civil law courts exercising commercial jurisdiction in other parts of the Republic.

In synthesis, this is what the leading Argentine writers have said about the present relation of the civil and commercial law. Segovia has said that the civil and the commercial law are sisters. He believes in a fusion of the two, especially as regards obligations and contracts, as well as bankruptcy and insolvency. Obarrio has said that the civil law is the general rule and commercial law is the exception to the rule. Siburu admits the autonomy of these two branches of the law, which together form the great mass of substantive law. Malagarriga has said that the autonomy of these two branches of the law cannot be doubted, but he points out that there is an interdependency between the two, adding that commercial law lives in close relation with the civil law for what it contains and for what it does not contain-for what it contains, because it governs certain legal institutions which are unique; for what it does not contain, because the provisions of the civil law are applicable to commercial controversies for which there is no solution in the provisions of the commercial law as embodied in the Code of Commerce.

CIVIL AND COMMERCIAL LAW

Under the Roman system of law the principles of the jus civile, later liberalized by those of the jus gentium, were generally applied without distinction being made between merchants and nonmerchants or between commercial and noncommercial transactions. These principles, which had proved to be so splendidly suited to the necessities of the era in which they were evolved, did not continue in their evolution, and in the Middle Ages were found to be inadequate for the new conditions which had sprung from the great commerce developed by the powerful Italian cities of those days. To remedy such a situation the merchants of those cities organized into guilds, which had corporate right of legislation with respect to their own members as well as the right to exercise jurisdiction over them. Under the auspices of these guilds well-defined rules of commercial law were conceived and enacted and became binding upon merchants as a class. With the unification of the merchant guilds uniformity in these rules was generally attained. Disseminated by international commerce they became well established in all the main trading nations. In the course of time this group of commercial laws received its sanction from the State, but as such was made applicable only to merchants as a class, while in all other cases the general principles of the civil law were applied. The division between the commercial and the civil law existing now in the juridical systems of practically all the nations of the civilized world may be traced to the above-outlined facts.

In England, before the time of Lord Mansfield, commercial law existed as an independent body of law administered by commercial tribunals. However, under the initiative of Lord Mansfield this body of law, commonly known in England as the "law merchant," was absorbed by the common law and administered by the common-law courts. This division then disappeared from the English juridical system and does not exist at the present time in countries such as the United States of America whose juridical systems have been derived from that of England.

MERCHANTS AND THEIR COMMERCIAL ACTS

As defined by article 1 of the Code of Commerce, merchants are all individuals who, having legal capacity to contract, make a habitual profession of engaging for their own account in commercial

acts.

Under article 8 of the Code of Commerce the following are commercial acts:

(1) Every acquisition for a valuable consideration of a movable thing (personal property) or right in it, in order to profit by its alienation, whether it be in the same state in which it was acquired or after giving it another form of greater or less value.

(2) The transfer to which reference is made in the foregoing section. (3) Every operation of exchange, banking, brokerage, or auction.

(4) Every negotiation of bills of exchange or local bills, checks, or any other kind of endorsable paper, or to bearer.

(5) Enterprises of factories, commissions, commercial powers of attorney, deposits or transportation of merchandise or persons by water or by land.

(6) Insurance (of all kinds) and anonymous societies (corporations), whatever may be their object.

(7) Charterage, construction, purchase or sale of ships, equipment, provisions and anything relative to maritime commerce.

(8) Operations of factors, bookkeepers, and other employees of merchants insofar as they relate to the business of the merchant on whom they depend. (9) Agreements as to salaries of clerks and other employees of merchants. (10) Letters of credit, bonds, pledges, and other accessories of a commercial operation.

(11) Other acts specifically legislated in this Code.

