Report No. 13873-BO How Legal Restrictions on Collateral Limit Access to Credit in Bolivia December1 994 Office of the Chief Economist Latin America and the Caribbean Region Document of the World Bank HOW LEGAL RESTRICTIONS ON COLLATERAL LIMIT ACCESS TO CREDIT IN BOLIVIA December 1994 *This report is based on the findings of two missions to Bolivia in March 1991 and March 1992. The team was led by Heywood W. Fleisig of the Bank and included Juan Carlos Aguilar, economist at the La Paz Resident Mission, and Nuria de la Pefia, laywer and consultant to the Bank. The authors are obliged to Robert Effros of the International Monetary Fund for his early guidance about the economic importance of these legal provisions, and to Alejandro Garro and Andrew Spanogle for extensive advice on the legal issues. Marcelo Selowsky advised throughout on the economic analysis and its bearing on the Bank's credit line operations. William Shaw worked closely with us and advised us from the inception of the project. Roberto Cucullu, Mark Dorfman, Graciela Rodriguez Ferrand, Lance Girton, Thomas Glaessner, Roberto Laver, and Hal Scott made many helpful comments. Many Bolivians have generously given their time to explain their perspectives on these problems. Any errors are entirely the responsibility of the authors. CONTENTS Executive Summary ............. - I. Introduction.. 1 - II. How the Laws Governing Financial Instruments Affect Credit and Economic Growth .- 3- How Do Borrowers Back Their Loans? .- 3- Collateral Problems Reduce Investment and Growth .- 4 - Collateral Problems Distort Credit Allocation. -6- CoHateral Problems Narrow the Distribution of Credit. -6- Conclusion.. 8- III. Extralegal Repossession and Sale of Collateral .- 10 - IV. Financial Instruments and Collateral: Overview of Legal Issues .- 14 - Definition of Property .- 14 - Structuring Claims Against Property .- 15 - Establishing the Existence of a Claim Against Collateral in Bolivia .- 17 - Obtaining and Enforcing Judgment.. 17 - V. Creation and Perfection of Security Interests .- 18 - Creation and Perfection with Physical Possession .- 19 - Creation and Perfection without Physical Possession and without Written Registration .- 22 - Creation and Perfection without Physical Possession and with Written Registration .- 23 - The Registries .- 24 - Problems and Options for Solutions .- 26 - Pass a Comprehensive Law of Secured Transactions .- 27 - Improve the Operation of Legal Registries .- 29 - VI. Obtainine Judgment in Bolivia .- 31- Judicial Procedures .- 31 - Problems and Options for Solution .- 35 - Permitting Private NonJudicial Enforcement of Loan Contracts .- 36 - Improve the Administration of Justice.- 37 - VII. Enforcin2 Judoment .......................... - 41 - Determining the Amount Owed . .......................... - 42 - Attachment and Seizure . ..........................- 43 - Public Auction ...........................- 44 - Problems and Options for Solution .......................... - 45 - Appendix I: Economic Cost of Deficiencies in Bolivia's Collateral Law ....- 49 - Appendix II: Results of an Analysis of Bolivian Debt Collection Cases ... - 61 - Appendix III: le2islacion Sobre Garantias Reales Mobiliarias: Terininos de Referencia . - 71 - Appendix IV: Legislacion Sobre Acceso Publico a los Registros. Bienes Inembargables v Contratos Modelos para el Credito Mobiliario: Terminos de Referencia - 107 - Glossaries: English/Spanish .. . - 119 - Spanish/English .. . - 127 - MAP (IBRD 16591) Executive Summaary i. In Bolivia, banks supply most of the loans to the private sector. Bolivian banks usually accept only real estate as collateral for these loans, or the personal guarantee of someone who owns real estate. They usually will not accept inventory, accounts receivable, livestock or industrial equipment as collateral without demanding a supplemental guarantee based directly or indirectly on the ownership of real estate. ii. These policies: * Make it difficult for anyone without real estate to finance the purchase of equipment, inventory, or livestock. Limit access to credit by business enterprises in rented quarters, by farmers who work rented land or have unclear title, and by all who don't own real estate. * Limit profitable and socially useful lending by banks, as well as credit sales by industrialists, importers, and merchants. Make non-bank credit expensive, because lenders find collateral other than real estate very risky. Deprive lenders and borrowers of due process of law, by misusing the punitive sanctions of the criminal law to substitute for inadequate civil enforcement of contracts. Broadly, these lending policies lead to high interest rates, low volumes of lending, investment rates that fall short of socially profitable needs, and lower output and incomes. Problems in Securing Loans Against Movable Property iii. Why is credit so tightly linked to urban real estate and large rural land holdings in Bolivia? Not because of low income, low growth rates, or the relatively small size of the country. Nor is there evidence of excessive conservatism by commercial banks, disinterest in the needs of commerce, or excessive restriction by the Superintendency of Banks. Rather, this link arises from Bolivian law and legal procedures. iv. Lenders regard loans secured only by movable property and equipment as more risky than loans secured by real estate; this is correct: - ii - * Inadequate legal definition of collateral and guarantees makes it impossible to cover some important economic transactions with legally-recognized agreements. * The law permits only complex and time-consuming measures for repossessing collateral, procedures that take longer than the economic life of many movable property. * Inadequate registries make it hard for lenders to trace claims, pledges and mortgages and to identify their collateral in the eyes of the court. v. Movable property typically depreciates rapidly with time and use. If collection procedures take too long, such property has little value as collateral. In an examnination of over 500 debt collection cases, the average collection time was over two years. Lenders, understandably, require other forms of collateral. Ad Hoc Solutions to the Collateral Problem Have Failed in Bolivia vi. Lenders and borrowers, struggling to make profitable and socially beneficial deals despite the inadequacies of laws and legal institutions, go beyond the law. They use postdated checks to guarantee payment and send the borrower to jail in the event of default. They use bailee agreements that subject the bailee, typically a family member of the borrower, to jail if the collateral is not delivered. Nearly a third of the people in jail in La Paz -- and 60 percent of the women -- are there because debt collection has been criminalized. Debt-related "crimes" account for more prisoners than murder, theft, drugs, or rape. vii. Because these ad hoc solutions convert ordinary commercial risk into criminal risk, these are not good remedies. Where ordinary businessmen outside Bolivia face the prospect of loss if they default on a loan, Bolivian businessmen face the prospect of jail. Understandably, potential sellers hesitate to sell on credit, and potential buyers hesitate to buy on credit. Lenders with important reputations to protect, like banks, will not use these illegal methods to protect claims on movable property; for banks, illegal solutions are not solutions at all. The High Economic Cost of the Collateral Problem viii. Breaking this tight link between access to credit and ownership of real estate requires changing the law so that more lenders would find it profitable to make loans secured by movable property. This change could provide large and broadly distributed economic benefits. Banks would gain from undertaking profitable loans presently closed to them because of excessive collateral risk. - ill - * Manufacturers and dealers in equipment, fertilizer, seeds, and grains could extend their own credit to buyers. * Banks could accept the loans arising from such credit sales as collateral for other loans that would let these manufacturers and dealers sell more on credit. * Other financial intermediaries such as leasing companies could borrow to finance sales, accounts receivables, and machinery. * Potential buyers who now lack access to credit because they cannot offer real estate collateral could borrow in the private sector for productive loans using the movable property itself as collateral. ix. The overall benefit to the Bolivian economy would arise from the wider use of equipment and working capital in projects where it is profitable but, at present, difficult to finance. A rough estimate of this benefit indicates that -- with the drop in interest rates that might be expected from improved collateral -- the demand for equipment could rise by about $1 billion. That expanded use of equipment could increase output by an estimated $230 million to $330 million, about 3 percent - 4 percent of Bolivian GDP. Options for Solutions x. Addressing this problem requires revising Bolivia's Laws, improving legal registry systems for those commercial and civil contracts that create security interests, and speeding up the process for settling claims. The government of Bolivia has several options. Change the Law to Permit a Broader Range of Security Interests to Cover all Economically Important Transactions: xi. Enact a new law on secured transactions for business and consumer borrowers that includes substantive and procedural rules that: * Expand the range of assets that can serve as collateral. * Regulate floating security interests for all secured transactions and agreements, using commercial inventory as collateral. * Regulate accounts receivable as collateral, avoiding the transfer of accounts requirement. * Give a clear perfection of security interest in the goods sold on credit. - iv - * Establish clear regulations for disclosure of fees, interest rates, and other termns of lending. Accelerate the repossession and sale of collateral: In the short-tern: * Apply rapid resale to all movable collateral. Regulate or amend Article 171 of the Civil Code to clarify that its application is not limited to fruits and vegetables, but applies to all movable property that decline in value (si hubiere peligro de perdida o desvalorizaci6n) in an amount sufficient to endanger the collateral because of the long time required to litigate repossession and sale. Regulate or amend the law to clarify that the judicial power to order sale in the most convenient way (podra ordenar la venta en la forma mas conveniente) should include sale controlled by the creditor. * Clarify rapid repossession procedures. Regulate or amend Article 162 of the Civil Code, which gives the court the power to act rapidly, to set specific procedures for the rapid repossession of movable property. (Clarify which contracts pernit rapid repossession and sale. Regulate or amend the law to provide that rapid repossession and sale procedures can apply to several important secured transactions contracts such as right of retention (Commercial Code, Article 812); the right of adjudication related to the pledge without transfer of possession (Civil Code, Article 1427); and to the conditional sale or sale with retention of title (Commercial Code, Article 839). Draft sample contracts. Include model standard contract forms for seller credit, specifically a standard contract for business borrowers, negotiated under freedom of contract (Commercial Code, Article 786 and Civil Code, Article 454), providing that the seller can retain title to the goods. For bank credit: use pledge-without-transfer and chattel mortgage agreements when lending against movable property. In the long-term: * Change the law. Let private parties bypass the court procedure for execution of judgment by allowing them to write contracts permitting harmless repossession so that the creditor may repossess collateral, to sell it through private sale controlled by the aggrieved lender or through judicial sale without appraisal. This procedure will also let private parties bypass existing auction procedures. Improve Legal Registries: xii. After the law has been changed to make it economically useful to register security interest against movable property, reform the registries: * Index and computerize the registries in which secured claims are registered. * Computerize and modernize the Commercial Registry. * Expand the use of equipment registration at the Real Estate Registry. * Strictly enforce the public access requirements to government registries. * Set targets for improved performance and maintain public records of the amount of time required for each step in the registration process. How Legal Restrictions on Collateral Linit Access to Credit in Bolivia I. Introduction 1. In Bolivia, most lenders require real estate as collateral. This practice makes it very difficult for merchants, mine owners, industrialists, professionals, and farmers to borrow against equipment, inventory, crops, or anything else they might use in the course of their trade or business. 2. This paper asks why such a limited range of property should serve as collateral for loans. It finds the answer in the Bolivian legal, judicial, and regulatory systems: the court system operates very slowly and the system of laws makes it difficult for parties to make loan contracts that can bypass the courts for their full enforcement. 3. This paper aims at both economists and lawyers. The economic problem is relatively simple: collecting any debt in Bolivia is expensive and takes a long time. Only the most durable and valuable collateral is worth anything in such a system; therefore, most loans are ultimately secured by urban real estate, which will last beyond the time expected for a court decision and has great enough value to cover at least the minimum cost of collection. The typical piece of industrial or agricultural equipment is worth less than the typical real estate holding and, unlike real estate, typically falls in value with age. For lenders facing high fixed legal costs of repossession and sale, equipment is much less attractive as collateral than land. 4. This problem has complex legal and judicial roots. Consequently, this paper covers these issues at a level of detail that may seem tedious to some legal readers; this is regrettable but unavoidable. It is important to distinguish technical legal terms from common usage. To indicate technical legal terms for the non-legal reader, italics are used for English legal terms, with Spanish terms in parentheses. This also identifies legal terms for lawyers trained in only one of the legal systems, civil or common law, relevant to discussions in this paper. In most cases, these terms appear in the appended glossary. In some cases, differences between the civil and common law usage means that no equivalent term exists in the other language. In that case, the glossary sets out the sense in which the term is used in this paper. - 2 - 5. Chapter II discusses how Bolivian lenders actually secure their loans in the face of these severe problems that restrict the use of collateral. Chapter III discusses how the legal treatment of collateral affects credit and, in turn, the financing of investment and economic growth. Chapter IV introduces the legal issues: it defines property, explains how claims are secured by collateral, and discusses how the legal and judiciary system in Bolivia enforces those claims. Chapter V presents the general issue of the creation and perfection of security interests and how they are handled in Bolivia. Chapter VI describes how a Bolivian creditor would obtain judgment from the court in the event of a breach of a financial contract; it explains why the process takes a long time and sets out some options for shortening the process. Chapter VI discusses how a Bolivian creditor would enforce such a judgment; it also explains why that process is so protracted and discusses options for reform. 