Abstract
This article considers Hugo Grotius’s ideas on a specific topic of commercial law, analysing his position and potential contributions to early modern Dutch insolvency legislation. It might be questioned how ‘Hollandic’ Grotius’s interpretations of legal solutions for insolvency as presented in the Inleidinge tot de Hollandsche Rechts-Geleerdheid actually were. Grotius’s treatment of cessie van goede is relatively strict, whereas compositions are hardly mentioned. A rather different image rises from his later work. Here, Grotius displays a more radical view, in specific cases allowing the sovereign to interfere in private property rights and to restructure debts for the common good. It is an intriguing question if and to what extent these ideas can be related to contemporary Dutch insolvency practices.
1 Introduction
The seventeenth-century Dutch Republic witnessed a spectacular economic and cultural efflorescence, which sparked numerous innovations. Hugo Grotius is widely regarded as one of the most influential legal scholars of this period, mainly thanks to his work in the field of international law. However, he was also the first author to publish a comprehensive introduction to Holland’s private law and jurisprudence in the Dutch language.1 As I have argued in various publications, some of the most interesting legal innovations that occurred in Holland in this period concern insolvency legislation; more specifically, the growing acceptance of majority compositions.2
In light of this collection, which seeks to determine and analyse Grotius’s thoughts and influence on developments in commercial and maritime law, it is interesting to briefly review his writings on insolvency. Whereas existing scholarship has discussed Grotius in light of the actio Pauliana and the right of the unpaid seller, it has not explicitly been reviewed to what extent Grotius’s Inleidinge can be linked to the important seventeenth-century innovations in legal practice in the field of insolvency.3 In this article I will argue that Grotius, far from being at the forefront of these developments, in his Inleidinge displays a rather strict interpretation of both cessio bonorum and the possibility for compositions between insolvents and their creditors. In light of the aforementioned innovations in practice, it may even be questioned how ‘Hollandic’ his treatment of these topics in the Inleidinge actually was. This is especially puzzling when confronted with related statements in his later work, such as De iure belli ac pacis. There, Grotius is actually arguing in favour of interpretations that might have seemed quite radical to most of his contemporaries writing on insolvency legislation and practices.
This article will, firstly, discuss Grotius’s position on cessie van goede (i.e. cessio bonorum), secondly, it will review his position on majority compositions in light of contemporary developments, in order to arrive at a conclusion that will evaluate Grotius’s view and potential contributions to the theory and practice of insolvency legislation in seventeenth-century Holland.
2 Cessie van Goede
The majority of insolvent debtors in seventeenth-century Amsterdam – and probably Holland as a whole – resolved their illiquidity through the legal benefice of cessie van goede, also described as ‘boedelafstand’, based upon the Latin cessio bonorum.4 Grotius discusses cessie together with the letters of respijt or inductie (explicitly providing for a temporally delimitated suspension of the repayment of debts) in section iii.51 of his Inleidinge. Those ‘benefices’ had in common that they were officially granted by the hooge overheid, the sovereign, who in this period in Holland had been functionally replaced in that capacity by the High Court of Holland, Zeeland and West-Friesland. In practice, the actual decision was usually made by a local court after an official committimus.5 In Amsterdam, for instance, the aldermen and after 1643 the commissioners of the Desolate Boedelskamer (Chamber of Abandoned and Insolvent Estates) decided whether or not an applicant for cessie should be granted this benefice, after a consultation of the local creditors.6 If there were no signs that the insolvent had committed fraud, the commissioners would return a positive advijs or ‘recommendation’ to the High Court, which would proceed to officially grant the brieve van cessie. This letter could then be registered at the local court by means of the interinement procedure, through which it received its effect.7 These effects of the benefice, as Grotius states, were as follows:
This description is in line with similar passages by Van Leeuwen, Van Alphen’s Papegay, as well as Van Wassenaer, who refers to Grotius’s book in this context, even if amidst a broad range of other publications.9 What were the roots of this procedure, and to what extent did Grotius display signs of innovation in his treatment of boedel-afstand?
Cessie as a legal concept can be traced back to the Roman cessio bonorum, introduced by a lex Julia.10 In 1256, king Louis ix introduced the cessio in France, probably inspired by its earlier revival in Italian commercial cities. From there, it spread to the Low Countries under the dukes of Burgundy. It appears in various sixteenth-century collections of urban customary law, among which Antwerp’s was most important for Holland.11 In 1536, Charles V centralized the cessio-practice in the Low Countries.12 Henceforth, an official letter issued by his chancellery was required to obtain the benefice. In response to concerns about potential abuses of cessie, mainly voiced by the important Flemish cities of Bruges and Ghent, the ordinance also introduced the duty to have the letter homologated (through its interinement) by the authorities of the insolvent’s place of residence.13 Bruges had long resisted the application of cessio bonorum. In 1527, for instance, both a group of merchants and the Bruges aldermen stated that cessie had never been practiced in the city.14 Perhaps Charles V required the local interinement for cessie in his 1536 ordinance to placate such opposing voices.
