Fallidos: the graded law of bankruptcy in the Curia Philipica
The chapter on failed merchants in the Curia Philipica sorts insolvency by fault before amount. The merchant broken by shipwreck, fire, war or a debtor who did not pay is blameless: no criminal process, no infamy, no prison for debt, and enough left to eat. The merchant who hides his goods or his books is prosecuted as a public robber, and the gallows is in the text, for nobles too. Between them sits fraudulent failure, proved from the books: none kept, or a leaf torn out, and fraud is presumed.
Why this wins its question: Bankruptcy is usually told as an English and Italian story, and pre-modern insolvency as undifferentiated cruelty to debtors. This object prints, from the folios themselves, a working Spanish chapter that does the opposite of what that story predicts: it sorts failure by fault first, exempts the merchant ruined by shipwreck, fire, war or a defaulting debtor from criminal process, penalty, infamy and imprisonment for debt, and requires that enough be left him to eat, with the reason given — that he cannot be sued for more than he can do. It then prints the other half without flinching: the gallows and infamy for the man who hides his goods or his books, applied to nobles because "in this they do not enjoy the privilege of nobility", and to a trading wife. And it shows the mechanism that made the middle category provable, a duty of orderly accounts enforced by a presumption of fraud from a tangled entry or a torn-out leaf. Each rule is bound to the folio it is printed on, so the reader can see the protection and the severity sitting in the same chapter.
Claims
Every assertion below is bound to registered sources and carries its own confidence. Weight them; do not treat the page as uniformly authoritative.
The chapter stands as capitulo XI of the second book of the second tome, under the running head "Lib. II. Comercio Terrestre", at folios 406 and following of the printing read here, and the general index places it at "Fallidos Tom. 2. lib. 2. f. 406". Its opening definition is deliberately wide: "Fallidos son los Mercaderes, Cambios, y Bancos, ó sus Factores, que faltan, ó quiebran al tiempo de sus pagas, créditos, ó contrataciones, y negocios, conforme una Ley de la Recopilacion". Merchants, exchanges, banks and their factors are one category for this purpose.
The organising move of the chapter is a division by fault rather than by amount, stated at paragraph 4: "Los fallidos son en tres generos. El primero, quebrados, que quiebran sin culpa suya. El segundo, alzados, que alzan, ú ocultan los bienes, ó libros. El tercero, fraudulentos, ó culpados, que faltan por fraude, dolo, ó culpa suya, segun una Ley." Everything that follows — whether a man may be prosecuted, imprisoned, made infamous or hanged — is worked out from which of the three he falls into.
The first genus is defined by misfortune and is protected accordingly. These are the men who break "sin dolo, culpa, ni vicio, por infortunio, ó suceso inculpable de mar, ó tierra, ó por no les acudir con sus bienes, ú deudas á su tiempo", on the authority of Straca and of Matienzo; and "por ser inculpables, no se puede proceder criminalmente contra ellos, ni incurren en pena, ni pueden ser punidos, ni son infames, aunque hagan cesion de bienes". The cession of goods — the surrender of the estate to the creditors — is expressly stated not to carry infamy where the failure was blameless. A man who is not paid by his own debtors and fails in consequence is placed in this class by name.
Paragraph 6 turns the classification into two operative protections. Those who are fallidos "no por culpa, ni vicio ... sino por haber perdido sus bienes por ocasion, ó infortunio de guerra, incendio, naufragio, y otras cosas semejantes de mar, y tierra, no pueden ser presos por deuda"; and the debt is to be recovered from them in such a manner "que se les dexe lo necesario para alimentos", unless the creditor is himself poor or the debtor has a trade by which to feed himself, the reason given being that they are of those "que no pueden ser convenidos en mas de lo que pueden hacer". A subsistence exemption and a bar on imprisonment for debt are stated together, as consequences of blamelessness rather than as grace.
The same paragraph carries a cross-reference in the author's own voice — "como lo dixe en la Curia Philipica", with the margin reading "In Cur. Philip. 2. p. §. 17. n. 24" — so that the book on commerce refers back to the earlier work on judicial practice as to something its author had already written. In this printing the two are bound and paginated as one work in two tomes; the entry makes no claim about the dates or the places of any earlier printing of either.
