398 HARVARD LAW REVIEW, repaid within the limit fixed for the total payment. But the repay- ment does not always operate here in a normal manner. For different reasons the time may be advanced. For instance, the borrower may fail, or possibly desire to convert his loan. Let us then examine these two cases of anticipated repayment, and consider rapidly what is the right of the holder of the lottery bond in each of these hypotheses. a. Failure. — Some writers in France assert that it is essential in such cases to know the beneficiaries of the lots. Consequently, it is required to proceed immediately to all of the drawings. The winners will appear in the failure for the sums that the lot would have given them, and will obtain at least a dividend on the lots due them. This solution has been justly criticised. After the failure no such proceeding should be possible as the assignment of prizes by lot. The failure arrests everything. It fixes the situa- tion of the creditors m statu quo. The failure, it might be said, acts as a veritable crystallization. No case of inequality should arise among the creditors after the declaration of the failure.^ The future drawings could not then be arranged on the day of the failure. It would appear that in all such cases the bondholders would have the right to claim damages. By his fault the borrower fails in an obligation to be performed, which he had assumed, — his obligation to arrange drawings by lot. This obligation un- executed sounds in damages according to common law.^ On the arrangement of these damages fresh difficulties arise, which, how- ever, we may not consider here. b. Conversion. — This is a very grave question, and in France has just given rise to a notorious lawsuit still pending before the Court of Appeal.^ Is it permissible for the borrower who has issued bonds to assume the right to impose on his bondholders anticipated payment in order to liquidate his debt? Most of the courts and text-writers answer in the negative. Others think that the borrower enjoys this privilege. If this solution holds, however, it must be admitted that the existence of lottery chances attached to the bonds places the borrower in a singular embarrassment. In short, certain bonds, to be determined by lot extending through a number of years, should obtain a prize. Now it is self-evident 1 Art. 445, Code de Commerce Fran9ais. 2 Art. 1 142 du Code Civil Fraii9ais. 3 Compagnie d'Assurances generales v. Compagnie des Chemins de Far de I'Estj Civil Court of the Seine, ist Chamber, i8th of July, 1895.
