Hessel Yntema was not only one of the world’s leading conflicts of law scholars and an insightful Romanist, but he was also a learned comparative legal historian. On a bright, snowy night in Ann Arbor, Michigan, during one of his unforgettable visits to the office where I was writing my doctoral dissertation, he reflected on when and where European commercial law acquired its distinct features. These features were acquired, according to Yntema, in the Late Middle Ages in cities such as Florence, Genoa, Siena and Venice in Italy, Barcelona in Spain, and Hamburg in Germany. Seminal inland and seafaring ventures took place not only in the above cities and nearby oceans, but also in fairs like those of Champagne in France, Piacenza in Italy, and Medina del Campo in Spain. He added that while German and Northern European Hanseatic league cities and fairs also contributed important features to the emerging commercial law, the Italian cities and the French fairs were the most fertile incubators of Europe’s pre-codified commercial law.
Pre-codified law, however, was dispersed, disorganized and contrasted sharply with the nineteenth-century French and German civil and commercial codes. At this stage, I can best describe these French and German codes of the nineteenth century as sets of rules organized by subject matter, following a sequence that reflected the codifiers’ perceived socio-economic importance of the various subjects. Their drafting style was guided by formally logical defined legal concepts and by principles associated either with not-for-profit (civil) or for profit (commercial) activities. When I asked Professor Yntema to please suggest readings on the transition from pre-codified to codified commercial law, he said that the list was long, but that I would do well to start with Levin Goldschmidt’s Universalgeschichte des Handelsrechts for an insightful panorama of medieval commercial law,1 and with Paul Huvelin’s Essai Historique sur le Droit des Marchés et des Foires2 for the same type of description of the European fairs. The following sections summarize the observations of Goldschmidt, Huvelin, and of contemporary legal historians on the emergence of pre-codified commercial law in Europe and on the role of medieval courts.
The courts of the medieval fairs and consular cities were responsible, inter alia, for summary legal procedures of claims supported by “self-enforcing” legal instruments 298such as bills of exchange and other writings that acknowledged the obligations of merchants in summary fashion (scripta obligatoria). Fairs s and consular courts also helped identify the nature of the commercial transactions heard by them by often referring disputes that involved criminal conduct or non-commercial transactions to other city or provincial courts.
The commercial exclusivity of the jurisdiction of fair courts was echoed, centuries later, in the listing of the “acts of commerce” (actes de commerce) by France’s Code de Commerce of 1807 side-by-side in this code with its rules on the competence and jurisdiction of commercial courts.3
The French approach to the codification of commercial law influenced other European and non-European civil law nations such as, among others, Belgium and Argentina. These countries defer the adjudication of commercial disputes to commercial courts which apply their commercial codes only to the acts of commerce listed in them. The adoption of this “objective” approach was another instance in which the life of the law was, Justice Oliver Wendell Holmes Jr. notwithstanding, neither logic nor the product of experience.4 Whoever thinks of commercial law (and commercial codes) as the products of a strictly logical discipline that applies to transactions easily discernible as acts of commerce has a surprise coming. He or she will find out soon in this chapter that beneath the purported logical rigor lies a human story with shades of greed and passion as in the eighteenth-century French commercial court’s “Red Ink” case.5 He or she will also find out in Chapter 10 how unrealistic and arbitrary can be the application of the acts of commerce criterion by commercial and non-commercial courts alike.6
Unfortunately, many interpreters continue to treat the acts of commerce listed in these codes as if they were magical formulas capable of discerning immediately which transactions are “commercial” and governed by the commercial code and which are “civil” and thus governed by the Code Civil. This type of interpretation occurred, and continues to occur, without paying attention to why the French codifiers and Napoleon himself were so keen on preventing non-merchants from becoming subject to the same rules as merchants, especially when the non-merchants were not involved in “acts of commerce.”
Simply put, Napoleon’s favorite citizen was not the merchant but, the bourgeois. Consequently, the reason for listing acts of commerce was not as much to exclude unlisted commercial transactions from a commercial or commercial-like treatment, as assumed by many to this day, but to prevent the application of code rules to non-merchants.
This datum explains provisions such as Mexico’s Article 385 of its Commercial Code of 1889, which prevents parties to commercial sales from resorting to remedies 299available to non-merchant sellers of land under the Code Civil.7 According to Article 385, a buyer who is a party to a commercial sale cannot rescind the contract because he paid a price for the goods that exceeds the market value of the goods and thus suffers an economic loss (lesion). In contrast, in accordance with Article 1674 of the Code Civil (which introduced to the codified world the doctrine of lesion as a ground for rescission in the sale of real property), a French landowner who sells his real property for a price that “harms” him economically can petition the court for a rescission of his sale agreement. Please note the significance of the status of the parties and the object of their sale in both provisions. Article 385 of the Mexican Commercial Code is directed at merchants or regular participants in commercial sales, and the principal object of their contract was personal property. Article 1674 of the Code Civil is directed at a landowner as seller of real property and its purpose is to protect him from a bad bargain that involved the Code Civil’s most valuable asset.
As will be recalled, by the twelfth century, associations of merchants had begun to form guilds to control prices and competition.8 These guilds became powerful as trade in the Mediterranean and across Europe increased. Some, such as those in Genoa, Florence, and Siena, also became dominant in their associations with local governments.9 In due course, a number of these guild and city-state inspired principles found their way into the European commercial codes of the nineteenth century. As noted by the legal historian Frederic Rockwell Sanborn: “On the one side, in Germany, in northern France, and in England we behold a development of the law through the medium of the fair, while on the other side, in Italy and in southern France, the law is developed in the medieval city state.”10
Italy’s medieval city-states were heavily engaged in maritime trade with the Middle East, Africa and the Orient. Goldschmidt traces to this maritime trade distinctly commercial legal principles such as: the division of risks among investors and active partners; the methods for allocating profits and management functions especially in partnerships of the commenda type; the reliance on double-entry bookkeeping; the allocation of risks in maritime transportation contracts; the binding language of negotiable instruments such as bills of exchange often in a manner 300independent from the underlying transaction; and so on.11 All of this was part of an emerging “corporate commercial law” in the broadest sense of this term.12
This corporate commercial law was patterned after a democratic city government in which merchants had a preponderant voice. In fact, as pointed out by Huvelin and Sanborn, since many of these cities were established by the merchants as outgrowths of their markets, their corporations and the municipal bodies in which they participated as citizens resembled each other.13 In Sanborn’s words, “[t]he market was the first franchise granted to the old [merchant] groups, and the right of doing business was the first liberty. From this there developed a privileged situation for these groups, and the organization of the market was the embryo of the organization of the city.”14
Some of the most commercially-minded cities distinguished between the status of major corporations (often organized as guilds) and minor official corporations.15 In addition to craftsmen, guilds included merchants and bankers (cambiatores, campsores nummularii, banchieri, tabulari) as well as their notaries and physicians. These commercial associations were presided over by an elected consul who occasionally also acted as the city’s mayor (podestá). For his decision-making, the consul relied on elected administrative and judicial magistrates whose number varied with the size of the association.16
As with the cities, the commercial associations were governed by statutes (statuta mercatorum), many of which were enacted between the thirteenth and sixteenth centuries by the municipality (statuti letti nell’ adunanza generale).17 The standard of commercial behavior expressed in these statutes was clear. It expected that association members be sworn to “obey their magistrates and behave in a scrupulous and orderly manner” (condotta scrupolosa e ordinata).18
There were different types of commercial statutes. Some were of general application to all merchants (dei commerciante in generale) and were often labeled as “consular” statutes.19 Other statutes were directed at specialized merchants or guilds (corporazione or gilde), colonial ventures (statuti coloniali), or maritime ventures (diritti marittimi).20
The administration of justice for disputes involving members of a commercial association was carried out by the president or consul and chosen association representatives usually in the premises of the association (domus-curia mercatorum, 301casa de la mercanzia dei mercanti). In some cases, these tribunals had an exclusive jurisdiction; in others, they shared it with regular courts.21
Generally, the statuta mercatorum did not require that the judge or judges (whose number varied with the importance of the case) be legally trained. Certain technical legal issues requiring specialized knowledge could be referred to legally-trained judges or experts (consilium sapientis).22 Nonetheless, the procedures were generally conducted by lay judges. Formalities, including the keeping of records of the proceedings, were entrusted to notaries who, during the trial, ostensibly acted as consiglieri to the judge or judges.23
Goldschmidt emphasizes that these consular courts were not intended to serve as commercial courts, or as courts for any and all disputes among merchants or among merchants and their lay customers. They were designed as disciplinary tribunals or as our present professional misconduct boards in charge of policing the conduct of the members of the respective associations. And, even in that limited capacity, many acts or transactions were subject to the jurisdiction of ordinary tribunals, especially those that entailed the commission of crimes or required the imposition of fines or imprisonment.24 Therefore, their jurisdiction was not always clear, as it could only be defined as pertaining generally to proper corporate conduct (materia di corporazione or causa quae ad artem pertinet).25
The procedure before consular courts was summary, including the possibility of compulsory arbitration in cities such as Genoa, where the consular-judicial procedure was not fully developed.26 Summary procedures, whether before consular or regular courts, were common in Italy starting in the thirteenth century. Their main features were set forth in Dispendiosam de iudicii, a 1306 Decretal by Pope Clement the Fifth: Judges had to hand out justice plainly, and without artifice or devoid of long and clamorous adjudication (de plano ac sine figura et longo strepitu iudicii).27 Unlike their ecclesiastical counterparts, whose pleading and proof were mostly in writing and filed with and read secretly by the judges, some of the proceedings in these commercial courts were oral and in open court. Evidence, on the other hand, continued to be largely dependent upon private writings and entries made by association members in their books and records. Defenses, especially against claims supported by acceptable writings, were also limited to those specified by statute.
