Citation
Trading under the laws of Cuba

Material Information

Title:
Trading under the laws of Cuba
Series Title:
Trade information bulletin ;
Creator:
Everett, Guerra
United States -- Bureau of Foreign and Domestic Commerce
Place of Publication:
[Washington G.P.O.
Publisher:
[s.n.]
Publication Date:
Language:
English
Edition:
Rev. ed. -- prepared by Guerra Everett.
Physical Description:
1 online resource (73 p.) : ;

Subjects

Subjects / Keywords:
Commercial law -- Cuba ( lcsh )
Derecho mercantil -- Cuba ( bidex )
Commerce ( fast )
Commercial law ( fast )
Commerce -- Cuba ( lcsh )
Comercio -- Cuba ( bidex )
Cuba ( fast )
Genre:
bibliography ( marcgt )
federal government publication ( marcgt )
non-fiction ( marcgt )

Notes

Bibliography:
Includes bibliographical references.

Record Information

Source Institution:
|University of Michigan Law Library
Holding Location:
|University of Michigan Law Library
Rights Management:
The University of Florida George A. Smathers Libraries respect the intellectual property rights of others and do not claim any copyright interest in this item. This item may be protected by copyright but is made available here under a claim of fair use (17 U.S.C. §107) for non-profit research and educational purposes. Users of this work have responsibility for determining copyright status prior to reusing, publishing or reproducing this item for purposes other than what is allowed by fair use or other copyright exemptions. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder. The Smathers Libraries would like to learn more about this item and invite individuals or organizations to contact Digital Services (UFDC@uflib.ufl.edu) with any additional information they can provide.
Resource Identifier:
779767813 ( OCLC )
ocn779767813

Downloads

This item has the following downloads:


Full Text


















This volume was donated to LLMC to enrich its on-line offerings and
for purposes of long-term preservation by

University of Michigan Law Library









TRADING UNDER THE


LAWS OF CUBA
REVISED EDITION






Prepared by

GUERRA EVERETT
I
Tr..d Inorm.ation Buletin No. 343 &
q 1J


UNITED STATES
DEPARTMENT OF COMMERCE


BUREAU OF FOREIGN AND DOMESTIC COMMERCE


I L~
C. ~










Trade Information Bulletin No. 343 (Revised)
Price, 10 cents
FOREWORD

Cuba ranks first among the countries of Latin America, not only in imports from but in exports to the United States. Our imports of merchandise from Cuba in 1926 were valued at $250,600,000, and our exports at $160,488,000. The amount of United States capital invested in Cuba is between $1,250,000,000 and $1,500,000,000. Moreover, a large amount is spent in the island annually by tourists from the United States. From these figures it is apparent that Cuba presents a broad field for the extension of American manufactured exports.
The importance of Cuba as a customer for the products of the United States, and the close political and historical position held by Cuba in the American scheme of things, serve to make all dependable information relative to that market of peculiar interest and value, so that the present reprint should be readily welcome to exporters and their counsel.
Since the publication of the original bulletin, in April, 1925, the tax system of Cuba "s been revised. In the present edition there is'included chapter regarding the validity of conditional sales in Cuba. The chapter on industrial property is the work of Bernard A. Kosicki, of the division of commercial laws, expert in foreign patent, trade-mark, and copyright laws.
The division of commercial laws receives from foreign countries information regarding changes in the laws and any legal decisions which might affect American trade. Exporters are invited to keep in touch with the Bureau of Foreign and Domestic Commerce in order to be notified of any change in conditions or laws which might pertain to their business. The present edition has been revised and made current by Guerra Everett.
JULIUS KLEIN, Director,
Bureau of Foreign and Domestic Commerce.
AUGUST, 1927.
(II)


I ,



r'










L3~
TRADING UNDER THE LAWS OF CUBA
(REVISED EDITION)


CONTENTS
: Legal aspects of American-Cuban commerce. Industrial property.
Political and judicial organization of Sources and principles of legislation.
Cuba. Patents.
The basic codes of law. Trade-marks.
Commerce and merchants. Shop signs.
Effect of failure to register. Industrial designs and models.
Selling through commission agents. Appendix.
Domestication of American corpora- Legal holidays of Cuba.
tions in Cuba. The division of commercial laws.
Organization of Cuban companies. Foreign service of the United States in
The'law of sales. Cuba.
Negotiable instruments. Foreign service of Cuba in the United
Powers of attorney. States.
Suspension of payments and bank- Bibliography.
ruptcy.
Factory and labor laws.
Taxation.
Action and remedies at law.

LEGAL ASPECTS OF AMERICAN-CUBAN COMMERCE
By Guerra Everett, Formerly Chief, Section of Legal Information, Division of Commercial Laws
POLITICAL AND JUDICIAL ORGANIZATION OF CUBA

With a length of nearly 800 miles and an area of 44,215 square miles and a population (1923) of 3,143,210, Cuba lies about 90 nautiQ cal miles from Key West, Fla., the terminus of an American railroad connecting with the whole American railroad system. Daily steam- ship service is maintained between Key West and Habana, and freq uent sailings are made between other Cuban and American ports.
Telephone, cable, and wireless communication between the continent % and the island is available for commercial uses.
Cuba was discovered by Columbus on the first voyage across the
Atlantic, but the island was not circumnavigated until 1508, and Columbus died believing it to be a part of the mainland. Because of its fertility and climate and numerous natural seaports it became at once the point of departure for Spanish colonial operations. The first permanent settlement was made in 1511, but by 1515 there were seven communities flourishing along the coasts. In 1517 Hernin Cortgs sailed from Cuba for the conquest of Mexico, draining the island of many of its settlers and much of its stock of horses and supplies. From 1492 to 1898 the Pearl of the Antilles remained in the uninterrupted possession of Spain, except for a few months in
1762-63, when it was seized by an English fleet.
As a consequence, the outstanding racial characteristic of the
populace is Spanish. Even after the establishment of the Republic
(1)
235733






the great bulk of immigration to the island came from Spain. The Indians who inhabited the island in 1492 rapidly disappeared in an epidemic which swept in from one of the neighboring islands, so that it became necessary to resort to the African slave trade for the procurement of labor. The institution of slavery was not abolished until 20 .years after the close of our Civil War.
Cuban habits of thought and the bases of Cuban jurisprudence are, therefore, essentially of Spanish origin. From the beginning the Province was governed as a dependency o fSpain, by a captain gen.eral or civil-military governor appointed by the Crown. The civil and commercial laws in force were the same laws that ruled in Spain, and in the determination of Cuban cases the judges were guided by decisions of Spanish courts. The Consulado del Mar, the Ordenanzas of Burgos, of Barcelona, and of Bilbao, and the Novisima Recopilaci6n, in commercial matters, and the Brevarium Aniani, the Fuero Juzgo, the Siete Partidas, and the Recopilaci6n de Leyes de Indias, in civil matters, were in vigor in Cuba as in all the Spanish colonies in America, but as Cuba remained a part of Spain for three-quarters of a century or more after the rest of America became independent, and as the Spanish civil code of 1889 and the Spanish commercial code of 1885 were extended to the Province of Cuba during that period, the law of Cuba to-day more closely approximates the Spanish law than does the law of any other Latin-American country.
United States Aids in the Establishment of the Republic.
On April 20, 1898, the following joint resolution was approved:
Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, First, That the people of Cuba are, and of right ought to be, free and independent * * * (30 Stat. 738).
Hostilities between the United States and Spain ceased with the signing of the protocol of agreeint of August 12, 1898, Article I of which provides that "Spain will relinquish all claim of sovereignty over and title to Cuba." The same clause became Article I of the treaty of Paris, concluded December 10, 1898, ending the Spanish-American War.
The same treaty declared that "the island is, upon its evacuation by Spain, to be occupied by the United States' and "the United States will, so long as such occupation shall last, assume and discharge the obligations that may under international law result from the fact of its occupation, for the protection of life and property." Furthermore, the United States undertook the following responsibility:
ARTICLE XVI. It is understood that any obligations assumed in this treaty by the United States with respect to Cuba are limited to the time of its occupancy thereof; but it will, upon the termination of such occupancy, advise any government established in the island to assume the same obligations. Spain having "relinquished" Cuba to the United States "in trust for the people of Cuba," the United States took formal possession on January 1, 1899, and steps were immediately taken to promote the political organization of the new nation. "Under the authority of the United States, as temporary occupant of Cuba, a general election was held in the island on the third Saturday in September, 1900, to







elect delegates to a constitutional convention, which was to meet at Habana on thd first Monday of November. The election was held on September 15, and the convention assembled on the 5th of November." (President McKinley, annual message, December 3, 1900, For. Rel. 1900, xli.) I
The deliberations of this convention continued over a period of three months, and a constitution was adopted on February 21, 1901. In view of these developments, Senator Platt, of Connecticut, offered an amendment to a bill making appropriations for the Army of the United States, authorizing the President " to 'leave the government and control of the island of Cuba to its people' so soon as a government shall have been established in said island under a constitution which, either as a part thereof, or in an ordinance appended thereto, shall define the future relations of the United States with Cuba," substantially in accordance with the following articles:
The Platt Amendment.
I. That the Government of Cuba shall never enter into any treaty or other compact with any foreign power or powers which will impair or tend to impair the independence of Cuba, nor in any manner authorize or permit any foreign power or powers to obtain by colonization or for military or naval purposes or otherwise, lodgment in or control over any portion of said island.
II. That said Government shall not assume or contract any public debt, to pay the interest upon which, and to make reasonable sinking-fund provision for the ultimate discharge of which, the ordinary revenues of the island, after defraying the current expenses of government, shall be inadequate.
III. That the Government of Cuba consents that the United States may exercise the right to intervene for the preservation of Cuban independence the maintenance of a government adequate for the protection of life, property, and individual liberty, and for discharging the obligations with respect to Cuba imposed by the treaty of Paris on the United States now to be assumed and
undertaken by the Government of Cuba.
IV. That all acts of the United States in Cuba during its military occupancy thereof are ratified and validated, and all lawful rights acquired thereunder shall be maintained and protected.
V. That the Government of Cuba will execute, and as far as necessary extend, the plans already devised or other plans to be mutually agreed upon for the sanitation of the cities of the island, to the end that a recurrence of epidemic and infectious diseases may be prevented, thereby assuring protection to the people and commerce of Cuba, as well as to the commerce of the southern ports of the United States and the people residing therein.
VI. That the Isle of Pines shall be omitted from the proposed constitutional boundaries of Cuba, the title thereto being left to future adjustment by treaty.
VII. That to enable the United States to maintain the independence of Cuba and to protect the people thereof, as well as for its own defense, the Government of Cuba will sell or lease to the United States lands necessary for coaling or naval stations at certain specified points to be agreed upon with the President of the United States.
VIII. That by way of further assurance the Government of Cuba will embody the foregoing provisions in a permanent treaty with the United States.
The measure became law as the act of March 2, 1901 (31 Stat. 895). The articles were incorporated in an ordinance appended to the new constitution of Cuba, and also embodied in a treaty between the United States and the Republic of Cuba signed at Iabana on ,May 22, 1903, the ratifications of which were exchanged at Washington, July 1, 1904.,

The Cuban Constitution.
The new constitution, with the above-mentioned ordinance appended, was published officially on April 14, 1902, by Gen. Leonard Wood, military governor. The military government formally with-






drew on May 20 and the first President of Cuba TomAs Estrada Palma, was inaugurated the same day.
By the terms of the constitution Cuba is a unitary Republic, divided into six Provinces, as follows: Pinar del Rio, Habana, Matanzas, Santa Clara, Camagiiey, and Oriente. The legislative power is vested in a Congress, composed of a chamber of representatives and a senate. An examination of the powers of the Congress serves to show the centralized form of the Cuban Government. The powers delegated to Congress by the constitution include the right to enact "national codes and laws of a general nature," to supervise and regulate national, provincial, and municipal elections, and to issue orders for the regulation and organization of all services pertaining to the administration of national, provincial, and municipal governments, and "to pass all other laws and resolutions which it may deem proper relating to other matters of public interest." The regulation of the services of communications, railroads, canals, and harbors, by express provision, belongs to Congress.
The constitution regulates in detail the government of the Provinces and municipalities and has a special section devoted to the powers and duties of mayors of cities. Article 114 declares that all property existing within the territory of the Republic and not belonging to Provinces, municipalities, or private individuals or corporations shall belong to the State.
The judicial power is vested in a supreme court of justice and such other tribunals as may be established by law, and the law shall regulate the respective jurisdictions of such inferior courts. The following special powers are vested in the supreme court: To take cognizance of cases on a writ of error; to decide between conflicts of jurisdiction between courts immediately inferior to it or not having a common superior; to take cognizance of the cases to which the State on the one side and the Provinces or municipalities on the other are parties; and to decide as to the constitutionality of the laws, decrees, and regulations when a question to that effect is raised by any party.
Justice by the constitution shall be administered gratuitously throughout the Republic. and courts must take cognizance of all cases, whether civil, criminal, or between the Government and private parties. Judicial commissions and special extraordinary tribunals of all kinds are prohibited, and provision is made for the independence of judicial officers in the discharge of their duties, but they are not relieved of responsibility for violations of the law which they may commit.
The Judiciary Law.
From September 29, 1906, to January 28, 1909, the United States intervened in Cuba to assist in laying a stronger foundation for the administration of the new Republic. During this period several important laws were enacted by the authority of the military government, among them being a law for the organization of the executive departments, one for the civil administration of the Government, one for the regulation of provincial government, and the law for the organization of the judicial power.
The last-mentioned law divides Cuba, for the purposes of the administration of justice, into six districts, coterminous with the






six Provinces. Each district is subdivided into sections, or partidos judiciales, there being 33 such sections in all. Each partido judicial is composed of one or more municipal areas (tgrminos municipales), the total number of which is 84.
The supreme court, or tribunal supremo, is the highest court in the land, considered as the cepter of the judicial power. It sits at Habana. It is divided into three branches: Civil (trying cases on
-appeal in cassation from the audiencias); contentious-administrative (as an appellate court in actions against the Government arising out of administrative resolutions) ; the criminal branch (trying cases on appeal in cassation from the audiencias) ; and the chamber of administration (trying cases on appeal from audiencias in which civil matters pertaining to real property laws are concerned).
The immediate inferiors of the supreme court in the judicial hierarchy are the audiencias, sitting in the capitals of the Provinces and having jurisdiction over the respective districts. The audiencias have original criminal and contentious-administrative jurisdiction and appellate civil jurisdiction.
The lower courts having jurisdiction in the first instance are: Civil, municipal courts and courts of first instance, and criminal, courts of instruction, correctional courts.
There are 47 courts of first instance, 14 of which have exclusive civil jurisdiction and 33 of which have concurrent criminal jurisdiction as courts of instruction.
There are 130 municipal courts having civil jurisdiction in minor cases and correctional jurisdiction at places where there are no correctional courts.
The courts of instruction act as the grand jury does in the United States, in the investigation and preparation of criminal cases which after indictment are sent to the respective audiencias for trial. There are 14 courts of instruction.
The correctional courts are courts for the trial of minor offenses and misdemeanors. There are 13 correctional courts.
The same law provides the foundations for the organization of the Cuban bar, the requirements for the admission to which are regulated by the courts. A few American citizens have in the past been admitted to practice before the courts of Cuba. This bar has in recent years produced several brilliant commentators on the codes, such as Betancourt and Duval y Fleites; and Dr. Antonio S. de Bustamente, as judge on the Permanent Court of International Justice, at The Hague, has added luster to the accomplishments of the lawyers of the Republic.
The Isle of Pines.
It will be seen from Article VI of the Platt amendment that the Isle of Pines was expressly reserved from the delimitation of the Cuban national territory, and its nationality was to be decided by subsequent treaty between the United States and Cuba. The United States Government was at that time considering the use of this territory as a naval base but has since been using instead the leased area on Guantanamo Bay. Many Americans, however, expecting that the island would come under the American flag, have settled or acquired property there.






As a matter of fact, the public services of the island have been continuously administered by the Cuban authorities since the organization of the Republic. The wealth of the island as a lumbering and truck-gardening area has increased its importance from year to year, and the Cuban Government has for a long time endeavored to have the matter settled. Several proposed treaties failed of passage, including those of 1903 and 1904. The last treaty was reported favorably to the Senate by the Foreign Relations Com-. mittee in 1922, but it was not ratified by the Senate until the special session called by President Coolidge immediately after his inauguration. The ratification is dated March 13, 1925, and includes certain reservations in favor of American residents, which reservations have been acceded to by Cuba, so that now the Isle of Pines both de facto and de jure is a part of the Republic of Cuba.
THE BASIC CODES OF LAW
The military government of Cuba on January 1, 1899, declared by proclamation that "the civil code and criminal code existing before the termination of Spanish sovereignty shall remain in force, being modified and changed from time to time when necessary for better government," and this decree was adopted by the constitution. The Supreme Court, by a decision of December 14, 1901, interpreted this proclamation to include the code of civil procedure. The code of commerce was tacitly continued in force, no diret order with regard to it having been published by the authorities. Other codified laws were likewise continued, among the more important of which was the notarial law.
In Spanish jurisprudence, as in that of all Latin countries, the whole body of private substantive law is comprised in two codes, the oivil and the commercial, the latter of which is merely a special case of the former applicable to merchants and transactions of merchants. The ground covered in detail by the code of commerce is also treated generally in the civil code, but the special rules of the code of commerce derogate from the general rules of the civil code wherever the are in conflct. In all commercial matters the provisions of the code of commerce are applied, but where these are insufficient reference to the civil code is made.
The Civil Code.
The civil code is of course much more comprehensive than the commercial. It is divided into four books, of which the first treats of persons, including juridical persons, nationality, domicile, matrimony, capacity, and other personal and family matters. Book second classifies the various kinds of property and treats of possession and rights in property apart from possession, including the different kinds of easements. Book third is concerned principally with testamentarv succession and administration of estates.
From the point of view of trade the fourth book, which treats of obligations and contracts, is the most important. The general rules covering the origin, nature, kinds, transfer extinction, and proof of obligations are first laid down, after which the essentials of the law of contract, including determination of consent, legality of objects, consideration, interpretation, and recision, are dealt with. Following






this there are dispositions referring to special classes of contracts, as follows: Matrimonial capitulations; purchase and sale; exchange, or trade in kind; rent and hire; ground rent, emphyteusis, and other easements; societies or companies; agency and powers of attorney; loans, deposits, and other bailments; insurance; compromise; guaranty; pledge, mortgage, and antichresis; implied contracts; prescription and limitation of actions.
The civil code has been amended by the inclusion of a special law relating to contracts for the grinding of sugar cane. (Law of March 2, 1922. Regulations, Official Gazette, April 12, 1922.) The Code of Civil Procedure.
The juridiction of the courts is of two kinds, contentious and voluntary, the later being concerned with the cognizance of ex parte matters, such as adoption, guardianship, perpetutation of testimony, and the opening of wills. Contentious jurisdiction in the code of civil procedure (c6diro de enjuiciamento civil) comprises causes to which there are two or more adverse parties. The code establishes the norms for the institution of actions and for their conduct to judgement, and its precepts are applicable alike in civil and commercial courts. Actions and remedies at law are discussed further hereafter.
The Code of Commerce.
The four books of the code of commerce treat, first, of the status of merchants and the field of commerce in general; second, of special contracts peculiar to commerce, such as agreements for the organization of companies, commercial agencies, sales of merchandise, bills and notes, and mercantile loans; third, of maritime law; and fourth, of bankruptcy, insolvency, and the suspension of payments.
Most of the provisions of these four books are considered in the following pages, but the limits of this monograph compel the exclusion of a detailed summarv of the third book, which has to do with admiralty law, contracts for the carriage of goods by sea, marine insurance, average, and maritime law in general. The special law for the carriage of goods by rail, based on Military Order No. 34 of 1902, is also omitted.
Many Reforms Under Consideration.
Cuban lawyers and merchants are unanimous in the opinion that many branches of the commercial law are in great need of modernization, and appropriate legislation is much to be desired. This is especially true of the law of sales, bills of exchange, and powers of attorney. Modification of these laws will redound to the benefit of American exporters, for the absence in Cuban legislation of provision for chattel mortgages or conditional sales, and the lack of uniformity between Cuban and American practice with regard to negotiable instruments, as well as the expense and danger connected with the drafting of powers of attorney, are all useless impediments to the extension of our trade with Cuba.
The habits of mind of Cuban lawyers and legislators, however, precludes the possibility of hasty adoption of any radical changes, and if merchants, lawyers, and legislators, working together, can bring about gradual modifications this is as much as can be expected.
58737-27--2






By presidential decree No. 1608 of July 27, 1925, the President, in response to the repeated movements for modification and modernization of the Cuban codes of law, civil, commercial, and criminal, as well as the procedural codes, created a codification commission subdivided into a section on civil legislation, section on commercial legislation, and section on criminal legislation. Twelve prominent members of the Cuban bar were appointed to this commission. An office was opened in the department of justice called " Office of legislative projects," whose duty it is to properly draft in code form the work of the commission and present same to Congress for enactment. To date the commission has prepared a Labor Code, modified two books of the Civil Code, two books of the Commercial Code, and practically finished a new Penal Code. The commission is still at work and holds periodical sessions.
Mortgage Law Practical Aid to Business.
Within the limits of this monograph it is not possible to go into the details of the mortgage law (ley hipotecaria), which, as noted above, is a part of the civil code. It may be stated here, however, that the procedure for procuring and foreclosing mortgages on real property is exceedingly simple, and hence this class of security is more and more frequently used in ordinary business transactions.
COMMERCE AND MERCHANTS

Merchants, since medieval times, have been considered as a class
apart from the general community, and their transactions were judged by separate tribunals according to special rules and customs 'k of law. In England the peculiar rules of the "law merchant " were incorporated into the general body of the common law of the land thro'ugh the efforts of Lord Mansfield and other great justices of the early eighteenth century. In continental countries, however, the distinction was retained, largely on account of the practice of making special codes of commerce instead of merging the customs of the merchant class into the broad provisions of the civil codes. This was the case in Spain, whose jurisprudence is the foundation of the Cuban system.
Merchants are persons who, with legal capacity therefor, dedicate themselves habitually to the exercise of commerce, including companies organized under the provisions of the code of commerce to pursue mercantile or industrial purposes. Acts of commerce are those transactions between merchants, or between merchants and nonmerchants, which relate to the traffic in goods for gain. To this intent, the Cuban commercial code recognizes as commercial acts all those treated in the code, together with "any others of analogous nature"; thus the door is open for the admission of new operations devised by business pioneers or resulting from the very progress of civilization itself.
Commercial law, therefore, has as its subjects two things-merchants and commercial acts. To these two things the commercial law, represented by the code of commerce, alone is applicable; the precepts of the civil code or custom or usage govern only in the absence of a provision covering the instance in the code of commerce.







The Qualification of Merchants.
Whenever a person holds himself out to the public as being engaged in commerce, whether by 'circulars, advertisements, signs, cards, or otherwise, the presumption at once arises, that he is a merchant, and consequently whoever denies that such person is a merchant is bound to support the burden of proving that he is not. This is ordinarily no hardship, for it is only necessary to search the commercial register, inasmuch as the final evidence of the status of merchant is inscription in this register. The character of merchant, industrialist, owner of a retail or wholesale store, or owner of a vessel can be proved only by a certificate of due registration in the commercial register.,
Commercial re isters are kept in the capitals of the Provinces and in other places of commercial importance, and they serve two purposes, which are, first,' to keep a perpetual record of merchants and acts of commerce; and, second, to afford publicity to mercantile operations. Registration is obligatory and must be made within eight days after the commencement of business, or, in case the business has been purchased, within eight days after the period expires within which the tax on such transfer must be paid. Details of the Registration.
For the inscription of individual merchants a petition signed by the merchant or his duly empowered agent must be presented. In the case of companies, the memorandum of agreement or articles of incorporation, with a notation by the fiscal authorities that the necessary tax has been paid, must be shown. In the case of a foreign company these documents have to be translated and legalized by the Cuban consul and further authenticated by the ministry of foreign affairs.
In each register there are three books, one for individuals, one for companies, and the third for owners of vessels. Each individual merchant, company, or shipowner is accorded a separate page numbered serially, and the registrar maintains an index of entries. The books are visaed by the municipal judge or judges of the locality. Each document presented for registry is entered and rubber stamped by the registrar upon the payment of a small fee. Items That Must be Registered.
In the first two books the following items must be entered:
In the cas? of a company, all instruments of modification, recision, or dissolution of the company.
Powers of attorney granted to managers, factors, or clerks, and the revocation of these.
License of a married woman to engage in business.
Instruments relating to the separate estate of the wife of a merchant.
The issue of shares, bonds, and obligations of all kinds by a company, and collateral instruments.
Declarations of bankruptcy or suspension of payments.
Embargoes or attachments.
Emission of bank notes.
Titles to industrial property, patents of invention, trade-marks.






EFFECT OF FAILURE TO REGISTER
A fine of $25 is imposed for failure to register in due course. In addition, the following legal effects result:
. The articles of incorporation, partnership agreements, and other
internal contracts of companies are valid as between the members of the company, but can not operate to prejudicc any third party; the latter may, however, rely upon anything therein appearing to his benefit. This applies also to instruments providing for the increase or diminution of the firm capital.
Unregistered agreements concerning dower rights have no preferential status over other credits, except in the case of rights in real estate registered in the civil property register prior to the inception of such other credits.
Powers of attorney unregistered support actions between principal and agent but can not be used to the prejudice of third persons; the latter may, nevertheless. take advantage of anything in his favor in such powers.
A merchant or company not having become registered originally is precluded from registering subsequent items. Inscription of Credits in the Commercial Register.
Any properly registered individual or company, being a creditor of another registered party and having as evidence of such credit the note, stated account, or receipt of the latter signed by the debtor, proceeding from money or goods or services supplied to the debtor, may, upon presenting the instrument and swearing to the validity of the signature and the existence of the debt, have such credit inscribed on the separate page of the debtor. After the extinction of the credit the entry may be canceled by the creditor or by the debtor upon presentation of the original instrument.
This inscription of credits, a device of the Cuban jurist, Dr. Miguel Gener, was authorized by an order (No. 400) of the military government and had as its object the greater guaranty of commercial credit for the promotion of internal and foreign trade and further publicity of mercantile operations.
Certain Account Books Required by Law.
The idea of publicity of mercantile operations is one which is manifested in more than one way in the commercial law of Latin countries. It is distinguishable in the requirement of the law that all merchants and companies must keep certain books in a certain way, submitting such books to the authorities for visa each year; but here it is connected with another ancient notion, which is that the commercial law must watch over and discipline its subjects. The only thing in American law which resembles this paternal attitude is the old maxim that sailors are the wards of admiralty. The laws of American States and certain Federal commissions prescribing the method of accounting to be followed by corporations subject to their jurisdiction may find a ready justification in the system which has existed since Roman times by which every merchant or company is required to carry specified account books.'
See Loose-Leaf Accounting in Foreign Countries, by Guerra Everett. Trade Information Bulletin No. 391.






In Cuba there are two classes of books, those which may be kept voluntarily and those which the law requires to be kept. The latter consist of the following: The inventory and balance book; the diary; the ledger; the copy book; any others prescribed by special laws; and in the case of companies a minute book.
Any other books may be kept voluntarily and may be legalized when they meet the requirements as to form; these are called subsidiary books.
All of the foregoing books are familiar enough to Americans. except the copy book, an institution which is fast disappearing in this country. According to Cuban law, all correspondence, telegrams, etc., must be recorded in this book word for word with meticulous care and in chronological order, either by hand or by any mechanical device. In addition, all such correspondence as well as all books must be retained by the merchant for the life of the firm and five years thereafter, provided, however, that papers may be destroyed after the expiration of the period of limitation of actions which might arise therefrom.
Use of Books in Evidence.
The required books, which at present may be carried in any language, must be presented bound, lined, and paginated to the local municipal judge, who notes the number of pages on the first leaf and stamps each page. For this there is a small fee payable.
When books have thus been rubricated by the judge, they are admissible in evidence in court under the following conditions:
The books of a merchant are always proof against his interest; but his adversary having accepted that form of proof may not accept that which is favorable to him and reject the unfavorable.
If the books of both opposing merchants have been carried according to law, the court will decide between them on the basis of other evidence adduced; in this connection the regularity and freedom from errors in either set of books will be taken into account.
If the books of one have been kept according to law and those of the adversary have not been, the proper books will prevail over the irregular ones, unless sufficient extrinsic evidence is adduced to overcome the presumption.
When one merchant fails to produce his books or admits that he carries none, those of the adversary will be proof against him, unless he can show that such failure is due to force majeure, or unless he can prove that the entries in the adversary's books are false.
The privacy of the merchant's books and his accounting office is guaranteed by reasonable rules. No judge can order the general investigation of the accountability of a merchant to be made in the latter's counting room.
If the merchant does not carry the books himself, it is presumed that his bookkeeper is his authorized agent, and often such bookkeepers are authorized by a power of attorney protocolized, by a notary public.
Functions of Notaries.
When we speak of having a document protocolized by a notary public (notario pfiblico, or escribano) in Cuba, we are speaking of an institution which does not exist in the United States. In Spain,






as in some other European countries, the institution of the public witness, or fM pdblica, is very ancient and is closely associated with the march of civil progress. As civilization became more intricate, the office of the notary developed accordingly, until now there is little resemblance between the Spanish and the American notary. The notarial system for Cuba was reorganized by the Spanish law of 1873, which directed the Government to organize the Cuban system, ordered notaries in the Indies to maintain a private file or protocol of all extrajudicial acts and contracts certified by them, and endowing them with all the Dowers of Spanish notaries. The military government and the constitution of the Republic continued the law in force. The bureau of registers and notaries is one of the two main branches of the present ministry of justice. This bureau has two divisions, one for matters connected with the public register and the other for supervision of the notaries. Notarial Districts Delineated.
Each judicial district is also a notarial district, and in each municipality there is at least one notarial office. The minister of justice may create additional offices not exceeding one for every 5,000 residents in the municipality.
Every notarial district has a separate association or "college" of notaries, governed by an elective board of directors, whose tenure is for a term of fhlree years and is obligatory, honorary, and gratuitous. "The boards of directors," says the law, "shall maintain the most rigorous discipline among all notaries, shall make practice uniform, and shall strive for better public service and the honor of the class of y notaries." To carry out these objects the boards are given ample '4 visitorial and correctional powers. One of their duties is the custody of the general archives, in which the notaries deposit their recorded documents.
The Character of the Notary.
The law defines a notary as a public functionary, empowered and bound to witness (dar f6), according to law, all contracts and other extrajudicial acts presented to him. His qualifications are specified in detail and include the successful completion of the notarial course at the National University, followed by a year's clerkship or practice. The curriculum of this course embraces law studies scarcely less comprehensive than those of the full law course. However, there is no special notarial course of study at Habana University at the present time and it is necessary to have a degree of doctor of civil laws in order to obtain a commission to act as notary public.
The notary is commissioned by the President, upon the nomination of the Minister of Justice, and is entitled to a pension upon retirement or disability. Notaries are allowed to hold such public offices as are not incompatible with their notarial duties. There are many members of Congress and counselors for Government departments who are notaries.
They may engage in private business, and many are practicing attorneys. Only under very limited conditions may they exercise their functions away from their own notarial offices (notarias). The notary begins the exercise of his functions by taking physical possession of an established office, with its seals and archives.






Protocolization the Principal Duty of Notaries.
In each office there is kept a "protocol," which is the file of contracts and other instruments drafted by the notary during the course of the year. These documents are each sealed and secret, and the year's collection is bound, indexed, and paged in accordance with detailed regulations. At the end of the year the bound volumes are deposited in the general archives under the care of the notarial colleges. Naturally, an instrument that has been filed in the notarial protocol, or "protocolized," forms almost absolute and irrebuttable evidence of the transaction to which it refers.
The drafting of instruments for inclusion in the protocol is one of the most important duties of the notary, and he must be skilled in the "redaction of public instruments." The notary must be able to draw up a contract so as to express the desires of the parties and so as to be legally effective, and thus he performs one of the duties which in the United States is ordinarily referred to a lawyer. Likewise, he formulates wills, filiation declarations, and other extrajudicial instruments. Such contract or instrument is called an escritura pfiblica, or public instrument. The notary drafts the document in his own handwriting, after which it is signed by the parties and by the necessary witnesses and then signed and sealed by the notary. The notary numbers it and places it in the protocol, upon which it becomes an escritura matriz, or matrix, and then he issues to the parties certified copies, which, under proper safeguards, may be typewritten.
Possibilities and Usefulness of the Notarial System.
The form and content of the instrumento pfiblico is regulated in great detail, and the security thereby obtained may serve many business purposes. Many times it is impossible to make a contract of the kind desired under the general law, whereas it may be made as a public instrument. For example, it might be impossible under the general law of promissory notes to make a series of notes, with the provision in each of them that upon failure to pay any one of them at maturity the others shall forthwith become due and payable, because the general law might not permit a condition in one note to affect other independent notes of the series and might insist instead that each note must mature of its own force; but, with the assistance of a competent notary, on the other hand, an enforceable agreement might be drafted to cover this situation.'
Whenever it becomes necessary for American business men to accept promissory notes from their Cuban customers, these should be protocolized for security, and all important contracts, powers of attorney, bonds, compositions, and other instruments, together with their revoking acts, should likewise be protocolized.
Certain grades of Cuban consular officers in the United States are authorized to exercise notarial functions, and instruments may be protocolized, certified copies issued, acknowledgments and oaths taken, and other notarial duties performed in the consulates or the embassy.
SELLING THROUGH COMMISSION AGENTS
An American manufacturer who desires to create a demand for his product in the Cuban market will usually introduce his product by means of travelers sent there from the home office or procured in







Cuba itself. Such travelers are authorized to distribute samples and take orders for the approval of the home office. Shipments are usually made direct to customer, the terms most commonly applied being c. i. f. Cuban port, or f. o. b. American port; documents against payment, or confirmed credit. In some cases where the credit rating of the customer is reported good 60 or 90 day acceptances are employed; this is in many cases necessary, not only in order to meet competition, but also in order to meet the only recourse of the customer, whose liquid assets may be dependent upon the financial cycle resulting from the marketing of the sugar crop.
In any case, the traveler should not be required to participate in the delivery of the goods or the collection of the payment, because in carrying out these duties he may involve his home office in local registration and tax laws, such activities being liable to be interpreted as "doing business"' within Cuba, whereas the traveler's legitimate operations should be confined to such activities as are consistent with the fact that the American firm is " doing business ' with the island only.
What Constitutes Doing Business in Cuba.
Tke differentiation between these two ideas is a matter of importance, and, while in Cuba the insistence upon the matter may not be as acute as in some of our States, the principle underlying the rule is similar to the laws prevailing in most States affecting the activities of corporations of another State within their jurisdiction.
"Foreign companies," according to a case in the Cuban Supreme Court, dated June 28, 1915, " are obliged to register in the Mercantile Register only when they are established or when they create branches in _Cuba. The fact that foreign companies enter into contracts of commerce with nationals or with other Cuban companies does not signify the creation of branches." This decision is evidence of the leniency of the Cuban courts where leniency conduces to the promotion of Cuban foreign commerce. Nevertheless, in view of the penalties and disabilities for failure to register, which have been discussed on another page of this bulletin, it has been thought wiseto keep in mind the dangers which attend this situation and the means of avoiding them.
In studying this problem the division of commercial laws obtained,, through American Trade Commissioner C. A. Livingood, Habana,. the following opinion from Dr. Lucius Q. C. Lamar, chairman of the judiciary committee of the American Chamber of Commerce of Cuba, on the question "What constitutes doing business in Cuba?"
1. As to the definition which the Supreme Court of Cuba gave in Its decision of June 28, 1915, of the terms "carrying on business in Cuba," article 15 of theCuban Commercial Code provides that "foreigners and companies organized abroad may exercise commerce (that is, do business) in Cuba, subject to thelaws of their country, insofar as relates to their capacity to contract, and to, the provisions of that code, insofar as concerns the creation of their establishments (that is, the opening of their offices) within the Cuban territory, their mercantile transactions and the jurisdiction of the Cuban courts." Article, 21, section 12, of the Commercial Code provides that "foreign companies that wish to establish themselves (that is, to set themselves up in business) or to. create branches in Cuba shall present and register in the Registry, besides their charters and the documents required for Cuban companies, a certificate Issued by the Cuban consul that they have been organized and authorized In accordance with the laws of the proper country." What the Supreme Court,









of Cuba decided in its judgment of June 28, 1915, was that the registration of foreign commercial companies is compulsory when they wish to establish themselves or to open branches in Cuba. In that case the company was not registered here, but from the place of its domicile-that is, from its principal place of business abroad-it entered into contracts with residents of Cuba. The court held that under these circumstances it was no defense to allege that the company was not registered here.
The supreme court in this case did decide, as the division of commercial laws says, that a foreign mercantile company must procure inscription in the Mercantile Registry in order to carry on business in Cuba. It also decided that it was not necessary to procure such inscription here if the business done by the company was done abroad; that is, If the contracts were made abroad with residents of Cuba. I think the court did not in that decision define in so many words what it considered as included in the phrase, "carrying on business in Cuba."
2. As to the definitions of the same phrase by the same court or other courts in other decisions: Article 2, paragraph 2, of the Cuban Commercial Code, provides that "acts of commerce (that is, commercial transactions) are those embraced in that code and any others of an analogous nature (that is, of a similar character)." In the preamble to the code it is said that "after having vainly sought for a phrase sufficiently comprehensive which as a definition might determine what is understood by mercantile acts (that is, by commercial transactions) the wording of this article of the code was adopted, leaving the expression of judgment on the facts, as they appear from time to time in the business world, to the good sense of merchants and to the experience and practical spirit of the judges and courts."
. Article 3 of the Cuban Commercial Code provides that "a legal presumption exists of habitually doing business when a person proposing to do it advertises through circulars, newspapers, handbills, posters exhibited to the public, or in any other manner, an establishment the purpose of which is some mercantile transaction." The Supreme Court of Spain, when it was the supreme court for Cuba, in an opinion dated January 20, 1872, prior to the taking effect of the present Commercial Code, held that an habitual doing of business (that is, a customary engagement in commerce) undoubtedly exists from an uninterrupted series of commercial transactions; but the same intention may be manifested by one transaction only, either expressly through advertisements or circulars, or impliedly by throwing open to the public a warehouse or shop. In another decision, dated June 14, 1883, the same court held that a person who customarily and ordinarily devotes himself to purchasing grain for conversion into flour, the latter being sold, must be consideied a merchant, notwithstanding that he did not advertise his business to the public through newspapers, handbills, or permanent posters, which only constitutes one case in which a customary engagement in commerce is presumed for legal purposes.
With respect to the Cuban 1 per cent gross sales tax (now 1 per cent; see chapter on taxation) on December 10, 1922, the National Association of Shoe Dealers consulted the Secretary of the Treasury on the following point, namely, whether sales on consignment are also subject to the payment of the tax on the amount of merchandise which is sent to the consignee, or whether the said tax, aside from the tax which the consignee may have to pay for sales made by him, may be paid by the seller only on merchandise which the said consignee takes definitely or pays for. The chief of the section of gross sales tax, by authority of the Assistant Secretary of the Treasury, decided as follows: "That sales made on consignment are considered for the purposes of the tax as firm sales, and the same provisions of law govern both kinds of sales."
The basis for this decision of the Assistant Secretary was stated as follows: "The contract of sale is perfected abroad, and as the tax is of a national and internal character it is not possible to subject sales of foreigners (sic) ; but payment of the tax should be made on such sales as are made in the national territory of merchandise or effects coming in on consignment, and the proper official book and patent should be taken out."
On January 15, 1923, the Secretary of the American Chamber of Commerce of Cuba was advised by the.department of a decision rendered by it on that date, as follows: That sales which are perfected abroad and which come
58737-27--3







directly to the purchaser are not subject to the payment of the tax, and that only sales which are, made in the national territory are so subject, and thus foreign products are not taxed.
If an American company establishes its representative in an office which it has rented or acquired in its own name, the probability is that it is to be considered as doing business in Cuba, notwithstanding that orders taken by the representative are technically accepted at the home office of the company in the United States, and consequently the company is liable to registration and license requirements, as well as to thd 1 per cent sales tax and other imposts.
The mere renting of office space, however, is not the ultimate test, for it is just as true that the American firm can provide offices for its representative at its own cost, provided the representative operates the offices in his own name, and provided his sole duty is to solicit orders which are transmitted to the home office in the United States for acceptance, after which the merchandise is shipped direct to customer by the home office. In such case, the representative is classified as a "commission merchant with samples." He must obtain a license to do business as such and is subject to a tax of 1 per cent on the commissions received by him from the company. Trading Through a Commission Agent.
Most of these problems are avoided when the manufacturer employs a Cuban commission 'merchant (comisionista) to represent his interests, and this is the method adopted when the product of the American house is already in demand in that market. Consignments of merchandise, to be paid for as sold and protected by insurance on the consignee, can be made to the comisionista, or goods may be sent to him for dispatch to the buyer, in the name of the 'American firm, or the comisionista can receive and indorse over to the buyer the documents covering the shipment to be dispatched by the buyer at the customhouse, and in no case will the American firm be subject to registration or taxation, although under a recent ruling the comisionista is himself liable for sales and profits taxes. Moreover, the comisionista may with equal freedom undertake to see that drafts are paid at maturity and do other things which a traveler could not do without exposing the American firm to the dangers discussed above.
The comisionista, like the notary, belongs to a class that deserves special mention, for his status, rights, and duties are regulated by law, one of the titles of the code of commerce being devoted to a consideration of his privileges and responsibilities. In the commercial code brokers, agents, and factors are regarded not as merchants, but as auxiliaries of commerce (agentes mediadores del comercio), but the comisionista is regarded as a real merchant and is permitted to carry out his commission contracting as well in his own name as in the name of his principal (comitente). In most cases the business is done in the name of the principal, although, as has been said, the comisionista may accept consignments and sell the goods in his own name, paying for them as sold. In either case the comisionista is arbitrarily regarded by the code, not as a mere agent, but as a merchant, entitled to a merchant's privileges.








