Most of the judicial decisions discussed in this book are by appellate courts. This may lead the reader to assume that these decisions were the product of similar pleading and proof practices at the trial level. They were not. Some of the pleading and proof differences are attributable to the presence of a jury as a chief finder of facts in common law jurisdictions or to the heavier reliance on written pleadings and proof in civil law countries. Other differences are the product of even deeper disparities among distinct legal cultures. Some of these contrasts are clearly observed among Spanish and Latin American jurisdictions on the one side and Anglo-American jurisdictions on the other. It is for this reason that our comparison will focus largely on these jurisdictions.
In Spain and Latin America, trial court disputes for breach of contract fall into two procedural categories: One is the ordinary or declarative trial (juicio ordinario or declarativo) where the court starts out in tabula rasa fashion to establish all of the relevant facts and at the end of the procedure “declares” the parties’ rights and duties. The other procedural category is that of a summary or executive trial (juicio sumario or ejecutivo) where many of the most important facts are presumed to have been established by the highly credible documents tendered to the court at the start of the procedure. These documents could be notarial or public deeds, negotiable instruments or court decisions that have “declared” the parties’ rights and are awaiting execution. The purpose of this proceeding, then, is to decide whether or not a decree of execution against assets of the defendant is in order.
In contrast with Latin-American law, U.S. law does not distinguish between declarative and executive actions. While summary actions and even trials exist, they do not arise from a separate trial procedure but from “motions” or requests for summary hearings or actions, including equitable relief, as part of the same procedure before trial courts. Following is a basic description of an ordinary Latin-American trial court procedure for breach of a commercial contract. Thereafter, we will discuss its U.S. counterpart. It should be noted that while some Latin American jurisdictions have special commercial courts, most assign commercial and civil trials to the same courts of first instance.
Because the rights and duties of the parties in a declarative or ordinary trial have to be established and fully proven, the process is much longer than in an executive or summary trial. In some Mexican state jurisdictions, for example, an ordinary civil trial can often last several years, and once one includes appeals, the final decision may take as long as a decade.2 Even thought commercial disputes are often heard in declarative and ordinary trials (because evidentiary documents are unavailable or insufficient to support an executive trial), a vast number of commercial disputes are disposed of in executive or summary trials.
The most important source of law that governs civil procedure in Spain and Latin America is the code of civil procedure. A typical description of what the codes of civil procedure require for ordinary trials may be found in a description provided by the Mexican Institute for Legal Research:
[T]he ordinary trial procedure sets forth the requirements of a complaint and notice of it; admissible evidence, and how it can be obtained, proffered and weighed by the court; the manner in which allegations have to be presented; the term during which the court must issue its opinion; and the necessary requirements to execute the judgment and give it res judicata effect.3
Normally, the codes of civil procedure list the elements of an ordinary commercial or civil complaint. For example, in Mexico a complaint alleging a commercial cause of action must comply with the provisions of Article 1061 of the Federal Commercial Code;4 similarly, a Colombian complaint must comply with the requirements of Article 75 of the Colombian Code of Civil Procedure.5
Typically, the complaint in an ordinary trial must be filed before the competent judge, who will determine its admissibility. Once it has been admitted, notice must be given to the defendant, granting him a term to respond or to file a counterclaim. When responding, the defendant may completely or partially deny the facts, dispute the law being invoked and file defenses or counterclaims. Where the defendant files a counterclaim, the court will decide on its admissibility once the period of reply by the plaintiff has elapsed. The same rule applies to any defenses, provided they do not require the production of evidence; if they require it, the judge will grant a period in which evidence must be obtained and will rule on the defense at the preliminary and conciliation hearings.
If the parties settle during this conciliation hearing, the process will end; otherwise, it will proceed to the evidentiary stage and will continue until a judgment is 1084handed down. The ordinary procedure concludes with the commencement of the appellate stage. During this stage, the hierarchically superior courts may revoke, modify or affirm a decision handed down by the lower courts.
As is apparent from the preceding summary, the Code of Civil Procedure holds a tight reign over the proceedings: the parties are not allowed to conduct, let alone design, ancillary procedures as is done by United States litigators during pre-trial discovery. Just as important, adjudication is strictly based upon what the pleadings (and especially the complaint) asks for, as required by the principle of “justicia rogada” (only that which is expressly requested or “prayed for” will be granted).
Despite its seemingly innocuous nature, Section 5 of Article 75 of the Colombian Procedural Code, as transcribed above, must not be overlooked. It requires that the complaint specify: “What is being sought with the claim, which must be precisely and clearly stated. If there are several claims, they must be stated separately, complying with the provisions of Article 82.”6
This provision is a corollary of the procedural principle of justicia rogada. In plain words, it means that the court should grant neither more nor less than what the parties requested (prayed for) in their pleadings and especially in the complaint, answer or counterclaim. If the decision goes beyond or fails to rule on any of the prayers for relief, it is very likely to be appealed and reversed.
Consider, for example, the statute that governs the jurisdictional powers of the Supreme Court of El Salvador (Ley de Casación) and a typical decision rendered under it. Judges must decide in direct response to the express petitions of the litigants; if they do not, the parties may request reversal of the decision in the cassation procedure. The law reads as follows:
The Law on Appeals involving only Violations of the Law (Ley de Casación):
Art. 3. An appeal because of violation of the law or judicial doctrine shall be granted on the following bases:
4°—If the decision was contrary to the petitions formulated by the litigants, by granting more than what was asked for or failing to rule on any of the petitions…7
As stated in the following summarized excerpt of the decision of the Civil Branch of the Supreme Court of El Salvador in ASSA v. AIG:8
III. SPECIFIC ARGUMENTS FOR THE APPEAL
3. Because the lower appellate court’s decision is inconsistent with what was requested by the parties by granting more than what they requested… as set forth by Article 3 of the Cassation Law…
The appellants allege that the lower appellate court decision is inconsistent with the request made by the litigants because it grants more than they requested… They assert that the above-mentioned provision has a twofold purpose; on the one hand it prevents baseless claims and on the other it forces the judge to examine the parties’ petitions solely in the context of their respective pleadings…
In the proceedings below, the plaintiff presented documentary evidence to support its factual allegations without objection by the defendant… In addition, the trial judge ordered an accounting of commingled assets by an expert witness whose testimony he took into account when ruling that: “Having established that the plaintiff is entitled to be compensated for the unilateral and unjustified termination of its distribution contract with the defendant… it is therefore appropriate to grant the plaintiff’s petition with the exception of personal unsecured loans extended by the plaintiff… as well as mortgage loans granted with its own and not with AIG assets, and on which ASSA assumed the risk of non-payment and cannot claim their losses from AIG…” This Branch of the Supreme Court finds that the points on appeal are: that the appellant disagrees with the payment decreed below which includes amounts allocated to furniture, equipment and land in the amount of ¢1.451.750.40 and for the above-mentioned loans in the amount of ¢864.248.00 which although they involved insurance policies issued by AIG the risk of loss had been assumed by ASSA. For these reasons we find that the appealed decision included items that were not requested in the pleadings below, neither before the first nor the second instance courts. Therefore, the lower appellate court did not limit itself to those facts and claims submitted to it, thereby ignoring the procedural requirement of consistency between what was requested and what was granted… Simply put, the lower appellate court granted more than what was requested by the parties in their pleadings and its decision is therefore an ultra petita…
Would a United States federal or state court judge be limited in his award of damages or of other remedies to what was stated in the complaint? What is gained or lost by adopting the principle of justicia rogada and its corollary of ultra petita?
Brazilian civil procedural rules introduce an unexpected and somewhat perplexing twist by granting appeals based not only on ultra petita but also on infra petita which can be resolved on appeal by the appellate judge without the need of remanding the case to the trial court for further proceedings. In December 2001, a reform to the Code of Civil Procedures added Section 3 to Article 515, allowing the appellate court to resolve issues on appeal within certain limits. This section states: “Where a process is concluded without a decision on the merits (Art. 267), the court may rule forthwith on the matter, provided that the issue at bar is exclusively on a matter of law and the circumstances require an immediate ruling.”9
Furthermore, a decision of the Appellate Civil Court of Brazil in 200410 decided that Section 3, transcribed above, gives a broader interpretation with regards to its scope of application. It held that:
Although the instant case is not a process concluded without a ruling on the merits, the court considers that it is possible to give § 3 of Art. 515 of the Code of Civil Procedures a broader interpretation. Therefore, it is appropriate to cite the Honorable Paulo Afonso Brum Vaz: “…I believe that it is possible to give § 3 of Art. 515 of the Code of Civil Procedures … a broader interpretation, so that the concept of a process concluded without a ruling on the merits also covers cases where the judge a quo has issued a decision that is not related to the petitions formulated by the claiming party… Therefore, a court will be able to rule on the merits of the petitions in cases of extra petita or infra petita rulings, provided that the requirements of the final part of the cited provision are met (‘…is exclusively on a matter of law and the circumstances require an immediate ruling.’).”
The following section contains two typical complaints: the first initiates an ordinary or declarative action claim before a trial court in Uruguay; the second is a generic breach of contract complaint before a trial court in the United States. The reader will note that, consistent with the principle of justicia rogada, the Uruguayan complaint is more formal, structured and specific in its “petition” section.
The Uruguayan complaint’s caption reflects the remaining influence of Roman law typification: it typifies the action by averring that it is an action for the rescission of a contract and for payment of a penalty clause. Its allegations of fact and offer of evidence must bear out this assertion; if not, its effectiveness can be objected to as self-contradictory, and this may be fatal. It is filed by an attorney acting as a representative of the plaintiff and proving her representation by means of a notarial power of attorney attached to the complaint. The reader will note that the filing attorney refers to this power to establish his authority to appear on behalf of her client.
The U.S. complaint is much simpler and is limited to naming the parties, the facts as alleged by the plaintiff, and the cause or causes of action; it does not require that the attorney establish his power to act on behalf of his stated client. Thus, as an “officer of the court” (a concept seldom heard in Spanish and Latin American jurisdictions), the lawyer is trusted (and presumed) to be telling the truth about his power of representation. However, if he lied about it, he could easily face disciplinary action, including disbarment.
Even though both documents make reference to the facts that led to the breach of the contract, the reader will notice certain differences. The U.S. complaint makes a general reference to facts and no express reference to the law applicable to that specific case, with the exception—in this example—to the laws of the State of Arizona where both corporations were incorporated. In contrast with its U.S. counterpart, the Uruguayan complaint, when stating the facts and alleging non-performance of contractual obligations, makes reference to the specific clauses that were breached. It also lists the evidence pertaining to the facts, and includes the names of witnesses and key evidentiary documents. In addition, it has a section dedicated to the law applicable to the case at bar. In this section, the complaint finds its grounds in specific legislation citing provisions from the applicable codes or statutes.