Beginning in the fourteenth century, attachment and foreclosure procedures became widespread and could be supported by private, non-notarial documents provided they were executed and signed by the debtor. Occasionally, commercial books and records could lead to attachment and execution of the assets of the defendant.28 Appeals were, in many instances, unavailable or highly restricted. They could be made to the higher corporate authorities such as the “super consuls” (sopraconsoli) or to the 302association. Finally, where insolvency was concerned, the consular tribunals had developed what Goldschmidt described as a middle approach, or via de mezzo, “between the humane and perhaps excessively relaxed treatment of insolvent debtors in Justinian Roman law and the rough and often cruel provisions of Germany’s law of obligations.”29
The Consulates of the Sea, mostly located in European port cities, had diverse functions. In some ports, they acted as administrative agencies issuing sailing permits, certifying merchandise as exportable, and issuing other port and customs regulations. In others, they enjoyed judicial powers, thus sitting in disputes among seagoing or homecoming merchants. A third group of consulates, such as the Consulate of Pisa, combined these functions.30
Catalonians take pride in a 1494 compilation of commercial maritime and port regulations associated with their Barcelona Sea Consulate. It is referred to by some writers as the Consolato del Mare, and it supposedly was the most important compilation of pre-codification European maritime commercial law.31 Yet, its title, authorship and scope are all uncertain. Some authors characterized this compilation as being confined to the law of the sea and only in times of war while others, based upon better historical sources, attributed to it a much broader scope.32
If its scope were as large as the latter writers thought, it encompassed, among other subjects, the following: marine loans, the construction and the buying and selling of vessels, bills of lading, and responsibility for shipped cargo, including proportional sharing of liability among the shippers for the captain’s decision to throw cargo 303overboard in order to save the ship and the remainder of the cargo (later referred to in maritime law as “general average”).33 It also prescribed methods of electing the Consuls of the Sea and Judges of Appeal, their jurisdiction, and procedural regulations regarding the adjudication of cases brought before them.34
In addition to the law that emerged from commercial associations and from the consular tribunals, including the consulates of the sea, the third and most important contributor to European pre-codified commercial law was the large fairs—especially those in the Champagne region of France and in Piacenza, Italy. At this point, the reader would be well advised to re-read Braudel’s short description of the various types of fairs and transactions conducted in them.35
The uniformity of pre-codified commercial law (“merchant law”) owes a great debt to these fairs. In Huvelin’s words:
We owe to the fairs of Champagne in addition to the rapprochement between the commercial worlds of France and Germany … the encounter of the commercial interests from the entire European continent. Thanks to the fairs, groups of merchants could deal with each other governed by the same enforceable law and under the same tribunals. A central authority existed to which the merchants of all nations could demand, successfully in many cases, protection against overreaching attempts by other merchants intent on applying their local law. This is a fact whose historical importance is unsurpassed by any other in the development of the commercial law of the middle ages….36
Policing the fairs so that peace could prevail among participants and visitors was a dual function: One was to keep what Huvelin referred to as the “material” peace,37 i.e., the prevention or repression of altercations, thievery, assaults, and so on. It also entailed inspecting stores, booths, and the lodgings of merchants to ascertain compliance with fair rules and to assure the safety of the merchants’ journeys. The other policing function had to do with adjudicating the many disputes among merchants, money exchangers, lenders and their assistants. This function led to the creation of the “Peace of the Market,” a legal institution which has since been associated with European markets and fairs:
The city was thought to be a permanent market, and the truce of the market became a true peace, justice being available at all times, instead of at certain times. The original peace of the market extended beyond the market’s boundaries…. to the homes of the merchants, just as it went still further away to the doors of those coming from or going to the markets…. The 304market cross was the traditional symbol of this peace, both in the market and, later, in the city. From this special peace of both market and city it resulted that even the legitimate authorities could not interfere to make arrests for offences committed or debts contracted elsewhere. There was created a true right of asylum, just as in the early fairs…. There was a special law of the markets … [that] made no distinction between persons, in the interests of commerce, free or servile, villain or noble.38
Fairs succeeded in attracting merchants from near and far because, as put by the French legal historian Jean Brissaud:
Feudalism did not recognize freedom of trade and industry…. [In fact, it did everything within its power to erect barriers against trade by imposing all sorts of taxes, duties, tolls, tallies, etc.] Markets and fairs could not be held without a special peace which the public authority (king, seignior, church, or commune, depending on the place) assured by means of heavy penalties…. The merchants who attended obtained a safe-conduct or safeguard while they were going and returning…. They were drawn to the fairs by exemptions from transit dues (such as tolls, etc.) and from taxes collected on the occasion of sales of merchandise…. They were subject neither to escheat dues … nor to the right of marque and reprisal by virtue of which merchants were stopped and their goods seized for the offenses or debts of their fellow citizens or of their seigniors—debts or offenses of whose existence they often had no suspicion; they even enjoyed freedom from arrest, that is, their creditors could neither imprison them nor attach their goods for previous debts or offenses.39
Maintaining the peace of the fair was the function of the Guard or Guards of the Fair (Custodes Nundinarum), a term used in official documents for the first time in 1174 in connection with the great fairs of Champagne.40 Their custodial function resulted from a gradual delegation of jurisdictional powers, first by the feudal count, and later on (as when Champagne was united to France) by the king. This official power was eventually delegated to a special commercially-based jurisdiction (jurisdiction de marchands et des marches).41
Levin Goldschmidt pointed to the connection between the “Peace of the Market” and the personal nature of medieval law.42 Itinerant or traveling merchants “carried their law on their backs” and could not claim the protection of the laws of the towns and fairs they visited to do business. This created the possibility of imprisonment or death resulting from the imposition of confiscatory penalties under local law or practice 305against defaulting foreign debtors and their compatriots, regardless of the relationship between those compatriots and the defaulting debtors. Often, a debt owed by someone in the foreign trader’s home country—unrelated as that other debtor was to the foreign trader present in the host country fair—could be collected from the foreigner present at the fair by any means.
The “Peace of the Market” entitled the foreign trader to a legal treatment equal to that given to national or local merchants. This is the same equal or “national” treatment granted to merchants and their products by the post-Second World War General Agreement on Tariffs and Trade (GATT) and its progeny, such as the World Trade Organization (WTO) and regional agreements such as the North American or the Central American Free Trade Agreements (NAFTA and CAFTA, respectively).43 Thus, the principle of equal or national treatment, as derived from the medieval “Peace of the Market,” has become a cornerstone of contemporary free trade treaties, bi-national as well as multinational.
The early Fair Courts also contributed expeditious judicial or quasi-judicial remedies, especially with respect to foreclosure and execution of acknowledged commercial debts. Some of these remedies were delegated to fair guards. The judicial powers of the guards were enhanced by their designation as keepers of the fairs’ seals, an important attribution because most contracts had to be sealed by the guard of the fair. This meant that the guards had jurisdiction over contracts executed at the fair. It also meant that letters, signed by fair guards and with the fairs’ seals that requested attachment or sale and foreclosure of assets, could be executed throughout France.44 Similarly, the letters by the “captains” of Italian commercial associations doing business abroad were entitled to execution against the assets of the member of the association when located in Italy.45 A fair court decision certified under the seal of the fair was enforceable for thirty years on the goods of the debtor, though the debtor could not be imprisoned after the lapse of one year of the issuance of the decision.46
Fairs such as that of Champagne also popularized the use of commercial statutory liens, i.e., liens imposed by statute upon the goods or estate of a commercial debtor in default of his obligations. According to Huvelin, the goods of a debtor were subject to overreaching or “exorbitant” liens under the laws applicable to transactions outside the fairs.47 Yet, creditors who claimed similar remedies under fair rules had to share their liens on a pro rata basis with other creditors of the same fair.48 This rule fashioned by fair courts also embodied the principle of equality of treatment, a crucial principle in our contemporary treatment of secured creditors and creditors of an insolvent or bankrupt debtor.49 Similarly, fairs influenced an important institution of the contemporary law of insolvency and creditor-debtor arrangements of “compositions”: If a majority of an insolvent debtor’s creditors agreed on a monetary or in-kind arrangement with the debtor that released him from liability (compositio), this arrangement bound minority creditors.
The extent of the participation of merchants as judges in the early fair courts has not been fully established. Huvelin finds references to “guards of the fairs and other notables” as members of the fair courts. This would indicate the presence of at least some merchants as judges. At the same time, however, he finds many references in records of proceedings to the absenteeism of guards, and to the imposition of the requirement that guards and adjudicators be subject to a minimum time of compulsory residence in the fairs.50 As will be discussed shortly, with the decay of feudalism, fair courts became increasingly commercial tribunals.
Please recall51 that the Italian consular tribunals owed their existence to commercial associations. These associations developed a close commercial relationship in France with French merchants of the Provence region. The Societas et Communitas Mercatorum de Francia was one of the most active French associations in France’s commerce with Italy during the thirteenth century and was comprised mostly of merchants from the Montpellier, Provence region.52 The Montpellier consulate was in charge of naming the head of this association and gave him the title of “captain” (Capitaneus in Francia et in nundinis Companie).