Commencement of the Commission.
Usually the commission contract arises when the commission merchant accepts the proposal of the manufacturer or exporter, but the law specifies that should the manufacturer send a consignment of merchandise to the commission merchant the contract takes effect when the latter actually receives and accepts it. If the commission merchant does not intend to accept the consignment, he is obliged to advise the seller by the most rapid means of communication, confirming the same by the next mail. Meanwhile he has the obligation of a bailee and has to exercise due care in the custody and conservation of the merchandise until the seller designates a new commission merchant to take it over or disposes of the goods in some other manner. He must respond in damages for any negligence, either in the custody of the goods or in promptly advising the seller of his refusal; on the other hand, he is entitled to be reimbursed for any expenses to which he may be put in the disposition of the shipment.
If funds are to be supplied by. the seller for handling the merchandise after arrival, the commission merchant is not responsible for carrying out the commission until such funds are provided, and if the funds sent are insufficient and are exhausted the commission merchant is entitled to suspend activities with respect to the matter until additional funds are provided. Duties of the Seller (Comitente) and Comisionista.
The seller is responsible for all lawful contracts made in his behalf with respect to the merchandise by the commission merchant and must pay the commission agreed or reasonably computed and reimburse the comisionista for all necessary expenses.
The responsibilities of the comisionista are set forth in detail in the code of commerce. He must carry out the instructions of the comitente faithfully, but nmay adopt other measures when necessary for the preservation of the merchandise; he must notify the comitente of any such deviations from instructions promptly; he is an insurer for all money coming into his possession by reason of the business; in buying and selling he must proceed with the care that he would employ if he were conducting his own affairs and is liable for the difference if he pays too much or sells too cheaply; he is solely responsible for any infringement of the laws or regulations of the country, unless such infringement was expressly ordered by the comitente; he must notify the comitente opportunely of the developments of importance concerning the business; he can not delegate his authority to another, for the commission is regarded as personal unless otherwise provided by agreement, but he can employ ministerial employees.
The comisionista must carry the same books that the law requires of all merchants and must render accounts periodically to his comitente. For delay in transmitting surplus funds to the principal the comisionista is liable for interest at the legal rate, and should he return such funds by a method not authorized by the principal he is liable for any resulting loss; but in the absence of express instructions such surplus funds may be returned through the best







channels available at the risk of the principal. The comisionista is held liable civilly and criminally for conversion of money put into his hands in the course of the business. Good Faith Required of the Comisionista.
The law exacts from the comisionista the highest degree of good faith (uberrima fides) in view of the confidence which must be reposed in him by his principal. To that end he is not allowed to buy for himself anything instrusted to him by the principal for sale without the authorization of the principal nor to sell to the principal merchandise of his own when he has been charged with procuring such merchandise in the open market. He may not alter the marks on the principal's goods, nor may he keep merchandise of the same kind belonging to different principals without taking extraordinary precautions to keep it separated.
He must sell for cash unless otherwise authorized expressly, and if he breaks this rule he is liable for uncollectible accounts. Nevertheless there is nothing to prevent the principal from entering into a del credere arrangement.
Finally, provision is made for revocation and rescission of the commission. The principal may revoke the commission at any stage of the business, becoming responsible for any loss thereby sustained by the comisionista. The -contract may be. rescinded only in case of the death or civil disability of the comisionista; in case of the death of the principal, his heirs or representatives may revoke the authority granted.
Organization of Commission Merchants in Habana.
The Cuban comisionistas, unlike the notaries and brokers, are not required by law to form "colleges" or self-governing corporations, but there has been voluntarily established in Habana an organization composed of comisionistas engaged in import and export called the Association of Representatives of Foreign Firms (Asociaci6n de Representatives de Firmas Extranjeras), whose president, Sr. Armando Marc6, has provided the division of commercial laws with much practical information regarding the operation of commission merchants in Cuba, and who has offered to give attention to specific inquiries from American firms that wish to enter the Cuban market.
Members of th association enjoy certain privileges accorded by law; and it is now proposed to establish a class of " commercial notaries," with powers similar to those of American notaries, for the benefit of members of the association.
This association exists, primarily, for the purpose of caring for and watching over the credit and standing of its members and fostering their welfare in general. Its disciplinary powers are indirect but none the less effective. To be admitted into the association it is necessary to have a clean record or to be able to justify any doubtful act committed prior to the application for membership, and any member may be suspended or expelled for failure to comply with the standard of honest commercial practice set by the association.
Applicants for membership must, of course, obtain the necessary government license and secure registration with the municipal government and the mercantile register; in addition, they must satisfy the association that they are maintaining their offices and keeping








their books in accordance with law and good custom. The association has been in existence about two years and is now composed of over 100 firms of comisionistas, representing some 2,000 foreign houses, doing an annual business estimated at $125,000,000.
The association has other activities in its field, also, and has done much to promote Cuban foreign commercial relations. The association is attempting to organize the facilities for the exchange of commercial and credit information and is boosting the construction of a suitable building to house the Department of Trade-Marks and Patents.
How the Representative Operates.
In the office of each such representative of foreign firms the necessary books are kept and the necessary staff is employed, including travelers who call on the trade throughout the island. When an order is obtained it is transmitted by letter or cable to the foreign house, where a confirmation or contract is made out and the merchandise shipped direct to the buyers. Shipping documents may be sent to the representative with draft attached, but the common practice is to present them through the bank. In most instances the intervention of the representative is limited to this, except that he is in a position to inform the foreign firm of the reasons for the nonacceptance of goods shipped to buyers, or the dishonor of drafts, and may in some cases assist in settling trade disputes between buyer and seller.
The representative sells with the price lists and quotations furnished by the foreign firm. If the subject of the sale is an article of movement in the market, the manufacturer quotes on each change; for instance, in wheat flour, the millers or manufacturers cable daily the fluctuations of the market. With these cables the representative calls on the buyers and exercises his selling efforts. Receiving an offer, the representative cables it to the mill, which by another cable either accepts or refuses the operation. Should the transaction be accepted by the mill the representative makes out a contract in triplicate, which he signs in behalf of the mill (having been previously authorized to do so), and which are also signed by the buyer. The original copy is mailed to the mill or manufacturer, the duplicate is given to the buyer, and the representative retains the triplicate. A standard form of such contracts (printed in Spanish and English) reads on its face as follows:
JoHN DOE, Representative of Foreign Firms
Habana, Cuba, ..... 192Messrs----. -of ----- have sold through me to Messrs .......-, of ,
as per my cable or letter dated --..... and subject to the conditions on the back hereof :
Quantity: Price:
Merchandise: Brand:
Shipments:
Terms of payment:
Remarks:
Our No .-... Salesman-----------Representative in Cuba of Messrs.---------Correct: The buyer:


(See conditions on the other side)







20

On the reverse the following conditions are printed in English and Spanish:
CONDITIONS

Consular charges for invoices and bills of lading will always be for the account of the buyer.
Shippers are not responsible for any loss, delay, or damage that the goods may suffer while in transit. In such cases the buyers will refer their claims properly to the insurance, transportation, or steamship companies.
Shippers are not responsible for delays or losses caused by strikes, embargoes, wars, or other contingencies beyond their control.
All claims must be made in writing to the seller's representative or his legal agent within 48 hours from time goods are placed on wharf. Each shipment will be considered as a separate contract. Claims against the insurance company for any goods sold c. i. f. must be presented by the buyer to the proper insurance company.
Any addition or correction made on this contract will be void. Any disagreement regarding this contract will be settled according to the by-laws of the Habana Produce Exchange.
TERMS
F. o. b. means free on board steamer or railroad car at the place from where the goods are to be shipped.
F. a. s. means free alongside the steamer or railroad car at the place from where the goods are to be shipped.
C. & F. means that in the price is included the cost and transportation expenses of the goods to the port or place indicated.
C. i. f. means cost, freight, and insurance paid to the port of destination by the shipper.
. The responsibility of the shipper ceases upon delivering the documents from the railroad or steamship company to the buyer.
These conditions are part of the contract as signed by the buyer on the other side.
Quoting Prices with Regard to Consular Invoices.
It is important for shippers to remember that when sales have been made on a c. i. f. basis the consular invoices should be based instead on the f. o. b. cost of the goods, whenever the goods must pay Cuban duty ad valorem, since the consular regulations do not demand payment of duty on the maritime freight or consular expenses. Sales made for delivery by parcels post must comply with all consular regulations, and consular invoices must be attached. Full information regarding Cuban consular regulations and customs practice is available in the division of foreign tariffs, Bureau of Foreign and Domestic Commerce.
Dispatch of Goods Through Customs.
As a rule, as has been said, the purchaser of goods attends to the dispatch of merchandise through customs, and the comisionista has nothing to do with this procedure. The latter receives a copy of the invoice which is sent to the purchaser, and in some cases duplicates of other documents, and may. be occasionally appealed to for assistance in case of need. In some cases the comisionista receives direct the documents controlling the shipment, which he delivers to the purchaser upon the acceptance of draft by the latter, but this is not a common practice. The same may be said with regard to the procedure followed by a very small number of comisionistas of making collections and remitting to the seller. Ordinarily the shipment is a transaction from the seller to the purchaser, with no inter-








vention on the part of the comisionista, such intervention as may be needed to retain control of the merchandise until paid for being normally intrusted to banks.
Advertising and Use of Letterheads.
The comisionista, whose clients are normally jobbers and wholesalers, is less concerned with advertising than would be the case if his clients consisted of the general public, and many comisionistas do no work of advertising unless it be to distribute placards, etc., supplied by the seller. The American company in some cases arranges for its advertising campaign through an advertising agency in the United States or through such an organization in Habana, and it is not the normal practice for the comisionista to attend to this matter, although it is sometimes done.
If, for instance, it is desired to secure publicity in the Habana press, the representative would willingly obtain and submit rates and arrange contracts. If the American firm should desire to send a publicity man to Cuba to visit the trade and boost sales on behalf of the comisionista, there is nothing to prevent it, for the man may be attached to the office of the comisionista temporarily. This, in at least one American State, according to recent decisions, would constitute doing business in the jurisdiction.
A comisionista may carry only his own name on his letterhead or may add the names of the firms represented by him. Some companies supply to the comisionista their own letterheads, on which is shown the name of the representative, and which the latter uses in correspondence concerning that particular firm. The more common practice is for the comisionista to use letterheads bearing his own name.
Remuneration of the Representative.
The comisionista is paid direct by the company which he represents, payment being customarily received through the mail. This settlement may be made monthly or weekly or at irregular intervals. The commission is ordinarily understood to be earned by the agent when the sale is made and agreed to by the principal and the purchaser. However, it is frequently the case that commissions are not paid until the seller has received payment from the buyer. Some American houses send the agents in Cuba monthly statements of collections made relating to sales effected by the agent and remit commissions on the basis of these collections. Again, sometimes the manufacturer pays so much per month to the representative, and every six months a liquidation is made, and any existing difference is charged or credited to the account between them.
The following rates, quoted to the bureau by Trade Commissioner C. A. Livingood, Habana, will give an idea of the range of commissions currently charged by comisionistas in Cuba, these being subject, of course, to modification by agreement: Packing-house products, 2 per cent; canned vegetables and fruits, 5 per cent; grain, 1 cent per bushel; beans, 10 cents per bag of 100 pounds; flour, 15 cents per bag of 200 pounds; hosiery, shirts, ties, handkerchiefs, notions, etc., 4-5 per cent; piece goods, 11/2-21/2 per cent; machinery, 5 per cent. These rates, of course, vary and depend to some extent upon the readiness of sale and size of the transaction.







Shipping Merchandise on Consignment.
The legality of sending goods on consignment to comisionistas, to be paid for as sold, is not doubted, and a large share of American sales to Cuba are handled in this manner. Nevertheless, field officers of the bureau and others qualified by experience and study have never been oversanguine in recommending the practice, opposing substantial theoretical and practical objections.
In the first place, it is said that this method of distributing goods is not sound psychologically, for it offers no spur to the activity of the representative. When the latter has to pay something down on the goods he undertakes to dispose of he has an interest in its turnover that is apt to be lacking when the stock on hand does not represent a capital charge. Secondly, the law expressly provides a lien in favor of the representative against the goods for any charges or commission claimed. Third, although the law establishes and protects the rights of the consignor to the goods, in many cases, due to the distance and to the lack of familiarity with local conditions, the consignor is too late in availing himself of this protection or the necessity of invoking it may not come to his attention in time.
By the execution of a proper form of continuing contract, which may be registered in the local commercial register, it is possible to send goods to a representative, with authority to sell, while retaining property in or title to the goods until so sold. In order to make the ownership of the goods doubly clear they should be marked with consignor's name, and in all correspondence, bills of lading, or other advices to the representative care should be taken to refer to the A ownership of the goods. In the contract it should be stipulated that '4 the goods are to be kept physically separated from other property in the representative's store or warehouse.
Under these conditions the representative is civilly and criminally liable for the misappropriation of the goods. They may be followed into the hands of an innocent purchaser for value and recovered by an action in rem. They may be released from embargo raised by the creditors of the representative. In the case of the bankruptcy of the representative they may be released by the trustee of the bankrupt's property upon a timely proof of title. Other remedies besides are available to the consignor, but, as stated above, it frequently happens the the goods are dissipated by a fraudulent representative who escapes or who, when tried and found guilty, can not respond in damages but can only serve a criminal sentence. Revenge against a fraudulent representative is poor return for the loss of a valuable stock of merchandise.
Again, notice of the embargo, the suspension of payments, or the bankruptcy of the representative may be published in an obscure local newspaper, complying with the letter of the law, but not likely to be brought to the attention of the consignor until the assets have been marshalled and distributed beyond recovery. Consequently, the only secure protection in the case of consigned goods lies in sufficient bond by the representative or ample insurance.







DOMESTICATION OF AMERICAN CORPORATIONS IN CUBA
Foreign corporations derive the right to exercise their functions in Cuba in the first instance from the provisions of article 10 of the Cuban constitution, which, while referring expressly to "foreigners residing in Cuba," may be taken to apply equally to foreign juridical persons. This clause of the constitution provides that such resident foreigners shall be equal to Cubans in regard to the protection of their persons and property, the enjoyment of civil rights guaranteed by the constitution and other laws, and likewise in regard to the obligation to observe and comply with the laws, decrees, regulations, and other dispositions in force in the Republic, to submission to the decisions of the courts and other authorities, and to the obligation to contribute to the public expenses of general government, Province, and municipality.
The foregoing article of the constitution is included as article 27 of the Civil Code. In the succeeding article the Civil Code specifies that "corporations, foundations, and associations recognized by the law and domiciled in Cuba shall enjoy Cuban nationality provided they have the quality of juridical persons in accordance with the dispositions of the present code. Associations domiciled abroad shall have in Cuba the consideration which treaties or special laws may determine." Branches of Corporations Receive Benefits of Cuban Nationality.
American corporations, therefore, may establish branch offices in Cuba and receive all the benefits of Cuban nationality while retaining American nationality without any special permission of the
Executive, as required in some countries of Latin America, provided that their object is legitimate and in conformity with the laws both of Cuba and of the United States; that they have been properly incorporated according to the laws of one of the States of the United States; and that in operating in Cuba they comply with the Cuban civil and administrative laws. The following is taken from the "Law of Foreigners," and is applicable to foreigners and foreign companies whether domiciled in Cuba or not:
ART. 40. Foreigners may exercise commerce, wholesale or retail, but with subjection to the code of commerce and other laws, regulations, or dispositions which apply.
ART. 42. They will also be subjected to the Cuban courts in all actions brought by or against them for the execution of agreements contracted within or without Cuba with Cubans or which refer to the possession of goods existing within Cuban territory.
ART. 43. Cuban tribunals shall be competent and shall take cognizance of actions between foreigners brought before them, and which concern the carrying out of obligations contracted in Cuba or to be executed there.
ART. 47. Foreigners, as such, shall not enjoy any special immunity or privilege and shall be subject to the same courts which, in similar cases, take cognizance of the affairs of Cubans.
This is the old Spanish law of foreigners and has never been remodeled as contemplated in the original plan of government. It is, however, held by court decisions to be in full force at the present time. Foreign Companies Recognized by Commercial Code.
The code of commerce is, of course, the principal source of law for business corporations. Article 15 of this code provides: Foreigners and companies established in foreign countries may exercise commerce in Cuba, being, in everything that refers to their capacity to contract, subject to the laws of their own country; and being subject to the dispositions
58737-27-----4







of this code in everything relating to the establishment of places of business in Cuban territory, to their mercantile operations, or to the jurisdiction of the courts of the nation.
This provision, it will be seen, has two parts. The first permits the application of the law of the corporation's own country, is limited to the single instance of determining capacity to contract-in accordance with what jurists term the "personal statute " of the company. In all else the internal Cuban laws are paramount.
It follows that foreign companies may be put upon a parity with Cuban companies by having them comply with all the requirements exacted of Cuban companies with regard to registration and the payment of fees; but inasmuch as the law requires that foreign companies exist in accordance with the laws of their own countries, it is necessary to produce proof, consisting of a consular certificate, that the corporation was duly organized and presently exists in good standing at home.
Sometimes American corporations, instead of domesticating branch offices of their own in Cuba, organize subsidiary corporations under the laws of an American State for the sole purpose of taking over the Cuban business of the firm. This procedure has certain advantages, chief among them being simplicity in administration and taxation.
Documentation Necessary.
The preparation of the documents necessary for registration should be intrusted to an American lawyer familiar with Cuban procedure, of whom there are a number in practice in several American cities, whose names are on file in the division of commercial laws. This attorney will first have to examine the by-laws to see whether they contain all the provisions necessary for the execution of the form of inscription in the commercial register, which requires some 21 facts to be set forth, as in the case of the registration of a Cuban sociedad an6nima.
Triplicate copies of the articles of incorporation and of the bylaws and of any amendments thereto should be prepared and certified by the State officer who has custody of the originals. The board of directors should prepare two resolutions, the first authorizing the establishment of the branch and indicating the amount of capital assigned to it, and the second authorizing the execution of a power of attorney to the agent of the company in Cuba. The actual power is executed by the president of the company by virtue of this authority. The purpose of assigning a specific capital to the Cuban branch is to avoid paying registration fees in proportion to the entire capital of the company. These documents are likewise prepared in triplicate and certified by the secretary of the company and acknowledged before a notary, whose attestation is certified by the county clerk or other officer in charge of notaries.
All of these documents must then be presented to the local consul of Cuba for his legalization and the addition of his certificate that the company was duly incorporated and is in good standing.
When these documents reach Cuba they must be taken to the proper Government office in the department which corresponds to the American State Department, where the legalization of the consul will be homologated or verified and then translated into Spanish by








a sworn translator. The papers may thereafter be protocolized with a Cuban notary, although this is not necessary; it may be useful in case the company should desire to open branches in other cities than the original, in which case copies of the protocolized papers, instead of new, legalized copies, may be presented to the commercial register at that city. In any case, the triplicate copies must be presented next to the ministry of finance, which will add a certificate that transfer taxes are not payable (these being payable only in the case of the organization of Cuban companies).
The papers are now in order to be presented to the commercial register, where a small fee is payable, based upon the amount of capital assigned to the Cuban branch, and a small stamp tax is collected. They are finally deposited with the ministry of agriculture, commerce, and industry, which, as before explained, is charged with the supervision of stock companies by the organic law of the executive power.
Appointment of Agent.
No Cuban law requires the appointment of a statutory agent with authority to receive service of process, as is usual in the foreign corporation laws of most States and countries. Nevertheless, it is usual and convenient to appoint a general agent in charge in the branch with power to sue and be sued in the local courts on behalf of the corporation, and to do other things beyond those of a purely administrative character, and which require the use of discretion and authority. This appointment is made by the registration of a power of attorney in the commercial register.
The power of attorney should be protocolized with a notary in the beginning, for many occasions will arise when certified copies of it will have to be presented. The nature, form, and content of powers of attorney are discussed in a separate part of this bulletin. Cost of Domestication.
The costs of registering a branch in Cuba correspond in general to the cost of organizing a Cuban company, except that the articles of incorporation, etc., are not drafted in the original, but merely copied from the already existing documents. On the other hand, there must be added the costs of certifying, legalizing, and translating the documents, which, when these are voluminous, are quite likely to be expensive. The consular legalization in each case costs $3, and the cost of translation by an official translator of the Cuban State Department is 1 cent per word.
Some Advantages of Domestication Considered.
If the local business of the American firm is so extensive as to demand Cuban incorporation or the establishment of a branch of the principal office, the question of the relative advantages of these two methods arises. From the point of view of initial costs it has been shown that there is little to choose between them. This is substantially true also from the point of view of annual taxation.
Reference has been made to the provision that in case of war the interests of foreigners in Cuban corporations shall be inviolable. This would seem to place domestic and foreign corporations on a par, but it has been well argued that in view of the peculiar political relation between Cuba and the United States a branch of an Ameri-







can corporation, which can obtain diplomatic protection in certain contingencies, enjoys a substantial privilege not available to a Cuban company.
In this connection Osgood Smith, an attorney residing in Cuba, reports that "under the treaty between Cuba and the United States the American Government has such rights that it is in a peculiarly advantageous position to intervene diplomatically for the protection of American capital and investments in Cuba whenever the proper occasion for such intervention arises. The American Government has never hesitated to intervene in this manner whenever it has been properly convinced that there was just reason for such action on its part. Moreover, a careful inquiry among Americans who have invested large amounts in Cuba will show that they have no fear of any serious damage to their property because of any disorder that may arise."
ORGANIZATION OF CUBAN COMPANIES
Partnerships and corporations do not, in Cuban jurisprudence, constitute separate branches of the law as they do in this country, but are regarded as two phases of the same branch of law, which we may call company law. A company, by the Cuban code of commerce, is considered merely the product or manifestation of a special kind of commercial contract-a contract where two or more persons obligate themselves to put into a common fund goods, money, or labor or other valuable commodity, for the purpose of obtaining and dividing between them the profits of industry or trade. The contract is "formal," that is, it must be drafted in a particular manner and must be distinguishable by its object and it must be registered in accordance with the dispositions of the code of commerce. Companies are known as sociedades or societies.
There are three kinds of companies recognized by law-the colectiva, the comanditaria, and the an6nima-to each of which, in addition to the general rules of company law, special provisions are set forth in the code.
The Sociedad Colectiva.
Closely approximating the American partnership in purpose and function, the sociedad colectiva is, nevertheless, considered as a juridical person-an entity apart from the individual partners that compose it. Notwithstanding this, the characteristic that distinguishes the sociedad colectiva is the joint and several responsibility of the persons who compose it, so that the difference between the American partnership and the sociedad colectiva is one of form rather than of substance.
The name of the sociedad colectiva may contain the names of all the members or of only one or more of them; in the latter case, it must be followed by the words "y compafiia," meaning " and company." If the name of an individual not a member should appear in the firm name, it would make such individual liable jointly with the members. Only such members as have been specifically authorized may use the firm name; unauthorized members are personally liable for its use.








The sociedad colectiva is instituted by the registration of a " public document" or formal contract containing the following essential requisites:
Name and address of each partner.
The firm name adopted.
Names of the members to whom is intrusted the direction of the business and the use of the firm name.
The amount of capital or capital goods contributed by each member and the value set on the latter.
Duration of the company.
Amounts allowed annually to partners for personal expenses. Any other terms and conditions, such as the ratio of profit and loss to be borne by each partner.
The partners are permitted to trade privately for their personal profit as long as the kind of trade engaged in is not the same as that of the partnership and does not harm the partnership business. However, partners whose contribution consists only in personal services and not money or property may not exercise any business whatever apart from the partnership business. The Sociedad Comanditaria.
This form of company is provided for the purpose of affording machinery for the investment of capital by persons who have no connection with the conduct of the enterprise of the company. If certain individuals desire to operate a business, but lack the necessary capital, they may organize a sociedad comanditaria, in which other individuals who have capital to invest may take an interest, contributing the capital and accepting the gain or loss, but not being liable for the obligations of the company beyond the amount contributed.
The comanditaria takes two forms-the simple company and the company by shares. In the former, the capitalist may have some personal interest in the conduct of the company and is to be compared with the silent partner in our partnership law. In the latter, the interest is impersonal and is represented by shares, much in the manner of statutory joint stock companies in some of our States.
The active partners are all jointly and severally liable, and the company is instituted in the same way as an ordinary partnership, by the registration of the contract of association. The name of the firm is formed of the names of one or more members, as in the colectiva, but must have added to it in every case the words " Sociedad en Comandita," or the abbreviation "S. en C." Should the name of any silent partner be included, he will become fully responsible as an active partner.
The sociedad en comandita is an instrument of commerce that is sufficiently pliable and adaptible to permit its use in circumstances when the adoption of a partnership or corporation form of business would not be suitable or desirable, for it offers all the advantages of personal participation in the direction of the business by the investors, while providing them with limited liability. It is recommended to the consideration of those interested in industrial enterprises in Cuba requiring the investment of large sums of money. The Sociedad An6nima.
The difference between a Cuban sociedad an6nima (anonymous company) and an American corporation is rather theoretical than








practical; the rights and liabilities of the shareholders are the same and the management of the company is similar.
A sociedad an6nima is organized by the execution of a contract of association before a notary, the registration of this contract in the commercial register of the locality in which the company is to have its principal place of business, and the payment of the requisite fees and taxes. There is no mention in the law of the nationality or residence of the incorporators, from which commentators have deduced the proposition that the contract of association may be made outside Cuba and by foreigners. If this is true, and if the contract of association should be executed in the United States by Americans, it would probably be insufficient if acknowledged before an American notary; it might be acknowledged before a Cuban consul or authorized attach6 of the embassy, or, failing this, it might be protocolized in Cuba before presentation at the commercial register.
The sociedad an6nima is regulated fundamentally by the code of commerce, and in the report of the Spanish redactors of that code the following are given as the principles governing their treatment of this form of company: Full liberty of the associates to constitute the kind of company they deem convenient; complete absence of governmental intervention in the internal affairs of juridical persons; and publicity for the social acts that might interest third parties, which publicity is a truer and more efficient guaranty than previous authorization of the government or the inspection exercised by delegates, now abolished in the principal commercial countries. Nevertheless, upon the establishment of the Republic, the doctrine Af was modified to some extent, and in the organic law of the executive power, the ministry of agriculture, commerce, and labor was intrusted with the supervision of mercantile companies.
For the regulation of this supervision a decree was published October 25, 1909, which, reciting the said organic law, and pointing out that even in countries where the liberty of contract was most jealously guarded a close supervision of corporations was considered a legitimate function of government, and that even in Spain, where the code of commerce was in force, a law of the previous year had instituted the inspection of anonymous companies, empowered the division of commerce and industry in the foregoing ministry to keep a register of all anonymous companies, obliging the local commercial registers to forward an abstract of the registration entered by each such company, and obliging the companies themselves, under pain of a fine of $30 to $60, to file certified copies of contracts of association and amendments. Inspectors are provided to see that companies keep the books required by law, and information regarding such companies is available to the public on application at the offices of the ministry. Annual reports of the condition of anonymous companies must be prepared by the director of the division, who may also put in motion the machinery to terminate the license of any company.
These regulations are not considered burdensome and are conducive to regularity in corporate enterprises, to the promotion of public confidence in corporations, and to the collection of accurate statistical information concerning the trend of corporate activity.






29

Requirements of the Contract of Association.
The following are the requirements of the contract of association (escritura social) which, signed before a notary, must be registered at the commercial register of the place where the principal office will be located, and a certified copy of which must be transmitted to the ministry of agriculture, commerce, and labor:
Name and address of the incorporators.
Name of the company (which must be descriptive of the object of the company, must not be confused with that of any existing company, and must bear at the end of the designation " Sociedad An6nima," abbreviated " S. A.").
List of the persons charged with the administration of the company and the manner of filling vacancies.
Amount of capital, with a designation of the value assigned to any contributions of capital not consisting of actual money.
The number and kinds of shares emitted.
The time within which unpaid subscriptions must be paid in.
Duration of the company.
Objects or nature of business operations.
Regulations applicable to general or extraordinary meetings.
Any other agreements, including any by-laws to be published.
The law does not specify any form of administration of the company, it being customary, however, to adopt the ordinary form of board of directors. Most Latin-American countries require not only a board of directors, but another set of officials called sindicos, whose duty consists in maintaining a vigilance over the activities of the board. Cuba merely specifies, however, that whatever administrator is appointed shall have certain duties and liabilities and may not exceed limits of his delegated authority. The administrator is considered a general agent.
The company must publish a monthly balance in the official gazette, and shareholders may inspect the books under the regulations agreed to.
Laws Concerning Shares of Stock.
Shares are either "nominative" or "bearer." Nominative shares are registered, and each transfer must be registered in the books of the company, while bearer shares may be transferred without restriction. Only shares which have been paid up to the extent of 50 per cent may be issued to bearer, others being issuable as nominative shares only. The amount paid up must be indicated on the face of the certificate. Detailed regulations are established for the payment of dividends and for the issue of new series of stock and for the purchase by the corporation of its own shares. A company can not lend money on the security of its own shares. It can not reduce its capital without complying with certain formalities under the supervision of the court.
A provision of interest to publicists the world over to-day is contained in article 169 of the code of commerce, which, with the object of inspiring confidence in foreign investors of capital, establishes that " funds belonging to foreigners existing in anonymous societies shall not be subject to reprisals in case of war." Special Rules for Certain Kinds of Company.
Banks, financial companies in general, railroads, or other public or semipublic enterprises, and warehouse companies are governed by special regulations too detailed for inclusion in this monograph.






30

Cost of Incorporation.
The elements of cost which are to be considered in the organization of a sociedad an6nimu are of two kinds-cost of drafting the contract and fees and taxes. In the cost of drafting the instrument the attorney's charge and the charge of the notary for protocolizing the document must be considered. It is, of course, impossible to say even in a general way how much an attorney will ask for his advice in organizing the company. Notarial fees for protocolization are based on the amount of authorized capital represented and are scaled about as follows:
Notarial fee
$25,000 -------------------------------------------------$50
$50,000 --------------------------------------------------so
$100,000 ------------------------------------------------125
$250,000 ------------------------------------------------200
$500,000 ------------------------------------------------300
$1,000,000 ----------------------------------------------500
Over $1,000,000 the fee is $100 for every additional million or fraction thereof.
Under the laws of July 31, 1917, and June 1, 1920, a stamp must be affixed to each page of the original and certified copies of the contract of association. For the original the stamp is 5 cents per page, but for copies the stamp is fixed on the first page only, in accordance with the following schedule:
Stamp tax
$500 -------------------------------------------------$0.10
$1,000 --------------------------------------------------. 20
$3,000-------------------------------------------------- .50 4
$6,000 -------------------------------------------------1.00
$15,000 ------------------------------------------------5.00
Over $15,000 ------------------------------------------10. 00
Before the contract of association can be presented for registration the government organization tax of one-quarter of 1 per cent on the paid-in capital or the value of stock issued as fully paid must be paid. This tax is thereafter payable on any stock issued from time to time.
The next important item is the registration fee, payable at the time of presentation of the contract of association to the commercial register of the locality where the company has its principal place of business. This fee is also based on the amount of authorized capital and is scaled as follows:
Registration fee
Under $5,000 ------------------------------------------$1. 50
From $5,000 to $20,000 ----------------------------------2. 00
From $20,000 to $50,000 --------------------------------- 5. 00
From $50,000 to $100,000 -------------------------------10.00
Over $100,000, $1 for every additional $20,000.
There is also a flat rate of 75 cents for each separate document filed with the register and a stamp tax of 5 cents for each page of the mercantile register upon which the document is transcribed.
(The foregoing Information relating to cost of incorporation is based partly on a report of Dr. Alfredo Lombard, attorney, Habana.)







THE LAW OF SALES
The chapter in the civil code (Title IV) which, as has been noted in describing the scope of that code, treats of the contract of purchase and sale, lays down the general law of sale applicable both to civil and commercial transactions, except where the code of commerce establishes special rules for the latter. In the law of sales the code of commerce derogates from the civil code in only a few'particulars, and these exceptions may be briefly described as follows:
In the first place, only such sales are "mercantile," and therefore subject to the exceptions, as relate to the traffic in movables (" personal property ") for the purpose of resale for profit.
In mercantile sales, if the sale is made by sample or by reference to a standard recognized by the trade, the buyer can not reject the goods if they conform. If he refuses to accept them, the matter will be referred to experts, named in conformity with the code of civil pro-i cedure, upon whose finding the validity of the contract will depend.
Time is of the essence of commercial contracts, and failure to deliver in the time stipulated entitles the buyer to rescind, with damages.
If the goods are to be delivered in a specified time, the buyer need not receive part delivery; if he receives delivery of part, however, the sale is consummated as to that part, the buyer retaining the privilege of rescinding the contract with damages as to the remainder of the goods.
The seller is liable for any damage or deterioration of the goods
prior to delivery, unless the goods have been placed at the disposition of the buyer at the latter's agreement. " Delivery " here must be taken to mean actual or constructive delivery.
If the buyer refuses unjustly to receive the goods, the seller can demand compliance with or rescission of the contract, meanwhile depositing the goods judicially-that is, in accordance with the code of civil procedure, by order of court-and the seller himself can be named depository. Costs are for the party at fault.
After the contract is complete if the seller has the goods at the place prescribed in the time prescribed, any damage or loss is, in general, for the account of the buyer. But the loss is for the account of the seller if the goods are sold by weight or measure or do not bear identifying marks or are otherwise undetermined; or if, by custom or agreement, the buyer has the right of examination before acceptance; or if it wa specifically agreed that the goods should not be delivered until they comply with all the conditions stipulated. In case the seller takes the loss, he must return so much of the purchase price as he may have received.
If the buyer has opportunity to inspect the goods at the time of delivery, the rule of "caveat emptor" applies, and the buyer can not complain afterwards; but if the goods are in bundles or bales he has four days within which to exercise his right of refusal. The seller has the right to require the buyer to execute a declaration in the form established by the code of civil procedure, admitting that the goods are to his satisfaction, thus precluding possibility of subsequent action to rescind.
If no time is stipulated, the sellermust produce the goods within 24 hours after the contract. The costs of delivery up to the point
58737-27- 5







of placing the goods, weighed or measured, at the disposition of the buyer is for the account of the seller, but is for the buyer thereafter.
As soon as the goods have been placed at the disposal of the buyer and the latter expresses his acceptance, the obligation of payment on account or at stipulated periods begins.
While the goods are still in possession of the seller he has a lien on them as against other creditors of the buyer to the extent of the purchase price and interest charges. Interest is charged against a buyer who delays payment of the purchase price.
The right to reclaim against the seller on account of hidden defects lapses 30 days after delivery of the goods. Money paid to bind the contract is considered paid in partial liquidation of the purchase price and in evidence of the ratification of the contract.
A mercantile contract may not be rescinded on account of undue advantage which, with respect to the price, one party may take of the other, but the party aggrieved has his action for malice or fraud and may also institute criminal action against the other.
The buyer is entitled to the benefits of "evicci6n," which is warranty of title, and "saneamento," which is warranty of possession and quality.
The General Law of Contracts of Purchase and Sale.
Except in the particulars of the code of commerce mentioned above, recourse must be had to the civil code for determination of what constitutes the law of sales. The need of a new sales act to be incorporated in the code of commerce, modeled on the English and .American uniform legislation, is deeply felt and will be one of the first objects of the attention of the commission for the recodification of the laws which has now commenced its labors.
The civil code describes the nature and form of contracts of sale and the capacity of the parties, adding that lawyers can not purchase the property which was the object of litigation in which they intervened.
A special point is made of the case of the loss of the subject matter at the time of the completion of the contract, in which case the contract is without effect; but in the case of only partial loss of the subject matter the buyer can choose whether he will take the part or elect to rescind. No mention is made, however, of the case of mutual mistake which may arise, as in the famous English decision where one party sold to another certain goods to arrive "ex Peerless," and there were two ships of that name, one of which failed to arrive, it appearing that the parties did not have reference to the same vessel.
The obligations of the vendor, which consist in the delivery of the goods and the warranties required by law, are set forth in some detail, as are the obligations of the vendee, which consist principally in payment of the purchase price at the time and place indicated. These obligations are fairly covered by the provisions of the code of commerce, abstracted above, and will not be further dealt with here. Bulk Sales Law.
There does not appear to be in Cuban legislation a bulk sales law like that of many States and many Canadian Provinces, requiring the registraifion of all sales of an entire establishment' In a decision








of 1905 the Cuban Supreme Court held valid the sale of a mercantile establishment, together with its stock, ignoring the plea that, because the stock was not listed in the contract of sale, the object of the sale was indeterminate, invalidating the contract. Conditional Sales of Personalty.
Although as a practical matter many American products have been regularly merchandised in Cuba on the installment plan commonly employed in the United States, much doubt has until recently been cast upon the legality of such sales. The- old law of sales appeared to recognize the validity of a sale in which the price was to be paid in installments, but in such case the doctrine was that title passed absolutely upon delivery of the thing, and could not be impressed with a condition subsequent for the return of the property sold if installment payments were not made. A third party creditor of the purchaser might under such a theory attach the article, or the purchaser might sell it to a third party, giving a good title thereto. In other words, possession, under such circumstances, would be equivalent to title.
There does not exist in Cuba the system of chattel mortgages or registered conditional sales common in the United States. Recently a bill in the Cuban Congress carried, among other things, a provision for the registration of conditional sales, which would have provided the safeguards desired by the business world; the bill was vetoed, however, because of some of its other provisions.
A system of leasing store fixtures, household furniture, and the like, however, was worked out, based upon a contract in which the lessee agrees to care for the property, not to move it or give up possession of it, and to pay a stipulated rental, and the lessor agrees to transfer title to the property to the lessee after a certain number of rental payments have been made. There was danger, however, that the court might at any time hold that such leases were simulated sales and, as sales, subject to the doctrine described above, as the courts of other civil law countries have held. (See Installment Sales in Foreign Law, Trade Information Bulletins Nos. 370 and 376.)
A case decided by the supreme court on January 19, 1926, offered some relief to manufacturers who sell on the installment plan. The case involved the sale of machinery to a factory owner under a contract providing for the retention of title by vendor until payment of the whole price (contrato con pacto de reserva de dominio). The factory was mortgaged, and on foreclosure the mortgagor attempted to take the machinery also on the ground that it had become a part of the real property mortgaged. In holding that chattels attached to mortgaged real property do not become subject to the mortgage if they do not belong to the mortgagee, the court also held:
1. The parties to a contract of sale may provide whatever conditions they desire, provided they do not contravene the laws, morals, or public order.
2. The covenant for the retention of title by the vendor pending payment of purchase price is not contrary to law, morals, or public order.
This decision was given publicity by the 'American Chamber of Commerce in Cuba, which published a comment thereon by Dr. Luis Machado, of the Habana bar (also published in Comparative Law Series, Vol. III, No. 2, division of commercial laws).









Doctor Machado's article has prompted a letter to the American Chamber of Commerce of Cuba from Dr. Antonio S. de Bustamente, a prominent international lawyer and one of the judges of the World International Court, from which the following excerpts are taken:
I have read with great interest the article published by you relating to the conditional sales contract.
The article is question is, fundamentally, a commentary on the decision rendered by the Supreme Court of Cuba on January 19, 1926, and has reference also to the decision of December, 16, 1925.
For many years ive had in mind that the Supreme Court of Spain, in a decision handed down on February 16, 1894, that is to say, at a date when it applied to our country, being .prior to the termination of Spanish suzerainty in Cuba, decided that a conditional sale contract covering property, by virtue of which the seller while transferring it to the buyer retained his ownership in it until the price of the sale should be paid, was perfectly valid and binding.
But the same Supreme Court of Spain, at a time when its decisions did not affect the rulings of our courts, i. e., after Spanish sovereignty over the island of Cuba had ceased, decided on 'March 6, 1906, "that the stipulation that the ownership of a thing covered by a sale is not transmitted to the buyer until the total amount of the price be paid, is not prohibited by law, nor is it contrary to good practice."
Some time later the same Supreme Court of Spain, on December 13, 1921, decided "that the clause which left the acquisition of ownership indeterminate must be understood not as placing a limitation on ownership, inasmuch as it is not natural to a sales contract-the nature, conditions, and effects of wh'ch are fixed by law and can not be changed-but this to be considered as somewhat akin to a contract of pledge or guaranty to insure the collection of the price of the sale."
In these circumstances, and without our civil courts having decided on this matter, inasmuch as the civil chamber of the supreme court of the Republic has never had the opportunity to clear up the doubt which was raised between the first two decisions of the Supreme Court of Spain and the last one of December 19, 1911, the rulings quoted in the American Chamber of Commerce of Cuba's publication were issued.
The decision of February 16, 1894, of itself does not constitute legal doctrine for our, courts, but taken with that of January 19, 1926, it does establish a legal doctrine which has to be accepted and applied by our courts.
Consequently, under these decisions it is possible to covenant that the seller reserves the right of ownership to the thing sold until the total amount of the price agreed upon has been paid to him.
In order that this agreement shall be respected by a third party, i. e., one not a party to the contract, it is necessary, under the provisions of article 1218 of the Civil Code, that it be entered into by public instrument, because although the private instrument, acknowledged in court by the party whom it affects, has the same value between the contracting parties as a public document, according to article 1227 of the Civil Code, its date shall be considered with regard to a third party only from the date on which it may have been filed or entered in a public registry; from the death of any of these who signed it, or from the date on which it may have been delivered to a public official by virtue of his office.
Our supreme court, therefore, having in its decision of January 19, 1926, (officially published on July, 15, 1926), resolved that a conditional sale is possible, the most practical course to follow is to make the conditional sale, reserving ownership in the seller until the entire amount owed to him is paid, and agreeing that the failure on the part of the buyer to fulfill any of the obligations incumbent upon him under the contract, or the attachment orseizure, judicially or administratively, of the goods sold, shall authorize the seller to request a dec'sion from an amicable compounder ordering the immediate return of the goods the buyer to lose what lie may have paid up to that date, such payments to be considered as just indemnification to the seller for the use of the goods by the buyer, and likewise as a penalty for the nonfulfillment of the contract.








American firms intending to introduce their products in Cuba on the part-payment plan should consult with competent counsel with regard to the form of contract best suited to the protection of the rights of the firm.
NEGOTIABLE INSTRUMENTS

Although in some countries of Latin America the bill of exchange can not be considered apart from the transaction which gave rise to it, in Cuba the bill is an autonomous instrument of credit, whatever the nature of the transaction from which it originated, provided always that it conforms in all its details to the requirements of the Code of Commerce. The contract of exchange is exclusively commercial, and its incidents are determined, first, by the Code of Commerce, and, second, by the usages and customs of merchants, or, failing both of these, by common law. Requirements of a Negotiable Bill of Exchange or Draft.
According to article 444 of the code of commerce, bills of exchange must contain, in order to be admissible as such in lawsuits, the following items:
1. The designation of the place, day, month, and year on which it was issued.
2. The time it falls due.*
3. The name and surname, firm name, or title of the person to whose order the payment is to be made.
4. The amount which the drawer orders paid, stating the same in cash or such fictitious currency as commerce may have adopted for exchange purposes (e.g., the Chinese tael).
5. The form in which the drawer declares himself satisfied or reimbursed by the taker, whether by receipt of its value in cash or merchandise or other property, which must be expressed by the phrase " valor recibido" (value received), or, when taken in the course of other business between the parties, by the phrases "valor en cuenta" (value on account), or the phrase "valor entendido" (value understood). When either of the latter two phrases is used the taker is liable to reimburse the drawer in the manner and time agreed between them. However, the use of such phrase merely establishes a presumption of liability and may be contested in court; it is not enforceable as against third parties.
6. The name, surname, firm name, or title of the person or association from whom the amount of the bill is received or to whose account it is charged.
7. The name, surname, firm name, or title of the person .or association on whom it is drawn, as well as his or its domicile.
8. The signature of the drawer, in his olwn handwriting, or the signature of his agent with sufficient power of attorney ad hoc.
It will be seen that drafts to be drawn on Cuban customers differ slightly in form from those drawn on customers in other parts of the world. The exporter should carefully consider the form which he uses for Cuba to -see whether it complies with the foregoing requirements.
A "payment. on arrival " bill of exchange, it seems, is not considered a negotiable instrument in Cuba. Since the bill does not bear a specific date, it has no legal value. The law requires that time and place of payment must be indicated in a bill of exchange.
The refusal to pay a bill of exchange drawn at sight, to accept a time bill, or refusal to pay an accepted bill, pending arrival and inspection of the merchandise, is considered a dishonor of the bill of exchange by law. By custom, however, the refusal to pay a bill







drawn at sight or to accept a time bill would not be considered a dishonor. Custom does, however, consider it a dishonor to refuse to pay an accepted bill pending arrival of the merchandise. The custom would not have any bearing on the strict legal interpretation of the situation, inasmuch as the Cuban courts are extremely literal in adhering to the statute in their decisions.
The fact that the contract of sale provided for the inspection of the merchandise prior to acceptance or payment of the bill would have no effect on the bank, but might beshown to the court.
Where the merchandise has not arrived and the drawee claims a right of inspection, banks follow the practice of giving a reasonable extension of time. Acepted drafts are protested for nonpayment in any case, since this is necessary in order to maintain their legal value.
It is to be noted, however, that a draft drawn in dollars, unless otherwise specified, is payable in Cuban currency and consequently exchange would be for account of the exporter in the United States. To avoid this drafts are generally stamped "Payable at the current rate of exchange at the collecting bank for demand drafts (or cable transfer) on New York (or, plus stamps, collection charges, etc.). Where "No Protest " Instructions Accompany the Bill of Exchange.
The fact that "no protest" instructions accompanied the bill of exchange does not reach the knowledge of the drawee and thus give him an opportunity to delay payment without danger of protest unless the words are written on the face of the bill itself. Trade Acceptance Not in Common Use.
In this connection it may be pointed out that the trade acceptance now generally used in domestic transactions is an American development and quite possibly does hot meet the description of a bill of exchange under Cuban law. While some exporters are using these forms in their Cuban business, no test case by Cuban courts has come to the attention of the division of commercial laws, and pending the judicial determination of this point it seems advisable to discourage the use of domestic trade acceptance forms for drawing upon Cuban buyers.
Negotiation and Transfer of the Draft.
Bills may be drawn to the order of the drawer or another and are negotiated by indorsement." They may be indorsed by holder's agent provided the agent has power of attorney and so states above his signature. The indorsement should state the date, the indorsee, and the consideration.
Bills may be drawn payable at sight, or one or more days or months after sight or date, or at a fixed or determinable date. They may also be drawn payable at a fair, in which way they are payable on the last day of the fair.
They may likewise be drawn payable at one or more usances. A usance is the time, according to Pothier (Contrat du Change, n. 15), whiih by the custom of certain countries is allowed for the payment of bills of exchange. The usance for bills drawn in the United States on Cuba is expressly established as 60 days.
All bills must be paid on the duie date, or the first legal business day thereafter, before the seting of the sun, without grace.







