clear that such a claim could not be supported. This demand was refused by the Tribunal of Commerce, and it came before the Paris Court of Appeal on Dec. 2, 1891.

It is of this action, which may be considered as the closing scene of the legal drama arising out of the financial crisis of the spring of 1889, that I now propose to give a short account. The origin of the claim of the Comptoir d'Escompte to rank in the bankruptcy of the Société des Métaux as a creditor for 75,000,000 francs was as follows. On March 5, 1889, as may be remembered, M. Denfert Rochereau, the manager of the Comptoir d'Escompte, committed suicide. It was thereupon discovered that the failure of the Société des Métaux had affected the Comptoir to such an extent that that institution was tottering and must inevitably come down with a crash so tremendous as to render it impossible even to pay the smallest depositors unless very large financial assistance could be immediately procured. The Minister of Finance appealed to the Bank of France, which after a careful consideration of the position resolved to render aid. It was considered that the deposits at sight of the Comptoir d'Escompte would not exceed a hundred million francs. That sum was immediately placed at its disposal, on the guarantee, however, of the principal credit institutions of Paris to the extent of one-fifth, viz. twenty million francs. Some days later it was found that a hundred millions would be insufficient, and forty millions more were advanced on a guarantee of the moiety of that sum by the same financial institution and on the delivery to the Bank of the entire assets of the Comptoir, composed on the one hand of various kinds of securities and on the other of the large stock of copper which had been warranted to the Comptoir by the Société as security for advances by the former. The Bank of France however is precluded by its bye-laws from making advances except upon the security of three signatures, and in order to comply with the letter of this regulation resort was had to the following proceeding. Monsieur Secrétan drew upon the Société des Métaux one hundred bills of exchange for a million francs each to the order of the Comptoir d'Escompte. These bills, when accepted by the Société and endorsed by the Comptoir, bore the necessary three signatures and could be discounted by the Bank without any infringement of its rules. By way of defining the position of affairs an agreement was drawn up and executed by the parties-the Bank, the Société, and the Comptoir-the 26th July, 1889, by which it was declared that as the claim of the Comptoir against the Société would manifestly be ultimately reduced to the extent of the value of the copper which it held as security, and as this

security had now passed to the Bank it was expedient to fix by agreement its approximate value as it could not be realised at that time without enormous loss, and it was thereby agreed that such security should be estimated at sixty-five millions. The Bank guarded itself by a series of clauses into the details of which it is unnecessary to enter against any loss by reason of the security, when realised, amounting to less than sixty-five millions, and it was settled that the Bank should rank provisionally in the bankruptcy of the Société as a creditor for 75,000,000 francs, being the difference between the 140,000,000 francs it had advanced and the 65,000,000 at which its security was valued. Eventually, the realisation of assets being terminated, the liquidators of the Comptoir d'Escompte paid to the Bank the entire sum of 140,000,000 which it had advanced and received in return the copper which had passed to the Bank as security. It therefore claimed to step into the shoes of the Bank to the extent of the 75,000,000 francs and rank as a creditor against the Société for that amount.

This claim was never disputed by the liquidators of the Société des Métaux until the judgment of the Court of Appeal, before alluded to, of Dec. 18, 1890, seemed to offer them a loophole of escape. For it appears to have at once occurred to the Société or its advisers that it might now turn against its quondam ally the weapon which together they had wielded with such signal success against the various mining companies who had brought actions against them for the fulfilment of their contracts or for damages, and thus completely escape from its onerous liability to the Comptoir d'Escompte. If1,' they argued with considerable plausibility, the contracts made between the Société des Métaux and the different mining companies for the delivery of all their copper over periods of various length, extending in the case of the Rio Tinto Company to three years, were null and void as constituting a conspiracy in restraint of trade, then it follows that the sums advanced by the Comptoir to the Société for the performance of these contracts by payment of the copper were advanced upon an illegal consideration, and consequently the Comptoir was not entitled to recover them in an action against the Société. The Comptoir d'Escompte, on the other hand, relied on art. 12512, sec. 3, of the Civil Code. On paying the Bank of

Les mêmes motifs d'ordre public,' say the pleadings, qui ont fait déclarer non-recevable l'action des tiers contre la Société des Métaux et le Comptoir d'Escompte doivent faire également prononcer l'irrecevabilité de l'action du Comptoir contre la Société des Métaux pour une prétendue créance procédant en réalité des dites opérations entachées d'une nullité radicale et absolue.'

2 Article 1251 of the Civil Code runs :

'La subrogation a lieu de plein droit. ..

3o. Au profit de celui qui étant tenu avec d'autres ou pour d'autres au paiement de la dette, avait intérêt de l'acquitter.'

France its claim against the Société des Métaux, the Comptoir, it was argued, became subrogé1' in all the rights of the Bank, and whatever defences might have been set up by the Société in an action against it by the Comptoir 2, such defences were not available against the Bank and consequently not against anyone standing from a legal point of view in the shoes of the Bank. This defence found favour in the eyes of the Tribunal of Commerce, which accordingly gave judgment for the Comptoir. The Société des Métaux appealed.