As with the Italian commercial associations described by Professor Goldschmidt,53 the captains and consuls of the French association wielded essentially disciplinary, albeit very broad, powers over members of their association. At the same time, however, a 1278 treaty between France and a number of Italian city-states conferred the right upon Italian merchants to be judged in France in accordance with their own law by their capitanei, rectores e consules.54
While the number of captains was limited to only one for the entire (Italian or French) association, there could be multiple consuls, each possessing jurisdictional power over the community under his direction. Thus, for example, the powerful Florentine association of drapery merchants had two consuls at the fairs of Champagne.55 However, it should be emphasized that their jurisdiction depended on the nationality of the persons involved (ratione personae). If the judgment were against an Italian member of the association, the captain of the association could enforce the judgment in Italy. If it were against a local merchant, then only the fair’s guard could determine its execution under local law.56
This power vested upon the guard of the French fair completed the evolutionary process toward a commercial type of adjudication, a process lead by merchants or their representatives. For, as with the procedure in the Italian consular or commercial association courts, the procedure in the fair courts in France was “plain and without delay, without drama or long judicial carryings on” (“de plano, ac sine figura et longo 307strepitu iudici”).57 Huvelin cites the example of a request by the Consulat of Lyons that its “short robed” judges replace the “long robed” judges of the ordinary courts in fair commercial disputes. The justification offered for this request was that the procedure followed by regular judges was notoriously lengthy because these non-merchant judges “associate[d] the length of their procedure with their prestige as judges.”58
The Europeanization of this procedure was prompted by the presence in French, Italian and Spanish fairs of merchants from the entire continent and beyond. When disputes arose among them, treaties that provided for adjudication based upon the respective national laws did not apply either because such laws did not exist or, if they existed, most of the disputants were not members of national commercial associations such as those of the Italians, who had signed treaties of “national treatment.” The only available forum was that of the fairs and their courts for “dusty feet” litigants.
The following summary was insightfully penned by the late Professor Rudolf Schlesinger and his co-authors Hans W. Baade, Peter E. Herzog, and Edward M. Wise:
The procedure of these merchants’ courts was fair, rational and expeditious, in sharp contrast both to the primitive forms of trial (battle, ordeal, or wager of law … and to the delays and subtleties of canonistic procedure which in non-commercial matters dominated procedural thinking on the continent from the middle ages until the 19th century. The main characteristics of the substantive law which was created by the commercial courts, were emphasis on freedom of contract and on freedom of alienability of movable property, both tangible and intangible; abrogation of legal technicalities; and most importantly, a tendency to decide cases ex aequo et bono rather than by abstract scholastic deductions from Roman texts. No wonder, then, that commercial law was a highly successful institution.59
I would only add that a standard of desirable commercial conduct (or best commercial practices) was already required by the consular tribunals that heard disputes involving Italian commercial associations. It will be recalled that members of these associations were sworn to obey their consuls and magistrates and to behave in a scrupulous and orderly manner.
Towards the end of the sixteenth century, fair courts gradually merged with consular courts, broadening their jurisdiction and increasing their reliance on lay (merchant) judges. In doing this, the expanded fair courts became the ancestors of France’s modern commercial courts. As succinctly put by Sanborn: “Finally, the merchants succeeded in getting the jurisdiction of the fair into their own hands.”60
France’s commercial-consular courts received their official approval with the enactment of a Royal Decree of December of 1563 by Charles IX. At the instigation of Chancellor Michel de l’Hospital, this decree created the Consular or Merchant courts of Paris and Bordeaux, among other cities.61 The justification for these courts was that they were to serve “for the public good and the shortening of all suits and differences between merchants.”62 Some merchant courts had jurisdiction over only inland commercial disputes; others, like Nice’s Consulate, had jurisdiction over both inland and admiralty disputes.63 Among other powers, these courts could decree fines or imprisonment, especially with respect to the non-payment of negotiable instruments.64
In 2004, Professor Amalia D. Kessler of Stanford University Law School published a thoroughly researched and revealing description of the decisions and modus operandi of the Parisian commercial court during the eighteenth century.65 This court (which she refers to as the Merchant Court and which I will refer to as the commercial court) consisted of one judge and four consuls, all of whom had decision-making powers as members of the jurisdiction consulaire de Paris.66 “The judge and consuls were lay merchants elected on an annual basis through a procedure that, although varying slightly over time, accorded the leading Parisian guilds a prominent role.”67
The procedure of the commercial court was summary, i.e., it lasted days instead of months or years as was the case in civil and ecclesiastical courts. The commercial court resolved disputes between merchants and occasionally between merchants and non-merchants. It decided, inter alia, actions based on bills of exchange, even though one or more parties to these bills were non-merchants.68 These summary actions inspired the acciones ejecutivas (actions based on self-enforcing documents) of the Spanish and Latin American nineteenth-century commercial codes.69 Typically, these actions enabled the attachment of the defendant’s property at the time of the filing of the complaint and certain trustworthy documents as “a conservatory measure.”70 This 309characterization of the bill of exchange carried over to the list of acts of commerce in the Code de Commerce of 1807 and its progeny.71
Bankruptcy disputes were also adjudicated by these courts. However, the ample protection the eighteenth-century courts afforded to bourgeois landowners and creditors contrasted sharply with the minimal protection afforded to secured commercial creditors. It took a major social upheaval in the following century for the secured claims of these merchants to be protected by the newly-enacted bankruptcy law.
Adjudication by the commercial courts was based on the following procedural principles: (1) Judges must be competent in commercial matters; (2) Proceedings must be simple and summary; and (3) Court decisions must be enforced quickly.72 Despite the consistency of these features with the manner in which business must be conducted in active marketplaces, the French commercial court, a direct descendant of the fair courts, contributed considerably less than its ancestors to a commercial law consistent with the needs of the marketplace.
Take, for example, a subject as vital to commercial intercourse as secured credit: The eighteenth-century commercial court failed to do anything to help modernize the two devices which French law inherited from Roman law, namely, the pledge (gage) for personal property security, and the mortgage (hypothèque) for real estate lending.73 In contrast, German judges, whose law was equally (if not more) influenced by the Roman pledge (pignus), adapted instead a variant of the constitutum possessorium which enables a fiduciary transfer of the pledged assets to the creditor but allows the debtors to remain in possession of them.74
Hence, for reasons that will be discussed in detail in the following sections, French commercial law judges, unlike their counterparts in other European jurisdictions such 310as Germany and England, contributed little to the modernization of commercial law. This failure remained well into the twentieth century. Take a subject as important to France’s local and international trade as commercial letters of credit. Writing in 1957, Dean Jean Stoufflet, France’s leading authority on this subject, stated: “We shall see during the course of our study that a large number of issues that have never been decided by French judges have been the subject of decisions by United States and English judges.”75
If the guiding procedural principles of the commercial court were consistent with commercial needs, what was the obstacle in the way of a more commercially creative role? Could the court’s adjudicative policies be responsible for its shortcomings? French legal historians have recently focused on the contrasting values of the commercial court and the marketplace. Professor Silvie Humbert, for example, suggests that the values of the merchant courts conflicted with those of the marketplace and this conflict did not evolve over time, but was apparent from the creation of these courts in the sixteenth century and was present during Honore de Balzac’s time (1799–1850).76 Balzac’s novel Cesar Birotteau, about a merchant who was also a consular judge, illustrates the central character’s awareness “from the beginning [his appointment that] the notions of trade and justice [and] of merchant and judge [in him] seemed to conflict….”77
Similarly, Professor Hubert Bonin points to the conflict of an “unrestrained” version of building capitalism vs. a socially aware version of commerce.78 He refers to the guilt in France associated with doing business as a common characteristic of our country, a feeling he traces to the time of the French Revolution.79 These views find considerable support in the work of Professor Kessler.
In Professor Kessler’s article, she focuses on the religious roots of the virtuous behavior expected by commercial judges from themselves and merchants.80 Prior to commenting on the illustrative decisions she compiled, it will be useful to sketch, with the help of Kessler’s materials, key features of a typical eighteenth-century Parisian merchant.
An important segment of the eighteenth-century Parisian merchant community (and a descendant of the verlagssystem81) consisted of traders and artisans who 311produced and sold the goods they made. They received commissions to do work from, among others, merchants or intermediaries, and this work was usually to be done on a short-term basis.82 Because these merchants worked out of their own shops, they belonged to a more advanced stage in the evolution of capitalism than the “domicile” workers financed by the verlegers described in a previous chapter by Fernand Braudel.
These Parisian merchants had a small volume of business because they lacked the information necessary to predict the demand for their goods or services.83 I would also add that even if they could predict a future increased demand, they still lacked the credit necessary to fulfill that future demand. As noted earlier, the only secured credit available to attempt to satisfy such a demand was by means of the above-mentioned pledge (gage) of tangible assets or the mortgage (hypothèque) of the merchant’s place of abode, if he happened to own it. Also, the pledge required that the merchant, as debtor, transfer possession of his productive assets to his creditor, thereby losing their use.
Because the Parisian merchant lacked access to institutional commercial credit, he could only increase his sales by extending (and receiving) credit on a personal “book debt” basis.84 Book debt was an informal, usually oral, but ex post facte form of extending credit. It was not an extension of credit based upon future assets which would have resulted from future, albeit highly likely, transactions. But, was part of an ongoing and often longstanding contractual relationship wherein the debtor would pay in installments, while purchasing additional goods or services from his creditor and, often, vice versa. Only at the end of their credit relationship was there a final settlement where the creditor was paid in full.85
As one reflects on this description of book debt, it is difficult not to conclude that whoever extended this credit had to charge interest for it. Had he not recovered his transactional and financial costs, he would not last as an artisan-trader. And here, in my opinion, is where the most damaging conflict between commercial practice and prevailing Christian and commercial court morality existed.
French eighteenth-century church doctrine adhered to the scholastic definition of usury as any amount of interest charged for the use of the principal lent.86 This doctrine considered any interest charged by the Parisian merchant usurious and, as Professor Kessler acknowledges, usury was “vociferously decried throughout the eighteenth-century.”87 Accordingly, (and this is my assertion, not Professor Kessler’s) a double standard of commercial behavior had to exist: One standard for official or public consumption (including that of the court and the church), and the other for the actual business transaction. And again, in my opinion, this double standard undermined 312attempts to modernize the law of commercial transactions; it prevented the facilitation of the extension of commercial credit.