Finally, the last section of the Uruguayan complaint known as the “petition” section, states all the remedies and relief (including the amount of the compensation) sought by the complaint and authorizes the attorneys to receive notices related to the process. If a remedy does not appear requested in this section, in all likelihood it will be deemed to have been waived. Similarly, because of the ultra petita corollary of the principle of “prayed for justice,” the amount claimed stands as the limit of the recovery. Thus, from a remedial standpoint, the Uruguayan complaint is intended to be the final, polished document.
The U.S. complaint is a more informal, flexible and inconclusive document intended essentially to request the court’s intervention in order to obtain judicial remedies whose scope and extent is yet to be fully determined. As the trial proceeds, new facts and new remedies may be added, including a larger or smaller amount of the claim. Thus, the U.S. complaint operates much as the opening salvo of a remedial request than as the plaintiff’s remedial blueprint.
COMPLAINT FOR RESCISSION OF CONTRACT AND ENFORCEMENT OF PENALTY (URUGUAY)
JUDGE OF FIRST INSTANCE IN CIVIL MATTERS ON DUTY IN MONTEVIDEO.
Lucía González, with Identification Document No. 3.455.818–3, acting as a legal representative of XXX, SRL, according to the power of attorney attached as Exhibit A to this complaint, with domicile in Avda. Gral. Rivera No. 3089–302, Montevideo, and for purposes of this process, establishes as her domicile, Plaza Independencia 810, of this city; to the Judge, I state:
That acting in the capacity previously mentioned, I come to pursue an ordinary trial for breach of contract and enforcement of a penalty stipulated under clause 8 of the contract of which rescission is requested, against ZZZ, S.A. domiciled in Avda. 18 de Julio No. 2233, pursuant to the allegations of facts and statements of law that I proceed to exhibit.
I. FACTS
1. XXX, SRL (hereinafter “XXX”) is the owner of a renowned flower shop (The Flower Shop) established in this city since 1980, through which she supplies flower arrangements upon the request of its customers, not only within the city of Montevideo, but to anywhere in the country.
Until the year 2004, XXX supplied its own products, but as the business grew it was not able to comply in due time with the requests of its clients.
2. Therefore, in July 12, 2004, XXX entered into a contract (the “Contract”) with ZZZ, S.A. (hereinafter “ZZZ”) under which ZZZ would provide delivery services for XXX.
3. To render the services, ZZZ had to keep twenty vehicles available for any requests of XXX under the conditions stated in the Contract. ZZZ had the 1088duty to send a vehicle to XXX establishment within fifteen minutes of the latter’s request (Clause 2 of Annex I of the Contract). The Contract (Clause 4) also stipulated a timeframe in which deliveries had to be performed, taking into consideration the distance to the place of delivery.
4. Soon after entering into the Contract, ZZZ began facing considerable delays in the expected deliveries, not only because of the time that it took for the vehicles to arrive at XXX establishment to pick up the flower arrangements that had to be delivered, but also in the time of delivery to its customers.
5. Such delays damaged XXX’s image and resulted in monetary losses—because in several cases it could not charge its customers since the flower arrangements were not delivered on time; it also lost many old and new customers by turning down several orders because it was not able to deliver them on time. Paradoxically, a contract that was entered into to improve XXX’s services ended up almost ruining the business.
6. According to Clause 12 of the Contract, the parties would automatically be in breach of contract upon non-performance of their obligations, without the need of a special notice or claim of default. However, after having several meetings with Mrs. White, General Manager of ZZZ, requesting that services be provided as agreed and not having any positive results, XXX sent, extrajudicially, a claim on January 20, 2005, demanding ZZZ to comply with the services pursuant to the Contract (document C). Nevertheless, ZZZ continued to breach the contract.
7. XXX tried to negotiate the termination of the Contract so that it could begin using the services of another company, in order to improve such services and prevent the loss of existing customers and potential new business; however, ZZZ refused.
8. It must be pointed out that to this day XXX has complied with every payment to ZZZ in accordance with the Contract, as is shown by the receipts attached herein (document D).
9. For all the aforementioned, it is the interest of the party that I represent to request the rescission of the Contract, and the enforcement of the penalty stipulated in Clause 8 of said Contract for the amount of $250,000.00.
II. LAW
I support my claim with the law found in Articles 1341 to 1347 and 1336 of the Civil Code and under Chapter III and Articles 337 et seq. of the Code of Civil Procedure.
III. EVIDENCE
1. Documentary Evidence
i) Document A: Power of Attorney.
ii) Document B: Contract between XXX and ZZZ dated July 12, 2004.
iii) Document C: Extrajudicial claim sent by XXX to ZZZ on January 20, 2005.
iv) Document D: Payment receipts issued by ZZZ upon payments made by XXX from July 2004 to March 2005.
2. Testimonial Evidence
Judicial notice to the following witnesses is requested for them to give testimony as witnesses:
i) María Gómez, Identification Document No. 1.222.333–4, with domicile in Pte. Barrio No. 1212, who will testify as customer of The Flower Shop on the delays suffered when ZZZ began providing its delivery services.
ii) Lucy González, Identification Document No. 1.222.333–5, with domicile in Avda. 18 de Julio 6464, a former customer of The Flower Shop who will testify on the same issue.
iii) Geraldine White, Identification Document No. 1.222.333–6, who will receive notice at ZZZ’s domicile in Avda. 18 de Julio No. 2233, and who will testify on the several meetings held with Mr. Luis González, legal representative of XXX, who requested changes in the services provided by ZZZ and explained the damages that resulted from ZZZ’s breach of contract.
iv) Luis González, Identification Document No. 1.222.333–7, with domicile in Pereira de la Luz No. 8789, who will testify on the same issue as Mrs. White, and on the complaints of customers resulting from delays on the delivery of The Flower Shop’s products.
v) Sylvia Pereira, Identification Document No. 1.222.333–8, with domicile in Charrúa No. 7889 and Gilberto Jiménez, Identification Document No. 1.222.333–9, with domicile in Calle Colonia 1234–405; both will testify on the complaints of customers resulting from delays in the delivery of The Flower Shop’s products and on the cancellation and rejection of orders because of the inability to comply with the time of delivery.
IV. PETITIONS
For the aforementioned reasons, I respectfully petition the Judge that he:
1. Receive the complaint and documents attached and acknowledge the sufficiency of the power of attorney granted in my favor, and accept the actual and contractual domiciles as stated.
2. Give notice of this complaint to ZZZ at the domicile previously indicated, in accordance with the corresponding procedures.
3. Following the notice, declare the rescission of the Contract and order ZZZ to pay the penalty established in Clause 8 of the Contract.
And I state: That I hereby authorize Dr. Laura González, Juan Pérez and the Paralegal Cristina Campos to receive notifications of any resolution issued in this process, and to have access to the file and to retrieve the file if necessary.
A commercial substantive law that is secreted from “the interstices of procedure” happens only when courts are willing to facilitate commercial transactions by mitigating excessive procedural rigidity, encouraging good faith and protecting third parties otherwise unprotected by the substantive law extant.
In theory, such a power should be more willingly and easily wielded by courts in countries such as France with a long tradition of commercial courts. Yet, as was discussed in connection with the codification of commercial law in France, as a result of a deeply imbedded disdain for commerce such a remedial power was not exercised by the Commercial Court to the degree desired or welcomed by French merchants.13 Neither has it been used by other countries such as Mexico that enacted federal commercial procedural rules as part of its federal commercial code.14 On the other hand, countries such as Colombia seem to have made some significant statutory progress in liberalizing commercial procedure, especially in connection with summary or executive trials.
In this section, we will study how summary trials involving formal commercial contracts as well as negotiable instruments, among other commercial transactions, are conducted and appealed. What is discussed hereafter, and especially its comparison with United States’ motions for summary judgment is of importance to practical and theoretical commercial lawyers in civil and common law countries. For these procedures are supposed to serve best those who have little time for protracted trials and can submit the type of evidence best found in uncontroverted standardized documents such as those regularly used by merchants. Hence what follows should help evaluate the ability of the executive process and the motion for summary judgment to resolve commercial disputes quickly and fairly.
The petitioner of a summary process must accompany his petition with a document worthy of immediate enforcement, also known as an “executive” or “enforcement title” (“título ejecutivo”). This document provides credible evidence of the existence of a clear, express, and liquid or immediately enforceable obligation. An express obligation is one that appears clearly and unequivocally from the document. Its immediate enforcement feature has been defined by the Supreme Court of Colombia as one “due forthwith and not subject to any terms or conditions and thus a pure, simple and already declared obligation.”15 This is a broad enough criterion to include a wide 1091range of documents such as res judicata or final decisions in declarative trials, a notarial or public deed recorded in a land registry endowed with the power to issue land titles where the recorded owner wishes to quickly evict a trespasser, a negotiable instrument or document of title in the hands of a holder in due course, a court document in which the defendant confesses judgment in favor of the plaintiff, etc.
Most civil law countries require that these executive titles be in writing; however, as will become apparent in the following section, in Colombia an obligation which is not in writing may also qualify as an enforcement title. For example, according to Article 488 of the Code of Civil Procedure of Colombia:
Express, clear and enforceable obligations may be enforced by means of a summary procedure; for that purpose, they must be incorporated in a document granted by the debtor or assignor and constitute undisputed evidence against the latter, or [the obligation may be] declared in a court’s decision—of any jurisdiction—or other court order enforceable by law, or [in decisions] that result from administrative or police procedures, where legal fees are approved or legal honoraria of justice functionaries are specified. A confession [in answer to interrogatories made during a trial] is not an enforcement title, but the confession regulated under Article 294 is an enforcement title.16
Yet, some countries, such as Turkey, would also allow the use of additional executive documents such as arbitration awards for appeals and executions of judgments.17 Aware of the growing need for documents that could reduce litigation time and cost, the Code of Civil Procedure of Colombia does not provide an exclusive list of documents or of “titles” that can trigger the initiation of an executive-summary process. As noted by Professor López Blanco, “it is untrue that only certain obligations may be enforced [in an executive trial] because every obligation that complies with the provisions and general requirements of Article 488 has the right to its summary process.”18 By contrast, Article 407 of the Mexican Federal Code of Civil Procedure provides a clearly exhaustive list of civil enforcement titles,19 and Article 1391 of the Federal Commercial Code provides a similar list for commercial enforcement titles.20 In 1092this writer’s opinion, Colombia’s “open number” of enforceable titles embodies the most desirable legislative policy from a commercial law standpoint because it enables the judge—where the evidence before him warrants it—to fashion his remedy with greater flexibility and fairness than allowed by the exhaustive list approach. Even though this flexibility may be regarded by some as injecting uncertainty, the ability of the judges to obtain actual facts in a dispute results in much better commercial adjudication and better “individual judicial norms” that can be followed by precedents.21
Another feature of the Colombian summary process is that it is not necessary to have a written enforcement title. Professor López Blanco gives the example of a tape recording of a debtor confessing his default. As provided by Articles 1122 and 1223 of Law 446 of 1998, any document provided by the parties is authentic, whether written or incorporated into another media. Nevertheless, written documents continue to be the most commonly used in Colombian and Mexican summary procedures.