6. Appendix I sets out a back-of-the envelope estimate of the economic cost of the collateral problem in Bolivia. Appendix II presents the analysis of debt collection cases in Bolivian courts. Appendix III contains the terms of reference for a general law of secured transactions for Bolivia, prepared by Professor Alejandro Garro. Appendix IV has the terms of reference for a series of short-term solutions that address aspects of the collateral problem. II. How the Laws Governiig Financial Instruments Affect Credit and Economic Growth 7. Bolivian law envisions two broad classes of private borrowers: commercial banks and everyone else. As a practical matter, the debt of non-bank private borrowers is backed by real estate: property other than real estate cannot readily serve as collateral. This system limits the volume of credit available for productive transactions. It allocates credit away from farmers who rent, from farmers with unclear title to land, and from manufacturers who need large amounts of machinery relative to their real estate holdings. It allocates credit toward real estate development, and keeps credit out of the hands of those without land. This credit system reduces economic growth and directs the benefits of growth away from the poor. How Do Borrowers Back Their Loasm? 8. Private lenders care deeply about how their debts will be repaid. Therefore, they care about what backing the borrower offers. Commercial banks borrow by taking deposits, by selling certificates of deposit, or by issuing bonds. They back their debts with their real property, their investment assets, and their expected profits. At one level, these anticipated profits depend on the bank's expected interest costs, interest receipts, and loan performance. At a deeper level, however, the quality of the backing that the bank offers depends indirectly on the quality of claims against the government. First, because the de facto and de jure policy of the Bolivian government on insuring depositors effectively provides a state guarantee to some of the debt of commercial banks. The state does not offer comparable guarantees for non-bank private borrowers. Second, because how well a commercial bank services its own debt will depend on government policies -- how freely the Central Bank rediscounts the private loans presented to it by the commercial banks, and how aggressively the bank regulators force banks to recognize losses. 9. What backs the promises to repay by other borrowers -- consumers, industrialists, merchants, and farmers? For some loans to individuals, collateral is not necessary. To some degree, individuals, like nations, will service debts because the gain from future, larger loans exceeds the burden of servicing past, smaller loans. Accordingly, revolving funds that lend for recurring needs, like seeds for farmers, often show high servicing rates. In other cases, community pressure ensures repayment. Often community or church cooperative lenders show high servicing rates, and, no doubt, some individuals can be counted on to repay loans because they have strong moral views that loans should be repaid. These loans are unsecured but they have good backing. 10. But, even while some lenders will make unsecured loans, if they have intimate knowledge of the borrower, few lenders will make substantial loans under such conditions. For lenders in most countries, good collateral and good collection make good loans. In most cases in Bolivia, - 4 - such borrowers secure their promises to pay by either mortgaging real estate to secure their loans' or by giving evidence of the ownership of real estate that could be attached to pay loans. Such borrowers give personal guarantees,2 which involve a generalized pledge of their wealth, or use a surety of the wealth of another. Few Bolivian borrowers secure their loans by pledging durable equipment or personal belongings. This situation has roots in problems of Bolivian law and legal procedures. Collateral Problems Reduce Investment and Growth 11. How important are these legal obstacles compared to other factors in explaining high interest rates or reduced investment? Do legal problems in creating collateral explain the high interest rates facing borrowers who secure loans with real estate? Most likely, they do. Consider some frequently offered alternative explanations: 12. Macroeconomic instability and high bank intermediation margins. Only a small amount of the high interest rates facing Bolivian borrowers arises from macroeconomic factors or high bank intermediation spreads. Loans to individuals without real estate in Bolivia run between 36 percent and 72 percent per year, versus a range of 9 percent to 14 percent in the United States -- a difference of 22 - 63 percentage points (Table 1). 13. Of that difference, about 8.5 percentage points arises from the risk of macroeconomic instability in Bolivia and another 5.5 percentage points arise from higher bank intermediation spreads. The additional interest rate differential -- 14 to 50 percentage points -- arises from problems with movable property as collateral. 14. Put a different way, half to three-quarters of the higher interest rates observed in Bolivia arise from the collateral problem. For lawyers, "real property" refers to real estate as distinct from other physical or 'personal property.' For economists, "real property" connotes both real estate and 'personal property,' as distinct from "nominal" assets like paper securities. Broadly speaking, under Bolivian lav, borrowers can give lenders one of two guarantees: a real guarantee or a personal guarantee. Under a real guarantee, the creditor has a security interest in a specific asset of the debtor, such as a mortgage on the debtor's house or a pledge on the debtor's equipment. The lender is then a secured creditor who holds a position in the line of priority to recover the amount that he is owed from the proceeds of the eventual sale of that specific piece of property. tJnder a personal guarantee, the lender is an unsecured creditor because the borrower will [respond] with any and all of his property, giving the creditor no specific interest, priority, or security interest against any specific property (C(6digo Civil, Art. 1335). In such a situatiol, the lender-creditor will be unsecured until a court orders an attachment or a judgment lien recorded in the appropriate registry. Whetn the creditor records such a court order, the creditor creates a specific lien on a specific asset of the debtor; the lender then becomes a lien creditor with respect to that specific asset, and will remain an unsecured creditor for any deficiency judgment (the creditor will have a personal guarantee on any of debtor's assets until the total balance due is paid). Under Bolivian law, the parties need not stipulate in their contracts the debtor's personal guarantee: a personal guarantee of the debtor always exists under the law. without the need to provide for it specifically. Table 1: Explaining High Interest Rates for Loans in Bolivia United States Bolivia Difference I. Greater Macroeconomic Risk in Bolivia: [7There is no risk that the U.S. government will be unable to pay its bonds in dollars, because it has the legal monopoly on printing dollars. The government of Bolivia must get its dollars by raising taxes or cutting spending. These are politically difficult actions and lead to perceptions of macroeconomic risk. The differnce between the U.S. interest rate on dollar bonds and the Bolivian interest rate on dollar bonds is entirely macroeconomic risk. Government borrowing rate in dollars | 3.5% 12.0% 8.5% 2. Higher commercial bank intermediation spreads in Bolivia: [Commercial banks in Bolivia have less competition than do U.S. banks so they charge more to intermediate funds. Reserve requirements are similar and do not explain differences in intermediation spreads] Prime business rate 6.0% 20.0% l --Spread over govemment borrowing rate 2.5% 8.0% 5.5% 3. Movable property is less adequate collateral for loans in Bolivia: [Differences in macroeconomic risk and intermediation cost apply equally to loans secured by real estate and loans secured by movable property. In the United States, loans secured by movable property have interest rates close to the interest rates on mortgages; in Bolivia, banks do not make loans secured only by movable property and informal lenders charge rates of 36 percent to 72 percent] Mortgage Interest Rate 8.25% (25 year) 18% (5-10 years) Equipment/Automobile Loan 9.30% (4 yr) - 12.7% (10 yr) 36% - 72% FSpread 1.05% - 4,45% | 18.00% - 54.00% 13.55% - 50.00% Source: U.S. data taken from Federal Reserve Bulletin, July 1993, tables 1.35, 1.53, 1.56; Bolivian data from the Bulletin of the Central Bank. Rates for loans secured by movable collateral based on evidence given during interviews. 15. High transactions costs relative to loan size. One explanation offered for the reluctance to lend for equipment rests on the supposed small size of such loans. This doesn't hold up well under examination. In fact, about three-fourths of the loans made by Bolivian commercial banks are for US$10,000 or less. Loans of that size for movable equipment are common in the United States, where the labor costs of loan processing are higher. High transactions costs can't explain the reluctance of the Bolivian banks to make these loans. Their reluctance, rather, arises, as the bankers themselves repeatedly and consistently stress, from their belief that the movable property do not offer much value as guarantees for loans. 16. Structure of banking. Some explanations of high interest rates rest on allegations of conservative bank lending policies. But banks cannot substantially liberalize their policies regarding collateral unless the underlying quality of collateral policy is changed. Without reform, loans secured only by movable property do present substantial additional risks. Where high bank intermediation spreads arise from too little competition, the collateral problem limits development of non-bank lenders that could compete with banks and lend for movable equipment. - 6 - Collateral Problems Distort Credit Allocation 17. Restrictions on collateral distort Bolivian economic activity. Economic sectors in Bolivia, as elsewhere, differ substantially in their most profitable combinations of real estate, equipment, and human capital. Since real estate security is better in Bolivia, the legal and regulatory environment for lending operates to lower the risk of lending for real estate; this permits lower interest rates for such loans and leads the market to allocate more capital toward operations intensive in real estate. Hotels and commercial buildings will be relatively easy to finance. By contrast, though, a factory operating in rented space will find it difficult to finance machinery because it cannot mortgage the real estate. A service company -- such as a bus, taxi, or road transport company -- that requires large inputs of durable equipment and relatively little real estate will also find financing difficult. A landless farmer, or one whose land is covered by murky homestead provisions, will have trouble financing equipment. 18. How much is it worth to address this problem? Appendix I sets out a rough estimate. In Bolivia, about 10 percent of commercial bank loans are granted using movable equipment as collateral; in the United States, about 40 percent. If fixing the problem of collateral led to a similar expansion in lending and drop in interest rates, total lending for equipment could rise by as much as $675 million. That increase in equipment use could increase Bolivian GDP by as much as $200 million a year, an increase of about 2 percent. Collateral Problems Narrow the Distribution of Credit 19. While both wealth and income are distributed quite unevenly in Bolivia, real estate is distributed even more unequally. Indeed, Bolivia has one of the most concentrated patterns of land ownership in Latin America, with about 5 percent of the people owning about 95 percent of the land (Table 2). Problems with using movable property as collateral, therefore, lead the present system to distribute credit even more narrowly than the distribution of wealth. In countries with different credit-granting systems, an employed person without wealth can borrow using movable property as security: a businessman in rented quarters might borrow to buy equipment or inventory, using these goods as security for the loan; a farmer on rented or inalienable land might pledge his equipment or his crop as collateral. Present Bolivian laws and legal procedures make such transactions nearly impossible. Not surprisingly, small farmers, small businessmen, and the poor cannot borrow in the formal banking sector. Nor can they get much credit from merchants or machinery dealers because those businesses, in turn, cannot get credit to finance their movable property: inventories and accounts receivables. Instead, they must borrow in the informal or illegal sector, where rates are higher than they would be if the legal framework permitted competition, and where borrowers are often subject to extralegal collection techniques. Table 2: Size Distribution of Loans, Deposits, Borrowers and Lenders Amount of Deposits Number of Depositors Million Comulative Comulative DEPOSITS US$ Percent Percent Number Percent Percent $200,000+ 301.4 25.8 25.8 599 0.2 0.2 $100,000 - $200,00() 131.2 11.2 37.0 947 0.3 0.5 $50,000 - $100,000 170.5 14.6 51.6 2,439 (.8 1.2 $40,000- $50,(0() 63.9 5.5 57.1 1,463 0.5 1.7 $30,000- $40,000 65.4 5.6 62.7 1,933 0.6 2.3 $20,001)- $30,000 92.0 7.9 70.6 3,855 1.2 3.5 $10,00(0- $20,000 128.1 11.( 81.5 9,220 2.9 6.3 $5,00) - $10,000 93.6 8.( 89.6 12,899 4.0 1(0.4 $1,000 - $5,000 92.7 7.9 97.5 37,93() 11.8 22.1 $500- $1,00(0 12.6 1.1 98.6 17,351 5.4 27.5 < $500 16.6 1.4 1((.( 233,529 72.5 10().( Total 1,167.8 1(XI.0 322,165 1()(1.() Amount of Loans 1/ Number of Borrowers Thousand Cumulative Cunmulative DEPOSITS US$ Percent Percent Number Percent Percent $1,500,0(0)(+ 314,366 18.0 18.0 108 (1.1 (.1 $1,0(0,(X)( - $1,500,000 84,551 4.8 22.8 78 ().1 0.2 $750,000 - $1,0)0).0()(( 94,519 5.4 28.2 134 (0.2 (1.4 $500,00) - $750,000 128,572 7.4 35.6 30)0) 1).4 ().8 $250,0(X) - $5(0,((( 229,151 13.1 48.7 752 1.() 1 7 $1(0),00) - $250,000 260,431 14.9 63.6 1,71)8 2.2 3 9 $75,0(0) - $10(1),1000 78,548 4.5 68 1 979 1.2 5.1 $50,)0 - $75,0(00 88,718 5.1 73.2 1,559 2.( 7.1 $25,000 - $50,000 141,132 8.1 81.3 4,15(0 5.3 12.4 $1(0010 - $25,(0(N) 157.466 9.() 90.3 1(),168 12 9 25.2 < $1(,0(1() 109,335 9.7 1()().() 59.056 74.8 10.() Total 1,746,791 1()().() 78,992 1()().() Source: Superiltelldenley of Banks of Bolivia, Monthlv Bulletih. I/ Including contingents. -8 - Conclusion 20. These effects of law on the allocation and distribution of credit reflect the rational responses of borrowers and lenders to the legal structure of the country. These allocative and distributive effects would not, however, follow in an environment where the legal structure made personal property better collateral, as it does, for example, in Trinidad, Jamaica, the United States, and Germany. A different legal structure would yield lower interest rates without lowering risk to lenders. That would permit more investment in equipment at the same level of profit and, consequently, produce a higher rate of economic growth. 