The eighteenth-century Parisian commercial court regarded itself as “a bastion of Christian virtue, actively seeking to promote charitable love and to restrain unbridled self-interest.”88 In contrast to other royal, seigniorial and city courts, the sixty-some merchant courts situated throughout Old Regime France provided justice at no cost. The litigants who came before these courts were not required to pay any fees and, since they were (at least in theory) to represent themselves, they did not have to hire lawyers. Likewise, the lay merchants who served as the courts’ judges worked for free:
[T]he fact that litigants argued without the assistance of lawyers and merchant-court judges received no emolument was crucial to contemporary merchants because it ensured that justice would not be for sale—that it would be … shielded from the base commercialization to which the “normal” courts were deemed so susceptible…. In the early-modern world, and especially in Catholic France, the age-old Christian belief that the pursuit of profit is sinful continued to exert significant force, and commerce was therefore viewed by many with suspicion and distaste.89
Lest the reader dismiss the above description of the court’s Christian morality as toothless, Professor Kessler notes the presence of an important enforcer:
Priests served two critical functions in the merchant court—one clerical, and the other judicial. In their strictly clerical role, priests were responsible for overseeing the religious life of the merchant court and of the community it served. The court itself was housed in a church and contained an internal chapel, built in 1630. In this chapel, Mass was said every Monday, Wednesday and Friday morning, which were the days that the court sat to hear new cases. Generally, the judge and consuls attended this Mass….90
According to the facts provided by a merchant named Bedos,91 who also sat as presiding judge of the commercial court of Paris when this case was heard, the plaintiff was a destitute young woman who demanded payment of the 10,000 livres promised in a bill of exchange of which she was the payee. It was drawn by her lover against a third party (drawee) who presumably owed him the amount of the bill. The drawee refused to pay and the plaintiff sued her lover as the drawer of the bill. She alleged that she had provided him cash in exchange for the bill, that the place of the purchase of the bill of exchange and its payment were different, and that the bill had been properly 313protested in strict compliance with the requirements of the Commercial Ordinance of 1673.92
The judge acknowledged compliance with the Ordinance, but expressed his surprise at the color of the bill’s ink.93 Then the plaintiff explained that it was not cash but her virtue that she had surrendered after the defendant promised her that she would receive the payment of the ten thousand livres.94 The red ink was her boyfriend’s blood which he obtained by sticking a pin into his vein.95 Either before or after giving this explanation, the plaintiff fainted.96 The court did not enforce payment, nor did it deny enforcement as an ordinary court might have done because the “cause” underlying the transaction (prostitution) was immoral.97 In Professor Kessler’s narrative:
Precisely because the transaction was immoral, the merchant court did not wash its hands of it, but instead tried to save the parties by actively promoting virtue, or Christian love. The court’s motto, as Bedos explained, was that “humanity is the primary law.” Thus … the judge turned to the defendant and said, “Here, sir, is where you have led her, she sinned out of weakness … tell her that you will marry her, her restored honor will call her back to life.” Properly chastened, the defendant agreed that he ought to marry the plaintiff and promised God that he would make her happy. At this point, the plaintiff immediately revived and recovered sufficiently to ask the court to keep the bill until the day following the marriage, upon which it could be returned to her then husband. Thus assisted by the merchant court in their efforts to remain virtuous, the litigants departed to live happily ever after: “These poor children withdrew satisfied.”98
The commercial court’s desire to decree a remedy consistent with Christian virtue was quite apparent. Yet, which version of Christian virtue was the one applied? Clearly, the court assumed that its remedy of an imposed marriage was more virtuous than a compensation for the damages inflicted by the defendant’s breach of promise of payment of the amount specified in the bill of exchange. What facts, if any, warranted this assumption? Why did the court not discuss the possibility of imposing a jail sentence on the defendant for his breach of a promise contained in a negotiable instrument as was assumed by Napoleon himself during the drafting of the Code de Commerce?99
As someone who is unfamiliar with the Christian theology on punishment for a breach of promise in a negotiable instrument, I wonder whether Christian theology (if it could speak with one voice) would have imposed the remedy of a marriage that could have easily resulted in a lifetime of unhappiness for the plaintiff. How happy would the plaintiff have been if, having been the victim of a breached promise, she married 314someone unwilling or unable to keep his future promises? Further, is it consistent with Christian morality not to consult the victim of reprehensible acts about her willingness to marry the person who committed those acts? On the other hand, what if the true story were not one of rape or malicious seduction, but of blackmail? This blackmail would take the form of plaintiff’s threat of an accusation that the defendant criminally breached his promise to pay a negotiable instrument. The threat was serious because defaulting on such an instrument could, under some circumstances, bring about imprisonment. As the reader will soon discover, a highly influential French legislator, aware of this decision, apparently read the plaintiff’s complaint to the commercial court precisely as an attempt to extort money from the defendant.
Judge Bedos may have rejected the remedy of damages because the underlying obligation could have been nullified by its immoral cause of payment for the services of prostitution, as regularly done by civil courts.100 This possibility was alluded to by Professor Kessler when, in the above quote, she praised Judge Bedos’s decision and said: “Precisely because the transaction was immoral, the merchant court did not wash its hands of it, but instead tried to save the parties by actively promoting virtue, or Christian love.”101
Yet, was a rule applicable to, say, the leasing of residential premises for prostitution purposes equally applicable to a promise of payment in a bill of exchange that did not mention the cause for which it was issued? After all, this was a promise which was supposed to be independent of underlying transaction causes, at least as to certain third parties. Thus, the applicability of the “independence of the cause” rule could depend upon, among other considerations, the identity of the party holding the instrument (a third party in good faith, a holder in due course, or a party to the original transaction) or the party alleging the defense of an immoral or illegal cause.102
Professor Kessler herself acknowledges that a bill of exchange is subject to different rules with respect to underlying causes, particularly when the bill is in the hands of someone whom the law deems a third party in good faith or (in Anglo-American legal parlance) a holder in due course.103 Granted, during Judge Bedos’s time there was little if any law on whether or when a payee of a bill of exchange, such as the plaintiff in our case, could become a third party holder in good faith. Moreover, a civil law court may have found it counterintuitive to treat the payee of the bill as a third party or holder in due course when she was in fact the first and only holder of the bill. Yet, by the same token, could a defendant-drawer of the bill object to plaintiff’s status as a third party or holder in due course when he himself raised the defense of an immoral cause? Wasn’t he, as the drawer of the bill and instigator of the immoral cause, in pare delictu with the payee?
Be that as it may, a commercial law judge, especially one who, like his ancestors in the fairs, was supposed to do what was “right and equitable,” could have fashioned a remedy to protect an exploited payee against an exploiting and overreaching drawer (if that is what the parties were). Judge Bedos would argue that, having in mind the need to act in accordance with Christian virtue, his remedy was the most consistent with the France of his time. In it, destitute young women such as the plaintiff had few good mating choices, especially after having been seduced by a promise of a monetary reward. Thus, her marriage to a person of means assured her and her future children of continued support. Yet, are commercial courts the best equipped entities to decide on 315the allocation of rights and duties regarding matrimonial companionship, and family support choices for destitute women, or for prostitutes?
Finally, Judge Bedos leaves the impression that the plaintiff, a destitute young woman and prostitute, was in full command of the pleading requirements under Colbert’s Ordinance of 1673. This would have included inserting two different addresses or locations, one for the place of issuance and acceptance or payment of the bill of exchange and the other for the delivery of the foreign currency, a requirement known among experienced merchants and bills of exchange lawyers as the distantia loci.104 Was this assumption by Judge Bedos realistic? Or was it a “literary license” to dramatize the lay and humanistic nature of his court’s justice and the Christian virtue of a court that dealt sympathetically with such destitute members of society?
Judge Bedos’ “typical day” in the commercial court is intended to illustrate how charitable love for fellow human beings, rather than commercial rules or practices, was the basis of the commercial court’s decisions. According to him, he awakened in the middle of the night so that he could conduct a business that was designed not so much for his own profit as it was to help others. Hence, he instructed his cashier to sell “at ten percent below the legal rate.”105
In an equally typical day, a merchant petitioned the court to allow him to suspend his payments because much of his inventory, while headed for France, was seized by pirates. The chief judge granted the suspension and told his colleagues that charity required that all of them pool their resources so that they could help their colleague make up his loss of 240,000 livres.106
After the suspension hearing, the judge urged a procedure for such charitable undertakings to ensure that all needy and virtuous merchants would receive equal assistance. Pledges were made by the judges to help set up a fund for such unlucky merchants. Next, the judges went to the cathedral to pray for the successful childbirth of the queen and to renew their pledges of contributions to the poor in the hospitals, to 316the marriage of twenty-four girls with respectable dowries, and to the enablement of poor children as workers in agriculture, shepherding, and the trades (Arts et Métiers).107
The commercial court often deputized parish priests as mediators and arbiters.108 In the latter capacity, priests relied for their fact-finding on their knowledge of the moral character of the parties and not as much upon a neutral collection of the actual facts.109 It was not unusual for a priest to certify that a particular parishioner was “a person who leads a good life and has good morals and is known by everyone as such and that, according to my own knowledge and that of the inhabitants of my parish where she was born and has always lived, she has never failed to pay a debt….”110
Such a finding would often be decisive, as was apparent in a number of disputes. In one, a business agent claimed underpayment of his services. After listing the virtues and moral flaws of the parties, the arbiter recommended that the virtuous defendants be awarded damages and that the plaintiff—whom he described as “crafty … and whom it is impossible to approach without … producing a strong shock”—be made to pay those damages.111 Similarly, an arbiter-priest recommended that as between two disputant cousins, one’s misery “obliterates his debt and it is not to be supposed that [another party], who is more comfortable, would be capable of wanting to be paid … by his cousin who is less comfortable than he….”112
The just price of goods or services was routinely appraised by the arbiter-priest. For example, a seller of wine claimed that he was underpaid by the owner of a restaurant. After taking into account that the seller had maintained good records of his sales and that the price claimed “seemed reasonable” in the eyes of the arbiter-priest, the commercial court ordered its payment.113 The same type of subjective appraisal applied to the reasonableness of the amount charged for the discount of a bill of exchange.114 As noted by Professor Kessler, the basis of such a determination of reasonableness or of absence of lesion was not clear.115 I should add that I did not find in her survey of cases arbitral findings supported by commercial customs and practices, plentiful though they were throughout France.116
Professor Kessler concludes that the commercial court’s Christian values contributed to the “long-term relationships of trust … made possible by the institutional context in which most merchant-artisans lived and worked….”117 In other words, by behaving as virtuous and charitable Christian merchants and by belonging to the same Christian organizations as well as being subject to the same system of commercial justice, the Parisian artisan merchants gained each other’s trust, vital business information, and credit. This Christian and virtuous way of doing business and of deciding commercial cases:
lowered transaction costs sufficiently to make commerce in the relatively undeveloped economy of the Old Regime profitable. Furthermore, because the merchant court could tap into the preexisting network of communal institutions to which it was integrally linked, it was able cheaply and effectively to monitor and regulate behavior by enforcing the community’s norms.118
While I find Professor Kessler’s scholarship and descriptive skills admirable, I disagree with her conclusions. I agree that belonging to the same religious organizations should lead to greater trust among artisan-merchants. I also agree that the system of book debt may not have been feasible without the same religious bonds ensuring a higher likelihood of repayment. Yet, charity as a form of doing business and of judicial decision-making suffers from inherently crippling limitations.