Before the order of execution is issued by the Colombian trial court, some preliminary procedures, also known as “cautionary measures,” are usually available to the petitioner, including provisional attachments and garnishments of assets that the plaintiff has grounds to believe the debtor may attempt to hide. In addition, Article 489 of the Code of Civil Procedure of Colombia provides for cautionary measures intended to facilitate the execution procedure such as notice of default to the defaulting debtor,24 1093notice of the assignment of receivables to the attaching creditor25 and notice of enforceable titles directed to the debtor’s heirs.26
In Colombia, a summary process may be for a large, small or minimum amount claimed; this amount determines the competency of the court. Until very recently, large and small claims followed the same procedural rules, and minimum claims were subject to a different one. Since the enactment of Law 794 in 2003, all summary processes must follow the same procedure, with the only difference that large and small claims are now subject to appeals and conciliation, while minimum amount claims have a single instance and, therefore, do not allow appeals or others.27
According to the Attorney General of Colombia, the reasoning behind having a single-instance process for minimum amount claims and a two-instance process for large and small claims is that “the minimum amount claim process is characterized by its briefness, expedited resolution, and balance between judicial economy and the right to legal representation and access to justice…”28
Most civil-law countries have a similar procedure for summary trials. Its steps are the following: First the complaint is filed before the competent judge, and it is accompanied by the enforcement title which, as just discussed, must incorporate a clear, express and immediately enforceable obligation. If applicable, it is also accompanied by a petition for cautionary measures to preserve assets for the purpose of execution by means of a preliminary order of attachment, garnishment or sequestration.
If the court is persuaded that the requirements for the summary procedure are met, it will issue an order directing the defendant to pay or else to face the attachment, garnishment or sequestration of assets available for execution.29 If the complaint was accompanied by a request for cautionary or preliminary attachment and it is accepted 1094by the court, an order of attachment, garnishment or sequestration will be issued to the sheriff or court official in charge of such actions.
The judge may find that the document attached to the complaint was not an enforcement title because it did not comply with the requirements of law or may determine that the complaint is not sufficiently clear—in such cases the complaint may be dismissed by the judge, with or without prejudice.
If an order to pay is issued, notice must be given to the defendant. Forthwith, the official that is enforcing the order will request payment, and if the defendant pays or had previously paid then the process is suspended. However, if the defendant did not or does not pay, then the official will attach the defendant’s assets, and following this stage in the process the defendant will be notified and will have a reasonable amount of time to comply with the obligation or to oppose the enforcement by filing defenses.30
If the defendant fails to comply within the time provided, he will be summoned to appear in court to hear the pronouncement of judgment; if he does comply with the obligation within the time, the process will end. However, if the defendant files any or all of the limited defenses allowed by the code of civil procedure there will be a short evidentiary period followed by the pronouncement of judgment within a short period of time.
TO THE CIVIL JUDGE OF THE CIRCUIT OF CALI
E.S.D.
REF.: INDIVIDUAL ACTION FOR SUMMARY PROCESS FILED BY IGNACIO JARAMILLO CABAL AGAINST JOSE MARIA ACEVEDO CASTRO
Daniel López, authorized lawyer, of age and of this domicile, as identified by my signature, acting as attorney for Mr. Ignacio Jaramillo Cabal, of age and of this domicile, in this writ filed in this court to start an individual summary process for a large claim against Mr. José María Acevedo Castro, of age and of this domicile, so that an order to pay is issued against the defendant and in favor of the plaintiff, for the amount that I will indicate in the petitions of this complaint.
FACTS
FIRST: The defendant issued check No. 023 in favor of the plaintiff on the defendant’s checking account number 0003458761 at Bank Santander, with main offices in this city, for the amount of one hundred million pesos ($100,000,000.00). SECOND: That when trying to cash the check the bank did not pay it because of insufficient funds. THIRD: That all cash stamps have been removed from the check and its lack of payment has been formally protested. FOURTH: The debtor has not paid the check, therefore producing a current, clear, express and enforceable obligation. FIFTH: The plaintiff as 1095payee and holder of the check granted me the necessary powers of representation to file this claim.
CLAIMS
To the Honorable Judge, I request that you issue an order against the defendant and in favor of the plaintiff for the following amounts:
1. One hundred million pesos ($100,000,000.00) for the amount of the check;
2. Twenty million pesos ($20,000,000.00) equivalent to 20% of the amount of the check, as penalty pursuant to the provisions of Article 731 of the Commercial Code;
3. Banking default interest from the moment it was due until the defendant fulfills payment of these claims; and
4. Legal fees of this process.
LAW
The provisions of law supporting this claim are: Articles 619 to 670 and 712 to 751 of the Commercial Code and 488 et. seq. of the Code of Civil Procedure, and other corresponding or complementary laws.
PROCEDURE
This is a summary process for a large amount, and the process is regulated under Title XXVII, Chapter I through VI of the Code of Civil Procedure.
COMPETENCE AND AMOUNT CLAIMED
Your Honor is competent to hear this claim because of the place where the obligation is supposed to be complied with, because of the parties’ domicile and because of the amount of the claim, which I estimate at one hundred and twenty million pesetas ($120,000,000.00).
EVIDENCE
I file as evidence, to support this claim, the negotiable instrument incorporated in check number 023 on the checking account number 0003458761 at Bank Santander, with main offices in this city.
ATTACHMENTS
I attach to this complaint the power of attorney granted in my favor, the previously-cited negotiable instrument, a copy of this complaint for the court files, a certification of bank interest issued by the Bank Supervising Agency, and a copy of the complaint to provide notice of it.
NOTIFICATIONS
I may be notified at the courthouse office, or at my office located at 4563 Street #11–33 of this city.
The plaintiff may be notified at 8965 Street #45–99 of this city.
The defendant may be notified at his place of residency, at 3256 Street #88–11 of this city.
Sincerely,
To you the Honorable Judge,
__________
Daniel López
C.C. No. 12345678 of Cali
T.P. No. 87654321 of the Superior Judicial Council
FILE No. _______
COMMERCIAL SUMMARY PROCESS
LA FLOR COMPANY, S.A. DE C.V.
v.
LA 14, S.P.R. DE R.I.
JUDGE OF FIRST INSTANCE
CIVIL COURTROOM ON DUTY
SEBASTIAN QUIJANO, of Mexican nationality, of legal age, acting in my capacity as attorney at law in charge of disputes and collections for the company La Flor Company, S.A. de C.V., capacity that I demonstrate with a certified copy of public deed number 14137, volume 333, of the public notary 31, Pedro Gomez Esq., practicing and domiciled in this city, I hereby establish as place to receive notifications my law firm located at Street Tetabiate, No. 89, of this city; and pursuant to Articles 1069 of the Commercial Code in force and Articles 71, 72 and 174 of the Code of Civil Procedure of the State of Sonora, I hereby authorize as senior lawyer, Camilo Arango Esq. with Professional Identification Number 1493973 issued by the General Department of Professions, and pursuant to the last of the above-mentioned articles, I hereby authorize José Reyes, Daniel Cervantes and Martin Caicedo; I respectfully appear before you to state that:
By means of this writ and based on section IV of Article 1391 of the Commercial Code in force, I come to file a summary commercial claim against the company La 14, S.P.R. de R.I. which may receive service of process at its domicile located at Calle Coahuila, No. 872–8 of this city, claiming payment and compliance of the following obligations:
a) Payment of the principal amount of US$18,080.00 (Eighteen thousand and eighty US dollars).
b) Payment of normal interest of 15% per annum, as stated in the document that supports this claim.
c) Payment of default interest of 18.75% per annum, until the date of full payment of the debt.
d) Payment of the tax on normal and default interest at a rate of 15% or the rate in effect as of the time it is owed.
e) Payment of legal fees and expenses sustained because of this trial.
I base the claim on the following facts and law:
FACTS
1. On June 12, 2001, the company La 14, S.P.R. de R.I. through its legal representatives issued a promissory note in favor of La Flor Company, S.A. de C.V. for the amount of US$18,080.00 (Eighteen thousand and eighty US dollars) payable on November 30, 2001.
2. In said promissory note, the company La 14, S.P.R. de R.I. had the obligation to pay normal interest of 15% per annum and default interest of 18.75% per annum until the date of full payment.
3. Since the date for payment as stated in number 1 above has elapsed and the issuer has not fully paid it, despite several extrajudicial requests of payment made by the company I represent, for this reason it is necessary to judicially claim its payment.
EVIDENCE
I offer the following evidence:
1. Certified copy of public deed number 14137, volume 333, of the public notary 31, Pedro Gomez Esq., practicing and domiciled in this city, with which I prove my capacity as general attorney for disputes and collections for the company La Flor Company, S.A. de C.V.
2. Original promissory note Number D1–000142 issued by the company La 14, S.P.R. de R.I. on June 12, 2001 payable on November 30 of the same year.
LAW
Articles 175 to 196 of the General Law of Negotiable Instruments and Credit Operations are applicable to the substance of this claim.
With respect to the procedure available for this claim, Articles 1391 to 1414 of the Commercial Code apply.
Based on all the aforementioned, to you honorable Judge I hereby petition:
FIRST. To recognize my capacity as attorney for the company La Flor Company, S.A. de C.V. as evidenced by the certified copy of the public deed containing the power of attorney that is attached to this complaint; upon this recognition of my capacity, I ask you to admit this complaint against the company La 14, S.P.R. de R.I. in a commercial summary process, exercising the right for payment of the stipulations of the amounts claimed.