21. The policy question facing Bolivia revolves around devising an alternative legal structure that could meet these economic needs and yet remain at least as politically acceptable as the current structure. Setting up public institutions that lend for the purchase of movable property despite these legal problems will not solve the problem -- such institutions would simply find themselves with non-collectable loans. They would fail for precisely the same reasons that private lenders originally refused to make such loans. - 9 - Table 3: Gini index values for concentraion of land ownership in 54 couz,ties a! Number of countries in range Range of index values Latin American countries Other non-industrial countries b/ Industrial counries cl .80 and over 12 3 3 .70to .79 5 4 4 .60to.69 0 7 4 .50 to .59 0 4 3 .40 to .50 0 3 3 Total 17 21 17 Gini values for selected Latin American countries Bolivia .94 Brazil .84 Venezuela .89 El Salvador .83 Peru .88 Uruguay .82 Guatemala .86 Dominican Republic .79 Ecuador .86 Honduras .76 Colombia .86 Nicaragua .76 Argentina .86 Panama .74 Mexico .69 a Most available data are frouitn e 1960s For three countries, irtdex values before and after land reform were available. Pre- and post-refoim valucs are, respecsely: Mexico, 0 96-0 69, Egypt, 0 81-0 67; Taiwan, 0.65.0.46 b/ Countries in Asia, North Africa, Southern Europe, plus Jamaica. c/ Less than 30 percent of labor force employed in agriculture. Source Samuel P Huntington, Political Order in Changing Societies (New Haven, Conn Yale University Press, 1968); Table 6.2, p. 382, cited an Malcolm Bale, LA Tenare in Venezuela, IBRD 1992 - 10 - III. Extralegal Repossession and Sale of Collateral 22. If Bolivia could use property other than real estate as collateral, it would open up a large number of profitable transactions between lenders and borrowers. These transactions would increase Bolivian economic efficiency, production, and incomes. Not surprisingly, Bolivians have devised ways to bolster the value of personal property as collateral, but these solutions are not legal: the postdated check (cheque postdativo), theft of collateral, police harassment, misuse of the bailment (depositario) agreement, misuse of sale with an option to repurchase (venta con pacto de retroventa), and illegal pawnshops. This chapter explains how these Bolivian laws and legal procedures criminalize these business transactions. 23. The postdated check. The borrower writes a check to the lender for the amount of the loan but does not date the check. If the borrower does not pay the lender, the lender can threaten to deposit the check. If the borrower has insufficient funds, the check bounces; the borrower who wrote the check has committed a criminal offense.3 The lender can present the returned check to the police station and have the borrower arrested. While using postdated checks to guarantee loans is a criminal offense for both borrower and lender, respondents could cite no case of a person jailed for accepting a postdated check. 24. The postdated check, Dickensian though it is in its workings, is a major form of guarantee in Bolivian lending. Half the inmates in La Paz jails are imprisoned for non-drug offenses; of these, half are imprisoned for the crime of writing checks without funds. The mission interviewed approximately 15 of these inmates. In each case, the "check without funds" had been written as the guarantee of a business transaction and in each case the prisoner was a small business operator. Those imprisoned typically lacked the family connections necessary to raise the funds necessary to cover the check. They remain in prison until the check is covered, even if that means staying imprisoned beyond the four-year maximum penalty for crimes related to the use of the check. For imprisoned women this can take on a particularly disturbing dimension, as they bring their children to the jail. 25. Abuse of the bailment (dep6sito). Under a bailment agreement, a third person is named bailee (depositario). The lender drafts the agreement requiring the borrower to name a close relative as the bailee, such as the wife, mother or child. That person is responsible for turning over the collateral in the event of nonpayment. Failure to turn over the collateral is a criminal offense and the bailee can be jailed. 26. Misuse of the sale with reservation of title (venta con reserva de propiedad). The lender has the borrower execute a sale document granting the lender ownership until the total purchase price is paid.4 If the borrower fails to repay, the lender gets a summary judgment and the property is passed Codigo de Comercio, Art. 602, 640; C6digo Penal, Art. 204-205. See also D.S. 1943, March 6, 1950 which defines checks drawn without funds as a swindle (estafa) punishable under the C6digo Penal, Art. 637. 4 The sales agreement under reservation of title does not constitute a security interest, but merely an agreement specifying the time at which ownership passes to the buyer. See Alejandro M. Garro, 1990. "The Reform and Harmonization of Personal Property Security Law in Latin America," Revista Juridica de la U.P.R., V59:1:90. - 11 - to the lender. Sometimes the amount of the loan is a small fraction of the value of the collateral, so the debtor loses far more equity than would be the case with legal foreclosure procedures. The abuse arises from the frequent occurrence of unconscionable contracts where the loan is for only a small fraction of the value of the property. Under conventional foreclosure procedures, the borrower receives the difference between the selling price of the collateral and the loan due; in this case, the borrower does not. Such contracts are typically unenforceable because they are unconscionable, but a borrower with insufficient funds to exercise the option to repurchase may also lack the funds for a lawyer to press the case and will lose the property anyway. 27. Police harassment. Some lenders avoid judicial proceedings by requesting police investigation of a person whose payments are in arrears. Such investigations can lead to the debtor being jailed for minor infractions, apparently unrelated to the debt. Such harassment continues until the debt is serviced or the collateral returned. Legally, the police have no such function; in practice, creditors prepared to pay the police can sometimes obtain their cooperation in such efforts. 28. Forcible repossession of collateral. Some industrial countries permit harmless repossession: a creditor may seize collateral for a loan so long as there is no breach of the peace, and a debtor wronged in the process can sue for redress. In Bolivia such peaceful seizure would, strictly speaking, be theft. Nonetheless, creditors on occasion simply seize the collateral. In some cases, repossession is done harmlessly; in other cases, bands of armed men are sent to collect equipment. It is then up to the debtor to use the painfully slow legal system to recover the property if it was wrongfully seized. 29. Illegal pawnshops. Informal lenders apparently grant loans with personal property as collateral. They charge interest rates above the usury ceiling and illegally privately sell collateral. It is difficult to pass and enforce consumer protection legislation stipulating publicly quoted rates and clear procedures for privately selling collateral. The current practice ensures that the poor pay higher interest rates than they would if legal lenders competed under clear disclosure rules. 30. Extralegal solutions are socially undesirable; lenders averse to taking risks will avoid them, making interest rates and transactions costs higher than they would be otherwise. Borrowers averse to taking risks will also avoid them, because sanctions in the extralegal market expose them to far greater risks to person and property than would sanctions in a country whose laws facilitated these transactions. The fundamental issue is that private parties can contract around many defects in government performance, but they will have great difficulty contracting around defects in the government's provision of a legal framework in which to exercise the right to contract. 31. Arrest and imprisonment of debtors. A credible criminalized debt collection mechanism must actually imprison debtors who fail to pay. In Bolivia, those who used the foregoing security devices are typically jailed for check without funds, fraud, or abuse of confidence. 32. Who gets arrested? Offenders can be arrested and detained or they can be arrested and subsequently freed. Over the period 1990-1993, about 20 percent of those arrested and detained and about 40 percent of those arrested and freed were arrested in connection with an offense broadly - 12 - associated with substituting criminal sanctions for collateral -- about 1/3 of those arrested in La Paz between 1990 and 1993 (Table 4). Table 4: Arrests, annually, with and without detention Total and arrests related to the use of checks as collateral Year 1990: 1991: 1992: 1993 (Jan-Mar): Total 19993) Year arrested arrested, arrested arrested, arrested arrested, arrested arrested, and not and not and not and not detained detained detained detained detained detained detained detained bad check 75 1215 98 942 81 1227 12 495 4145 fraud 61 295 43 248 54 170 25 72 968 abuse of confidence 11 112 16 85 10 39 8 12 293 total, collateral- 147 522 157 1275 145 1436 45 579 4306 related (est) total arrested or 541 2869 661 2654 834 2832 314 971 11676 detained for all crimes | Collateral-related 27.2% 18.2% 23.8% 48.0% 17.4% 50.7% 14.3% 59.6% 36.9% (es() as a percentage|lllllllll of total crimes l l l l l l l l l Source: Corte Superior del Distrito, Presidencia, La Paz, Bolivia. Statistics supplied to the mission, April 19, 1993 33. Who is in jail? Because different groups of offenders get jail sentences of different lengths, the number of people in jail for different crimes may differ from the number of people arrested for different crimes. Counting as collateral-related crimes only check offenses and "fraud," typically both used in post-dated check guarantees, would place the number of inmates imprisoned for collateral-related crimes at just under 20 percent of the jail population (Table 5). This represents a heavy concentration of women inmates -- over 40 percent of the women in jail are there for check and fraud offenses. 34. A larger category of "economic" crimes would embrace other collateral-related offenses -- for example, misuse of bailee and trustee agreements. About 40 percent of the La Paz jail population is imprisoned for "economic crimes" -- about 2/3 of the women and about 1/3 of the men. 35. Economic crimes represent the largest single cause of incarceration in La Paz -- more than murder, theft, narcotics, or rape. Indeed, even narrowly defined collateral-related crimes like check and fraud offenses are a more important cause of imprisonment than theft, drugs, or rape and a close tie for - 13 - murder and assault. Between 40 percent and 60 percent of women inmates are imprisoned for collateral- related crimes. In many cases, their children live in jail with them. 36. The mission spent a day in the La Paz jails interviewing inmates of the men's and women's prison charged with economic crimes. In every case, these were business people who used post-dated checks or bailee's agreements to secure a business deal -- a truck, a liquor shipment, a tv shipment. As interpreted by Bolivian courts, those jailed for check-related crimes are not freed until they have paid the civil penalties; the civil penalty is typically equal to the amount of the check. The mission interviewed inmates who had been in jail for 5 to 7 years and who had no prospect of release. 37. In considering changes in the law that speed up repossession and sale of property used as collateral, it is important to consider not just the abstract concepts of the rights of the debtor and creditor; important as well is the reality that confronts the actual borrowers in the system. Table 5: Inmates of La Paz Prisons by Gender and by Nature of Crime, 1993 Men Women Total Crime: Number Percent Number Percent Number Percent of total of total of total Minimum Estimate of 14.0% 41.9% 18.3% Collateral-related Crimes --Check offenses 120 8.8% 79 31.2 % 199 12.3 % --Fraud 71 5.2% 27 10.7% 98 6.0% Maximum Estimate of 33.6% 60.9% 37.9% Collateral-related Crimes --Economic Crimes 460 33.6% 154 60.9% 614 37.9% Non-Economic Crimes: --Crimes against people 325 23.8% 33 13.4% 358 22.9% --Crimes against property 214 15.6% 11 4.4% 225 13.9% --Narcotics trafficking 134 9.8% 62 24.5% 196 12.9% --Sex crimes 167 12.2% 167 10.3% --Other 38 2 8% 3 1.2% 41 2.5% Total: 1368 253 1621 . Sotircc Coret Superior del Disirito, Presideiscia, La Paz, Bolivia. Statistics supplied to die missioin. April 19, 1993. - 14 - IV. Financial Instruments and Collateral: Overview of Leal Issues 38. Assets may have great economic value but be useless in credit transactions if the law does not permit transfer of property rights in those assets. For example, mining machinery could represent excellent collateral for a loan in a legal system that permits the pledge of mining equipment, but not in a legal system that forbids it.5 Agricultural land may produce a good yield but be useless as collateral if the terms of occupancy forbid transfer of land rights or the seizure of the crop. For assets technically acceptable as collateral, such as a car or a lettuce crop, collection procedures may be so slow that the collateral loses its economic value during the collection process. 39. Such restrictive legal institutions can have major effects on credit markets. Land reform that makes land inalienable makes farmers better off by ensuring they will always own land. It makes them worse off by preventing them from borrowing against the land. Under such a land policy, other compensating measures are necessary to make it possible to seize collateral like cash crops or farn equipment, if the farmer is to receive secured credit at all. Similarly, when lengthier and more extensive legal procedures are introduced to protect the rights of debtors, compensatory policies to maintain the speed of these legal processes are necessary if those protected are to have access to credit. 40. These legal issues raise several general questions: What does the law view as property? How can individuals establish claim to property when they secure a transaction with an interest in that property? If the borrower does not perform under the contract, how does the creditor obtain compensation? If compensation is necessary, how does the creditor arrange for it, including seizure and sale of the collateral? When a court judgement is required for compensation, how does the creditor execute that judgment? Definition of Property 41. The law defines property. This paper follows the following definitions, typical in common and civil law: * Real Property -- real estate. * Fixtures -- property physically attached to but not incorporated into real estate, like carpets or most production machinery in a factory. Bolivian law exempts mining equipment from the reach of all creditors. Bolivian lenders cannot legally accept movable personal property used in mining activities as collateral. Articles I to 10, 27 and 28 of the C6digo de Mineria states that they are 'goods of public utility" (bienes de utilidad publica). Article 179 (Clauses9 and 10) of the Code of Civil Procedure, in conjunctionwith Article 449 and 456 of the Commercial Code, states that property indispensable for the operation of the mine (or any business) cannot be attached to satisfy creditors' claims. So "protected," these citizens cannot buy such equipment on credit without offering other property as a guarantee. - 15 - * Tangible Personal Property -- inventory, equipment, farm products, or consumer goods. * Intangible Personal Property -- assignments of rights for payment of money, such as the accounts receivable, promissory notes or documents of title (a warehouse receipt, a promissory note, or a bill of lading); intangible assets of a business may include its value as an on-going concern, good will, or the right to use a trademark, copyright, or patent.6 Structuring Claims Against Property 42. Claimants against property fall into two classes: * General creditors having a general claim against a debtor's property. * Secured creditors having a security interest in a specifically designated property of the debtor. 