The Aval.
An institution not familiar in American and English legislation on bills of exchange is the "aval," or guaranty (pledge) by a person not a party to the bill, who, by placing his name on the back of the draft with a statement.of his undertaking, becomes secondarily liable thereon under the conditions of his undertaking. The law says that " the payment of a bill can be secured by a written obligation independent of that contracted by the acceptor and indorser, known by the name of aval." An action on the aval is an action arising out of the draft, and, according to a court decision, is outlawed in three years after the due date of the draft to which it refers.
The aval may be general in its terms, in which case it is governed by the terms of the draft as to the time and place of payment, or it may be restricted to any time, place, amount, or person. The fact that' a condition may be expressed in the undertaking of the aval does not in any manner affect the negotiability of the instrument, since the aval is a contract apart from the obligation imposed by the draft itself.
Attention may be called to the possible use which may be made of the aval as an added source of credit insurance. The provisions relating to its employment are sufficiently flexible to admit of practical application.
Presentation and Protest of Drafts.
Drafts, to retain their full effect in lawsuits, must be protested both for nonacceptance and nonpayment. Protest for nonacceptance does not exempt the holder from the duty of protesting for nonpayment. Not even the death of the drawee exempts the holder from this duty. Protest must be made before the sunset of the day following presentation.
Opinion in commercial circles is to the effect that the Cuban laws relating to protest of drafts are cumbersome and antiquated and far from being adequate under modern conditions of business. The cost is out of all proportion, due to the fact that the intervention of a notary is required as well as the execution of a very complicated procedure. Where notaries are available in the town, the cost may be $8 or $10 only, but if none are available it may sometimes rise to $100 to $500. Reference to the section of this bulletin describing the functions of notaries will help to give one an understanding of the formalities applied to protests.
A matter of some consequence in connection with the protest of drafts is the attitude of Cuban merchants toward it. Due to the fact that the holder of a protested draft may be in a position to embargo the business of the merchant and upset his affairs quite summarily by trie employment of the executive action against him, it is a peculiarly dangerous instrumentality from the point of view of the debtor. It seems unjust to him that because he may have had some good reason to dishonor a particular draft that his whole credit and reputation should be imperiled. While, therefore, the drawer's only protection in case of dishonor is to protest, he must understand that in so doing he may sever relations with the debtor completely and must not expect future business with the same customer. This is a dilemma which must be solved by a consideration of the circumstances of each particular case.







If the drawer wishes to extend the time for payment of the draft, he may do so only by drawing a new bill or by entering into a formal protocolized contract to that effect. To extend the original draft results in impairing its force in law; it is no longer entitled to execuive action, but becomes an ordinary debt, enforceable in the ordinary tedious, expensive way through the bringing of a " declarative " civil action. The acceptance of a new draft avoids these consequences. The execution of a protocolized contract serves to substitute the contract in the place of the bill, the contract being sufficient ground for the bringing of an executive action. Subject Specially Considered in Other Bulletins.
The question of protest of drafts in Cuba and the other countries of Latin America has been comprehensively treated in' a series of bulletins prepared by the division of commercial laws. Copies of the bulletins relating to Cuba, Nos. 112 and 113, are still available upon request to that division.
Right of Action on Dishonored Bills.
The code of commerce supplements the code of civil procedure with reference to the right of action which accrues to holders of bills of exchange, expressly providing that the action against the acceptor shall be executive and execution may issue upon the mere presentation to the court of the accepted bill-ex parte, as it were-it not being necessary to prove the signature of the acceptor unless he denies it at the time of protesting for nonpayment. Actions arising out of drafts must be brought within three years of date of dishonor, whether the draft was protested or not. Of the executive and declarative action, and the execution and embargo which may issue therefrom, more is said in another part of this bulletin. Other Forms of Negotiable Instruments.
A libranza is a draft drawn on a merchant in the same city as the drawer; a vale is an i. o. u. or note of hand; a pagar6 is a promissory note. When any of these relate to commercial dealings, and in case the last two are made out "to order," they are subject to all the rules applicable to bills of exchange, except the acceptance feature.
If a vale or a pagar6 is not made out "to order," it is a simple promise to pay and is subject to the rules of the civil code or the commercial code according to the nature of the transaction which gave rise to it.
The law of checks is codified in the code of commerce, but does not differ greatly from the law of bills of exchange, except in a few particulars. Checks must be presented within five days in the same city or within eight days if drawn from another city. Hence American firms should not, as a rule, accept local checks in payment from Cuban customers, unless they can be cashed in Cuba within a week.
Letters of credit must contain two essential conditions: They must be made to a determined person and not to order; they must refer to a fixed any specified sum of money or to a number of unfixed sums the total of all of which must be comprised in a fixed and specified sum. Letters of credit may not be protested, and they may be annulled upon notice to the bearer and to the addressee. They








anust be used within the time specified or, no time being mentioned, within one year of date. The bearer of the letter must reimburse the drawer promptly, and failing to do so he may be sued by
-executive action.
'Transfer of Nonnegotiable Credit Instruments.
Nonnegotiable instruments may be transferred from one holder to another without consent of the debtor, it being only necessary to :advise the debtor of the transfer. Subsequent to so advising him, the only legitimate payment and satisfaction of the debt is that
-which is made to the new holder. The transferor in this case guar:anties the legitimacy of the debt and the identity of the debtor but not the solvency of the latter.

POWERS OF ATTORNEY
The agent of an American firm in Cuba requires a sufficient power of attorney in order to be able to perform many ordinary commercial transactions and also to comply with many administrative functions, such as recording contracts in the commercial register, withdrawing parcels and correspondence or cashing money orders at the post office when these are addressed to the firm's Cuban office instead o f to the agent personally, but the most important use of this instrument is in the event of a suit at law. In order to bring suit or defend one on behalf of an American firm, a Cuban lawyer must show a power of attorney granted by the firm or its authorized agent. Importance of Instrument Must Not be Underestimated.
An incredible proportion of cases brought by American firms against Cuban customers are either obstructed temporarily or completely quashed on account of technical discrepancies in the power of attorney or its faulty execution. As every firm that carries on a large business in any part of the world may expect a certain number of cases in which it is necessary to resort to the courts, such firms .may expect to make use of the power of attorney more or less frequently. In plain words, the instrument is a source of possible grave .danger, and its importance should not be minimized. The cost of its preparation is exorbitant, but to try to save money at this point is undeniably penny-wise and pound-foolish.
Efforts have been made from time to time to procure remedial legislation, but until such legislation is promulgated and fully tested in the courts no leniency in the preparation of powers should be indulged or tolerated.
'Travelers Should Bear Powers of Attorney.
Salesmen and others visiting Cuba on behalf of American firms should be provided with adequate powers of attorney, without which
-they will find themselves incapable of transacting many important
-matters which may arise during their sojourn in the island.
The power of attorney is the passport to the busines world in most Latin American countries, and even though one is sole owner 'of his firm, or a managing partner, or a director or officer of a corporation exercising full powers at home, he should take with him to ,Cuba sufficient evidence of his power and authority.








Form of Document.
No special form of power of attorney is prescribed by law, and theprinciple that prevails is that if the power is in a form that is valid by the law of the country of origin it is also valid in Cuba. Uniformly, however, powers of attorney are made in Cuba according to. a form which has been developed in the course of much time. As. this form represents the result of yast experience, it should be followed as far as possible.
Forms prepared by Cuban notaries are likely to be very verboseand redundant. Much of this quasilegal verbiage can be pruned away, and the shorter the instrument is the less expensive it will be to prepare and use it. However, such pruning should be done only by an expert, for otherwise the instrument may be turned out with an essential requirement missing, and a power with a material erroris worse than no power at all, because it may put the grantor at a disadvantage in dealing with his adversary. Printed forms should be avoided, and a special document should be prepared to fit eachseparate case.
There are in the United States a number of attorneys and law firms with experience in the preparation of documents for use in Cuba, and a list of these is on file in the division of commercial laws. The preparation of powers .should be intrusted to such expert counsel; with such counsel the division is ready to cooperate in the diafting of powers.
Must Show Identity and Authority of Grantor.
The power begins with a statement somewhat as follows:
In the city of - , county of --..... State of -----, United States of
1America, this first day of January, nineteen hundred and twenty-six, before. me, a notary public in and for the county aforesaid, personally appeared John Doe, to me well known, of full age, merchant, residing in the city and Stateaforesaid, who, in the presence of the witnesses named at the end of this instrument, says (that he grants the power).
In case the power is granted by a manufacturer who owns all the firm it is sufficient for the notary to certify to that fact and to add that the grantor is in full exercise of his civil rights.
If it is granted by a partnership, both or all partners should appear, or if one only appears on behalf of the rest he should prove his right to do so by transcribing the partnership agreement with a, reference to the clause under which he claims the right.
If it is granted by a corporation the matter is most complicated. It should be granted by the president of the corporation, who must not only prove his authority, but the existence of the corporation and its right to grant such powers. A power of attorney granted by a large American corporation to a Cuban agent, a copy of which is. on file in the division of commercial laws, may serve as a model, and a brief description may be useful. This power begins in the usual manner, but before reaching the body of the power itself it containsa long introduction by the notary who certifies to the existence of the corporation after examination of a certified copy of its articles. of incorporation. He transcribes literally the parts of the by-lawswhich refer to the powers of the president, followed by a translation into Spanish.
Next follows a transcript of the parts of the minute book of thecorporation showing the election of the directors by the general_








meeting of stockholders and the election of the president by thec board of directors, followed by a translation. The notary then certifies to the legal capacity of the president, after which followsa statement of the powers which the president grants to the agent. Powers Not Granted Unless Specified in Document.
Authority will not be implied, and only such powers as are specifled in the power of attorney will be recognized as valid. The power drafted in general terms authorizes no acts except such as are purely administrative. To s'ue, sell property, or do any other act denoting ownership, special authority is required. The power to sue does not include power to submit to arbitration. Hence, it is necessary toinclude items to cover all possible contingencies. In the corporate power described above the following clauses are given. The agent is granted power to:
Take charge of and manage the branch.
Demand and collect accounts due the company.
Collect rents and remove intruders and trespassers.
Take possession of present or future property of the company.
Execute bonds and guaranties when necessary.
Accept, negotiate, protest, and collect bills of exchange and other credit documents.
Present bids for Government supplies.
Deal with mortgages and real or personal property given in payment and to appraise and accept same.
. Liquidate and compound or compromise accounts with debtors or creditors or submit disputes to arbitration.
Settle lawsuits out of court.
Represent the company in public offices or registers.
Execute public or private documents necessary to the conduct of the businessWithdraw correspondence from the post office.
Reg:ster patents and trade-marks and oppose registration thereof by strangers.
Assist and defend the company in all courts (specifying them) taking all procedural steps (specifying them).
Appoint attorneys in fact or at law.
Substitute the power granted and revoke substitutions.
The foregong comprise the elements of what is called a "general power. "Special " powers may be made for particular uses, such asto travel and sell, receiving payments for goods sold, to prosecute an action against a single debtor, to prosecute and defend all suits. brought by or against the company in Cuba, etc. Each of the items given above is explained in detail and strictly limited, so that this part of the instrument alone is liable to cover several pages of foolscap.
Attestation and Legalization.
The instrument is closed with the signatures of the grantor, the two witnesses, and the notary. The certificate of the county clerk, prothonotary, or other State official charged with the superintendence of notaries is added. If the nearest Cuban consul recognizes thu signature of this officer, he will add the consular legalization upon the payment of the respective fees ($3 for each legalization).
Before it may be used in Cuba it must be presented to the Cuban State Department for authentication of the consular legalization. It should then be registered in the commercial registry if possible, end if this is not possible it should be protocolized with a Cuban notary.







Language.
Much expense Will be saved if the instrument is drawn up originally in Spanish, for if it is in English it can not be used in Cuba until it is translated by an official translator, which may cost $30 to $40 or more.
Expiration and Cancellation of the Power. The power of attorney expires by act of law when the term expressed for its validity has expired or when the parties die or cease te exercise civil rights. The power may be canceled by executing an instrument with the same formalities and serving it on the agent and registering and filing it in the commercial registers or protocols where the power may have been originally inscribed. A notice of cancellation may also be sent to a Cuban notary to serve on the agent, and the notice may be advertised and circulariized to customers who have dealt through the agent. An attorney may also obtain a court order canceling the power which will be served on the agent. It is best, whenever there is any possibility of dispute over the cancellation, to refer the matter to efficient Cuban attorneys.
When the purpose for which a power has been granted no longer exists, the mandate should be closed in a businesslike manner, in order that unscrupulous persons may not be enabled to work harm through obtaining possession of an outstanding, forgotten, but still valid document. On this point as much care should be exercised as has been urged in connection with other phases of the power of attorney.
SUSPENSION OF PAYMENTS AND BANKRUPTCY
Because of the fact that during the serious financial depression which was visited upon Cuba at the conclusion of the war, when firms of the highest standing and integrity'were involved in financial difficulties often beyond solution, many unscrupulous persons took a fraudulent advantage of the situation, the general opinion prevails that the Cuban laws of insolvency and bankruptcy are inadequate to meet modern conditions of international commerce. The recodification commission has taken cognizance of this opinion and will no doubt present a project for recasting these laws in due course.
The laws, however, which constitute Book IV of tlie code of commerce, as amended by the law of June 24, 1911, have a scientific background. While many modifications would no doubt be desirable, it will take time to accomplish them, and meanwhile business men trading with Cuba have the alternative of studying and applying the advantages, actually or potentially available, which the existing laws provide.
Unquestionably, in a measure, the protection of the creditor depends in Cuba, as in every country, upon his own vigilance and firmness. In foreign trade another element must be considered-cooperation of creditors. In fact, since in international trade it is practically always necessary to delegate to a local representative the care of the creditor's interests, it follows that for successful disposition of foreign bankruptcy situations two things are vitally necessary-a capable attorney on the ground and effective cooperation of all the American creditors. It is customary for the creditors to form a protective committee, under the superintendence of an American lawyer.








The division of commercial laws can supply names of recommended attorneys in many Cuban cities.
Remedies Other Than Bankruptcy-Composition of Creditors.
Except when the bankruptcy is declared fraudulent, a composition with creditors may be arranged out of court at any point in the proceedings. Three-fifths of all unsecured credits must be represented in order to make such an agreement binding. The agreement may be attacked in court as fraudulent by dissenting creditors. If it becomes impossible to carry out the agreement, general bankruptcy proceedings may be resumed.
In a great many cases the former is the better policy to adopt, and it is practically always so when the bona fides of the debtor can be established. Often the debtor is able to reestablish himself in his business while carrying out the composition terms, and if tactfully handled the rehabilitated merchant may represent for the creditors a valued customer in years to come. Suspension of Payments.
A form of modified bankruptcy called suspensi6n de pagos (suspension of payments), which is practically a kind of private moratorium, is available to Cuban firms which find themselves temporarily involved. The abuse of this remedy during the postwar crisis has led many creditors to distrust it heartily, but as it actually exists and is employed in many cases creditors should take account of the advantages accruing from its proper administration rather than merely decry its hardship.
Under the terms of this law a merchant, upon finding that he can not meet the demands of his creditors, may, when such demands are presented in a suit or in a notarial instrument, petition voluntarily within two days thereafter to be placed in the state of suspension of payments.
The merchant must show that he has sufficient property to cover the entire outstanding indebtedness, but that it is not liquid enough to meet the obligations as they fall due. If he can then present satisfactory security for the payment within three years of at least W0 per cent of his indebtedness and then deposit a small sum to cover court expenses, he will be accorded the status upon his submission of an inventory of his assets, a sworn list of debts, with names and addresses of creditors and amounts due each, proof of petitioner's due registration in the commercial register, the text of the petitioner's offer (which can not exceed a period of three years ivithout unanimous consent of the creditors), and the petitioner's nominee of a merchant to represent him on the committee appointed by the creditors to oversee the carrying out of the agreement.
The offer referred to must be ratified by a meeting of creditors (for which, if there are foreign creditors, the judge may order four months' notice to be given), and the vote'of approval must represent at least 75 per cent of the total unsecured indebtedness and more than half the creditors present. Vice Consul Charles B. Hosmer, Habana, commenting on this procedure. nofes the following additional considerations of interest:
1. A creditor may be represented by a third person duly empowered, but an individual holding more than one claim counts only one numerically in voting. (All claims properly represented count as to capital requirements.)








'2. The debtor must present the court with a complete report of the progress
-of his business at the end of each year while the suspension is in force.
3. Preferred claims are not affected in status unless the holders take part in the proceedings.
4. The final decree may be attacked by any dissenting creditor within five days on any ground involving fraud or bad faith. (Foreign creditors resident in North America, If they took no part in the proceedings, have this privilege within two months from the ratification by creditors.)
5. The debtor can not alienate real estate during the suspension without ,consent of the court.
6. Any breach of the agreement on the part of the debtor vacates the suspension of payments, and creditors can proceed to collect by other means.
7. All levies on executions and pending litigation against the debtor are sus-pended on the 'entering of the provisional decree and remain so throughout the period of the suspension of payments.
This appears to be in most respects an excellent law and surrounded with all practical safeguards. Two defects have been noted which render it capable of .abuse, particularly against foreign creditors, although in many cases their .losses have been due to failure to exercise the rights given them.
1. An unscrupulous and badly bankrupt debtor, by filing a petition for suspension of payments, retains custody of his property and can fraudulently dispose of it in the interim before the report of the commission exposes his bad
-faith.
2. The judicial supervision during the suspension is so slight and infrequent that important business reverses may continue unchecked to the prejudice of the creditors.
I do not see how either of these abuses can be prevented, at least without further amendment to the law.*
Full Bankruptcy Either Voluntary or Involuntary.
An insolvent merchant may apply of his own motion for a declaration of bankruptcy upon filing a petition and inventory, together with a balance sheet and a statement of the direct and indirect causes of his insolvency. The declaration will be issued if it is found that the insolvent was not fraudulent.
Involuntary bankruptcy may be declared on the petition of any creditor who can show that his judgment against the debtor has
-been returned unsatisfied, or that the debtor has generally defaulted in his obligations, or that the debtor has absconded without leaving anyone in charge of his business.
Provision is made for the arrest and bonding of the bankrupt, but if it is shown that the proceedings were fraudulent or without due cause or care the merchant arrested may have his action of damages. Administration of Bankrupt's Estate.
Upon decreeing the bankruptcy of a merchant or company, the judge of first instance appoints a reputable merchant commissioner to take charge of the estate and prepare an inventory and balance sheet. A trustee or depository may be also named to take physical charge of the property and make collections. The commissioner issues a call for a general meeting of creditors on a day named, which must be within 30 days. The commissioner and depository report to this meeting, which then elects three trustees to carry out the liquidation. Two of the trustees are elected by a majority of amounts of debts represented and the third by a majority of creditors numerically. The court may remove any trustee for fault or negligence.
The commissioner originally named continues the active administration of the estate, as the direct representative of the court, carry- . ing out the directions of the trustees in the disposal of assets, these directions being subject to appeal to the court.







The commissioner and trustees must report monthly to the court, and the law lays down careful and sufficient rules safeguarding the interests of the creditors, which, if faithfully observed, serve as an adequate protection. It is here that the presence of diligent counsel representing American creditors on the ground is most important. Consigned Goods Do Not Merge in Bankrupt's Estate.
,Upon presentation of proof of ownership to the creditors' meeting or to the court, goods belonging to American firms which have been sent on consignment to the bankrupt but to which title is retained by the American firm may be withdrawn from the mass of the bankrupt's estate and returned to the shipper. This proof must be /satisfactory," and in order to assure satisfaction shippers on consignment should take every possible precaution to make their title to the property self-evident.
Proceeds of the sale of consigned goods are trust funds if they
can be identified and segregated from "the rest of the estate, whether ii cash or credits. The principle of stoppage in transit applies in Cuba with little variation.
Marshaling of Assets.,
In Cuba, as elsewhere, certain creditors are preferred or privileged. Burial and probate expenses, maintenance of the bankrupt and his family, and wages of employees, for instance, have first consideration. The limits of this bulletin do not admit of a detailed description of these preferences, but it may be remarked that in giving credit to a Cuban firm the public registers are open to consultation concerning the number of mortgage and other registered creditors who have a preference. Judgment creditors are preferred, -as well as creditors whose credit is evidenced by a negotiable instrument or a protocolized document.
FACTORY AND LABOR LAWS
For the installation of any factory or workshop or any theater, circus, market, or similar establishment where mechanical appliances :are employed, previous license must be obtained from the local director of sanitation, issued after consideration of a memorandum presented by the applicant. This memorandum must contain the following information: Nature of the establishment, location, technical ,conditions applying to its industrial purpose, safety, stability, lighting, ventilation, sanitary installations, capacity, kind and number of machines and apparatus, number of operatives, and other employees.
The requirements of the sanitary laws of 1914 relating to factories and workshops are simple. They relate to ventilation and, light, disposition of gas, dust, smoke, waste, pollution of streams and wells, provision of cuspidors, deodorizing devices, and sanitary installations and the maintenance of a sanitary condition of the latter, and screening or otherwise insuring safe use of dangerous machinery.
One paragraph of this law as now amended provides that it shall not be permissible to employ in workshops and factories children under 14 years of age and that boys under 18 years of age can not be employed to operate dangerous machinery.,
Buildings must offer by the solidity of their construction a sufficient guaranty of safety for the lives'of workmen and employees,'







and wells, trapdoors, openings, and excavations must be inclosedBoilers must be kept in the best condition for safety and proof against explosions.
Where there are dangerous machines or where dangerous substances are handled, it is obligatory to kee on hand materials for first aid for cases of accident to persons on the premises. Pensions and Workmen's Compensation.
Except for employees of railway, street railway, and telephone. companies there is no general industrial insurance or pension law.
A law of June 12, 1916, however, regulates the question of indemnification of employees for accident. Copies of this law and its accompanying regulations are on file in the division of commercial laws forloan to inquirers. Trade Commissioner Livengood, summarizing theprovisions of this law, points out that it covers an extended list of industries and in these industries affects employers of more than fiveworkers. Some of the outstanding features of the law are the following:
The employer is not responsible in case of accident due to force majeure foreign to the work in which the accident occurs. Compensation is not required for injuries which do not result in the incapacity of the employee during a period of at least two weeks. The State, Provinces, ad muncipalities are bound by the provisions. of this law.
When an accident results in absolute or permanent incapacity on. the part of the laborer, his idemnity is fixed as an income equaling two-thirds of his annual salary. If the incapacity is partial, the rate is half of the decrease in salary caused by the accident. When the, incapacity is temporary, the indemnity is equal to half of the salary which the worker was receiving at the time of the accident. ,
In case of death caused by the accident, if there be a survivingspouse, the latter shall receive an income for life equal to 20 per cent of the annual salary of the victim of the accident. Legitimate or legitimatized children of the victim whose mother survives, if less. than 18 years of age or if incapacitated for work, shall receive an income as follows: From a minimum of 30 per cent to a maximum of 60 per cent of the renumeration of the victim, depending upon the number of children. In case the mother shall have died prior to the accident, the children shall receive a total income not greaterthan 50 per cent. In case no children exist, provision is made forother relatives and the scale of income is prescribed. Pensions to. children dependents of the victim terminate when these arrive at. their majority unless they are incapacitated.
In cases of an accident in an establishment whose equipment lacks; the safety apparatus prescribed by law, indemnities shall be increased by one half. Provision is made for foreign workmen, victims of accidents, who desire to leave the country to receive in one sum the amount of pensions due them, and the method of determining this; sum is specified.
Chiefs of establishments may free themselves from the obligation to pay expenses of illness and sustenance to which victims of accidents are entitled if the former provide proper insurance in legally constituted insurance companies. All workmen must be insured at the expense of the employers against accidents of labor.







TAXATION
Taxes in Cuba are collected by the government and by the municipalities only, so that taxation is relatively simple. General taxes, besides special excises on liquors, beer, matches, soda water, tobacco, and playing cards, established by the law of January 25, 1904, and not taking into consideration customs duties, consist principally of the 8 per cent profits tax, the gross sales tax, the exportation of money tax, the documentary stamp tax, the income from real estate tax, and municipal taxes.
The 4 Per Cent Tax on Profits Abolished by the Public Works Law.
Because of the difficulty of its enforcement and the small returns the 4 per cent tax on profits established in 1920 was abolished by the public works law of July 15, 1925, which modified other existing taxes and instituted certain additional ones. The public works law is a measure appropriating millions of dollars for the execution of a vast plan of public works throughout Cuba, including the construction of a network of highways, the institution of municipal sewerage and waterwork systems, the building of schoolhouses, hospitals, and the improvement of harbors and port facilities. The money thus appropriated is to be expended over a period of 10 years. The 8 Per Cent Profits Tax Revised.
To compensate the treasury for the loss of revenue from the discontinuance of the 4 per cent tax, an old tax created by the American Military Order 463 of 1900 was revived by decree of December 27, 1926. (See Special Circular No. 139, division of commercial laws.) This tax amounts to 8 per cent of the net profits of banks, corporations, and stock companies (but not partnerships or individuals). Railroads and shipping companies pay only 6 per cent, while insurance companies are charged 2 per cent on premiums collected. The 1 V Per Cent Gross Sales Taxes.
A law of October 9, 1922, established a tax on gross sales, exchanges, or transfers of merchandise equivalent to 1 per cent of the price or value of the articles taxed. The rate was raised by the public works law of July 15, 1925, to 1/2 per cent.
The tax is of an " interior and national character" and is payable on merchandise, whether of domestic production or imported and whether the sale is for cash or on account. An American firm exporting to Cuba does not pay the tax, but it is paid by the importer when he sells or disposes of the imports, or by the commission merchant or wholesaler at the customhouse. Quarterly declarations must be made by merchants and submitted to the tax collector of the local district (admistrador de contribuciones e impuestos de la zona o distrito fiscal). The tax is payable quarterly and when not paid is subject to an added charge of 25 per cent of the tax. Infringements of the law resulting in defrauding the treasury are punishable by a fine equal to the amount of the tax payable for the first offense and for the second offense a fine of not exceeding $1,000 or imprisonment for one year, or both.
Payment of the tax is affected by the purchase of stamps of the face value of the amounts shown on the declarations. These stamps







are affixed to a certificate which must be obtained by each merchant and posted in a prominent place in his place of business. The Exportation of Money Tax.
The public works law of July 15, 1925, established an excise of one-fourth of 1 per cent on all payments, assignments of funds, transfers of credits or securities or products, or similar operations which directly or indirectly imply the exportation of money or its equivalent from the national territory to foreign countries. The uncertainty of the terms of this tax was the subject of considerable comment when the bill was first proposed, and its full effect on international trade is not yet entirely apparent. From the message of the President accompanying the measure when it was first submitted to the Cuban Congress, it is evident that the intent was to tax dividends and earnings of foreign industrial, agricultural, and other enterprises in Cuba which are remitted abroad, as well as Cuban funds which are invested in foreign countries, and not to levy a tribute on ordinary trade transactions. The regulations, however, require the payment of the tax on all money sent out of the country for every purpose, even in payment for commodities purchased abroad.
Incidence of Money Export Tax Not Equal.
Products shipped from Cuba are taxed provisionally under the regulations, the tax payment being deposited subject to refund if proof is presented that payment for the goods was received within 90 days. The object is to prevent the escape from taxation of the j export of money in the form of domestic products, the fact that a refund is provided is recognition of the principal that ordinary international mercantile transactions are not within the purview of the tax. Nevertheless, drafts in payment for foreign goods sold to Cubans are subject to tax without refund or other recourse. As the regulations now stand, the export of a cargo of sugar for which payment of $5,000 representing the price is received within 90 days, does not constitute the export of money or wealth and is not permanently taxed, whereas the remittance of $5,000 in payment for a cargo of machinery or other commodity imported is subject to an unrefundable tax of $12.50.
Stamp Tax on Documents.
In order to meet extraordinary war-time expense, a law of July 17, 1917, created a stamp tax applicable to a very comprehensive list of documents in different amounts. These include all kinds of notarial instruments, private receipts, commercial invoices, leases, insurance policies, negotiable instruments, summonses, and other legal processes, academic diplomas, and others. It was expected that this tax, which is considered a necessary war time nuisance tax, would be discontinued by the new public works law but it was not abrogated. Income from Real Estate Tax.
Under the public works law, the rent from country and city real estate, the income from mortgage credits, and the estimated value of unimproved property is taxed at the rate of 2 per cent. In municipalities where the real estate direct tax amounts to 10 per cent, the 2 .per cent tax is not collected. This provision exempts all improved real estate within the city of Habana, because the direct







territorial tax in this city amounts to 12 per cent. This, however, does not exempt Habana unimproved property. The tax is to be collected through the municipal authorities at the time of collection of the regular municipal territorial tax. All real estate which does not produce a rental will be taxed upon an estimate of 6 per cent of the appraised value, the 2 per cent tax being collected upon this estimated rental.
No General Income Tax Expected.
In answer to an inquiry regarding the possibility of the enactment of a general income tax in Cuba, Trade Commissioner C. A. Livengood, Habana, writes as follows:
There has been no indication on the part of Cuban legislators or other men of influence that a general income tax law will be considered for Cuba at any early date. In fact, the matter has received no discussion. In view of the periodic protests against the taxes which are already levied, it seems probable that an early change in the Cuban system of taxation will be in the direction of curtailment rather than expansion. Of course, in case new bond issues should be made for purposes of road construction or otherwise, it is possible that additional taxes would be required; but even in the case of such issues we have seen no suggestion that a general income-tax law should be enacted.
Municipal Taxes.
In each municipality all business concerns must obtain an annual license, which is graduated in cost according to the class of business in each city. The licenses in each class also differ in cost according to the size of the city, those for the city of. Habana being the most expensive.
It is impossible to give here a schedule of these taxes, even for one city, but an indication of their cost may be made. Stores, for instance, for the sale of groceries, etc., pay from $275 to $385, to which is added 25 per cent as a provincial council tax. Importers pay up to $1,000 and commission merchants up to $500. The tax is payable in quarterly installments. Traveling salesmen pay a license tax in Habana.
In order to comply with this tax requirement, two copies of a blank form issued for the purpose should be obtained at the city hall. These should be filled according to the printed instructions and presented to thd general receiving register at the city hall. The license is then granted after the inquiry and approval of the publichealth department. A preliminary fee of about $12 must be paid.
The penalty for opening a store or place of business without obtaining a license is the payment of a sum equal to twice the amount which should have been paid. In order to avoid this penalty care should be taken to ascertain the amount of the tax, which, although collected by the municipalities, is regulated by authority of a national law called Ley de Impuestos Municipales y Procedimiento de Cobranza, dated September 22, 1908. This law, together with forms and schedules, is published by J. V. Bonachea, Habana, in a second edition of 1924. Advice regarding the amount of this tax in particular cases may be obtained from the division of commercial laws or from the office of the Bureau of Foreign and Domestic Commerce at Habana.







Municipal Territorial Taxes.
The public works law increases by 50 per cent direct taxes placed by municipalities on real estate. Thus taxes vary in the several municipalities.
Miscellaneous Taxes.
The public works law places a tax of 10 cents per gallon on the consumption of gasoline and a surcharge of 10 per cent on the present import duties of all articles of luxury and 3 per cent on the duties fixed by the customs tariffs on all other articles imported, except prime necessities. A transportation tax on vehicles is also created, as follows:
Motor vehicles are subject to the following taxes:
Per annum
Private automobiles to 105 inches wheel base --------------- $40
From 105 to 120 inches wheel base ------------------------- 50
From 120 to 128 inches wheel base -------------------------60
From 128 to 135 inches wheel base -------------------------75
Beyond 135 inches wheel base -----------------------------90
(Cars for public service will be charged one-half the above
rates.)
Trucks to %-ton capacity ---------------------------------25
From % to 11/ tons capacity -------------------------------50
From 1'/2 to 21/2 tons capacity 100 From 21/2 to 5/2 tons capacity ----------------------------200
More than 5/a tons capacity ------------------------------400
Motor cycles of all kinds ----------------------------------10
Trucks of more than 7 tons capacity are not permitted on the national highways.
The following rates apply to animal-drawn vehicles:
Per annum
For public roads, vehicles of two wheels, capacity to 1 ton ... $20 Vehicles, four wheels, same capacity ------------------------15
Vehicles, four wheels, capacity up to 2 tons ----------------30
Vehicles, four wheels, capacity up to 4 tons -----------------100
Pushcarts ------------------------------------------------ 5
Horse-drawn vehicles with a capacity of more than 4 tons will not be allowed on the public roads.
A special tariff is made for oxcarts for operation on public roads, but not on national highways, as follows: Per annum
2-wheeled cart with rims exceeding 6 inches in width -------- $12 4-wheeled cart, similar rims -------------------------------10
2-wheeled cart, rims less than 6 inches in width --------------- 10
Carts other than oxcarts with rims more than 6 inches wide are taxed $5 per annum, with similar provision forbidding operation on national highways.
Carts, wagons, and other vehicles operated solely on private property up to a capacity of 500 pounds are exempt from taxation.
The reason for taxing according to width of the rim is that most of the damage at present done to public roads is chargeable to a heavy-wheeled type of ox-drawn cane cart used locally.
All of the above taxes are to be collected once a year by the municipal authorities, who will remit one-half of the sum to the national treasury and retain the other half for local use.







ACTIONS AND REMEDIES AT LAW
Because of the unitary form of government of Cuba there is no double jurisdiction of Federal and State courts such as we have in the United States and such as exists in Brazil, Mexico, and Venezuela. There is a single hierarchy of courts. Courts of original jurisdiction in ordinary cases are the municipal courts in actions involving less than $350 and the courts of "first instance" in actions involving more than that sum. Appeal is to the provincial "Audiencia," which sits in the capital of each Province; thence to the Tribunal Supremo, or supreme court, sitting at Habana.
The jury system is not employed in commercial cases, but there exist a certain number of peremptory challenges and challenges for cause available against the judges, as well as against other members of the court.
Attorneys practicing before Cuban courts are free to make any contract with clients regarding fees, although lawyers of the better class do not favor contingent fees. If no previous contract is made, lawyers may present a bill to clients for services rendered, and should the client object the matter will be referred to the judge, who may appoint an arbitrator to find a just amount. Commercial Arbitration Not Yet Common.
Although chambers of commerce offer the usual facilities for commercial arbitration, the principle is not generally practiced. Efforts are being made to popularize this system, which has found so much favor in some American jurisdictions, however, and legislation similar to the United States arbitration act and the arbitration laws of New York, New Jersey, Oregon, Massachusetts, California, Pennsylvania, and Hawaii has been proposed.
The Cuban law of procedure provides a rather cumbersome process for the submission of disputes to arbitrators. The submission must be made by means of a formal notarial instrument, in which each party agrees to pay a penalty in case of noncompliance or appeal. Appeal is available. The proceedings must be according to law, and, in fact, the whole process is little more than the substitution of a private judge in place of the ordinary court. Manifestly, there is little to be saved by this method, and consequently it is not favored.
Under a similar arrangement, however, the law permits a submission to amigables componedores (friendly adjusters), who need not follow the forms of law but may make a decision on the merits after hearing both parties. The submission, however, entails many formalities, and the decision must be made in a notarial instrument (which, as has been pointed out in another part of this bulletin, is a more formidable document than the mere notarial acknowledgment used in the United States). There is an appeal from this decision to the court, but if it is not taken within the time limited the judge of first instance will proceed to execute the award. This system is more often employed in commercial matters, but it is far from providing the swift, convenient, fair, and inexpensive remedy found in the new American arbitration laws. The Arbitration Society of Cuba.
In March, 1925, steps were taken to organize an Arbitration Society of Cuba with objects similar to those of the American Arbitration







Association. The principal purpose of the society is to set up the machinery necessary for the arbitration of commercial disputes by voluntary submission to arbitrators appointed by the society, to foster interest in this method of adjusting differences, to promote the inclusion of arbitration clauses in commercial contracts, to procure the passage of legislation similar to the United States Federal arbitration law, the New York and the New Jersey arbitration laws, and to carry out cognate proposals in the interest of reducing avoidable litigation.
Existing facilities for commercial arbitration in Cuba include committees appointed by the American Chamber of Commerce of Cuba and the Asociaci6n de Comercio, Industria y Navegaci6n de la Isla de Cuba.
At present the inclusion of an ordinary arbitration clause in a contract is without legal effect whatever, it being necessary for the. usual submission form to be voluntarily executed after the rise of the dispute. At a luncheon in New York City given by the American Arbitration Association and the Cuban Chamber of Commerce of the United States to President Gerardo Machado of Cuba in April, 1927, the President stated that interest in commercial arbitration was spreading rapidly in Cuba and that he would favor the passage of an arbitration law which would give a legal sanction to such clauses in contracts.
Measures Preliminary to Suit.
The embargo preventivo is an attachment in advance of suit, which may be enforced against the property of defendant in certain cases, such as when the defendant absconds without leaving some one in charge of his premises, or when the one in charge does not know the whereabouts of the defendant, or where defendant is about to abscond.
The embargo may issue against a foreigner or nonresident, or against any debtor when there is reasonable ground to believe that he is about to dispose of his assets in fraud of creditors. In any case the petition for embargo must be supported by documentary evidence of the existence of the, debt. The debtor may be released from embargo upon supplying the necessary security, and provision is made for indemnifying a debtor who has been embargoed without just cause. The embargo often causes irreparable injury to the credit of merchant debtors and is therefore regarded as a very severe measure.
During the progress of an action the property of the defendant may in certain circumstances be attached in order to insure the plaintiff against a futile judgment. Property that is embargoed or attached, as well as the proceeds of the security offered for release thereof, may be applied to the satisfaction of judgment. Institution of an Action at Law.
Unless the plaintiff conducts the suit in person, he must supply the attorney with a power of attorney in the form elsewhere described. If plaintiff is a foreigner, the defendant may require him to file security for the costs of the action in case defendant prevails (judicatum solvi). All documents relative to the claim must be filed with the complaint, as they may not, in general, be brought into the suit thereafter.







The Executive Action.
When plaintiff's claim is based upon one of a number of specified formal instruments, a short form of executive action (juicio ejecutivo) is provided. In this form of action the judge, upon merely a view of the instrument, and sometimes, in addition, the oath of the creditor, may issue execution upon the property of the debtor previously or coincidentally embargoed. The following are the formal instruments justifying this action:
Any public instrument (escritura pfiblica), which is an instrument draw up by a notary and protocolized.
Any private written instrument, when the debtor acknowledges it as genuine, under oath before a competent judge.
Any admission made before such a judge.
Any bill of exchange, when the acceptor, at the time of protest for nonpayment, failed to deny the authenticity of his acceptance.
Any bearer negotiable instruments representing past-due obligations.
Any written contract made through the intermediation of a registered broker or commission agent, signed by the parties, when properly authenticated.
All of the foregoing, it will be seen, are in the nature of what American lawyers would call confessions of judgment. It is manifest that the proper handling, protesting, protocolizing, and preserving of these formal instruments is necessary for the success of this form of summary action. Especially in the case of drafts, great care mut be taken to have the documents in order, if the benefit of the executive action is to be obtained. The Ordinary Civil Action.
The ordinary civil action (juicio declarativo) is employed in cases not subject to executive action. This form of action contemplates the proof of the existence of the debt and the consideration of all defenses which might be interposed against it through the slow and deliberative method peculiar to civil cases and which does not meet the exigencies of modern commerce. Witnesses must be examined, collateral issues decided, motions made and opposed, venue established or changed, and other complicated procedural measures taken which never fail to insure long life to the action. The action is divided into three kinds-mayor cuantia, menor cuantfa, and juicio verbal-depending upon the amount involved. The greater the amount the more complicated are the forms required to be observed. Such suits may take months and years to fight through to a conclusion, and the expenses accruing by these delays increase in mathematical progression.
This serves as one more illustration of the necessity of keeping contracts and negotiable paper in proper order to insure that an executive action will lie in case of emergency. If the declaratory action must be resorted to, the best thing for the party to do is to secure the most competent counsel available and to enter into an agreement with respect to fees and probable costs. Outlawing of Actions.
Cuban jurisprudence does not include a statute of limitations, but recognizes instead the principle of "prescription." The results are practically the same, the difference being largely theoretical. One difference is that rights (whether rights of ownership, rights of action, or, other rights) that are outlawed by the statute of limita-







tions still subsist, although they can not be enforced wihout some positive act of recognition on the part of the person against whom the rights existed. Rights that have been "prescribed," on the other hand, are completely wiped out and can not be revived. In our law of real property we have a principle comparable to the Cuban prescription. We call it prescription or ownership by occupation or by some other name, but the principle operates in any case to extinguish the rights of all persons except the claimant to title by adverse possession.
The Cuban civil code, commercial code, and procedural code contain provisions relating to prescription of rights. The most important of these, from the point of view of business men, is the provision that actions arising out of bills of exchange and other negotiable instruments are barred three years after maturity, whether the instrument has been protested or not. Actions between partners or members of companies also prescribe in three years, but actions against the directors of a corporation are given four years from the day when their duties terminated.
Actions to decide title to personal property are barred in six years, but an action to regain possession (such as our action of replevin) must be brought in one year. Thirty years are allowed for the recovery of title to real property. Personal actions generally fail after 15 years.
Lawyers and other professional men must sue in three years for their fees, counting from the time when their services are ended. When debts are to be paid with interest, prescription runs from the last installment or payment of interest.
Prescription is interrupted (in the sense that the statute of limitations, as we say, is tolled) when the claimant brings an action against the defendant or makes an extrajudicial demand upon him for payment, or when defendant expressly recognizes the existence of the obligation.
Execution of Foreign Judgments in Cuba.
Final judgments of foreign courts may be executed by the Cuban Supreme Court when international treaties so provide. In the absence of treaty stipulation, the Cuban court will execute foreign judgments when it is proved as a fact that the courts of the particular foreign country or State reciprocally execute Cuban judgments. Such foreign judgments must be the result of a personal action, must not have been given by default, must be based upon an obligation which is not illicit by Cuban law, and the certificate must be properly authenticated according both to the foreign and the Cuban law.












