Rise and Fall of Cesar Birotteau

But here it becomes necessary to explain to persons who have not had the happiness to be in business the whole drama of bankruptcy, so as to make them understand how it constitutes in Paris a monstrous legal farce; and also how the bankruptcy of Cesar Birotteau was a signal exception to the general rule.

This fine commercial drama is in three distinct acts, – the agent’s act, the assignee’s act, the concordat, or certificate-of-bankruptcy act. Like all theatrical performances, it is played with a double-intent: it is put upon the stage for the public eye, but it also has a hidden purpose; there is one performance for the pit, and another for the side-scenes. Posted in the side-scenes are the bankrupt and his solicitor, the attorney of the creditors, the assignees, the agent, and the judge-commissioner himself. No one out of Paris knows, and no one in Paris does not know, that a judge of the commercial courts is the most extraordinary magistrate that society ever allowed itself to create. This judge may live in dread of his own justice at any moment. Paris has seen the president of her courts of commerce file his own schedule. Instead of being an experienced retired merchant, to whom the magistracy might properly be made the reward of a pure life, this judge is a trader, bending under the weight of enormous enterprises, and at the head of some large commercial house. The sine qua non condition in the election of this functionary, whose business it is to pass judgment on the avalanche of commercial suits incessantly rolling through the courts, is that he shall have the greatest difficulty in managing his own affairs. This commercial tribunal, far from being made a useful means of transition whereby a merchant might rise, without ridicule, into the ranks of the nobility, is in point of fact made up of traders who are trading, and who are liable to suffer for their judgments when they next meet with dissatisfied parties, – very much as Birotteau was now punished by du Tillet.

The commissioner is of necessity a personage before whom much is said; who listens, recollecting all the while his own interests, and leaves the cause to the assignees and the attorneys, – except, possibly, in a few strange and unusual cases where dishonesty is accompanied by peculiar circumstances, when the judge usually observes that the debtor, or the creditors, as it may happen, are clever people. This personage, set up in the drama like the royal bust in a public audience-chamber, may be found early in the morning at his wood-yard, if he sells wood; in his shop, if, like Birotteau, he is a perfumer; or, in the evenings, at his dessert after dinner, – always, it should be added, in a terrible hurry; as a general thing he is silent. Let us, however, do justice to the law: the legislation that governs his functions, and which was pushed through in haste, has tied the hands of this commissioner; and it sometimes happens that he sanctions fraud which he cannot hinder, – as the reader will shortly see.

The agent to whom the judge delegates the first proceedings, instead of serving the creditors, may become if he please a tool of the debtor. Every one hopes to swell his own gains by getting on the right side of the debtor, who is always supposed to keep back a hidden treasure. The agent may make himself useful to both parties; on the one hand by not laying the bankrupt’s business in ashes, on the other by snatching a few morsels for men of influence, – in short, he runs with the hare and holds with the hounds. A clever agent has frequently arrested judgment by buying up the debts and then releasing the merchant, who then rebounds like an india-rubber ball. The agent chooses the best-stocked crib, whether it leads him to cover the largest creditors and shear the debtor, or to sacrifice the creditors for the future prosperity of the restored merchant. The action of the agent is decisive. This man, together with the bankrupt’s solicitor, plays the utility role in the drama, where it may be said neither the one nor the other would accept a part if not sure of their fees. Taking the average of a thousand failures, an agent would be found nine hundred and fifty times on the side of the bankrupt. At the period of our history, the solicitors frequently sought the judge with the request that he would appoint an agent whom they proposed to him, – a man, as they said, to whom the affairs of the bankrupt were well-known, who would know how to reconcile the interests of the whole body of creditors with those of a man honorably overtaken by misfortune. For some years past the best judges have sought the advice of the solicitors in this matter for the purpose of not taking it, endeavoring to appoint some other agent quasi virtuous.