The 1536 ordinance did not just reform the cessio procedure, but also its effect. While in late medieval local practice, defamatory rituals had come to be attached to obtaining cessio, Charles V’s ordinance discontinued such punishments for non-fraudulent insolvents. As Demars-Sion argues, this reveals a new, more neutral view on insolvency, even though it was not immediately adopted throughout the Low Countries.15 A subsequent ordinance issued in 1541, however, stipulates that the insolvent had to request the homologation of his letter of cessie bare-headed and without a belt.16 Perhaps this meant to placate cities such as Antwerp, where cessie continued to have social defamatory connotations, even if these had been removed in a legal sense.17
The development towards a gradual decriminalization of insolvency also had an impact in Holland. Earlier, cities such as Leiden (1501) and Rotterdam (1520) had requested and received a comital privilege that allowed applicants for cessie to be subjected to shameful rituals. In Leiden, the cessionant would have to stand on an elevated ‘place, three or four steps high’ attached to the city hall – known as the roepstoel – on three consecutive days between half twelve and half one in the afternoon, wearing nothing but their underwear.18 Only the creditors could decide to refrain from this humiliating ritual. In Rotterdam, the magistrate, too, could liberate especially unfortunate applicants for cessie from this sanction.19 It seems that these practices fell into disuse in the seventeenth century. In 1666, the Leiden-born legal scholar Simon van Leeuwen (1626–1682) already remarked that while shaming sanctions had been observed in the past, in his own days they had since long fallen into disuse.20 The Leiden court book contains a case from 1669, in which the creditors demanded that the old privilege would be respected. Rather than applying the shaming sanction, the request for cessie was left ‘hanging’, it being unclear how the insolvency was resolved.21 In Holland too, therefore, defamatory ceremonies of any sort for cessie applicants seem to have disappeared by Grotius’s time.22
Grotius’s treatment of the cessie procedure in seventeenth-century Holland clearly displays these developments. The fact that the benefice was granted by the High Court after an investigation by local authorities was standard practice in Holland, ‘even though that was not required by Roman law’ – hoe wel zulcs by de Roomsche rechten niet en werd vereischt. Grotius also includes Charles V’s stipulation that applicants for cessie would have to appear in person, not by attorney, when receiving their benefice.23 Interestingly, he adds his own explanation for this rule: ‘in order to allow for his punishment, if anything in the application appears to be deficient’ – om ghestreft te werden, indien in sijn te kennen geven gebreck werd bevonden.24 An important reason for the need for a local homologation of the benefice was that it could only be granted to non-fraudulent insolvents. The ordinance is somewhat unspecific in this regard, just stating that cessie would be provided to those who had become insolvent through bad fortune, ‘without guilt’ – buyten sinen schult.25 Grotius is more specific. He excludes all those who had absconded themselves; had attempted to hide their goods; had acted in bad faith; had gotten into debt through crime; had denied their debts; by means of cessie sought to escape from an obligation that they could actually repay; or tried to get away with not paying their fair share of taxes.26 In the Lund manuscript, an annotation reveals Grotius’s inspiration for part of these statements: the French legal scholar Jean Papon.27
Cessie did not provide for an acquittal of remaining debts after the distribution of the insolvent’s assets. This had been true for all variants since its conception in antiquity. As Grotius states, ‘if the debtor afterwards would obtain any means, exceeding his bare necessity, he will owe his creditors further payments’.28 There is some disagreement in contemporary scholarship as to what one’s noodruft or ‘basic necessities’ might entail.29 Charles V’s 1544 ordinance stated that an applicant for cessie could retain a single bed and its appurtenance, besides a small number of haeffelycke goederen – movables. This expressly excluded any tin- or silverware, as well as other furniture.30 Grotius offers a somewhat stricter interpretation, stating that applicants ‘could retain nothing but their daily apparel’; however, in his view this also meant that someone who did not have any other goods left could still qualify for the benefice.31 Van Wassenaer adds that artisans were allowed to keep ‘any tools, needed to carry out their craft and so make a living’. This also meant, for instance, that a university student would be allowed to keep the books that were essential for his studies, but this was contested.32 In practice, it seems that successful applicants for cessie in Holland were allowed to keep a set of clothing, the tools needed to practice their craft, as well as some very basic goods.33
Grotius did not live in a vacuum, and his thinking as represented in the Inleidinge must have been influenced by contemporary practices in seventeenth-century Holland. It is interesting, therefore, to briefly compare cessie to the practice of ‘putting the key on the grave’. In this similar situation of an ‘abandoned estate’, questions about what constituted a ‘necessity’ were also present. Many Flemish and Brabantine cities knew a custom whereby a widow could renounce the insolvent inheritance of her deceased husband through the demonstrative act of placing the key of their house on the coffin or grave during the funeral. In this way, the widow could publicly distance herself from her late husband’s debts. Interestingly, many of the laws regulating this practice stipulated that she could retain the clothes she wore. While Herenthals allowed widows to wear their best set of clothes (als sy op den Paesdagh ter kercken gaet – dressed up as if she would attend Church for Easter), Leuven forced them to wear ‘their normal attire, neither the best nor the worst’. Other cities, such as Roeselare or Oostende, also allowed to retain a bed and its appurtenance. This custom, which was practiced well into the seventeenth century, shows a remarkable resemblance to the allowances of ‘basic necessities’ that applicants for cessie van goede could retain.34 As we learn from Grotius’s Inleidinge, Holland knew a similar custom. In Leiden, for instance, a widow gaende voor de baer uit – ‘walking in front of the bier’ –, wearing nothing but her ‘daily apparel’ or daghelickse kleederen, would be liberated from any debts contracted during the marriage. Similar to the aforementioned Flemish and Brabantine custom, widows of merchants who, in their husbands’ absence, had engaged in business, were excluded from this custom.35 Since he clearly knew this tradition, Grotius might potentially have been influenced by it when offering his interpretation on the goods that could be retained after boedelafstand.