THE LAW OF INDUSTRIAL PROPERTY IN CUBA
Bernard A. Kosicki, Chief, Patent and Trade-Mark Section, Division of Commercial Laws
SOURCES AND PRINCIPLES OF LEGISLATION
The laws of Cuba relating to patents, trade-marks, prints, labels, and copyrights reflect the influence of the three political regimes in the history of that island.
The basic patent law is found in the royal ordinance of July 30, 1833. This law has been subsequently modified by supplementary legislation during the period of the Spanish domination, by the orders of the United States military government of occupation, and by the laws and decrees of the Government of the Republic.
The basic trade-mark law is contained in the royal decree of August 21, 1884. This trade-mark law as administered at the present time is modified by amendments made thereto under the Spanish, American, and Cuban administrations.
The constitution of Cuba (February 21, 1901) guarantees to every author or inventor the exclusive ownership of his work or invention, the extent of this right being determined by law (art. 35). This provision is very broad and gives recognition to the laws in effect prior to the Republic and to privileges acquired under them. As in the Constitution of the United States, no specific mention of trademark rights is made in the constitution of Cuba, and neither is the authority to legislate on trade-mark matters conferred upon the Congress in express terms.
Orders of the Military Government.
During the period of military occupation of Cuba by the United States, from January 1, 1899, to May 20, 1902, the laws of Cuba relating to industrial property and copyrights were modified to bring them more into conformity with the laws of the United States and to facilitate the protection of American rights in Cuba. These orders, while in most respects only of temporary effect, in certain particulars, through the operation of the Platt amendment, have left a permanent impression on the law of Cuba.
Some of the more important measures which have endured, either through incorporation in the law of Cuba or continuation in practice, may be cited.
Civil Order No. 196, issued October 19, 1899, established a term of 17 years for the duration of a patent in place of the terms of 5, 10, and 15 years provided for by the decree of July 30, 1833. The military orders which modified the Cuban law to admit of the protection of United States patents, upon filing of certified copies thereof, have resulted in the present practice of issuing a "revalidation" patent, as distinguished from a "national " patent. A revalidation patent is obtained by filing a certified copy of the foreign patent and endures for the life of the foreign patent.








Civil Orders No. 216 of May 26, 1900, and No. 497 of December 10, 1900, have had the effect of inaugurating a preliminary examination of foreign patents which are submitted for revalidation, although examination by the Government as to novelty or utility of the invention is expressly negatived by the law.
The only modification of any importance introduced by the military government into the trade-mark law of Cuba was established by Civil Order No. 512 of January 1, 1901. This order amended article 12, paragraph 1, of the trade-mark law of 1884, to extend the liability for infringement to those who buy or sell receptacles bearing infringing trade-marks.
On June 21, 1902, at the termination of the military occupation of Cuba, the orders providing for the registration in Cuba of copies of patents granted and trade-marks, prints, and labels registered in the United States were declared void by the Cuban Secretary of Agriculture, Commerce, and Industry. Since that time the law relating to industrial property has been administered by the Cuban Government, and with the exception of several amendments introduced by the Cuban Congress the law is substantially the law which Cuba inherited from Spain.
Origin of Cuban Patent Law and Its Characteristics.
At a time when the idea of granting monopolies to inventors for the purpose of stimulating invention and industry was gathering momentum in Europe and in the United States, Spain followed the example of the countries supporting this idea in the enactment of the law of 1820 and the royal decree of March 27, 1826, which formed the basis of the patent legislation of Spain. The latter decree was followed by a similar enactment, effective in Cuba, the Philippines, and Porto Rico, issued July 30, 1833. The fundamental principle of the original Spanish law has been substantially retained in the present Cuban patent law.
The original patent law of Cuba provided for the grant of a monopoly for a limited period to the person who first introduced or established in Cuba a new machine, instrument, or process of a mechanical or chemical function. The person claiming a patent did not necessarily have to apply in the capacity of inventor. He was entitled to a "patent of introduction" for an invention imported by him from another country. This was the prevailing idea of the day, the privilege being founded on the desire on the part of the sovereign to encourage the development of trade and industry, even though this result did not necessarily follow from the exercise of ingenuity on the part of persons responsible for the introduction of new ideas into the country.
During the period of Spanish domination a peculiar system of patent law existed in Cuba, which was characterized by the enforcement of two separate patent laws. The first of these laws, the royal decree of July 30, 1833, concerned the issue of insular patents, and applied to Cuba, Porto Rico, and the Philippines. The second law was established by royal decree of July 30, 1878, which was intended to create and regulate patent rights throughout the entire Spanish territory. For this purpose a patent issued in Madrid was to be regarded as valid throughout the Spanish dominions.








The effect of this law was extended to Cuba by virtue of the decree of May 14, 1880. Because of this dual system for the protection of patents existing in Cuba at the close of the Spanish domination the law which had to be adopted as the national law of Cuba was the earlier decree of 1833. This decree, as modified and amended, is now in force.
Civil-Law Principle of Cuban Trade-Mark Law.
The theory that a trade-mark right is, in effect, a privilege which may be conferred by the State, in a manner analogous to the grant of a patent, underlies the trade-mark law of Cuba. As in all of the Republics of Latin America, the exclusive right to the use of a trade.mark or label can be acquired only through proper registration under the law.
It is but natural to suppose that this idea should permeate strongly the fabric of Cuban jurisprudence, in view of the early date of the basic law of the Republic and its decided inclination toward principles followed by the civil-law countries. The language of the decree of 1884 does not admit of any question as to the necessity for registration in order to claim title to a trade-mark in Cuba.
Article 4, paragraph 2, of this decree clearly enunciates this rule of law: "Those who fail to provide themselves with said certificate (of registration) shall have no right to use any mark to distinguish the products of their industry or prevent other parties from using their impressions, industrial designs, or models." The law further reads (art. 7) : "No one may claim the ownership of marks, designs, or industrial models unless he shall have the corresponding certificate and shall prove that lie has complied with the provisions of the present decree."
The trade-mark law of Cuba does not recognize any legal or equitable right to a trade-mark which may be acquired by the fact of user. It does not provide for the cancellation of trade-marks which have been wrongfully registered against the interests of a person who had used the trade-mark in commerce but who had failed to secure it by registration.
Notwithstanding the unyielding commitment to the civil-law principle of registration which the decree of 1884 carries, the courts of Cuba have been able to render decisions serving the ends of public policy and justice, without a disregard of the principles of Cuban statutory law, by giving effect to the doctrine declared in article 9 of the Buenos Aires trade-mark convention of 1910, to which Cuba is a party. This article provides for the cancellation of trade-marks registered in fraud of third parties, and it has been liberally interpreted by the Cuban courts in cases where the municipal law proved inadequate. The convention of 1910, however, was superseded on September 30, 1926, by the revised convention signed at Santiago, Chile, on April 26, 1923. The new convention varies somewhat the concellation provisions of the convention of 1910, and there may result a corresponding modification in Cuban jurisprudence in this respect.
International Conventions.
Cuba has taken an active part in all of the important international arrangements for the protection of industrial property. It adhered to the International Union of 1883 for the protection of industrial







property and ratified the revisions of the convention of this union of 1900 and 1911. The arrangement of Madrid of April 14, 1891, for the suppression of false indications of origin, revised in 1911,.. was entered into by Cuba on January 1, 1905. On the same date Cuba adhered to the arrangement of Madrid of April 14, 1891, as revised in 1900 and 1911 for the international registration of trademarks. Cuba is a party to the inter-American convention of August 20, 1910, for the protection of patents, designs, and industrial models. The Buenos Aires trade-mark convention of August 20, 1910, was. ratified by Cuba on June 13, 1912, and the Santiago trade-mark convention of April 26, 1923, was ratified by Cuba on August 2, 1924. This latter convention was declared effective on September 30, 1926, on which date the convention of 1910 became legally inoperative.* The convention of 1923 is in force as between the following nations: The United States, Brazil, Cuba, Paraguay, Haiti, and the Dominican Republic.
Administration of Patent and Trade-Mark Laws.
The registration of patents, trade-marks, labels, and designs is intrusted to the office of trade-marks and patents of the department of agriculture, commerce, and labor. The secretary of that department is charged with the execution of the law.
The President of the Republic has appellate jurisdiction to review administrative decisions of the secretary. The appeal must be perfected within 10 days following the announcement of the decision, but it can not be taken in those cases where the law declares the decision of the secretary to be final. The right of administrative appeal is established by article 57 of the organic law of the executive power, of January 12, 1909, and Presidential Decree No. 855, of September 26, 1913, executing this article.
PATENTS

In Cuban law the term "Privilege of invention" is used almost exclusively for the word "patent " to indicate the monopoly which is granted by the State to the person owning a new invention. This privilege or patent may be granted to any person or persons, whether foreign or national. A patent may also be conferred on a corporation or an association of persons.
In order to become entitled to a patent of invention it is not necessary for the applicant to be an inventor. The Cuban law regard, merely the invention or discovery in considering the grant of a patent; it does not look to the character in which the applicant petitions the grant of a patent. Consequently the author of an invention may assign his rights to another prior to his having obtained the patent and the assignee may then apply for a patent as owner of the invention.
There are two kinds of patents granted in Cuba-" National' patents, or independent Cuban patents, and "revalidation " patents, which are issued upon the basis of a prior unexpired foreign patent. National Patents.
A privilege or patent of invention is issued for a term of 17 years, counting from the date of the grant. The invention to be subject of a valid patent must be new and must consist of a "machine, appa-








ratus, instrument, process, or operation of a mechanical or chemical nature." It must be of industrial utility and capable of being put in practice. Mere theoretical or scientific discoveries are not patentable. Products which are obtained through a new process or operation can not be patented, since everyone is considered free to create the same product by different means. A new combination or application of known means is patentable, but not a new employment of known means.
Requirements for National Patent.
In applying for a national patent in Cuba specifications and draw. ings of the invention, in duplicate, must be presented. The specifications must be in Spanish and must be signed by the inventor or his attorney. They must begin with the name or title of the inven. tion and must state the object and nature of the invention, specifying its essential difference from similar known inventions and enumerating by proper reference the figures contained in the drawings.
The claims must define the structure or process which is presented as the applicant's own invention and upon which the patent will be based.
Drawings, in duplicate, must be submitted to illustrate the invention. The original must be made on tracing linen of a convenient size, not less than 330 millimeters long by 203 millimeters wide and not more than 381 millimeters long and 254 millimeters wide. The duplicate drawing may be sumbitted on tracing linen, three-ply bristol board, or blueprint paper. The drawings must be signed by the inventor or his attorney in the lower right-hand corner. The drawings must be made in black indelible ink. If the same part of an invention appears in more than one view of the drawing, it must be referred to by the same character. In case the invention consists of an improvement in a machine, apparatus, or device already known, the invention must be shown, first by itself, then, in another figure, it must be joined to the basic invention.
The power of attorney must be acknowledged before a notary public and legalized by a Cuban consul. If the assignee makes the application, the power must be signed by both the inventor and the assignee.
Revalidation.
The practice of accepting foreign patents for deposit in Cuba was introduced during the military occupation for the purpose of protecting United States patents during their period of duration. The regulations of the department of agriculture, commerce, and industry of May 5, 1903, recognized this practice as valid and extended it to all foreign patents.
Upon revalidation of the foreign patent protection is granted in Cuba for the unexpired term of the foreign patent not to exceed 17 years. The question whether prior publication or use in Cuba or abroad will invalidate a revalidation patent has not yet been decided by the courts. It is advisable, however, to apply for revalidation as soon as possible after the grant of the foreign patent to avoid an adverse decision on the ground of novelty in case the validity of the patent is tested or to preclude the issue of a valid national patent for the same invention. No working of the invention is required when it is protected by a revalidation patent.







Requirement for Deposit of Foreign Patents.
In order to deposit or obtain revalidation of a foreign patent an application must be submitted to the department of agriculture, industry, and commerce, together with a certified copy of the patent issued in the country of origin, including specification and drawings and legalized by the Cuban consul. Two copies of the United States patent, including drawings, may be filed in place of the drawings required in regular applications.
The documents must be accompanied by a translation into Spanish, acknowledged before a notary public of Cuba or a Cuban consul. The translation must be in duplicate, and the second copy may be signed by the applicant or his attorney.
Unless the applicant presents his petition in person he must apply through an attorney, furnishing him with a power of attorney legalized by a Cuban consul. The fee payable to the Cuban administration for the deposit of a foreign patent is $35 United States currency. Upon payment of this fee a certificate of deposit will issue. Novelty.
One of the essential conditions for the existence of a valid patent is that the invention must be novel. The law defines an invention as novel if prior to the time of the application for patent it had not been reduced to practice or described in print in Cuba or abroad. If the invention does not possess novelty or industrial utility, it is subject to annulment. This condition does not apply where the application for a national patent is filed within 12 months following the application for patent in the United States or in any other country belonging to the Industrial Property Union of 1883. Preliminary Examination.
No preliminary examination as to novelty or industrial utility is required or authorized by the basic Cuban patent law. The issue of patents is, in effect, only a ministerial act. The Cuban patent office officials examine applications for national patents for the purpose of determining their regularity; and, if the documentation is found to be in compliance with the law, a patent must be granted. Owing to the practice founded during the period of military occupation of Cuba, patents submitted for revalidation are subject to a preliminary examination and, in case of interference with prior grants, the application will be rejected.
The grant of a patent by the Cuban Government is made without any guaranty as to the validity of the patent or of the novelty or utility of the invention. These questions can not be brought up in administrative proceedings but must be raised before a court of proper jurisdiction.
Working.
The Cuban law is founded on the idea that in return for the grant of a patent the patentee must undertake to establish the industry in Cuba. The law, therefore, requires that an invention for which a national patent had been granted must be put into practice in Cuba within a year and a day from the date of the application, and that the working must not be interrupted for more than a year thereafter.
Through the operation of the international convention this period has been extended to three years, counting from the date of appli-







cation in Cuba. The working, therefore, may be delayed for this period. Failure to work a patented invention in Cuba without good reason may result in the forfeiture of the patent.
Proof of working must be submitted at the specified intervals to the Secretary of Agriculture. The Secretary then generally designates an engineer of the patent office to make a study of the question and determine whether the object of the patent had been carried out in Cuba.
Decisions adverse to the patentee are subject to appeal to the President of the Republic and, if affirmed by the executive, an appeal may be taken to the contentious-administrative court (tribunal contencioso-administrativo). No working is required in the case of revalidation patents.
Annulment and Forfeiture.
A difference is to be noted between the two ways in which a patent may fail; namely, through annulment or forfeiture (nulidad y caducidad). When, for any of the reasons specified in the law, a patent is annulled, the annulment operates retroactively, and the patent is regarded as never having had a valid existence. A privilege that is forfeited, on the other hand, fails from the moment that the forfeiture is declared.
A patent may be annulled because of lack of novelty, or utility, or because of the unlawful character or object of the invention. Annulment may be declared only by a court of justice and is not the subject of an administrative decision.
The patent may be declared as forfeited upon failure to pay the dues within a period of three months after publication, or upon proof that the invention has not been worked satisfactorily in Cuba within the required period, or that it had been abandoned, or upon expiration of the national patent or expiration of the term of the foreign patent in the case of revalidation patents. Decisions of forfeiture in such cases may be rendered by the Secretary of Agriculture, but when it is a question of interruption in working of the invention and the patentee opposes the declaration of forfeiture, the case is referred to the judge of first instance of the patentee's district for determination.
Actions at Law for Infringement.
Infringement of a patent in Cuba, as in other civil-law countries, partakes of the character of a civil and public wrong. It occurs when there has been an unauthorized reproduction of the essential idea of the patented invention. Both a civil and criminal action will lie for infringement, and the remedies are concurrent.
The suit must be brought in the court of first instance or instruction in the district where the defendant has his domicile. The procedure is the same as in ordinary actions and is governed by the code of civil or criminal procedure as the case might be.
Parties.-The proprietor of the patent of record is entitled to sue in a civil court or to prosecute the infringer in a court of criminal jurisdiction. The public administration has also the right to prosecute the delinquent, but it can not initiate the proceedings. Since the wrong is essentially a private one, the complaint must be brought by the injured party before the public administration can act.







The privilege conferred on a patentee is broad and entitles him to an action against all those who may have used his invention in any way whatever. Thus, all parties who are connected with the wrongful transaction, whether as manufacturers, vendors, etc., can be made liable and joined in the same action. The patentee need not prove fraudulent intent on the part of the infringer to make out a cause of action; a prima facie case is made out by proving the fact of infringement.
Criminal liability.-Article 563 of the Penal Code extends the penalties established by article 561 to all those who commit a fraud on literary or industrial property. Fraud in this connection is taken to mean infringement. The penalty indicated in article 561 is major arrest in minimum and medium grades and a fine equaling the amount of damages or up to three times the amount of damages.
Confiscation of infringing goods.-In addition to these penalties, article 31 of the decree of 1833 provides for the confiscation of the infringing articles and the payment of three times their value, to be recovered in each case by the owner of the patent. This, however, is regarded rather in the nature of civil reparation for the injury committed than a penalty for the wrong.
The court can not refuse to pronounce a confiscation of the goods involved in the infringement, even though this is not formally required by the plaintiff. The geizure can be effected only as to those goods which are in possession of the defendant. It can not operate against any party who has not been brought into court. Absence of fraudulent intent will not relieve the defendant of the liability of seizure of products in his possession which infringe on the plaintiff's patent, even though he may be acquitted in a criminal suit.
Civil responsibility.-In a civil action brought for the infringement of a patent the patentee or one claiming under him may recover for the injury which he has suffered. The measure of damages is not based on the defendant's gain but rather on the plaintiff's loss, and, therefore, absence of profit on the part of the defendant will not relieve him of the payment of damages.
The owner of a patent is entitled to a seizure of the goods in accordance with article 31 of the decree of 1833 and to a recovery of up to three times the value of these goods.
Effects and advantages of civil qnd criminal actions.-The advantage offered in pursuing an infringer criminally is apparent when the defendant is without financial responsibility. The existence of this remedy acts as a deterrent against infringement in such cases. Another advantage in bringing criminal suit lies in the fact that the prosecution is not concluded by the punishment of the delinquent in case he is found guilty, but also a certain amount can be recovered by way of damages through confiscation of the infringing goods and the assessment of damages thereon.
The bringing of either a civil or criminal action will not bar the other. The two actions are different in nature-one being essentially a trial for the commission of a wrong in which the public has an interest and the other a suit for the reparation of a private injury.
The decision in a criminal action is not of the same importance as in a civil action where the point to be decided is the validity of the patent. If the defendant in a criminal action sets up the in-







validity of the patent because of lack of novelty, priority of his own invention, failure to work the patent, etc., the judgment of the court will have no effect upon the status of the patent. It merely determines the guilt of the accused in that particular case. In a civil action, on the other hand, where such defense is interposed and the validity of the patent is tested, the decision, in case the patent is found valid, would have the force of res adjudicata in so far as the same parties and the same cause of action are concerned. If the patent is found invalid, it may be declared as such and the patentee's right would be immediately determined.
Period of presciptiort.-Infringement is covered by the same period of prescription that applies to all delicts. This period is 10 years from the time the wrongful act was committed. The same period applies in bar of the civil or criminal action. The penal code provides that any act of prosecution will interrupt the period of prescription.
Prescription goes not only to the remedy but also to the right. The defense, therefore, is one of public interest and, even though it may not be set up by the defendant, the court may apply it of its own motion in bar of the action.
Marking.
There is no requirement of special marking on patented articles. Assignment.
A patent of invention is transferable in the same manner as other species of personal property. It may be conveyed by way of gift, purchase, devise, etc. Assignments and transfers to have legal effect must be made by public deed which should state whether the transfer is absolute or partial.
The deed must be in Spanish or accompanied by a Spanish translation and executed and acknowledged by the assignor before a notary public. It must be legalized by-a Cuban consul. The deed must then be presented to the Secretary of Agriculture, Commerce, and Labor for registration. If this presentation is not made within 60 days following the date of execution, the transfer or assignment will be null and void.
TRADE-MARKS

Cuban law distinguishes between trade-marks used on products of Cuban origin and those used on foreign products. There exist, then, for the purpose of regulating the acquisition of trade-mark property, two kinds of trade-marks; namely, national marks and foreign marks.
Anyone who has an industrial or commercial establishment in Cuba may register the trade-mark which he uses on the products of this establishment as a national trade-mark. If this trade-mark should be used on goods of foreign manufacture as well as on goods of Cuban origin by the owner thereof or under his authority, protection will be granted only in so far as the trade-mark properly conforms to its national character; that is, only its use on Cuban goods will be legally protected.
The distinction between national and foreign trade-marks does not effect the substantive right of trade-mark ownership. The prop-







erty right in each case is protected in the same manner. Different rules, however, apply in connection with the grant of the right, its regulation, and its transfer or termination.
In addition to these broad classifications, a distinction is made between the various classes of trade-marks according to the goods on which they are used and the business in which they are employed. Thus, trade-marks under Cuban law are divided into four special classes, to wit, factory marks (marcas de fabrica), commercial marks (marcas de comercio), agricultural marks (marcas de agricola) and cattle marks (marcas de granadera). This classification is frequently encountered in the trade-mark laws of the countries of Latin America. Foreign trade-marks are generally regarded as marcas de fabrica.
Registrability of Trade-Marks.
The provisions of the decree of 1884 defining trade-marks which shall be admitted to registration and protection are much broader than corresponding provisions in the Federal law of the United States. The Cuban law defines a valid trade-mark to be any denomination, emblem, sign, illustration, label, wrapping, carton, etc., which serves to distinguish the merchandise of one person from that of another. There is apparently no requirement that the trademark be placed in actual proximity to the goods, provided that it distinguishes them. Thus, any person, natural or legal, has the right to adopt as his trade-mark any word, sign, device, or label not expressly prohibited by the law.
In general, the trade-marks which can not be registered in Cuba
are those which are (1) against public order or morality; (2) not susceptible of exclusive appropriation, such as the ordinary name of a product; and (3) those which infringe on the rights of third parties.
Trade-marks which consist of or contain the following characteristics are not registrable: The coat of arms, flags, insignia, etc., of Cuba or any foreign government, without express consent; denominations generally used to designate a product; words or illustrations which are scandalous or immoral; marks which are confusingly similar to trade-marks already registered for the same class of products; the Red Cross emblem and words; a representation of coin or currency of Cuba; awards of merit or distinction, without proof of their genuineness, to be submitted to the Secretary of Agriculture; colors when used apart from illustrations, labels, etc., portraits of living persons without their consent and of deceased persons without the consent of relatives within the fourth civil! degree.
It was decided by the Secretary of Agriculture, in 1913, that names of foreign localities can not be used in national marks. The decision was prompted by the terms of the Madrid convention of 1891 for the suppression of false indications of origin, to which Cuba is a party.
Nature of Right and Its Duration.
As explained earlier in the article, the exclusive right to the use of a trade-mark can be acquired only by registration in accordance with the law. The right begins to run in favor of the applicant as soon as he files his application, but until the trade-mark is regis-







tered there is merely a priority which the applicant may claim over other applicants filing conflicting claims subsequent to his application. It may, therefore, be said that the property right arises only upon the registration of the trade-mark.
The trade-mark right endures for 15 years for national trademarks, and it may be renewed for like periods. The period of registration is the same for foreign marks, provided the foreign registration is maintained and the right is not lost through abandonment or cancellation.
Requirements for Registration.
An application must be filed showing the name, residence, and occupation of the petitioner. It must also state the class of the mark (in other words, whether of manufacture, commerce, or agriculture), describe the mark, and enumerate the products which the mark is intended to distinguish. The application should be accompanied by 26 copies of the trade-mark, 3 of them to be accompanied by a description of the mark, a certified copy of registration in the United States and a power of attorney, both legalized by a Cuban consul. An electrotype not less than 2 by 2 centimeters and not greater than 10 by 10 centimeters and 24 millimeters in thickness must be submitted for use in advertising the application. The application must be published once in the Boletin Oficial at the expense of the applicant.
Collective Marks.
Collective marks are those used by associations to distinguish products of the persons or companies composing the group or to serve the purpose of certification by the association. A collective or association mark differs from the ordinary trade-mark in that the association which uses the mark does not produce goods or add any value to them by physical means.
Such trade-marks are not registrable under the Federal laws of, the United States. The royal decree of 1884 does not mention collective marks expressly, but through subsequent regulations and legislation they are accorded the same treatment as trade-marks. Obligatory Marks-Pharmaceutical Regulations.
Article 6 of the royal decree of 1884 provides that registered trademarks must be used on articles of gold or silver and chemical and pharmaceutical products. This provision does not apply to foreign trade-marks except in so far as it refers to pharmaceutical products.;
The importation of foreign pharmaceutical specialties is governed by the pharmaceutical law of Cuba in 1923. According to this law a foreign specialty, when imported and placed on sale in Cuba, must be accompanied by a certificate from a competent authority in the, country of origin setting forth the fact that the sale of the product is not prohibited in that country, or, in the absence of this certificate, by an aflidavit to that effect from the importer, his agent, or representative.
All pharmaceutical preparations or patent medicines, sealed and bottled in a uniform manner and bearing the label, must show plainly on the label the substance contained therein to which are due their medicinal properties and must indicate the name and address of the producer.







International Trade-Marks.
Trade-marks registered in Cuba in accordance with the Madrid arrangement of 1891 or the Buenos Aires convention of 1910 are accorded the same protection as trade-marks registered under the municipal law. The Inter-American Trade-Mark Bureau for the . Northern Group, established by authority of the convention of 1910, is located in Habana. This bureau will continue to function under the convention of 1923, which replaces the convention of 1910. Commercial Names-Personal Names.
The names of partnerships, corporations, and individuals may be registered as trade-marks, provided that the registration does not interfere with the rights of third parties previously acquired. On the other hand, a person or company is free to use its trade style provided this does not create unfair competition.
Under the terms of the convention of 1923 (art. 1, sec. 4) commercial names are entitled to protection in Cuba whether they form a part of a trade-mark or not, without the necessity of registration. Variance Between Trade-Mark as Registered and as Used.
Article 42 of the decree of 1884 lays down the rule that the right to a trade-mark may be lost if there is a variation in the trade-mark as used over the registered trade-mark. The only variations that may be made without affecting the right are those with respect to the color or size of the trade-mark or insignificant features which do not serve to distinguish.
The effect of variation may be felt in two ways: First, through a denial of protection, and, second, through a cancellation of the trade-mark. The trade-mark may be canceled by the Secretary of Agriculture, Commerce, and Labor. A petition for the cancellation of the trade-mark for this reason may be brought by anyone, whether baving a material interest in the matter or not. Opposition.
The right of opposing the registration of a trade-mark runs only in favor of persons who are the owners of a registered trade-mark which the trade-mark to be registered resembles. The time allowed for presenting the opposition is 60 days following the publication of the application notice in the Patent Office Bulletin. The opposition must be presented to the Secretary of Agriculture, Commerce, and Labor, and may be grounded on the fact that the trade-mark sought to be registered is identical with the registered trade-mark of the opposer, or that it is confusingly similar to his mark. Cancellation.
The termination of the right of trade-mark ownership, which in Cuba corresponds to the annulment or cancellation of the registered trade-mark, may be declared either administratively or judicially.
The Secretary of Agriculture, Commerce, and Labor may cancel the registration under any of the following circumstar ces: (1) Upon voluntary petition of the trade-mark proprietor; (2) upon failure of the trade-mark owner to make use of it within two years following the date of registration; or (3) upon failure to comply with any of the requirements of the decree. An appeal from the decision of the Secretary of Agriculture, Commerce, and Labor may be taken to the President of the Republic within 10 days after its announce-








ment. When the registration period expires and no renewal is applied for, the trade-mark falls into the public domain, and to reinstate the right of ownership a new registration is necessary.
A court of proper jurisdiction may determine the question of trademark ownership as between the parties before it, and an executory sentence declaring the invalidity of the registration will operate to cancel the registration. A petition for cancellation because the use of the trade-mark in Cuba has been interrupted for more than a year can be entertained only by the court, the Secretary of Agriculture, Commerce, and Labor having no jurisdiction over the subject matter. The obligatory use of a registered trade-mark in Cuba means use on the products for which the trade-mark is registered. If the trade-mark is used only on some of the products and not on others, it will be considered abandoned as to the products on which there has been no user within the statutory period.
In addition to the grounds for the cancellation of the trade-mark set forth in article 18 of the royal decree of 1884, article 5 of the Santiago convention of 1923 establishes further grounds for cancellation. This article states that if a trade-mark duly submitted for registration according to the terms of the convention is refused registration because of the existence of a prior, registered trade-mark or a prior application, the owner of the foreign trade-mark may seek to cancel the registered mark. The grounds upon which the cancellation of a national trade-mark registered in Cuba may be sought in view of the convention are as follows:
(a) That the owner of the foreign trade-mark had legal protection for his mark in any of the contracting States before the date of application for the registration which he seeks to cancel; or
(b) That the registrant had no right to the ownership, use, or employment of the registered mark at the date of its deposit; or
(c) That the mark covered by the registration which he seeks to cancel has been abandoned.
Liability for Infringement.
There can be no violation of the right of trade-mark ownership for which an action for infringement will lie unless (1) the trademark has been registered, (2) used in the form in which it was registered, and (3) the alleged infringing trade-mark may be confused with the registered mark and is used on the same class of goods.
If these conditions exist, the infringer becomes liable to both a criminal and a civil action, and to seizure of the goods if they are imported.
Parties.-A criminal action may be initiated by any interested party-in other words, one who has suffered an injury because of the act of the defendant-or by any person (art. 43), or by the public administration. In the last case no complaint on the part of a witness is necessary; the public administration may begin and continue the prosecution of its own accord.
Article 12 of the royal decree and articles 287 and 288 of the penal code attaches liability to all those who counterfeit, falsify, or use a registered trade-mark buy, sell, or use containers so marked; or sell or expose for sale goods bearing an infringing trade-mark.
The same liability is imposed on those who use marks which are capable of deceiving the purchaser regarding the nature of the prod-







uct or who detach trade-marks from goods for the purpose of using them on others.
Criminal liability.-For any of the above acts the defendant is criminally liable, provided that he committed them with knowledge and wrongful intent. The offense is punishable with fine and imprisonment in its minimum and medium grades.
Civil liability.-The owner of a registered trade-mark may sue for damages occasioned by the infringement. The courts, in estimating the amount of damages, consider the importance of the injury and base the sum to be recovered on the loss of profits, the extent of the injury, and the expenses caused by the necessity to prove the infringement.
The absence of a wrongful intent will not exonerate the defendant in a civil action. It is sufficient to prove that the infringement was due to the negligence or fault of defendant to establish his liabilty to respond in damages.
Seizure of Infringing Goods by Customs.
The customs authorities are empowered to seize and confiscate goods entering Cuba on proof that they bear an infringing trademark or label. After the goods have been seized an account of them will be rendered to a judge of instruction, together with a description of the infringing marks and .exhibits. The, judge will then order a destruction of the marks or even of the products if the marks can not be otherwise removed.
Prescription.--The period of prescription barring criminal actions for infringement is 10 years as in other cases of delicts. Assignment and Marking.
Trade-marks, labels, and other forms of property regulated by the royal decree of 1884 are transferable in the same manner as tangible personal property. They may be transferred apart from the business or industry in which they are used and the conveyance of the physical property of an enterprise does not include a transfer of the trade-mark unless expressly stated in the contract.
It may be observed here that a national trade-mark can not be assigned to a foreigner to be used in an enterprise established outside of Cuba. Where an assignment of this kind is contemplated an arrangement may be entered into with the owner of the Cuban trade-mark to release his right by a voluntary cancellation, and at the same time an application to register the trade-mark as a foreign mark can be entered.
An assignment or transfer of a trade-mark must be recorded within 90 days after it is executed.
The Cuban trade-mark law does not require that a notice of registration of the trade-mark be carried on the face of the trade-mark. Such notice, however, may be used without objection, and the form Marca Registrada may be conveniently used because of its acceptability in other countries of Latin America.







SHOP SIGNS
While the protection of shop signs or signs used to advertise an industrial or commercial establishment is purely local in character, a word may be said of the law which governs this subject because of its close analogy to the common law of unfair competition as applied in the United States.
Shop signs are not subject to protection under the trade-mark law and can not be registered under its terms. This.law applies only to marks which are used in connection with merchandise. Shop signs, on the other hand, are used to distinguish an establishment or factory having a definite situs.
The right to the exclusive use of a sign to distinguish an establishment is determined by priority of user, and this right is protected according to the ordinary principles of law. The property right in a shop sign is a local right only and corresponds in territorial extent to the actual influence which the sign has in identifying the establishment or factory. The law on this subject corresponds very closely to the Anglo-American law.
The right in a shop sign is assignable and has the character of personal property, but, if the establishment is sold, the right to the use of its distinctive sign goes with the transfer of the tangible property, unless otherwise stipulated in the contract. The infringement of a shop sign makes the infringer liable civilly for damages.

INDUSTRIAL DESIGNS AND MODELS
Industrial designs and models are protected under the decree of

August 21, 1884, relating to trade-marks. An industrial design is one that is intended for adornment or one that forms an essential part of a manufactured article. Thus, the designs on wall paper, cloth, etc., would be considered as designs of adornment. Examples of designs forming an essential part of an article are embroideries, laces, etc.
Industrial designs must be distinguished from artistic designs, since the former are protected by the trade-mark decree of 1884, while the latter are the subject of the copyright law. The difference between the two classes of designs is fixed by some text writers according to the immediate ends which the designs serve. Thus, if the design is used by a manufacturer for an ordinary purpose, it is an industrial design; whereas if a design is an artistic creation and it serves the purpose of art it is an artistic design. The value or merit of an industrial design has no importance in legal contemplation.
An industrial model consists in the peculiar form or appearance that is given an object. It differs from an artistic model which is the subject of copyright law, in that it primarily serves the ends of industry and utility.
The right of exclusive property in industrial designs and models is acquired under the decree of 1884, on the same terms as trade-mark rights. The term of protection is 15 years and, according to the law, may be renewed. The same requirements for registration apply to industrial models and designs as to trade-marks.








An essential preliminary condition that must be fulfilled in obtaining the registration of an industrial design or model, after its character as such has been established, is novelty.- As in the case of inventions, an industrial design or model to be the subject of exclusive ownership must be new at the time application for registration is filed.
BIBLIOGRAPHY

Pedro Diazmartinez: Marcas y Patents. Garcia Gar6falo: Legislacion Industrial. Ruege & Graham: Trade-Mark Laws of the World. White & White: Patents Throughout the World. B. Singer: Patent Laws of the World. Patent and trade-mark laws of the South American Republics, Brazil, and the Republic of Haiti: International Bureau of American Republics.













APPENDIX


LEGAL HOLIDAYS IN CUBA

In addition to Sundays, the f6llowing are legal holidays by act of the Cuban Congress:
January 1.-New Year's Day.
January 28.-Martf's Birthday.
February 24.-Baire Revolution Day.
May 10.-Independence Day.
October 10.-Yara Revolution Day.
October 12.-Columbus Day.
December 7.-Decoration Day.
December 25.-Christmas.
Election Day.
Business houses are required to close by 6 p. m., except Saturdays, when they may transact business until 10 p. m. They must remain closed on Sundays and legal holidays. Exemption from the law is provided in some cases.
Holidays, other than legal holidays, include Students' Day, November 27; Holy Thursday; Good Friday; September 1; Labor Day, May 1; Thanksgiving Day; and Christmas week. The supreme court and the courts of appeal are closed during July and August.
THE DIVISION OF COMMERCIAL LAWS
The division of commercial laws of the Bureau of Foreign and Domestic Commerce is that division of the United States Department of Commerce charged with the collection, digest, and distribution of information relating to the commercial laws of foreign countries. It is under the direction of C. J. Junkin, who is assisted by a staff specializing in definite branches of foreign commercial law. The files of the division contain current data concerning tax legislation, compulsory registration of companies, depositing of trade-marks, licensing of agents, protesting of drafts, funding of employee pensions, and keeping account books, and recent intelligence regarding credit conditions, insurance, and the reliability of the bar in foreign cities.
The division assists in the friendly adjustment of trade disputes with foreign customers, and promotes interest in commercial arbitration, unification of commercial laws, and simplification of trade terms and practices. It offers to assist American enterprise under the export trade act (Webb-Pomerene law) and the China trade act, and it serves as a forum for the discussion of the rules for the carriage of goods by sea and'the use of through bills of lading. Information regarding American laws is made available to foreign attorneys in return for foreign legal citations, and American counsel









may obtain, on application, names of recommended attorneys in foreign cities or of American law firms with foreign branch offices. Counsel are free to submit to the division, for informal criticism, forms of agency contracts, articles of incorporation, powers of attorney, etc., for use in foreign countries.
Foreign traders and their counsel are invited to correspond with the division concerning difficulties arising out of the complications of foreign commercial laws, and to cooperate in the promotion of the objects of the Bureau of Foreign and Domestic Commerce.

FOREIGN SERVICE OF THE UNITED STATES IN CUBA

The Embassy of the United States is located at Obispo 7, Habana, in the Horter Building. The office of the commercial attach is in room 311 of the same building. Business men going to Cuba are invited to visit the latter offices, where many of the services of the Washington office of the Bureau of Foreign and Domestic Commerce will be found available.
Following is a list of American consulates throughout Cuba; correspondence should be addressed to "The American Consul " at the addresses given below:
Habana: Horter Building.
Antilla: Hotel Antilla Building.
Cienfuegos: San Carlos 83.
Nueva Gerona (Isle of Pines): Anderson Building. Nuevitas: 25 2 Marti Street.
Santiago de Cuba: Bank of Nova Scotia Building.
There are, besides, consular agents at Caibarien, Sagua la Grande, Matanzas, and Manzanillo.

FOREIGN SERVICE OF CUBA IN THE UNITED STATES

The Embassy of Cuba is located at 2630 Sixteenth Street, Washington, and the offices of the commercial attach6 are in the same build-' ing. Luis Marino Perez, the commercial attach in charge, may be addressed in matters relating to the facilitation of Cuban-American business. Following is a list of Cuban consuls in the United States, with their addresses:
Baltimore: Eduardo L. Desvernine, consul; Chancellor Meliton Perez, deputy consul in charge; the Munsey Building. Boston: Jose M. Gonzalez, consul, 113 State Street. Charleston: Leopaldo Doltz, consul; Chancellor Calixto E. Sanchez, deputy consul in charge; 86 Ashley Avenue.
Chicago: Julio C. Garrido, consul; Angel Perez, vice consul; Watson Building.
Cincinnati: Hirginio J. Medrano, consul, 509 Glenn Building. Galveston: Francisco Rayneire, consul; Jose Pareda, chancellor; 2627 Broadway Street.
Jacksonville: Julio Rodriguez Embil, consul; Manuel Velasquez, chancellor, 1030 Laura Street.
Key West: Jorge R. Ponce, consul, 423 Simonton Street. Miami: Domingo J. Milor, consul.
Mobile: Andres Jimenez y Ruz, consul, 252 St. Louis Street. Norfolk: Pedro Firmat, consul in charge; Arcade Building. Newport News: Luiz Alvarez, vice consul in charge, 2411 Washington Avenue.
New Orleans: Eduardo Paterson, consul; Luis Bas Malina, vice consul; Orme Building.









New York: Augusto Merchau, consul general; Mario del Pino, first class consul; Jose A. Torralba, vice consul; Pedro E. Desvernine, second class consul; 44 Whitehall Street.
Philadelphia: Jose Antonio Ramos, consul; Courado Dominguez, vice consul; 608 Chestnut Street.
St. Louis: Alberto G. Abreu, consul, Fullerton Building.
San Francisco: Gabriel G. Amenabar, consul, Holbrook Building.
Tampa: Guillermo Espinosa, consul; Chancellor Eliseo Perez Diaz, vice consul; 609 Henderson Avenue.
Washington, D. C.: Cayetano de Quesada, consul; Orestes Garcia, vice consul; 2630 Sixteenth Street.
CONSU AR AGENCIES

Los Angeles: Jose S. Saenz, 922 West Thirtieth Street. Atlanta: Guy King.
Chattanooga: Miguel Caballero.
Kansas City, Kans.: Clarence S. Palmer.
Louisville: Richard Patrick Cane, 311 West Main Street.
Pascagoula: Jose R. Cabrera.
Savannah: William McLane Coolidge.

BIBLIOGRAPHY

A translation into English of the Cuban Code of Commerce, Civil Code, Procedural Code, commercial exchange regulations, commercial registry regulations, and Code of Criminal Procedure was made by the War Department in 1899 and 1901, and these translations, with annotations and amending military orders, have been published by the Government Printing Office, Washington. Following are editions in Spanish of these and similar laws used in the preparation of this bulletin:
Betancourt: C~digo Civil; C6digo de Commerelo; Ley de Enjuiciamento Civil: Procedimiento Contencioso Administrativo; Suspensi6n de Pagos; Jurisprudencia Cubana Civil y Contensioso Administrativo.
Caflizares: Divisi6n Judicial y Organizaci6n de Tribunales.
Duval y Fleites: Derecho Mercantil.
Sanchez y Fuentes: Ley Orgdinica del Poder Judicial.
Sedano y Agramonte: El Notariado en Cuba.
The best handhook on Latin American commercial law is that issued under that name by T. Esquivel Obreg6n, published by Banks Law Book Co., New York.
An authoritative study of the Isle of Pines situation, by Capt. Elbridge Colby, United States Army, appears in the Monthly Bulletin of the Pan American Union for October, 1924.
Many libraries of the law schools contain fine collections of Cuban commercial law books, which are often available to business men under certain restrictions. Every general law library will be found to contain some literature on this subject. Where the Cuban laws are not available, reference should be made to the Spanish shelves. The Cuban stacks in the library of the Pan American Union and the law division of the Library of Congress, Washington, are well supplied.