43. A security interest7 is "a right of satisfaction" from the property -- the collateral -- to which the security interest is attached. When the collateral is sold or exchanged, the claim of the secured creditor will be paid or "satisfied" in the order of its priority among all claims against the collateral.8 A secured creditor has a security interest in the designated property of the debtor. This secured claim must be satisfied before any claim of the general creditor.9 The general creditor has a general claim against all past, present or future properties of the debtor, but has no security interest in any specific property of the debtor."' A security interest in a designated property has priority over the general claim of a general creditor. " 44. Using security interests, firms can borrow from suppliers, merchants, or banks, and can offer their inventory as security; they can borrow to buy equipment and secure their promises to pay with that 'This paper uses the term "movable property" to include tangible, intangible, and fixtures property. 7 The term security interest should be distinguished from securities. Securities are instruments that represent a general claim against all the nonexempt assets and income of the issuing agent or corporation, such as stocks, bonds, commercial paper, certificates of deposit, or bank deposits. Under U.S. concepts, a security interest is also an ownership interest in the property itself but less than full ownership. For example, a mortgagee or pledgee is a secured creditor (Bolivian Civil Code, Articles 1360, 1397, 1398, 1405, 1406, 1427, and 1428). '° Bolivian Civil Code, Article 1335. " Some important public-policy exceptions exist to this general rule: government liens for unpaid taxes, property that is exempt from seizure for debts, and workers claims for severance pay and back wages are the most important] In the event that the secured creditor's claim is not satisfied by sale of the collateral, the secured creditor has a general claim against the debtor's other property for any deficiency balance. - 16 - equipment; they can borrow with loans secured by warrants that are issued by warehouses and represent claims on merchandise in the warehouse. 45. Security interests need not be created only against tangible personal property. They may be created against intangible property, such as commercial contracts that economic agents use to assign different property rights to the goods and services in which they deal. In most civil and common law countries, many types of commercial contracts exist: sales contracts to move goods from producer to consumer; leases of goods that permit their use without ownership; consignments of goods that permit their sale without use; contracts with carriers for the shipment of goods conveying no right to use or sell; contracts with warehouses for the storage of goods; assignments of accounts receivable; promissory notes issued as evidence of debt; documents of title; and rights to payment under letters of credit that ensure that shipped goods are paid for before delivery.'2 Security interests may also be created using a security (titulo-valor) as collateral: a lender could have a security interest in stock, bond, or a certificate of deposit. " 46. Each contract assigns property rights in a way that solves some economic problem; each contract makes some improvement in economic efficiency. A commercially useful mechanism for secured loans must minimally accomplish the following five basic tests: 1. It must cost little to create an enforceable security interest. 2. It must cost little to enforce the security interest. 3. The security must produce real commercial value for the lender when enforced. 4. The lender must be able to determine before the loan is made, with certainty and at little cost, whether any other lender has better claims to the security. 5. The lender must be protected from claims of third parties, including secured and unsecured creditors, the trustee in bankruptcy, and some purchasers of the security. 14 47. Bolivian law permits many contracts with which creditors can secure a debt with movable property. Nothing in the Bolivian system is inconsistent with a commercially useful law system, but the Bolivian secured transactions system does not meet the five tests. Moreover, Bolivian law unnecessarily restricts the types of collateral that may be covered by security interests, especially concerning the security interests in fixtures and personal property on which this paper focuses.'5 12 Richard E. Speidel. Sales and Sales Financing. 1984. St. Paul; West's Publishing Co. 28. '3 Usually this refers to a security agreement used as collateral (chattel paper). A lender may take as collateral all of another lender's security interests in equipment from the second lender's secured loans to its borrowers. Legal constraints in Bolivia give limited, almost non-existent use to chattel paper. '' John A. Spanogle, Proposed Polish Charges Act (1992). IS Uider Bolivian law, parties cannot fully contract security interests on any collateral they choose. The asset must be specifically mentioned in the law. Moreover, the law must also define the type of contract to be used. See Bolivian Civil Code, Articles 1417 and 1418 and Bolivian Commercial Code, Articles 878 and 886. - 17 - Establishing the Existence of a Claim Against Collateral in Bolivia 48. When a creditor and debtor agree that a loan will be secured with some interest in the debtor's property, the creditor obtains a security interest in the debtor's property. The agreement that creates this security interest is the security agreement, and the transaction is a secured transaction. 49. The creditor gains public recognition of the security interest by giving effective public notice of that interest; if public notice is effected in accordance with the local laws, the creditor's interest is perfected. The process of perfecting an interest is crucial for the lender: it establishes the priority of the lender's claim among all claims against the property, and it permits the lender to legally defend this claim against the claims of other creditors. In some cases, the creditor must perfect an interest by filing it in a public registry. In others, the creditor is presumed to have a perfected interest by possessing the collateral. Chapter V discusses how security interests are created and perfected in Bolivia. Obtaining and Enforcing Judgment 50. If one of the parties to a contract believes that a contract has been breached, what procedural steps must be taken to give that party relief? For example, if a creditor makes a loan to a debtor to permit the debtor to buy a truck and the contract specifies that the creditor may repossess the truck if payment is not made in a timely way. If the borrower falls into arrears on the loan, what procedure certifies that payment was not made and establishes the right of the creditor to take the truck? 51. Broadly speaking, that procedure is obtaining judgment; Chapter VI discusses it. But if a court rules that the creditor is entitled to the truck, how does the creditor actually seize it? What distinguishes the creditor in seizing the truck from a thief? Can the creditor physically take the truck? If the borrower objects, can the creditor use physical force? Will the judicial police enforce the judgment? How does the creditor enforce his rights? Chapter VII discusses enforcing judgment in Bolivia. - 18 - V. Creation and Perfection of Security Interests 52. The law determines what property can serve as collateral -- the object of a security interest. The law also determines the circumstances under which that property can serve as the object of a security interest. Broadly speaking, these two features of the law set out how a security interest may be created. The law also establishes the procedure for determining the position, ranking, or seniority of different security interests in the same property. This takes place through perfection -- the legal process that warns all other potential creditors that a prior claim exists on the asset. This chapter sets out a brief overview of Bolivian practices and then discusses the processes of creation and perfection in more detail. 53. Creation. Lenders may create security interests in goods that remain il the hands of the borrowers with three instruments: the civil pledge (prenda civil), the commercial pledge (prenida comercial), and the chattel mortgage (hipoteca mueble). The law states that the civil pledge may be used for goods used by hotels, industries, agriculture and ranching. The commercial pledge must he used for other goods in commercial use that do not involve those sectors. The chattel mortgage regulates licensed personal property. Table 6 spells out the relationships among these instruments and types of contracts. 54. There are many "gaps" in Table 6 -- many economic agents, types of property, and types of contracts that are economically useful but not envisioned under the law. Any lender who, nonetheless. writes a loan contract will run a heightened risk of not collecting his loan. 55. Perfection. A lender may have a security interest in a property, but what prevents another lender from taking another, more senior, security interest in the same property? Perfection is the legal process that warns all other potential creditors that a prior claim exists on the assets and ranks the claims of lenders. In Bolivia, creditors may perfect the order of priority of their interests, either with or without physical possession. When an interest is perfected with physical possession, the secured party physically holds the collateral, as does a pawnshop or bonded warehouse. This physical possession warns all other potential creditors that a prior claim exists on the asset. When an interest is perfected without physical possession, however, the creditor usually must file a notice of the security interest in a public registry maintained for that purpose. 56. For both economic and legal reasons, the publicity is crucial for perfection. When lenders can readily determine who else has a claim against the personal property or fixture, they can also know with confidence that they can defend their claims against other potential claimants. They know the law will reject the claims of those who have failed to post their claims to the collateral publicly. The general rule that all claims must be publicly registered permits a workable ranking system in which lenders can have confidence, and permits an economically superior outcome. By contrast, a system that permitted secret claims would raise the risk to all lenders, reduce lending, and produce an economically inferior outcome. - 19 - Table 6: Personal property and fixtures that can serve as collateral and the loan contract that can secure loans against them. Type of collateral Pledge with Pledge Chattel transfer without mortgage transfer Type of contract Pawnshop Warehouse Civil Commer- receipt receipt pledge cial pledge Any physical merchandise Yes, acceptable Yes, if No No No by pawnshop acceptable by proprietor warehouse proprietor Licensed property (car, boat, Yes, if Yes, if No Yes, if Yes plane) acceptable acceptable acceptable Licensed property used in hotel, Yes, if Yes, if Yes No Yes, if industry, ranching, or acceptable acceptable accep- agriculture table Licensed property used in other Yes, if Yes, if No Yes Yes commerce acceptable acceptable Unlicensed property used in Yes, if Yes, if Yes No No hotel, industry, ranching, or acceptable acceptable agriculture Documents of sale No No Not Not readily No readily Revolving inventory; No No No No No transformable inventory; professional office equipment Unlicensed property used in Yes, if Yes, if No Yes No commerce other than hotel, acceptable acceptable industry, ranching, or agriculture Accounts receivable, chattel No No No No No paper Creation and Perfection with Physical Possession 57. Creation. A variety of broad problems arise in Bolivia with the creation of security interests in collateral held by the lender. These are laid out broadly in Table 6. The most serious arises from the definition of the "floating pledge" that would be written over a homogeneous commodity like wheat in a grain elevator, cattle, or generalized inventory -- where the definition is very restrictive and raises the risk that the lender will lose the security interest in the commodity when the physical composition of that commodity changes in the normal course of business. For example, when the borrower sells some grain - 20 - from inventory and replaces it with other grain, the security of the lender's claim may be undermined even when the total value of the grain in storage remains the same. Table 7: Place of registration of the loan contract Licensing registry (motor Real estate registry Commercial registry vehicle, boat, airplane) Prenda Civil Yes, if property has license Yes, if non-licensed used in number, and used in hotel, hotel, industry, agriculture industry, agriculture, or or ranching ranching Prenda Comercial Yes, if property is licensed Yes, if property is and not used in hotel, unlicensed and not used in industry, agriculture, or hotel, industry, agriculture, ranching. or ranching Hipoteca Mueble File against any good receiving a license number 58. A lender can perfect a security interest by taking physical possession of the collateral. That is, the physical possession alone serves to notify all other potential lenders that the possessor has a security interest in the property.'6 For example, a pawnbroker retains the item pawned; afield warehouse places the inventory under the custody of the lender or the lender's agent; collateral placed in the custody of a bailee remains in the physical possession of the lender so long as the lender controls the document of title. In such cases, the law regards the lender as having a perfected security interest. By mere possession, the lender maintains this interest.'" In some countries, but not in Bolivia, the creditor may sell the collateral with no further court action. Several important examples of perfection with physical possession exist in Bolivia: pawned items held in pawnshops or deposits in bonded warehouses. Pawnshops and warehouses are examples of the use of pledge agreements where the collateral remains in the hands or the control of the lender, the "prenda con desplazamiento." 59. Pawnshops. Decree Law No. 07438 (December 14, 1965) established the "Caja de Ahorro y Cr6dito Popular," (CACP) a combined public savings bank and pawnshop that would extend credit secured by personal property. Formally, CACP negotiated pledge agreements. Under DL 07438, however, in the event of a loan default when it had possession of the collateral, CACP could privately sell the collateral -- that is, sell without a court-administered auction."8 DL 07438 overruled the pledge provisions of the Civil and Commercial Codes, which forbid such private sales.'9 This law provided that CACP must maintain custody and auction the movable property given as collateral. Legal pawnshops 1" C6digo Civil, Article 1403 and C6digo de Comercio, Article 882. 1' C6digo de Comercio, Articles 882 to 885 and C6digo Civil, Articles 1403 to 1412. II D.L. 07438, Articles 20 and 28. " C6digo Civil, Articles 1340 and 1409, and C6digo de Comercio, Article 880. - 21 - no longer exist in Bolivia: the combination of usury ceilings20 and interest rates that soared with inflation made private pawnshops unprofitable; nor could private pawnshops use the private sale provisions accorded to CACP. The CACP closed when the losses from its subsidized operation became unmanageable.21 60. Bonded warehouses. Bolivian law authorizes general deposit warehouses (almacenes generales) for the storage of goods; warehouses have the power to issue warehouse receipts (certificados de dep6sito) which banks may accept as collateral.22 61. A warehouse receipt demonstrates ownership of the goods deposited in the warehouse. Endorsing the warehouse receipt can transfer ownership of the goods. Attached to the warehouse receipt is a collateral receipt (bono de prenda). Endorsing the collateral receipt can transfer the security interest in the goods.' 