SECOND. To issue a resolution containing an order requesting the defendant to pay and upon non-compliance, to attach the defendant’s assets up to the amount owed and to place them in deposit with the person appointed by the creditor, and to provide the defendant with notice of this complaint so that it can present its arguments.
THIRD. Once all legal procedures have been completed, to issue judgment against the defendant as requested in this complaint and order public auction of the attached assets to pay the creditor with the proceeds of the auction.
FOURTH. To accept my authorization of the professionals hereby appointed by me to intervene on my behalf in this process.
I DECLARE ALL THAT IS NECESSARY.
City of Obregon, Sonora, February 12, 2002.
Sebastian Caicedo Quijano, Esq.
The following Spanish appellate decision illustrates the fallacy of the widespread assumption in civil law countries that negotiable instruments such as promissory notes and bills of exchange are ipso iure executive documents. This fallacious assumption is heard even when the plaintiffs in the executive actions are the original payee-holders of these instruments and their defendants are the original debtors of the underlying transaction acting as makers-signers of the notes or as acceptors of the bills of exchange. The truth is that the only parties whose status as holders of negotiable instruments is undisputed as plaintiffs in executive actions are those who are holders in due course. Because the legal status of all the holders of negotiable instruments (whether in due course or not) is governed not only by the codes of civil procedure but also by the laws of negotiable instruments, and because the latter list the defenses against holders in greater detail than the former, the laws of negotiable instruments should be given the preeminent status of a “lex specialis” or of the more specific law and therefore prevail. Yet as will be apparent in the following decision, Spanish appellate courts seem evenly divided on this point. One of the questions for the reader to keep in mind, then, is whether the same “virus” that seemed capable of infecting the executive status of the promissory note in this case can also infect other documents that involve the original parties to the underlying transaction as plaintiffs and defendants. Another question is whether reasoning by the Spanish appellate court is not surprisingly close to that of a United States court considering whether there are grounds to grant a motion for summary judgment. And if that is the case, could not this decision be regarded as inhabiting the grey area between the facts required to be proven in executive actions and those in motions for summary judgment?
Gamma Due, SL v. SMACC SpA31
In the city of Castellon, on the sixteenth day of June of two thousand and one. The First Branch of the Provincial Appellate Court of Castellon comprised by the undersigned judges has considered the present appeal against the lower court decision of… the thirteenth day of October of nineteen hundred and ninety nine. This opinion is drafted by D. Fernando Martínez Sanz.
FACTS:
First: The lower court decision literally ordered:… to proceed with the execution of judgment against the attached goods of defendant Gamma Due, SL and obtain payment with the proceeds of these goods to plaintiff SMAC, SPA for an amount of 10998,068,900 pesetas, as well as payment of all the legal interest owed on this debt… by the defendant.
Second: Upon notification of this decision to the parties by the representatives of Gamma Due, SL a timely appeal was lodged against it and this appeal having being admitted… service of process was issued and the parties appeared before this court.
Third: By this court’s order of November 24, 1999 the present record of proceedings was created… A hearing was held with the parties present. During this hearing, the appellant requested the reversal of the lower court decision with the issuance of another decision in its favor and imposing costs upon the plaintiff below. Appellee requested the confirmation of the lower court decision with the imposition of costs upon the appellant…
LEGAL BASES FOR THE PRESENT DECISION:
The legal bases of the appealed judgment are accepted and confirmed based on the following reasons:
FIRST. The appellee is the payee-holder of a promissory note validly issued and signed by the appellant. The parties had entered into a purchase and sale agreement, the executing appellee is an Italian company who had sold a tile polishing machine to the appellant… The note was presented for payment after its due date and was dishonored. Thereafter a series of collection actions were undertaken by the appellee… and when these failed the appellee brought an executive action against the appellant.
Appellant, Gamma Due, SL, raised first the defense of lack of proper formalities alleging that the note was presented for payment in an untimely manner on November 21, 1997. Such a defense is rejected as it was below. It is true that the holder of a note has the burden of presenting it on its due date or during the next two working days. Nevertheless, the consequence of failing to present the note during such a date is the loss of an action against the parties secondarily liable such as endorsers or drawers, etc. (who would otherwise lack notice of the presentment and be deprived of an opportunity to timely pay themselves or force payment by the defendant). Thus, the failure to present the note during those early days does not entail the loss of an action by a party primarily liable such as the appellee who as holder of the note was not affected by the above-mentioned period of presentation.
SECOND. The second ground for appeal which consists of the allegation that funds were not provided to the appellant for the payment of the note by the appellee appears to create greater difficulties for the appealed decision. One of the components of this defense is that appellee breached his contractual duties as seller of the equipment purchased by the appellant. Article 67.1 of the applicable law of negotiable instruments points out, in relation to Article 96 of the LCCH, that the “the debtor of a negotiable instrument may raise against the holder of the bill of exchange all the defenses that emerge from their personal (contractual) relationship.” In the case before us, the defense would have been the defects that appellant alleges he found in the tile polishing machine that made it unfit for the purpose it was acquired.
The law links this defense to the bill of exchange… It is true that the provision in question may seem to warrant such a defense when it states that “to the promissory note will be applicable, the provisions related to the bill of exchange… as long as they are not incompatible with its nature (arts. 49–60, 62 and 68)” (art. 96 LCCH)… If 1100applicable, these rules would allow defenses such as the extinction, nullity, or breach of the underlying contract. We are mindful of the existence of numerous decisions by provincial appellate courts which reject the application to promissory notes of the defense that funds for its payment were not provided to the maker-appellant. We are also mindful of the existence of an equal number of decisions that allow such a defense. Our survey of case law shows, then, that the law of defenses is far from uniform.
The critical issue, then, is whether the causal or underlying contract defenses, such as a breach of contract by the appellee against the appellant, are incompatible with the nature of the promissory note. It is obvious that the promissory note differs from the bill of exchange in some fundamental respects: While the note embodies a pure and simple promise of payment by its maker-signer, the bill of exchange is an order of payment directed by the drawer to the drawee. On the other hand, it is also true that once a drawee accepts the bill, his position does not differ much from that of a signer or maker of a promissory note, for his acceptance will also be “pure and simple.” … And no one dares to assert that a drawee cannot raise the defense of lack of provision of funds to the holder of a bill of exchange that claims it. From the standpoint of the certainty of the holding of negotiable instruments, is there a reason to treat any differently the maker or signer of a note and an acceptor of a bill of exchange?… If one were to prevent the maker or signer of a note to raise causal defenses, the promissory note would be transformed into something it is not: the so-called “first demand guarantee,” in which the guarantor promises in an unconditional and absolute fashion to pay once its beneficiary demands payment…
At a time when the instrument has not yet left the immediate parties (the debtor and creditor of the original or underlying transaction) and is not yet in circulation there are no valid reasons to… “immunize” the original creditor from the causal or underlying contract defenses… since he is not a third party in good faith as required by Article 20 of the LCCH. As long as there are not such third party holders, the “personal” or causal defenses between the appellant and appellee may be raised. (art. 67.1 LCCH). The lower court judge is therefore correct when he states that it is possible to raise the defense of the lack of provision of funds against the party seeking to execute on a promissory note.
The fact that such a defense may be raised does not mean that it is appropriate in the present case. What the appellant alleges by way of underlying or causal contract defense was that the machine had a number of defects that made it unfit for its business purpose. This argument is unacceptable… Despite the large volume of materials on record, no precise indication appears on the purpose of the machine. By not supplying the actual sale agreement and its exact specification on the object of this contract, its payment schedule, etc., it is very difficult to deduce if there was a breach by the seller. We only find a document related to the terms of its delivery (franco destination)32 and an addendum whereby the buyer agrees to test the machine for a period of five days allowing its return if it does not perform as it did in the factory and that the period of thirty days to claim hidden or latent defects (vicios ocultos) set forth by Article 342 of the Commercial Code lapsed…
For purposes of admissibility in an executive procedure, our case law distinguishes between the defense of total breach or lack of performance (exceptio non adimpleti 1101contractus) and a defective performance short of a total breach (exceptio non rite adimpleti contractus). While the effect of the first is unambiguous and easily provable in an executive trial—even if the debtor’s promissory note is the basis for this trial—the same is not true with a merely defective performance… The reason for this distinction is that a defective performance often is a matter of degree and therefore it cannot be easily proven by a procedure restricted to objectively and quickly ascertainable evidence… for this reason such evidence is best heard in an ordinary or declarative action as held by a vast number of decisions.
In the case before us, while defects of the polishing machine are alleged it is not certain whether they are major or structural or they arise in normal usage. These are issues beyond the evidentiary capability of a summary trial… In addition, as stated by our Supreme Court, one ought to distinguish between the case of latent defects and a breach due to the mistaken delivery of one thing for another (aliud pro alio)… As stated by the Supreme Court in its decision of December 1, 1977, where one thing has been delivered for another, a total breach has occurred and the aggrieved buyer may rely on articles 1101, 1106 and 1124 of the Civil Code without having to prove the total inability to use the thing… and the latent defects required by articles 1484, 1485 and 1486 of the Civil Code. An executive summary procedure is not suitable also for the determination of whether there is an “aliud por alio.”
No matter how strenuous the efforts of the plaintiff, this court is in no position to determine if there was such a delivery in this case… Here and now what we can only establish is whether or not the machine fulfilled satisfactorily at the time of its delivery and installation as we can also establish that after such a delivery and installation the plaintiff signed the promissory note in question… even though he had no obligation to do it if it was not to his satisfaction… This court thus shares the conclusions arrived by the court below after examining the expert’s findings on the lack of sufficient evidence for a claim of total breach… For all these reasons, we decide that:
The appeal is rejected and the lower court decision is confirmed…
This decision should be highly influential on the issue of admissible defenses in executive actions for commercial contracts and promises of payment. It is factually based and well researched from a jurisprudential, although not always from a transactional, standpoint (as will be discussed shortly). What it says about the enforcement of promissory notes as executive titles could be easily applied to checks, bills of exchange, public deeds and, in some Latin American countries, even to invoices signed by the debtor-purchaser (facturas cambiarias o conformadas or the Brazilian duplicatas), precisely for the purpose of enabling the filing of executive-like actions.
One need not be a legal oracle to divine the reason behind the use of these instruments in an executive trial, a use that crossed national boundaries and appears in the trade between Spain and Italy, two members of the European Union: to avoid the extraordinary lengths and costs of a declarative-ordinary, breach of contract action. Yet, has this promissory note-based practice achieved its purpose?
