Art. VIL-LAW OF DEBTOR AND CREDITOR IN LOUISIANA.

NUMBER III.*

PRIVILEGES.-Perhaps there is no branch of the law of Louisiana, of greater practical importance in the every-day affairs of commercial life, than that by which, and under certain circumstances, a priority and preference is given to the creditor for the payment of his claim upon specific property of his debtor.

The provisions of the civil law, in this respect, are widely different fromthose of the common law. "Vigilantibus non dormientibus curat lex," is a maxim of the common law, which finds no support in those numerous articles of the civil code by which liens and privileges are created, and provision made for their enforcement, without any express agreement, and quite independently of the contracts of the parties.

The creditor in New York, who, by vigilantly pursuing his claim, secures the first attachment upon his debtor's property, (in a case where an attachment can be made,) or who, by superior activity and energy, obtains the first judgment, (upon which execution is issued, and a levy made,) or the first recorded judgment, which operates as a lien upon the real estate of the debtor in the county of its registration, thinks himself tolerably, if not quite certain of the ultimate payment of his debt, to the extent of the value of the property which he has attached, seized, or recovered by his recorded judgment. Not so the creditor in Louisiana. By superior swiftness in the race, or by exceeding activity and industry, he may obtain the first attachment, or seizure, or sequestration, or the first judicial mortgage; but after he has succeeded, at great expense, and by the exercise of the greatest perseverance and the most indomitable energy, in reducing his debtor's property to cash in the hands of the sheriff, which he imagines is to be forthwith transferred to his own in satisfaction of his debt and costs--lo! an intervention! A privileged creditor steps in--one who has all the while reposed upon his rights, that another, by his labors, might facilitate the enforcement of his privilege-and by petition filed in the first creditor's suit, he prays that, after due proceedings are had against his debtor, he may be first paid from the proceeds of his debtor's property in the sheriff's hands, and that the sheriff be ordered not to pay over the money, or that he pay it into court, there to abide the order of the court upon the decision of the question of privilege. Very vexatious, this-but of daily occurrence in the process of enforcing claims under the laws of Louisiana, and illustrating the importance of some degree of information, by the mercantile community, of provisions so materially affecting their rights and interests.

Anything like a detailed statement of the great variety of liens and privileges granted by the provisions of the civil law, would be here out of place. The design of this article will be, merely to allude to some of the more prominent privileges established by the Louisiana code, and such as are most important to the mercantile community, as affecting the relationship of debtor and creditor.

It is, of course, in the process of collecting debts, either from an insol

*For No. I. of the series of articles relating to the Law of Debtor and Creditor in Louisiana, see Merchants' Magazine, for July, 1846, (No. 1, Vol. XV., page 70-75.) For No. II., see same for November, 1846, (Vol. XV., No. 5, page 471-475.)

vent debtor,or from the insufficient estate of a deceased debtor, that the law of priority, or preference and privileges, becomes of practical import

ance.

Under the old constitution of Louisiana-(it is said that the new constitution will effect a great reform in this wise. Such was the design, but whether such will be the result, remains to be seen-but under the old regime) great indeed must have been the estate of one, whose heirs or representatives had the misfortune of "opening his succession" in Louisiana, if it possessed much sufficiency, after it had been subjected to the application of all the classes of privileges which attach to the estates of persons deceased. To say nothing of the privileges of the first class-the expenses of the last illness, and the funeral charges-the law expenses, alone, as they are termed, are sufficient to absorb the proceeds of the large majority of successions which are opened in Louisiana. First comes the notary, who, in compliance with the requisitions of the law, has placed his seals upon the defunct's effects as soon as he is notified of the soul's flight, and who has subsequently made his inventories, and his proces verbaux, and returned them to the judge. What a glorious fat fee is the notary's! What a curiosity is his bill, when considered item by itemand what an amazement in the sum total! Then come the subordinates of the court-the register of wills, and deputy register, and clerks, and sheriff's-how many papers they do have to copy, and file, and serve — But there is no will: the yellow fever has carried off the late possessor of the estate, who, in his anxiety to add another to his aggregated thousands, has remained in the city a day too long. Then must the judge ap. point some good, discreet man, to administer the estate-the nearest of kin, or, in the absence of kindred, the largest creditor,-he is the curator. There is the curator of the "vacant succession," as it is called, and there is the curator for the absent heirs; the curators employ attorneys, and there is the attorney for the succession, and the attorney for the absent heirs. And all these are feed-heavens! how they are feed! All assessed by the court-all to come out of the estate-all privileged. In due time, the creditors and persons interested are called upon to show cause why the proceeds of the estate should not be distributed and paid over, in accordance with a beautiful tableau of distribution, and in conformity with the privileges as there classified. To oppose this tableau, to endeavor to reduce the amount of the privileged claims, is the only hope of the ordinary creditor of the succession of an estate, which, in the life-time of its possessor, was ample to pay every debt, and leave a fortune after. But the futility of all attempts to oppose the "homologation" of this "tableau," will be attested by thousands who have resorted to the Probate Courts of Louisiana to obtain the payment of a lawful claim against the deceased intestate, or to demand a legacy or gather an inheritance devised by the testator. Some idea may be had of the vanity of such a pursuit, from the fact that a fee of five, or even ten thousand dollars, privileged upon the proceeds of the deceased's estate, and to be paid therefrom as a portion of the law expenses, to the attorney of the succession and to the attorney of absent heirs, was considered a very reasonable and proper fee, in ordinary cases, in which no extraordinary service was required. It may be that these enormities, which were in full bloom a year since, have been somewhat nipped under the new order of things. Heaven grant it! Need enough was there for reform in this matter-for impositions, for years past,