When charity displaces profit-making, it soon ceases to be a viable business, as outlays and expenses eventually do away with the business’s assets. A commonly heard and highly lauded justification for charity as a form of business nowadays is that profit-making is nothing more than selfishness necessarily at the expense of the common good.119 This is a fallacy that often contributes to lively after-dinner conversations and even to dramatic theater such as in Berthold Brecht’s “The Good Soul of Szechwan.” In it, the good soul poses the “dilemma”: If I am good to myself, am I not necessarily bad to others and vice versa?
The fallacy of this dilemma was exposed during the first centuries of the Common Era in the Talmudic saying: “There is good in evil, as there is evil in good.”120 This 318Rabbinical view was echoed in Bernard Mandeville’s “Fable of the Bees” and in Adam Smith’s “Invisible Hand” as well as in each of the countless commercial contracts that populate the world’s marketplaces and fuel its prosperity. As proven by the evolution of capitalism, selfish profit-making when properly channeled can lead to the common good. As also proven by E. O. Wilson and other socio-biologists, the human species belongs to a select group that has managed to combine selfishness with altruism in a manner that results in cooperation and economic development.121
In contrast, charity, for its own sake or without expecting something in return, assists an individual debtor or business person at a given moment, but seldom leads to a community’s economic development. If this form of charity were required of merchants and charity is all they provided, it would make the welfare of the needy depend upon the generosity of the benefactors. The more charity is given and the more the needy depend upon the benefactors for their survival, the higher the likelihood that the needy remain will remain needy perennially.
The eighteenth-century French commercial court’s version of charity, when practiced virtuously (and not merely to prevent the appearance of usury or of sinful profit-making), was a charity for its own sake. To contribute to personal as well as to a community’s economic development, charity would have had to empower the needy to help themselves. For this empowerment to spread, it would have to become institutionalized or incorporated into positive or customary law norms.
Accordingly, the court or legal decision-maker would have to determine, inter alia: Which empowering conduct could become the norm for a given transaction or group of transactions? Who would have to contribute to it, how much and for how long? Would there be security or verification mechanisms attached to the giving and to the return? Would there be an educational component attached to it, for example, on how to keep good accounting books or how best to market one’s goods or services?
Thus, the normative charity focuses not only on the beneficence of an act, but on its empowering effects, meaning the willingness of some to give up something for the sake of others and the effects of the giving upon a class of merchants and eventually upon society. To illustrate, consider the commercial court decision that suspended the debts of the merchant who lost his inventory to pirates and followed it up with a collection of the amount lost among the judges. What if the decision would have been to suspend those debts in a manner that enabled the insolvent merchant as well as others in his same position to rehabilitate themselves?
This rehabilitation may have required a temporary forgiveness of a debt, but also, and perhaps more importantly, it would provide access to new credit either from pre-existing creditors or new lenders. Yet, such new credit would not be available unless a realistic and protected source of repayment was assured. Quite possibly a special priority may have to be granted to the new creditors. Clearly, the process of enabling debtor rehabilitation would have to be a much more reflective and well-planned process of decision-making than the instinctive “here and now” charity of Judge Bedos and his colleagues.
It is worth noting that normative charity is not the exclusive domain of enlightened legislatures and commercial courts; it is usually found in viable marketplaces, especially when the transaction or business sector in question has been interrupted by a catastrophe. In such cases, for the transaction or business sector to remain viable, it must regain the trust of regular participants in the marketplace.122 This was the case of the Mediterranean Jewish traveling merchants whose duty it was to “pick up their deceased colleagues’ bundle” and upon doing so, sell their colleague’s goods and deliver the proceeds at no charge to the deceased’s family. It was also the case of the London goldsmiths who repaid their depositors for the loss of their jewels and other deposits suffered as a result of the London fires—despite the availability of the excuse of force majeur.123 It was also the case of a few solvent New York bankers paying off the debts of their failing colleagues and enabling some of them to continue in business, all of this without charging for their rescue.124
These or similar acts became the norms for certain trades, professions or sectors, in some instances as positive law and in others as customary law or as “gentlemen’s agreements.” Clearly, this normative charity, in contrast with the charity for its own sake, assumes that the benefactors will get something in return (whether greater market stability or a larger volume of future business, etc.) and thus, in some measure, is a selfish act. Yet, it usually benefits not just a handful, but an entire class of merchants, thus contributing to the health of the marketplace and the community’s economic development.
When the commercial court required what it regarded as commercially virtuous behavior, it discouraged and delegitimized “unchristian” profit-seeking. Such an attitude influenced the commercial court’s determinations of a just price, whether of commodities, services or money (as in the case involving the discount rate for a bill of exchange).
The commercial courts and their arbiters’ determinations of a just price were not based upon Saint Thomas Aquinas’ “secundum aestimationem fori” (in accordance with the estimation of the market) as discussed in Chapter 5, but upon subjective, if not capricious, criteria. In doing this, they added uncertainty to doing business, particularly for those who may have been interested in extending institutional credit at reasonable rates of interest to merchants or consumers.
When coupled with the prohibition of usury (defined as the charge of any interest for the principal lent), the eighteenth-century commercial court’s decision-making discouraged the creation of both credit and capital markets. As concluded earlier in this book by an English scholar: “Under the labyrinthine edifice of Scholastic casuistry … competition withered, the flow of credit congealed, and interest rates soared.”125 As similarly concluded by Raymond de Roover, despite its intention to protect borrower-debtors, the prohibition of usury had the opposite effect.126 The cost of the many subterfuges to evade the usury prohibition was ultimately borne by the same borrowers it was meant to protect.
The cost of evading the usury prohibition, inseparably linked as it was with the commercial court’s determinations of just prices, undermined the benefits Professor Kessler attributes to the long-term relationships and to the book debt system. Transactional costs and risks had to increase and competition had to decline as the scarcity of working capital and credit retarded economic growth.
In the final analysis, then, the failure of the charitable rationale as a law-making force by the commercial court described by Professor Kessler was its subjectivity, unpredictability, and resultant inability to become institutionalized. In contrast, predictability was and is a key feature of the type of decision-making based upon observed customs and practices. The certainty of observed custom and practice is earned objectively and only after a laborious process of trial and error. It is, therefore, the certainty that only a “well-trodden practice path” can provide.127
From the standpoint of the development of commercial law, the commercial court’s failure to rely on observed and sound commercial customs and practices as persuasive, if not binding, sources of law was, in my opinion, its most serious shortcoming. And, while Professor Kessler warns that Christian norms were not the only basis for commercial court jurisprudence, she adds that “though not every case was resolved by applying norms of Christian virtue, such norms were … the driving force behind many of the court’s decisions and procedures.”128
As described by Arnaud de la Cotardiére, Patricia Peterson & Delphine Pujos, three lawyers at Linklaters LLP, a major international law firm with a substantial French litigation practice:
The [French] Commercial Courts [Tribunaux de commerce] are courts of first instance with jurisdiction over:
• Disputes in connection with undertakings between business persons (commerçants) such as traders, between credit insitutions or between business persons and credit institutions.
• Disputes involving commercial corporate entitites.