In conclusion, with regards to cessie van goede Grotius’s Inleidinge reflects the procedural practice of early seventeenth-century Holland, but seems to offer a somewhat stricter interpretation than near-contemporary scholars such as Van Wassenaer on the amount of goods a successful (and thus innocent) applicant for the benefice could retain. This is reinforced by a stress on potential punishment for faulty applications. It should be noted, however, that this difference represents a matter of gradation rather than a radically divergent position. We should now go on to examine to what extent this basic attitude is reflected in Grotius’s view on a legal solution that precluded cessie: the akkoord or (majority) composition.
3 Majority Compositions
The akkoord or composition is an agreement between an insolvent debtor and his creditors that seeks to restructure the debts in order to prevent an execution of the estate. As Lagerwey argues, the central goal of such legal arrangements is to further the common good. On the one hand, a composition might result in higher repayment percentages thanks to reduced procedural costs; on the other hand, it means that the insolvent can continue to administer his own affairs and seek to continue his business, ‘saving him from personal financial demise and at the same time preserving a laborious citizen for society’.36 A composition could accomplish these goals by facilitating the official registration of a delayed repayment, or even the remission, of (part of) the outstanding debts. Of course, this required sufficient trust on the part of the creditors involved to secure their collective support of the proposed agreement, without which it could not materialize.37 To a certain extent, guarantors securing (part of) the repayment scheme could help to win over the support of all creditors.38 However, as long as a single creditor could block a composition, this legal solution for insolvency remained hard to realize. Therefore, over the seventeenth century, majority compositions binding unwilling minorities of creditors were introduced in many Dutch cities.39 This was, however, not uncontroversial. In this section, I will briefly discuss these developments in early modern Dutch insolvency legislation and legal practice, show how these reflected the relevant passages in Roman law and ius commune, and analyse to what extent Grotius’s work displays or might even have influenced the important innovations in this field.
The emperor Charles V not only treated cessie in his sixteenth-century ordinances, but also provided a legal framework for compositions. In 1540, he strongly condemned the ratification of such agreements with ‘bankrupts and fugitives, be it for the acquittal of their whole debt or part thereof’. Such committers of fraud deserved to be treated like a common thief, ending up dead by hanging.40 This did not, however, provide any guidance on agreements between non-fraudulent insolvents and their creditors. Perhaps that is the reason why Charles included a further comment on compositions in his subsequent 1544 ordinance. Article 34 states that it is strictly forbidden to force any creditor to join a majority composition that would acquit the insolvent of part of his debts, or provide a (delayed) date of repayment without proper securities.41 This did not, therefore, completely rule out the conclusion of compositions between non-fraudulent insolvents and their creditors, as long as the latter collectively supported the proposed agreement.
From the second half of the sixteenth century, such extra-judicial compositions became increasingly popular. In 1608, the city of Antwerp officially embraced their conclusion in court.42 Even though the States of Holland had resolved to uphold the aforementioned imperial ordinances in 1596, subsequent decades saw increasing numbers of cities in the Dutch Republic, too, introduce the possibility of concluding majority compositions.43 At first, these compositions were concluded before public notaries, but from the second half of the seventeenth century governmental institutions such as the Amsterdam Desolate Boedelskamer increasingly institutionalized this practice.44 To what extent were these developments in Dutch courts reflected in legal scholarship?
When discussing compositions, it is important to differentiate between agreements that only provide for a restructured repayment scheme of the debt as a whole, or that actually provide debt relief by acquitting the insolvent of (part of) his debts. In Roman law, these variants appear as dilatio and remissio, respectively.45
The remissio came into existence in the second century ad, but was very limited in scope. It only applied to the heir of an insolvent estate. If creditors holding the majority of debts agreed, the praetor could grant him a remission of any remaining debts after the execution of the inherited estate. No judicial intervention was required if all creditors agreed. According to Dalhuisen, the absence of guilt does not appear to have been required for a remissio.46 The fact that a remission could be granted even contrary to the wish of a minority of creditors presented a breach of the basic rules of contract law – that a contractor could only contract for himself –, as represented by the medieval maxim, Quod omnes tangit, ab omnibus debere approbari. The glossators solved this problem by arguing that in the case of a deceased debtor, granting the remissio would present an advantage even for the dissenting minority of creditors. Rather than resulting in the complete absence of a debtor when the heir would refuse to accept his insolvent inheritance, forcing the unwilling minority of creditors to accept the remissio would mean that at least part of the collective debts could be repaid.47
Well into the seventeenth century, it remained commonly accepted among legal scholars that it was impossible to apply this reasoning to a living debtor. This ran contrary, however, to contemporary legal practice. In late-medieval Italian city states, majority compositions started to be applied in court to cases with fugitive insolvents – equally absent as the deceased debtor from Roman law.48 The Castilian Siete Partidas explicitly allowed majority compositions for a living, non-absent insolvent, even without the involvement of a judge.49 As discussed above, notwithstanding Charles V’s prohibitions, the Low Countries subsequently also saw the rise of majority compositions in practice. Wolfgang Forster argues that by the late seventeenth century they should be regarded as an integral part of European ius commune.50 Even though the rules for a majority binding a minority of creditors can be traced to the Roman remissio, we should be careful not to interpret all medieval or early modern instances of majority compositions as resulting in a legal discharge of debts. At least in the Dutch Republic, such agreements in practice usually concerned a dilatio, instead.