During this act of the drama the creditors, real or pretended, come forward to select the provisional assignees, who are often, as we have said, the final ones. In this electoral assembly all creditors have the right to vote, whether the sum owing to them is fifty sous, or fifty thousand francs. This assembly, in which are found pretended creditors introduced by the bankrupt, – the only electors who never fail to come to the meeting, – proposes the whole body of creditors as candidates from among whom the commissioner, a president without power, is supposed to select the assignees. Thus it happens that the judge almost always appoints as assignees those creditors whom it suits the bankrupt to have, – another abuse which makes the catastrophe of bankruptcy one of the most burlesque dramas to which justice ever lent her name. The honorable bankrupt overtaken by misfortune is then master of the situation, and proceeds to legalize the theft he premeditated. As a rule, the petty trades of Paris are guiltless in this respect. When a shopkeeper gets as far as making an assignment, the worthy man has usually sold his wife’s shawl, pawned his plate, left no stone unturned, and succumbs at last with empty hands, ruined, and without enough money to pay his attorney, who in consequence cares little for him.

The law requires that the concordat, at which is granted the bankrupt’s certificate that remits to the merchant a portion of his debt, and restores to him the right of managing his affairs, shall be attended by a majority of the creditors, and also that they shall represent a certain proportion of the debt. This important action brings out much clever diplomacy, on the part of the bankrupt, his assignees, and his solicitor, among the contending interests which cross and jostle each other. A usual and very common manoeuvre is to offer to that section of the creditors who make up in number and amount the majority required by law certain premiums, which the debtor consents to pay over and above the dividend publicly agreed upon. This monstrous fraud is without remedy. The thirty commercial courts which up to the present time have followed one after the other, have each known of it, for all have practised it. Enlightened by experience, they have lately tried to render void such fraudulent agreements; and as the bankrupts have reason to complain of the extortion, the judges had some hope of reforming to that extent the system of bankruptcy. The attempt, however, will end in producing something still more immoral; for the creditors will devise other rascally methods, which the judges will condemn as judges, but by which they will profit as merchants.

Another much-used stratagem, and one to which we owe the term “serious and legitimate creditor,” is that of creating creditors, – just as du Tillet created a banker and a banking-house, – and introducing a certain quantity of Claparons under whose skin the bankrupt hides, diminishing by just so much the dividends of the true creditors, and laying up for the honest man a store for the future; always, however, providing a sufficient majority of votes and debts to secure the passage of his certificate. The “gay and illegitimate creditors” are like false electors admitted into the electoral college. What chance has the “serious and legitimate creditor” against the “gay and illegitimate creditor?” Shall he get rid of him by attacking him? How can he do it? To drive out the intruder the legitimate creditor must sacrifice his time, his own business, and pay an attorney to help him; while the said attorney, making little out of it, prefers to manage the bankruptcy in another capacity, and therefore works for the genuine credit without vigor.

To dislodge the illegitimate creditor it is necessary to thread the labyrinth of proceedings in bankruptcy, search among past events, ransack accounts, obtain by injunction the books of the false creditors, show the improbability of the fiction of their existence, prove it to the judges, sue for justice, go and come, and stir up sympathy; and, finally, to charge like Don Quixote upon each “gay and illegitimate creditor,” who if convicted of “gaiety” withdraws from court, saying with a bow to the judges, “Excuse me, you are mistaken, I am very ‘serious.’” All this without prejudice to the rights of the bankrupt, who may carry Don Quixote and his remonstrance to the upper courts; during which time Don Quixote’s own business is suffering, and he is liable to become a bankrupt himself.

The upshot of all this is, that in point of fact the debtor appoints his assignees, audits his own accounts, and draws up the certificate of bankruptcy himself.

Given these premises, it is easy to imagine the devices of Frontin, the trickeries of Sganarelle, the lies of Mascarille, and the empty bags of Scapin which such a system develops. There has never been a failure which did not generate enough matter to fill the fourteen volumes of “Clarissa Harlowe,” if an author could be found to describe them. A single example will suffice. The illustrious Gobseck, – ruler of Palma, Gigonnet, Werbrust, Keller, Nucingen, and the like, – being concerned in a failure where he attempted to roughly handle the insolvent, who had managed to get the better of him, obtained notes from his debtor for an amount which together with the declared dividend made up the sum total of his loss. These notes were to fall due after the concordat. Gobseck then brought about a settlement in the concordat by which sixty-five per cent was remitted to the bankrupt. Thus the creditors were swindled in the interests of Gobseck. But the bankrupt had signed the illicit notes with the name of his insolvent firm, and he was therefore able to bring them under the reduction of sixty-five per cent. Gobseck, the great Gobseck, received scarcely fifty per cent on his loss. From that day forth he bowed to his debtor with ironical respect.