62. If the debtor does not pay the pledge credit when due, the holder of the collateral receipt for the goods held as collateral can request that the warehouse manager sell them at a private auction.24 This auction may not be suspended except by order of a competent judge, or by payment of the amount due plus interest and costs. The creditor will be paid from the proceeds of the auction. The secured creditor has priority over any other creditor; no legal action is required to document this priority, as the law deems the fact of the goods being in the warehouse as constituting such notice.' Warehouse receipts are readily accepted as collateral by Bolivian banks. They represent good collateral because, in the event of default on a loan, the collateral may be quickly sold.6 63. This is important evidence against the charge that Bolivian banks are excessively conservative and unreasonably unwilling to lend on collateral other than mortgages and personal guarantees. Their 20 Usury laws prevent Bolivian consumers from not legally contracting to pay more than 3 % in monthly interest. 'De acuerdo a lo previsto por los Articulos 409 y 410 del C.C., que por ser imperativas de orden puiblico, el interes convencional no puede exceder del 3 % mensual y si se estipula una suma superior debe reducirse a dicha tasa...." (G.J. No. 1646, A.S. No. 120 de S.C. Ia., de 24- VII-80). 21 The law for the restructure of the Agrarian Bank contains similar provisions for private sale, arid it includes provisions for harmless repossession (Decreto Supremo 16699, July 5, 1979, Articles 57 and 58). See also D.S. 11658, Article 64. 22 C6digo de Comercio, Articles 689 to 711, and D.L. of January 15, 1931. u C6digo de Comercio, Article 692(7), 694(1) and 698. Article 699 also requires giving notice, underthe responsibility of the endorser, that the security interest has been transferred to the endorsee. However, it seems that failure to give this notice would not affect the effectiveness of the endorsement. 24 C6digo de Comercio, Article 706. 25 C6digo de Comercio, Articles 706-711. Also, and more importantly, constitutes notice the fact that the warehouse receipt, which represents the stored goods, indicates that the collateral receipt has been negotiated (C6digo de Comercio, Articles 692(7), 694(1) and 698). 26 See also, Banking law (1928), Article 147; D.S. No. 06456, D.S. No. 07507, D.S. No. 7878, D.S. No. 8351, D.S. No. 8768, D.S. No. 9229, D.S. No. 9733, D.S. No. 10326, D.S. No. 11658 (Article 64), D.S. No. 13100, D.S. No. 11536, D.S. No. 16699 (Articles 57 and 58), D.S. No. 19534, D.S. No. 20252; and D. L. No. 07070 (2.3.65). - 22 - acceptance of warehouse receipts as collateral supports the view that lending would broaden if procedures to repossess and sell collateral were improved for other classes of property. 64. Other types of possession. Aside from pawnshops and warehouses, Bolivian law broadly permits businesses to make loans secured by personal property and fixtures in the lender's physical possession under the Commercial Code; non-business individuals can make similar loans under the Civil Code. In these cases, however, the provisions of the Commercial and Civil Codes prohibiting private sale apply. If the borrower defaults, the creditor must go through the full court procedure for obtaining and executing judgment. These court processes are expensive and lengthy, reducing the usefulness of movable property as collateral from the perspective of the lender. 65. The parties to the loan contract could privately agree to private sale and shorter procedures; but such a private agreement would be contrary to the Civil and Commercial Codes and, therefore, void.27 The lender would be unable to enforce this right in court if the debtor objected. As the objection of the debtor is not improbable, the lender would not view this extra-legal agreement as substantially reducing his risk. The collateral, therefore, would not make the loan substantially less risky than an unsecured loan to the same borrower. 66. Economic problems. Loans that rely on perfection with physical possession can severely restrict the economic usefulness of collateral to the debtor, especially where the debtor needs to use the collateral such as retail inventory, a farm tractor, a truck, or woodworking machinery. Nor would physical possession reduce the lender's risk where the collateral was intangible; for example, physically possessing the accounts receivable of a company would yield little advantage to the debtor.28 67. Summary. Perfection with physical possession plays an important role where the borrower does not need to retain physical possession of the collateral. Where it works in Bolivia, in warehouses and formerly in pawnshops, it works well even though gaps in the law could be closed and permit its expansion. This type of lending underscores the substantial role that movable collateral could play in Bolivia if the problems surrounding obtaining and executing judgment (see below) could be solved or circumvented. Creation and Perfection without Physical Possession and without Written Registration 68. In Bolivia, as in most countries, security interests are never created automatically by the law. Only a formal agreement between the parties can create a security interest. However, in some other countries, the law specifies that the underlying features of the transaction give a creditor a perfected interest without registration. Moreover, if a security agreement accompanied the credit or sale, and if the seller discovers that the buyer did not pay for the goods, the seller may satisfy the debt by repossessing or selling the goods without going to court. Under Section 9-503 of the Uniform Commercial Code (U.C.C.), the seller has the right of harmless repossession -- the seller/creditor can physically take the collateral from the debtor so long as the seller/creditor does not breach the peace. 27 Bolivian Civil Code, Articles 1340 and 1409, and Commercial Code, Article 880 void any contract stipulation for private sale. 2M See, Alejandro M. Garro. 1987. "Security Interests in Personal Property in Latin America: A Comparison with Article 9 and a Model for Reform," Houston Journal of International La v 157:171. - 23 - For example, a truck that serves as collateral for a loan in default can be towed from its parking place and returned to the lender. 69. Bolivia's secured transactions law does not have similar provisions. In no case does a security interest arise automatically for the seller of goods against a debtor who has not paid for those goods. Typically, however, upon default the creditor gets a preference (privilegio) or statutory lien on payment of the amount due, as a landlord would if a tenant failed to honor a lease, or seller if a buyer failed to pay.'9 However, this statutory lien is much weaker than that implied by a perfected interest in the United States because it does not imply priority over other creditors.30 70. In Bolivia, the creditor without possession of the goods can only sell them judicially -- that is, get a court order to sell them.3' The creditor could not, as in the United States, repossess and privately sell the goods and avoid going to court. Creation and Perfection without Physical Possession and with Written Registration 71. In Bolivia, when the collateral stays in the possession of the debtor, the only legal way to create a security interest is by using one of the formal agreements specified in the law. The Civil and the Commercial Code regulate two such agreements: the pledge without transfer of possession and the chattel mortgage. The chattel mortgage requires a more specific identification of the property than does the pledge and is typically used for licensed movable property. The pledge can be used for some movable property. For any loan contemplated, whether the chattel mortgage or the pledge is most appropriate depends on the nature of the property and the transactors. The criteria are set out in the Civil and the Commercial code. 72. To be perfected, these contracts must be recorded in the appropriate registry designated by the government.32 Filing such claims with the state establishes priority of claims, because potential lenders know where to look to discover whether other lenders have prior, conflicting claims to the same collateral. In the simplest example, perfection would give notice to other creditors that a senior security interest exists in the same collateral. The borrower could grant another security interest, but only one with less seniority than the first perfected security interest. 29 Besides the vendor's privilege, Bolivian law recognizes the lessor's privilege in the goods of the tenant, the repairman's lien privilege over the property repaired, and the privilege of the innkeeper in the baggage of his guest. Bolivian Civil Code, Articles 1349, 1350, and 1351. 30 `[The privilege] comes into existence by operation of law if a seller is not paid for the goods sold; and its effects are generally limited to the time during which the goods sold remain in the hands of the buyer. However, even during this period the privilege is generally not effective in the buyer's bankruptcy. It is this lack of effectiveness vis-a-vis all third persons which diminishes the practical value of the seller's privilege, making it merely a second-rate security device." Drobnig, Ulrich, 1977. Report of the Secretary General: study on security interests (A/NC.91131), Yearbook of the United Nations Commission on International Trade Law [hereinafter UNCITRAL Yearbook], 3:175. 31 C6digo Civil, Articles 1340 and 1341; C6digo de Comercio, Article 880. 32 C6digo Civil, Articles 1424, and C6digo de Comercio, Article 887. - 24 - The registries33 73. Bolivian law directs that different claims be registered in different registries (see Table 7). Most claims in Bolivia will be registered in one of three registries: the Real Estate Registry,34 the Motor Vehicles Registry,35 or the Comnmercial Registry.36 Other registries exist, however, for licensed personal property; for example, title and security interests in an aircraft are registered in a separate registry for aircraft, and title to some copyrights and trademarks are registered in the Registro de Patentes y Marcas. 74. Registering a claim in the wrong registry typically represents a fatal defect in perfection, because a convincing case can be made that public notice is incomplete if notice is filed in a registry in which interested parties would not normally look. A creditor who misfiled a claim could, therefore, lose priority on the collateral. 75. All registries in Bolivia present major obstacles to the filing of claims against personal property and fixtures. The most important arises from the general barrier to public access, the key in establishing the general credibility of claims against personal property and fixtures. In addition, registries typically lack adequate computerized indexes or document retrieval systems. Consequently, retrieving documents is time-consuming, expensive, and subject to great uncertainty about priority and authenticity. 76. The Real Estate Registry (Registro de los Derechos Reales). Located in the real estate office (oficina de los derechos reales), is the legally-designated registry for mortgages and for some agricultural credit instruments, like crop security interests and security interests on farm equipment. This registry files security interests according to the location of the property.37 Since physical location is unambiguous, a lender searching for security interests on a property offered as collateral has a clear indication of where to look. In principle, the record is public and can be inspected by any citizen.38 In practice. the system has been computerized, but searches can only be conducted by staff. This can sometimes involve a lengthy wait. Although the filing system is not fast, it is a workable way of locating mortgages or other encumbrances in real estate. 77. Security interests against agricultural movable property such as tractors or grain driers, as well as security interests against crops orfixtures -- equipment attached to the land -- are also filed in the real 33 Bolivia's legal registries are examined at greater length in Nuria de la Pefa, Heywood Fleisig and Frederick Miller, "Improving Legal Registries in Bolivia to Facilitate Lending" (Govemment of Bolivia, 1992). 34 Registro de los Derechos Reales, C6digo Civil, Articles 1538 and 1566. 35 D.S., No. 15191, 12-15-77. 36 C6digo de Comercio, Article 26. 37 Generally, the real estate registry is the proper place to file documents affecting the financial status of property that can be easily located. M C6digo Civil, Articles 1523 and 1562, Clauses I and 11. - 25 - estate registry office having jurisdiction over the place in which the collateral is located.39 When filed, the interest makes explicit that it refers to tangible personal property or fixtures, not to the land. Under the law, the security interest is filed in this registry even if farmer does not own the land. In practice, registry officials will not file security interests unless the borrower owns land recorded in the registry. In La Paz and Santa Cruz, at least, farmers who lack clear title to the land or who do not own land have no place where a potential creditor could file a claim or security interest.' 78. The Motor Vehicle Registry (Registro de la Direcci6n General de Trinsito) provides a local filing system for registering title and security interests in most cars, trucks, and other vehicles requiring registration to operate on the road. This state function arises from the responsibility of the state not to register stolen motor vehicles. Security interests and security interests in vehicles must be filed in the motor vehicle registry office of the jurisdiction where the vehicle is registered.4' Any security interest or lien must be disclosed in the certificate of title. The index system of this office works well: liens and security interests are located both by name of the owner and by serial number of the vehicle. It could work faster if it were computerized. There is no centralized computer registry of vehicle ownership. 79. Other registries. Security interests in other licensed personal property, such as those arising under chattel mortgages or pledges without transfer, either under Civil or the Commercial Code, are filed in the same specialized registries in which the licensing occurs.42 39 Security interests against a crop are filed in the real estate office for the region in which the crop is grown. D.S. No. 16699, Article 50, July 5, 1979. 40 There is no legal justification for the registry office to refuse recordation. In principal, crops and equipment attached to land are deemed to be immovable property (inmuebles por su destino); C6digo Civil, Article 75(l). However, C6digo Civil Article 82 identifies certain kinds of property as fixtures called appurtenances (pertenencias). Paragraph III of that article expressly provides that they may be subject to legal transactions independently of the immovable fixture to which they are attached. 41 C6digo Civil, Articles 1395 and 1418. 