The dilatio was introduced in the late fourth century ad, and originally seems to have been regarded as an alternative to cessio bonorum. Upon the consent of the majority of the creditors of a non-fraudulent insolvent, the Emperor could grant a five-year deferral of payment. It has been argued, however, that a dilatio could also be granted as an exclusive imperial favour, without taking the wish of the creditors into account.51 In the early modern German territories, this form of moratorium was known as quinquennell, after the quinquennale spatium in C 7.71.8. While letters providing a dilatio for shorter periods, such as one or two years, were also issued, deferrals for more than five years were regarded as impossible.52 In his 1548 Reichspolizeiordnung, Charles V ordered that any moratorium in the Empire could only be provided after an investigation by local authorities had confirmed the non-fraudulent nature of the insolvency.53 In the Dutch Republic, five-year deferrals were likewise granted as ‘letters of inductie or respijt’ after a local investigation. The aforementioned shorter deferrals appear closer in nature to the much-used legal benefice of seureté de corps, which was granted for (multiple) consecutive six-month periods.54
Interestingly, in practice most long-term deferrals – surpassing the scope of seureté de corps – in the seventeenth-century Dutch Republic were not directly granted by the sovereign, but within the context of compositions. A qualitative study of the contents of ninety compositions that I conducted as part of my dissertation research reveals that, in seventeenth-century Amsterdam, this type of agreement (1) usually provided for the delayed repayment of (2) part of the debt in (3) a number of instalments (4) secured by guarantors, and, finally (5) if the insolvent fulfilled these provisions, his creditors could no longer proceed against him in court for the repayment of the remainder of the debts, even though (6) it rested upon his conscience to repay them faithfully if God allowed him to once more arrive at fatter fortune in business. This means that Dutch akkoorden, even if after 1647 gaining their effect in court after the consent (signing) of a majority of the creditors, in a procedure reminiscent of the Roman remissio, usually did not provide for an actual acquittal of the remaining debts, but rather enforced a restructured repayment that in practice seems closer to the dilatio.55
This does not mean that the introduction of majority compositions was without its effect for insolvents or the economy at large. The preamble to the 1649 ordinance of the States of Zeeland introducing majority compositions for that province, for instance, was motivated by the fact that often a single small creditor would adamantly refuse to support a proposed composition. This resulted in unnecessary financial losses for both insolvents and their creditors.56 The introduction of majority compositions, supported by objective and transparent procedures such as those administered by the Amsterdam Desolate Boedelskamer, allowed for the creation of a trust culture in which businesses could more easily be revived and former insolvents could be enabled to once more contribute to society.57 What was Grotius’s view on what is arguably the most important innovation in seventeenth-century Holland’s insolvency legislation? To what extent could his work have inspired these developments in legal practice?
Intriguingly, Grotius fails to mention the akkoord at all in the Inleidinge, written during his imprisonment in Loevestein (printed in 1631). In section iii.41 he does state, though, that it is forbidden to acquit debts as a whole or in part, as well as to allow their delayed repayment by fraudulent bankrupts, whom he calls achter-uit-vaerders (‘reversers’). Such measures, according to Grotius, ‘are void, harming the common good’.58 This reflects a rather strict interpretation of Charles V’s ordinances, and does not present any novel perspectives on the topic of compositions. For innocent insolvents, Grotius only explicitly mentions cessie van goede as a legal solution to get out of their financial trouble. In contemporary practice, however, as discussed above, numerous Dutch insolvents concluded compositions with their creditors that usually covered only part of their debts.
The contradiction between theory and practice that appears in Grotius’s Inleidinge seems even more interesting when examining De iure belli ac pacis (ibp, 1625) – written later, even if it appeared in print first. Here, notwithstanding its primary focus on international law, Grotius also includes some remarks that might shed a different and more nuanced perspective on his position towards majority compositions. In order to define his concept of ‘just war’, he works out the concept of ius, using the Roman law distinction also developed in the Inleidinge: persons, things, and actions. Or, as reformulated in ibp: power, ownership, and contractual rights.59 In this discussion of ‘legal right strictly so called’, Grotius points out that ‘for the common good the king has a right of property over the possessions of individuals greater than that of the individual owners’. He goes on to argue that ‘each citizen is under a greater pecuniary obligation to the state, for the meeting of public needs, than to a private creditor’.60 Grotius repeats this point in a later passage of ibp, in a context ‘to secure peace’. He argues that ‘the property of subjects belongs to the state under the right of eminent domain’, therefore, the state can ‘use […] and even destroy it or alienate it, not only in case of direct need […] but also for the sake of the public advantage’. To this public advantage, ‘private advantage should yield’. He does limit the impact of this power, however, by stating that such losses should be recompensed ‘at public expense’.61 From these passages it appears that Grotius did not categorically oppose the idea of a state-enforced delayed repayment of debts, as long as this was (1) executed by the authorities (2) for the common good.