have been practised in the courts of succession in Louisiana, under color of the civil law privileges, upon the estates of deceased persons, imposi tions upon the commercial creditors of the North, and upon the heirs and personal representatives here, such as are without parallel in the records of the jurisprudence of any other civilized country on the face of the earth. But, dismissing the subject of privileges upon the property of persons deceased, with this cursory consideration, let us briefly review the more prominent of those which arise in the daily contests between the creditors of an insolvent.

First, of course, in the order of preference, come the "law expenses." If the debtor be absent from the state, leaving no representative, and his property is attached, the court, upon this suggestion, appoints an attorney to represent him, whose duty it is to corrrespond with the defendant, and to whom time is given for that purpose. The fee for this attorney, whether subsequently employed by the defendant, or not, is awarded by the court, and constitutes a very important item in the "law expenses" privileged upon the proceeds of the property attached. It is said, that this system of appointing attorneys to represent absent heirs and absent defendants, which in past time has been most outrageously abused, and under which creditors and heirs have been subjected to wholesale plunder, has been reformed by the new constitution.

Then come in the privileged claims which in every case may arise, and some of which in every case do arise.

First, is the privilege of married women. This is a subject of such vast importance, that it deserves and must receive a separate article for its consideration. Suffice it to say here, that the Northern merchant, in giving credit to the merchant of Louisiana, cannot ask questions of more vital consequence to his interests than these: Are you a married man? Is there an ante-nuptial, notarial contract between yourself and your wife? For such is the law, that the married woman may sweep into her possession every dollar of the property of her insolvent husband, leaving not a shilling for his creditors, without regard to the nature or privileges of their claims.

But suppose that this privilege does not arise. Next comes that of the lessor and most careful is the civil law in establishing and protecting the privilege of the lessor. For the amount due or to become due to the lessor, upon the lease of the building in which the property attached or seized is stored or kept, he has a privilege upon its proceeds, taking precedence of the attaching and every other creditor. He may claim this privilege by intervention in the attachment suit, in any stage of the process. He may enforce it by a "provisional seizure" of the property deposited in his building, (unless the property be owned by some other than the lessce, and the building is avowedly leased for the storing of such property,) and he may follow the property in whose hands soever he can identify it, for fifteen days after its removal from his premises. This is but a passing glance at the privilege of the lessor.

Next comes the privilege of the vender. This privilege is oftentimes of vast importance to the creditor. It is a privilege attaching to the specific property sold, for the payment of the unpaid purchase money. In cases in which it may be enforced, it sets at nought the vigilance of the ordinary attaching creditors, and it may be set up and enforced in the same manner as that of the lessor, either by original suit, or by intervention in the orig

Law of Debtor and Creditor in Louisiana.

inal suit, in all cases where the specific property is capable of identification as such, or remains in the possession of the vendee, or where he has not parted with it in good faith, and for a valuable consideration.

It will at once be seen of how great importance this civil law privilege to the vender may be to the Northern merchants, in their creditor relations with the merchants of Louisiana.

Another privilege, of much importance to the mercantile community, is that of the consignee, commission merchant, or factor, upon the property of the principal in their hands, for the payment of their expenses, commissions, and advances, and for the general balance due them. This claim takes precedence of that of the ordinary creditor, and may be enforced in like manner as other privileges. The salary of the clerk, and the wages of the laborer in the employment of the debtor, are privileged claims upon his property, or its proceeds, taking precedence of those of the general

creditors.