42 C6digo Civil, Article 1395, and D.S. 16699, Article 56. - 26 - 80. The Conmmercial Registry (Registro de Comercio). Much personal property is not licensed. Non-licensed personal property includes tangible personal property which includes equipment, such as heavy machinery that does not require a certificate of title to operate, such as mining or construction equipment; inventory, cash, and jewelry. It also includes intangible personal property such as interests in accounts receivable, the value of an on-going operational concern, and goodwill. Security agreements that create security interests in non-licensed personal property under the rules of the Commercial Code must be perfected by filing the agreement in the Commercial Registry.43 81. The commercial registry (registro de comercio), an agency of the Ministerio de Economia, operates under the terms of the Decreto Supremo 15191, (December 20, 1977). It registers all securities (titulos-valores) issued by businesses," commercial mortgages (hipotecas mercantiles), and security interests in unlicensed personal property (prenda comercial sin desplazamiento).4 It also contains the documents necessary to file a security interest against a corporation: articles of incorporation, bylaws, bankruptcy decisions," and annual reports. Problems and Options for Solutions 82. Clear rights to collateral and unambiguous rules about what happens to collateral when borrowers default make lenders more willing to lend against that collateral. So long as borrowers understand these rules clearly, and so long as lenders fully disclose their terms, borrowers can only gain through public policies that expand their borrowing options. Since they can always refuse to borrow under these new arrangements, new options cannot hurt them and can increase willingness to lend and expand access to credit. 83. They operate through expanding loans secured by property that remains in the physical possession of the debtor, giving clearer priority to the claim of the wholesale seller of goods, so that retailers who do not own real estate could get credit against those goods; and improving the registries so that potential lenders can more easily trace claims against collateral. 43 C6digo de Comercio Articles 26 to 35, 886 to 897, and D.S. 15191 (12-20-77), Articles 2 and 3. 44 Reglamento del Registro de Comercio, Article 3, Clause j. " Reglamento del Registro de Comercio, chapter IX. 46 C6digo de Comercio, Article 30. - 27 - Pass a Comprehensive Law of Secured Transactions47 84. Many potentially economically important loan contracts cannot be written in Bolivia, either because gaps in the law that govern creation of security interests do not contemplate such transactions or because it is too difficult and risky to use existing law to write such contracts. A new secured transactions law is needed to close that gap.4" The revised law must specifically: Give a clear and perfected security interest in the goods sold on credit, instead of the present weaker privilege (privilegio). In Bolivia, a wholesaler who advances inventory to a retailer, such as a peddler, gets a privilegio in the goods sold to the retailer on credit, without negotiating another agreement, such as a pledge.49 Such a wholesaler has a weak priority in claims over these goods in the event of bankruptcy. The wholesaler will also lose his vendor's lien (privilegio) upon sale of the merchandise by the retailer. The existing Bolivian vendor's lien system lacks key features that the secured transactions law needs to provide to encourage lending. Moreover, wholesalers and dealers cannot represent to their banks that such extensions of credit are sound. Consequently, commercial banks will not refinance such extensions of credit by merchants and dealers; if they did, the superintendent of banks would be acting appropriately in objecting. 47 For a proposal to adopt UCC Article 9 to Civil Code systems, see Alejandro M. Garro, "Security Interests in Personal Property in Latin America: A comparison with Article 9 and a Model for Reform," 9 Hous. J. of Int'l Law 157 (1987), and the "Reform and Harmonization of Personal Property Security Law in Latih America," Revista Juridica de la U.P.R., Vol. 59:1 (1990), and R.C.C. Cumming, Q.C., "Public Registration of Security Interests in Personal Property: Some Recent Canadian Developments," International Academy of Comercial and Consumer Law Conference, Nattonal Autonomous University School of Law, Mexico City, Mexico, June 15, 16, & 17, 1983, Revista de la Facultad de Derecho de M6xico, Tomo XXXV, Enero-Junio de 1985, Ntms. 139-140-141. The United States Commission on International Trade Law authorized the Secretary General to undertake a study for a law on security interest in 1968 [Official Records of the General Assembly, Twenty-Fifth Session, Supplement No. 17 (A/8017), in 1 UNCITRAL Yearbook, Part 2, 111, A (1968-1970)]. Professor Ulrich Drobnig of the Max Planck Institute for Foreign and Private International Law completed this study in 1977 [Report of the Secretary-General: Study on security interests (A/CN.9/131), in 8 UNCITRAL Yearbook 171 (1977)]. The study aimed at assessing the feasibility of a uniform law on security interests to help international sales. The Drobnig study, going one step further, recommends a unified law on security interests. It also points out the importance and magnitude of the restrictions on collateral in various civil law countries. The UNCITRAL study, however, did not specifically link the restrictions on collateral with economics (issues such as access to credit were not considered). In 1979, the Secretary General submined to the Commission a report on the feasibility of uniformn rules on security interests and on their possible content [Report of the Secretary- General: Security interests; feasibility of uniform rules to be used in the financing of trade, 10 UNCITRAL Yearbook, para 6. at p. 81 (A/CN.9/165), 19791. At this time, the Commission concluded that "... the subject matter of security interests is of sufficient importance for it to continue work in respect of it. The importance derives from the fact that, while the use of security interests is an important means of financing commercial transactions, the law in most States is rudimentary and as such is not appropriate to respond to the needs of modem commerce. " However, UNCITRAL did not continue this work. It was suggested that the commission await the conclusion of other studies before undertaking further work on its own. The terms privilege in "tide-type secured transactions" and "pledge-type secured transactions" are misleadingly similar: the "title type secured transaction" is a privilege given to a lender while the "pledge-type secured transaction" is a security interest given a seller. But priority of position should be based on the economic function of the security interest; to facilitate the availability of credit to enable debtor to purchase goods-rather than on the basis of whether the creditor happens to be the owner of the collateral. Equalizing the status of sellers who give credit, lenders who take a purchase money pledge, and mortgagees will be an important step forward in the modernization and harmonization of personal property security law in Latin America. See, Alejandro M. Garro, "Harmonization of Personal Property Security Law in Latin America, " Revista Juridica U.P.R. V59: 1, at p.93 (1990). - 28 - Permit security interests to continue in the proceeds of the collateral. Under Bolivian law, the creditor loses the security interest in the collateral when the collateral is sold or transformed.50 This increases the risk to the lender, because the security interest does not continue in the proceeds of the collateral: so, for example, a creditor with a security interest in collateral would no longer have a security interest in the cash realized from the sale of the collateral. It also can increase the transactions cost of financing by requiring repeated redrafting of security agreements: for example, a supplier selling wool on credit to make of blankets would require a new security for each transformation of the wool -- from wool to yarn to woven fabric to trimmed product. Instead of this, the law could specify that the security interest continues "with the good" no matter how it is transformed. Permit floating security interests. Bolivian law does not expressly allow security interests in a group of goods. This limitation makes financing inventory very difficult.5' If a manufacturer borrows and wants to offer his inventory as collateral, the manufacturer must identify every inventory item; new items entering inventory are not part of the collateral offered. A farmer could pledge $100,000 worth of cattle, rather than enumerate each member of the herd of cattle. A floating security interest would make it possible to secure a loan with whatever assets happen to be part of the inventory. Increase the use of account receivables as collateral by avoiding the notice-and- notarization requirement. When a merchant has made many sales on credit, these "accounts receivables" can serve as collateral for another loan. For example, the merchant could take the account receivables to a bank to secure financing to continue the merchant's own sales on credit. Bolivian law imposes burdensome requirements on using account receivables as collateral. The merchant wishing to use accounts receivable as collateral must transfer the accounts to the lender by notifying his customers of the assignment or by acknowledging the assignment in writing before a judge or a notary public.52 This requirement can be very costly to a merchant. In some cases, merchants will want to continue collecting from their customers without the customer knowing of the sale; in other cases, merchants make many small credit transactions each day and the transaction costs are prohibitive.53 Registration of security interests in accounts receivable can completely avoid the need to transfer the accounts. 5 See, C6digo Civil, Article 1421, Clause 4. A creditor could rely in the civil law doctrine of real subrogation. However, since Article 1421(4) does not address this problem squarely, the uncertainty is too wide for a lender to rely on any doctfinal theory for recovery. 5' See, Alejandro M. Garro, "The Reform and Harmonization of Personal Property Security Law in Latin America," Revista Jurldica de la U.R.P., V59:1, at p. 45 (1990). 52 See C6digo Civil, Articles 389, 390 and 391. Notice should be required for the protection of the customer so that he does not pay the wrong person. But, notice should not be required for other creditors. 53 See, Alejandro M. Garro, "The Reform and Harmonization of Personal Property Security Law in Latin America," Revista Juridica de la U.R.P., V59:1, at p. 47 (1990). - 29 - Improve the Operation of Legal Registries 85. Enforce the laws that pennit public access to the registries. Without direct public access, lenders cannot determine their priority in actual or contemplated secured transactions. 86. Improve technical functioning. Records must be stored in ways that information can be retrieved by all concerned parties in a timely manner. Index systems should, for all registries, identify secured interests by the name of the borrower or lender and should be computerized, with full public access.54 This would improve the attractiveness of non-real estate collateral and would speed up court debt-collection processes that depend on requesting information from these registries. In particular, the Commercial Registry must be computerized and indexed if non-licensed machinery is to serve as collateral. Registry reform should distinguish between creating an index -- which is essential; and computerizing the index -- which is desirable but not as urgent; and computerizing record retrieval, which is typically still less urgent. 87. Clarify the identification of the registry to be used for different types of collateral. Under the civil code, secured interests against non-licensed goods for hotels, farmers, and small industries are filed with the real estate registry office. Under the commercial code, secured interests against non- licensed goods for large industries and merchants are filed in the commercial registry.55 This division invites confusion between small and large industry and between multi-product enterprises. Options for improvement include producing a unified system of regulations that allocates chores to registries with less ambiguity, and computerizing cross-references among directories. 88. Enforce the law that permits filing security interests in the real estate registry even when the borrower owns no real estate. Bolivian law states that secured interests against agricultural crops and agricultural equipment are to be filed in the real estate registry of the district in which the crops or agricultural equipment are located.56 Under the law, the farmer need not own land; nor does the security interest in the crops or equipment need to be filed along with the land. Contrary to the law, however, Bolivian registries have sometimes refused to file security interests against borrowers that do not own land. It is essential that registries permit such filings. 89. Centralize the filing of security interests in goods. A central registry for security interests in goods could give creditors important advantages and expand lending. Creditors could avoid confusion about where to file their security interests. The place of filing now depends either on the domicile of the debtor or on the location of the goods. Creditors can lose their priority on the collateral if, not knowing 54 See, Alejandro M. Garro, Recordation in Argentine Law, V15 Revista Juridica de la Universidad Interamericana de Puerto Rico, Jan-April '81, pp. 175-220; Douglas Whalan, Immediate Success of Registration of Title to Land in Australasia and Early Failures in England, New Zealand Universities Law Review, Vol.2, p. 416; Paul R. Welshons, The Mini-Computerization of an Abstract Office, Title News, Feb. 1984, p. 8; M. Scott Stovall, Efficiency 'From the Ground up', Title News, June-July 1984, p.15; Beginning an Automated Title Operation, Title News, September-October 1985, p. I 1; Herben N. Morgan, Workshop: Automation in The Local Title Office (Future Office or Future Shock - the Office of the Future Contrasted with the Office of the Present), Title News, January 1984; Richard J. Oliver, Automation: What Agents and Underwriters Should Expect, Title News, January-February 1985, p. 30; and, David L. Drury, Computerization Increases Productivity, Title News, September-October 1986, p. 13. 55 C6digo Civil, Article 1424 and C6digo de Comercio, Article 887. 56 D.S. No. 16699, Article 56, and C6digo Civil, Article 1424. - 30 - where the debtor resides or where he has placed the goods, they file their interest in the wrong place. Central registration would allow creditors to file a security interest valid for the entire country. 90. Limit procedures prior to registration. Bolivian law often requires individuals to comply with notarizations, certificates, certificates of mapping, certificates of residency, or acknowledgements of payments of duties or fees before filing in the registry. These steps need to have a careful evaluation of their economic return because they raise the cost of transactions and lead parties not to undertake them. 91. Use standard forms and model contracts for commonly-registered documents. A great deal of time is spent reading and transcribing the content of deeds in registries. Standard forms certified by the law as acceptable could speed processing and lower the cost of registry processing and the private cost of preparation. - 31 - VI. Obtaining JudLynent in Bolivia 92. When the parties to a contract dispute the facts of its performance, the disputants will obtain judgment: they will follow some procedure, binding on both creditor and debtor, and settle the dispute. A creditor with a security interest, for example, may conclude that the debtor has not honored the terms of the agreement by not making payments on the loan. Sometimes the parties do not dispute the facts of the case; the debtor may concede that payment is impossible and freely give up the collateral to satisfy the debt. Or, the debtor may dispute the facts and block repossession of the collateral. The debtor may present defenses to justify non-payment: for example, he may claim that the signature on the note is someone else's and that the debt is owed by another, or that payment has been already made. 93. The rules of civil procedure in Bolivia are such that obtaining judgment takes a long time. The law also limits the ability of private parties to make contracts that attempt to bypass this lengthy judgment process. 