OFFICES OF THE BUREAU OF FOREIGN AND DOMESTIC COMMERCE
DISTRICT OFFICES

Atlanta: 538 Post Office Building.
Boston: 1801 Customhouse.
Chicago: Room 845, 33 south Clark Street.
Des Moines: 121 Federal Building.
Detroit: 607 Free Press Building.
Galveston: 309 Post Office Building.
Houston: Chamber of Commerce Building.
Louisville: Board of Trade Building.
Memphis: Chamber of Commerce Building.
Minneapolis: Federal Building.
New Orleans: 322 Post Office Building.
New York: 734 Customhouse.
Philadelphia: Room 812, 20 South Fifteenth Street.
Portland, Oreg.: 215 New Post Office Building.
St. Louis: 1201 Liberty Central Trust Co. Building.
San Francisco: 310 Customhouse.
Seattle: 515 Lowman Building.
COOPERATIVE OFFICES

Akron, Ohio: Chamber of Commerce.
Baltimore, Md.: Associgtion of Commerce.
Beaumont, Tex.: Chamber of Commerce.
Birmingham, Ala.: Chamber of Commerce.
Bridgeport, Conn.: Manufacturers' Association.
Charleston, S. C.: Chamber of Commerce.
Chattanooga, Tenn.: 1301 Market Street.
Cincinnati, Ohio: Chamber of Commerce.
Cleveland, Ohio: Chamber of Commerce.
Columbus. Ohio: Chamber of Commerce.
Dallas, Tex.: Chamber of Commerce.
Dayton, Ohio: Chamber of Commerce.
El Paso, Tex.: Chamber of Commerce.
Erie, Pa.: Chamber of Commerce.
Fort Worth, Tex.: Manufacturers' Association.
Greensboro, N. C.: Chamber of Commerce.
Indianapolis, Ind.: Chamber of Commerce.
Lake Charles, La.: Association of Commerce.
Jacksonville, Fla.: Chamber of Commerce.
Keokuk, Iowa: Chamber of Commerce.
Los Angeles, Calif.: Chamber of Commerce.
Lowell, Mass.: Chamber of Commerce.
Milwaukee, Wis.: Association of Commerce.
Mobile, Ala.: Chamber of Commerce.
Newark, N. J.: Chamber of Commerce.
Norfolk, Va.: Hampton Roads Maritime Exchange.
Orange, Tex.: Chamber of Commerce.
Pensacola, Fla.: Chamber of Commerce.
Pittsburgh, Pa.: Chamber of Commerce.
Port Arthur, Tex.: Chamber of Commerce.
Providence, R. I.: Chamber of Commerce.
Richmond, Va.: Chamber of Commerce.
Rochester, N. Y.: Chamber of Commerce.
San Diego, Calif.: Chamber of Commerce.
Syracuse, N. Y.: Chamber of Commerce.
Tacoma, Wash.: Chamber of Commerce.
Toledo, Ohio: Chamber of Commerce.
Trenton, N. J.: Chamber of Commerce.
Worcester, Mass.: Chamber of Commerce.
(74)
U.S. GOVERNMENT PRINTING OFC :1927




Full Text
xml version 1.0 encoding UTF-8
REPORT xmlns http:www.fcla.edudlsmddaitss xmlns:xsi http:www.w3.org2001XMLSchema-instance xsi:schemaLocation http:www.fcla.edudlsmddaitssdaitssReport.xsd
INGEST IEID EAIURJ6MJ_S41E9C INGEST_TIME 2014-09-03T20:57:20Z PACKAGE AA00021756_00001
AGREEMENT_INFO ACCOUNT UF PROJECT UFDC
FILES



PAGE 1

This volume was donated to LLMC to enrich its on-line offerings and for purposes of long-term preservation by University of Michigan Law Library

PAGE 2

Trade Information Bulletin No. 343 -,CSi%. C 3% TRADING UNDER THE LAWS OF CUBA REVISED EDITION Prepared by GUERRA VERETT b. INSTITUTE 'ECONOMICS TIOk Ln ARY SEP.-1927 y ,WASHINGTON, D. 0. UNITED STATES DEPARTMENT OF COMMERCE BUREAU OF FOREIGN AND DOMESTIC COMMERCE ~ 1)

PAGE 3

Trade Information Bulletin No. 343 (Revised) Price, 10 cents FOREWORD Cuba ranks first among the countries of Latin America, not only in imports from but in exports to the United States. Our imports of merchandise from Cuba in 1926 were valued at $250,600,000, and our exports at $160,488,000. The amount of United States capital invested in Cuba is between $1,250,000,000 and $1,500,000,000. Moreover, a large amount is spent in the island annually by tourists from the United States. From these figures it is apparent that Cuba presents a broad field for the extension of American manufactured exports. The importance of Cuba as a customer for the products of the United States, and the close political and historical position held by Cuba in the American scheme of things, serve to make all dependable information relative to that market of peculiar interest and value, so that the present reprint should be readily welcome to exporters and their counsel. Since the publication of the original bulletin, in April, 1925, the tax system of Cuba s been revised. In the present edition there is included a chapter regarding the validity of conditional sales in Cuba. The chapter on industrial property is the work of Bernard A. Kosicki, of the division of commercial laws, expert in foreign patent, trade-mark, and copyright laws. The division of commercial laws receives from foreign countries information regarding changes in the laws and any legal decisions which might. affect American trade. Exporters are invited to keep in touch with the Bureau of Foreign and Domestic Commerce in order to be notified of any change in conditions or laws which might pertain to their business. The present edition has been revised and made current by Guerra Everett. JULIUs KLEIN, Director, Bureau of Foreign and Domestic Commerce. AUGUST, 1927. (II) *6 e ga I,

PAGE 4

JAY" FL8 TRADING UNDER THE LAWS OF CUBA (REVISED EDITION) CONTENTS 1 Legal aspects of American-Cuban commerce. Industrial property. Political and judicial organization of Sources and principles of legislation. Cuba. Patents. S The basic codes of law. Trade-marks. Commerce and merchants. Shop signs. Effect of failure to register. Industrial designs and models. Selling through commission agents. Appendix. o Domestication of American corporaLegal holidays of Cuba. tions in Cuba. The division of commercial laws. Organization of Cuban companies. Foreign service of the United States in The' law of sales. Cuba. Negotiable instruments. Foreign service of Cuba in the United Powers of attorney. States. Suspension of payments and bankBibliography. ruptcy. Factory and labor laws. Taxation. Action and remedies at law. LEGAL ASPECTS OF AMERICAN-CUBAN COMMERCE By Guerra Everett, Formerly Chief, Section of Legal Information, Division of Commercial Laws -/ POLITICAL AND JUDICIAL ORGANIZATION OF CUBA With a length of nearly 800 miles and an area of 44,215 square y s miles and a population (1923) of 3,143,210, Cuba lies about 90 nautim cal miles from Key West, Fla., the terminus of an American railroad connecting with the whole American railroad system. Daily steam-ship service is maintained between Kvey West and Hlabana, and frequent sailings are made between other Cuban and American ports. Telephone, cable, and wireless communication between the continent I and the island is available for commercial uses. Cuba was discovered by Columbus on the first voyage across the Atlantic, but the island was not circumnavigated until 1508, and Columbus died believing it to be a part of the mainland. Because of its fertility and climate and numerous natural seaports it became at once the point of departure for Spanish colonial operations. The first permanent settlement was made in 1511, but by 1515 there were seven communities flourishing along the coasts. In 1517 Hernain Cortes sailed from Cuba for the conquest of Mexico, draining the island of many of its settlers and much of its stock of horses and supplies. From 1492 to 1898 the Pearl of the Antilles remained in the uninterrupted possession of Spain, except for a few months in 1762-63, when it was seized by an English fleet. As a consequence, the outstanding racial characteristic of the populace is Spanish. Even after the establishment of the Republic (1) 't 5a3w ,( OLTIAL NDJUICAL RGNIATIN FtUB

PAGE 5

2 the great bulk of immigration to the island came from Spain. The Indians who inhabited the island in 1492 rapidly disappeared in an epidemic which swept in from one of the neighboring islands, so that it became necessary to resort to the African slave trade for the procurement of labor. The institution of slavery was not abolished until 20 years after the close of our Civil War. Cuban habits of thought and the bases of Cuban jurisprudence are, therefore, essentially of Spanish origin. From the beginning the Province was governed as a dependency o fSpain, by a captain general or civil-military governor appointed by the Crown. The civil and commercial laws in force were the same laws that ruled in Spain, and in the determination of Cuban cases the judges were guided by decisions of Spanish courts. The Consulado del Mar, the Ordenanzas of Burgos, of Barcelona, and of Bilbao, and the Novisima Recopilaci6n, in commercial matters, and the Brevarium Aniani, the Fuero Juzgo, the Siete Partidas, and the Recopilaci6n de Leyes de Indias, in civil matters, were in vigor in Cuba as in all the Spanish colonies in America, but as Cuba remained a part of Spain for three-quarters of a century or more after the rest of America became independent, and as the Spanish civil code of 1889 and the Spanish commercial code of 1885 were extended to the Province of Cuba during that period, the law of Cuba to-day more closely approximates the Spanish law than does the law of any other Latin-American country. United States Aids in the Establishment of the Republic. On April 20, 1898, the following joint resolution was approved: Resolved by the Senate and Houseof Representatives of the United States of America in Congress assembled, First, That the people of Cuba are, and of right ought to be, free and independent ** (30 Stat. 738). Hostilities between the United States and Spain ceased with the signing of the protocol of agreement of August 12, 1898, Article I of which provides that "Spain will relinquish all claim of sovereignty over and title to Cuba." The same clause became Article I of the treaty of Paris, concluded December 10, 1898, ending the Spanish-American War. The same treaty declared that "the island is, upon its evacuation by Spain, to be occupied by the United States" and "the United. States will, so long as such occupation shall last, assume and discharge the obligations that may under international law result from the fact of its occupation, for the protection of life and property." Furthermore, the United States undertook the following responsibility : ARTICLE XVI. It is understood that any obligations assumed in this treaty by the United States with respect to Cuba are limited to the time of its occupancy thereof; but it will, upon the termination of such occupancy, advise any government established in the island to assume the same obligations. Spain having "relinquished" Cuba to the United States "in trust for the people of Cuba," the United States took formal possession on January 1, 1899, and steps were immediately taken to promote the political organization of the new nation. "Under the authority of the United States, as temporary occupant of Cuba, a general election was held in the island on the third Saturday in September, 1900, to

PAGE 6

3 elect delegates to a constitutional convention, which was to meet at Habana on thd first Monday of November. The election was held on September 15, and the convention assembled on the 5th of. November." (President McKinley, annual message, December 3, 1900, For. Rel. 1900, xli.) The deliberations of this convention continued over a period of three months, and a constitution was adopted on February 21, 1901. In view of these developments, Senator Platt, of Connecticut, offered an amendment to a bill making appropriations for the Army of the United States, authorizing the President to 'leave the government and control of the island of Cuba to its people' so soon as a government shall have been established in said island under a constitution which, either as a part thereof, or in an ordinance appended thereto, shall define the future relations of the United States with Cuba," substantially in accordance with the following articles: The Platt Amendment. I. That the Government of Cuba shall never enter into any treaty or other compact with any foreign power or powers which will impair or tend to impair the independence of Cuba, nor in any manner authorize or permit any foreign power or powers to obtain by colonization or for military or naval purposes or otherwise, lodgment in or control over any portion of said island. II. That said Government shall not assume or contract any public debt, to pay the interest upon which, and to make reasonable sinking-fund provision for the ultimate discharge of which, the ordinary revenues .of the island, after defraying the current expenses of government, shall be inadequate. III. That the Government of Cuba consents that the United States may exercise the right to intervene for the preservation of Cuban independence the maintenance of a government adequate for the protection of life, property, and individual liberty, and for discharging the obligations with respect to Cuba imposed by the treaty. of Paris on the United States now to be assumed and undertaken by the Government of Cuba. IV. That all acts of the United States in Cuba during its military occupancy thereof are ratified and validated, and all lawful rights acquired thereunder shall be maintained and protected. V. That the Government of Cuba will execute, and as far as necessary extend, the plans already devised or other plans to be mutually agreed upon for the sanitation of the cities of the island, to the end that a recurrence of epidemic and infectious diseases may be prevented, thereby assuring protection to the people and commerce of Cuba, as well as to the commerce of the southern ports of the United States and the people residing therein. VI. That the Isle of Pines shall be omitted from the proposed constitutional boundaries of Cuba, the title thereto being left to future adjustment by treaty. VII. That to enable the United States to maintain the independence of Cuba and to protect the people thereof, as well as for its own defense, the Government of Cuba will sell or lease to the United States lands necessary for coaling or naval stations at certain specified points .to be agreed upon with the President of the United States. VIII. That by way of further assurance the Government of Cuba will embody the foregoing provisions in a permanent treaty with the United. States. The measure became law as the act of March 2, 1901 (31 Stat. 895). The articles were incorporated in an ordinance appended to the new constitution of Cuba, and also embodied in a treaty between the United States and the Republic of Cuba signed at Habana on .May 22, 1903, the ratifications of which were exchanged at Washington, July 1, 1904. The Cuban Constitution. The new constitution, with the above-mentioned ordinance appended, was published officially on April 14, 1902, by Gen. Leonard Wood, military governor. The military government formally with-

PAGE 7

4 drew on May 20 and the first President of Cuba Tomias Estrada Palma, was inaugurated the same day. By the terms of the constitution Cuba is a unitary Republic, divided into six Provinces, as follows: Pinar del Rio, Habana, Matanzas, Santa Clara, Camagiiey, and Oriente. The legislative power is vested in a Congress, composed of a chamber of representatives and a senate. An examination of the powers of the Congress serves to show the centralized form of the Cuban Government. The powers delegated to Congress by the constitution include the right to enact "national codes and laws of a general nature," to supervise and regulate national, provincial, and municipal elections, and to issue orders for the regulation and organization of all services pertaining to the administration of national, provincial, and municipal governments, and "to pass all other laws and resolutions which it may deem proper relating to other matters of public interest." The regulation of the services of communications, railroads, canals, and harbors, by express provision, belongs to Congress. The constitution regulates in detail the government of the Provinces and municipalities and has a special section devoted to the powers and duties of mayors of cities. Article 114 declares that all property existing within the territory of the Republic and not belonging to Provinces, municipalities, or private individuals or corporations shall belong to the State. The judicial power is vested in a supreme court of justice and such other tribunals as may be established by law, and the law shall regulate the respective jurisdictions of such inferior courts. The following special powers are vested in the supreme court: To take cognizance of cases on a writ of error; to decide between conflicts of jurisdiction between courts immediately inferior to it or not having a common superior; to take cognizance of the cases to which the State on the one side and the Provinces or municipalities on the other are parties; and to decide as to the constitutionality of the laws, decrees, and regulations when a question to that effect is raised by any party. Justice by the constitution shall be administered gratuitously throughout the Republic, and courts must take cognizance of all cases, whether civil, criminal, or between the Government and private parties. Judicial commissions and special extraordinary tribunals of all kinds are prohibited, and provision is made for the independence of judicial officers in the discharge of their duties, but they are not relieved of responsibility for violations of the law which they may commit. The Judiciary Law. From September 29, 1906, to January 28, 1909, the United States intervened in Cuba to assist in laying a stronger foundation for the administration of the new Republic. During this period several important laws were enacted by the authority of the military government, among them being a law for the organization of the executive departments, one for the civil administration of the Government, one for the regulation of provincial government, and the law for the organization of the judicial power. The last-mentioned law divides Cuba, for the purposes of the administration of justice, into six districts, coterminous with the

PAGE 8

5 six Provinces. Each district is subdivided into sections, or partidos judiciales, there being 33 such sections in all. Each partido judicial is composed of one or more municipal areas (terminos municipales), the total number of which is 84. The supreme court, or tribunal supremo, is the highest court in the land, considered as the cepter of the judicial power. It sits at Habana. It is divided into three branches: Civil (trying cases on appeal in cassation from the audiencias) ; contentious-administrative (as an appellate court in actions against the Government arising out of administrative resolutions) ; the criminal branch (trying cases on appeal in cassation from the audiencias); and the chamber of administration (trying cases on appeal from audiencias in which civil matters pertaining to real property laws are concerned). The immediate inferiors of the supreme court in the judicial hierarchy are the audiencias, sitting in the capitals of the Provinces and having jurisdiction over the respective districts. The audiencias have original criminal and contentious-administrative jurisdiction and appellate civil jurisdiction. The lower courts having jurisdiction in the first instance are: Civil, municipal courts and courts of first instance, and criminal, courts of instruction, correctional courts. There are 47 courts of first instance, 14 of which have exclusive civil jurisdiction and 33 of which have concurrent criminal jurisdiction as courts of instruction. There are 130 municipal courts having civil jurisdiction in minor cases and correctional jurisdiction at places where there are no correctional courts. The courts of instruction act as the grand jury does in the United States, in the investigation and preparation of criminal cases which after indictment are sent to the respective audiencias for trial. There are 14 courts of instruction. The correctional courts are courts for the trial of minor offenses and misdemeanors. There are 13 correctional courts. The same law provides the foundations for the organization of the Cuban bar, the requirements for the admission to which are regulated by the courts. A few American citizens have in the past been admitted to practice before the courts of Cuba. This bar has in recent years produced several brilliant commentators on the codes, such as Betancourt and Duval y Fleites; and Dr. Antonio S. de Bustamente, as judge on the Permanent Court of International Justice, at The Hague, has added luster to the accomplishments of the lawyers of the Republic. The Isle of Pines. It will be seen from Article VI of the Platt amendment that the Isle of Pines was expressly reserved from the delimitation of the Cuban national territory, and its nationality was to be decided by subsequent treaty between the United States and Cuba. The United States Government was at that time considering the use of this territory as a naval base but has since been using instead the leased area on Guantanamo Bay. Many Americans, however, expecting that the island would come under the American flag, have settled or acquired property there.

PAGE 9

6 As a matter of fact, the public services of the island have been continuously administered by the Cuban authorities since the organization of the Republic. The wealth of the island as a lumbering and truck-gardening area has increased its importance from year to year, and the Cuban Government has for a long time endeavored to have the matter settled. Several proposed treaties failed of passage, including those of 1903 and 1904. The last treaty was reported favorably to the Senate by the Foreign Relations Committee in 1922, but it was not ratified by the Senate until the special session called by President Coolidge immediately after his inauguration. The ratification is dated March 13, 1925, and includes certain reservations in favor of American residents, which reservations have been acceded to by Cuba, so that now the Isle of Pines both de facto and de jure is a part of the Republic of Cuba. THE BASIC CODES OF LAW The military government of Cuba on January 1, 1899, declared by proclamation that "the civil code and criminal code existing before the termination of Spanish sovereignty shall remain in force, being modified and changed from time to time when necessary for better government," and this decree was adopted by the constitution. The Supreme Court, by a decision of December 14, 1901, interpreted this proclamation to include the code of civil procedure. The code of commerce was tacitly continued in. force, no direct order with regard to it having been published by the authorities. Other codified laws were likewise continued, among the more important of which was the notarial law. In Spanish jurisprudence, as in that of all Latin countries, the whole body of private substantive law is comprised in two codes, the civil and the commercial, the latter of which is merely a special case of the former applicable to merchants and transactions of merchants. The ground covered in detail by the code of commerce is also treated generally in the civil code, but the special rules of the code of commerce derogate from the general rules of the civil code wherever the are in confict. In all commercial matters the provisions of the code of commerce are applied, but where these are insufficient reference to the civil code is made. The Civil Code. The civil code is of course much more comprehensive than the commercial. It is divided into four books, of which the first treats of persons, including juridical persons, nationality, domicile, matrimony, capacity, and other personal and family matters. Book second classifies the various kinds of property and treats of possession and rights in property apart from possession, including the different kinds of easements. Book third is concerned principally with testamentary succession and administration of estates. From the point of view of trade the fourth book, which treats of obligations and contracts, is the most important. The general rules covering the origin, nature, kinds, transfer extinction, and -proof of obligations are first laid down, after which the essentials of the law of contract, including determination of consent, legality of objects, consideration, interpretation, and recision, are dealt with. Following

PAGE 10

7 this there are dispositions referring to special classes of contracts, as follows: Matrimonial capitulations; purchase and sale; exchange, or trade in kind; rent and hire; ground rent, emphyteusis, and other easements; societies or companies; agency and powers of attorney; loans, deposits, and other bailments; insurance; compromise; guaranty; pledge, mortgage, and antichresis; implied contracts; prescription and limitation of actions. The civil code has been amended by the inclusion of a special law relating to contracts for the grinding of sugar cane. (Law of March 2, 1922. Regulations, Official Gazette, April 12, 1922.) The Code of Civil Procedure. The juridiction of the courts is of two kinds, contentious and voluntary, the later being concerned with the cognizance of ex parte matters, such as adoption, guardianship, perpetutation of testimony, and the opening of wills. Contentious jurisdiction in the code of civil procedure (c6diro de enjuiciamento civil) comprises causes to which there are two or more adverse parties. The code establishes the norms for the institution of actions and for their conduct to judgement, and its precepts are applicable alike in civil and commercial courts. Actions and remedies at law are discussed further hereafter. The Code of Commerce. The four books of the code of commerce treat, first, of the status of merchants and the field of commerce in general; second, of special contracts peculiar to commerce, such as agreements for the organization of companies, commercial agencies, sales of merchandise, bills and notes, and mercantile loans; third, of maritime law; and fourth, of bankruptcy, insolvency, and the suspension of payments. Most of the provisions of these four books are considered in the following pages, but the limits of this monograph compel the exclusion of a detailed summary of the third book, which has to do with admiralty law, contracts for the carriage of goods by sea, marine insurance, average, and maritime law in general. The special law for the carriage of goods by rail, based on Military Order No. 34 of 1902, is also omitted. Many Reforms Under Consideration. Cuban lawyers and merchants are unanimous in the' opinion that many branches of the commercial law are in great need of modernization, and appropriate legislation is much to be desired. This is especially true of the law of sales, bills of exchange, and powers of attorney. Modification of these laws will redound to the benefit of American exporters, for the absence in Cuban legislation of provision for chattel mortgages or conditional sales, and the lack of uniformity between Cuban and American practice with regard to negotiable instruments, as well as the expense and danger connected with the drafting of powers of attorney, are all useless impediments to the extension of our trade with Cuba. The habits of mind of Cuban lawyers and legislators, however, precludes the possibility of hasty adoption of any radical changes, and if merchants, lawyers, and legislators, working together, can bring about gradual modifications this is as much as can be expected. 58737-272

PAGE 11

8 By presidential decree No. 1608 of July 27, 1925, the President, in response to the repeated movements for modification and modernization of the Cuban codes of law, civil, commercial, and criminal, as well as the procedural codes, created a codification commission subdivided into a section on civil legislation, section on commercial legislation, and section on criminal legislation. Twelve prominent members of the Cuban bar were appointed to this commission. An office was opened in the department of justice called Office of legislative projects," whose duty it is to properly draft in code form the work of the commission and present same to Congress for enactment. To date the commission has prepared a Labor Code, modified two books of the Civil Code, two books of the Commercial Code, and practically finished a new Penal Code. The commission is still at work and holds periodical sessions. Mortgage Law Practical Aid to Business. Within the limits of this monograph it is not possible to go into the details of the mortgage law (ley hipotecaria), which, as noted above, is a part of the civil code. It may be stated here, however, that the procedure for procuring and foreclosing mortgages on real property is exceedingly simple, and hence this class of security is more and more frequently used in ordinary business transactions. COMMERCE AND MERCHANTS Merchants, since medieval times, have been considered as a class apart from the general community, and their transactions were judged by separate tribunals according to special rules and customs of law. In England the peculiar rules of the "law merchant were incorporated into the general body of the common law of the land through the efforts of Lord Mansfield and other great justices of the early eighteenth century. In continental countries, however, the distinction was retained, largely on account of the practice of making special codes of commerce instead of merging the customs of the merchant class into the broad provisions of the civil codes. This was the case in Spain, whose jurisprudence is the foundation of the Cuban system. Merchants are persons who, with legal capacity therefor, dedicate themselves habitually to the exercise of commerce, including companies organized under the provisions of the code of commerce to pursue mercantile or industrial purposes. Acts of commerce are those transactions between merchants, or between merchants and nonmerchants, which relate to the traffic in goods for gain. To this intent, the Cuban commercial code recognizes as commercial acts all those treated in the code, together with any others of analogous nature "; thus the door is open for the admission of new operations devised by business pioneers or resulting from the very progress of civilization itself. Commercial law, therefore, has as its subjects two things-merchants and commercial acts. To these two things the commercial law, represented by the code of commerce, alone is applicable; the precepts of the civil code or custom or usage govern only in the absence of a provision covering the instance in the code of commerce.

PAGE 12

9 The Qualification of Merchants. Whenever a person holds himself out to the public as being engaged in commerce, whether by circulars, advertisements, signs, cards, or otherwise, the presumption at once arises. that he is a merchant, and consequently whoever denies that such person is a merchant is bound to support the burden of proving that he is not. This is ordinarily no hardship, for it is only necessary to search the commercial register, inasmuch as the final evidence of the status of merchant is inscription in this register. The character of merchant, industrialist, owner of a retail or wholesale store, or owner of a vessel can be proved only by a certificate of due registration in the commercial register. Commercial registers are kept in the capitals of the Provinces and in other places of commercial importance, and they serve two purposes, which are, first; to keep a perpetual record of merchants and acts of commerce; and, second, to afford publicity to mercantile operations. Registration is obligatory and must be made within eight days after the commencement of business, or, in case the business has been purchased, within eight days after the period expires within which the tax on such transfer must be paid. Details of the Registration. For the inscription of individual merchants a petition signed by the merchant or his duly empowered agent must be presented. In the case of companies, the memorandum of agreement or articles of incorporation, with a notation by the fiscal authorities that the necessary tax has been paid, must be shown. In the case of a foreign company these documents have to be translated and legalized by the Cuban consul and further authenticated by the ministry of foreign affairs. In each register there are three books, one for individuals, one for companies, and the third for owners of vessels. Each individual merchant, company, or shipowner is accorded a separate page numbered serially, and the registrar maintains an index of entries. The books are visaed by the municipal judge or judges of the locality. Each document presented for registry is entered and rubber stamped by the registrar upon the payment of a small fee. Items That Must be Registered. In the first two books the following items must be entered: In the case of a company, all instruments of modification, recision, or dissolution of the company. Powers of attorney granted to managers, factors, or clerks, and the revocation of these. License of a married woman to engage in business. Instruments relating to the separate estate of the wife of a merchant. The issue of shares, bonds, and obligations of all kinds by a company, and collateral instruments. Declarations of bankruptcy or suspension of payments. Embargoes or attachments. Emission of bank notes. Titles to industrial property, patents of invention, trade-marks.

PAGE 13

10 EFFECT OF FAILURE TO REGISTER A fine of $25 is imposed for failure to register in due course. In addition, the following legal effects result: The articles of incorporation, partnership agreements, and other internal contracts of companies are valid as between the members of the company, but can not operate to prejudice any third party; the latter may, however, rely upon anything therein appearing to his benefit. This applies also to instruments providing for the increase or diminution of the firm capital. Unregistered agreements concerning dower rights have no preferential status over other credits, except in the case of rights in real estate registered in the civil property register prior to the inception of such other credits. Powers of attorney unregistered support actions between principal and agent but can not be used to the prejudice of third persons; the latter may, nevertheless, take advantage of anything in his favor in such powers. A merchant or company not having become registered originally is precluded from registering subsequent items. Inscription of Credits in the Commercial Register. Any properly registered individual or company, being a creditor of another registered party and having as evidence of such credit the note, stated account, or receipt of the latter signed by the debtor, proceeding from money or goods or services supplied to the debtor, may, upon presenting the instrument and swearing to the validity of le the signature and the existence of the debt, have such credit inscribed on the separate page of the debtor. After the extinction of the credit the entry may be canceled by the creditor or by the debtor upon presentation of the original instrument. This inscription of credits, a device of the Cuban jurist, Dr. Miguel Gener, was authorized by an order (No. 400) of the military government and had as its object the greater guaranty of commercial credit for the promotion of internal and foreign trade and further publicity of mercantile operations. Certain Account Books Required by Law. The idea of publicity of mercantile operations is one which is manifested in more than one way in the commercial law of Latin countries. It is distinguishable in the requirement of the law that all merchants and companies must keep certain books in a certain way, submitting such books to the authorities for visa each year; but here it is connected with another ancient notion, which is that the commercial law must watch over and discipline its subjects. The only thing in American law which resembles this paternal attitude is the old maxim that sailors are the wards of admiralty. The laws of American States and certain Federal commissions prescribing the method of accounting to be followed by corporations subject to their jurisdiction may find a ready justification in the system which has existed since Roman times by which every merchant or company is required to carry specified account books.' 1 See Loose-Leaf Accounting in Foreign Countries, by Guerra Everett. Trade Information Bulletin No. 391.

PAGE 14

11 In Cuba there are two classes of books, those which may be kept voluntarily and those which the law requires to be kept. The latter consist of the following: The inventory and balance book; the diary; the ledger; the copy book; any others prescribed by special laws; and in the case of companies a minute book. Any other books may be kept voluntarily and may be legalized when they meet the requirements as to form; these are called subsidiary books. 'All of the foregoing books are familiar enough to Americans. except the copy book, an institution which is fast disappearing in this country. According to Cuban law, all correspondence, telegrams, etc., must be recorded in this book word for word with meticulous care and in chronological order, either by hand or by any mechanical device. In addition, all such correspondence as well as all books must be retained by the merchant for the life of the firm and five years thereafter, provided, however, that papers may be destroyed after the expiration ofthe period of limitation of actions which might arise therefrom. Use of Books in Evidence. The required books, which at present -may be carried in any language, must be presented bound, lined, and paginated to the local municipal judge, who notes the number of pages on the first leaf and stamps each page. For this there is a small fee payable. When books have thus been rubricated by the judge, they are admissible in evidence in court under the following conditions: The books of a merchant are always proof against his interest; but his adversary having accepted that form of proof may not accept that which is favorable to him and reject the unfavorable. If the books of both opposing merchants have been carried according to law, the court will decide between them on the basis of other evidence adduced; in this connection the regularity and freedom from errors in either set of books will be taken into account. If the books of one have been kept according to law and those of the adversary have not been, the proper books will prevail over the irregular ones, unless sufficient extrinsic evidence is adduced to overcome the presumption. When one merchant fails to produce his books or admits that he carries none, those of the adversary will be proof against him, unless he can show that such failure is due to force majeure, or unless he can prove that the entries in the adversary's books are false. The privacy of the merchant's books and his accounting office is guaranteed by reasonable rules. No judge can order the general investigation of the accountability of a merchant to be made in the latter's counting room. If the merchant does not carry the books himself, it is presumed that his bookkeeper is his authorized agent, and often such bookkeepers are authorized by a power of attorney protocolized by a notary public. Functions of Notaries. When we speak of having a document protocolized by a notary public (notario piblico, or escribano) in Cuba, we are speaking of an institution which does not exist in the United States. In Spain,

PAGE 15

12 as in some other European countries, the institution of the public witness, or f6 pfiblica, is very ancient and is closely associated with the march of civil progress. As civilization became more intricate, the office of the notary developed accordingly, until now there is little resemblance between the Spanish and the American notary. The notarial system for Cuba was reorganized by the Spanish law of 1873, which directed the Government to organize the Cuban system, ordered notaries in the Indies to maintain a private file or protocol of all extrajudicial acts and contracts certified by them, and endowing them with all the powers of Spanish notaries. The military government and the constitution of the Republic continued the law in force. The bureau of registers and notaries is one of the two main branches of the present ministry of justice. This bureau has two divisions, one for matters connected with the public register and the other for supervision of the notaries. Notarial Districts Delineated. Each judicial district is also a notarial district, and in each municipality there is at least one notarial office. The minister of justice may create additional offices not exceeding one for every 5,000 residents in the municipality. Every notarial district has a separate association or "college" of notaries, governed by an elective board of directors, whose tenure is for a term of three years and is obligatory, honorary, and gratuitous. The boards of directors," says the law, "shall maintain the most rigorous discipline among all notaries, shall make practice uniform, and shall strive for better public service and the honor of the class of g notaries." To carry out these objects the boards are given ample visitorial and correctional powers. One of their duties is the custody of the general archives. in which the notaries deposit their recorded documents. The Character of the Notary. .The law defines a notary as a public functionary, empowered and bound to witness (dar f6), according to law, all contracts and other extrajudicial acts presented to him. His qualifications are specified in detail and include the successful completion of the notarial course at the National University, followed by a year's clerkship or practice. The curriculum of this course embraces law studies scarcely less comprehensive than those'of the full law course. However, there is no special notarial course of study at Habana University at the present time and it is necessary to have a degree of doctor of civil laws in order to obtain a commission to act as notary public. The notary is commissioned by the President, upon the nomination of the Minister of Justice, and is entitled to a pension upon retirement or disability. Notaries are allowed to hold such public offices as are not incompatible with their notarial duties. There are many members of Congress and counselors for Government departments who are notaries. They may engage in private business, and many are practicing attorneys. Only under very limited conditions may they exercise their functions away from their own notarial offices (notarias). The rotary begins the exercise of his functions by taking physical possession of an established office, with its seals and archives.

PAGE 16

13 Protocolization the Principal Duty of Notaries. In each office there is kept a protocol," which is the file of contracts and other instruments drafted by the notary during the course of the year. These documents are each sealed and secret, and the year's collection is bound, indexed, and paged in accordance with detailed regulations. At the end of the year the bound volumes are deposited in the general archives under the care of the notarial colleges. Naturally, an instrument that has been filed in the notarial protocol, or protocolized," forms almost absolute and irrebuttable evidence of the transaction to which it refers. The drafting of instruments for inclusion in the protocol is one of the most important duties of the notary, and he must be skilled in the redaction of public instruments." The notary must be able to draw up a contract so as to express the desires of the parties and so as to be legally effective, and thus he performs one of the duties which in the United States is ordinarily referred to a lawyer. Likewise, he formulates wills, filiation declarations, and other extrajudicial instruments. Such contract or instrument is called an escritura ptiblica, or public instrument. The notary drafts the document in his own handwriting, after which it is signed by the parties and by the necessary witnesses and then signed and sealed by the notary. The notary numbers it and places it in the protocol, upon which it becomes an escritura matriz, or matrix, and then he issues to the parties certified copies, which, under proper safeguards, may be typewritten. Possibilities and Usefulness of the Notarial System. The form and content of the instrumento pviblico is regulated in great detail, and the security thereby obtained may serve many business purposes. Many times it is impossible to make a contract of the kind desired under the general law, whereas it may be made as a public instrument. For example, it might be impossible under the general law of promissory notes to make a series of notes, with the provision in each of them that upon failure to pay any one of them at maturity the others shall forthwith become due and payable, because the general law might not permit a condition in one note to affect other independent notes of the series and might insist instead that each note.must mature of its own force; but, with the assistance of a competent notary, on the other hand, an enforceable agreement might be drafted to cover this situation. Whenever it becomes necessary for American business men to accept promissory notes from their Cuban customers, these should be protocolized for security, and all important contracts, powers of attorney, bonds, compositions, and other instruments, together with their revoking acts, should likewise be protocolized. Certain grades of Cuban consular officers in the United States are authorized to exercise notarial functions, and instruments may be protocolized, certified copies issued, acknowledgments and oaths taken, and other notarial duties performed in the consulates or the embassy. SELLING THROUGH COMMISSION AGENTS An American manufacturer who desires to create a demand for his product in the Cuban market will usually introduce his product by means of travelers sent there from the home office or procured in

PAGE 17

14 Cuba itself. Such travelers are authorized to distribute samples and take orders for the approval of the home office. Shipments are usually made direct to customer, the terms most commonly applied being c. i. f. Cuban port, or f. o. b. American port; documents against payment, or confirmed credit. In some cases where the credit rating of the customer is reported good 60 or 90 day acceptances are employed; this is in many cases necessary, not onlyin order to meet competition, but also in order to meet the only recourse of the customer, whose liquid assets may be dependent upon the financial cycle resulting from the marketing of the sugar crop. In any case, the traveler should not be required to participate in the delivery of the goods or the collection of the payment, because in carrying out these duties he may involve his home office in local registration and tax laws, such activities being liable to be interpreted as "doing business within Cuba, whereas the traveler's. legitimate operations should be confined to such activities as are consistent with the fact that the American firm is doing business with the island only. What Constitutes Doing Business in Cuba. The differentiation between these two ideas is a matter of importance, and, while in Cuba the insistence upon the matter may not be as acute as in some of our States, the principle underlying the rule is similar to the laws prevailing in most States affecting the activities of corporations of another State within their jurisdiction. Foreign companies," according to a case in the Cuban Supreme Court, dated June 28, 1915, are obliged to register in the Mercantile Register only when they are established or when they create branches in Cuba. The fact that foreign companies enter into contracts of commerce with nationals or with other Cuban companies does not. signify the creation of branches." This decision is evidence of the leniency of the Cuban courts where leniency conduces to the promotion of Cuban foreign commerce. Nevertheless, in view of the penalties and disabilities for failure to register, which have been discussed on another page of this bulletin, it has been thought wiseto keep in mind the dangers which attend this situation and themeans of avoiding them. In studying this problem the division of commercial laws obtained,, through American Trade Commissioner C. A. Livingood, Habana,, the following opinion from Dr. Lucius Q. C. Lamar, chairman of the judiciary committee of the American Chamber of Commerce of Cuba,, on the question What constitutes doing business in Cuba?" 1. As to the definition which the Supreme Court of Cuba gave in its decision of June 28, 1915, of the terms "carrying on business in Cuba," article 15 of theCuban Commercial Code provides that "foreigners and companies organized abroad may exercise commerce (that is, do business) in Cuba, subject to thelaws of their country, insofar as relates to their capacity to contract, and to, the provisions of that code, insofar as concerns the creation of their establishments (that is, the opening of their offices) within the Cuban territory, their mercantile transactions and the jurisdiction of the Cuban courts." Article 21, section 12, of the Commercial Code provides that foreign companies that wish to establish themselves (that is, to set themselves up in business) or to create branches in Cuba shall present and register in the Registry, besides their charters and the documents required for Cuban companies, a certificate issued by the Cuban consul that they have been organized and authorized in accordance with the laws of the proper country." What the Supreme Court

PAGE 18

15 of Cuba decided in its judgment of June 28, 1915, was that the registration of foreign commercial companies is compulsory. when they wish to establish themselves or to open branches in Cuba. In that case the company was not registered here, but from the place of its domicile-that is, from its principal place of business abroad-it entered into contracts with residents of Cuba. The court held that under these circumstances it was no defense to allege that the company was not registered here. The supreme court in this case did decide, as the division of commercial laws says, that a foreign mercantile company must procure inscription in the Mercantile Registry in order to carry on business in Cuba. It also decided that it was not necessary to procure such inscription here if. the business done by the company was done abroad; that is, if the contracts were made abroad with residents of Cuba. I think the court did not in that decision define in so many words what it considered as included in the phrase, "carrying on business in Cuba." 2. As to the definitions of the same phrase by the same court or other courts in other decisions: Article 2, paragraph 2, of the Cuban Commercial Code, provides that "acts of commerce (that is, commercial transactions) are those embraced in that code and any others of an analogous nature (that is, of a similar character)." In the preamble to the code it is said that "after having vainly sought for a phrase sufficiently comprehensive which as a definition might determine what is understood by mercantile acts (that is, by commercial transactions) the wording of this article of the code was adopted, leaving the expression of judgment on the facts, as they appear from time to time in the business world, to the good sense of merchants and to the experience and practical spirit of the judges and courts." Article 3 of the Cuban Commercial Code provides that a legal presumption exists of habitually doing business when a person proposing to do it advertises through circulars, newspapers, handbills, posters exhibited to the public, or in any other manner, an establishment the purpose of which is some mercantile transaction." The Supreme Court of Spain, when it was the supreme court for Cuba, in an opinion dated January 20, 1872, prior to the taking effect of the present Commercial Code, held that an habitual doing of business (that is, a customary engagement in commerce) undoubtedly exists from an uninterrupted series of commercial transactions; but the same intention may be manifested by one transaction only, either expressly through advertisements or circulars, or impliedly by throwing open to the public a warehouse or shop. In another decision, dated June 14, 1883, the same court held that a person who customarily and ordinarily devotes himself to purchasing grain for conversion into flour, the latter being sold, must be considered a merchant, notwithstanding that he did not advertise his business to the public through newspapers, handbills, or permanent posters, which only constitutes one case in which a customary engagement in commerce is presumed for legal purposes. With respect to the Cuban 1 per cent gross sales tax (now 11 per cent; see chapter on taxation) on December 10, 1922, the National Association of Shoe Dealers consulted the Secretary of the Treasury on the following point, namely, whether sales on consignment are also subject to the payment of the tax on the amount of merchandise which is sent to the consignee, or whether the said tax, aside from the tax which the consignee may have to pay for sales made by him, may be paid by the seller only on merchandise which the said consignee takes definitely or pays for. The chief of the section of gross sales tax, by authority of the Assistant Secretary of the Treasury, decided as follows : That sales made on consignment are considered for the purposes of the tax as firm sales, and the same provisions of law govern both kinds of sales." The basis for this decision of the Assistant Secretary was stated as follows: The contract of sale is perfected abroad, and as the tax is of a national and internal character it is not possible to subject sales of foreigners (sic); but payment of the tax should be made on such sales as are made in the national territory of merchandise or effects coming in on consignment, and the proper official book and patent should be taken out." On January 15, 1923, the Secretary of the American Chamber of Commerce of Cuba was advised by the .department of a decision rendered by it on that date, as follows: That sales which are perfected abroad and which come 58737-27-3

PAGE 19

16 directly to the purchaser are not subject to the payment of the tax, and that only sales which are, made in the national territory are so subject, and thus foreign products are not taxed. If an American company establishes its representative in an office which it has rented or acquired in its own name, the probability is that it is to be considered as doing business in Cuba, notwithstanding that orders taken by the representative are technically accepted at the home office of the company in the United States, and consequently the company is liable to registration and license requirements, as well as to the 11/2 per cent sales tax and other imposts. The mere renting of office space, however, is not the ultimate test, for it is just as true that the American firm can provide offices for its representative at its own cost, provided the representative operates the offices in his own name, and provided his sole duty is to solicit orders which are transmitted to the home office in the United States for acceptance, after which the merchandise is shipped direct to customer by the home office. In such case, the representative is classified as a commission merchant with samples." He must obtain a license to do business as such and is subject to a tax of 1 per cent on the commissions received by him, from the company. Trading Through a Commission Agent. Most of these problems are avoided when the manufacturer employs a Cuban commission merchant (comisionista) to represent his interests, and this is the method adopted when the product of the American house is already in demand in that market. Consignments of merchandise, to be paid for as sold and protected by insurance on the consignee, can be made to the comisionista, or goods may be sent to him for dispatch to the buyer, in the name of the American firm, or the comisionista can receive and indorse over to the buyer the documents covering the shipment to be dispatched by the buyer at the customhouse, and in no case will the American firm be subject to registration or taxation, although under a recent ruling the comisionista is himself liable for sales and profits taxes. Moreover, the comisionista may with equal freedom undertake to see that drafts are paid at maturity and do other things which a traveler could not do without exposing the American firm to the dangers discussed above. The comisionista, like the notary, belongs to a class that deserves special mention, for his status, rights, and duties are regulated by law, one of the titles of the code of commerce being devoted to a consideration of his privileges and responsibilities. In the commercial code brokers, agents, and factors are regarded not as merchants, but as auxiliaries of commerce (agentes mediadores del comercio), but the comisionista is regarded as a real merchant and is permitted to carry out his commission contracting as well in his own name as in the name of his principal (comitente). In most cases the business is done in the name of the principal, although, as has been said, the comisionista may accept consignments and sell the goods in his own name, paying for them as sold. In either case the comisionista is arbitrarily regarded by the code, not as a mere agent, but as a merchant, entitled to a merchant's privileges.

