Article Third. On Cession of Goods

518. Declarations. Cession of goods is said to be that act by which a debtor who is unable to pay all debts hands over his goods to creditors so that from them the debts may be paid to them.

1. A twofold cession of goods is distinguished: one voluntary, by which a cession offered by the debtor is spontaneously accepted by creditors; another judicial, which is made with a judge intervening, and indeed in two ways: either the debtor himself spontaneously yields his goods before a judge, or at the action of one of the creditors he is compelled to yield his goods.

Voluntary cession has those effects about which the debtor and creditors agree. In judicial cession, when the matter has been brought to a judge in whatever way, a concourse is proclaimed, namely the creditors come together to the judge and prove their rights, so that from the goods of the debtor (sold or auctioned) they may receive payment.

2. Cession on the part of the debtor can be culpable or inculpable, according as the debtor has become unable to pay by his own fault or without fault from mere misfortune.

519. Principles. 1. The juridical order of cession of goods, from the common opinion of theologians, obliges in conscience insofar as it is not opposed to natural law.

2. Once cession of goods has been juridically declared, the debtor is deprived by law of administration and free disposition of his goods; but creditors acquire the right of receiving payment from those goods.

a. Therefore it is not permitted to him who has yielded his goods to withdraw his goods or credits, that is, those things which are owed to him by others, from his creditors. Indeed, not even before cession is it permitted to do this, because the debtor thus directly intends to make himself unable to satisfy creditors. Wherefore he acts unjustly who, either before or after an intimated cession, to that end sells his goods to his children or takes care that his credits are transferred to his wife, unless a just cause renders this manner of acting licit, as if the wife belonged to the creditors, or if those things which are transferred to the wife were necessary for support.

b. Hence if a debtor, after cession of goods has been made, makes donations or remits debts, those actions are invalid; likewise debtors of the cessor must pay debts not to the one yielding but to his creditors.

3. The debtor who yields his goods can, by natural right, secretly retain for himself those things which are necessary for the honorable support of himself and his own, if he lives sparingly according to his state:¹ for the obligation of restitution, at least to be made at once, ceases if it cannot be made without grave inconvenience; therefore he is not bound to cast himself into grave necessity, nor to fall from his justly acquired state, in order that he may be able to restore.

a. Therefore he sins against justice who, besides these necessary things, conceals, sells, or in another way withdraws other goods from creditors, for example, more precious things, unless there is question of a thing which those yielding value very highly, for example, on account of memory of parents, but which others do not hold at a great price.

b. He is not to be condemned of injustice who reserves for himself the means by which he can begin another business from small beginnings: for the beginning of some business also pertains to necessary support.

c. When a husband encumbered with debts has died, his heirs, namely wife and children, can secretly withdraw from the goods of the deceased, before creditors receive them, as much as they judge necessary for honorable support.

4. Cession of goods of itself does not extinguish the obligation of paying fully, but only suspends it until that time when the debtor comes to a better condition, unless the creditors have explicitly or implicitly declared that they condone the remaining part of the debt.

a. For the cause excusing from restitution in this case of cession of goods is impotence; but impotence does not excuse altogether, but only as long as it lasts; wherefore when impotence ceases, the obligation of restoring urges again.

b. Among recent laws some expressly establish that the obligation of afterward restoring remains, while others free him who has yielded his goods, in the external forum, from restitution to be made afterward. Hence it happened that theologians began to ask whether he who yielded his goods would also be freed in conscience from the burden of restitution. All indeed concede that he who by his own fault has become unable to pay debts is not freed from the obligation of restoring; but some declare him immune from this obligation who inculpably became unable, unless creditors add the express condition that the obligation of afterward paying remains. Now it can be conceded that the cessor is immune from the obligation where the common persuasion has prevailed that the obligation of restoring itself ceases if civil law, because of cession of goods, denies creditors a judicial action against the debtor: for according to this persuasion creditors are considered to accept the cession unless they expressly declare otherwise.

¹ C.A. in this matter, agreeing with Roman law, does not permit the debtor to retain anything from his goods; yet it cannot take away the right which nature grants to necessary support.