94. To determine the typical experience faced by creditors in court-administered collections, we examined over 500 court-processed debt collection cases (Appendix 2). Fewer than half these cases brought to court were collected under court supervision. The court operates under rules of civil procedure that call for a judge to reach judgement in eight days and, if there is no appeal, to execute judgement in another three days. The practice is quite different; on average, cases required 670 days to be carried to the point of collection. 95. This is simply too long a period to make most movable property usable as collateral: livestock die; equipment depreciates; inventory becomes shopworn; accounts receivables are paid to the wrong person. Only real estate will preserve its value over a collection period this long. Businesses understand this; banks understand this; the superintendent of banks understands this. Consequently, movable property is not acceptable as collateral from borrowers who have no real estate to back up their loans. The credit structure remains tied to real estate. Judicial Procedures 96. Bolivian law specifies five civil procedures for obtaining judgment:" ordinary (ordinario), executive (ejecutivo), and summary (sumario and sumarisimo). The ordinary civil procedure is the main legal framework under which the parties operate. It includes the general provisions, such as those for taking evidence or filing motions, and can require as much as five years to complete. Bolivian lawyers will typically structure agreements to avoid ordinary procedures, but this is not always possible. 97. The Code determines how other special procedures apply, typically depending on the type of dispute. The executive procedure usually applies to debt collection cases supported by an executive document, such as a negotiable instrument or a mortgage deed and typically requires 566 days.58 '7 They are contained in the C6digo de Procedimiento Civil of Bolivia. See appendix 11. - 32 - Summnary procedures are for small claims. They could require as little as twenty days, but typically takes much longer. Ordinary Procedure (Proceso Ordinario) 98. Ordinary procedure must be followed in several cases: * Whenever the Code of Civil Procedure does not indicate any other proceeding to be allowed. * When procedural problems occur while parties attempt to follow the executive procedure. * When taking evidence, since the rules set out in ordinary procedure apply to all the other civil procedures. Usually applicable to civil and commercial contracts, ordinary procedure provides the broadest provisions for taking evidence but can be extremely time consuming; obtaining judgment can take as much as five years and, in some cases, even ten years. 99. The rules for taking evidence set out for ordinary procedure also apply when the executive, coactive, summary and summary procedures do not provide otherwise.59 While the different procedures may state shorter time limits for taking evidence to speed up the procedure, any departure from routine or any legal gaps in the rules for taking evidence throw the process back under the rules of ordinary procedure. Therefore, these short deadlines that the law sets for the other procedures are rarely enforced.6' 100. Much of the slowness of Bolivian civil procedure is rooted in provisions that aim to protect the debtor's right to due process and fair trial, a traditional protection accorded to citizens in civil and common law countries. Both Common Law countries and the Civil Code countries of Europe, however, have devised other procedures that protect a citizen's right to a fair judicial proceeding while aiding the citizen's right to speedy redress.6" Some of the procedures that delay the taking of evidence in the Bolivian judicial system are described below. 101. Unlike countries with a Common Law system, in Bolivia, the parties in dispute, or at issue, undertake no pre-trial discovery, or do not begin gathering evidence before the trial. Rather, parties take evidence after the trial begins, before the court, and at the expense of the court. This means that taking evidence, potentially time consuming, must be paced by the court's schedule.62 59 C6digo de Procedimiento Civil, Articles 316, 481, 485 and 51(), See Appendix 11. C6digo de Procedimicnto Civil, Article 510: "Opuestas con las condiciones previstas en el articulo precedente, las excepciones seh3aladas en el articul 5110, cI Juez abrira el plazo probatorio improrogable de 10 dias." While the law specifies 10 days for taking evidence, the average time between the first court order and the final decision in the case -- a period that mosdy involves the taking of evidence -- is 269 days (Appendix 11). 6' See Codigo Procesal Civil y Procesal Penal, Modelos para Iberoaamerica. Ministerio de Justicia, Madrid 1991. 'Z This discussion does not address advantages or disadvantages of pre-trial discovery. Since taking evidence at the court is a source of delay, taking evidence by the parties with minimal court supervision should be considered. - 33 - 102. Moreover, nearly all discovery normally takes place in writing, not orally.63 That includes calligraphic testimony, accounting or appraisal reports by independent experts and objections by the parties.64 Not surprisingly, this slows the exchange of views and makes it more expensive. Moreover, the court may need to issue an order to require the other party to respond to an objection; or the parties may need a ruling from the judge in order to proceed with discovery, so the court must issue an interlocutory decision.65 It can take a week to issue such an order and a case may require many of them. 103. In countries where experts testify orally, where witnesses are all on hand to testify and rebut, and where court reporters transcribe that testimony, a judge can require response to objections or make interlocutory decisions on the spot. In such a system, a single exchange between counsels for plaintiff and defendant may take minutes, and many exchanges can take place in a single day. 104. In Bolivia, attempts to set time limits for admitting evidence cannot work because they are inconsistent with the rules for obtaining evidence. Simply specifying a shorter procedure without specifying how it is to be shortened, moreover, raises the conceptual problem of potentially abrogating the right to present and rebut testimony that will affect the case.6' Some borrowers believe there is a need to implement more restricted procedures for introducing evidence, such as oral proceedings in which the grievances of the defendant may be heard and disposed on the spot, bypassing the solemnities and formalities that surround written proceedings. 105. Under rules for obtaining evidence, all motions, including the complaint, are first filed before the court. Only after the court enters an order may the opposing party be notified or a motion be served. Such notice must always be made by an officer of the court.6" This method requires numerous communications back and forth. The court will not make a decision before the other party responds in writing. Since each step must be routed through the court, the case proceeds slowly. 106. Bolivian courts remain very overloaded and are limited by law in how they can expedite procedures. Service of process and all other notices to the opposing party must be done by the judiciary; opposing counsel cannot serve court documents. The mail is never used to serve notice of motions to opposing parties. New technology is forbidden: telephone conversations for the record between the court and the representing counsels may not be recorded, and facsimile transmissions of legal documents for the record are forbidden. Motions must be filed in writing during the hours the court is open: there is no provision for dropping off a paper after the court has closed. 107. Most objections to admissibility of evidence must also be in writing. If the testimony of an independent expert is required, experts have to accept their appointment from the court. If one expert 61 C6digo de Procedimiento Civil, Articles 92 to 97. Except for taking depositions before the Court. 65 C6digo de Procedimiento Civil, Article 203. 66 Compelling the enforcement of deadlines, without attending the specific problems that cause the delay, will replace a fair judicial decision by an expeditious one, in order to meet the deadline, regardless on whether such judicial decision is just. 67 C6digo de Procedimiento Civil, Articles 121, 133 and 138. - 34 - declines, a second expert is appointed; the judge may take a week to receive any filing and request the opposing party to respond, and then take another week to take an interlocutory decision. Therefore, if the case is open for taking evidence, the rules of civil procedures apply and at least three to four months pass before closing the procedure for the admission of evidence. 108. The procedure can sometimes be taken to an extreme: for example, to photocopy a document in the record, some courts require a written motion to petition the court for such copy. The court may take a week to act upon the motion, and only then miay the authorized individual make the desired photocopies. 109. Stenographers are not normally used for taking depositions. Witnesses may, however, speak slowly while an officer of the court types the testimony. This increases the time needed to take depositions. There is no word processing equipment in the court. Ordinary typewriters are used; carbon copies are the only method of copying permitted by the courts. 110. Records are not computerized; they are kept manually, either by date or in alphabetical order, but not both. Records are never microfilmed; space and security for written records are very limited in each court. Cases are physically stacked in aisles and on the floor, where they are unavoidably kicked and knocked over in daily work. A motion filed before the court must be physically sewn, with a needle and thread, into the record books before it actually reaches the desk of the judge or the clerk of the court. 111. The code does not set a deadline within which the clerk of the circuit or appellate courts has to submit the record to the judge to be acted upon. The court may withhold the record for months before submitting it to the judge's chamber. 112. Article 191 of the Code of Civil Procedure provides that a Judge must examine the record to correct any errors before ordering that it is in status for taking a final decision. Since the Code of Civil Procedure does not set any time limit, a judge can take months for this examination and only then permit the record to pass to the chamber for taking a final decision. There are no tabulated records of the performance of judges or the number of cases they handle, of speed of disposition, of frequency of reversal."5 The study in appendix 11 is the first quantified study of judicial performance on debt collection cases. Executive Procedure (Proceso Ejecutivo) 113. While ordinary procedure applies to any dispute concerning contracts, executive procedure is a potentially faster procedure, restricted to a suit against a debtor who has defaulted on a payment. A suit for payment, executive procedure, is one in which a creditor sues a debtor who defaulted on payment, or in which the creditor demands fulfillment of an obligation. The debt must be supported by one of three instruments: mortgages, negotiable instruments, and pledges (titulos de fuerza ejecutiva)."9 The In some other civil law countries the problem is addressed bs fixine a shon-tinie litilit in whichi the judge must act or otherwise be subject to fines. However, this is not a real solutioni it lack of comilpeteit personntel is not also addressed. C6digo de Procedimiento Civil, Articles 486 and 487. - 35 - most important instruments are those demonstrating the existence of a mortgage in favor of the creditor or a claim for default payment on a negotiable instrument.70 114. The creditor may file suit against the debtor on the basis of such an instrument. If the creditor is unsecured, he will demand the imnediate attachment of the debtor's property and the filing of this attachment in the appropriate registry. From that time onward, the property is subject to the results of the suit with respect to junior secured creditors; the security interest will have no effect against senior creditors. 115. The judge orders the attachment and if the demurrers or preliminary defenses are rejected, a final decision is taken that will order public auction of the attached property. The enforcement of this judgment is governed by the enforcement of judgment procedure (Proceso de ejecuci6n de sentencia) of the Code of Civil Procedure. Summary Procedures (Procesos Sumario and Sumarisimo) 116. Summary procedures apply usually to causes of action in torts law and to small claims, where all documentary evidence must be introduced and all other discovery must be petitioned before trial and presented with the complaint. The case is open to admit evidence for only twenty days. No closing argument is required and, with few exceptions, appeals may not suspend the enforcement of judgment. Once the complaint is filed, the Court will set a time for hearing counsels and parties in the case. The same provisions apply to proceso sumarisimo except that the defendant may answer the complaint orally or in writing the day of the hearing; the case is kept open to admit evidence for 10 days; and as soon as it is closed, the judge must decide the case within 10 days. Notice for appeals are not allowed to suspend the enforcement of the judgment. 117. These potentially useful procedures founder, however, on being subject to the same time- consuming rules for taking evidence set out in ordinary procedure. The short deadlines in these civil procedures conflict with the longer periods specified for taking evidence in the ordinary procedure and, in the end, the longer periods are the ones enforced. Problems and Options for Solution 118. Obtaining judgment takes a long time in Bolivia and is expensive.7" Anticipating that, lenders are reluctant to accept consumer durables and inventory as collateral because their value will usually be negligible by the time judgment is obtained. They are equally reluctant to make loans too small to cover the sizeable costs of collection. Therefore, lenders demand collateral that will last as long as it takes to secure judgment and is of sufficient value to cover the high costs of litigation: typically, that means real estate. Improving registries cannot, by itself, solve this problem. Nor will improving the definition of security interest. 