Privileges and Mortgages — General Principles

Titre XXXII — Of Privileges and Mortgages (Articles 1429–1434)

General Provisions

Titre XXXII is one of the most consequential sections of the entire Code Henry. It establishes the system by which creditors gain priority over one another — the rules that determine who gets paid first when a debtor's assets are insufficient to satisfy all claims.

Article 1429 sets the foundation: whoever has personally obligated themselves must fulfill their commitment. All their movable and immovable property, present and future, is affected and may be sold if they default. The proceeds are distributed among creditors by contribution — unless some creditors are entitled to preference.

Article 1430 identifies the two categories of preferred creditors: the privileged (privilégiés) and the hypothecary (hypothécaires). Privilege arises from the quality of the debt; hypothèque arises from security taken on immovable property.

Chapter I: Of Privileges

Article 1431 defines privilege: it is the quality of the debt that gives the creditor the right to be preferred over all others — even over hypothecary creditors. This is a powerful statement: privilege trumps mortgage.

Article 1432 establishes ranking among the privileged: the quality of the privilege determines preference. In case of equal quality, creditors are paid concurrently (proportionally).

Article 1433 gives absolute priority to the state: the rights of the treasury and state domains are preferred over all other claims. The King's revenue came first — reflecting the fiscal necessities of a kingdom that needed reliable revenue to maintain its independence.

Article 1434 notes that privileges apply to both movables and immovables.