First, let me address some of the transactional shortcomings of the decision. When comparing the promissory note to the bill of exchange, the court follows what seems to have become a tradition among Spanish courts and litigants. They equate the 1102historical defense of lack of a provision of funds (peculiar to bills of exchange) to the generic “causal” defense because of breach or failure to perform related to the underlying (exceptio non adimpleti contractus and exceptio non rite adimpleti contractus).
The lack of a provision of funds is a defense in mostly obsolete bill of exchange law because, it was based on the acceptance that a bill of exchange was supposed to document an underlying contract for the purchase or trade of foreign exchange.33 It will be recalled that its typical transaction was as follows: The purchaser of the exchange, say in Genoa, Italy, provided Genovese currency to the drawer of the bill of exchange in Genoa so that he would order or instruct (by means of the bill) his correspondent or business partner drawee in Salamanca, Spain to pay a similar or corresponding amount of Spanish pesetas in Spain. The bill of exchange also acted as an authorization to debit the drawer’s account with the drawee for the amount paid out to the holder of the bill. A failure to provide funds to the drawer could be used by the drawee as his justification for not accepting the bill of exchange (if the bill required acceptance) or for not paying it, if it was payable “at sight.”
Only by a rather distant factual analogy could this justification for non-acceptance or non-payment by the drawee (a third party) be equated to the breach of contract by the payee of the promissory note against the maker of the note. For unlike the drawee and the payee-holder of the bill of exchange, the maker and payee of the note were in a direct contractual relationship. Their relationship was referred to by English judges as in “privity of contract,” and the breach of this contract was directly suffered by the maker of the note, unlike what happened with the drawee of the bill. If the same sale had been paid by a bill, it may not have necessarily been suffered by its acceptor-payor because his relationship was with the drawer and its ostensible “cause” was a foreign exchange transaction and not a forbidden loan or even installment sale transaction.
Further, as will be recalled from the discussion about the effect of causa upon French, German and English negotiable instruments law,34 the underlying cause played a disabling role with respect to French negotiable instruments in contrast with its very different (if existent) role with respect to German and English bills of exchange.
In light of the different weight given to the cause of the underlying transaction in France and Spain on the one hand and Germany and Britain on the other, and to the increased willingness by European consumer protection legislation to replace the warranty against hidden defects by a broader warranty of merchantability,35 the following waiver of defenses by the maker of the note may be a useful tool for summary procedures: “The maker of this note irrevocably waives the defense of breach of contract, whether total or partial, except for the defenses of payee’s fraud, malice or grave fault in the performance of the underlying transaction.”36
Yet, would such a waiver be possible under the Geneva Convention on Bills of Exchange and Promissory Notes?37 Would it be possible under U.C.C. Articles 3 and 9?38 Would you agree that if such a waiver were upheld, the promissory note and perhaps other instruments such as the check, the bill of exchange or a signed invoice could truly become effective tools of a quick and inexpensive executive procedure? In light of the importance of contemporary consumer protection law, should this waiver be restricted only to merchants in their commercial transactions?
When drafting the preceding waiver, I was fully aware that, as I stated in the introductory paragraph to this case, a fundamental difference exists between the status of an “immediate” party to the transaction such as the seller of the polishing machine and his buyer in this case, and a third party holder in due course or innocent purchaser of the promissory note. The latter should enjoy immunity from the underlying defenses while the immediate party, in principle, does not deserve to be “immunized.”39 Yet, buyers may well agree to such a waiver if in exchange for their signature they get a considerable reduction in the price or other beneficial terms or conditions, including a beneficial interest in a reasonably-priced insurance policy.
Although the United States inherited a rigid system of pleading and proof known as “forms of action” from English law (whereby unless plaintiffs or defendants repeated ritualistic formulas in their “writs” they risked losing their actions or defenses) such has not been its procedural law for over two centuries. During the nineteenth century, many if not most states adopted a “code” or statutory pleading that dispensed with the old forms of action. It relied instead on a generic complaint or declaration followed by an answer, rejoinder, rebutter and surrebutter, and other unnamed pleadings. Eventually, code pleading was also discarded in favor of a less formalistic and technical system as embodied in the rules of civil procedure adopted by the United States federal district courts in 1938 and eventually by most state courts as well.
United States procedural law, whether in federal or state courts, does not distinguish between civil and commercial trials; the trial of what a civilian would consider a commercial or civil case is subject to the same unified rules of pleading and proof in United States law. This unified trial system is divided into several stages: 1) pleadings; 2) disclosure of the essence of the claims and defenses, and pre-trial discovery; 3) oral presentation of evidence before the judge or jury, as the case may be; 1104and 4) final judgment. This judgment can take the form of a summary judgment in which case there is no need for the presentation of evidence or for discovery, because, based on what the parties themselves alleged, there is no issue of fact to be tried. A fifth and final stage consists of the appeal.
During the entire process, facts “drive the vehicle we call law,” as stated by Judge F. Molloy, a litigator and friend of the author—or “Ex Factum Ius Oritur,” as more elegantly stated by Justice Brandeis of the Supreme Court of the United States. This is the reason why under U.S. law the initial pleadings or complaint have to be sufficiently broad and flexible, enabling the parties to discover and then add, remove or modify its content at any of the previously mentioned stages—prior to final judgment.
As described by Judge Molloy, “the complaint is a written declaration of a claim [a term that now includes electronic communications between the court and the parties], which can be founded on either legislative or common law. The claim need not state facts but may be based on legal conclusions.”41 The Rules of Civil Procedure specify that the complaint requires a “ ‘short and plain statement’ of the grounds of jurisdiction of the court and a ‘short and plain statement’ of the claim.”42 Also, “pleading in the alternative and adoption by reference [are] permitted.”43
A typical U.S. complaint (as the one provided in this section)44 is divided into different counts that state different legal grounds for the claim. Unlike what happens with the Colombian and Mexican complaints, in the U.S. complaint, “[i]t is not material that the counts are phrased in the alternative, or even that one count is not consistent with another.”45
Judge Molloy continues: “Contrary to the practice in many legal systems with Roman ancestry … it is not necessary to allege: … [t]he capacity of a party to sue or to be sued.”46 To which I would add that it is also unnecessary to allege and prove before trial that the parties or of their judicial or extrajudicial representatives have the powers of attorney under which the complaint is filed. Under the U.S. law of procedure there is a presumption of good faith of the parties and of the professionals.
Moreover, under U.S. civil procedure there is no difference between declaratory and summary judgments, because the latter is a generic motion for judgment by which the moving party petitions the court to issue its ruling before trial. This motion is known as motion for summary judgment or motion for judgment on the pleadings, and it requires that there be no “genuine dispute as to the material facts concerning one or more issues”;47 the quid iuris is only on the applicable law, a matter that can be decided by the judge without determining the facts of the case, and hence the process is bound to be resolved summarily.
Under U.S. law, this concept of a trial revolved around the distinct nature of the judicial hearing and its components, both evidentiary and decisional, all of them 1105contributors to the proverbial “day in court.” This concept is in contrast to the civil procedure in many countries with Roman roots, in which the judicial hearing is a stage in a civil or criminal process and which occurs serially.48 In fact, “[i]n the U.S., the trial is in the nature of a single public event, essentially oral in nature, commencing at a time certain, solely and only for the presentation of evidence and the questioning and the cross-examining of witnesses. This event commences on a date and hour fixed by the court, with its object the determination of the facts of the case [and may last a few hours, weeks or, sometimes, even months or years]. [Similarly], [c]ontests over what the applicable law may be [or certain procedures, especially evidentiary ones], are often determined by the trial judge in rulings upon various pre-trial motions [and special rulings].”49
In U.S. civil trials, there is an action and procedure for obtaining a summary judgment. Summary judgment procedures are available for actions based on commercial contracts and negotiable instruments, as well as for actions based on other evidentiary documents or titles that prove the certainty of the rights claimed (for example, final judgments or a party’s confession). As was mentioned in the previous section, the procedural theory behind the U.S. action and procedure for summary judgment is that there is no dispute on the material facts of the claim as alleged by the moving party and not objected by the other party; the only dispute is on the law applicable to such facts. The moving party—whether the plaintiff or defendant—is the one that must prove that there is no genuine dispute as to the material facts. In addition, it is the non-moving party who has to prove that there is a genuine dispute as to the material facts; hence, the nature of the evidence is open and unlimited and, therefore, different from that of summary processes under civil law systems.50 It will be recalled that under the latter, defenses are listed in the law and, therefore, they are closed in number.
One of the most important distinguishing features of the U.S. civil and commercial trial procedure is the ability of the parties to obtain disclosure of facts from opposing parties. The right to discover the factual and legal bases of the opposing party’s case extends not only to material evidence, but also to any fact which may “lead to the discovery of admissible evidence.”51 This revolution in judicial procedure commenced with the adoption by the U.S. Congress of the Federal Rules of Civil Procedure in 1938—rules which, as noted earlier, have served as the model for similar rules in the great majority of the U.S. states and their courts.52
The result of this procedural revolution is that the parties are free to investigate the facts from any type of evidence (documental, testimonial, expert testimonies) before it is presented in trial. This leads to the preparation of very elaborate questionnaires and petitions for documents or other evidence and to the close examination of answers to these questionnaires and to testimony presented by the other party. It must be emphasized that although the parties proceed to this disclosure in their individual and private capacities, the procedure for requesting and disclosing pre-trial evidence is of a mandatory nature.
It is also mandatory to hold private hearings or meetings in which the plaintiff has the right to question the truthfulness of the information provided by the other party—whether provided in the pre-trial discovery stage or during the private hearing. The party answering the questionnaire may object directly before the trial court during the stage of production of evidence, or during the private hearing. In general, an objection may be to the irrelevance, broadness, excessiveness or abusive petition of documents or other type of evidence; or on the examination or cross-examination made by the plaintiff during the private hearing. An objection made during the private hearing must be made to the party conducting the hearing, normally a private lawyer. All objections will be evaluated by the court during a special hearing, and its decision will either order the corresponding party to provide the evidence or the requested answer, or will exempt it from doing so.
This procedure shapes the manner in which the complaint is drafted, leaving the facts, applicable law and petition of evidence open to everything that may be discovered during this pre-trial discovery. This pre-trial process also has a profound effect on the way the parties present their allegations and evidence during trial and on the drafting of the final judgment.
At the end of this section, there is an example of an arbitral award governed by the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL),53 which was influenced by U.S. pre-trial discovery rules and practice. This arbitration award illustrates the significant impact that pre-trial discovery of facts had on the findings of facts and the resolution of that dispute.
