R. S. 1803-1804

Creditors, 43 An. 486. An affidavit is not necessary. Lacaze & Reine vs. Creditors, 46 An. 238; and the vice president of a corporation is authorized to represent it. Id.

On the trial of oppositions to the election of a syndic by the creditors of an insolvent, it was shown that the votes were cast in conformity with the wishes of the owners of the claim, and that objection to the votes had not been made at the meeting. Held: That the oppositions were properly dismissed, though it appeared that the evidence submitted to the notary as to the existence of the claims voted and the authority of the representation of the claimants to vote them might have justified him in refusing to receive the votes. Kocke, Hernandez & DePass vs. Their Creditors, 51 An. 937.

A meeting of creditors of an insolvent was held on first September, 1897, kept open for thirteen days and returned into court on the fourteenth September. On first September, when the meeting was opened, a creditor who took no part in these proceedings filed an opposition to them, charged fraud, etc. Held: That the opposition was not prematurely filed, the statute "fixes only the time limit beyond which he may not do so." Cappel vs. His Creditors, 50 An. 318.

[Fraudulent Debtors.]

1803. Every insolvent debtor shall also be considered as guilty of fraud who shall have passed simulated deeds for the purpose of conveying the whole or any part of his property, and depriving his creditors thereof, or shall have knowingly omitted to declare any of his property, right or claims in his schedule; or purloined his books or any of them, altered, changed or made them anew, always with an intent to defraud his creditors; or committed any other kind of fraud to the prejudice of his creditors.

R. C. C., Art. 2285.

The debtor who innocently places on his schedule fictitious claims, and accounts to some extent exaggerated, is not guilty of fraud within R. S. 1802, 1803. Romano vs. His Creditors, 46 An. 1176. The charge of fraud against an insolvent is a civil, not a criminal proceeding, and the Civil District Court has jurisdiction. Mayewski vs. His Creditors, 40 An. 94. The selection of a syndic by the creditors does not exclude judicial inquiry in a charge of fraud. Spears vs. His Creditors, 40 An. 650. See Chapoton vs. Her Creditors, 44 An. 451. An insolvent shown to have committed any kind of fraud against his creditors, whether it is specially denounced in the statute or not, may be proceeded against under Sec. 1803. Mayewski vs. His Creditors, 40 An. 94. It is not necessary to show that the mass of the creditors have been injured by the fraudulent acts of the insolvent; it suffices that the insolvent obtained goods under a fraudulent pretence from a single creditor. Id. Intention to defraud and injury to the complainant from such fraud, must be shown. Burdeau vs. His Creditors, 44 An. 11. Marx vs. His Creditors, 48 An. 1340.

[Presumptive Fraud, What Constitutes.]

1804. If a debtor, who has voluntarily surrendered his property to his creditors, or has been proceeded against for a surrender, shall have given within the year an unjust advan

R. S. 1805-1806

tage or preference to any one or more of his creditors, by payment or otherwise, or shall have anticipated the payment, or provided for the payment of a debt not due, the effect whereof shall be to injure the complaining creditor; or shall purchase property for cash, the delivery whereof shall be made to him, and then shall sell or dispose of the same without paying his vendor; or shall remove the same beyond the reach of such vendor, or shall conceal or cover the same in any manner so that his vendor cannot render the same liable, or shall fail to pay over money received or collected for, or deposited with him for another; or shall have made a conveyance, transfer, mortgage or pledge of his property, to the prejudice of the complaining creditor, any such act shall be held presumptive evidence of fraud-liable, however, like all other presumptions, to be disproved.

R. C. C., Art. 2285. See note to Sec. 1803. State National Bank vs. Monroe Cotton Press Co., 39 An. 834; 33 An. 198. See Block vs. Marks et al., 47 An. 107.

The Supreme Court will not disturb the verdict of a jury on a question of fact in acquitting an insolvent of fraud. Monroe vs. His Creditors, 48 An. 801. Frauds alleged to have been committed more than twelve months prior to the insolvency are prescribed. Marx vs. Creditors, 48 An. 1343.

[Arrest of Debtors-Bond.]

1805. Any creditor who may justly believe that he has good cause of complaint, may appeal to a competent judge, who may, thereupon, order the arrest and confinement of the party complained of, until he shall give bond, in a sum to be fixed by the judge, with one or more solvent sureties residing in the State, conditioned for such party's appearance to answer the petition and abide the final order of the court thereon.

[Interrogatories to Debtors Accused of Fraud.]

1806. Upon an accusation of fraud, the creditor who shall have brought the same, shall have the right to interrogate the insolvent debtor, and to put to him such written questions on the state of affairs, and the several transactions in which he may have been engaged, as he shall think proper; and the debtor shall answer in writing, in a pertinent and distinct manner; and every insufficient answer on his part shall be construed against him.

C. P., Art. 349.

R. S. 1807-1808

[Trial of Accused-Penalty, etc.]

1807. If the jury, summoned for the purpose of deciding on the accusation of fraud brought against the insolvent debtor, declare in their verdict that he has been guilty of fraud, the insolvent debtor shall forever be deprived of the laws passed in favor of insolvent debtors in this State, and shall be sentenced to imprisonment for a term not exceeding three years; and if it shall appear that the debtor has only been guilty of conferring an unjust preference or advantage upon another bona fide creditor, whose demand was actually due, such defendant may be relieved from imprisonment by paying the complaining creditor, or repairing the injury or fraud complained of; and in case the jury or court shall find the charges against the debtor unfounded, and that he has proceeded, without reasonable ground of suspicion, they may impose such damages against the party complaining, as may be reasonable and just.