By the civil code of Louisiana, many privileges are created of particular, and not general, application. Of such are the privileges of contractors, artizans, mechanics, laborers, and the furnishers of supplies and materials, upon the buildings by them designed or constructed, or upon which they have labored, or for which they have furnished the materials. Of this nature, also, are the privileges of the overseer, and furnisher of plantation supplies, upon the last and growing crop, or its proceeds, for the payment of their salaries, and the liquidation of their accounts. Of these privileges upon this specific property, nothing can take precedence, save the necessary expense for its preservation, transportation, and conversion into money. A large class of privileges created by the Louisiana code, and those which are of the most frequent application in contests for preference, are those upon vessels, and especially upon steamboats. These are oftentimes sufficient to absorb the entire proceeds of a steamboat, which has been sold at the suit, and upon the attachment of one of the ordinary creditors of the owners-leaving the attaching creditor, and all others whose privileges are not established by law, nothing to satisfy their claims. Thus, a mortgage upon a steamboat-though the first mortgage-if she is to be subjected to the application of the Louisiana laws, by navigating the river which washes her shores, is inadequate security for the payment even of a small debt. Your security is dependent upon her good or ill success in obtaining freight and passengers. This you cannot insure. If she is unfortunate, the expenses of navigation are enormous, and soon overwhelm the property. These are all privileged claims, as between themselves, according to a classification of priority fixed by law, but all taking preference of the ordinary or attaching creditor, or the creditor who, by' contract of pledge or mortgage with the debtor, has acquired a special property in the vessel. These are the salaries and wages of all the offi cers, and men and women employed on board-the workmen who have labored in the construction and repair of the vessel-those who have furnished materials and supplies-those who have furnished wood-and those who have furnished provisions. These privileges must be claimed within a certain time prescribed by law, or they are lost, and the claims fall back into the class of ordinary debts.

Enough has been said upon this subject to manifest clearly enough the very great difference which exists between the laws of Louisiana and the other States of the Union, in a matter so material to the relation of debtor

and creditor; and enough to indicate the importance of a more extended information upon this subject in the mercantile community, than now exists. But that portion of the civil law of privileges which is, when considered in its various phases and in all its influences, of the highest importance, is that which grows out of the civil law of the domestic relation of husband and wife. A review of this subject must be reserved for the next article.

Art. VIII.-LAW OF DEBTOR AND CREDITOR IN ALABAMA.

NUMBER II.*

In the article preceding this, we have given a practical, but brief exposition of the principles of law in Alabama, directly affecting the relation of debtor and creditor. In this, which follows, we propose, in plainly defined divisions, to consider what may be denominated collateral provisions operating upon the rights and remedies of this relation. If we have not done so previously, it may be well here to mention that the common law rule is followed in Alabama in all cases, except so far as the peculiar arrangements of the local institutions, and positive statutory enactments, determine its inconsistency.

OF FRAUDS.

Fraud in Alabama, which is usually considered in controversies arising upon deeds of trust or mortgages, grows out of expressions on the face of the deed, or from extrinsic facts proved with respect to the motive and conduct of the parties. This fraud may be fraud in fact or fraud in law, positive or constructive fraud. The latter species is that act which the law declares to be fraudulent, without inquiry into the motives, but which carries irresistible evidence of fraud. Great inadequacy of price, however, though. indicative of it, would not be regarded in general as evidence of fraud. But in equity, all acts, omissions, or concealments, involving breaches of legal or equitable duty, trust or confidence, and working injury, or effect. ing undue advantage, amount to fraud. Fraud truly is a question of law; but when the evidence of fraud is furnished by parol, in connection with a deed, fair on its face, it becomes a mixed question of law and fact. Fraud may be made out not only by proof of it in fact, but by the insertion of clauses and stipulations in the deed inhibited by the rules of law. So it may be the result of fair inferences, as where creditors known to the parties capable of being hindered and delayed in the recovery of their debts, are in truth hindered and delayed in consequence of the act. Thus, if a debtor in an insolvent condition, with judgments against him, and others about to be obtained, sells his entire estate to his father-in-law, providing for the payment of only a portion of his debts, and giving a credit for the remainder of the purchase money of from seven to twelve years, the law will presume a fraud, because the tendency is to hinder and delay creditors. The retaining possession by the grantor, after an absolute sale, is also evidence of fraud. When in such case the contract is declared void for fraud, it is void from the beginning; and the deed will not be mitted to stand as security to the grantee, for responsibilities incurred, or advances made. If, nevertheless, the grantee has in good faith made ex

per

*For No. I., same subject, see Merchants' Magazine for December, 1846, (Vol. XV., No. 6, page 580.)