PROVISIONS OF THE CODE OF COMMERCE

The provisions of the Code of Commerce govern exclusively commercial acts. Acts of merchants will be presumed to be commercial. The status of merchant will not be presumed and must be proven. If the issues of a lawsuit should devolve upon a commercial act, these will be decided by the commercial law irrespective of the fact of whether one or all of the parties intervening in the transaction does not possess the status of merchant. Furthermore, under the provisions of article 7 of the Code of Commerce, commercial law will be applied when the issues of a lawsuit should devolve upon an act which is commercial to only one or more of the parties involved.

MATRICULATION OF MERCHANTS

As stated before, a person acquires the status of merchant when he makes a profession of habitually engaging in commercial acts for his own account, possessing at the same time the required legal capacity to contract. Under the provisions of article 33 of the Code of Commerce, those who make a profession of habitually engaging in commerce incur the obligation of fulfilling all the requirements established by the commercial law. Among these, article 33 enumerates the following: (a) The registration in a public registry of the matriculation and of all other documents required by law to be registered; (b) the duty of pursuing a uniform system of bookkeeping, having the necessary books to that end; (c) the preservation of correspondence which relates to the business, as well as all books of account; and (d) the duty to render accounts as required by the law.

Persons who have acquired the status of merchant, under the definition given before, must matriculate in the tribunal of commerce of their domicile, and in the absence thereof matriculate in the respective court of the justice of the peace in order to avail themselves of important privileges which are offered by the provisions of the Code of Commerce to those merchants who have fulfilled this requirement. This matriculation or enrollment does not of itself confer upon a person the status of a merchant. It will, however, establish the presumption that the matriculated person is a merchant, a presumption which may be rebutted by proof. At the same time, a person must not necessarily be matriculated to acquire the status of merchant, as this may be acquired in the manner previously discussed. Ín the absence of matriculation or enrollment, the burden of proving that the status of merchant has been acquired will be upon the person claiming such status.

Matriculation enables third persons to ascertain from a public record certain essential facts concerning the business of those who profess to engage in commerce. The law regards this step as most important, judging from the penalties which are imposed for failure to effect it. The penalties which have been deemed too severe by leading Argentine jurists are as follows:

Under articles 25 and 26 of the Code of Commerce merchants who have not matriculated will not be able to take advantage in case of litigation of the probative force of their books, even though these may have been kept in the manner prescribed by law. Furthermore, the right of applying for composition of creditors, the right to obtain rehabilitation or discharge in bankruptcy, and the right of exercising the functions of syndics in bankruptcies will all be denied to them.

In order that the matriculation may be effective it must be made at the commencement of the business. Petition must be made to the proper tribunal of commerce or to the court of the justice of the peace and must contain (1) in the case of an individual, name, status, and nationality, and in the case of a company, the names of the different members, as well as the name of the company; (2) a statement of the nature of the trade or business; (3) the place or address of the establishment or office; and (4) the name of the manager or other employee placed at the head of the business, if any.

The court, on finding that the petitioner fulfilled the requisites imposed by the law in order to be a merchant, will order gratuitously the registration of matriculation in the public register of commerce.

PUBLIC REGISTER OF COMMERCE

The public register of commerce, hereinafter referred to as the commercial registry", is a registry which is kept in all the commercial courts, in charge of the respective secretary, where the matriculation of merchants must be entered, as well as organization documents of companies, commercial powers of attorney, and certain agreements concerning the marital status of individual merchants, such as the marriage settlements which merchants execute or have executed at the time of devoting themselves to commerce, and the notarial instruments made in cases of restitutions of the wife's property and the

139898°-35-2

documents of title to the wife's property, judgments of divorce or separation of property with indications of the property or sums which the husband is bound to deliver, authorization granted to married women to engage in commerce, as well as their revocation, and, in general, all those other documents whose registration is especially ordered by the provisions of the Code of Commerce.

As a general rule, it may be stated that those documents which are required by law to be registered in this registry and are not registered will not be binding upon third parties who, however, may avail themselves of their provisions to sue the original parties.