PAGE 20

17 Commencement of the Commission. Usually the commission contract arises when the commission merchant accepts the proposal of the manufacturer or exporter, but the law specifies that should the manufacturer send a consignment of merchandise to the commission merchant the contract takes effect when the latter actually receives and accepts it. If the commission merchant does not intend to accept the consignment, he is obliged to advise the seller by the most rapid means of communication, confirming the same by the next mail. Meanwhile he has the obligation of a bailee and has to exercise due care in the custody and conservation of the merchandise until the seller designates a new commission merchant to take it over or disposes of the goods in some other manner. He must respond in damages for any negligence, either in the custody of the goods or in promptly advising the seller of his refusal; on the other hand, he is entitled to be reimbursed for any expenses to which he may be put in the disposition of the shipment. If funds are to be supplied by the seller for handling the merchandise after arrival, the commission merchant is not responsible for carrying out the commission until such funds are provided, and if the funds sent are insufficient and are exhausted the commission merchant is entitled to suspend activities with respect to the matter until additional funds are provided. Duties of the Seller (Comitente) and Comisionista. The seller is responsible for all lawful contracts made in his behalf with respect to the merchandise by the commission merchant and must pay the commission agreed or reasonably computed and reimburse the comisionista for all necessary expenses. The responsibilities of the comisionista are set forth in detail in the code of commerce. He must carry out the instructions of the comitente faithfully, but may adopt other measures when necessary for the preservation of the merchandise; he must notify the comitente of any such deviations from instructions promptly; he is an insurer for all money coming into his possession by reason of the business; in buying and selling he must proceed with the care that he would employ if he were conducting his own affairs and is liable for the difference if he pays too much or sells too cheaply; he is solely responsible for any infringement of the laws or regulations of the country, unless such infringement was expressly ordered by the comitente; he must notify the comitente opportunely of the developments of importance concerning the business; he can not delegate his authority to another, for the commission is regarded as personal unless otherwise provided by agreement, but he can employ ministerial employees. The comisionista must carry the same books that the law requires of all merchants and must render accounts periodically to his comitente. For delay in transmitting surplus funds to the principal the comisionista is liable for interest at the legal rate, and should he return such funds by a method not authorized by the principal he is liable for any resulting loss; but in the absence of express inI structions such surplus funds may be returned through the best

PAGE 21

18 channels available at the risk of the principal. The comisionista is held liable civilly and criminally for conversion of money put into his hands in the course of the business. Good Faith Required of the Comisionista. The law exacts from the comisionista the highest degree of good faith (uberrima fides) in view of the confidence which must be reposed in him by his principal. To that end he is not allowed to buy for himself anything instrusted to him by the principal for sale without the authorization of the principal nor to sell to the principal merchandise of his own when he has been charged with procuring such merchandise in the open market. He may not alter the marks on the principal's goods, nor may he keep merchandise of the same kind belonging to different principals without taking extraordinary precautions to keep it separated. He must sell for cash unless otherwise authorized expressly, and if he breaks this rule he is liable for uncollectible accounts. Nevertheless there is nothing to prevent the principal from entering into a del credere arrangement. Finally, provision is made for revocation and rescission of the commission. The principal may revoke the commission at any stage of the business, becoming responsible for any loss thereby sustained by the comisionista. The 'contract may be. rescinded only in case of the death or civil disability of the comisionista; in case of the death of the principal, his heirs or representatives may revoke the authority granted. Organization of Commission Merchants in Habana. The Cuban comisionistas, unlike the notaries and brokers, are not required by law to form "colleges" or self-governing corporations, but there has been voluntarily established in Habana an organization composed of comisionistas engaged in import and export called the Association of Representatives of Foreign Firms (Asociaci6n de Representatives de Firmas Extranjeras), whose president, Sr. Armando Marc6, has provided the division of commercial laws with much practical information regarding the operation of commission merchants in Cuba, and who has offered to give attention to specific inquiries from American firms that wish to enter the Cuban market. Members of the association enjoy certain privileges accorded by law; and it is now proposed to establish a class of "commercial notaries," with powers similar to those of American notaries, for the benefit of members of the association. This association exists, primarily, for the purpose of caring for and watching over the credit and standing of its members and fostering their welfare in general. Its disciplinary powers are indirect but none the less effective. To be admitted into the association it is necessary to have a clean record or to be able to justify any doubtful act committed prior to the application for membership, and any member may be suspended or expelled for failure to comply with the standard of honest commercial practice set by the association. Applicants for membership must, of course, obtain the necessary government license and secure registration with the municipal government and the mercantile register; in addition, they must satisfy the association that they are maintaining their offices and keeping

PAGE 22

19 their books in accordance with law and good custom. The association has been in existence about two years and is now composed of over 100 firms of comisionistas, representing some 2,000 foreign houses, doing an annual business estimated at $125,000,000. The association has other activities in its field, also, and has done much to promote Cuban foreign commercial relations. The association is attempting to organize the facilities for the exchange of commercial and credit information and is boosting the construction of a suitable building to house the Department of Trade-Marks and Patents. How the Representative Operates. In the office of each such representative of foreign firms the necessary books are kept and the necessary staff is employed, including travelers who call on the trade throughout the island. When an order is obtained it is transmitted by letter or cable to the foreign house, where a confirmation or contract is made out and the merchandise shipped direct to the buyers. Shipping documents may be sent to the representative with draft attached, but the common practice is to present them through the bank. In most instances the intervention of the representative is limited to this, except that he is in a position to inform the foreign firm of the reasons for the nonacceptance of goods shipped to buyers, or the dishonor of drafts, and may in some cases assist in settling trade disputes between buyer and seller. The representative sells with the price lists and quotations furnished by the foreign firm. If the subject of the sale is an article of movement in the market, the manufacturer quotes on each change; for instance, in wheat flour, the millers or manufacturers cable daily the fluctuations of the market. With these cables the representative calls on the buyers and exercises his selling efforts. Receiving an offer, the representative cables it to the mill, which by another cable either accepts or refuses the operation. Should the transaction be accepted by the mill the representative makes out a contract in triplicate, which he signs in behalf of the mill (having been previously authorized to do so), and which are also signed by the buyer. The original copy is mailed to the mill or manufacturer, the duplicate is given to the buyer, and the representative retains the triplicate. A standard form of such contracts (printed in Spanish and English) reads on its face as follows: JOHN DoE, Representative of Foreign Firms Habana, Cuba, ----192. Messrs.---, of ___ have sold through me to Mepsrs. ----, of ----as per my cable or letter dated ------, and subject to the conditions on the back hereof: Quantity: Price: Merchandise: Brand: Shipments: Terms of payment: Remarks: Our No. ------. Salesman ----------Representative in Cuba, of Messrs. -----------Correct: The buyer: (See conditions on the other side)

PAGE 23

I 20 On the reverse the following conditions are printed in English and Spanish: CONDITIONS Consular charges for invoices and bills of lading will always be for the account of the buyer. Shippers are not responsible for any loss, delay, or damage that the goods may suffer while in transit. In such cases the buyers will refer their claims properly to the insurance, transportation, or steamship companies. Shippers are not responsible for delays or losses caused by strikes, embargoes, wars, or other contingencies beyond their control. All claims must be made in writing to the seller's representative or his legal agent within 48 hours from time goods are placed on wharf. Each shipment will be considered as a separate contract. Claims against the insurance company for any goods sold c. i. f. must be presented by the buyer to the proper insurance company. Any addition or correction made on this contract will be void. Any disagreement regarding this contract will be settled according to the by-laws of the Habana Produce Exchange. TERMS F. o. b. means free on board steamer or railroad car at the place from where the goods are to be shipped. F. a. s. means free alongside the steamer or railroad car at the place from where the goods are to be shipped. C. & F. means that in the price is included the cost and transportation expenses of the goods to the port or place indicated. C. i. f. means cost, freight, and insurance paid to the port of destination by the shipper. .The responsibility of the shipper ceases upon delivering the documents from the railroad or steamship company to the buyer. These conditions are part of the contract as signed by the buyer on the other side. Quoting Prices with Regard to Consular Invoices. It is important for shippers to remember that when sales have been made on a c. i. f. basis the consular invoices should be based instead on the f. o. b. cost of the goods, whenever the goods must pay Cuban duty ad valorem, since the consular regulations do not demand payment of duty on the maritime freight or consular expenses. Sales made for delivery by parcels post must comply with all consular regulations, and consular invoices must be attached. Full information regarding Cuban consular regulations and customs practice is available in the division of foreign tariffs, Bureau of Foreign and Domestic Commerce. Dispatch of Goods Through Customs. As a rule, as has been said, the purchaser of goods attends to the dispatch of merchandise through customs, and the comisionista has nothing to do with this procedure. The latter receives a copy of the invoice which is sent to the purchaser, and in some cases duplicates of other documents, and may. be occasionally appealed to for assistance in case of need. In some cases the comisionista receives direct the documents controlling the shipment, which he delivers to the purchaser upon the acceptance of draft by the latter, but this is not a common practice. The same may be said with regard to the procedure followed by a very small number of comisionistas of making collections and remitting to the seller. Ordinarily the shipment is a transaction from the seller to the purchaser, with no inter-

PAGE 24

21 mention on the part of the comisionista, such intervention as may be needed to retain control of the merchandise until paid for being normally intrusted to banks. Advertising and Use of Letterheads. The comisionista, whose clients are normally jobbers and wholesalers, is less concerned with advertising than would be the case if his clients consisted of the general public, and many comisionistas do no work of advertising unless it be to distribute placards, etc., supplied by the seller. The American company in some cases arranges for its advertising campaign through an advertising agency in the United States or through such an organization in Habana, and it is not the normal practice for the comisionista to attend to this matter, although it is sometimes done. If, for instance, it is desired to secure publicity in the Habana press, the representative would willingly obtain and submit rates and arrange contracts. If the American firm should desire to send a publicity man to Cuba to visit the trade and boost sales on behalf of the comisionista, there is nothing to prevent it, for the man may be attached to the office of the comisionista temporarily. This, in at least one American State, according to recent decisions, would constitute doing business in the jurisdiction. A comisionista may carry only his own name on his letterhead or may add the names of the firms represented by him. Some companies supply to the comisionista their own letterheads, on which is shown the name of the representative, and which the latter uses in correspondence concerning that particular firm. The more common practice is for the comisionista to use letterheads bearing his own name. Remuneration of the Representative. The comisionista is paid direct by the company which he represents, payment being customarily received through the mail. This settlement may be made monthly or weekly or at irregular intervals. The commission is ordinarily understood to be earned by the agent when the sale is made and agreed to by the principal and the purchaser. However, it is frequently the case that commissions are not paid until the seller has received payment from the buyer. Some American houses send the agents in Cuba monthly statements of collections made relating to sales effected by the agent and remit commissions on the basis of these collections. Again, sometimes the manufacturer pays so much per month to the representative, and every six months a liquidation is made, and any existing difference is charged or credited to the account between them. The following rates; quoted to the bureau by Trade Commissioner C. A. Livingood, Habana, will give an idea of the range of commissions currently charged by.comisionistas in Cuba, these being subject, of course, to modification by agreement: Packing-house products, 2 per cent; canned vegetables and fruits, 5 per cent; grain, 1 cent per bushel; beans, 10 cents per bag of 100 pounds; flour, 15 cents per bag of 200 pounds; hosiery, shirts, ties, handkerchiefs, notions, etc., 4-5 per cent; piece goods, 1 -2 per cent; machinery, 5 per cent. These rates, of course, vary and depend to some extent upon the readiness of sale and size of the transaction.

PAGE 25

22 Shipping Merchandise on Consignment. The legality of sending goods on consignment to comisionistas, to be paid for as sold, is not doubted, and a large share of American sales to Cuba are handled in this manner. Nevertheless, field officers of the bureau and others qualified by experience and study have never been oversanguine in recommending the practice, opposing substantial theoretical and practical objections. In the first place, it is said that this method of distributing goods is not sound psychologically, for it offers no spur to the activity of the representative. When the latter has to pay something down on the goods he undertakes to dispose of he has an interest in its turnover that is apt to be lacking when the stock on hand does not represent a capital charge. Secondly, the law expressly provides a lien in favor of the representative against the goods for any charges or commission claimed. Third, although the law establishes and protects the rights of the consignor to the goods, in many cases, due to the distance and to the lack of familiarity with local conditions, the consignor is too late in availing himself of this protection or the necessity of invoking it may not come to his attention in time. By the execution of a proper form of continuing contract, which may be registered in the local commercial register, it is possible to send goods to a representative. with authority to sell, while retaining property in or title to the goods until so sold. In order to make the ownership of the goods doubly clear they should be marked with consignor's name, and in all correspondence, bills of lading, or other advices to the representative care should be taken to refer to the 4 ownership of the goods. In the contract it should be stipulated that qt the goods are to be kept physically separated from other property in the representative's store or warehouse. Under these conditions the representative is civilly and criminally liable for the misappropriation of the goods. They may be followed into the hands of an innocent purchaser for value and recovered by an action in rem. They may be released from embargo raised by the creditors of the representative. In the case of the bankruptcy of the representative they may be released by the trustee of the bankrupt's property upon a timely proof of title. Other remedies besides are available to the consignor, but, as stated above, it frequently happens the the goods are dissipated by a fraudulent representative who escapes or who, when tried and found guilty, can not respond in damages but can only serve a criminal sentence. Revenge against a fraudulent representative is poor return for the loss of a valuable stock of merchandise. Again, notice of the embargo, the suspension of payments, or the bankruptcy of the representative may be published in an obscure local newspaper, complying with the letter of the law, but not likely to be brought to the attention of the consignor until the assets have been marshalled and distributed beyond recovery. Consequently, the only secure protection in the case of consigned goods lies in sufficient bond by the representative or ample insurance.

PAGE 26

23 DOMESTICATION OF AMERICAN CORPORATIONS IN CUBA Foreign corporations derive the right to exercise their functions in Cuba in the first instance from the provisions of article 10 of the Cuban constitution, which, while referring expressly to "foreigners residing in Cuba," may be taken to apply equally to foreign juridical persons. This clause of the constitution provides that such resident foreigners shall be equal to Cubans in regard to the protection of their persons and property, the enjoyment of civil rights guaranteed by the constitution and other laws, and likewise in regard to the obligation to observe and comply with the laws, decrees, regulations, and other dispositions in force in the Republic, to submission to the decisions of the courts and other authorities, and to the obligation to contribute to the public expenses of general government, Province, and municipality. The foregoing article of the constitution is included as article 27 of the Civil Code. In the succeeding article the Civil Code specifies that corporations, foundations, and associations recognized by the law and domiciled in Cuba shall enjoy Cuban nationality provided they have the quality of juridical persons in accordance with the dispositions of the present code. Associations domiciled abroad shall have in Cuba the consideration which treaties or special laws may determine." Branches of Corporations Receive Benefits of Cuban Nationality. American corporations, therefore, may establish branch offices in Cuba and receive all the benefits of Cuban nationality while retaining American nationality without any special permission of the Executive, as required in some countries of Latin America, provided that their object is legitimate and in conformity with the laws both of Cuba and of the United States; that they have been properly incorporated according to the laws of one of the States of the United States; and that in operating in Cuba they comply with the Cuban civil and administrative laws. The following is taken from the "Law of Foreigners," and is applicable to foreigners and foreign companies whether domiciled in Cuba or not: ART. 40. Foreigners may exercise commerce, wholesale or retail, but with subjection to the code of commerce and other laws, regulations, or dispositions which apply. ART. 42. They will also be subjected to the Cuban courts in all actions brought by or against them for the execution of agreements contracted within or without Cuba with Cubans or which refer to the possession of goods existing within Cuban territory. ART. 43. Cuban tribunals shall be competent and shall take cognizance of actions between foreigners brought before them, and which concern the carrying out of obligations contracted in Cuba or to be executed there. AnR. 47. Foreigners, as such, shall not enjoy any special immunity or privilege and shall be subject to the same courts which, in similar cases, take cognizance of the affairs of Cubans. This is the old Spanish law of foreigners and has never been remodeled as contemplated in the original plan of government. It is, however, held by court decisions to be in full force at the present time. Foreign Companies Recognized by Commercial Code. The code of commerce is, of course, the principal source of law for business corporations. Article 15 of this code provides: Foreigners and companies established in foreign countries may exercise commerce in Cuba, being, in everything that refers to their capacity to contract, subject to the laws of their own country; and being subject to the dispositions 58737-27----4

PAGE 27

24 of this code in everything relating to the establishment of places of business in Cuban territory, to their mercantile operations, or to the jurisdiction of the courts of the nation. This provision, it will be seen, has two parts. The first permits the application of the law of the corporation's own country, is limited to the single instance of determining capacity to contract-in accordance with what jurists term the "personal statute of the company. In all else the internal Cuban laws are paramount. It follows that foreign companies may be put upon a parity with Cuban companies by having them comply with all the requirements exacted of Cuban companies with regard to registration and the payment of fees; but inasmuch as the law requires that foreign companies exist in accordance with the laws of their own countries, it is necessary to produce proof, consisting of a consular certificate, that the corporation was duly organized and presently exists in good standing at home. Sometimes American corporations, instead of domesticating branch offices of their own in Cuba, organize subsidiary corporations under the laws of an American State for the sole purpose of taking over the Cuban business of the firm. This procedure has certain. advantages, chief among them being simplicity in administration and taxation. Documentation Necessary. The preparation of the documents necessary for registration should be intrusted to an American lawyer familiar with Cuban procedure, of whom there are a number in practice in several American cities, whose names are on file in the division of commercial laws. This attorney will first have to examine the by-laws to see whether they contain all the provisions necessary for the execution of the form of inscription in the commercial register, which requires some 21 facts to be set forth, as in the case of the registration of a Cuban sociedad an6nima. Triplicate copies of the articles of incorporation and of the bylaws and of any amendments thereto should be prepared and certified by the State officer who has custody of the originals. The board of directors should prepare two resolutions, the first authorizing the establishment of the branch and indicating the amount of capital assigned to it, and the second authorizing the execution of a power of attorney to the agent of the company in Cuba. The actual power is executed by the president of the company by virtue of this authority. The purpose of assigning a specific capital to the Cuban branch is to avoid paying registration fees in proportion to the entire capital of the company. These documents are likewise prepared in triplicate and certified by the secretary of the company and acknowledged before a notary, whose attestation is certified by the county clerk or other officer in charge of notaries. All of these documents must then be presented to the local consul of Cuba for his legalization and the addition of his certificate that the company was duly incorporated and is in good standing. When these documents reach Cuba they must be taken to the proper Government office in the department which corresponds to the American State Department, where the legalization of the consul will be homologated or verified and then translated into Spanish by

PAGE 28

25 a sworn translator. The papers may thereafter be protocolized with a Cuban notary, although this is not necessary; it may be useful in case the company should desire to open branches in other cities than the original, in which case copies of the protocolized papers, instead of new, legalized copies, may be presented to the commercial register at that city. In any case, the triplicate copies must be presented next to the ministry of finance, which will add a certificate that transfer taxes are not payable (these being payable only in the case of the organization of Cuban companies). The papers are now in order to be presented to the commercial register, where a small fee is payable, based upon the amount of capital assigned to the Cuban branch, and a small stamp tax is collected. They are finally deposited with the ministry of agriculture, commerce, and industry, which, as before explained, is charged with the supervision of stock companies by the organic law of the executive power. Appointment of Agent. No Cuban law requires the appointment of a statutory agent with authority to receive service of process, as is usual in the foreign corporation laws of most States and countries. Nevertheless, it is usual and convenient to appoint a general agent in charge in the branch with power to sue and be sued in the local courts on behalf of the corporation, and to do other things beyond those of a purely administrative character, and which require the use of discretion and authority. This appointment is made by the registration of a power of attorney in the commercial register. The power of attorney should be protocolized with a notary in the beginning, for many occasions will arise when certified copies of it will have to be presented. The nature, form, and content of powers of attorney are discussed in a separate part of this bulletin. Cost of Domestication. The costs of registering a branch in Cuba correspond in general to the cost of organizing a Cuban company, except that the articles of incorporation, etc., are not drafted in the original, but merely copied from the already existing documents. On the other hand, there must be added the costs of certifying, legalizing, and translating the documents, which, when these are voluminous, are quite likely to be expensive. The consular legalization in each case costs $3, and the cost of translation by an official translator of the Cuban State Department is 1 cent per word. Some Advantages of Domestication Considered. If the local business of the American firm is so extensive as to demand Cuban incorporation or the establishment of a branch of the principal office, the question of the relative advantages of these two methods arises. From the point of view of initial costs it has been shown that there is little to choose between them. This is substantially true also from the point of view of annual taxation. Reference has been made to the provision that in case of war the interests of foreigners in Cuban corporations shall be inviolable. This would seem to place domestic and foreign corporations on a par, but it has been well argued that in view of the peculiar political relation between Cuba and the United States a branch of an Ameri-

PAGE 29

26 can corporation, which can obtain diplomatic protection in certain contingencies, enjoys a substantial privilege not available to a Cuban company. In this connection Osgood Smith, an attorney residing in Cuba, reports that "under the treaty between Cuba and the United States the American Government has such rights that it is in a peculiarly advantageous position to intervene diplomatically for the protection of American capital and investments in Cuba whenever the proper occasion for such intervention arises. The American Government has never hesitated to intervene in this manner whenever it has been properly convinced that there was just reason for such action on its part. Moreover, a careful inquiry among Americans who have invested large amounts in Cuba will show that they have no fear of any serious damage to their property because of any disorder that may arise." ORGANIZATION OF CUBAN COMPANIES Partnerships and corporations do not, in Cuban jurisprudence, constitute separate branches of the law as they do in this country, but are regarded as two phases of the same branch of law, which we may call company law. A company, by the Cuban code of commerce, is considered merely the product or manifestation of a special kind of commercial contract-a contract where two or more persons obligate themselves to put into a common fund goods, money, or labor or other valuable commodity, for the purpose of obtaining and dividing between them the profits of industry or trade. The contract is formal," that is, it must be drafted in a particular manner and must be distinguishable by its object and it must be registered in accordance with the dispositions of the code of commerce. Companies are known as sociedades or societies. There are three kinds of companies recognized by law-the colectiva, the comanditaria, and the an6nima-to each of which, in addition to the general rules of company law, special provisions are set forth in the code. The Sociedad Colectiva. Closely approximating the American partnership in purpose and function, the sociedad colectiva is, nevertheless, considered as a juridical person-an entity apart from the individual partners that compose it. Notwithstanding this, the characteristic that distinguishes the sociedad colectiva is the joint and several responsibility of the persons who compose it, so that the difference between the American partnership and the sociedad colectiva is one of form rather than of substance. The name of the sociedad colectiva may contain the names of all the members or of only one or more of them; in the latter case, it must be followed by the words "y compafia," meaning and company." If the name of an individual not a member should appear in the firm name, it would make such individual liable jointly with the members. Only such members as have been specifically authorized may use the firm name; unauthorized members are personally liable for its use.

PAGE 30

27 The sociedad colectiva is instituted by the registration of a public document or formal contract containing the following essential requisites: Name and address of each partner. The firm name adopted. Names of the members to whom is entrusted the direction of the business and the use of the firm name. The amount of capital or capital goods contributed by each member and the value set on the latter. Duration of the company. Amounts allowed annually to partners for personal expenses. Any other terms and conditions, such as the ratio of profit and loss to be borne by each partner. The partners are permitted to trade privately for their personal profit as long as the kind of trade engaged in is not the same as that of the partnership and does not harm the partnership business. However, partners whose contribution consists only in personal services and not money or property may not exercise any business whatever apart from the partnership business. The Sociedad Comanditaria. This form of company is provided for the purpose of affording machinery for the investment of capital by persons who have no connection with the conduct of the enterprise of the company. If certain individuals desire to operate a business, but lack the necessary capital, they may organize a sociedad comanditaria, in which other individuals who have capital to invest may take an interest, contributing the capital and accepting the gain or loss, but not being liable for the obligations of the company beyond the amount contributed. The comanditaria takes two forms-the simple company and the company by shares. In the former, the capitalist may have some personal interest in the conduct of the company and is to be compared with the silent partner in our partnership law. In the latter, the interest is impersonal and is represented by shares, much in the manner of statutory joint stock companies in some of our States. The active partners are all jointly and severally liable, and the company is instituted in the same way as an ordinary partnership, by the registration of the contract of association; The name of the firm is formed of the names of one or more members, as in the colectiva, but must have added to it in every case the words Sociedad en Comandita," or the abbreviation S. en C." Should the name of any silent partner be included, he will become fully responsible as an active partner. The sociedad en comandita is an instrument of commerce that is sufficiently pliable and adaptible to permit its use in circumstances when the adoption of a partnership or corporation form of business would not be suitable or desirable, for it offers all the advantages of personal participation in the direction of the business by the investors, while providing them with limited liability. It is recommended to the consideration of those interested in industrial enterprises in Cuba requiring the investment of large sums of money. The Sociedad An6nima. The difference between a Cuban sociedad an6nima (anonymous company) and an American corporation is rather theoretical than

PAGE 31

28 practical; the rights and liabilities of the shareholders are the same and the management of the company is similar. A sociedad an6nima is organized by the execution of a contract of association before a notary, the registration of this contract in the commercial register of the locality in which the company is to have ( its principal place of business, and the payment of the requisite fees and taxes. There is no mention in the law of the nationality or residence of the incorporators, from which commentators have deduced the proposition that the contract of association may be made outside Cuba and by foreigners. If this is true, and if the contract of association should be executed in the United States by Americans, it would probably be insufficient if acknowledged before an American notary; it might be acknowledged before a Cuban consul or authorized attache of the embassy, or, failing this, it might be protocolized in Cuba before presentation at the commercial register. The sociedad an6nima is regulated fundamentally by the code of commerce, and in the report of the Spanish redactors of that code the following are given as the principles governing their treatment of this form of company: Full liberty of the associates to constitute the kind of company they deem convenient; complete absence of governmental intervention in the internal affairs of juridical persons; and publicity for the social acts that might interest third parties, which publicity is a truer and more efficient guaranty than previous authorization of the government or the inspection exercised by delegates, now abolished in the principal commercial countries. Nevertheless, upon the establishment of the Republic, the doctrine was modified to some extent, and in the organic law of the executive power, the ministry of agriculture, commerce, and labor was intrusted with the supervision of mercantile companies. For the regulation of this supervision a decree was published October 25, 1909, which, reciting the said organic law, and pointing out that even in countries where the liberty of contract was most jealously guarded a close supervision of corporations was considered a legitimate function of government, and that even in Spain, where the code of commerce was in force, a law of the previous year had instituted the inspection of anonymous companies, empowered the division of commerce and industry in the foregoing ministry to keep a register of all anonymous companies, obliging the local commercial registers to forward an abstract of the registration entered by each such company, and obliging the companies themselves, under pain of a fine of $30 to $60, to file certified copies of contracts of association and amendments. Inspectors are provided to see that companies keep the books required by law, and information regarding such companies is available to the public on application at the offices of the ministry. Annual reports of the condition of anonymous companies must be prepared by the director of the division, who may also put in motion the machinery to terminate the license of any company. These regulations are not considered burdensome and are conducive to regularity in corporate enterprises, to the promotion of public confidence in corporations, and to the collection of accurate statistical information concerning the trend of corporate activity.

PAGE 32

29 Requirements of the Contract of Association. The following are the requirements of the contract of association (escritura social) which, signed before a notary, must be registered at the commercial register of the place where the principal office will be located, and a certified copy of which must be transmitted to the ministry of agriculture, commerce, and labor: Name and address of the incorporators. Name of the company (which must be descriptive of the object of the company, must not be confused with that of any existing company, and must bear at the end of the designation Sociedad An6nima," abbreviated S. A."). List of the persons charged with the administration of the company and the manner of filling vacancies. Amount of capital, with a designation of the value assigned to any contributions of capital not consisting of actual money. The number and kinds of shares emitted. The time within which unpaid subscriptions must be paid in. Duration of the company. Objects or nature of business operations. Regulations applicable to general or extraordinary meetings. Any other agreements, including any by-laws to be published. The law does not specify any form of administration of the company, it being customary, however, to adopt the ordinary form of board of directors. Most Latin-American countries require not only a board of directors, but another set of officials called sindicos, whose duty consists in maintaining a vigilance over the activities of the board. Cuba merely specifies, however, that whatever administrator is appointed shall have certain duties and liabilities and may not exceed limits of his delegated authority. The administrator is considered a general agent. The company must publish a monthly balance in the official gazette, and shareholders may inspect the books under the regulations agreed to. Laws Concerning Shares of Stock. Shares are either nominative or bearer." Nominative shares are registered, and each transfer must be registered in the books of the company, while bearer shares may be transferred without restriction. Only shares which have been paid up to the extent of 50 per cent may be issued to bearer, others being issuable as nominative shares only. The amount paid up must be indicated on the face of the certificate. Detailed regulations are established for the payment of dividends and for the issue of new series of stock and for the purchase by the corporation of its own shares. A company can not lend money on the security of its own shares. It can not reduce its capital without complying with certain formalities under the supervision of the court. A provision of interest to publicists the world over to-day is contained in article 169 of the code of commerce, which, with the object of inspiring confidence in foreign investors of capital, establishes that funds belonging to foreigners existing in anonymous societies shall not be subject to reprisals in case of war." Special Rules for Certain Kinds of Company. Banks, financial companies in general, railroads, or other public or semipublic enterprises, and warehouse companies are governed by special regulations too detailed for inclusion in this monograph.

PAGE 33

30 Cost of Incorporation. The elements of cost which are to be considered in the organization of a sociedad an6nima are of two kinds--cost of drafting the contract and fees and taxes. In the cost of drafting the instrument the attorney's charge and the charge of the notary for protocolizing the document must be considered. It is, of course, impossible to say even in a general way how much an attorney will ask for his advice in organizing the company. Notarial fees for protocolization are based on the amount of authorized capital represented and are scaled about as follows: Notarial fee $25,000 --------------------------------------------$50 $50,000 ----------------------------------------------s0 $100,000 -------------------------------------125 $250,000 -------------------------------------200 $500,000 -------------------------------------300 $1,000,000 -------------------------------------500 Over $1,000,000 the fee is $100 for every additional million or fraction thereof. Under the laws of July 31, 1917, and June 1, 1920, a stamp must be affixed to each page of the original and certified copies of the contract of association. For the original the stamp is 5 cents per page, but for copies the stamp is fixed on the first page only, in accordance with the following schedule: Stamp tax $500 --------------------------------------$0.10 $1,000----------------------------------------.20 $3,000---------------------------------------.50 41 $6,000-------------------------------------1. ooq $15,000 -------------------------------------5.00 Over $15,000 ---------------------------------10. 00 Before the contract of association can be presented for registration the government organization tax of one-quarter of 1 per cent on the paid-in capital or the value of stock issued as fully paid must be paid. This tax is thereafter payable on any stock issued from time to time. The next important item is the registration fee, payable at the time of presentation of the contract of association to the commercial register of the locality where the company has its principal place of business. This fee is also based on the amount of authorized capital and is scaled as follows: Registration fee Under $5,000 -------------------------------------$1. 50 From $5,000 to $20,000------------------------------2. 00 From $20,000 to $50,000 -----------------------------5.00 From $50,000 to $100,000---------------------------10.00 Over $100,000, $1 for every additional $20,000. There is also a flat rate of 75 cents for each separate document filed with the register and a stamp tax of 5 cents for each page of the mercantile register upon which the document is transcribed. (The foregoing information relating to cost of incorporation is based partly on a report of Dr. Alfredo Lombard, attorney, Habana.)

PAGE 34

31 THE LAW OF SALES The chapter in the civil code (Title IV) which, as has been noted in describing the scope of that code, treats of the contract of purchase and sale, lays down the general law of sale applicable both to civil and commercialtransactions, except where the code of commerce establishes special rules for the latter. In the law of sales the code of commerce derogates from the civil code in only a few particulars, and these exceptions may be briefly described as follows: In the first place, only such sales are mercantile," and therefore subject to the exceptions, as relate to the traffic in movables (" personal property ") for the purpose of resale for profit. In mercantile sales, if the sale is made by sample or by reference to a standard recognized by the trade, the buyer can not reject the goods if they conform. If he refuses to accept them, the matter will be referred to experts, named in conformity with the code of civil procedure, upon whose finding the validity of the contract will depend. Time is of the essence of commercial contracts, and failure to deliver in the time stipulated entitles the buyer to rescind, with damages. If the goods are to be delivered in a specified time, the buyer need not receive part delivery; if he receives delivery of part, however, the sale is consummated as to that part, the buyer retaining the privilege of rescinding the contract with damages as to the remainder of the goods. The seller is liable for any damage or deterioration of the goods prior to delivery, unless the goods have been placed at the disposition of the buyer at the latter's agreement. Delivery here must be taken to mean actual or constructive delivery. If the buyer refuses unjustly to receive the goods, the seller can demand compliance with or rescission of the contract, meanwhile depositing the goods judicially-that is, in accordance with the code of civil procedure, by order of court-and the seller himself can be named depository. Costs are for the party at fault. After the contract is complete if the seller has the goods at the place prescribed in the time prescribed, any damage or loss is, in general, for the account of the buyer. But the loss is for the account of the seller if the goods are sold by weight or measure or do not bear identifying marks or are otherwise undetermined; or' if, by custom or agreement, the buyer has the right of examination before acceptance; or if it wab specifically agreed that the goods should not be delivered until they comply with all the conditions stipulated. In case the seller takes the loss, he must return so much of the purchase price as he may have received. If the buyer has opportunity to inspect the goods at the time of delivery, the rule of caveat emptor applies, and the buyer can not .complain afterwards; but if the goods are in bundles or bales he has four days within which to exercise his right of refusal. The seller has the right to require the buyer to execute a declaration in the form established by the code of civil procedure, admitting that the goods are to his satisfaction, thus precluding possibility of subsequent action to rescind. If no time is stipulated, the seller'must produce the goods within, 24 hours after the contract. The costs, of delivery up to the point 58737-27-5

PAGE 35

of placing the goods, weighed or measured, at the disposition of the buyer is for the account of the seller, but is for the buyer thereafter. As soon as the goods have been placed at the disposal of the buyer and the latter expresses his acceptance, the obligation of payment on account or at stipulated periods begins. While the.goods are still in possession of the seller he has a lien on them as against other creditors of the buyer to the extent of the purchase price and interest charges. Interest is charged against a buyer who delays payment of the purchase price. The right to reclaim against the seller on account of hidden defects lapses 30 days after delivery of the goods. Money paid to bind the contract is considered paid in partial liquidation of the purchase price and in evidence of the ratification of the contract. A mercantile contract may not be rescinded on account of undue advantage which, with respect to the price, one party may take of the other, but the party aggrieved has his action for malice or fraud and may also institute criminal action against the other. The buyer is entitled to the benefits of evicci6n," which is warranty of title, and "saneamento," which is warranty of possession and quality., The General Law of Contracts of Purchase and Sale. Except in the particulars of the code of commerce mentioned above, recourse must be had to the civil code for determination of what constitutes the law of sales. The need of a new sales act to be incorporated in the code of commerce, modeled on the English and .American uniform legislation, is deeply felt and will be one of the first objects of the attention of the commission for the recodification of the laws which has now commenced its labors. The civil code describes the nature and form of contracts of sale and the capacity of the parties, adding that lawyers can not purchase the property which was the object of litigation in which they intervened. A special point is made of the case of the loss of the subject matter at the time of the completion of the contract, in which case the contract is without effect; but in the case of only partial loss of the subject matter the buyer can choose whether he will take the part or elect to rescind. No mention is made, however, of the case of mutual mistake which may arise, as in the famous English decision where one party sold to another certain goods to arrive "ex Peerless," and there were two ships of that name, one of which failed to arrive, it appearing that the parties did not have reference to the same vessel. The obligations of the vendor, which consist in the delivery of the goods and the warranties required by law, are set forth in some detail, as are the obligations of the vendee, which consist principally in payment of the purchase price at the time and place indicated. These obligations are fairly covered by the provisions of the code of commerce, abstracted above, and will not be further dealt with here. Bulk Sales Law. There does not appear to be in Cuban legislation a bulk sales law like that of many States and many Canadian Provinces, requiring the registration of all sales' of an entire establishment. In a decision

PAGE 36

33 of 1905 the Cuban Supreme Court held valid the sale of a mercantile establishment, together with its stock, ignoring the plea that, because the stock was not listed in the contract of sale, the object of the sale was indeterminate, invalidating the contract. Conditional Sales of Personalty. Although as a practical matter many American products have been regularly merchandised in Cuba on the installment plan commonly employed in the United States, much doubt has until recently been cast upon the legality of such sales. Theold law of sales appeared to recognize the validity of a sale in which the price was to be paid in installments, but in such case the doctrine was that title passed absolutely upon delivery of the thing, and could not be impressed with a condition subsequent for the return of the property sold if installment payments were not made. A third party creditor of the purchaser might under such a theory attach the article, or the purchaser might sell it to a third party, giving a good title thereto. In other words, possession, under such circumstances, would be equivalent to title. There does not exist in Cuba the system of chattel mortgages or registered conditional sales common in the United States. Recently a bill in the Cuban Congress carried, among other things, a provision for the registration of conditional sales, which would have provided the safeguards desired by the business world; the bill was vetoed, however, because of some of its other provisions. A system of leasing store fixtures, household furniture, and the like, however, was worked out, based upon a contract in which the lessee agrees to care for the property, not to move it or give up possession of it, and to pay a stipulated rental, and the lessor agrees to transfer title to the property to the lessee after a certain number of rental payments have been made. There was danger, however, that the court might at any time hold that such leases were simulated sales and, as sales, subject to the doctrine described above, as the courts of other civil law countries have held. (See Installment Sales in Foreign Law, Trade Information Bulletins Nos. 370 and 376.) A case decided by the supreme court on January 19, 1926, offered some relief to manufacturers who sell on the installment plan. The case involved the sale of machinery to a factory owner under a contract providing for the retention of title by vendor until payment of the whole price (contrato con pacto de reserva de dominio). The factory was mortgaged, and on foreclosure the mortgagor attempted to take the machinery also on the ground that it had become a part of the real property mortgaged. In holding that chattels attached to mortgaged real property do not become subject to the mortgage if they do not belong to the mortgagee, the court also held: 1. The parties to a contract of sale may provide whatever conditions they desire, provided they do not contravene the laws, morals, or public order. 2. The covenant for the retention of title by the vendor pending payment of purchase price is not contrary to law, morals, or public order. This decision was given publicity by the "American Chamber of Commerce in Cuba, which published a comment thereon by Dr. Luis Machado, of the Habana bar (also published in Comparative Law Series, Vol. III, No. 2, division of commercial laws).

PAGE 37

34 Doctor Machado's article has prompted a letter to the American Chamber of Commerce of Cuba from Dr. Antonio S. de Bustamente, a prominent international lawyer and one of the judges of the World International Court, from which the following excerpts are taken: I have read with great interest the article published by you relating to the conditional sales contract. The article is question is, fundamentally, a commentary on the decision rendered by the Supreme Court of Cuba on January 19, 1926, and has reference also to the decision of December, 16, 1925. For many years ive had in mind that the Supreme Court of Spain, in a decision handed down on February 16, 1894, that is to say, at a date when it applied to our country, being ,prior to the termination of Spanish suzerainty in Cuba, decided that a conditional sale contract covering property, by virtue of which the seller while transferring it to the buyer retained his ownership in it until the price of the sale should be paid, was perfectly valid and binding. But the same Supreme Court of Spain, at a time when its decisions did not affect the rulings of our courts, i. e., after Spanish sovereignty over the island of Cuba had ceased, decided on March 6, 1906, that the stipulation that the ownership of a thing covered by a sale is not transmitted to the buyer until the total amount of the price be paid, is not prohibited by law, nor is it contrary to good practice." Some time later. the same Supreme Court of Spain, on December 13, 1921, decided "that the clause which left the acquisition of ownership indeterminate must be understood not as placing a limitation on ownership, inasmuch as it is not natural to a sales contract-the nature, conditions, and effects of which are fixed by law and can not be changed-but this to be considered as somewhat akin to a contract of pledge or guaranty to insure the collection of the price of the sale." In these circumstances, and without our civil courts having decided on this matter, inasmuch as the civil chamber of the supreme court of the Republic has never had the opportunity to clear up the doubt which was raised between the first two decisions of the Supreme Court of Spain and the last one of December 19, 1911, the rulings quoted in the American Chamber of Commerce of Cuba's publication were issued. The decision of February 16, 1894, of itself does not constitute legal doctrine for our, courts, but taken with that of January 19, 1926, it does establish a legal doctrine which has to be accepted and applied by our courts. Consequently, under these decisions it is possible to covenant that the seller reserves the right of ownership to the thing sold until the total amount of the price agreed upon has been paid to him. In order that this agreement shall be respected by a third party, i. e., one not a party to the contract, it is necessary, under the provisions of article 1218 of the Civil Code, that it be entered into by public instrument, because although the private instrument, acknowledged in court by the party whom it affects, has the same value between the contracting parties as a public document, according to article 1227 of the Civil Code, its date shall be considered with regard to a third party only from the date on which it may have been filed or entered in a public registry; from the death of any of these who signed it, or from the date on which it may have been delivered to a public official by virtue of his office. Our supreme court, therefore, ,having in its decision of January 19, 1926, (officially published on July 15, 1926), resolved that a conditional sale is possible, the most practical course to follow is to make the conditional sale, reserving ownership in the seller until the entire amount owed to him is paid, and agreeing that the failure on the part of the buyer to fulfill any of the obligations incumbent upon him under. the contract, or the attachment or seizure, judicially or administratively, of the goods sold, shall authorize the seller to request a decision from an amicable compounder ordering the immediate return of the goods the buyer to lose what he may have paid up. to that date, such payments to be considered as just indemnification to the seller for the use of the goods by the buyer, and likewise as a penalty for the nonfulfillment of the contract.

PAGE 38

35 American firms intending to introduce their products in Cuba on the part-payment plan should consult with competent counsel with regard to the form of contract best suited to the protection of the rights of the firm. NEGOTIABLE INSTRUMENTS Although in some countries of Latin America the bill of exchange can not be considered apart from the transaction which gave rise to it, in Cuba the bill is an autonomous instrument of credit, whatever the nature of the transaction from which it originated, provided always that it conforms in all its details to the requirements of the Code of Commerce. The contract of exchange is exclusively commercial, and its incidents are determined, first, by the Code of Commerce, and, second, by the usages and customs of merchants, or, failing both of these, by common law. Requirements of a Negotiable Bill of Exchange or Draft. According to article 444 of the code of commerce, bills of exchange must contain, in order to be admissible as such in lawsuits, the following items: 1. The designation of the place, day, month, and year on which it was issued. 2. The time it falls due. 3. The name and surname, firm name, or title of the person to whose order the payment is to be made. 4. The amount which the drawer orders paid, stating the same in cash or such fictitious currency as commerce may have adopted for exchange purposes (e. g., the Chinese tael). 5. The form in which the drawer declares himself satisfied or reimbursed by the taker, whether by receipt of its value in cash or merchandise or other property, which must be expressed by the phrase "valor recibido" (value received), or, when taken in the course of other business between the parties, by the phrases "valor en cuenta (value on account), or the phrase "valor entendido" (value understood). When either of the latter two phrases is used the takbr is liable to reimburse the drawer in the manner and time agreed between them. However, the use of such phrase merely establishes a presumption of liability and may be contested in court; it is not enforceable as against third parties. 6. The name, surname, firm name, or title of the person or association from whom the amount of the bill is received or to whose account it is charged. 7. The name, surname, firm name, or title of the person .or association on whom it is drawn, as well as his or its domicile. 8. The signature of the drawer, in his own handwriting, or the signature of his agent with sufficient power of attorney ad hoc. It will be seen that drafts to be drawn on Cuban customers differ slightly in form from those drawn on customers in other parts of the world. The exporter should carefully consider the form which he uses for Cuba to see whether it complies with the foregoing requirements. A "payment on arrival" bill of exchange, it seems, is not considered a negotiable instrument in Cuba. Since the bill does not bear a specific date, it has no legal value. The law requires that time and place of payment must be indicated in a bill of exchange. The refusal to pay a bill of exchange drawn at sight, to accept a time bill, or refusal to pay an accepted bill, pending arrival and inspection of the merchandise, is considered a dishonor of the bill of exchange by law. By custom, however, the refusal to pay a bill

PAGE 39

36 drawn at sight or to accept a time bill would not be considered a dishonor. Custom does, however, consider it a dishonor to refuse to pay an accepted bill pending arrival of the merchandise. The custom would not have any bearing on the strict legal interpretation of the situation, inasmuch as the Cuban courts are extremely literal in adhering to the statute in their decisions. The fact that the contract of sale provided for the inspection of the merchandise prior to acceptance or payment of the bill would have no effect on the bank, but might be, shown to the court. Where the merchandise has not arrived and the drawee claims a right of inspection, banks follow the practice of giving a reasonable extension of time. Accepted drafts are protested for nonpayment in any case, since this is necessary in order to maintain their legal value. It is to be noted, however, that a draft drawn in dollars, unless otherwise specified, is payable in Cuban currency and consequently exchange would be for account of the exporter in the United States. To avoid this drafts are generally stamped "Payable at the current rate of exchange at the collecting bank for demand drafts (or cable transfer) on New York (or, plus stamps, collection charges, etc.). Where "No Protest" Instructions. Accompany the Bill of Exchange. The fact that "no protest" instructions accompanied the bill of exchange does not reach the' knowledge of the drawee and thus give him an opportunity to delay payment without danger of protest unless the words are written on the face of the bill itself. Trade Acceptance Not in Common Use. In this connection it may be pointed out that the trade acceptance now generally used in domestic transactions is an American development and quite possibly does not meet the description of a bill of exchange under Cuban law. While some exporters are using these forms in their Cuban business, no test case by Cuban courts has come to the attention of the division of commercial laws, and pending the judicial determination of this point it seems advisable to discourage the use of domestic trade acceptance forms for drawing upon Cuban buyers. Negotiation and Transfer of the Draft. Bills may be drawn to the order of the drawer or another and are negotiated by indorsement.They may be indorsed by holder's agent provided the agent has power of attorney and so states above his signature. The indorsement should state the date, the indorsee, and the consideration. Bills may be drawn payable at sight, or one or more days or months after sight or date, or at a fixed or determinable date. They may also be drawn payable at a fair, in which way they are payable on the last day of the fair. They may likewise be drawn payable at one or more usances. A usance is the time, according to Pothier (Contrat du Change, n. 15), which by the custom of certain countries is allowed for the payment of bills of exchange. The usance for bills drawn in the United States on Cuba is expressly established as 60 days. All bills must be paid on the die date, or the first legal business day thereafter, before the setting of the sun, without grace.