The second genus is the concealer, and the chapter defines him by conduct rather than by outcome. Alzados are those who flee with the goods or the books, or raise or hide them even without absenting themselves, "y asi lo son los que fingida, y simuladamente, y en confianza los enagenan, y transfieren en otros para ocultarlos de esta manera"; and those who within the preceding six months took goods on credit or on loan or in trust, with sureties, and then broke, "por presumirse ser alzados". That last is a presumption of law only: the chapter states that contrary proof is admitted against it, "por no ser presumpcion juris & jure, en que no se admite".
The treatment of the alzados is the harshest thing in the chapter and it is printed without softening. Against them "se ha de proceder criminalmente por el delito que cometen, conforme las Leyes de un titulo de la Recopilacion, por ser habidos por publicos robadores, é incurrir en las penas de tales", which are stated as "pena de infamia, siendo por ello condenados" and "pena de muerte natural de horca, conforme una Ley de Partida". The chapter adds that it proceeds "aunque sean nobles, porque en esto no gozan del privilegio de la nobleza, como lo dice una Ley de la Recopilacion", and also against the fraudulent bankrupt's wife where she is herself a trading alzada, on the authority of "Castillo de Bobadilla".
Paragraph 9 draws the line back. Not held for public robbers, nor liable to the penalties of such, are "los fallidos que se huyen, ú ocultan las personas, metiendose en las Iglesias, ú otras partes", provided they do not raise or hide the goods; nor those "que quiebran, ó faltan de sus creditos, ó negociaciones por falta de bienes, no los alzando, ni ocultando". The offence is the concealment of the estate and of the books, not the failure and not the flight.
The third genus, at paragraph 10, is the culpable failure short of concealment: those who fail "por fraude, dolo, ó malicia, ó culpa, ó vicio suyo, defraudando á sus acreedores en los bienes, ó disipandolos, ó consumiendolos en juegos, amancebamientos, comidas, vestidos, y otros gastos excesivos, y malos usos", on a law of the Recopilacion and on Matienzo and Straca. Fraud on creditors and the dissipation of the estate in gambling and display are treated as the same wrong.
The evidentiary heart of the chapter is the account book, and paragraph 12 makes keeping it properly a legal duty enforced by presumption. Fraudulent are those "á quien en fraude de sus acreedores no se hallan los libros como deben, no los teniendo, ó teniendolos, no estar asentadas en ellos las cuentas, ò estandolo, estár intrincadas, faltas, ó enmendadas, adulteradas, ó canceladas, ó quitada alguna hoja, ó de otro modo sospechosos, en que no conste la razon de ello, por presumirse dolo". Disorder in the books, an erasure, a missing leaf: each is made a ground of criminal presumption against the merchant, and the burden then lies on him to show the reason for it.
Paragraphs 13 to 15 complete the list of fraudulent failures, and each is a rule about conduct before the failure rather than after it: those who, knowing that they have creditors and not goods enough to pay them, contract further debts or make further contracts, dolo being presumed; those who, to contract a debt or to be given goods on credit or in trust, "dicen, afirman, ó hacen demonstraciones de que son abonados, ó idoneos no lo siendo, y con este engaño las contraen"; and those who in express or presumed fraud of their creditors remit or forgive a debt owed to them, or pay one creditor to the prejudice of the rest, or make other fraudulent contracts.
The limits of this entry. Everything above is read from folios 406 and 407 of the Madrid printing of 1790, whose title page states that its editor mended the errata and made precise the wrong citations of the earlier impressions; no wording is attributed to any earlier printing and no date is asserted for one. The chapter continues past paragraph 15 and the rest of it was not opened, nor were the neighbouring chapters on cesion de bienes at folio 371, on esperas y quitas, or on the Consulado at folio 439. Nothing here establishes how often a merchant was hanged as an alzado, whether the subsistence exemption was in fact allowed, how commonly account books were kept to this standard, or how the consulados of Lima, Mexico and Seville applied any of it. Those are questions for the records of those tribunals and for modern scholarship, neither of which was reachable for this entry.