a fictitious capital, or that he might make a distant preparation of the means of one day conveying away his fortune from his legitimate creditors.

The husband made a settlement on his wife equal to the portion which he pretended to have received. Often, also, he purchased real estate in the name of his wife, which he paid for with his own personal property, or rather the property of his creditors.

Finally, by fraudulent separations, and simulated contracts, the furniture, jewels, plate, and every thing of the kind, became the property of the wife; and at the moment of a catastrophe, often premeditated, the wife, with her fictitious dowry, her marriage settlements, her indemnities for debts, which she had never paid, and her pretended acquisitions, absorbed all the estate of her husband.