PAGE 40

37 The Aval. An institution not familiar in American and English legislation on bills of exchange is the "aval," or guaranty (pledge) by a person not a party to the bill, who, by placing his name on the back of the draft with a statement.of his undertaking, becomes secondarily liable thereon under the conditions of his undertaking. The law says that the payment of a bill can be secured by a written obligation independent of that contracted by the acceptor and indorser, known by the name of aval." An action on the aval is an action arising out of the draft, and, according to a court decision, is outlawed in thiee years after the. due date of the draft to which it refers. The aval may be general in its terms, in which case it is governed by the terms of the draft as to the time and place of payment, or it may be restricted to any time, place, amount, or person. The fact that a condition may be expressed in the undertaking of the aval does not in any manner affect the negotiability of the instrument, since the aval is a contract apart from the obligation imposed by the draft itself. Attention may be called to the possible use which may be made of the aval as an added source of credit insurance. The provisions relating to its employment are sufficiently flexible to admit of practical application. Presentation and Protest of Drafts. Drafts, to retain their full effect in lawsuits, must be protested both for nonacceptance and nonpayment. Protest for nonacceptance does not exempt the holder from the duty of protesting for nonpayment. Not even the death of the drawee exempts the holder from this duty. Protest must be made before the sunset of the day following presentation. Opinion in commercial circles is to the effect that the Cuban laws relating to protest of drafts are cumbersome and antiquated and.far from being adequate under modern conditions of business. The cost is out of all proportion, due to the fact that the intervention of a notary is required as well as the execution of a very complicated procedure. Where notaries are available in the town, the cost may be $8 or $10 only, but if none are available it may sometimes rise to $100 to $500. Reference to the section of this bulletin describing the functions of notaries will help to give one an understanding of the formalities applied to protests. A matter of some consequence in connection with the protest of drafts is the attitude of Cuban merchants toward it. Due to the fact that the holder of a protested draft may be in a position to embargo the business of the merchant and upset his affairs quite summarily by tie employment of the executive action against him, it is a peculiarly dangerous instrumentality from the point of view of the debtor. It seems unjust to him that because he may have had some good reason to dishonor a particular draft that his whole credit and reputation should be imperiled. While, therefore, the drawer's only protection in case of dishonor is to protest, he must understand that in so doing he may sever relations with the debtor completely and must not expect future business with the same customer. This is a dilemma which must be solved by a consideration of the circumstances of each particular case.

PAGE 41

38 If the drawer wishes to extend the time for payment of the draft, he may do so only by drawing a new bill or by. entering into a formal protocolized contract to that effect. To extend the original draft results in impairing its force in law; it is no longer entitled to executive action, but becomes an ordinary debt, enforceable in the ordinary tedious, expensive way through the bringing of a declarative civil action. The acceptance of a new draft avoids these consequences. The execution of a protocolized contract serves to substitute the contract in the place of the bill, the contract being sufficient ground for the bringing of an executive action. Subject Specially Considered in Other Bulletins. The question of protest of drafts in Cuba and the other countries of Latin America has been comprehensively treated in' a series of bulletins prepared by the division of commercial laws. Copies of the bulletins relating to Cuba, Nos. 112 and 113, are still available upon request to that division. Right of Action on Dishonored Bills. The code of commerce supplements the code of civil procedure with reference to the right of action which accrues to holders of bills of exchange, expressly providing that the action against the acceptor shall be executive and execution may issue upon the mere presentation to the court of the accepted bill-ex parte, as it were-it not being necessary to prove the signature of the acceptor unless he denies it at the time of protesting for nonpayment. Actions arising out of drafts must be brought within three years of date of dishonor, whether the draft was protested or not. Of the executive and declarative action, and the execution and embargo which may issue therefrom, more is said in another part of this bulletin. Other Forms of Negotiable Instruments. A libranza is a draft drawn on a merchant in the same city as the drawer; a vale is an i. o. u. or note of hand; a pagare is a promissory note. When any of these relate to commercial dealings, and in case the last two are made out to order," they are subject to all the rules applicable to bills of exchange, except the acceptance feature. If a vale or a pagard is not made out to order," it is a simple 'romise to pay and is subject to the rules of the civil code or the commercial code according to the nature of the transaction which gave rise to it. The law of checks is codified in the code of commerce, but does not differ greatly from the law of bills of exchange, except in a few particulars. Checks must be presented within five days in the same city or within eight days if drawn from another city. Hence American firms should not, as a rule, accept local checks in payment from Cuban customers, unless they can be cashed in Cuba within a week. Letters of credit must contain two essential conditions: They must be made to a determined person and not to order; they must refer to a fixed any specified sum of money or to a number of unfixed sums the total of all of which must be comprised in a fixed and specified sum. Letters of credit may not be protested, and they may be annulled upon notice to the bearer and to the addressee. They

PAGE 42

39 anust be used within the time specified or, no time being mentioned, within one year of date. The bearer of the letter must reimburse the drawer promptly, and failing to do so he may be sued by -executive action. Transfer of Nonnegotiable Credit Instruments. Nonnegotiable instruments may be transferred from one holder to another without consent of the debtor, it being only necessary to :advise the debtor of the transfer. Subsequent to so advising him, the only legitimate payment and satisfaction of the debt is that which is made to the new holder. The transferor in this case guar:anties the legitimacy of the debt and the identity of the debtor but tnot the solvency of the latter. POWERS OF ATTORNEY The agent of an American firm in Cuba requires a sufficient power of attorney in order to be able to perform many ordinary commercial transactions and also to comply with many administrative functions, such as recording contracts in the commercial register, withdrawing parcels and correspondence or cashing money orders at the post office when these are addressed to the firm's Cuban office instead of to the agent personally, but the most important use of this instrument is in the event of a suit at law. In order to bring suit or defend one on behalf of an American firm, a Cuban lawyer must show a power of attorney granted by the firm or its authorized agent. Importance of Instrument Must Not be Underestimated. An incredible proportion of cases brought by American firms against Cuban customers are either obstructed temporarily or comletely quashed on account of technical discrepancies in the power of attorney or its faulty execution. As every firm that carries on a large business in any part of the world may expect a certain number of cases in which it is necessary to resort to the courts, such firms may expect to make use of the power of attorney more or less frequently. In plain words, the instrument is a source of possible grave danger, and its importance should not be minimized. The cost of its preparation is exorbitant, but to try to save money at this point is undeniably penny-wise and pound-foolish. Efforts have been made from time to time to procure remedial legislation, but until such legislation is promulgated and fully tested in the courts no leniency in the preparation of powers should be indulged or tolerated. 'Travelers Should Bear Powers of Attorney. Salesmen and others visiting Cuba on behalf of American firms should be provided with adequate powers of attorney, without which they will find themselves incapable of transacting many important >matters which may arise during their sojourn in the island. The power of attorney is the passport to the business world in most Latin American countries, and even though one is sole owner 'of his firm, or a managing partner, or a director or officer of a corporation exercising full powers at home, he should take with him to Cuba sufficient evidence of his power and authority.

PAGE 43

40 Form of Document. No special form of power of attorney is prescribed by law, and theprinciple that prevails is that if the power is in a form that is valid by the law of the country of origin it is also valid in Cuba. Uniformly, however, powers of attorney are made in Cuba according to a form which has been developed in the course of much time. As. this form represents the result of vast experience, it should be followed as far as possible. Forms prepared by Cuban notaries are likely to be very verboseand redundant. Much of this quasilegal verbiage can be pruned away, and the shorter the instrument is the less expensive it will be to prepare and use it. However, such pruning should be done only by an expert, for otherwise the instrument may be turned out with an essential requirement missing, and a power with a material error is worse than no power at all, because it may put the grantor at a disadvantage in dealing with his adversary. Printed forms should be avoided, and a special document should be prepared to fit each separate case. There are in the United States a number of attorneys and law firms with experience in the preparation of documents for use in Cuba, and a list of these is on file in the division of commercial laws. The preparation of powers should be intrusted to such expert counsel; with such counsel the division is ready to cooperate in the diafting of powers. Must Show Identity and Authority of Grantor. The power begins with a statement somewhat as follows: In the city of ------, county of -----., State of ------, United States of America, this first day of January, nineteen hundred and twenty-six, before. me, a notary public in and for the county aforesaid, personally appeared John Doe, to me well known, of full age, merchant, residing in the city and Stateaforesaid, who, in the presence of the witnesses named at the end of this instrument, says (that he grants the power). In case the power is granted by a manufacturer who owns all the firm it is sufficient for the notary to certify to that fact and to add that the grantor is in full exercise of his civil rights. If it is granted by a partnership, both or all partners should appear, or if one only appears on behalf of the rest he should prove his right to do so by transcribing the partnership agreement with a, reference to the clause under which he claims the right. If it is granted by a corporation the matter is most complicated. It should be granted by the president of the corporation, who must not only prove his authority, but the existence of the corporation and its right to grant such powers. A power of attorney granted bya large American corporation to a Cuban agent, a copy of which is. on file in the division of commercial laws, may serve as a model, and a brief description may be useful. This power begins in the usual manner, but before reaching the body of the power itself it containsa long introduction by the notary who certifies to the existence of the corporation after examination of a certified copy of its articles of incorporation. He transcribes literally the parts of the by-lawswhich refer to the powers of the president, followed by a translation into Spanish. Next follows a transcript of the parts of the minute book of thecorporation showing the election of the directors by the general

PAGE 44

41 meeting of stockholders and the election of the president by the board of directors, followed by a translation. The notary then certifies to the legal capacity of the president, after which follows a statement of the powers which the president grants to the agent. Powers Not Granted Unless Specified in Document. Authority will not be implied, and only such powers as are specifled in the power of attorney will be recognized as valid. The power drafted in general terms authorizes no acts except such as are purely administrative. To sue, sell property, or do any other act denoting ownership, special authority is required. The power to sue does not include power to submit to arbitration. Hence, it is necessary to include items to cover all possible contingencies. In the corporate power described above the following clauses are given. The agent is granted power to: Take charge of and manage the branch. Demand and collect accounts due the company. Collect rents and remove intruders and trespassers. Take possession of present or future property of the company. Execute bonds and guaranties when necessary. Accept, negotiate, protest, and collect bills of exchange and other credit documents. Present bids for Government supplies. Deal with mortgages and real or personal property given in payment and to appraise and accept same. .Liquidate and compound or compromise accounts with debtors or creditors or submit disputes to arbitration. Settle lawsuits out of court. Represent the company in public offices or registers. Execute public or private documents necessary to the conduct of the businessWithdraw correspondence from the post office. Register patents and trade-marks and oppose registration thereof by strangers. Assist and defend the company in all courts (specifying them) taking all procedural steps (specifying them). Appoint attorneys in fact or at law. Substitute the power granted and revoke substitutions. The foregong comprise the elements of what is called a "general' power. Special powers may be made for particular uses, such as to travel and sell, receiving payments for goods sold, to prosecute an action against a single debtor, to prosecute and defend all suits brought by or against the company in Cuba, etc. Each of the items given above is explained in detail and strictly limited, so that this part of the instrument alone is liable to cover several pages of foolscap. Attestation and Legalization. The instrument is closed with the signatures of the grantor, the two witnesses, and the notary. The certificate of. the county clerk, prothonotary, or other State official charged with the superintendence of notaries is added. If the nearest Cuban consul recognizes thesignature of this officer, he will add the consular legalization upon the payment of the respective fees ($3 for each legalization). Before it may be used in Cuba it must be presented to the Cuban State Department for authentication of the consular legalization. It should then be registered in the commercial registry if possible, and if this is not possible it should be protocolized with a Cuban notary.

PAGE 45

42 Language. Much expense will be saved if the instrument is drawn up originally in Spanish, for if it is in English it can not be used in Cuba until it is translated by an official translator, which may cost $30 to $40 or more. Expiration and Cancellation of the Power. The power of attorney expires by act of law when the term expressed for its validity has expired or when the parties die or cease to exercise civil rights. The power may be canceled by executing an instrument with the same formalities and serving it on the agent and registering and filing it in the commercial registers or protocols where the power may have been originally inscribed. A notice of cancellation may also be sent to a Cuban notary to serve on the agent, and the notice may be advertised and circularized to customers who have dealt through the agent. An attorney may also obtain a court order canceling the power which will be served on the agent. It is best, whenever there is any possibility of dispute over the cancellation, to refer the matter to efficient Cuban attorneys. When the purpose for which a power has been granted no longer exists, the mandate should be closed in a businesslike manner, in order that unscrupulous persons may not be enabled to work harm through obtaining possession of an outstanding, forgotten, but still valid document. On this point as much care should be exercised as has been urged in connection with other phases of the power of attorney. SUSPENSION OF PAYMENTS AND BANKRUPTCY Because of the fact that during the serious financial depression which was visited upon Cuba at the conclusion of the war, when firms of the highest standing and integrity were involved in financial difficulties often beyond solution, many unscrupulous persons took a fraudulent advantage of the situation, the general opinion prevails that the Cuban laws of insolvency and bankruptcy are inadequate to meet modern conditions of international commerce. The recodification commission has taken cognizance of this opinion and will no doubt present a project for recasting these laws in due course. The laws, however, which constitute Book IV of the code of commerce, as amended by the law of June 24, 1911, have a scientific background. While many modifications would no doubt be desirable, it will take time to accomplish them, and meanwhile business men trading with Cuba have the alternative of studying and applying the advantages, actually or potentially available, which the existing laws provide. Unquestionably, in a measure, the protection of the creditor depends in Cuba, as in every country, upon his own vigilance and firmness. In foreign trade another element must be considered-cooperation of creditors. In fact, since in international trade it is practically always necessary to delegate to a local representative the care of the creditor's interests, it follows that for successful disposition of foreign bankruptcy situations two things are vitally necessary-a capable attorney on the ground and effective cooperation of all the American creditors. It is customary for the creditors to form a protective committee, under the superintendence of an American lawyer.

PAGE 46

43 The division of commercial laws can supply names of recommended attorneys in many Cuban cities. Remedies Other Than Bankruptcy-Composition of Creditors. Except when the bankruptcy is declared fraudulent, a composition with creditors may be arranged out of court at any point in the proceedings. Three-fifths of all unsecured credits must be represented in order to make such an agreement binding. The agreement may be attacked in court as fraudulent by dissenting creditors. If it becomes impossible to carry out the agreement, general bankruptcy proceedings may be resumed. In a great many cases the former is the better policy to adopt, and it is practically always .so when the bona fides of the debtor can be established. Often the debtor is able to reestablish himself in his business while carrying out the composition terms, and if tactfully handled the rehabilitated merchant may represent for the creditors a valued customer in years to come. Suspension of Payments. A form of modified bankruptcy called suspension de pagos (suspension of payments), which is practically a kind of private moratorium, is available to Cuban firms which find themselves temporarily involved. The abuse of this remedy during the postwar crisis has led many creditors to distrust it heartily, but as it actually exists and is employed in many cases creditors should take account of the advantages accruing from its proper administration rather than merely decry its hardship. Under the terms of this law a merchant, upon finding that he can not meet the demands of his creditors, may, when such demands are presented in a suit or in a notarial instrument, petition voluntarily within two days thereafter to be placed in the state of suspension. of payments. The merchant must show that he has sufficient property to cover the entire outstanding indebtedness, but that it isnot liquid enough to meet the oblgations as they fall due. If he can then present satisfactory security for the payment within three years of at least W0 per cent of his indebtedness and then deposit a small sum to cover court expenses, he will be accorded the status upon his submission of an inventory of his assets, a sworn list of debts, with names and addresses of creditors and amounts due each, proof of petitioner's due registration in the commercial register, the text of the petitioner's offer (which can not exceed a period of three years ivithout unanimous consent of the creditors), and the petitioner's nominee of a merchant to represent him on the committee appointed by the creditors to oversee the carrying out of the agreement. The offer referred to must be ratified by a meeting of creditors (for which, if there are foreign creditors, the judge may order four months' notice to be given), and the vote 'of approval must represent at least 75 per cent of the total unsecured indebtedness and more than half the creditors present. Vice Consul. Charles B. Hosmer, Habana, commenting on this procedure, notes the following additional considerations of interest: 1. A creditor may be represented by a third person duly empowered, but an individual holding more than one claim counts only one numerically in voting. (All claims properly represented count as to capital requirements.)

PAGE 47

44 '2. The debtor must present the court with a complete report of the progress of his business at the end of each year while the suspension is in force. 3. Preferred claims are not affected in status unless the holders take part in I the proceedings. 4. The final decree may be attacked by any dissenting creditor within five I days on any ground involving fraud or bad faith. (Foreign creditors resident in North America, if they took no part in the proceedings, have this privilege within two months from the ratification by creditors.) 5. The debtor can not alienate real estate during the suspension without consent of the court. 6. Any breach of the agreement on the part of the debtor vacates the suspension of payments, and creditors can proceed to collect by other means. 7. All levies on executions and pending litigation against the debtor are suspended on the 'entering of the provisional. decree and remain so throughout the period of the suspension of payments. This appears to be in most respects an excellent law and surrounded with all practical safeguards. Two defects have been noted which render it capable of abuse, particularly against foreign creditors, although in many cases their losses have been due to failure to exercise the rights given them. 1. An unscrupulous and badly bankrupt debtor, by filing a petition for suspension of payments, retains custody of his property and can fraudulently dispose of it in the interim before the report of the commission exposes his bad faith. 2. The judicial supervision during the suspension is so slight and infrequent that important business reverses may continue unchecked to the prejudice -of the creditors. I do not see how either of these abuses can be prevented, at least without further amendment to the law.' Full Bankruptcy Either Voluntary or Involuntary. An insolvent merchant may apply of his own motion for a declaration of bankruptcy upon filing a petition and inventory, together with a balance sheet and a statement of the direct and indirect causes( of his insolvency. The declaration will be issued if it is found that the insolvent was not fraudulent. Involuntary bankruptcy may be declared on the petition of any creditor who can show that his judgment against the debtor has been returned unsatisfied, or that the debtor has generally defaulted in his obligations, or that the debtor has absconded without leaving anyone in charge of his business. Provision is made for the arrest and bonding of the bankrupt, but if it is shown that the proceedings were fraudulent or without due cause or care the merchant arrested may have his action of damages. Administration of Bankrupt's Estate. Upon decreeing the bankruptcy of a merchant or company, the judge of first instance appoints a reputable merchant commissioner to take charge of the estate and prepare an inventory and balance sheet. A trustee or depository may be also named to take physical charge of the property and make collections. The commissioner issues a call for a general meeting of creditors on a day named, which must be within 30 days. The commissioner and depository report to this meeting, which then elects three trustees to carry out the liquidation. Two of the trustees are elected by a majority of amounts of debts represented and the third by a majority of creditors numerically. The court may remove any trustee for fault or negligence. The commissioner originally named continues the active administration of the estate, as the direct representative of the court, carrying out the directions of the trustees in the disposal of assets, these directions being subject to appeal to the court. I

PAGE 48

45 The commissioner and trustees must report monthly to the court, and the law lays down careful and sufficient rules safeguarding the interests of the creditors, which, if faithfully observed, serve as an adequate protection. It is here that the presence of diligent counsel representing American creditors on the ground is most important. Consigned Goods Do Not Merge in Bankrupt's Estate. Upon presentation of proof of ownership to the creditors' meeting or to the court, goods belonging to American firms which have been sent on consignment to the bankrupt but to which title is retained by the American firm may be withdrawn from the mass of the bankrupt's estate and returned to the shipper. This proof 'must be "satisfactory," and in order to assure satisfaction shippers on consignment should take every possible precaution to make their title to the property self-evident. Proceeds of the sale of consigned goods are trust funds if they can be identified and segregated from the rest of the estate, whether i cash or credits. The principle of stoppage in transit applies in Cuba with little variation. Marshaling of Assets. In Cuba, as elsewhere, certain creditors are preferred or privileged. Burial and probate expenses, maintenance of the bankrupt and his family, and wages of employees, for instance, have first consideration. The limits of this bulletin do not admit of a detailed description of these preferences, but it may be remarked that in giving credit to a Cuban firm the public registers are open to. consultation concerning the number of mortgage and other registered creditors who have a preference. Judgment creditors are preferred, -as well as creditors whose credit is evidenced by a negotiable instrument or a protocolized document. FACTORY AND LABOR LAWS For the installation of any factory or workshop or any theater, circus, market, or similar establishment where mechanical appliances are employed, previous license must be obtained from the local director of sanitation, issued after consideration of a memorandum presented by the applicant. This memorandum must contain the following information: Nature of the establishment, location, technical conditions applying to its industrial purpose, safety, stability, lighting, ventilation, sanitary installations, capacity, kind and number of machines and apparatus, number of operatives, and other employees. The requirements of the sanitary laws of 1914 relating to factories and workshops are simple. They relate to ventilation and, light, disposition of gas, dust, smoke, waste, pollution of streams and wells, provision of cuspidors, deodorizing devices, and sanitary installations and the maintenance of a sanitary condition of the latter, and screening or otherwise insuring safe use of dangerous machinery. One paragraph of this law as now amended provides that it shall not be permissible to employ in workshops and factories children under 14 years of age and that boys under 18 years of age can not be employed to operate dangerous machinery. Buildings must offer by the solidity of their construction a sufficient guaranty of safety for the lives' of workmen and employees,

PAGE 49

46 and wells, trapdoors, openings, and excavations must be inclosedBoilers must be kept in the best condition for safety and proof against explosions. Where there are dangerous machines or where dangerous substances are handled, it is obligatory to keep on hand materials for. first aid for cases of accident to persons on the premises. Pensions and Workmen's Compensation. Except for employees of railway, street railway, and telephone companies there is no general industrial insurance or pension law. A law of June 12, 1916, however, regulates the question of indemnification of employees for accident. Copies of this law and its accompanying regulations are on file in the division of commercial laws for loan to inquirers. Trade Commissioner Livengood, summarizing theprovisions of this law, points out that it covers an extended list of industries and in these industries affects employers of more than fiveworkers. Some of the outstanding features of the law are the following : The employer is not responsible in case of accident due to force majeure foreign to the work in which the accident occurs. Compensation is not required for injuries which do not result in theincapacity of the employee during a period of at least two weeks. The State, Provinces, ad muncipalities are bound by the provisions of this law. When an accident results in absolute or permanent incapacity on. the part of the laborer, his idemnity is fixed as an income equaling two-thirds of his annual salary. If the incapacity is partial, the rate is half of the decrease in salary caused by the accident. When the C incapacity is temporary, the indemnity is equal to half of the salary which the worker was receiving at the time of the accident. In case of death caused by the accident, if there be a survivingspouse, the latter shall receive an income for life equal to 20 per cent of the annual salary of the victim of the accident. Legitimate or legitimatized children of the victim whose mother survives, if less. than 18 years of age or if incapacitated for work, shall receive an income as follows: From a minimum of 30 per cent to a maximum of 60 per cent of the renumeration of the victim, depending upon the number of children. In case the mother shall have died prior to the accident, the children shall receive a total income not greater than 50 per cent. In case no children exist, provision is made for other relatives and the scale of income is prescribed. Pensions to children dependents of the victim terminate when these arrive at their majority unless they are incapacitated. In cases of an accident in an establishment whose equipment lacks the safety apparatus prescribed by law, indemnities shall be increased by one half. Provision is made for foreign workmen, victims of accidents, who desire to leave the country to receive in one sum the amount of pensions due them, and the method of determining this, sum is specified. Chiefs of establishments may free themselves from the obligation. to pay expenses of illness and sustenance to which victims of accidents are entitled if the former provide proper insurance in legally constituted insurance companies. All workmen must be insured at the expense of the employers against accidents of labor.

PAGE 50

47 TAXATION Taxes in Cuba are collected by the government and by the municipalities only, so that taxation is relatively simple. General taxes, besides special excises on liquors, beer, matches, soda water, tobacco, and playing cards, established by the law of January 25, 1904, and not taking into consideration customs duties, consist principally of the 8 per cent profits tax, the gross sales tax, the exportation of money tax, the documentary stamp tax, the income from real estate tax, and municipal taxes. The 4 Per Cent Tax on Profits Abolished by the Public Works Law. Because of the difficulty of its enforcement and the small returns the 4 per cent tax on profits established in 1920 was abolished by the public works law of July 15, 1925, which modified other existing taxes and instituted certain additional ones. The public works law is a measure appropriating millions of dollars for the execution of a vast plan of public works throughout Cuba, including the construction of a network of highways, the institution of municipal sewerage and waterwork systems, the building of schoolhouses, hospitals, and the improvement of harbors and port facilities. The money thus appropriated is to be expended over a period of 10 years. The 8 Per Cent Profits Tax Revised. To compensate the treasury for the loss of revenue from the discontinuance of the 4 per cent tax, an old tax created by the American Military Order 463 of 1900 was revived by decree of December 27, 1926. (See Special Circular No. 139, division of commercial laws.) This tax amounts to 8 per cent of the net profits of banks, corporations, and stock companies (but not partnerships or individuals). Railroads and shipping companies pay only 6 per cent, while insurance companies are charged 2 per cent on premiums collected. The 1 /2 Per Cent Gross Sales Taxes. A law of October 9, 1922, established a tax on gross sales, exchanges, or transfers of merchandise equivalent to 1 per cent of the price or value of the articles taxed. The rate was raised by the public works law of July 15, 1925, to 1 per cent. The tax is of an interior and national character and is payable on merchandise, whether of domestic production or imported and whether the sale is for cash or on account. An American firm exporting to Cuba does not pay the tax, but it is paid by the importer when he sells or disposes of the imports, or by the commission merchant or wholesaler at the customhouse. Quarterly declarations must be made by merchants and submitted to the tax collector of the local district (admistrador de contribuciones e impuestos de la zona o distrito fiscal). The tax is payable quarterly and when not paid is subject to an added charge of 25 per cent of the tax. Infringements of the law resulting in defrauding the treasury are punishable by a fine equal to the amount of the tax payable for the first offense and for the second offense a fine of not exceeding $1,000 or imprisonment for one year, or both. Payment of the tax is affected by the purchase of stamps of the face value of the amounts shown on the declarations. These stamps

PAGE 51

48 are affixed to a certificate which must be obtained by each merchant and posted in a prominent place in his place of business. The Exportation of Money Tax. The public works law of July 15, 1925, established an excise of one-fourth of 1 per cent on all payments, assignments of funds, transfers of credits or securities or products, or similar operations which directly or indirectly imply the exportation of money or its equivalent from the national territory to foreign countries. The uncertainty of the terms of this tax was the subject of considerable comment when the bill was first proposed, and its full effect on international trade is not yet entirely apparent. From the message of the President accompanying the measure when it was first submitted to the Cuban Congress, it is evident that the intent was to tax dividends and earnings of foreign industrial, agricultural, and other enterprises in Cuba which are remitted abroad, as well as Cuban funds which are invested in foreign countries, and not to levy a tribute on ordinary trade transactions. The regulations, however, require the payment of the tax on all money sent out of the country for every purpose, even in payment for commodities purchased abroad. Incidence of Money Export Tax Not Equal. Products shipped from Cuba are taxed provisionally under the regulations, the tax payment being deposited subject to refund if proof is presented that payment for the goods was received within 90 days. The object is to prevent the escape from taxation of the export of money in the form of domestic products, the fact that a refund is provided is recognition of the principal that ordinary international mercantile transactions are not within the purview of the tax. Nevertheless, drafts in payment for foreign goods sold. to Cubans are subject to tax without refund or other recourse. As the regulations now stand, the export of a cargo of sugar for which payment of $5,000 representing the price is received within 90 days, does not constitute the export of money or wealth and is not permanently taxed, whereas the remittance of $5,000 in payment for a cargo of machinery or other commodity imported is subject to an unrefundable tax of $12.50. :Stamp Tax on Documents. In order to meet extraordinary war-time expense, a law of July 17, 1917, created a stamp tax applicable to a very comprehensive list of documents in different amounts. These include all kinds of notarial instruments, private receipts, commercial invoices, leases, insurance policies, negotiable instruments, summonses, and other legal processes, academic diplomas, and others. It was expected that this tax, which is considered a necessary war time nuisance tax, would be discontinued by the new public works law but it was not abrogated. Income from Real Estate Tax. Under the public works law, the rent from country and city real estate, the income from mortgage credits, and the estimated value of unimproved property is taxed at the rate of 2 per cent. In municipalities where the real estate direct tax amounts to 10 per cent, the 2 per cent tax is not collected. This provision exempts all improved real estate within the city of Habana, because the direct

PAGE 52

49 territorial tax in this city amounts to 12 per cent. This, however, does not exempt Habana unimproved property. The tax is to be collected through the municipal authorities at the time of collection of the regular municipal territorial tax. All real estate which does not produce a rental will be taxed upon an estimate of 6 per cent of the appraised value, the 2 per cent tax being collected upon this estimated rental. No General Income Tax Expected. In answer to an inquiry regarding the possibility of the enactment of a general income tax in Cuba, Trade Commissioner C. A. Livengood, Habana, writes as follows: There has been no indication on the part of Cuban legislators or other men of influence that a general income tax law will be considered for Cuba at any early date. In fact, the matter has received no discussion. In view of the periodic protests against the taxes which are already levied, it seems probable that an early change in the Cuban system of taxation will be in the direction of curtailment rather than expansion. Of course, in case new bond issues should be made for purposes of road construction or otherwise, it is possible that additional taxes would be required; but even in the case of such issues we have seen no suggestion that a general income-tax law should be enacted. Municipal Taxes. In each municipality all business concerns must obtain an annual license, which is graduated in cost according to the class of business in each city. The licenses in each class also differ in cost according to the size of the city, those for the city of .Habana being the most expensive. It is impossible to give here a schedule of these taxes, even for one city, but an indication of their cost may be made. Stores, for instance, for the sale of groceries, etc., pay from $275 to $385, to which is added 25 per cent as a provincial council tax. Importers pay up to $1,000 and commission merchants up to $500. The tax is payable in quarterly installments. Traveling salesmen pay a license tax in Habana. In order to comply with this tax requirement, two copies of a blank form issued for the purpose should be obtained at the city hall. These should be filled according to the printed instructions and presented to the general receiving register at the city hall. The license is then granted after the inquiry and approval of the publichealth department. A preliminary fee of about $12 must be paid. The penalty for opening a store or place of business without obtaining a license is the payment of a sum equal to twice the amount which should have been paid. In order to avoid this penalty care should be taken to ascertain the amount of the tax, which, although collected by the municipalities, is regulated by authority of a national law called Ley de Impuestos Municipales y Procedimiento de Cobranza, dated September 22, 1908. This law, together with forms and schedules, is published by J. V. Bonachea, Habana, in a second edition of 1924. Advice regarding the amount of this tax in particular cases may be obtained from the division of commercial laws or from the office of the Bureau of Foreign and Domestic Commerce at Habana.

PAGE 53

50 Municipal Territorial Taxes. The public works law increases by 50 per cent direct taxes placed by municipalities on real estate. Thus taxes vary in the several municipalities. Miscellaneous Taxes. The public works law places a tax of 10 cents per gallon on the consumption of gasoline and a surcharge of 10 per cent on the present import duties of all articles of luxury and 3 per cent on the duties fixed by the customs tariffs on all other articles imported, except prime necessities. A transportation tax on vehicles is also created, as follows: Motor vehicles are subject to the following taxes: Per annum Private automobiles to 105 inches wheel base-------------$40 From 105 to 120 inches wheel base----------------------50 From 120 to 128 inches wheel base----------------------60 From 128 to 135 inches wheel base----------------------75 Beyond 135 inches wheel base--------------------------90 (Cars for public service will be charged one-half the above rates.) Trucks to %-ton capacity-----------------------------25 From % to 11/ tons capacity---------------------------50 From 1'/ to 2% tons capacity-------------------------100 From 2% to 5 tons capacity-------------------------200 More than 5/ tons capacity--------------------------400 Motor cycles of all kinds------------------------------10 Trucks of more than 71/2 tons capacity are not permitted on the national highways. The following rates apply to animal-drawn vehicles: Per annum For public roads, vehicles of two wheels, capacity to 1 ton-$20 Vehicles, four wheels, same capacity---------------------15 Vehicles, four wheels, capacity up to 2 tons--------------30 Vehicles, four wheels, capacity up to 4 tons---------------100 Pushcarts --------------------------------------------5 Horse-drawn vehicles with a capacity of more than 4 tons will not be allowed on the public roads. A special tariff is made for oxcarts for operation on public roads, but not on national highways, as follows: Per annum 2-wheeled cart with rims exceeding 6 inches in width-----$12 4-wheeled cart, similar rims---------------------------10 2-wheeled cart, rims less than 6 inches in width-------------10 Carts other than oxcarts with rims more than 6 inches wide are taxed $5 per annum, with similar provision forbidding operation on national highways. Carts, wagons, and other vehicles operated solely on private property up to a capacity of 500 pounds are exempt from taxation. The reason for taxing according to width of the rim is that most of the damage at present done to public roads is chargeable to a heavy-wheeled type of ox-drawn cane cart used locally. All of the above taxes are to be collected once a year by the municipal authorities, who will remit one-half of the sum to the national. treasury and retain the other half for local use.

PAGE 54

51 ACTIONS AND REMEDIES AT LAW Because of the unitary form of government of Cuba there is no double jurisdiction of Federal and State courts such as we have in the United States and such as exists in Brazil, Mexico, and Venezuela. There is a single hierarchy of courts. Courts of original jurisdiction in ordinary cases are the municipal courts in actions involving less than $350 and the courts of "first instance in actions involving more than that sum. Appeal is to the provincial "Audiencia," which sits in the capital of each Province; thence to the Tribunal Supremo, or supreme court, sitting at Habana. The jury system is not employed in commercial cases, but there exist a certain number of peremptory challenges and challenges for cause available against the judges, as well as against other members of the court. Attorneys practicing before Cuban courts are free to make any contract with clients regarding fees, although lawyers of the better class do not favor contingent fees. If no previous contract is made, lawyers may present a bill to clients for services rendered, and should the client object the matter will be referred to the judge, who may appoint an arbitrator to find a just amount. Commercial Arbitration Not Yet Common. Although chambers of commerce offer the usual facilities for commercial arbitration, the principle is not generally practiced. Efforts are being made to popularize this system, which has found so much favor in some American jurisdictions, however, and legislation similar to the United States arbitration act and the arbitration laws of New York, New Jersey, Oregon, Massachusetts, California, Pennsylvania, and Hawaii has been proposed. The Cuban law of procedure provides a rather cumbersome process for the submission of disputes to arbitrators. The submission must be made by means of a formal notarial instrument, in which each party agrees to pay a penalty in case of noncompliance or appeal. Appeal is available. The proceedings must be according to law, and, in fact, the whole process is little more than the substitution of a private judge in place of the ordinary court. Manifestly, there is little to be saved by this method, and consequently it is not favored. Under a similar arrangement, however, the law permits a submission to amigables componedores (friendly adjusters), who need not follow the forms of law but may make a decision on the merits after hearing both parties. The submission, however, entails many formalities, and the decision must be made in a notarial instrument (which, as has been pointed out in another part of this bulletin, is a more formidable document than the mere notarial acknowledgment used in the United States). There is an appeal from this decision to the court, but if it is not taken within the time limited the judge of first instance will proceed to execute the award. This system is more often employed in commercial matters, but it is far from providing the swift, convenient, fair, and inexpensive remedy found in the new American arbitration laws. The Arbitration Society of Cuba. In March, 1925, steps were taken to organize an Arbitration Society of Cuba with objects similar to those of the American Arbitration

PAGE 55

52 Association. The principal purpose of the society is to set up the machinery necessary for the arbitration of commercial disputes by voluntary submission to arbitrators appointed by the society, to foster interest in this method of adjusting differences, to promote the inclusion of arbitration clauses in commercial contracts, to procure the passage of legislation similar to the United States Federal arbitration law, the New York and the New Jersey arbitration laws, and to carry out cognate proposals in the interest of reducing avoidable litigation. Existing facilities for commercial arbitration in Cuba include committees appointed by the American Chamber of Commerce of Cuba and the Asociaci6n de Comercio, Industria y Navegaci6n de la Isla de Cuba. At present the inclusion of an ordinary arbitration clause in a contract is without legal effect whatever, it being necessary for the usual submission form to be voluntarily executed after the rise of the dispute. At a luncheon in New York City given by the American Arbitration Association and the Cuban Chamber of Commerce of the United States to President Gerardo Machado of Cuba in April, 1927, the President stated that interest in commercial arbitration was spreading rapidly in Cuba and that he would favor the passage of an arbitration law which would give a legal sanction to such clauses in contracts. Measures Preliminary to Suit. The embargo preventivo is an attachment in advance of suit, which may be enforced against the property of defendant in certain cases, such as when the defendant absconds without leaving some one in charge of his premises, or when the one in charge does not know the whereabouts of the defendant, or where defendant is about to abscond. The embargo may issue against a foreigner or nonresident, or against any debtor when there is reasonable ground to believe that he is about to dispose of his assets in fraud of creditors. In any case the petition for embargo must be supported by documentary evidence of the existence of the, debt. The debtor may be released from embargo upon supplying the necessary security, and provision is made for indemnifying a debtor who has been embargoed without just cause. The embargo often causes irreparable injury to the credit of merchant debtors and is therefore regarded as a very severe measure. During the progress of an action the property of the defendant may in certain circumstances be attached in order to insure the plaintiff against a futile judgment. Property that is embargoed or attached, as well as the proceeds of the security offered for release thereof, may be applied to the satisfaction of judgment. Institution of an Action at Law. Unless the plaintiff conducts the suit in person, he must supply the attorney with a power of attorney in the form elsewhere described. If plaintiff is a foreigner, the defendant may require him to file security for the costs of the action in case defendant prevails (judicatum solvi). All documents relative to the claim must be filed with the complaint, as they may not, in general, be brought into the suit thereafter.

PAGE 56

53 The Executive Action. When plaintiff's claim is based upon one of a number of specified formal instruments, a short form of executive action (juicio ejecutivo) is provided. In this form of action the judge, upon merely a view of the instrument, and sometimes, in addition, the oath of the creditor, may issue execution upon the property of the debtor previously or coincidentally embargoed. The following are the formal instruments justifying this action: Any public instrument (escritura pfiblica), which is an instrument draw up by a notary and protocolized. Any private written instrument, when the debtor acknowledges it as genuine, under oath before a competent judge. Any admission made before such a judge. Any bill of exchange, when the acceptor, at the time of protest for nonpayment, failed to deny the authenticity of his acceptance. Any bearer negotiable instruments representing past-due obligations. Any written contract made through the intermediation of a registered broker or commission agent, signed by the parties, when properly authenticated. All of the foregoing, it will be seen, are in the nature of what American lawyers would call confessions of judgment. It is manifest that the proper handling, protesting, protocolizing, and preserving of these formal instruments is necessary for the success of this form of summary action. Especially in the case of drafts, great care mut be taken to have the documents in order, if the benefit of the executive action is to be obtained. The Ordinary Civil Action. y The ordinary civil action (juicio declarativo) is employed in cases not subject to executive action. This form of action contemplates the proof of the existence of the debt and the consideration of all defenses which might be interposed against it through the slow and deliberative method peculiar to civil cases and which does not meet the exigencies of modern commerce. Witnesses must be examined, collateral issues decided, motions made and opposed, venue established or changed, and other complicated procedural measures taken which never fail to insure long life to the action. The action is divided into three kinds-mayor cuantia, menor cuantia, and juicio verbal-depending upon the amount involved. The greater the amount the more complicated are the forms required to be observed. Such suits may take months and years to fight through to a conclusion, and the expenses accruing by these delays increase in mathematical progression. This serves as one more illustration of the necessity of keeping contracts and negotiable paper in proper order to insure that an executive action will lie in case of emergency. If the declaratory action must be resorted to, the best thing for the party to do is to secure the most competent counsel available and to enter into an agreement with respect to fees and probable costs. Outlawing of Actions. Cuban jurisprudence does not include a statute of limitations, but recognizes instead the principle of "prescription." The results are practically the same, the difference being largely theoretical. One difference is that rights (whether rights of ownership, rights of action, or other rights) that are outlawed by the statute of limita-

PAGE 57

54 tions still subsist, although they can not be enforced wihout some positive act of recognition on the part of the person against whom the rights existed. Rights that have been "prescribed," on the other hand, are completely wiped out and can not be revived. In our law of real property we have a principle comparable to the Cuban prescription. We call it prescription or ownership by occupation or by some other name, but the principle operates in any case to extinguish the rights of all persons except the claimant to title by adverse possession. The Cuban civil code, commercial code, and procedural code contain provisions relating to prescription of rights. The most important of these, from the point of view of business men, is the provision that actions arising out of bills of exchange and other negotiable instruments are barred three years after maturity, whether the instrument has been protested or not. Actions between partners or members of companies also prescribe in three years, but actions against the directors of a corporation are given four years from the day when their duties terminated. Actions to decide title to personal property are barred in six years, but an action to regain possession (such as our action of replevin) must be brought in one year. Thirty years are allowed for the recovery of title to real property. Personal actions generally fail after 15 years. Lawyers and other professional men must sue in three years for their fees, counting from the time when their services are ended. When debts are to. be paid with interest, prescription runs from the last installment or payment of interest. Prescription is interrupted (in the sense that the statute of limitations, as we say, is tolled) when the claimant brings an action against the defendant or makes an extrajudicial demand upon him for payment, or when defendant expressly recognizes the existence of the obligation. Execution of Foreign Judgments in Cuba. Final judgments of foreign courts may be executed by the Cuban Supreme Court when international treaties so provide. In the absence of treaty stipulation, the Cuban court will execute foreign judgments when it is proved as a fact that the courts of the particular foreign country or State reciprocally execute Cuban judgments. Such foreign judgments must be the result of a personal action, must not have been given by default, must be based upon an obligation which is not illicit by Cuban law, and the certificate must be properly authenticated according both to the foreign and the Cuban law.