BOOKS WHICH MERCHANTS MUST CARRY

According to the provisions of the Code of Commerce, all merchants are required to keep books of account as well as a record of their commercial correspondence. The number of these books and the manner in which they may be kept are entirely optional. However, the law imposes upon all individual merchants, partnerships, and corporations the obligation of keeping the following books: (a) Journal, (b) an inventory book, and (c) a letter-copying book. In the case of a corporation (sociedad anónima), the law requires that a stock-transfer book be kept. More detailed information concerning this book will be found on page 46. A minute book, containing a record of the meetings of shareholders and of the board of directors, signed by the president and secretary, must also be carried.

The journal, inventory book, letter-copying book, and the stocktransfer book must be bound, covered, and paged, and submitted to the court of commerce of the domicile of the particular merchant or company for the signing and stamping of their pages, as well as for the purpose of having a certificate affixed to each book stating the number of pages contained in each. This procedure is termed rubrication. Outside of these four books the other books which merchants or companies may choose to carry do not have to be submitted to the foregoing formalities. It follows that loose-leaf books may not be used to receive the entries which must be made in the foregoing books which, according to law, must be rubricated.

In the journal there must be entered daily the details of all the commercial transactions in which the particular merchant or company has participated, in the order in which they have taken place.

On the opening of a business in the inventory book there must be entered a detailed list of those assets which form the capital. Following this, during the first 3 months of each fiscal year there must be entered in this book the general balance of the business for the particular year, which must include a detailed list of all the assets and liabilities thereof.

In the letter-copying book there must be entered, by order of dates and in the language in which they were originally written, the full text of all letters and telegrams concerning the particular business.

Books of merchants must not be mutilated in any way whatsoever and, furthermore, all the entries must be made according to the order of dates. Entries should follow one another, and no blank spaces will be permitted. Interlineations, erasures, and amendments must not be made in the entries, and the way to correct any error

which may have been made in any of them is by having a new entry made, accompanied by the proper explanation.

It is necessary to carry the above-stated books together with others in the manner prescribed by law on account of the credit to which they are entitled in the event of litigation involving a commercial act. The probative force to which they are entitled is discussed under the heading "Dangers of not legally registering ", on page 64. Books of merchants in lawsuits which do not involve commercial acts only serve as a foundation of evidence (principo de prueba), that is, they must be supported by further evidence.

Merchants may keep their books in any language. However, before they may be introduced in evidence they will have to be translated into the Spanish language by an official translator.

Merchants are under the obligation to preserve their books for a period of 20 years after the closing of their business.

CONTRACTS

Articles 207 to 220 of the Code of Commerce and those included in section III of book II of the Civil Code deal with contractual obligations. These articles envelop the fundamental principles of the civil law governing obligations ex contractu. Generally speaking, it may be said that in many respects these principles bear great similarity to those of the common law which govern the same subject.

Commercial contracts may be proven by public instruments, by the entries of brokers, by private instruments signed by the parties, by letter or telegraphic correspondence, by the books of merchants and invoices that have been accepted, by confession of party and by oath, and finally by witnesses. It is important to note that when contracts involve a sum exceeding 200 pesos fuertes oral testimony may not be introduced in evidence to prove them, unless there is a foundation of proof in writing. Any public or private instrument signed by the party to be charged therewith will be considered a foundation of proof such as would permit the introduction of oral testimony in evidence.

ACKNOWLEDGMENTS

Contracts executed and signed by the parties in the United States and intended to serve as the foundation for legal action to be conducted in the courts of a foreign country in case of breach should be acknowledged before a notary public or other official authorized to take acknowledgments, in order that they may be duly authenticated in this country by the proper officials of the country wherein suit is to be brought.

The signature of the public official taking the acknowledgment constitutes the starting point for the other signatures that will perfect the authentication. For further information regarding the signatures necessary see the section entitled " Powers of attorney on page 99. The fact that authentication is necessary to attest the legality in a foreign country of instruments executed in the United States makes acknowledgment an essential requisite. This is applicable to Argentina as well.

RATE OF INTEREST

When no legal rate of interest has been stipulated by the parties, that applying will be the current rate charged by the national bank