Under the U.S. trial system, a complaint is a writ (usually delivered to the court in electronic form) which contains factual and—to a lesser extent—legal grounds on which the action is based. The applicable law may be found in statutes or in common law. As is clearly shown in the complaint provided herein, there are very few formalities required in pleadings. For the complaint, Rule 8 of the Federal Rules of Civil Procedure specifies a “short and plain statement” of the grounds of jurisdiction of the court and a “short and plain statement” of the claim.54 Therefore, pleadings are usually schematic, which justifies some judges granting petitions requesting that the plaintiff provide a clearer or more comprehensive complaint. Finally, it is worth mentioning that not all actions seek to obtain damages, but that there are some special forms of action to claim specific performance of obligations. Unlike the justicia rogada 1107approach, it is not necessary to state the precise relief requested in order to receive damages. These are called actions in “equity,” in which the judge, rather than a jury, is the fact-finder and where what is sought by the plaintiff is recovery of title to real estate property or specific performance of contracts as well as remedies to do or not to do something (injunctive relief).
Law Offices of John P. Green
SBN 111111
2000 E. Main St.
Tucson, Arizona, 00000
(520) 888–8888
IN THE SUPERIOR COURT OF THE STATE OF ARIZONA IN AND FOR THE COUNTY OF PIMA
LISA SMITH, a single woman, and JEREMEY JONES and CHERYL JONES, husband and wife, plaintiffs,
v.
GENERAL PROPERTIES, INC., an Illinois corporation, and ABC LIMITED PARTNERSHIP, a limited partnership, defendants,
COMPLAINT: Rescission of Contract, or, in alternative, Damages for Fraud assigned to: _______.
FACTS: The plaintiffs, Lisa Smith, a single woman, and Jeremey Jones, and Cheryl Jones, husband and wife, for their causes of action against the defendants, and each of them, allege as follows:
COUNT ONE—Rescission
1. The defendant, GENERAL PROPERTIES, INC., is an Illinois corporation, doing business in Pima County, State of Arizona; defendant ABC LIMITED PARTNERSHIP is an Arizona limited partnership; all events giving rise to the causes of action herein stated occurred in Pima County, Arizona.
2. Plaintiff, Lisa Smith is a single woman; plaintiffs, Jeremey Jones and Cheryl Jones are husband and wife.
3. In early September of this year (2000), and prior to September 18, 2000, the defendants, and each of them, by their agent Michael Morgan, made representations and promises to the plaintiffs to induce them to enter into a certain transaction with the defendants, by which the plaintiffs were to purchase through a corporation to be formed and owned by them, a certain space in the “Patron Place,” a shopping center owned and controlled by the defendants, located on East Broadway, Tucson, Arizona (hereinafter referred to as “the Mall”). Among such representations made, which induced the plaintiffs to so act, were the following:
a. That the Mall had traffic levels of approximately 50,000 people per day and that the traffic would at least double over the Christmas and New Year holidays;
b. That the other spaces in the Mall similar to the one being sold to the plaintiffs had present sales levels of a minimum of $2000 per day, and some were doing over $12,000 per day;
c. That in the Mall, during November and December of 1999, the space which had the least amount of sales grossed $70,000 monthly and there were similar spaces that grossed as much as $120,000 monthly during this time.
4. That in reliance upon these representations, the plaintiffs: (a) commenced the organization of a corporation, Body Color, Inc., which was to be the buyer of the space promised to them by the defendants; (b) paid the defendants $100,000 as a partial payment of the purchase price estimated at $500,000; (c) purchased merchandise to retail in the space bought by the plaintiffs from the defendants; (d) employed personnel to administer the retail store to be established; and (e) devoted hundreds of hours of their own time in promoting and conducting said business.
5. The plaintiffs have received no benefit from the space so purchased from the defendants, and in addition to the amounts paid to the defendants as part of the purchase price, the plaintiffs have lost substantial sums of money in carrying out the business.
6. Upon discovering that the representations above stated were materially false and that the marketing campaign in newspapers and television that the defendants as owners of the shopping center had promised had not occurred before or at the time of this complaint, the plaintiffs gave written notice to the defendants, to the effect that they elected to rescind the above-described contract, and offered to deliver back the purchased space in exchange for the $100,000 initially paid.
7. The defendants refused to rescind the contract.
8. In connection with the bringing of this action, the plaintiffs have incurred several costs, including legal fees.
WHEREFORE, plaintiffs ask for judgment as follows:
1. That this court declares that the contract between the parties has been rightfully rescinded by the plaintiffs, and that the defendants must return the sum of $100,000, plus interest at legal rate.
2. That the plaintiffs recover their reasonable legal fees, the costs of this action, and any other that this court deems appropriate.
COUNT TWO—Damages
In the event that the relief sought in the prior count cannot be promptly granted, the plaintiffs adopt by reference the allegations of paragraphs 1 through 4, inclusive, of Count One, supra, and allege the following:
With regard to the said representations and promises, the plaintiffs allege: (a) that these misrepresentations were deliberately made by the defendants; (b) that the representations made were known by the defendants to be false 1109when made; (c) that the defendants had no intention of performing future acts promised; (d) that the representations were deliberately made to induce the plaintiffs to enter into the aforesaid contract, and to induce the plaintiffs to pay to the defendants $100,000; (e) that the plaintiffs were ignorant of the falsity of said representations and promises and reasonably believed the representations made to be true, and that the promised activities would be performed; and (f) that the plaintiffs relied upon the representations and promises made by the defendants and, as a result thereof, they incurred expenses in an amount in excess of $300,000, and expended considerable amounts of their time and energy calculated at a reasonable value of $150,000.
WHEREFORE, plaintiffs ask for judgment as follows:
For judgment against the defendants and each of them for damages sustained in the sum of $450,000, and for the costs incurred in this action, including attorneys’ fees.
For judgment against the defendants for punitive damages in the sum of $300,000, or in such greater amount as the jury and court may deem appropriate, with the purpose of discouraging similar conduct.
For such other relief as the court may deem appropriate.
LAW OFFICES OF JOHN P. GREEN
STATE OF ARIZONA
PIMA COUNTY ss
Lisa Smith and Cheryl Jones stated under oath that they have read the foregoing complaint and that the statements therein are true, in substance and in fact.
Given the importance of pre-trial discovery, I will now transcribe sections of an arbitral award in connection with a major commercial contract dispute, where this type of discovery played a central role and where I was Chair of the Arbitral Tribunal that applied the Arbitration Rules of the UNCITRAL55 signed by Mexico and, therefore, part of the Mexican arbitration procedure that allowed discovery prior to arbitration. Please pay special attention to Section C of this award.
The names of the parties and disputed facts have been modified in order to preserve their anonymity.
Arbitral Award issued with majority of votes, in Mexico September 17, 1996.56
I. BACKGROUND
A. Facts
1. Joint Venture
On June 15, 1985 the Mexican companies PC and MC, each a subsidiary of U.S. corporations PC Inc. and MC Corp. respectively, concluded a contract of joint venture (hereinafter JV).57 The purpose of the contract was to market “fertilizer PC” in Mexico.
Under the contract, MC provided the product and trademark, while PC had to distribute and market the product, including selling, invoicing, collecting, advertising and promoting the product. The parties agreed to equally receive profits or sustain losses, i.e., at a 50/50 rate.
2. CONTRACTUAL REFERENCES TO MEXICAN PESOS AND U.S. DOLLARS
The JV’s daily operations were kept in Mexican pesos, as well as the resulting distribution of dividends and tax obligations. However, their contract referred to the initial investment of the parties as: “the amounts in Mexican Pesos then equivalent to US$560,000…”
3. CONTRACTUAL STIPULATIONS ON MC’S TERMINATION OF THE CONTRACT WITHOUT RIGHTFUL CAUSE
Article 10 of the JV stipulates the termination of the contract with or without rightful cause. Article 10.2.1 establishes the terms and conditions applicable to MC if MC decides to terminate the contract without rightful cause. This article grants MC two options for terminating the contract:
If MC notifies PC of its termination of the contract without rightful cause, MC must comply with one of the following alternatives:… (b) MC will pay PC, or whoever PC appoints, a severance payment equal to 175% of the net aggregated sales of the product received in the last twelve months prior to the notice of termination.
On January 23, 1995, MC notified PC of its intention to terminate the JV effective as of July 31 of the same year, because it considered that, although there were good economic results, the JV was not consistent with its objectives. In the notice, MC indicated that the amount of 112,602,000 new Mexican Pesos was equal to what it calculated was 175% multiplied by the net aggregated sales of fertilizer PC received in the last twelve months prior to this notice, in consideration of the half of the fertilizer business owned by 1111PC. On August 1, 1995, MC delivered payment to PC on the basis of the above calculation and deposited the aforesaid amount… in a bank account with Citibank, NY, where it is still deposited awaiting the resolution of this dispute.
The dispute between the parties is on the amount offered by MC to PC. The amount offered in payment by MC is based on the net sales of the product in Mexican Pesos, during the twelve months prior to the notice of termination, multiplied by 175%. The amount of 112,602,000 new Mexican pesos according to MC was equal to US$19,478,262. Only just a month before MC’s assessment, the Mexican currency was devaluated by approximately forty percent with respect to the U.S. dollar. If the Mexican peso had not been devaluated and if MC would have based the estimations on the net sales on the JV’s profit and loss statement of that year, the amount that MC would have to pay would have reached US$32,783,986.
Therefore, although there are several facts in dispute in the arbitral complaint, in the responsive pleadings to the complaint and in the counterclaim, this dispute is fundamentally on the meaning of the phrase: “the net aggregate sales of the product received in the last twelve months prior to the notice of termination.”
The plaintiff, PC, argues that the parties’ intention was to include a clause in connection with the severance payment section of the contract on the aggregate amount that resulted from the monthly conversion of the value from Mexican pesos into U.S. dollars. This process is known as the dollarization of the Mexican peso, and its main purpose is to preserve in U.S. dollars the value of income from sales received in Mexican Pesos. PC argues that the conversion of Mexican pesos to U.S. dollars was accustomed by the parties and consistent with the obligation of providing periodical financial reports to both holding companies in the U.S. and to the U.S. supervising authorities.
The defendant, MC, argues that the parties’ intention was that of simply paying the amount in Mexican pesos based on the annual volume of sales at the end of the period and not on a monthly and dollarized basis. MC argues that, after all, they are both Mexican companies that conduct their daily operations in Mexican pesos, including tax payments and dividends, as required by Mexican Law.