The creditor who may proceed against his debtor under the provisions of this and the three preceding sections, may, in the same action, proceed against the party in favor of whom the defendant may have made the sale, mortgage, pledge, assignment or payment complained of; and the court may render judgment against such third party, according to law.

An insolvent accused of fraud may claim trial by jury. Romano vs. Creditors, 46 An. 1176; Burdeau vs. Creditors, 44 An. 11.

[Who Debarred from Benefit of Insolvent Laws, etc.]

1808. Any debtor who shall, within three months next preceding his failure, have sold, engaged or mortgaged any of his goods and effects, or shall have otherwise disposed of the same, or confessed judgment, in order to give an unjust preference to one or more of his creditors over the others, shall be debarred from the benefit of the insolvent laws, and the said deed or act shall be declared null and void.

If the purchaser of such property shall prove that the property was either sold or engaged to him for a true and just consideration, by him bona fide delivered at the time of such deed, then, and in that case, the sales and mortgages shall be declared valid.

R. C. C., Art. 2285, 1986.

What facts do not show knowledge of the creditor, to whom a mortgage had been given by an insolvent, that his debtor was in an insolvent condition before

R. S. 1809-1811 and at the time the mortgage was executed. Chapoton vs. Her Creditors, 45 An. 451. It is essential to show that the creditor had such knowledge. Id.

In a revocatory action to annul a transfer of property by an insolvent it must be shown that the transferror had knowledge of the transferree's insolvency, and that the transfer was to the prejudice of the other creditors. Sentell vs. Hewitt, 49 An. 1021.

[Defaulting Receivers of Public Funds Debarred.]

1809. All defaulting receivers of public funds of any kind, and all unfaithful depositaries shall be deprived of the benefit of all acts passed for the relief of insolvent debtors; also all those whose losses shall have been occasioned by gambling, dissipation or debauch.

R. C. C., Art. 2958.

[Failure of Creditors to Elect Syndic.]

1810. If, on the day appointed for the meeting, the creditors, although duly summoned, do not attend, or refuse to appoint a syndic, it shall be lawful for the judge, on a certificate of the notary or other public officer, in whose office the meeting was held, stating that the creditors did not attend, or would not appoint a syndic, to authorize the sheriff to perform in every respect the functions of syndic, unless any of the creditors should choose to take that charge, in which case the judge shall appoint the creditor for that purpose, on his giving bond with good and sufficient security according to law.

Pending an opposition in which the election of a syndic is at issue, a definitive syndic will not be appointed. Harrison vs. His Creditors, 42 An. 1054. If appointment has been inadvertently made it may be rescinded. Id. The appointment of the sheriff as syndic will not be set aside, on the complaint of a creditor, when the result would be to remand the case for choice between the applicant and his opponent. Hacket vs. His Creditors, 43 An. 485.

[Powers of Syndic.]

1811. The syndic, without any authorization from any court for that purpose, is authorized to sue and be sued in everything which respects the rights and actions which may belong to the insolvent debtor, and which may concern the mass of creditors; and finally he shall make a distribution of the proceeds of the property, agreeably to the discretions of the court.

As to pledged property, see Renshaw vs. His Creditors, 40 An. 37. See also State National Bank vs. Monroe Cotton Oil Mill Company, 39 An. 834; Chapoton vs. Creditors, 45 An. 451.

Property recovered by an individual creditor. Andrus vs. His Creditors, 45 An. 1067; Id. 1073, 1081; and see Downey vs. Kenner, 42 An. 1129.

R. S. 1812-1814.

The judgment homologating the final account of the syndic is res adjudicata as to all parties who participated in the cession of the concurso. Sembre vs. Sembre, 45 An. 117. Disbursements on ex parte orders. In re Louisiana, etc., Co. 40 An. 514.

The creditor's claim was secured by pledge; when the debt matured the debtor to avoid the sale of the pledged property, which was declining in value, pledged additional property to prevent the sale. Within three months from the pledging of the additional property, the pledgeor, through unexpected reverses, became insolvent. Held: That his syndics could not set aside the pledge when it appears to have been made in good faith. Nott vs. State National Bank, 51 An. 871.

[Property, How Disposed of.]

1812. The property ceded, excepting incorporeal rights, shall be ordered by the court to be sold at public auction, at such times and places and upon such terms and conditions as may be determined by the creditors; and incorporeal rights, actions and credits may also be sold by public auction, by virtue of an order of the court before which the proceedings are depending, to be made upon the petition of the syndic, setting forth the reasons which may render such a mode of disposition advisable.

Act 21, 1890: May sell bonds at private sale, printed under title "Successions.''

Before proceedings can be taken for the sale of the property of the insolvent, a syndic must have been qualified, an order of court for the sale obtained, and a meeting of creditors held to determine terms and conditions of sale. Spears vs. His Creditors, 40 An. 650. At a meeting called to select a syndic in place of the one who died, the creditors may deliberate on the sale of the property, but they cannot do so at the first meeting for the election of a syndic. Phillipi vs. His Creditors, 44 An. 675.

[Syndic May Release Mortgages to Certain Parties, etc.]

1813. The syndic, for the purpose of effecting the sale of the property assigned, shall be authorized to give a release of the mortgages existing on the property in favor of any of the creditors. He shall keep in his hands the proceeds, subject to the same rights in favor of the mortgage creditors, which they had in the property itself.

See Sec. 1800 and note.

[Vacancy in Office of Syndic, How Filled.]

1814. In case of vacancy in the office of syndic, by removal or otherwise, a meeting of the creditors to fill the vacancy shall be ordered.