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MAY 1

1940

Legal Information is a Business Necessity

Comparative Law Series

THE DIVISION OF COMMERCIAL LAWS

Guerre Euerelt, Chief

Harold DeCourcy, Assistant Chief

Commercial Arbitration
Joseph H. Barkmeler - Foreign laws and Taxes
James L. Brown - Industrial and Imellectual Property
Henry P. Crawford - Foreign Laws and Taxes
Harry J. Daniels Insurance and Social legislation
Joseph Janousek Foreign laws and Shipping
Morton Kent - Slavic laws
Leo G. Koepfle - Domestic Industrial Legislation
A. Tetrault - International Trade Adjustments

A Monthly World Review

of
Laws Affecting American Commerce

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TEN CENTS
MAKE REMITTANCES TO
SUPERINTENDENT OF DOCUMENTS, WASHINGTON, D.C.
U. S. DEPARTMENT OF COMMERCE. HARRY L. HOPKINS. Secretary
BUREAU OF FOREIGN AND DOMESTIC COMMERCE ALEXANDER V. Dre, Director

THE CIVIL LAW RECEPTION

OF TRUSTS

By Ricardo J. Alfaro*

I am sure that in many different countries governed by the civil law, courts were frequently confronted with the difficulty of enforcing trusts affecting persons residing or property situated in these countries, and lawyers encountered situations and problems that could only be adequately solved by means of an institution similar to the trust feature of the Anglo-American law.

At the time I was proposing a trust law for the Republic of Panama I received a letter from the manager of one of the local banks, who is as well a lawyer, wherein he stated:

That the common law trust or something analogous thereto is desirable, almost necessary here, goes without saying. Almost daily there come up instances of inconvenience and even of injustice, because we do not have it. You in the practice of law have seen many such, and I would be willing to state that we bankers see as many or even more instances where it is impossible to accomplish some sound and worthy object because there is no such thing as a trust in this jurisdiction. I have often wondered why no attempt has been made to introduce it and have presumed that it was due to the inherent difficulty of adapting a peculiar institution of one system of jurisprudence to another and very different system; but on reading your draft of law, it looks simpler than I had supposed.

an

In France the problem of enforcing foreign trusts within the national jurisdiction arose with considerable frequency. Several cases of importance were decided by the French tribunals between 1880 and 1928 in which the question of the validity of trusts was examined and decided in different ways.

In the year 1909 the noted French jurist, Maurice Travers, discussed the matter in excellent article published in the Revue de Droit International Privé (Darras-Lapradelle, 1909, pp. 521-533). With great juridical perspicacity the author studied the validity of trusts created by aliens on property subject to the French law, or by French citizens on property situated outside France. He reached the conclusion that trusts of the latter category are valid insofar as there is nothing in the French law that voids such a contract executed by French citizens to produce its effects outside French territory. But as to the former he gives this unequivocal opinion:

On the contrary, trusts created on personal or real property situated in France are, at least in the case we have examined, 1.e., where the trustee has the legal ownership, null and void in the eyes of the French law, whatever the nationality and the

*Porner President of the Republic of Panama and Minister of Panama at Washing tos. This article is an address that was delivered to the Committee on Latin Americas Law of the American Bar Association, Section of International and cost parative Law, on November 16, 1938.

De la validité, au point de vue du droit francais, des trusts crées par des étrangers sur des bien, soumis a la loi francaise ou par des Prancais sur des bien situé's hors de France, par Maurice Travers, Avocat a la Cour de Paris, Docteur en Droit, lauréat de l'Institut,

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