As all operations undertaken by an insolvent within ten days before his failure can be impeached, prudent men are careful to enter upon certain affairs with a certain number of creditors whose interest, like that of the bankrupt, is to arrive at the concordat as fast as possible. Skilful creditors will approach dull creditors or very busy ones, give an ugly look into the failure, and buy up their claims at half what they are worth at the liquidation; in this way they get back their money partly by the dividend on their own claims, partly from the half, or third, or fourth, gained on these purchased claims.

A failure is the closer, more or less hermetically tight, of a house where pillage has left a few remaining bags of silver. Lucky the man who can get in at a window, slide down a chimney, creep in through a cellar or through a hole, and seize a bag to swell his share! In the general rout, the sauve qui peut of Beresina is passed from mouth to mouth; all is legal and illegal, false and true, honest and dishonest. A man is admired if he “covers” himself. To “cover” himself means that he seizes securities to the detriment of the other creditors. France has lately rung with the discussion of an immense failure that took place in a town where one of the upper courts holds its sittings, and where the judges, having current accounts with the bankrupts, wore such heavy india-rubber mantles that the mantle of justice was rubbed into holes. It was absolutely necessary, in order to avert legitimate suspicion, to send the case for judgment in another court. There was neither judge nor agent nor supreme court in the region where the failure took place that could be trusted.

This alarming commercial tangle is so well understood in Paris, that unless a merchant is involved to a large amount he accepts a failure as total shipwreck without insurance, passes it to his profit-and-loss account, and does not commit the folly of wasting time upon it; he contents himself with brewing his own malt. As to the petty trader, worried about his monthly payments, busied in pushing the chariot of his little fortunes, a long and costly legal process terrifies him. He gives up trying to see his way, imitates the substantial merchant, bows his head, and accepts his loss.

The wholesale merchants seldom fail, nowadays; they make friendly liquidations; the creditors take what is given to them, and hand in their receipts. In this way many things are avoided, – dishonor, judicial delays, fees to lawyers, and the depreciation of merchandise. All parties think that bankruptcy will give less in the end than liquidation. There are now more liquidations than bankruptcies in Paris.

The assignee’s act in the drama is intended to prove that every assignee is incorruptible, and that no collusion has ever existed between any of them and the bankrupt. The pit – which has all, more or less, been assignee in its day – knows very well that every assignee is a “covered” merchant. It listens, and believes as it likes. After three months employed in auditing the debtor and creditor accounts, the time comes for the concordat. The provisional assignees make a little report at the meeting, of which the following is the usual formula: —

Messieurs, – There is owing to the whole of us, in bulk, about a million. We have dismantled our man like a condemned frigate. The nails, iron, wood, and copper will bring about three hundred thousand francs. We shall thus get about thirty per cent of our money. Happy in obtaining this amount, when our debtor might have left us only one hundred thousand, we hereby declare him an Aristides; we vote him a premium and crown of encouragement, and propose to leave him to manage his assets, giving him ten or twelve years in which to pay us the fifty per cent which he has been so good as to offer us. Here is the certificate of bankruptcy; have the goodness to walk up to the desk and sign it.

At this speech, all the fortune creditors congratulate each other and shake hands. After the ratification of the certificate, the bankrupt becomes once more a merchant, precisely such as he was before; he receives back his securities, he continues his business, he is not deprived of the power to fail again, on the promised dividend, – an additional little failure which often occurs, like the birth of a child nine months after the mother has married her daughter.

If the certificate of bankruptcy is not granted, the creditors then select the permanent assignees, take extreme measures, and form an association to get possession of the whole property and the business of their debtor, seizing everything that he has or ever will have, – his inheritance from his father, his mother, his aunt, et caetera. This stern measure can only be carried through by an association of creditors.

There are therefore two sorts of failures, – the failure of the merchant who means to repossess himself of his business, and the failure of the merchant who has fallen into the water and is willing to sink to the bottom. Pillerault knew the difference. It was, to his thinking and to that of Ragon, as hard to come out pure from the first as to come out safe from the second. After advising Cesar to abandon everything to his creditors, he went to the most honorable solicitor in such matters, that immediate steps might be taken to liquidate the failure and put everything at once at the disposition of the creditors. The law requires that while the drama is being acted, the creditors shall provide for the support of the bankrupt and his family. Pillerault notified the commissioner that he would himself supply the wants of his niece and nephew.