• Disputes in connection with commercial matters, including a wide variety of instruments such as bills of exchange, promissory notes, security or transactions relating to businesses as a going concern (fonds de commerce).129
Many of the judges who sit in commercial courts are volunteer businessmen who are elected by their peers and many hold their judicial position on a part time basis. Thus a good number of these judges, especially in smaller cities, are not legally trained.130 The commercial court is led by a presiding judge.131 Although judges generally sit in panels of three, usually a reporting judge (juge rapporteur) is designated and parties often appear in front of this judge instead of the entire three judge panel.132
Jonathon Polier, an international lawyer who practices in Paris and appears before the commercial court, describes the procedural steps in a common type of claim that involves the collection of a contractual debt.133 It starts out with the plaintiff sending a registered letter addressed to the defendant in which he demands the payment of his debt or the defendant’s carrying out the corrective measures to pay such a debt. This procedure is known as placing the defendant in default or “mise en demeure.”134 One of the functions of this date is to start the interest payment clock running.135
If payment does not occur within the time stipulated in the letter, a summons and complaint form (“assignation”) will be prepared by an advocate and will be served by a 322bailiff (“huissier”) to the defendant.136 It states briefly the relevant facts and the applicable law by reference to a code provision.137
If the defendant fails to pay:
[L]egal counsel to the parties will commence a monthly cycle of Tribunal mandated exchanges of pleadings and supporting document wherein they alternately refine the alleged facts and issues of law. These are called “conclusions” and “conclusions en réponse” …. If either Advocate wishes for an expert to be designated by the tribunal, the Advocate files a motion (“demande d’expertise”) with the TDC. A hearing is scheduled and the tribunal decides to grant or deny the motion. If an expert is appointed, the expertising process becomes a mini proceding where the expert formally notifies the parties of the steps he intends to take (e.g., an inspection of goods or records) and the parties and the Advocates may generally accompany the expert when he effects his inspection, if it is appropriate, as in the case of issues of non-conforming goods.138
Polier notes that in rare cases, it may be possible to obtain an interlocutory order to compel the opposing side to produce a precise document or object. But he warns that ordinarily, the French commercial court is “very reluctant to authorize such production and American-type pre-trial ‘fishing expedition’ discovery procedures are absolutely out of the question.”139
Cotardiére et al. provide a similar description but emphasize that the complaint not only sets out the factual and legal arguments in support of the claimant’s claim, but it must also submit the list of documents on which plaintiff relies as supporting evidence.140 They also emphasize that:
Documentary evidence is given greater weight in the French system than the evidence of witnesses, either in written or oral form. In practice, litigants argue their cases on the basis of documentary evidence and tend to resort to witness statements or oral evidence where there is no other choice. Oral testimony is very rare in civil and commercial cases in France.141
As will be discussed in a later chapter on comparative trial procedures,142 one of the problems with this type of complaint is that it confines the facts as well as the legal issues to those that were plead in it and were supported by the documentary evidence it lists in final fashion; facts and issues that may lead to a larger recovery than originally plead will suffer from the fatal procedural sin of plus peititio (a larger award than requested or supported). In addition, the inability to rely on the examination and cross-examination of witnesses (including the parties as well as experts) prevents finding what is often the most reliable version of the parties’ contractual intent—the 323parties’ course of contractual performance, prior courses of dealings and the usages of their trades.143
It is precisely this realization that has led important, emerging commercial nations in Latin America, such as Mexico, Chile and Colombia, to adopt statutory law on “oral trials.” These trials open up commercial adjudication to the examination and cross-examination of witnesses and to the reception of the most relevant facts even if obtained at a stage later than the filing of a commercial complaint.144
It is my opinion that unless France’s commercial court and its progeny adopt the key features of the oral trials, it will continue to be an anachronistic institution with little or no chance to contribute to a nation’s or region’s economic development. Although concluded in 1976, the assessment of the future of French commercial courts by Professor Denis Tallon of the University of Law, Economics and Social Sciences in Paris is still valid in many respects:
The maintenance of the commercial courts is a matter of considerable dispute in France. They may have advantages by virtue of the better knowledge that the judges have of commercial practices. But because of their very wide jurisdiction, more and more matters are heard by them which call for a thorough legal training, e.g. in insolvency and company law. For this reason there is a call at least to restrict their jurisdiction.145
To this assessment, I would add that as presently constituted, the French commercial court not only lacks requisite legal knowledge, but also, and at least as importantly, the factual knowledge of the many transactions in which the businessmen judges are not regular participants. The following interview illustrates how a high official of the commercial court views its present and future functions:
Interview with President Perrette Rey on October 1, 2007 on the Reform of Commercial Courts146
The interview took place on the bicentennial of the Code de Commerce. The interviewers prefaced their questions with a reference to the fact that France is preparing to modernize its approach to commercial law, including the reform of the judicial system, a partial decriminalization of business law, and more effective measures to prevent bankruptcies. According to the interviewers, these were the three pillars of the platform presented by Nicolas Sarkozy on September 6, 2007. Speaking in the name of the French Conference of Lay Judges, Perrette Rey, President of the Paris Commercial Court, gave her views on these developments.147
Mme. Perrette Rey was born on August 27, 1942 and has been President of the Paris Commercial Court since 2004. As President of the French Conference of Lay Judges, she represents the country’s 185 commercial courts. A former company director, she has been actively involved in commercial law issues for over fifteen years.
Selected Questions and Answers:
Commerce International (hereinafter C.I.): Legal proceedings involving lay lawyers are generally considered as less expensive, quicker, and closer to the sensibility of businesses than their alternatives. Have France’s commercial courts been “rehabilitated” after the crisis they recently went through?
Perrette Rey (hereinafter P.R.): France’s 3,100 commercial court judges have learned the lessons of those difficult years. Entrepreneurs and company directors, both elected and voluntary, understood that they needed to make continual progress in order to meet the expectations of the businesses that use their services. It seems to me that it was appropriate that the President, Nicolas Sarkozy, should highlight the efforts made by the Commercial Courts to modernize.
C.I.: Economic and legal competencies, professional ethics, and efficiency are the qualities that you demand from a good lay judge. How can these qualities be developed?
P.R.: Since 2003, the French National Magistrates’ College has provided initial training for 300 to 350 lay judges every year. And it dispenses continued training courses to all of France’s lay judges. Since 2005, the National Council of Commercial Courts, presided over by the Minister of Justice, half of whose members are lay judges and the other half senior magistrates, directors of the Chancery, and qualified personalities, has been diligent in its efforts to improve professional competencies and the working methods of lay judges by, for example, concretely defining their duties and obligations in terms of the way they behave and carry out their duties as judges in order to avoid conflicts of interest.
C.I.: How has the upcoming reform to the judicial system been greeted by the professionals of the lay justice sector?
P.R.: They regard it as the pre-condition for greater efficiency. Commercial law is becoming increasingly complex and voluminous. A good judge of commercial disputes is not necessarily a good bankruptcy judge. Specialization and, consequently, an improvement in the decision-making process, are only possible in jurisdictions over a certain size. Moreover, in 2004, the General Conference of Commercial Courts started to work on a blueprint for reform, which it finalized in 2004 before the subject came under the spotlight. The blueprint is based on a precise and quantified analysis of the activities of all Commercial Courts in regard to the needs of businesses in the area they cover. It recommends not only grouping courts together but also transferring the commercial divisions of the Tribunaux de Grande Instance (or ‘Courts of First Instance’) to Commercial Courts.
C.I.: What about the other announcements: reinforcing the role of the Procurator in the Commercial Courts, developing preventive measures in the field of collective procedures, and partially decriminalizing business law?
P.R.: These reforms should be welcomed…. In regard to the criminalization of business life, it is not, by any means, the most appropriate response in most cases. It is often more effective to levy a fine….
C.I.: Is the harmonization of European commercial law a priority?
P.R.: Before harmonizing commercial law, we should get to know one another, familiarize ourselves with each other’s legal systems, our specificities in terms of 325structure, procedure, and execution. The elaboration of a European jus oeconomicus is dependent, first and foremost, on working judges participating in dialogue with a view to fostering mutual understanding. As an adjunct to the celebrations of the bicentenary of the French Code of Commerce, we have set up a group including judges and representatives from the French, Belgian and, in the near future, British public prosecutor’s offices, as well as business people from our respective countries, to exchange ideas and discuss ways of harmonizing European commercial law. The approach is modest and pragmatic. That is probably what makes it so effective.
C.I.: Will the fact that certain business milieux favor arbitration encourage harmonization?
P.R.: Due to the costs involved in the arbitration process, it is mostly favored by large companies. Compared to the one million judgments handed down annually by the French Commercial Courts, the number of arbitrations is infinitesimal. It seems to me that those who use the approach are more concerned with choosing the right judge-arbitrator than with serving the cause of European harmonization.
Please note the absence of references to usages of trade or to the standard and best practices of the various commercial professions. Still, what could have happened to the eighteenth-century “Bastion of Virtue” that made it necessary for the present-day court to get closer to the “sensibility of businesses”? Surely, contemporary French businesses, large, medium and small, are not known for their disdain for profit-making. Nor are the French banks and investment companies known for their reticence to charge interest or hefty commissions. What role, if any, did the enactment of the Code de Commerce of 1807 play in this radical change of attitude and value system? Are there remnants of the “Bastion of Virtue” value system in today’s commercial adjudication? If not, why would the interviewers ask Mme. Rey about the need to “concretely define their duties and obligations in terms of the way they behave and carry out their duties as judges in order to avoid conflicts of interest?”
Does the volume of commercial decisions handed down annually by the present-day commercial courts in France (approximately one million decisions according to Mme. Rey) sound reasonable for a country whose population is approximately sixty million? If so, how would the volume of France’s commercial litigation compare to that of the United States?
In response to a question on the harmonization of European commercial law, Mme. Rey says: “Before harmonizing commercial law, we should get to know one another, familiarize ourselves with each other’s legal systems, our specificities in terms of structure, procedure and execution.” In light of the experience with the eighteenth-century commercial court and its archetypal merchant and judge, what would you say is missing from the above list of items requiring “familiarization”?
How about the usages of the various trades and sectors whose international compilations of standard and form contracts has been undertaken for many years by entities such as the International Chamber of Commerce (ICC), the International Swaps and Derivatives Association (ISDA), or the Grain and Feed Trade Association (GAFTA)? Are they being relied upon by the parties and the judges of the commercial court?
If not, what are the reasons and consequences of their disregard? While I have read some decisions by the commercial court that apply the Uniform Customs and Practices for Documentary Credits (UCP 500 and 600) and others that attempt to 326interpret the GAFTA Master Agreement, decisions involving the standard practices of French associations of merchants and their “auxiliaries” do not seem common. If that is actually the case—and it is not caused by the limitations of my own research—why not? Clearly, a body of case law based upon a healthy body of local customary law is only likely to heighten the influence of the commercial court. A disregard of local customary law can only make that court’s adjudication less influential.