On appeal this theory of 'subrogation' was accepted neither by the Avocat Général-the impartial organ of the Ministère Public, who performs in effect towards the Bench much the same 3 function as does an English judge when he sums up to the jury -nor by the Court. The origin of these bills was carefully scrutinised, and it was found-inevitably, as it would seem-that they were not bills given to the Comptoir d'Escompte by the Société des Métaux in recognition and in payment of a debt, for at the time that they were drawn the amount of the claim of the Comptoir against the Société was totally unknown and has to this day never been finally established, but simply and solely in order to create an 'effet de commerce' with three signatures, and thus enable the Pank of France to make an advance upon them. 'Consequently,' says the judgment, 'the Comptoir d'Escompte was never, either in fact or in law, in a position to consider itself or to be considered, as regards the Société des Métaux as a creditor who had been paid with these bills and who therefore, after having personally reimbursed a third party to whom he had transmitted them, could claim to be "subrogé" in the rights of such third party, and to shelter itself behind the conclusive effect of the Res judicata resulting from the judicial permission to rank in the bankruptcy of the drawer or indorser.'

The Bank of France and its legal situation having thus definitely disappeared from the contest, the Comptoir d'Escompte and the Société des Métaux remained the only combatants, and the défence which the former had successfully set up in first instance having broken down on appeal, it seemed difficult for it to escape from what the Avocat Général called the 'implacable logic' of its ad1 The Scotch legal expression 'surrogated,' which simply means substituted, would be the exact equivalent of the French term.

* Such an action as the one described in this article could not, it is apprehended, arise in this country. The Société des Métaux having accepted the bills would have been estopped by its acceptance from denying its liability to the Comptoir d'Escompte, which was a holder in due course.

Except that an English jury, whose sole mission it is to find the facts, must take the law of the case from the judge, whereas a French Court is by no means bound to take the same view of the law as the Ministère Public any more than it is bound to take his view of the facts.

versary's argument as to illegal consideration. In the event, however, somewhat to the general astonishment, it has succeeded in emerging triumphantly out of what looked like a very ugly predicament.

The Avocat Général, M. Falcimaigne, in his very able and lucid argument being evidently unable to see his way out of the legal impasse in which the Comptoir had become involved, and being no less evidently anxious to discover an issue, endeavoured to distinguish between, on the one hand, the sums of money furnished by the Comptoir to enable the Société des Métaux to buy up in the market, principally in London, the stock of copper actually in existence and immediately available, and, on the other, the sums which it had advanced subsequently by way of guarantee of the contracts made by the Société for the delivery of the entire future outputs of the various mines contracted with, extending over a specified space of time.

As regards the former, the Comptoir was, he contended, plainly entitled to recover inasmuch as such a transaction was in no wise contrary to law, and the judgment of the Court of Appeal did not contain a single word which implied a doubt of its legality. As regards the latter, however, the Comptoir d'Escompte could not be considered to have confined itself to its legitimate role of banker of the Société (as was contended throughout by its own counsel), but, inasmuch as it had actually become a party as guarantor to no less than seventeen out of the entire number of thirty-seven of these contracts, it must be considered as having participated in an illegal conspiracy, and thereby disentitled itself to any redress at the hands of its joint tort-feasor. Finally the Court, in its judgment, went a step further. The Conseil d'Administration of the Comptoir as a body, says the Arrêt, has never been shown to have been entirely cognisant of Secrétan's illicit operations, at any rate in their ensemble. The Comptoir was only a party to seventeen out of the thirty-seven contracts, and there is nothing to prove that if there had only been seventeen of such contracts in all, the

The representatives of the Société des Métaux did not scruple to affirm in their arguments that the Comptoir d'Escompte had been throughout the accomplice' of Monsieur Secrétan in his illegal speculations, basing this accusation on art. 59 of the Penal Code, which treats as an accomplice a person who has procured the means for the commission of a crime or misdemeanour, knowing that these means were to be used for such purpose. The means for the commission of the misdemeanour, said the plaintiffs, were the moneys furnished by the Comptoir, who knew the destination to which they were to be applied. The argument is specious enough in appearance, but apart from the questionable propriety of introducing into civil actions principles of criminal law, according to the judgment of the Court this was just what the Board of Directors of the Comptoir d'Escompte as a body did not know, fully or completely, whatever individual members of the Board might have known, and it was of course only as a body that the Board could bind its shareholders.

Court of Appeal would have held that they were sufficient to constitute a conspiracy in restraint of trade, as it perforce decided when it became apparent that the thirty-seven contracts together insured to Secrétan 180,000 tons of copper a year, whereas the output of the entire world does not exceed from 200,000 to 220,000 tons. Finally, says the judgment, the advances made by the Comptoir during the entire period of the illicit operations were effected under the same conditions as those previously made by reason of the credit opened several years before as banker of the Société, and no sum was actually paid by the Comptoir to the representatives of the mines in its capacity of joint and several guarantor, and as paying its own debt, but solely in its capacity of banker1, and as an advance made to its client whose account was regularly debited accordingly; the proof of this fact being that the Comptoir proceeded in exactly the same manner towards those of the mines' companies, the contracts with which it had guaranteed, and those towards which it had entered into no sort of engagement.

Judgment was accordingly given for the Comptoir d'Escompte with costs, and as far as the equity of the matter is concerned no impartial person is likely to quarrel with the decision, but it is hardly possible to withstand the conviction that legal principles were a trifle strained to afford an equitable conclusion. Some hard things were said by the Avocat Général about the morality of the behaviour of the Société des Métaux in thus turning round upon its guarantor and endeavouring by a legal quibble to shuffle out of its liabilities. Irrelevant as such observations appear to be, their justice is indisputable, and it is perhaps no great reproach to the Court of Appeal under the circumstances to suggest that it was to some extent actuated in its judgment by a desire to falsify the cynical dictum of Cicero- Summum jus summa injuria.'

MALCOLM McILWRAITH.

Herein the Court appears to differ from the Ministère Public.