Du Tillet had worked all things together to make the failure a prolonged agony for his old master; and this is how he did it. Time is so precious in Paris that it is customary, when two assignees are appointed, for only one to attend to the affair: the duty of the other is merely formal, – he approves and signs, like the second notary in notarial deeds. By this means, the largest failures in Paris are so vigorously handled that, in spite of the law’s delays, they are adjusted, settled, and secured with such rapidity that within a hundred days the judge can echo the atrocious saying of the Minister, – “Order reigns in Warsaw.”

Du Tillet meant to compass Cesar’s commercial death. The names of the assignees selected through the influence of du Tillet were very significant to Pillerault. Monsieur Bidault, called Gigonnet, – the principal creditor, – was the one to take no active part; and Molineux, the mischievous old man who lost nothing by the failure, was to manage everything. Du Tillet flung the noble commercial carcass to the little jackal, that he might torment it as he devoured it. After the meeting at which the creditors appointed the assignees, little Molineux returned home “honored,” so he said, “by the suffrages of his fellow-citizens”; happy in the prospect of hectoring Birotteau, just as a child delights in having an insect to maltreat. The landlord, astride of his hobby, – the law, – begged du Tillet to favor him with his ideas; and he bought a copy of the commercial Code. Happily, Joseph Lebas, cautioned by Pillerault, had already requested the president of the Board of Commerce to select a sagacious and well-meaning commissioner. Gobenheim-Keller, whom du Tillet hoped to have, found himself displaced by Monsieur Camusot, a substitute-judge, – a rich silk-merchant, Liberal in politics, and the owner of the house in which Pillerault lived; a man counted honorable.

One of the cruellest scenes of Cesar’s life was his forced conference with little Molineux, – the being he had once regarded as a nonentity, who now by a fiction of law had become Cesar Birotteau. He was compelled to go to the Cour Batave, to mount the six flights, and re-enter the miserable appartement of the old man, now his custodian, his quasi judge, – the representative of his creditors. Pillerault accompanied him.

“What is the matter?” said the old man, as Cesar gave vent to an exclamation.

“Ah, uncle! you do not know the sort of man this Molineux is!”

“I have seen him from time to time for fifteen years past at the cafe David, where he plays dominoes. That is why I have come with you.”

Monsieur Molineux showed the utmost politeness to Pillerault, and much disdainful condescension to the bankrupt; he had thought over his part, studied the shades of his demeanor, and prepared his ideas.

“What information is it that you need?” asked Pillerault. “There is no dispute as to the claims.”

“Oh,” said little Molineux, “the claims are in order, – they have been examined. The creditors are all serious and legitimate. But the law, monsieur, – the law! The expenditures of the bankrupt have been disproportional to his fortune. It appears that the ball – ”

“At which you were present,” interrupted Pillerault.

“ – cost nearly sixty thousand francs, and at that time the assets of the insolvent amounted to not more than one hundred and a few thousand francs. There is cause to arraign the bankrupt on a charge of wilful bankruptcy.”

“Is that your intention?” said Pillerault, noticing the despondency into which these words had cast Birotteau.

“Monsieur, I make a distinction; the Sieur Birotteau was a member of the municipality – ”

“You have not sent for us, I presume, to explain that we are to be brought into a criminal police court?” said Pillerault. “The cafe David would laugh finely at your conduct this evening.”

The opinion of the cafe David seemed to frighten the old man, who looked at Pillerault with a startled air. He had counted on meeting Birotteau alone, intending to pose as the sovereign arbiter of his fate, – a legal Jupiter. He meant to frighten him with the thunder-bolt of an accusation, to brandish the axe of a criminal charge over his head, enjoy his fears and his terrors, and then allow himself to be touched and softened, and persuaded at last to restore his victim to a life of perpetual gratitude. Instead of his insect, he had got hold of an old commercial sphinx.

“Monsieur,” he replied, “I see nothing to laugh at.”