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1 Levin Goldschmidt, Universalgeschichte des Handelsrechts 117–28 (1891) [hereinafter Goldschmidt, Handelsrechts]. See also Levin Goldschmidt, Storia Universale del Diritti Commerciale 23 (V. Pourchain & A. Torino trans., 1913) (an Italian translation).
2 Paul Huvelin, Essai Historique sur le Droit des Marchés et Des Foires (1897).
3 C. Com. (Fr.) art. 1 (1807) (“Sont commerçants ceux qui exercent des actes de commerce, et en font leur profession habituelle.”) (“Merchants are those who practice acts of commerce as part of their habitual profession.”) (author’s translation).
The detailed description of the acts of commerce is found in Articles 18 and 19 of the section devoted to the competence and jurisdiction of commercial courts.
4 See Oliver Wendall Holmes, Jr., The Common Law 1 (1881).
5 See infra § 9:2(E)(3)(c).
6 See infra § 10:2.
7 See, e.g., Código de Comercio [CCo.] [Commercial Code] art. 385, as amended, Diario Oficial de la Federación [DO] 13 de Diciember de 1889 (Mex.) (“Commercial sales shall not be rescinded because of lesion….”) (author’s translation). On the action or defense of lesion, see infra ch. 27. But see C. Civ. (Fr.) art. 1674 (“If a seller was harmed by selling real property for less than seven twelves of its price, he has the right to rescind the contract even though he waived scuch a claim in the sale agreement….”).
8 See supra § 6:1.
9 When I first visited a still largely medieval Siena, aside from being struck by the beauty of its city square, I was impressed by the imposing city hall building whose constituents and officials were mostly merchants. Its size and solidity clearly attempted to match, in importance and lay power, the nearby cathedral.
10 See Frederic Rockwell Sanborn, Origins of the Early English Maritime and Commercial Law 127 (1930).
11 Goldschmidt, supra note 1, at 117–28.
12 Id. at 117–28.
13 Sanborn, supra note 10, at 172; Huvelin, supra note 2, at 211–13.
14 Sanborn, supra note 10, at 173.
15 Goldschmidt, supra note 1, at 128–29.
16 Id. at 132–33.
17 Id. at 135.
18 Id. at 133.
19 Examples include the Breve Consulum Mercatorum (Pisa), the Capitolare dei Consoli di Mercanti (Venezia), or the Capitolare dei Sopraconsoli (Verona). Id. at 135.
20 Id. at 136.
21 Id. at 137.
22 Id.
23 Id. at 138.
24 Id. at 138–39.
25 Id. at 139.
26 Id. at 142.
27 Id. at 139–40. See also Huvelin, supra note 2, at 417–18.
28 Goldschmidt, supra note 1, at 141.
29 Id. at 142.
30 Id. at 143.
31 See generally Stanley S. Jados, Consulate of the Sea and Related Documents (Aug. 1974), available at http://libro.uca.edu/consulate/preface.htm (discussing the Consolato del Mare).
32 See generally Consolato del Mare (Guiseppe Lorenzo Maria Casaregis ed., 1720). For example, Hannis Taylor, a United States lawyer, diplomat and writer of controversial legal treatises who was appointed Minister or Ambassador to Spain in 1893 during President Grover Cleveland’s administration, stated, in his review of important Spanish legal compilations, that one of the most important of these publications was the Consolato del Mare, which he said was “probably compiled not later than the fourteenth century by order of the magistrates of Barcelona, the chief seat of the maritime tribunals of Catalonia. In it is contained the earliest collections of the laws and customs of the sea in time of war.” Hannis Taylor, The Science of Jurisprudence 162–63 (1908) (emphasis added). In contrast, according to Stanley S. Jados, the Consolato, to which he refers as the “Consulate of the Sea,” was published in a Latin Romance dialect. Jados, supra note 31. Its text was inspired by maritime laws traceable to the Phoenicians and the Greeks; its scope far exceeded the laws and customs of navigation in times of war. Id. Phoenician maritime law statutes adopted by the Isle of Rhodes and known (unjustifiably according to Mr. Jados) as the Rhodian laws contributed to the contents of the Consolato as did some Northern European laws. Id. Among the other antecedents quoted by Mr. Jados were Customs of the City of Amalfitina, “written and proclaimed in the year of Our Lord 1010. A second codification was published in 1063 in the city of Trani. In 1509, an edited copy of the Ordinances of Trani of 1063 was incorporated into the statutes of the city of Fermo.” Id. Baltic and North Seas cities such as Riga, Wisby, Hamburg, Lübeck and other cities of the Hanseatic League adopted some of these laws as early as the ninth century and published them:
[I]n the thirteenth and fourteenth centuries under the auspices of the Hanseatic League, under the title Waterrecht, following a conference of League members in 1407. These compilations were usually referred to as the Laws of Wisby. In the thirteenth century, the Laws of Oléron were promulgated by Louis IX, (1226–1270) king of France. The British Black Book of the Admiralty also dates its beginning to the middle thirteenth century. All these compilations contributed significantly to the later formation of internationally acceptable maritime law.
Id.
33 Jados, supra note 31, at 7.
34 Id.
35 See supra § 6:2(F)(4).
36 Huvelin, supra note 2, at 258.
37 Id. at 392.
38 Sanborn, supra note 10, at 173 (citations omitted). See also Goldschmidt, supra note 1, at 129–30.
39 Jean Brissaud, A History of French Public Law 236, 245–46 (James W. Garner ed., Little, Brown, and Co. 1915) (emphasis added) (citations omitted).
40 Huvelin, supra note 2, at 390–91.
41 Id. Fair guards were appointed for a period of one year, but later they held office for longer periods, though they could be removed from office for misconduct. Id. The number of guards per fair fluctuated yearly from one to three per fair, although generally they were two in number. Id. Usually, they were feudal knights (chevaliers) or merchants (bourgeois). Id.
42 Goldschmidt, supra note 1, at 31–32.
43 Kozolchyk, Grand and Small Scheme, at 137.
44 Huvelin, supra note 2, at 479.
45 See infra § 9:2(C).
46 Huvelin, supra note 2, at 475.
47 Id. at 481.
48 Id. at 483.
49 Id. at 489.
50 Id. at 394.
51 See supra § 9:1(A) & (B).
52 Huvelin, supra note 2, at 398–99.
53 See supra § 9:1(A) & (B).
54 Huvelin, supra note 2, at 399.
55 Id. at 400.
56 Id. at 401.
57 Id. at 418.
58 Id. at 419.
59 Rudolf B. Schlesinger, et al., Comparative Law 278 (6th ed. 1998) (citations omitted).
60 Sanborn, supra note 10, at 171.
61 See Michel Bochaca, The Courts of Bordeaux Competent on Matters of Merchandise before the Creation of the Consular Court (from the mid-15th to mid-16th Century), 17 Revue Histoire de la Justice (2007), abstract available at http://www.afhj.fr/publications/RHJ17_abstracts.pdf. See also Jean Hilaire, Introduction: The Commercial Jurisdiction from a Historical Viewpoint, 17 Revue Histoire de la Justice (2007), abstract available at http://www.afhj.fr/publications/RHJ17_abstracts.pdf.
62 IX The Cambridge Modern History 176 (A. W. Ward, G. W. Prothero & Stanley Leathes eds., 1907) [hereinafter Cambridge History].
63 Id. at 176–77.
64 See infra ch. 10 on the drafting of the Code de Commerce.
65 Amalia D. Kessler, Enforcing Virtue: Social Norms and Self-Interest in an Eighteenth-Century Merchant Court, 22 Law & Hist. Rev. 71 (2004) [hereinafter Kessler, Enforcing Virtue]; see generally Amalia D. Kessler, A Revolution in Commerce: The Parisian Merchant Court and the Rise of Commercial Society in Eighteenth-Century France (2007). See also G. Denière, La Jurisidiction consulaire de Paris, 1563–1792 (1872), cited in Kessler, Enforcing Virtue, at 80 n.36.
66 Kessler, Enforcing Virtue, supra note 65, at 80. As noted by Kessler, the roles of the “judge and consul differed only in that the former served as the court’s chief judge or as its administrative head.” Id.
67 Id.
68 Sanborn, Origins, supra note 10, at 171. It should be recalled from supra chs. 9 & 11 that bills of exchange were not merely instruments of payment, but also of credit and were a commonly-used device to circumvent the prohibition against usury.
69 See infra ch. 25.
70 Id.
71 See infra § 10:1(A).
72 Fabien Valente, The Consular Courts in the Napoleonic Commercial Code, 17 Revue Histoire de la Justice, (2007), abstract available at http://www.afhj.fr/publications/RHJ17_abstracts.pdf (abstract on file with author).
73 See L’ordonnance 2005–171 du 24 février 2005 simplifiant les procédures de constitution et de réalisation des contrats de garantie financière [Ordinance No. 2005–171 of February 24, 2005 Simplifying Procedures of Formation and Realization of Financial Collateral], Journal Officiel de la République Française [J.O.] [Official Gazette of France], Feb. 25, 2005, p. 3252:
Traditionnellement, le droit français permet le recours à des garanties sous la forme de sûretés réelles sans transfert de propriété (nantissement) principalement sous la forme d’un gage. Le mécanisme du gage présente toutefois un formalisme assez lourd pour sa constitution, nécessitant un acte écrit et une dépossession réelle du débiteur, ainsi qu’une certaine lourdeur dans la mise en oeuvre (enchère, intervention du juge). Dans le secteur financier, ces exigences sont rédhibitoires notamment lorsqu’il s’agit de garantir des transactions opérées sur les marchés financiers.