…
1. HEARINGS
During the preliminary hearing held on April 24, 1996, the tribunal decided that it would apply Mexican Law in deciding on the substantive matter and it would use the AAA rules on the process. The tribunal decided that the documents of the arbitration would be in English, with Spanish translations where applicable; and that the hearing would be held in English and in a manner consistent with other hearings governed by the AAA, meaning that 1112the parties could perform pre-trial discovery in accordance with the Arbitration Rules of the UNCITRAL.58
Prior to the final hearing, this Tribunal decided on MC’s refusal to provide documents requested by an order of this Tribunal; here MC was requested to provide evidentiary documentation requested by PC. MC objected to this order alleging that such order was contrary to Mexican law and its provisions on public order. The answer to the defendant’s objection was issued by a majority of votes and drafted by the same arbitrator that drafted this award. It held that the order did not violate said legal provisions and that, to the contrary, an Arbitral Tribunal has to focus on the facts of the dispute and reject the use of procedural hyper-technicalities that may shadow the relevant facts. Therefore, it held as follows:
In the case at bar, the facts—substance of the dispute—revolve around the intention of the parties in the text of the termination clause. The Mexican Constitutional provisions—including those on due process—in no way prevent this Tribunal from ordering the parties to provide evidence, including files and documents, that may shed light on what was the real intention of the parties… If there was any type of commercial practice or negotiation path followed by the parties, then it must be proven. If the parties had expressed their understanding of the contractual clauses in documents other than the JV, then these documents are subject to pre-trial discovery. After all, once the study of the contractual provision is exhausted, there is no better method to establish the parties intention than that of looking into documents related to prior negotiations and the parties understanding of the contractual clauses. In the absence of such type of evidence, commercial usage or practices in the marketplace must be taken into consideration with regard to the disputed contract…
Pursuant to this decision, both parties provided the required documents, exchanged their list of witnesses and provided a summary of what they anticipated their witnesses’ testimony would be… The final hearing was held in the city of Mexico, on the 24–28 of June, 1996.
II. FACTS
A. MEANING OF NET AGGREGATE SALES
There is no dispute on the meaning of the term “sales.” The meaning of the term “net” was clarified during the hearing as follows: “The term net is used to differentiate between the term gross, the latter being the listed price.” Therefore, what is pending to be clarified is how to aggregate the income derived from the net sales of the contract. The contract establishes a twelve-month period for aggregating sales, but is silent as to the way in which this has to be done. More specifically, it is necessary to determine if the net sales made in pesos should be converted into dollars at the end of each month, as is argued by the plaintiff. Or, must the monthly sales made in pesos be added until the end of the fiscal or calendar year, without converting them into dollars, as is argued by the defendant?
After researching and analyzing several meanings of the word “aggregate” contained in technical and common dictionaries, this Tribunal concluded that the meaning corresponds to the commercial context and purpose of its use. In this case, the context and purpose was to establish the value of the JV at the time of termination, in case one of the parties wanted to purchase half of the business held by the other party.
The contract which is the object of this dispute makes constant reference to amounts in dollars or their immediate equivalent amount in pesos. For instance, when it makes reference to the amounts invested by the parties, it is so done in dollars and provides an immediate equivalent amount in pesos; the same is true of the amounts stating the limits for capital expenses and indebtedness. In this context, the Tribunal may only ask itself: Is it reasonable that the parties wanted to stipulate the amounts for measuring the limits of the JV daily operations in dollars or their immediate equivalent in pesos, and that they did not want to stipulate the same values and amounts with respect to one of the most important transactions in the life of the JV, i.e., the purchase price to be paid by one of the partners?
Although companies like those partnered in the JV, who have issued shares and bonds for public offering, are subject to a strict duty of transparency and authenticity with regards to their accounting and measure of the value of their assets and liabilities, they cannot ignore the need for a coherent measure of assets and liabilities on a daily basis and at the time of sale. Furthermore, in order to guarantee their shareholders and creditors that their assets are constantly protected from devaluation, the only sound commercial and accounting practice is that of converting the assets to the most stable currency as soon as it is possible to convert it. Therefore, it is not reasonable to think that they would use different standards and methods for measuring value, to measure their limits on expenses and debts, and to measure the value of sale of the same assets.
B. REBUTTAL OF MC’S ALLEGATION
Even though the JV contract is silent regarding the way in which the aggregation of net sales must be done, MC argues that the parties’ intention was clear, since all purchases and sales made by the JV in Mexico were done in pesos and both companies were incorporated in Mexico. Despite the fact that it is true—as argued by MC—that the contract does not stipulate that the aggregation of net sales of the product had to be done in dollars, it is also true that the contract does not state that it had to be done in pesos. In fact, as is argued by PC, the contract makes reference to seven different amounts of money, six of which are made in dollars and only one of which—found in the appendix to the contract—is done in pesos.
C. PURPOSE OF THIS DISPUTE AND EVIDENCE RESULTING FROM PREVIOUS DISCOVERY
The real purpose of this dispute is not to determine if the payment must be done in dollars, excluding the Mexican pesos as payment currency, or if it 1114must be done directly in pesos.59 The real dispute is on the amount of pesos that MC must pay pursuant to the aggregation method agreed to by the parties in the JV, or, if the JV does not provide for such method, pursuant to Mexican law and the applicable commercial uses and practices.
MC argues that according to the provisions of Mexican laws on the interpretation of contractual intent…: “unless otherwise stipulated, the only currency that may be used to determine monetary obligations and to perform commercial transactions is the Mexican peso”—Article 635 of the Commercial Code. The arbitrator agrees with this interpretation; however—as previously stated—the issue is not to determine what currency must be used for paying the obligation, but on the amount of Mexican pesos and the method for aggregating them.
The fact that both companies are Mexican does not mean that its partners had the intention of measuring the severance payment in pesos, whose devaluation—both because of official policy and market behavior—has been continuous during the existence of the JV. Both the Mexican Supreme Court and the Appellate Courts ordinarily uphold as effective contractual clauses that stipulate the dollar as currency for measuring payments in pesos.60
Furthermore, and more convincingly, the evidence produced in pre-trial discovery by the plaintiff PC shows that the vice-president of the International Division of the defendant MC interpreted the clause at bar in the exact same way as it is claimed by PC. An internal memorandum addressed to the President, in which the author evaluated the various alternatives that MC had, indicated that: “in fact, and in all honesty, the payment that we should make should be 32.4 million dollars or the amount that results from multiplying the factor 1.75 times the total sales of last year.” To that he added that, depending on the forensic ability of the lawyers hired by PC for this claim, “the amount owed could result in being less onerous in the arbitration process.”
…
…
V. DECISION
In accordance with the preceding analysis, this Tribunal holds in favor of the plaintiff, dismisses the defendant’s petitions and grants the plaintiff the amount in Mexican pesos, equivalent to US$33,493,250 according to the exchange rate effective on the date in which payment had to be performed, plus six percent legal interest pursuant to the provisions of Article 362 of the 1115Commercial Code, in the concept of total and final payment of PC’s fifty percent in the JV.
__________________________
1 I am thankful to the following former LL.M. students from the University of Arizona, James E. Rogers College of Law, for their helpful contributions and suggestions: Ana María Rivera (Colombia), Flavia Figueredo Omodei (Uruguay), Manuel Pliego (Mexico), Samuel Barbosa (Brazil), Ana Cristina Castaneda, Research & Development Director, NLCIFT (El Salvador).
2 Stephen Zamora et al., Mexican Law 321–335 (2004).
3 Instituto de Investigaciones Jurídicas, Mexican Legal Dictionary 1862 (1988).
4 Cód. Com. (Mex.) art. 1061 (1889). It states: The first pleading must have attached:
I. The power of attorney that authorizes the litigant to act on behalf of another person;
II. The document or documents that establish the authority of the litigant in the dispute, when acting as the legal representative of an individual or corporation or when the right claimed was assigned to him by another person;
III. The documents on which the plaintiff supports his claim and those on which the defendant supports his defenses. If the plaintiff is missing a document, he must state in the complaint that he has requested that such document be issued and prove it with a simple copy of the document bearing the stamp of the registry, protocol, office or place in which the original document is filed, so that the certification of said document is issued at his expense, as provided by law. In the case of the defendant, he must prove that he has requested the issuance of the document that he is missing by attaching a simple copy of the document bearing the stamp of the registry, protocol or office when answering the complaint or within three days following the term to answer the complaint.
The parties are deemed to have access to the documents if they can legally request an authorized copy of the originals and if there is a duty to issue them to the parties. If the parties do not have access to the documents or for any other reason cannot file the documents supporting their claims or defenses, they shall state before the judge and under oath the reason why they cannot present said documents. After such statement, the judge shall order the issuance of the document to whoever is responsible for it, at the expense of the interested party, ordering its seizure as provided by law.
Unless otherwise provided by law, or in case of supervening evidence, if the parties fail to comply with any of the previous requirements, no documentary evidence will be admitted if it is not attached to the complaint or answer thereto; the same will apply if the complaint and answer to the complaint do not identify the documents in a way that will allow the court to request and receive them in due time.
IV. In addition to the provisions of numeral III, the parties must attach to the complaint or answer thereto every document that they have in their power and that will be used as evidence; and any document filed thereafter in breach of this provision will not be admitted, unless it is supervening evidence; and,
V. A simple legible copy of the complaint and all the documents referred to herein, including those that are filed for evidentiary purposes in accordance with the preceding paragraphs, in order to give notice to the opposing party.
The immediately preceding provision will also apply to writs claiming the defense of set-offs or counterclaims or other incidents in the process.
Id. (translation by author).
5 C.P.C. (Colom.) art. 75 (1970). It states:
The complaint for any process must include:
1. Designation of the judge to whom the complaint is addressed.
2. Name, age and domicile of the plaintiff and defendant; if no domicile is available, residency must be expressed, and if the defendant’s domicile or residency is not known to the plaintiff, this must be stated under oath, which will be deemed granted upon the filing of the complaint.
3. Name and domicile or residency in absence thereof of the legal representatives or agents of the parties, if they cannot or do not act on their own behalf. If this information is unknown, such circumstance must be expressed as provided in the previous numeral.
4. Name of the judicial representative of the defendant, if any.
5. What is being sought with the claim, which must be precisely and clearly stated. If there are several claims, they must be stated separately, complying with the provisions of Article 82.