To what extent can we link this more liberal view evident in ibp with contemporary scholarship focusing on insolvency from similar theological and natural law perspectives? Wim Decock has shown how early modern scholastics generally recognized that impoverished debtors should be granted at least temporal relief from repayment, even though they were very reluctant to accept actual debt relief in the form of remissions. The latter could only be allowed if meeting strict criteria of voluntary consent.62 A decade before Grotius published ibp, the minister Daniel Souterius (1571–1634) was the first Dutch author to publish a text dedicated to the topic of insolvency.63 His Praxis Banccae-ruptorum, mainly focused on the evil actions of fraudulent bankrupts and how to eradicate them from society, also works out a distinction between innocent and fraudulent debtors. According to Souterius, it would be inhumane if those ‘who by casualties have their substance wasted’ would have to take the blame for their misfortune and be punished. It would run ‘contrary to natural equity’ if ‘out of hatred to the guilty, one would lay blame on the guiltless’.64 Considering the fact that Grotius, too, in his Inleidinge only explicitly forbade compositions with fraudulent bankrupts, this strengthens the idea that he and his close contemporaries would not oppose the concept of a majority-imposed dilatio for bona fide insolvents.
Given Grotius’s rather limited statements on compositions in general in the Inleidinge, however, this raises the question to what extent he envisaged such principles to be applicable to his own society. In order to get closer to Grotius’s opinion on what could be allowed when dealing with insolvency as a legal problem, we need to briefly examine his statements on the two related issues mentioned above: first, what constitutes the sovereign and to what extent it could lawfully intervene in private property rights, and second, what constitutes the common good.
As Hans Blom argues, Grotius had an instrumental view on sovereignty. In ibp, he seeks to justify government’s superior power over its citizens, to work out the actual wielding of sovereignty in day-to-day political practice. For Grotius, the ultimate legitimization of institutions is historical or contingent. Society or civitas exists to promote a peaceful life in which the common interest is served. To attain this, societies should stick to their original constitution, and citizens should obey the rightful supreme power. Man is born free, yet always lives under a form of authority, government, born out of a necessity for order. This does not mean that citizens’ rights can be neglected, or that no changes in governmental arrangements can be made if these would better serve the original principles. Citizens’ natural right of resistance is limited, however, to correcting their government by remonstrance and argumentation. Grotius’s concept of sovereignty in ibp is basically a theory of legitimacy, the legitimate exercise of superior political power. In practice, sovereignty, the right of ruling, can be wielded by an individual king or prince, but also by a combination of different individuals or institutions such as parliaments. When performing such roles, these magistrates or authorities become part of sovereignty itself.65 In the seventeenth-century Dutch Republic, the sovereign authorities were formed by the Staten – the representatives of the estates of each individual province, in Grotius’s case the States of Holland and West Frisia. In 1618, he stated that the latter were his ‘absolute sovereign’, the Estates General exercising nothing more than a limited, delegated sovereignty.66
While sovereignty is power, a claim to property, to obligation, and it could be used to interfere with citizens’ property rights, this was in principle only allowed to further a just cause.67 It is interesting to compare these ideas to Grotius’s view on what constitutes the ‘common good’. Humans, Grotius believed, were able to know and take into account the common good, defined as the correct way to serve and approach God, thanks to the innate capacities of reason embedded in their ‘soul’ or ‘mind’. This would allow them to move beyond what was required by enforceable or ‘expletive’ justice, also taking distributive or ‘attributive’ justice into account: a broader, Aristotelian sense of justice considering the long-term good of society as a whole, respecting the needs of others as well as one’s strictly personal benefit.68 In ibp, therefore, a ‘common good’ is generally regarded as superior to a ‘private right’.69 Grotius ‘developed a theory of ‘responsible government’ [in this work,] precisely by re-conceiving natural justice to include distributive justice’. Private subjective rights, such as ownership (dominium), should always be regarded as embedded in natural law and justice.70 Even though this vision was voiced in a context that predominantly concerns the relations between states in matters of war and peace, the aforementioned fragments of ibp concerning the circumstances in which a (forced) public restructuring of private debts could be allowed – even preferred – for the common good clearly match up with this general theory.71
The States of Holland were the superior authority in Grotius’s days, functioning as a sovereign just like the Roman Emperor had been. Both Emperor and States fulfilled similar functions in the legal treatment of insolvency. Through the High Court of Holland and the urban courts to which it delegated its investigatory powers on a regular basis, payment deferrals or a cessio bonorum were granted. These same urban courts also enforced compositions supported by a majority of the creditors based upon a delegated power in the form of a local ordinance, officially approved and published by the States of Holland. It would, therefore, be a small step for Grotius to accept these public courts’ right to enforce the restructuring of debts in insolvent estates without the consent of a minority of the creditors, whose private property rights were thereby subjected to the common good. While a remissio would likely have been a step too far for both Grotius and his contemporaries, the fact that majority compositions in the seventeenth-century Dutch Republic were much closer in nature to the Roman dilatio, never officially resulting in a discharge of debts, should have made them acceptable. It can be argued, therefore, that Grotius implicitly created or at least displays legal space for an important seventeenth-century innovation: the majority composition.
4 Conclusion
Hugo Grotius’s contributions to early modern Dutch insolvency legislation can be interpreted as contradicting, even if implicitly visionary. The Inleidinge does not reflect any original statement on insolvency legislation. Here, Grotius is most extensive in his treatment of cessie van goede, but if and where it diverges from Charles V’s laws, this is in a conservative rather than innovative fashion, presenting a somewhat more strict and punitive interpretation of the cessie procedure than most of his contemporaries. Compositions are generally neglected. A different image, however, arises when we combine this with his later works such as ibp. While Grotius nearly neglects compositions in his Inleidinge, his later work strongly suggests the existence of legal space for a sovereign-enforced dilatio, with or against the consent of the majority of the creditors. It is unclear, however, if and to what extent these ideas might have influenced the introduction of majority compositions in Amsterdam and the Dutch Republic from 1647 onwards. Even though Grotius never explicitly applied his ideas about sovereignty and the common good to this specific subfield of legal practice, they nevertheless present an interesting perspective on what might have been his view on contemporary insolvency legislation.