Traditionally, French law allows the use of in rem guarantees without conveying ownership (to the creditor) principally in the form of a pledge. The mechanism of the pledge requires a burdensome formalism requiring a written document and the in rem dispossession of the debtor, similarly it overburdens the transaction by (requiring a judicial intervention) in the creation of this guarantee. These requirements inhibit the operations of the financial sector.
(author’s translation).
74 Based upon pre-existing case law, BGB § 223(2) provided that a right may be transferred to secure a claim. This was, in effect, a modern-day adaptation of the Roman constitutum possessorium. In German lending practice, this device was used for more than a century under the name of Sicherungsubertragung. See BGB § 223(2).
75 Jean Stoufflet, Le Credit Documentaire 99 (1957) (“Nous verrons au cours de notre etude qu’un assez grand nombre de points qui n’on jamais êtê tranches par les juges français ont été l’objet de decisions aux Etats-Unis et en Grande Bretagne.”).
76 Sylvie Humbert, Were there Honest Judges and Faithful Merchants in Lille in the 18th and 19th Centuries like César Birotteau?, 17 Revue Histoire de la Justice (2007), abstract available at http://www.afhj. fr/publications/RHJ17_abstracts.pdf (abstract on file with author).
77 Id.
78 Hubert Bonin, Justice and Business: a History Revealing Economic and Political Changes (19th-20th Centuries), 17 Revue Histoire de la Justice (2007), abstract available at http://www.afhj.fr/publications/RHJ17_abstracts.pdf (abstract on file with author).
79 Id.
80 Kessler, Enforcing Virtue, supra note 65.
81 See supra § 6:2.
82 Kessler, Enforcing Virtue, supra note 65, at 106.
83 It will be recalled that in contrast with the French artisan-merchants, the “domicile workers” worked out of their homes and did their work upon receipt of commissions brought to them by the early capitalist intermediaries known as verlegers. See supra § 6:2.
84 Kessler, Enforcing Virtue, supra note 65, at 107.
85 Id. at 107–08.
86 It will be recalled from the discussion in an earlier chapter that Pope Urban III issued in 1187 the Decretal Consuluit which, inter alia, stated that usury is any amount received by the lender in excess of the amount lent, regardless of how small the interest charged; the mere expectation of usury was sinful and the charge of a higher price for a sale on credit was implicit usury. See supra § 5:7(A) & (B) (discussing Saint Thomas’s justification of this view).
87 Kessler, Enforcing Virtue, supra note 65, at 74.
88 Id. at 72.
89 Id. at 73–74.
90 Id. at 81–82 (citations omitted).
91 According to Kessler, the facts of this case “appear[] in Le négociant patriote, an account of Old Regime commercial life and merchant-court practice penned by a successful eighteenth-century merchant named Bedos, who claimed to have served as a merchant-court judge and president of a chamber of commerce.” Id. at 72 (citation omitted).
92 Id. at 76.
93 Id.
94 Id. at 76–77.
95 Id. at 77.
96 Id.
97 Id.
98 Id. at 77–78 (citations omitted).
99 See infra § 10:2(A) & (B).
100 See supra § 9:2(E)(3)(c).
101 Kessler, Enforcing Virtue, supra note 65, at 77–78.
102 See Kozolchyk, Commercialization, at 7.
103 Kessler, Enforcing Virtue, supra note 65, at 77.
104 The distantia loci formalities were designed centuries earlier by Italian merchants and their legal advisers to simulate a sale of foreign exchange instead of acknowledging an interest-bearing loan, thereby helping to prevent an accusation of usury. Such an accusation would have resulted from having a bill of exchange pay a sum of money that included any amount of interest charged for an underlying loan. See Raymond De Roover, Business, Banking, and Economic Thought 32 (1974) [hereinafter de Roover, Business]. In this classic, de Roover describes this method of evading the possible charge of usury as follows:
Since the taking of interest was ruled out, the bankers had to find other ways of lending at a profit. The favorite method was by means of exchange by bills (cambium per litteras). It did not consist in discounting as practiced today, but in the negotiation of bills payable in another place and usually in another currency. Interest, of course, was included in the price of the bill…. Although the presence of concealed interest is undeniable, the merchants argued—and most theologians accepted these views—that an exchange transaction was not a loan (cambium non est mutuum) but either a[n] [exchange] of moneys (permutatio) or a buying and selling of foreign currency (emptio venditio).
Id. In other words, the exchange transaction was used to justify the credit transaction and speculative profits on exchange served as a cloak to cover interest charges. Nevertheless, it was argued that a cambium was not usurious since there could be no usury where there was no loan. Id.; see also Raymond de Roover, The Rise and Decline of the Medici Bank 11 (1963).
105 Kessler, Enforcing Virtue, supra note 65, at 75.
106 According to Kessler, this was “an extraordinarily large sum in age when the annual income of a tradesman ranged from 300 to 1,000 livres and that of a nobleman from 40,000 to 100,000 livres.” Id. at 75.
107 Id. at 79.
108 Id. at 82–84.
109 Id. at 87.
110 Id.
111 Id. at 100.
112 Id. at 89.
113 Id. at 90.
114 Id. at 91–92. No references appear in the justification of the finding as to the amounts charged or paid by others in that location or vicinity.
115 Id. at 92.
116 See, e.g., Cambridge History, supra note 62, at 176–79 (referring to these customs and practices and describing the codification process).
117 Kessler, Enforcing Virtue, supra note 65, at 108.
118 Id. at 72–73.
119 The reader may be interested in the discussion of the charitable form of doing business as part of micro-lending by the Nobel Prize laureate Mohammed Yunnus, the economist Hernando de Soto, and other lesser known economists and jurists in a televised symposium conducted by the journalist Andres Oppenheimer. See Oppenheimer Presenta: El Capitalismo Social (Mar. 21, 2007) (on file with author).
120 In the Fable of the Evil Impulse based upon Talmudic writings, at least thirteen centuries old, the writer described what would happen to mankind if man’s “evil desire” were subdued:
“If you kill him the world will expire!”
For three days the “Evil Yetzer” was imprisoned;
Temptations vanished, greed and pride ceased.
Hurrah! the battle over, the sex-impulse is won—
Alas … a fresh egg is needed, there is none.
…
At last it dawned—a truth profound
In scheme divine—a principle sound:
Vicious forces as passion, avarice and greed
Are vehicles of progress the world doth need.
Roman A. Ohrenstein, Economic Self-Interest and Social Progress in Talmudic Literature: A Further Study of Ancient Economic Thought and Its Modern Significance, 29 Am. J. Econ. & Sociology 59, 62–63 (1970). Professor Ohrenstein, an insightful historian of economic thought, pointed out the obvious parallel between eighteenth-century economic liberal and moral philosophical thought and how Bernard de Mandeville’s famous satire, “The Fable of the Bees” was of considerable influence on Adam Smith’s, “Wealth of Nations.” Id. at 61. He also notes the paradox that “[p]arties directly opposite [a]ssist each other as ’twere for spite.” Id. at 64. Thus, the apparently discordant passions strangely harmonize to the same end such that private vices are turned into public benefits. Further, Adam Smith’s Wealth of Nations points out that the individual’s exertion brings the greatest benefit not only to himself, but also to society. For Adam Smith’s individual “neither intends to promote the public interest, nor knows how much he is promoting it…. [He is] led by an invisible hand to promote an end which was no part of his intention…. By pursuing his own interest he frequently promotes that of society….” Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations 476 (Edwin Cannan ed., Univ. Chi. Press 1977) (1776).
121 See § 1:2(D).
122 See generally Kozolchyk, Fairness (discussing the standards of fairness that govern commercial adjudication in different legal systems); Kozolchyk, Commercialization.
123 See Thomas Pennant, Of London 361–62 (1790) (discussing the trustworthiness, respectability, and integrity of the London goldsmiths).
124 See People and Events: J.P. Morgan, PBS, http://www.pbs.org/wgbh/amex/1900/peopleevents/pande10.html (an interesting description of J. P. Morgan’s efforts to rescue failing banks in early twentieth-century America).
125 de Roover, Business, supra note 104, at 16.
126 Id. at 33.
127 Kozolchyk, Commercialization, at 38.
128 Kessler, Enforcing Virtue, supra note 65, at 81.
129 See Arnaud de la Cotardiére, Patricia Peterson & Delphine Pujos, Litigation and enforcement in France: overview, Practical Law (July 1, 2012), http://us.practicallaw.com/9–502–0121.
130 Id. They also point out that at least one commercial court exists in most of French administrative departments, totaling approximately 180 courts. Id. My own visits to French commercial courts during my stay as a visiting professor to the University of Aix en Provence confirmed the lack of legal training of some commercial judges. I have had difficulties finding contemporary scholarly discussions of practice before commercial courts in France. Most of the published writings on commercial code trial practice that I have had access to date back to the nineteen seventies and eighties. See generally Denis Tallon, Civil and Commercial Law, VIII–2 Int’l Encyclopedia of Comp. L. (1983).
131 Cotardiere et al., supra note 129.
132 Id.
133 Jonathon Wise Polier, French-American Commercial Litigation, paris-law.com, http://www.paris-law.com/articles/Fench_comercial_litigation-en.htm.
134 Id.
135 Id.
136 Id.
137 Id.
138 Id.
139 Id.
140 Cotardiére et al., supra note 129.
141 Id.
142 See infra ch. 25 (on the comparative commercial trial procedures).
143 See infra ch. 23.
144 See National Law Center for Inter-American Free Trade, http://natlaw.com/category/training/ (on “oral trials”).
145 Tallon, supra note 130, at 140.
146 Interview by Annabelle Pando & Frédérique Perrotin with Perrette Rey, President of the Paris Commercial Court (Oct. 1, 2007), available at http://www.actu-cci.com/reflexions-debats/10061–entretien-avec-perrette-rey-sur-les-reformes-en-vue-pour-la-justice-economique-francaise (emphasis added).
147 Id.