PAGE 58

THE LAW OF INDUSTRIAL PROPERTY IN CUBA Bernard A. Kosicki, Chief, Patent and Trade-Mark Section, Division of Commercial Laws SOURCES AND PRINCIPLES OF LEGISLATION The laws of Cuba relating to patents, trade-marks, prints, labels, and copyrights reflect the influence of the three political regimes in the history of that island. The basic patent law is found in the royal ordinance of July 30, 1833. This law has been subsequently modified by supplementary legislation during the period of the Spanish domination, by the orders of the United States military government of occupation, and by the laws and decrees of the Government of the Republic. The basic trade-mark law is contained in the royal decree of August 21, 1884. This trade-mark law as administered at the present time is modified by amendments made thereto under the Spanish, American, and Cuban administrations. The constitution of Cuba (February 21, 1901) guarantees to every author or inventor the exclusive ownership of his work or invention, the extent of this right being determined by law (art. 35). This provision is very broad and gives recognition to the laws in effect prior to the Republic and to privileges acquired under them. As in the Constitution of the United States, no specific mention of trademark rights is made in the constitution of Cuba, and neither is the authority to legislate on trade-mark matters conferred upon the Congress in express terms. Orders of the Military Government. During the period of military occupation of Cuba by the United States, from January 1, 1899, to May 20, 1902, the laws of Cuba relating to industrial property and copyrights were modified to bring them more into conformity with the laws of the United States and to facilitate the protection of American rights in Cuba. These orders, while in most respects only of temporary effect, in certain particulars, through the operation of the Platt amendment, have left a permanent impression on the law of Cuba. Some of the more important measures which have endured, either through incorporation in the law of Cuba or continuation in practice, may be cited. Civil Order No. 196, issued October 19, 1899, established a term of 17 years for the duration of a patent in place of the terms of 5, 10, and 15 years provided for by the decree of July 30, 1833. The military orders which modified the Cuban law to admit of the protection of United States patents, upon filing of certified copies thereof, have resulted in the present practice of issuing a revalidation patent, as distinguished from a national patent. A revalidation patent is obtained by filing a certified copy of the foreign patent and endures for the life of the foreign patent. (55)

PAGE 59

56 Civil Orders No. 216 of May 26, 1900, and No. 497 of December 10, 1900, have had the effect of inaugurating a preliminary examination of foreign patents which are submitted for revalidation, although examination by the Government as to novelty or utility of the invention is expressly negatived by the law. The only modification of any importance introduced by the military government into the trade-mark law of Cuba was established by Civil Order No. 512 of January 1, 1901. This order amended article 12, paragraph 1, of the trade-mark law of 1884, to extend the liability for infringement to those who buy or sell receptacles bearing infringing trade-marks. On June 21, 1902, at the termination of the military occupation of Cuba, the orders providing for the registration in Cuba of copies of patents granted and trade-marks, prints, and labels registered in the United States were declared void by the Cuban Secretary of Agriculture, Commerce, and Industry. Since that time the law relating to industrial property has been administered by the Cuban Government, and with the exception of several amendments introduced by the Cuban Congress the law is substantially the law which Cuba inherited from Spain. Origin of Cuban Patent Law and Its Characteristics. At a time when the idea of granting monopolies to inventors for the purpose of stimulating invention and industry was gathering momentum in Europe and in the United States, Spain followed the example of the countries supporting this idea in the enactment of the law of 1820 and the royal decree of March 27, 1826, which formed the basis of the patent legislation of Spain. The latter decree was followed by a similar enactment, effective in Cuba, the Philippines, and Porto Rico, issued July 30, 1833. The fundamental principle of the original Spanish law has been substantially retained in the present Cuban patent law. The original patent law of Cuba provided for the grant of a monopoly for a limited period to the person who first introduced or established in Cuba a new machine, instrument, or process of a mechanical or chemical function. The person claiming a patent did not necessarily have to apply in the capacity of inventor. He was entitled to a patent of introduction for an invention imported by him from another country. This was the prevailing idea of the day, the privilege being founded on the desire on the part of the sovereign to encourage the development of trade and industry, even though this result did not necessarily follow from the exercise of ingenuity on the part of persons responsible for the introduction of new ideas into the country. During the period of Spanish domination a peculiar system of patent law existed in Cuba, which was characterized by the enforcement of two separate patent laws. The first of these laws, the royal decree of July 30, 1833, concerned the issue of insular patents, and applied to Cuba, Porto Rico, and the Philippines. The second law was established by royal decree of July 30, 1878, which was intended to create and regulate patent rights throughout the entire Spanish territory. For this purpose a patent issued in Madrid was to be regarded as valid throughout the Spanish dominions.

PAGE 60

57 The effect of this law was extended to Cuba by virtue of the decree of May 14, 1880. Because of this dual system for the protection of patents existing in Cuba at the close of the Spanish domination the law which had to be adopted as the national law of Cuba was the earlier decree of 1833. This decree, as modified and amended, is now in force. Civil-Law Principle of Cuban Trade-Mark Law. The theory that a trade-mark right is, in effect, a privilege which may be conferred by the State, in a manner analogous to the grant of a patent, underlies the trade-mark law of Cuba. As in all of the Republics of Latin America, the exclusive right to the use of a trade.mark or label can be acquired only through proper registration under the law. It is but natural to suppose that this idea should permeate strongly the fabric of Cuban jurisprudence, in view of the early date of the basic law of the Republic and its decided inclination toward principles followed by the civil-law countries. The language of the decree of 1884 does not admit of any question as to the necessity for registration in order to claim title to a trade-mark in Cuba. Article 4, paragraph 2, of this decree clearly enunciates this rule of law: "Those who fail to provide themselves with said certificate (of registration) shall have no right to use any mark to distinguish the products of their industry or prevent other parties from using their impressions, industrial designs, or models." The law further reads (art. 7): "No one may claim the ownership of marks, designs, or industrial models unless he shall have the corresponding certificate and shall prove that he has complied with the provisions of the present decree." The trade-mark law of Cuba does not recognize any legal or equitable right to a trade-mark which may be acquired by the fact of user. It does not provide for the cancellation of trade-marks which have been wrongfully registered against the interests of a person who had used the trade-mark in commerce but who had failed to secure it by registration. Notwithstanding the unyielding commitment to the civil-law principle of registration which the decree of 1884 carries, the courts of Cuba have been able to render decisions serving the ends of public policy and justice, without a disregard of the principles of Cuban statutory law, by giving effect to the doctrine declared in article 9 of the Buenos Aires trade-mark convention of 1910, to which Cuba is a party. This article provides for the cancellation of trade-marks registered in fraud of third parties, and it has been liberally interpreted by the Cuban courts in cases where the municipal law proved inadequate. The convention of 1910, however, was superseded on September 30, 1926, by the revised convention signed at Santiago, Chile, on April 26, 1923. The new convention varies somewhat the concellation provisions of the convention of 1910, and there may result a corresponding modification in Cuban jurisprudence in this respect. International Conventions. Cuba has taken an active part in all of the important international arrangements for the protection of industrial property. It adhered to the International Union of 1883 for the protection of industrial

PAGE 61

58 property and ratified the revisions of the convention of this union of 1900 and 1911. The arrangement of Madrid of April 14, 1891, for the suppression of false indications of origin, revised in 1911,. was entered into by Cuba on January 1, 1905. On the same date Cuba adhered to the arrangement of Madrid of April 14, 1891, as revised in 1900 and 1911 for the international registration of trademarks. Cuba is a party to the inter-American convention of August 20, 1910, for the protection of patents, designs, and industrial models. The Buenos Aires trade-mark convention of August 20, 1910, was ratified by Cuba on June 13, 1912, and the Santiago trade-mark convention of April 26, 1923, was ratified by Cuba on August 2, 1924. This latter convention was declared effective on September 30, 1926,. on which date the convention of 1910 became legally inoperative. The convention of 1923 is in force as between the following nations: The United States, Brazil, Cuba, Paraguay, Haiti, and the Dominican Republic. Administration of Patent and Trade-Mark Laws. The registration of patents, trade-marks, labels, and designs is intrusted to the office of trade-marks and patents of the department of agriculture, commerce, and labor. The secretary of that department is charged with the execution of the law. The President of the Republic has appellate jurisdiction to review administrative decisions of the secretary. The appeal must be perfected within 10 days following the announcement of the decision, but it can not be taken in those cases where the law declares the decision of the secretary to be final. The right of administrative appeal is established by article 57 of the organic law of the executive power, of January 12, 1909, and Presidential Decree No. 855, of September 26, 1913, executing this article. PATENTS In Cuban law the term Privilege of invention is used almost exclusively for the word patent to indicate the monopoly which is granted by the State to the person owning a new invention. This privilege or patent may be granted to any person or persons, whether foreign or national. A patent may also be conferred on a corporation or an association of persons. In order to become entitled to a patent of invention it is not necessary for the applicant to be an inventor. The Cuban law regards merely the invention or discovery in considering the grant of a patent; it does not look to the character in which the applicant petitions. the grant of a patent. Consequently the author of an invention may assign his rights to another prior to his having obtained the patent and the assignee may then apply for a patent as owner of the invention. There are two kinds of patents granted in Cuba-" National patents, or independent Cuban patents, and "revalidation" patents, which are issued upon the basis of a prior unexpired foreign patent. National Patents. A privilege or patent of invention is issued for a term of 17 years, counting from the date of the grant. The invention to be subject of a valid patent must be new and must consist of a "machine, appa-

PAGE 62

59 ratus, instrument, process, or operation of a mechanical or chemical nature." It must be of industrial utility and capable of being put in practice. Mere theoretical or scientific discoveries are not patentable. Products which are obtained through a new process or operation can not be patented, since everyone is considered free to create the same product by different means. A new combination or application of known means is patentable, but not a new employment of known means. Requirements for National Patent. In applying for a national patent in Cuba specifications and draw. ings of the invention, in duplicate, must be presented. The specifications must be in Spanish and must be signed by the inventor or his attorney. They must begin with the name or title of the invent tion and must state the object and nature of the invention, specifying its essential difference from similar known inventions and enumerating by proper reference the figures contained in the drawings. The claims must define the structure or process which is presented as the applicant's own invention and upon which the patent will be based. Drawings, in duplicate, must be submitted to illustrate the invention. The original must be made on tracing linen of a convenient size, not less than 330 millimeters long by 203 millimeters wide and not more than 381 millimeters long and 254 millimeters wide. The duplicate drawing may be sumbitted on tracing linen, three-ply bristol board, or blueprint paper. The drawings must be signed by the inventor or his attorney in the lower right-hand corner. The drawings must be made in black indelible ink. If the same part of an invention appears in more than one view of the drawing, it must be referred to by the same character. In case the invention consists of an improvement in a machine, apparatus, or device already known, the invention must be shown, first by itself, then, in another figure, it must be joined to the basic invention. The power of attorney must be acknowledged before a notary public and legalized by a Cuban consul. If the assignee makes the application, the power must be signed by both the inventor and the assignee. Revalidation. The practice of accepting foreign patents for deposit in Cuba was introduced during the military occupation for the purpose of protecting United States patents during their period of duration. The regulations of the department of agriculture, commerce, and industry of May 5, 1903, recognized this practice as valid and extended it to all foreign patents. Upon revalidation of the foreign patent protection is granted in Cuba for the unexpired term of the foreign patent not to exceed 17 years. The question whether prior publication or use in Cuba or abroad will invalidate a revalidation patent has not yet been decided by the courts. It is advisable, however, to apply for revalidation as soon as possible after the grant of the foreign patent to avoid an adverse decision on the ground of novelty in case the validity of the patent is tested or to preclude the issue of a valid national patent for the same invention. No working of the invention is required when it is protected by a revalidation patent.

PAGE 63

60 Requirement for Deposit of Foreign Patents. In order to deposit or obtain revalidation of a foreign patent an application must be submitted to the department of agriculture, industry, and commerce, together with a certified copy of the patent issued in the country of origin, including specification and drawings and legalized by the Cuban consul. Two copies of the United States patent, including drawings, may be filed in place of the drawings required in regular applications. The documents must be accompanied by a translation into Spanish, acknowledged before a notary public of Cuba or a Cuban consul. The translation must be in duplicate, and the second copy may be signed by the applicant or his attorney. Unless the applicant presents his petition in person he must apply through an attorney, furnishing him with a power of attorney legalized by a Cuban consul. The fee payable to the Cuban administration for the deposit of a foreign patent is $35 United States currency. Upon payment of this fee a certificate of deposit will issue. Novelty. One of the essential conditions for the existence of a valid patent is that the invention must be novel. The law defines an invention as novel if prior to the time of the application for patent it had not been reduced to practice or described in print in Cuba or abroad. If the invention does not possess novelty or industrial utility, it is subject to annulment. This condition does not apply where the application for a national patent is filed within 12 months following the application for patent in the United States or in any other country belonging to the Industrial Property Union of 1883. Preliminary Examination. No preliminary examination as to novelty or industrial utility is required or authorized by the basic Cuban patent law. The issue of patents is, in effect, only a ministerial act. The Cuban patent office officials examine applications for national patents for the purpose of determining their regularity; and, if the documentation is found to be in compliance with the law, a patent must be granted. Owing to the practice founded during the period of military occupation of Cuba, patents submitted for revalidation are subject to a preliminary examination and, in case of interference with prior grants, the application will be rejected. The grant of a patent by the Cuban Government is made without. any guaranty as to the validity of the patent or of the novelty or utility of the invention. These questions can not be brought up in administrative proceedings but must be raised before a court of proper jurisdiction. Working. The Cuban law is founded on the idea that in return for the grant of a patent the patentee must undertake to establish the industry in Cuba. The law, therefore, requires that an invention for which a national patent had been granted must be put into practice in Cuba within a year and a day from the date of the application, and that the working must not be interrupted for more than a year thereafter. Through the operation of the international convention this period has been extended to three years, counting from the date of appli-

PAGE 64

61 cation in Cuba. The working, therefore, may be delayed for this period. Failure to work a patented invention in Cuba without good reason may result in the forfeiture of the patent. Proof of working must be submitted at the specified intervals to the Secretary of Agriculture. The Secretary then generally designates an engineer of the patent office to make a study of the question and determine whether the object of the patent had been carried out in Cuba. Decisions adverse to the patentee are subject to appeal to the President of the Republic and, if affirmed by the executive, an appeal may be taken to the contentious-administrative court (tribunal contencioso-administrativo). No working is required in the case of revalidation patents. Annulment and Forfeiture. A difference is to be noted between the two ways in which a patent may fail; namely, through annulment or forfeiture (nulidad y caducidad). When, for any of the reasons specified in the law, a patent is annulled, the annulment operates retroactively, and the patent is regarded as never having had a valid existence. A privilege that is forfeited, on the other hand, fails from the moment that the forfeiture is declared. A patent may be annulled because of lack of novelty, or utility, or because of the unlawful character or object of the invention. Annulment may be declared only by a court of justice and is not the subject of an administrative decision. The patent may be declared as forfeited upon failure to pay the dues within a period of three months after publication, or upon proof that the invention has not been worked satisfactorily in Cuba within the required period, or that it had been abandoned, or upon expiration of the national patent or expiration of the term of the foreign patent in the case of revalidation patents. Decisions of forfeiture in such cases may be rendered by the Secretary of Agriculture, but when it is a question of interruption in working of the invention and the patentee opposes the declaration of forfeiture, the case is referred to the judge of first instance of the patentee's district for determination. Actions at Law for Infringement. Infringement of a patent in Cuba, as in other civil-law countries, partakes of the character of a civil and public wrong. It occurs when there has been an unauthorized reproduction of the essential idea of the patented invention. Both a civil and criminal action will lie for infringement, and the remedies are concurrent. The suit must be brought in the court of first instance or instruction in the district where the defendant has his domicile. The procedure is the same as in ordinary actions and is governed by the code of civil or criminal procedure as the case might be. Parties.-The proprietor of the patent of record is entitled to sue in a civil court or to prosecute the infringer in a court of criminal jurisdiction. The public administration has also the right to prosecute the delinquent, but it can not initiate the proceedings. Since the wrong is essentially a private one, the complaint must be brought by the injured party before the public administration can act.

PAGE 65

62 The privilege conferred on a patentee is broad and entitles him to an action against all those who may have used his invention in any way whatever. Thus, all parties who are connected with the wrongful transaction, whether as manufacturers, vendors, etc., can be made liable and joined in the same action. The patentee need not prove fraudulent intent on the part of the infringer to make out a cause of action; a prima facie case is made out by proving the fact of infringement. Criminal liability.-Article 563 of the Penal Code extends the penalties established by article 561 to all those who commit a fraud on literary or industrial property. Fraud in this connection is taken to mean infringement. The penalty indicated in article 561 is major arrest in minimum and medium grades and a fine equaling the amount of damages or up to three times the amount of damages. Confiscation of infringing goods.-In addition to these penalties, article 31 of the decree of 1833 provides for the confiscation of the infringing articles and the payment of three times their value, to be recovered in each case by the owner of the patent. This, however, is regarded rather in the nature of civil reparation for the injury committed than a penalty for the wrong. The court can not refuse to pronounce a confiscation of the goods involved in the infringement, even though this is not formally required by the plaintiff. The seizure can be effected only as to those goods which are in possession of the defendant. It can not operate against any party who has not been brought into court. Absence of fraudulent intent will not relieve the defendant of the liability of seizure of products in his possession which infringe on the plaintiff's = patent, even though he may be acquitted in a criminal suit. Civil responsibility.-In a civil action brought for the infringement of a patent the patentee or one claiming under him may recover for the injury which he has suffered. The measure of damages is not based on the defendant's gain but rather on the plaintiff's loss, and, therefore, absence of profit on the part of the defendant will not relieve him of the payment of damages. The owner of a patent is entitled to a seizure of the goods in accordance with article 31 of the decree of 1833 and to a recovery of up to three times the value of these goods. Effects and advantages of civil and criminal actions.-The advantage offered in pursuing an infringer criminally is apparent when the defendant is without financial responsibility. The existence of this remedy acts as a deterrent against infringement in such cases. Another advantage in bringing criminal suit lies in the fact that the prosecution is not concluded by the punishment of the delinquent in case he is found guilty, but also a certain amount can be recovered by way of damages through confiscation of the infringing goods and the assessment of damages thereon. The bringing of either a civil or criminal action will not bar the other. The two actions are different in nature-one being essentially a trial for the commission of a wrong in which the public has an interest and the other a suit for the reparation of a private injury. The decision in a criminal action is not of the same importance e as in a civil action where the point to be decided is the validity of the patent. If the defendant in a criminal action sets up the in-

PAGE 66

63 validity of the patent because of lack of novelty, priority of his own invention, failure to work the patent, etc., the judgment of the court will have no effect upon the status of the patent. It merely determines the guilt of the accused in that particular case. In a civil action, on the other hand, where such defense is interposed and the validity of the patent is tested, the decision, in case the patent is found valid, would have the force of res adjudicata in so far as the same parties and the same cause of action are concerned. If the patent is found invalid, it may be declared as such and the patentee's right would be immediately determined. Period of prescription.-Infringement is covered by the same period of prescription that applies to all delicts. This period is 10 years from the time the wrongful act was committed. The same period applies in bar of the civil or criminal action. The penal code provides that any act of prosecution will interrupt the period of prescription. Prescription goes not only to the remedy but also to the right. The defense, therefore, is one of public interest and, even though it may not be set up by the defendant, the court may apply it of its own motion in bar of the action. Marking. There is no requirement of special marking on patented articles. Assignment. A patent of invention is transferable in the same manner as other species of personal property. It may be conveyed by way of i gift, purchase, devise, etc. Assignments and transfers to have legal effect must be made by public deed which should state whether the transfer is absolute or partial. The deed must be in Spanish or accompanied by a Spanish translation and executed and acknowledged by the assignor before a notary public. It must be legalized by a Cuban consul. The deed. must then be presented to the Secretary of Agriculture, Commerce, and Labor for registration. If this presentation is not made within 60 days following the date of execution, the transfer or assignment will be null and void. TRADE-MARKS Cuban law distinguishes between trade-marks used on products of Cuban origin and those used on foreign products. There exist, then, for the purpose of regulating the acquisition of trade-mark property, two kinds of trade-marks; namely, national marks and foreign marks. Anyone who has an industrial or commercial establishment in Cuba may register the trade-mark which he uses on the products of this establishment as a national trade-mark. If this trade-mark should be used on goods of foreign manufacture as well as on goods of Cuban origin by the owner thereof or under his authority, protection will be granted only in so far as the trade-mark properly conforms to its national character; that is, only its use on Cuban goods will be legally protected. The distinction between national and foreign trade-marks does not effect the substantive right of trade-mark ownership. The prop-

PAGE 67

64 erty right in each case is protected in the same manner. Different rules, however, apply in connection with the grant of the right, its regulation, and its transfer or termination. In addition to these broad classifications, a distinction is made between the various classes of trade-marks according to the goods on which they are used and the business in which they are employed. Thus, trade-marks under Cuban law are divided into four special classes, to wit, factory marks (marcas de fabrica), commercial marks (marcas de comercio), agricultural marks (marcas de agricola) and cattle marks (marcas de granadera). This classification is frequently encountered in the trade-mark laws of the countries of Latin America. Foreign trade-marks are generally regarded as marcas de fabrica. Registrability of Trade-Marks. The provisions of the decree of 1884 defining trade-marks which shall be admitted to registration and protection are much broader than corresponding provisions in the Federal law of the United States. The Cuban law defines a valid trade-mark to be any denomination, emblem, sign, illustration, label, wrapping, carton, etc., which serves to distinguish the merchandise of one person from that of another. There is apparently no requirement that the trademark be placed in actual proximity to the goods, provided that it distinguishes them. Thus, any person, natural or legal, has the right to adopt as his trade-mark any word, sign, device, or label not expressly prohibited by the law. In general, the trade-marks which can not be registered in Cuba are those which are (1) against public order. or morality; (2) not susceptible of exclusive appropriation, such as the. ordinary name of a product; and (3) those which infringe on the rights of third parties. Trade-marks which consist of or contain, the following characteristics are not registrable: The coat of arms, flags, insignia, etc., of Cuba or any foreign government, without express consent; denominations generally used to designate a product; words or illustrations which are scandalous or immoral; marks which are confusingly similar to trade-marks already registered for the same class of products; the Red Cross emblem and words; a representation of coin or currency of Cuba; awards of merit or distinction, without proof of their genuineness, to be submitted to the Secretary of Agriculture; colors when used apart from illustrations, labels, etc., portraits of living. persons without their consent and of deceased persons without the consent of relatives within the fourth civil degree. .d It was decided by the Secretary of Agriculture, in 1913, that names of foreign localities can not be used in national marks. .The decision. was prompted by the terms of the Madrid convention of 1891 for the suppression of false indications of. origin, to which Cuba is a party. Nature of Right and Its Duration. As explained earlier in the article, the exclusive right to the use of a trade-mark can be acquired only by registration in accordance with the law. The right begins to run in favor of the applicant as soon as he files his application, but until the trade-mark is regis-

PAGE 68

65 tered there is merely a priority which the applicant may claim over other applicants filing conflicting claims subsequent to his application. It may, therefore, be said that the property right arises only upon the registration of the trade-mark. The trade-mark right endures for 15 years for national trademarks, and it may be renewed for like periods. The period of registration is the same for foreign marks, provided the foreign registration is maintained and the right is not lost through abandonment or cancellation. Requirements for Registration. An application must be filed showing the name, residence, and occupation of the petitioner. It must also state the class of the mark (in other words, whether of manufacture, commerce, or agriculture), describe the mark, and enumerate the products which. the mark is intended to distinguish. The application should be accompanied by 26 copies of the trade-mark, 3 of them to be accompanied by a description of the mark, a certified copy of registration in the United States and a power of attorney, both legalized by a Cuban consul. An electrotype not less than 2 by 2 centimeters and not greater than 10 by 10 centimeters and 24 millimeters in thickness must be submitted for use in advertising the application. The application must be published once in the Boletin Oficial at the, expense of the applicant. Collective Marks. Collective marks are those used by associations to distinguish products of the persons or companies composing the group or to serve the purpose of certification by the association. A collective or association mark differs from the ordinary trade-mark in that the association which uses the mark does not produce goods or add any value to them by physical means. Such trade-marks are not registrable under the Federal laws of, the United States. The royal decree of 1884 does not mention collective marks expressly, but through subsequent regulations and legislation they are accorded the same treatment as trade-marks. Obligatory Marks-Pharmaceutical Regulations. Article 6 of the royal decree of 1884 provides that registered trademarks must be used on articles of gold or silver and chemical and pharmaceutical products. This provision does not apply to foreign trade-marks except in so far as it refers to pharmaceutical products.; The importation of foreign pharmaceutical specialties is governed by the. pharmaceutical law of Cuba in 1923. According to this law a foreign specialty, when imported and placed on sale in Cuba, must be accompanied by a certificate from a competent authority in the country of origin setting forth the fact that the sale of the product is not prohibited in that country, or, in the absence of this certificate, by an affidavit to that effect from the importer, his. agent, or representative. All pharmaceutical preparations or patent medicines, sealed and bottled in a uniform manner and bearing the label, must show plainly on the label the substance contained therein to which are due their medicinal properties and must indicate the name and address of the producer.

PAGE 69

66 International Trade-Marks. Trade-marks registered in Cuba in accordance with the Madrid arrangement of 1891 or the Buenos Aires convention of 1910 are accorded the same protection as trade-marks registered under the municipal law. The Inter-American Trade-Mark Bureau for the A Northern Group, established by authority of the convention of 1910, is located in Habana. This bureau will continue to function under the convention of 1923, which replaces the convention of 1910. Commercial Names-Personal Names. The names of partnerships, corporations, and individuals may be registered as trade-marks, provided that the registration does not interfere with the rights of third parties previously acquired. On the other hand, a person or company is free to use its trade style provided this does not create unfair competition. Under the terms of -the convention of 1923 (art. 1, sec. 4) commercial names are entitled to protection in Cuba whether they form a part of a trade-mark or not, without the necessity of registration. Variance Between Trade-Mark as Registered and as Used. Article 42 of the decree of 1884 lays down the rule that the right to a trade-mark may be lost if there is a variation in the trade-mark as used over the registered trade-mark. The only variations that may be made without affecting the right are those with respect to the color or size of the trade-mark or insignificant features which do not serve to distinguish. The effect of variation may be felt in two ways: First, through a denial of protection, and, second, through a cancellation of the trade-mark. The trade-mark may be canceled by the Secretary of Agriculture, Commerce, and Labor. A petition for the cancellation of the trade-mark for this reason may be brought by anyone, whether having a material interest in the matter or not. Opposition. The right of opposing the registration of a trade-mark runs only in favor of persons who are the owners of a registered trade-mark which the trade-mark to be registered resembles. The time allowed for presenting the opposition is 60 days following the publication of the application notice in the Patent Office Bulletin. The opposition must be presented to the Secretary of Agriculture, Commerce, and Labor, and may be grounded on the fact that the trade-mark sought to be registered is identical with the registered trade-mark of the opposer, or that it is confusingly similar to his mark. Cancellation. The termination of the right of trade-mark ownership, which in Cuba corresponds to the annulment or cancellation of the registered trade-mark, may be declared either administratively or judicially. The Secretary of Agriculture, Commerce, and Labor may cancel the registration under any of the following circumstances: (1) Upon voluntary petition of the trade-mark proprietor; (2) upon failure of the trade-mark owner to make use of it within two years following the date of registration; or (3) upon failure to comply with any of the requirements of the decree. An appeal from the decision of the Secretary of Agriculture, Commerce, and Labor may be taken to the President of the Republic within 10 days after its announce-

PAGE 70

67 ment. When the registration period expires and no renewal is applied for, the trade-mark falls into the public domain, and to reinstate the right of ownership a new registration is necessary. A court of proper jurisdiction may determine the question of trademark ownership as between the parties before it, and an executory sentence declaring the invalidity of the registration will operate to cancel the registration. A petition for cancellation because the use of the trade-mark in Cuba has been interrupted for more than a year can be entertained only by the court, the Secretary of Agriculture, Commerce, and Labor having no jurisdiction over the subject matter. The obligatory use of a registered trade-mark in Cuba means use on the products for which the trade-mark is registered. If the trade-mark is used only on some of the products and not on others, it will be considered abandoned as to the products on which there has been no user within the statutory period. In addition to the grounds for the cancellation of the trade-mark set forth in article 18 of the royal decree of 1884, article 5 of the Santiago convention of 1923 establishes further grounds for cancellation. This article states that if a trade-mark duly submitted for registration according to the terms of the convention is refused registration because of the existence of a prior registered trade-mark or a prior application, the owner of the foreign trade-mark may seek to cancel the registered mark. The grounds upon which the cancellation of a national trade-mark registered in Cuba may be sought in view of the convention are as follows: (a) That the owner of the foreign trade-mark had legal protection for his mark in any of the contracting States before the date of application for the registration which he seeks to cancel; or (b) That the registrant had no right to the ownership, use, or employment of the registered mark at the date of its deposit; or (c) That the mark covered by the registration which he seeks to cancel has been abandoned. Liability for Infringement. There can be no violation of the right of trade-mark ownership for which an action for infringement will lie unless (1) the trademark has been registered, (2) used in the form in which it was registered, and (3) the alleged infringing trade-mark may be confused with the registered mark and is used on the same class of goods. If these conditions exist, the infringer becomes liable to both a criminal and a civil action, and to seizure of the goods if they are imported. Parties.-A criminal action may be initiated by any interested party-in other words, one who has suffered an injury because of the act of the defendant-or by any person (art. 43), or by the public administration. In the last case no complaint on the part of a witness is necessary; the public administration may begin and continue the prosecution of its own accord. Article 12 of the royal decree and articles 287 and 288 of the penal code attaches liability to all those who counterfeit, falsify, or use a registered trade-mark, buy, sell, or use containers so marked; or sell or expose for sale goods bearing an infringing trade-mark. The same liability is imposed on those who use marks which are capable of deceiving the purchaser regarding the nature of the prod-

PAGE 71

68 uct or who detach trade-marks from goods for the purpose of using them on others. Criminal liability.-For any of the above acts the defendant is criminally liable, provided that he committed them with knowledge and wrongful intent. The offense is punishable with fine and imprisonment in its minimum and medium grades. Civil liability.-The owner of a registered trade-mark may sue for damages occasioned by the infringement. The courts, in estimating the amount of damages, consider the importance of the injury and base the sum to be recovered on the loss of profits, the extent of the injury, and the expenses caused by the necessity to prove the infringement. The absence of a wrongful intent will not exonerate the defendant in a civil action. It is sufficient to prove that the infringement was due to the negligence or fault of defendant to establish his liabilty to respond in damages. Seizure of Infringing Goods by Customs. The customs authorities are empowered to seize and confiscate goods entering Cuba on proof that they bear an infringing trademark or label. After the goods have been seized an account of them will be rendered to a judge of instruction, together with a description of the infringing marks and .exhibits. The, judge will then order a destruction of the marks or even of the products if the marks can not be otherwise removed. Prescription.-The period of prescription barring criminal actions for infringement is 10 years as in other cases of delicts. Assignment and Marking. Trade-marks, labels, and other forms of property regulated by the royal decree of 1884 are transferable in the same manner as tangible personal property. They may be transferred apart from the business or industry in which they are used and the conveyance of the physical property of an enterprise does not include a transfer of the trade-mark unless expressly stated in the contract. It may be observed here that a national trade-mark can not be assigned to a foreigner to be used in an enterprise established outside of Cuba. Where an assignment of this kind is contemplated an arrangement may be entered into with the owner of the Cuban trade-mark to release his right by a voluntary cancellation, and at the same time an application to register the trade-mark as a foreign mark can be entered. An assignment or transfer of a trade-mark must be recorded within 90 days after it is executed. The Cuban trade-mark law does not require that a notice of registration of the trade-mark be carried on the face of the trade-mark. Such notice, however, may be used without objection, and the form Marca Registrada may be conveniently used because of its acceptability in other countries of Latin America.

PAGE 72

69 SHOP SIGNS While the protection of shop signs or signs used to advertise an industrial or commercial establishment is purely local in character, a word may be said of the law which governs this subject because of its close analogy to the common law of unfair competition as applied in the United States. Shop signs are not subject to protection under the trade-mark law and can not be registered under its terms. This law applies only to marks which are used in connection with merchandise. Shop signs, on the other hand, are used to distinguish an establishment or factory having a definite sits. The right to the exclusive use of a sign to distinguish an establishment is determined by priority of user, and this right is protected according to the ordinary principles of law. The property right in a shop sign is a local right only and corresponds in territorial extent to the actual influence which the sign has in identifying the establishment or factory. The law on this subject corresponds very closely to the Anglo-American law. The right in a shop sign is assignable and has the character of personal property, but, if the establishment is sold, the right to the use of its distinctive sign goes with the transfer of the tangible property, unless otherwise stipulated in the contract. The infringement of a shop sign makes the infringer liable civilly for damages. INDUSTRIAL DESIGNS AND MODELS Industrial designs and models are protected under the decree of August 21, 1884, relating to trade-marks. An industrial design is one that is intended for adornment or one that forms an essential part of a manufactured article. Thus, the designs on wall paper, cloth, etc., would be considered as designs of adornment. Examples of designs forming an essential part of an article are embroideries, laces, etc. Industrial designs must be distinguished from artistic designs, since the former are protected by the trade-mark decree of 1884, while the latter are the subject of the copyright law. The difference between the two classes of designs is fixed by some text writers according to the immediate ends which the designs serve. Thus,. if the design is used by a manufacturer for an ordinary purpose, it is an industrial design; whereas if a design is an artistic creation and it serves the purpose of art it is an artistic design. The value or merit of an industrial design has no importance in legal contemplation. An industrial model consists in the peculiar form or appearance that is given an object. It differs from an artistic model which is the subject of copyright law, in that it primarily serves the ends of industry and utility. The right of exclusive property in industrial designs and models is acquired under the decree of 1884, on the same terms as trade-mark rights. The term of protection is 15 years and, according to the law, may be renewed. The same requirements for registration apply to industrial models and designs as to trade-marks.

PAGE 73

70 An essential preliminary condition that must be fulfilled in obtaining the registration of an industrial design or model, after its character as such has been established, is novelty. As in the case of inventions, an industrial design or model to be the subject of exclusive ownership must be new at the time application for registration is filed. BIBLIOGRAPHY Pedro Diazmartinez : Marcas y Patents. Garcia Garofalo: Legislacion Industrial. Ruege & Graham: Trade-Mark Laws of the World. White & White: Patents Throughout the World. B. Singer: Patent Laws of the World. Patent and trade-mark laws of the South American Republics, Brazil, and the Republic of Haiti: International. Bureau of American Republics. .n

PAGE 74

APPENDIX LEGAL HOLIDAYS IN CUBA In addition to Sundays, the following are legal holidays by act of the Cuban Congress: January 1.-New Year's Day. January 28.-Martf's Birthday. February 24.-Baire Revolution Day. May 10.-Independence Day. October 10.-Yara Revolution Day. October 12.-Columbus Day. December 7.-Decoration Day. December 25.-Christmas. Election Day. Business houses are required to close by 6 p. in., except Saturdays, when they may transact business until 10 p. in. They must remain closed on Sundays and legal holidays. Exemption from the law is provided in some cases. Holidays, other than legal holidays, include Students' Day, November 27; Holy Thursday; Good Friday; September 1; Labor Day, May 1; Thanksgiving Day; and Christmas week. The supreme court and the courts of appeal are closed during July and August. THE DIVISION OF COMMERCIAL LAWS The division of commercial laws of the Bureau of Foreign and Domestic Commerce is that division of the United States Department of Commerce charged with the collection, digest, and distribution of information relating to the commercial laws of foreign countries. It is under the direction of C. J. Jinkin, who is assisted by a staff specializing in definite branches of foreign commercial law. The files of the division contain current data concerning tax legislation, compulsory registration of companies, depositing of trade-marks, licensing of agents, protesting of drafts, funding of employee pensions, and keeping account books, and recent intelligence regarding credit conditions, insurance, and the reliability of the bar in foreign cities. The division assists in the friendly adjustment of trade disputes with foreign customers, and promotes interest in commercial arbitration, unification of commercial laws, and simplification of trade terms and practices. It offers to assist American enterprise under the export trade act (Webb-Pomerene law) and the China trade act, and it serves as a forum for the discussion of the rules for the carriage of goods by sea and'the use of through bills of lading. Information regarding American laws is made available to foreign attorneys in return for foreign legal citations, and American, counsel (71)

PAGE 75

72 may obtain, on application, names of recommended attorneys in foreign cities or of American law firms with foreign branch offices. Counsel are free to submit to the division, for informal criticism, forms of agency contracts, articles of incorporation, powers of attorney, etc., for use in foreign countries. Foreign traders and their counsel are invited to correspond with the division concerning difficulties arising out of the complications of foreign commercial laws, and to cooperate in the promotion of the objects of the Bureau of Foreign and Domestic Commerce. FOREIGN SERVICE OF THE UNITED STATES IN CUBA The Embassy of the United States is located at Obispo 7, Habana, in the Horter Building. The office of the commercial attache is in room 311 of the same building. Business men going to Cuba are invited to visit the latter offices, where many of the services of the Washington office of the Bureau of Foreign and Domestic Commerce will be found available. Following is a list of American consulates throughout Cuba; correspondence should be addressed to The American Consul at the addresses given below: Habana: Horter Building. Antilla: Hotel Antilla Building. Cienfuegos: San Carlos 83. Nueva Gerona (Isle of Pines) : Anderson Building. Nuevitas: 25% Marti Street. Santiago de Cuba : Bank of Nova Scotia Building. There are, besides, consular agents at Caibarien, Sagua la Grande, Matanzas, E and Manzanillo. FOREIGN SERVICE OF CUBA IN THE UNITED STATES The Embassy of Cuba is located at 2630 Sixteenth Street, Washington, and the offices of the commercial attach are in the same build-' ing. Luis Marino Perez, the commercial attach in charge, may be addressed in matters relating to the facilitation of Cuban-American business. Following is a list of Cuban consuls in the United States, with their addresses: Baltimore: Eduardo L. Desvernine, consul; Chancellor Meliton Perez, deputy consul in charge; the Munsey Building. Boston: Jose M. Gonzalez, consul, 113 State Street. Charleston: Leopaldo Doltz, consul; Chancellor Calixto E. Sanchez, deputy consul in charge; 86 Ashley Avenue. Chicago: Julio C. Garrido, consul; Angel Perez, vice consul; Watson Building. Cincinnati: Hirginio J. Medrano, consul, 509 Glenn Building. Galveston : Francisco Rayneire, consul; Jose Pareda, chancellor; 2627 Broadway Street. Jacksonville: Julio Rodriguez Embil, consul; Manuel Velasquez, chancellor, 1030 Laura Street. Key West: Jorge R. Ponce, consul, 423 Simonton Street. MIami: Domingo J. Milor, consul. .Mobile: Andres Jimenez y Ruz, consul, 252 St. Louis Street. Norfolk: Pedro Firmat, consul in charge; Arcade Building. Newport News: Luiz Alvarez, vice consul in charge, 2411 Washington Avenue. New Orleans : Eduardo Paterson, consul; Luis Bas Malina, vice consul; Orme Building.

PAGE 76

73 New York: Augusto Merchau, consul general; Mario del Pino, first class consul; Jose A. Torralba, vice consul; Pedro E. Desvernine, second class consul; 44 Whitehall Street. Philadelphia : Jose Antonio Ramos, consul; Courado Dominguez, vice consul; 608 Chestnut Street. St. Louis: Alberto G. Abreu, consul, Fullerton Building. San Francisco: Gabriel G. Amenabar, consul, Holbrook Building. Tampa : Guillermo Espinosa, consul; Chancellor Eliseo Perez Diaz, vice consul; 609 Henderson Avenue. Washington, D. C.: Cayetano de Quesada, consul; Orestes Garcia, vice consul; 2030 Sixteenth Street. CONSULAR AGENCIES Los Angeles: Jose S. Saenz, 922 West Thirtieth Street. Atlanta: Guy King. Chattanooga : Miguel Caballero. Kansas City, Kans.: Clarence S. Palmer. Louisville: Richard Patrick Cane, 311 West Main Street. Pascagoula: Jose R. Cabrera. Savannah: William McLane Coolidge. BIBLIOGRAPHY A translation into English of the Cuban Code of Commerce, Civil Code, Procedural Code, commercial exchange regulations, commercial registry regulations, and Code of Criminal Procedure was made by the War Department in 1899 and 1901, and these translations, with annotations and amending military orders, have been published by the Government Printing Office, Washington. Following are editions in Spanish of these and similar laws used in the preparation of this bulletin: Betancourt : COdigo Civil; Cddigo de Commercio; Ley de Enjuiciamento Civil: Procedimiento Contencioso Administrativo; Suspensifn de Pagos; Jurisprudencia Cubana Civil y Contensioso Administrativo. Cailizares: Division Judicial y OrganizaciOn de Tribunales. Duval y Fleites: Derecho Mercantil. Sanchez y Fuentes: Ley Orginica del Poder Judicial. Sedano y Agramonte: El Notariado en Cuba. The best handbook on Latin American commercial law is that issued under that name by T. Esquivel Obreg6n, published by Banks Law Book Co., New York. An authoritative study of the Isle of Pines situation, by Capt. Elbridge Colby, United States Army, appears in the Monthly Bulletin of the Pan American Union for October, 1924. Many libraries of the law schools contain fine collections of Cuban commercial law books, which are often available to business men under certain restrictions. Every general law library will be found to contain some literature on this subject. Where the Cuban laws are not available, reference should be made to the Spanish shelves. The Cuban stacks in the library of the Pan American Union and the law division of the. Library of Congress, Washington, are well supplied.

PAGE 77

OFFICES OF THE BUREAU OF FOREIGN AND DOMESTIC COMMERCE DISTRICT OFFICES Atlanta : 538 Post Office Building.: Boston : 1801 Customhouse. Chicago: Room 845, 33 south Clark Street. Des Moines : 121 Federal Building. Detroit: 607 Free Press Building. Galveston : 309 Post Office Building. Houston: Chamber of Commerce Building. Louisville: Board of Trade Building. Memphis : Chamber of Commerce Building. Minneapolis: Federal Building. New Orleans: 322 Post Office Building. New York : 734 Customhouse. Philadelphia: Room 812, 20 South Fifteenth Street. Portland, Oreg.: 215 New Post Office Building. St. Louis: 1201 Liberty Central Trust Co. Building. San Francisco: 310 Customhouse. Seattle: 515 Lowman Building. COOPERATIVE OFFICES Akron, Ohio: Chamber of Commerce. Baltimore, Md.: Associgtion of Commerce. Beaumont, Tex.: Chamber of Commerce. Birmingham, Ala.: Chamber of Commerce. Bridgeport, Conn.: Manufacturers' Association. Charleston, S. C.: Chamber of Commerce. Chattanooga, Tenn.: 1301 Market Street. Cincinnati, Ohioi: Chamber of Commerce. Cleveland, Ohio: Chamber of Commerce. Columbus. Ohio: Chamber of Commerce. Dallas, Tex.: Chamber of Commerce. Dayton, Ohio: Chamber of Commerce. El Paso, Tex.: Chamber of Commerce. Erie, Pa.: Chamber of Commerce. Fort Worth, Tex.: Manufacturers' Association. Greensboro, N. C.: Chamber of Commerce. Indianapolis, Ind.: Chamber of Commerce. Lake Charles, La.: Association of Commerce. Jacksonville, Fla.: Chamber of Commerce. Keokuk, Iowa: Chamber of Commerce. Los Angeles, Calif.: Chamber of Commerce. Lowell, Mass.: Chamber of Commerce. Milwaukee, Wis.: Association of Commerce. Mobile, Ala.: Chamber of Commerce. Newark, N. J.: Chamber of Commerce. Norfolk, Va.: Hampton Roads Maritime Exchange. Orange, Tex.: Chamber of Commerce. Pensacola, Fla.: Chamber of Commerce. Pittsburgh, Pa.: Chamber of Commerce. Port Arthur, Tex.: Chamber of Commerce. Providence, R. I.: Chamber of Commerce. Richmond, Va.: Chamber of Commerce. Rochester, N. Y.: Chamber of Commerce. San Diego, Calif.: Chamber of Commerce. Syracuse, N. Y.: Chamber of Commerce. Tacoma, Wash.: Chamber of Commerce. Toledo, Ohio: Chamber of Commerce. Trenton, N. J.: Chamber of Commerce. Worcester, Mass.: Chamber of Commerce. U. S. GOVERNMENT PRINTING OFFICe:1927