Acknowledgements
I would like to thank an anonymous reviewer as well as my Tilburg colleagues for their helpful comments, especially Dr. Ville Kari and Prof. Dr. Dave De ruysscher.
Hugo Grotius, Inleidinge tot de Hollandsche Rechts-Geleerdheid, ed. by F. Dovring, H.F.W.D. Fischer, and E.M. Meijers, 2nd ed. (Leiden: Universitaire Pers Leiden, 1965). See also: Wouter Druwé, ‘Grotius’ Introduction to Hollandic Jurisprudence’, in The Cambridge Companion to Hugo Grotius, ed. by Randall Lesaffer and Janne E. Nijman (Cambridge: Cambridge University Press, 2021), pp. 409–32.
Maurits den Hollander, Stay of Execution. Institutions and Insolvency Legislation in Amsterdam, 1578–1700 (doctoral dissertation, Tilburg University, 2021); Maurits den Hollander, ‘Restoring Trust and Credit through Innovative Governance in 17th-Century Amsterdam’, Tijdschrift voor Rechtsgeschiedenis 89, 3–4 (2021), 481–99.
J.A. Ankum, De Geschiedenis der ‘Actio Pauliana’ (Zwolle: Tjeenk Willink, 1962); Dave De ruysscher and Ilya Kotlyar, ‘Local Traditions v. Academic Law: Collateral Rights on Movables in Holland (c. 1300-c. 1700)’, Tijdschrift voor Rechtsgeschiedenis 86, 3–4 (2019), 365–403.
Den Hollander, Stay of Execution. In the year 1700, for instance, 83 applications for cessie were submitted to the Amsterdam Desolate Boedelskamer. In that same year, only 5 compositions were concluded. Based upon some preliminary observations, further research in the archives of the High Court of Holland, Zeeland and West-Friesland will most likely confirm that the image rising from the Amsterdam data will not radically differ from Holland as a whole.
Christel Verhas, ‘De beginjaren van de Hoge Raad van Holland, Zeeland en West-Friesland’ (doctoral dissertation, Den Haag, Universiteit Leiden, 1997), pp. 149–52; Maria-Charlotte le Bailly and Christel Verhas, Hoge Raad van Holland, Zeeland en West-Friesland (1582–1795): de hoofdlijnen van het procederen in civiele zaken voor de Hoge Raad zowel in eerste instantie als in hoger beroep (Hilversum: Verloren, 2006), pp. 21–22.
Gerard Rooseboom, ed., Recueil van verscheyde keuren, en costumen; midtsgaders maniere van procederen binnen de stadt Amsterdam, 2nd ed. (Amsterdam: Jan Hendricks, 1656), p. 307 (art. 11); Hermanus Noordkerk, ed., Handvesten; ofte Privilegien ende octroyen: Mitsgaders willekeuren, costuimen, ordonnantien en handelingen der stad Amstelredam, vol. 2 (Amsterdam: Hendrik van Waesberge, Salomon en Petrus Schouten, 1748), pp. 689–90 (art. 38).
Den Hollander, Stay of Execution, esp. pp. 203–9.
Grotius, Inleidinge, pp. 327–9; iii.51 (my translation).
Simon van Leeuwen, Het Rooms-Hollands-regt, waar in de Roomse wetten, met het huydendaagse Neerlands regt, in alles dat tot de dagelijkse onderhouding kan dienen, met een bysondre kortheit, so wel in de vaste regts-stoffen, als in de manier van regts-vordering over een gebragt werden (Leiden/ Rotterdam: Hackens, 1664), pp. 444–5, iv.41.1; Willem van Alphen, Nieuw verbeterde en vermeerderde papegay, ofte Formulier-boeck van alderhande requestē, mandamenten, conclusien &c, ghelijck die ghebruyckt ende gepractiseert werden voor de respectieve hoven van Iustitie in Hollandt (Den Haag: Johannes Verhoeve, 1649), pp. 161–6; Gerard van Wassenaer, Practijk Judicieel ofte Instructie Op de forme en maniere van Procederen voor Hoven en Rechtbanken, vol. 1 (Utrecht: Gijsbert van Zijll, 1669), pp. 244–56.
C. 7.71; D. 42.3; Wolfgang Forster, Konkurs als Verfahren: Francisco Salgado de Somoza in der Geschichte des Insolvenzrechts (Köln: Böhlau, 2009), pp. 89–92.
Véronique Demars-Sion, ‘La réglementation de la cession de biens dans les Pays-Bas méridionaux: copie ou modèle des solutions francaises?’, in Commerce et droit, ed. Jean-Marie Cauchies and Serge Dauchy (Bruxelles: Facultes Universitaires Saint-Louis Bruxelles, 1996), pp. 131–154, at pp. 132–4; Philippe Godding, Le droit privé dans les Pays-Bas méridionaux du 12e au 18e siècle (Bruxelles: Académie Royale de Belgique, 1987), pp. 218–9; Dave De ruysscher, ‘Antwerp Commercial Legislation in Amsterdam in the 17th Century: Legal Transplant or Jumping Board?,’ Tijdschrift voor Rechtsgeschiedenis 77 (2009), 459–79.