“Excuse me,” said Pillerault. “You have negotiated largely with Monsieur Claparon; you have neglected the interests of the main body of the creditors, so as to make sure that certain claims shall have a preference. Now I can as one of the creditors interfere. The commissioner is to be taken into account.”

“Monsieur,” said Molineux, “I am incorruptible.”

“I am aware of it,” said Pillerault. “You have only taken your iron out of the fire, as they say. You are keen; you are acting just as you do with your tenants – ”

“Oh, monsieur!” said the assignee, suddenly dropping into the landlord, – just as the cat metamorphosed into a woman ran after a mouse when she caught sight of it, – “my affair of the Rue Montorgeuil is not yet settled. What they call an impediment has arisen. The tenant is the chief tenant. This conspirator declares that as he has paid a year in advance, and having only one more year to” – here Pillerault gave Cesar a look which advised him to pay strict attention – “and, the year being paid for, that he has the right to take away his furniture. I shall sue him! I must hold on to my securities to the last; he may owe something for repairs before the year is out.”

“But,” said Pillerault, “the law only allows you to take furniture as security for the rent – ”

“And its accessories!” cried Molineux, assailed in his trenches. “That article in the Code has been interpreted by various judgments rendered in the matter: however, there ought to be legislative rectification to it. At this very moment I am elaborating a memorial to his Highness, the Keeper of the Seals, relating to this flaw in our statutes. It is desirable that the government should maintain the interests of landlords. That is the chief question in statecraft. We are the tap-root of taxation.”

“You are well fitted to enlighten the government,” said Pillerault; “but in what way can we enlighten you – about our affairs?”

“I wish to know,” said Molineux, with pompous authority, “if Monsieur Birotteau has received moneys from Monsieur Popinot.”

“No, monsieur,” said Birotteau.

Then followed a discussion on Birotteau’s interests in the house of Popinot, from which it appeared that Popinot had the right to have all his advances paid in full, and that he was not involved in the failure to the amount of half the costs of his establishment, due to him by Birotteau. Molineux, judiciously handled by Pillerault, insensibly got back to gentler ways, which only showed how he cared for the opinion of those who frequented the cafe David. He ended by offering consolation to Birotteau, and by inviting him, as well as Pillerault, to share his humble dinner. If the ex-perfumer had gone alone, he would probably have irritated Molineux, and the matter would have become envenomed. In this instance, as in others, old Pillerault was his tutelary angel.

Commercial law imposes a horrible torture upon the bankrupt; he is compelled to appear in person at the meeting of his creditors, when they decide upon his future fate. For a man who can hold himself above it all, or for a merchant who expects to recover himself, this ceremony is little feared. But to a man like Cesar Birotteau it was agony only to be compared to the last day of a criminal condemned to death. Pillerault did all in his power to make that terrible day endurable to his nephew.

The steps taken by Molineux, and agreed to by the bankrupt, were as follows: The suit relating to the mortgage on the property in the Faubourg du Temple having been won in the courts, the assignees decided to sell that property, and Cesar made no opposition. Du Tillet, hearing privately that the government intended to cut a canal which should lead from Saint-Denis to the upper Seine through the Faubourg du Temple, bought the property of Birotteau for seventy thousand francs. All Cesar’s rights in the lands about the Madeleine were turned over to Monsieur Claparon, on condition that he on his side would abandon all claim against Birotteau for half the costs of drawing up and registering the contracts; also for all payments on the price of the lands, by receiving himself, under the failure, the dividend which was to be paid over to the sellers. The interests of the perfumer in the house of Popinot and Company were sold to the said Popinot for the sum of forty-eight thousand francs. The business of “The Queen of Roses” was bought by Celestin Crevel at fifty-seven thousand francs, with the lease, the fixtures, the merchandise, furniture, and all rights in the Paste of Sultans and the Carminative Balm, with twelve years’ lease of the manufactories, whose various appliances were also sold to him. The assets when liquidated came to one hundred and ninety-five thousand francs, to which the assignees added seventy thousand produced by Birotteau’s claims in the liquidation of the “unfortunate” Roguin. Thus the total amount made over to Cesar’s creditors was two hundred and fifty-five thousand francs. The debts amounted to four hundred and forty thousand; consequently, the creditors received more than fifty per cent on their claims.