With a Little Help From Friends

On the 12th of November 1608, the Conservation of Lyon, which was, at that time, the commercial court of the city and in charge of bankruptcy cases, issued a peculiar law [1].

This court had been created in 1463, under Louis the XIth, and it remained active until 1795; it heard trials among merchants who visited Lyon’s annual fairs (first established in 1420 by Charles the VIIth) and disputes between merchants and the King’s officers. The Court’s jurisdiction was originally limited to all those controversies, civil and criminal ones, that occurred during the fairs and which were related thereto (“durant lesdictes foires et à cause d’icelles”) [2].

Several judicial records from the Conservation were concerned with cases of bankruptcy that involved merchants who came from all over Europe, as creditors but also as bankrupts.

Indeed, a large community of Florentine merchants settled in Lyon during the sixteenth century and, at the archives, we can still find several case files about Italian traders that went bankrupt in Lyon.

In 1608, the Conservation was administering the bankruptcy case of Philibert Munier, a French merchant prosecuted for fraudulent bankruptcy (“banqueroute frauduleuse et faulceté”) but who had absconded (he was “contumax et deffaillant”) [3], as often happened in merchants’ insolvencies.

In the Conservation’s law of 12 November 1608 the court elaborated on the opinion of the Crown’s prosecutor in this case; for the first time it was imposed that those who hid bankrupts in their homes, or any of their goods, were held to come forward; if not, they were deemed jointly and severally liable for the bankruptcy, together with the fled debtor.

Neither silver, gold, account books or other assets of fugitive debtors could be kept. Offenders were held liable, not as co-actors of a crime (which bankruptcy was), but in civil law, for the debts. This law is therefore rather remarkable. Fuga, i.e. flight of a debtor, was a typical situation for which banishment was imposed on the debtor; accomplices could be punsihed as well. Another typical penalty were fines. But the 1608 law did not categoriza help of a fugitive debtor in terms of crime.

The court of the Conservation clearly pursued a more suitable tactic. Since merchants going bankrupt were often high-flying traders, the labelling of accomplices as associates in the bankrupt’s debts meant that creditors of the fugitive were given more options to enforce their claims if few assets were recovered. Moreover, the law was clearly intended to deprive bankrupts of safehouses, and ultimately, to discourage them from fleeing from their creditors. Whether it proved to be a good strategy remains to be checked in the archival sources of later years. One can assume that “joint bankruptcy” was something which merchants in financial difficulties wanted to avoid at all costs; reputational harm could be much higher if business contacts or relatives were dragged into their bankruptcy. The law was read out loud on the Exchange Square and in several other streets of the old town; the merchants hearing the law may have interrupted their business dealings, pondering about the curious new measure.

[1] Archives Municipales de Lyon - Série FF- Cote 087 – Chappe IX - 272

[2] J. Vaësen, La juridiction commerciale à Lyon sous l'Ancien Régime: étude historique sur la Conservation des privilèges royaux des foires de Lyon (1463-1795), 1879

[3] Archives Municipales de Lyon - Série FF- Cote 087 – Chappe IX - 272