J. Lameere, ed., Recueil des Ordonnances des Pays-Bas. Deuxème Série 1506–1700, vol. iii (Brussels: J. Goemaere, 1902), pp. 549–50 [= ropb].
Demars-Sion, ‘La réglementation de la cession de biens’, pp. 137–9.
Dave De ruysscher, ‘Debt Recovery and Debt Adjustment: Assessing Institutional Change in Antwerp (ca. 1490-ca. 1560)’ (World Economic History Conference, Kyoto, 2015), p. 11: <https://www.researchgate.net/publication/301206654_Debt_recovery_and_debt_adjustment_assessing_institutional_change_in_Antwerp_ca_1490-ca_1560>.
Demars-Sion, ‘La réglementation de la cession de biens’, pp. 147–50.
J. Lameere and H. Simont, eds., Recueil des Ordonnances des Pays-Bas. Deuxème Série 1506–1700, vol. iv (Brussels: J. Goemaere, 1907), pp. 325–9. A Dutch translation of this French original was re-issued for the County of Holland on 10 May 1544: J. Lameere and H. Simont, eds., Recueil des Ordonnances des Pays-Bas. Deuxème Série 1506–1700, vol. V (Brussels: J. Goemaere, 1910), pp. 52–6. Grotius refers to this ‘placcaet 1544’ twice in his Lund annotations to the Inleidinge: Grotius, Inleidinge, pp. 328–29; iii.51.3 and 8.
Demars-Sion, ‘La réglementation de la cession de biens’, p. 151.
Frans van Mieris, ed., Bundel van Handvesten, Privilegiën en Octroyen, Rechten en Vryheden midsgaders Ordonnantiën, Resolutiën, Plakkaaten, Verbintenissen, Costumen, Instructiën, en Handelingen der Stad Leyden (Leiden: Abraham Kallewier, 1759), pp. 193–4.
Grotius, Inleidinge tot de Hollandsche Rechts-Geleerdheid, ed. Sybrand J. Fockema Andreae and L.J. van Apeldoorn, vol. ii (Arnhem: S. Gouda Quint, 1939), p. 332.
James Q. Whitman, ‘The Moral Menace of Roman Law and the Making of Commerce: Some Dutch Evidence’, The Yale Law Journal 105, 7 (1995), 1841–1889 (p. 1878).
Grotius, Inleidinge, ed. Fockema Andreae and Van Apeldoorn, ii, p. 332, referring to: Groot Dingboek, f. 179.
On this broader topic in general, see: Den Hollander, Stay of Execution, pp. 87–97.
Lameere and Simont, ropb, 1910, V, p. 55; ordinance 1544 art. 35.
Grotius, Inleidinge, p. 327; iii.51.3.
Lameere and Simont, ropb, 1910, V, p. 55; ordinance 1544 art. 30.
Grotius, Inleidinge, p. 328; iii.51.5.
Specifically section x.x.1–3, ‘de cession de biens’, which can (indeed) be found in: Jean Papon, Recueil d’arrestz notables des courts souveraines de France (Paris: Gilles Gourbin, 1563), p. 231.
Demars-Sion, ‘La réglementation de la cession de biens’, p. 153; Grotius, Inleidinge, p. 328; iii.51.6.
For this passage, see also: Den Hollander, Stay of Execution, pp. 203–4.
Lameere and Simont, ropb, 1910, V, pp. 55–6; art. 36.
Grotius, Inleidinge, p. 328; iii.51.4.
Van Wassenaer, Practijk Judicieel, 1, p. 249; ii.18.22. On this broader topic, see also: Wouter Druwé, ‘Dignity and Cessio Bonorum in Early-Modern Dutch Learned Legal Literature’, Max Planck Institut for European Legal History Research Paper Series 2016, no. 8 (2016), pp. 18–19.
These ideas largely seem to be based on late medieval Italian scholarship: Walter Pakter, ‘The Origins of Bankruptcy in Medieval Canon and Roman Law’, in Proceedings of the Seventh International Congress of Medieval Canon Law, ed. by Peter Linehan (Vatican City: Bibliotheca Apostolica, 1988), pp. 494–96.
Leo Adriaenssen, ‘De sleutel op het graf gelegd. Een oud rechtsritueel uit de doeken gedaan’, Brabants Heem 49 (1997), 136–43; Maurits van Coppenolle, ‘Een verdwenen uitvaartgebruik. De sleutels op den put leggen’, Biekorf 50 (1949), 3–7.
Grotius, Inleidinge, p. 83; ii.11.18–19. See also: Grotius, Inleidinge, ed. Fockema Andreae and Van Apeldoorn, ii, p. 142.
Antonie Cornelis Lagerwey, Het Accoord van den Gefailleerde met zijne Schuldeisers (Utrecht: T. de Bruyn, 1862), pp. 72–3.
Den Hollander, ‘Restoring Trust and Credit’.
Den Hollander, Stay of Execution, pp. 158–66.
Maurits den Hollander, ‘Failliet in de Republiek. Lokale ordonnanties over de omgang met desolate boedels, circa 1643–1713’, Pro Memorie 24, 2 (2022), 190–217.
Lameere and Simont, ropb, 1907, iv, pp. 233–4.
Lameere and Simont, ropb, 1910, V, p. 55.