6. The facts supporting the claims, duly determined, classified and listed.
7. Law that supports the claim.
8. Amount claimed, when the estimation of the amount is necessary for determining jurisdiction or type of process.
9. Indication of the type of process applicable to the claim.
10. Request of the evidence that the plaintiff attempts to make effective.
11. Address of the office or residence where the plaintiff and his agent will receive personal notices; address where to give notice to the defendant or his agent, unless the defendant or his agent provide a different address, or a statement under oath that such address is unknown, and this oath shall be deemed to be granted upon the filing of the complaint.
12. All other requirements that the code provides on this matter.
Id. (translation by author).
6 Id. art. 75 § 5.
7 Law No. 1135 Ley de Casación, Apr. 9, 1953, [161] Diario Oficial (El Sal.). Since then the law has undergone several reforms, the latest on Aug. 21, 2002.
8 Sala do lo Civil de la Corte Suprema de Justicia [the Civil Branch of the Supreme Court of Justice], 31 de marzo de 2003, “ASSA v. AIG” No. 1466 S.S. (El Sal.).
9 Decreto No. 5869, 17 de janeiro de 1973, Diario Oficial da Uniao [D.O.U.] de 17.1.1973 (Braz.) art. 515 (translation bu author).
10 S.T.F., Ap. Civ. No. 2003.71.05.000320–8/RS, Relator: Des. Federal VALDEMAR Capeletti, 22.09.2004, Diario Oficial da Uniao [D.O.U.], 27.10.2004 (Braz.), available at http://www.natlaw.com/interam/br/bk/cl/clbrbk00071.htm.
11 Example of a complaint prepared by Dr. Flavia Figueredo, graduate of the Master of Laws in International Trade and Business Law (LL.M.) program at the James E. Rogers College of Law of The University of Arizona (2005).
12 I am thankful to Ana María Rivera, graduate of the Master of Laws in International Trade and Business Law (LL.M.) program at the James E. Rogers College of Law of The University of Arizona (2005), for her help in preparing the materials used in this Section.
13 See supra § 9:3.
14 See Cód. Com. (Mex.) Book V (1889). In that respect, art. 1063 provides: “All commercial disputes will be conducted in accordance with the applicable procedures in this Code, special commercial laws and, in lack thereof, by the Federal Code of Civil Procedure.” Id. art 2063.
15 See Corte Suprema du Justicia [C.S.J.] [Supreme Court] augusto 31, 1942, Gaceta Judicial [G.J.] (No. LIV, p. 383) (Colom.).
16 C.P.C. (Colom.), supra note 5, art. 294 (emphasis added). It states: When a person plans to file a claim or fears to be claimed against, this person may make a single request, so that the other party answers an interrogatory of the facts that will be discussed in the process. The request must include a brief statement of what it is intended to be proven.
Id.
17 Code of Civil Procedure (CCP) (Turkey) art. 434 (1927).
18 Hernán Fabio López Blanco, Instituciones del Derecho Procesal Civil 378 (3d ed., 1998) (this author’s translation).
19 C.F.P.F. (Mex.) art. 407 (2008). It states:
The following may be enforced:
I. Final judgments;
II. Public documents that according to this code provide full proof;
III. Private documents recognized before a notary or a judicial authority; and
IV. All other documents that according to the law are deemed enforceable.
Id. (translation by author).
20 Cód. Com. (Mex.) art. 1391 (1889). It states:
The summary process is available for claims based on a document authorized to be enforced. The following are documents that are authorized to be enforced:
I. Final judgments or res judicata and final arbitral awards that do not allow for appeals pursuant to Article 1346 and following the provisions of 1348;
II. Public instruments, official copies of public documents and copies of said documents certified by authorized public officials;
III. The debtor’s judicial confession pursuant to Article 1288;
IV. Documents of credit;
V. Insurance policies in accordance with the provisions of the laws on this matter;
VI. The decision of insurance appraisal experts fixing the value of the incident, in accordance with the provisions of the laws on this matter;
VII. Invoices, checking accounts and any other commercial contracts signed and judicially recognized by the debtor; and
VIII. All other documents that according to the law or because of their characteristics are deemed to be enforcement titles.
Id. (translation by author).
21 See Boris Kozolchyk, The Individual Norm in Mexican Commercial Adjudication, 27 Ariz. J. Int’l. & Comp. L. 339 (2010).
22 L. 466, 8 de julio de 1998, Diario Oficial [D.O.] art. 11 (Colom.).
23 Id. art. 12. It states: “Documents that comply with the requirements of Article 488 of the Code of Civil Procedure are deemed authentic when they can be used as an enforcement title.” Id. (translation by author).
24 López Blanco, supra note 18, at 393. It states:
Notice of default to a debtor is used in cases where enforcement does not coincide with default; on the other hand, notice of the assignment of receivables must be used when the instrument containing the receivable cannot be assigned through endorsement, because if it is possible to transfer or assign a receivable through endorsement notice is not required.
Id.
25 Id. Notice of the assignment of receivables is done by presenting the instrument, “which will have an annotation with the transfer or assignment of the right, designating the assignee and bearing the signature of the assignor.” Cód. Com. (Colom.) art.1961 (1971). It is important to clarify that according to the provision of arts. 1960–1963 of the Colombian Commercial Code, the assignment of receivables has no effects against the debtor or third parties unless due notice has been provided.
26 Cód. Com. (Colom.), supra note 25, art. 1434. It states: “Negotiable instruments enforceable against a decedent are equally enforceable against his heirs, but creditors may not file a claim or enforce it until after eight days following judicial notice of these instruments.” Id. (translation by author).
27 L. 794, 9 de enero de 2003, Diario Oficial [D.O.] art. 70 (Colom.). It states:
This law repeals all provisions that are contrary to it and especially the following: (…) b) Articles 544 to 549 of the Code of Civil Procedure that regulate the minimum amount summary process. These processes will be resolved in a single instance under the rules established for summary processes for large and small claims.
Id. (translation by author).
28 Term used by the nation’s Attorney General in Corte Constitucional [C.C.] [Constitutional Court] 2005, Sentencia C–103/05, available at http://www.corteconstitucional.gov.co/relatoria/2005/C–103–05.htm (translation by author).
29 See, e.g., C.P.C. (Colom.), supra note 5, art. 497. It states:
Upon filing of the complaint in accordance with the law and with the enforcement title attached thereto, the judge will issue an order to the defendant, ordering him to comply with the obligation as requested in the complaint, if possible, or to comply in any way that he considers legal.
Id. (translation by author).
30 Jorge A. Claria Olmedo, Derecho Procesal 314 (1982) (this author’s translation). It states: “The purpose of filing defenses is to ‘avoid being subject to what the plaintiff claims as a definite result of the process filed by the latter.’ ” Id. (this author’s translation)
31 Gamma Due, SL v. SMACC SpA, 1st Branch of the Provincial Appellate Court of Castellon (Spain), June 16 2001 (originally Oct. 13, 1999) (unpublished version on file wit author).
32 See Glossary, “Franco Destination.”
33 See supra § 11:2(D).
34 Id.
35 Id. Perhaps the most important source for the increasing acceptability by civil law nations of its warranty and merchantability is CISG art. 35(2), which was replaced by U.C.C. § 2–314 & § 2–315.
36 The text of this quote is this author’s proposal.
37 The League of Nations, Convention Providing a Uniform Law for Bills of Exchange and Promissory Notes, (Geneva, 1930), available at http://www.jus.uio.no/lm/bills.of.exchange.and.promissory. notes.convention.1930/doc.html.
38 U.C.C. art. 3 (2012) & U.C.C. art. 9 (2012).
39 This is a distinction that I advocated in earlier writings and which was quoted approvingly in some unpublished Spanish, Chinese and Korean court decisions. See Boris Kozolchyk, The Immunization of Fraudulently Procured Letter of Credit Acceptances: All Services Exportacao, Importacao, Comercio S.A. v. Banco Bamerindus Do Brazil., S.A. and First Commercial v. Gotham Originals, 58 Brook. L. Rev. 369 (1992–1993).
40 John F. Molloy, Civil Procedure, in 1 United States Law of Trade and Investment 7–iii–7–76 (2001). This section is a summary of chapter 7 on U.S. Civil Procedure.
41 Id. at 7–22.
42 Id. at 7–48.
43 Id. at 7–49.
44 See infra 2.
45 Molloy, supra note 40, at 7–49.
46 Id. at 7–38.
47 Id. at 7–58.
48 Id. at 7–19.
49 Id. at 7–18. See also Boris Kozolchyk, in Transcript of the Symposium on Judicial Cooperation Between the United States and Mexico 1985 Ariz. J. Int’l & Comp. L 11–13 (1985) (for additional information on this comparison, and the dialogue between Mexican and U.S. lawyers).
50 Molloy, supra note 40, at 7–58.
51 Rule 26(b)(1) of the Rules of Civil Procedure for the United States District Courts, cited in id. at 7–4.
52 Id. at 7–4.
53 Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL). G.A. Res. 31/98, U.N. GAOR, 31st Sess., Supp. No. 17, U.N. Doc. A/31/PV.99, (Dec. 15, 1976).
54 Molloy, supra note 40, at 7–48.
55 Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL), supra note 53.
56 The text of the original arbitral award has been modified because of its length. The original arbitral award was ratified by the Supreme Court of Mexico.
57 Art. 252 of the Ley General de Sociedades Mercantiles [LGSM] [General Law of Commercial Corporations], as amended, Diario Oficial de la Federación [DO], 4 de agosto de 1934 (Mex.). It defines the atypical contract of joint venture as: “A joint venture is a contract by which one person grants another person or persons that provide goods or services to the former a share in the profits and losses of the commercial activity or of one or several commercial transactions.” Id. (translation by author).
58 See supra § 25:6(C)(1) (on pre-trial discovery).
59 Mexican monetary laws clearly, expressly and certainly stipulate that every monetary obligation payable in Mexico must be paid in pesos.
60 See Amparo Directo 8364/81, María Palacio Viuda de Suárez, 10 de octubre de 1983; Amparo Directo 6286/80, Carlos Villareal Alanís y María Elena Medina Ríos de Villareal, 1 de octubre de 1981; and Amparo Directo 1390/80, Arturo Cortés Villada y otros, 31 de octubre 1990, cited in Semanario de la Suprema Corte de Justicia [SCJN] [Supreme Court], tercera sala, Séptima Época, tomo 175–180 (undated), Tesis Aislada, Página 115 (Mex.). See also Amparo Directo 1149/82, Kenworth Mexicana, S.A. de C.V. 22 de noviembre de 1982, cited in Semanario de la Suprema Corte de Justicia [SCJN] [Supreme Court], tercera sala, Séptima Época, tomo 163–168, (undated) Tesis Aislada, Página 46 (Mex.).