Dave De ruysscher, ‘Naer het Romeinsch recht alsmede den stiel mercantiel’: handel en recht in de Antwerpse rechtbank (16de-17de eeuw) (Kortrijk-Heule: uga, 2009), pp. 329–31.
Lagerwey, Accoord, 60; Den Hollander, “Failliet in de Republiek.”
Den Hollander, Stay of Execution, pp. 139–78.
On the dilatio, see: C.7.71.8 and C.1.19.2–4; on the remissio, see: D.2.14.7.17–19; D.2.14.8–10; D.17.1.58.1; D.42.9.23. These references were obtained from: Jan Hendrik Dalhuisen, Compositions in Bankruptcy. A Comparative Study of the Laws of the E.E.C. Countries, England and the U.S.A. (Leiden: A.W. Sijthoff, 1968), p. 10.
D 2.14.7.17, 19; Dalhuisen, Compositions in Bankruptcy, pp. 9–11.
Dalhuisen, Compositions, p. 10; Forster, Konkurs als Verfahren, pp. 212–3.
See, for instance: Raphaelis Fulgosii placentini, Pandectarum Commentariorum (Lyon: Servarius, 1554), on D. 4.14.7.19; Dalhuisen, Compositions, p. 20, referring to: Matthaeus de Afflictis, Decisiones Neapolitani, p. 288.
Forster, Konkurs, p. 213, referring to: sp 1555 v.15.6.
Ibid., pp. 213–8.
Dalhuisen, Compositions, p. 9 and pp. 11–2.
Forster, Konkurs, p. 211.
Ibid., p. 211.
Den Hollander, Stay of Execution, pp. 118–22; Grotius, Inleidinge, ed. Fockema Andreae and Van Apeldoorn, ii, pp. 333–6.
Den Hollander, Stay of Execution, esp. pp. 152–154. The compositions studied can be found in: Gemeente Amsterdam Stadsarchief, 5072: Archief van de Commissarissen van de Desolate Boedelkamer, 1.2.8.1.
Cornelis Cau, Groot-placaetboek, vervattende de placaten, ordonnantien ende edicten van de Staten Generaal der Verenigde Nederlanden, vol. 1 (Den Haag: Algemeen Rijksarchief, 1655), pp. 407–10. See also: Den Hollander, ‘Failliet in de Republiek’, esp. p. 198.
Den Hollander, ‘Restoring Trust and Credit’.
Grotius, Inleidinge, p. 319; iii.41.11. Earlier in this work, Grotius more elaborately defined ‘achter uit-vaerders’ or ‘banck-breeckers’ (marginal annotation: ‘B. Bancquerotiers’) as ‘those who hide or run off leaving behind unpaid debts’: Grotius, p. 62; ii.5.3.
Hans Blom, ‘Sovereignty in Grotius’, in Early Modern Sovereignties. Theory and Practice of a Burgeoning Concept in the Netherlands, ed. by Erik De Bom, Randall Lesaffer, and Werner Thomas (Leiden: Brill, 2021), pp. 15–47, at pp. 34–35; Hugo Grotius, De Jure Belli Ac Pacis Libri Tres, ed. trans. by Francis W. Kelsey (Oxford: Clarendon Press, 1925), pp. 35–36; I.1.5–6.
Grotius, De Jure Belli ac Pacis Libri Tres, p. 36; I.1.6.
Ibid., p. 807; iii.20.7.
Wim Decock, ‘Law, Religion, and Debt Relief: Balancing above the “Abyss of Despair” in Early Modern Canon Law and Theology’, American Journal of Legal History 57:2 (2017), 125–41.
On Souterius: Joost Hengstmengel and Henri Krop, ‘De gereformeerde religie en economie in de vroege republiek. Daniël Souterius (1571–1634) over de plichten van kooplieden’, Documentatieblad Nadere Reformatie 42, 1 (2018), 2–22.
Daniel Souterius, Praxis Banccaeruptorum (Leiden: Godefridus Basson, 1615), pp. 4–9. See also: Maurits den Hollander, ‘Debt and Insolvency in Early Modern Amsterdam: Religious Influences on the Desolate Boedelskamer?’, under review.
Blom, ‘Sovereignty in Grotius’, p. 15.
Simon Groenveld, ‘North-Netherlandish Sovereigns at Work in the First Half of the Seventeenth Century’, in: Early Modern Sovereignties. Theory and Practice of a Burgeoning Concept in the Netherlands, ed. by Erik De Bom, Randall Lesaffer, and Werner Thomas (Leiden: Brill, 2021), pp. 264–287, at p. 280.
Blom, ‘Sovereignty in Grotius’, p. 35.
Janne E. Nijman, ‘Grotius’ ‘Rule of Law’ and the Human Sense of Justice. An Afterword to Martii Koskenniemi’s Forward’, The European Journal of International Law 30, 4 (2019) 1105–14, at p. 1109.
Grotius, De Jure Belli ac Pacis Libri Tres, p. 36; I.1.6.
Nijman, ‘Grotius’ ‘Rule of Law’’, pp. 1110–1.
On the concept of well-functioning insolvency legislation as a sovereign intervention in private property rights for the collective interest, see: Jérôme Sgard, ‘Bankruptcy Laws: East versus West’, in Law and Long-Term Economic Change: A Eurasian Perspective, ed. by Debin Ma and Jan Luiten van Zanden (Stanford: Stanford University Press, 2011), pp. 198–220.