7'' Both secured and unsecured creditors may use this procedure for collecting debts. For a more comprehensive study of the problems that affect the administration of justice in Bolivia, see, Eduardo A. Gamarra, "The System of Justice in Bolivia: An Institutional Analysis," Center for the Administration of Justice Centro Para La Administracion de Justicia, Florida International University --Led. -- San Jose, C.R., CA], p.104 (1991). - 36 - 119. Two broad strategies exist for attacking this problem. One relies on changing the legal procedures for obtaining judgment to permit consenting private parties to moving outside the judiciary system for routine debt cases; the second centers on legal and judicial reform. Permitting Private Non-Judicial Enforcement of Loan Contracts 120. Bypass the execution procedure by permitting non-judicial repossession of collateral. To expand access to credit, the law must give creditors an expeditious way to enforce collection.72 If creditors are permitted to seize the collateral from debtors without disturbing the peace, they can bypass slow procedures for obtaining judgment. This would make those foreclosures much faster and, by removing a large class of transactions from the court, permit the remaining transactions to be handled faster. Such a system protects debtors differently from the procedure outlined under Bolivia's laws. In the first instance, the only question asked of the debtor is whether he had paid. If he had not, the creditor may seize (and sell -- see below) the collateral. In subsequent proceedings, the debtor may raise all legally permitted defenses of non-payment. The debtor is also entitled to damages in the event of wrongful repossession of the collateral. Consumer debtors typically have more safeguards than business debtors. All debtors are empowered to recover from the secured party any loss caused by failure to observe the general rules governing harmless repossession and private sale.73 In addition, and consistent with the parties right to freely contract, the law may allow the debtor to agree with the creditor on other alternate collection measures. 121. Banco Agricola Boliviano had the power of harmless repossession and used it effectively in making small loans for equipment to farmers in the altiplano. The policy problem arises not in the constitutionality of the process, but rather in devising effective ways to extend this power to more economic agents and still regulate it in the public interest. 122. Similar advantages would accrue from expanded powers to offset which give the bank creditor the legal power to take debt payments out of the debtor's deposits in that bank. Gains would also arise from rules where the debtor is precluded from raising some defenses. This power requires safeguards similar to those that must surround harmless repossession. * Harmnless repossession. The law may authorize the right of a creditor to use self-help to repossess collateral upon default.74 In order to protect the general public, in no case may 72 The success of a comprehensive secured transactions law lies in giving creditors considerable freedom to enforce their security interests. "Essentially, the model rules should be oriented toward permitting secured creditors considerable freedom in the exercise of their remedies, irrespective of the location of title to the collateral. These remedies should include the right to agree on forfeiture clauses, the right to take possession of the collateral after default with the consent of the debtor, the right to pursue the debtor for any deficiency remaining after realization of the security (except where this had arisen form the secured creditor's failure to act in a commercially reasonable manner), and the right to private foreclosure." Alejandro M. Garro. 1990. "The Reform and Hamtonization of Personal Property Security Law in Latin America." Revista Juridica U.P.R., 59(1j:53. 71 U.C.C., § 9-507. 74 Under all legal systems it is difficult to reconcile the due process rights of a defaulting debtor and the economic need to provide creditors with efficient means to enforce their rights. Bolivian Civil Code presents some conflicting provision with self help repossession. Some forbid parties to take justice in their own hands (C6digo Civil, Art. 1282), some require that the creditor obtain a court order for repossessing collateral (C6digo Civil, Art. 1465 & 1467). The Bolivian Supreme Court has not dealt specifically with this issue. - 37 - a creditor breach the peace; this means that creditors may not use violence, actual or potential force, intimidation, fraud, or trickery. Any activity that violates the public order (not just violation of the law), or any violent activity that is fraught with the likelihood of resulting in violence, is prohibited. Moreover, the law should specifically forbid creditors from using the assistance, or even the mere presence, of any government official, including the police.75 * Permit business borrowers to borrow with fewer safeguards. In some other legal systems, different groups of borrowers receive different degrees of protection. For example, some legal systems give consumers more rights than does Bolivian law. Consumers do not operate professionally in the credit market and little social gain arises from having consumers consult lawyers over routine transactions. In such cases, business borrowers are relieved from following special safeguards that apply to consumers.76 Sellers may be prohibited from taking commercial paper, such as a promissory note negotiable for all purposes. The consumer would retain the right to refuse to pay if the goods were not as represented. In the United States, for example, a consumer may justify refusal to make a payment on an auto loan held by a third party by alleging that the car does not work; a business may not refuse to make a payment on that ground, but may enter into a civil suit against the dealer.' The United States Congress has enacted statutes concerning interest rate disclosure, loss of cash machine cards, and check clearing that apply to consumers but typically not to businesses. Restricting these rights to consumers alone can serve the purpose of protecting less sophisticated borrowers, while more sophisticated business borrowers can get access to more credit on better terms. Improve the Administration of Justice 123. Numerous thoughtful suggestions have been made about improving the administration of justice. Some revolve around improving the selection and training of judges; others around changing procedures specified generally under the Civil Code, particularly as practiced in Latin America. Such changes include introducing oral argument, improving equipment, modernizing systems of case load management, and instituting fines against judges for improper conduct. Several broad remedies exist to correct these slow court procedures, including amending the law to permit more actions to fall under the faster coactive and summary procedures; devising faster and more restricted procedures for introducing evidence; and 75 Burke and Reber. 1973. State Action, Congressional Power and Creditor's Rights: An Essay on the Fourteenth Amendment, 47. Southern California Law Review, 1(5). 76 Although Bolivian law provides for a division between business and non business borrowers and business and non business transactions [Commercial Code, Article 1, and 8], business borrowers cannot waive many rights and defenses accorded to them under the law (C6digo Civil, Articles 1340, and 1282, C6digo de Comercio, Article 880; Codigo de Procedimiento Civil, Articles 90, 179, 252, and 498). A less restrictive way of protecting debtors lies in enacting a general law applicable to all secured transactions and within the same law providing for special considerations whenever the collateral qualifies as "consumer goods. " 7 See Holder in Due Course Regulations: Code of Federal Regulations, 16 Code of Federal Regulations, Sec. 433.1 - 433.3. These supersede state commercial code provisions on the negotiability of consumer installment paper. - 38 - speeding up court processes by making court administration more efficient78 and amending the arbitration laws.7 124. This study does not judge the desirability of these reforms. It is the view of the authors, however, that the problems of legal impediments to credit access arising from restrictions on the use of collateral can be addressed with the specific remedies mentioned above and do not require general reform of the judiciary. The wider use of movable property as collateral in Great Britain and the United States appears to arise more from the unique features of the law, especially of Article 9 of the Uniform Conmnercial Code. Differences in perfornance of courts between these countries and the better managed Civil Code countries of Europe do not display compelling evidence that one model is superior to another, but the differences in the use of movable property as collateral are readily ascertainable. 125. Subject to these cautions, the following suggestions are frequently encountered in the literature that discusses proposed improvements in the administration of justice in Latin American civil code countries.i' These are economically attractive features of any judicial reform program. 126. Convert executive procedure into a genuine debt collection procedure and convert summary procedures into genuine small claims procedures. These improvements can be accomplished by restricting the arnount of time for judgment, limiting the evidence that may be brought, introducing oral hearings, specifying in the law that it is permissible to use prepared forms to permit non-lawyers to 7' See, Kostanze Pett, "Civil Justice and its Reform in West Germany and The United States," V13 The Justice System Journal Fall 1988, p. 186-201; and Doris Marianne Provine and Carol Seron, "Innovation and Reform in Courts: a Cross Cultural Perspective," V13 The Justice System Journal, Fall 1988, p. 158-167; 'Crisis de la Justicia y Reformas Procesales," I Congreso de Derecho Procesal de Castilla y Le6n, Ministerio de Justicia, Secretaria General Tecnica, Centro de Publicaciones, p. 1, Madrid, 1988; and Ignacio de Otto, "Estudios Sobre el Poder Judicial," Ministerio de Justicia, Secretarla General Tecnica, Centro de Publicaciones, p. 1, Madrid, 1989. 79 Bolivia's laws do not reflect modem trends on arbitration, especially compared to modem arbitration laws, such as the UNCITRAL model (Model Law on International Commercial Arbitration adopted by the United Nations Commission on Intemational Trade Law in 1985), or the 1988 Spanish Arbitration law. Bolivia's majorlegal deficiencies in arbitration include the following: the requirement that arbitrators only be lawyers; the lack of authority of the arbitral tribunal to enforce provisional orders; the lack of freedom of party autonomy to determine the place of arbitration, to appoint independentexperts, and to take certain types of evidence; and the judicial court's broad authority to review the arbitral tribunal's findings of facts. See, C6digo de Procedimiento Civil, Articles 712 to 746, and C6digo de Comercio, Articles 1483 to 1486. Modem legislation on arbitration limits the intervention of the courts. The Spanish arbitration law of 1988 limits the grounds upon which courts can review arbitral awards, authorizes the arbitral tribunal to rule on its jurisdiction, abolishes the two-stage procedure to enforce arbitration agreements, allows the parties to choose the procedural rules, and authorizes the parties to let institutions administrate the arbitration procedure. See also, Sharon A. Jennings. 1991. "Court-Annexed Arbitration and Settlement Pressure: a Push Towards Efficient Dispute Resolution or Second Class Justice?" Ohio State Journal on Dispute Resolution, 6:133-132. John Flynn Rooney, "Ist District to Explore Settlement Program," Chicago Daily Law Bulletin, 37:1. Lloyd Burton and John P. McIver, "A Surnmary of the Court- Annexed Arbitration Evaluation Project," Colorado Lawyer, August 91, p. 1595. ^" For current trends in the administration of justice problem, See, Crisis de la Justicia y Reformas Procesales, I Congreso de Derecho Procesal de Castilla y Le6n, Ministerio de Justicia, Secretaria General Tecnica, Centro de Publicaciones, Madrid, 1988; y Ignacio de Otto, Estudios Sobre el Poder Judicial, Ministerio de Justicia, Secretaria General Tecnica, Centro de Publicaciones, Madrid, 1989. - 39 - prepare claims, letting judges take charge of managing cases instead of letting lawyers dictate the flow of the litigation, and involving judges actively in the settlement of cases.8' 127. Devise separate rules of evidence consistent with different means of obtaining judgment.52 The five different procedures for obtaining judgment differ superficially in speed but use the same rules of evidence as the relatively slow ordinary procedure. In practice, the guidelines for time limits are consistently violated. This problem could be addressed by establishing different rules of taking evidence for different procedures. For example, the sumarisimo procedure could become a freestanding procedure that can be used reliably for a class of transactions -- Bank loans. 128. Change the Code of Civil Procedure to restrict the right to appeal. Civil suits in Bolivia invite abuse because the court permits appeals on very general grounds and on insufficient evidence.83 In debt collection procedures the law should provide that all judgments are final unless the appellant furnishes evidence that the judgment is manifestly wrong; otherwise it should narrow the grounds for appeal to very limited and specific grounds. 129. Amend the Code of Civil Procedure to speed case flow. Bolivian procedures can be modified to speed case flow without diminishing the rights accorded debtors and creditors. Most of these changes have already been undertaken in Common Law countries and in European Civil Code countries:' * Permit oral evidence and have it transcribed for the record. 8' "Students of the judicial process in the United States have in recent years noted a significant shift in orientation among trial judges. There is a new willingness to involve judges actively, aggressively, and creatively in the settlement of cases. This emerging commitment to settlement challenges the traditional role of a judge in key respects, setting the stage for an exciting and heated debate.... Despite the strongly held differences in view, all sides of this debate have been similarly myopic in one important sense: a review of this literature leaves the impression that the United States is the only country engaged in efforts to rearticulate an appropriate judicial role in civil adjudication in light of mounting demands (but see Lagbein, 1985). Actually, many countries are undertaking reforms designed to reduce the cost and delay of civil litigation and to render judges more accountable and efficient.... Germany has gone much further than England in overcoming resistance to reform. Managerial principles have been applied to every aspect of the pretrial process in a way that encourages litigants to settle disputes without court intervention." D. Marie Provine and Carroll Seron. 1988-89. "Innovationan Reform in Courts: A Cross-Cultural Perspective," The Justice System Journal, 13, Number (2):1561158. See also, Felix Carrisoza, "'Fast Track' is Success," Claims Judicial Council, Los Angeles Daily Journal, April 4, 1991:1. 82 See, Jose Almagro Nosete, C6digos Procesal Civil y Procesal Penal, Modelos para lberoamerica, Presentaci6n y Coordinaci6n, Ministerio de Justicia, Secretaria General Tecnica, Centro de Publicaciones, Madrid (1990), p.179, Articles 311 to 316. X' Italian law, under very similar procedural rules to those of Bolivia, also determines lengthy procedures for appeals that delay the time of disposition of the case. "In Italy too, there is a deeply ingrained concem about closing the gateways to judicial dispute resolution. This concem is manifest in the debate over reorganizing the complex appeals process in civil cases. Ferrarese describes an appeals system that, in an effort to insure a fair and complete reevaluation of the case, allows for the presentation of evideAce at the appellate level. As one might imagine, this practice helps create what is widely understood to be another serious problem: civil cases in which many years elapse between filing and final disposition. " D. Marie Provine and Carroll Seron, Innovation an Reform in Courts" A Cross-Cultural Perspective" The Justice System Journal, Volume 13, Number 2 (1988-89), p. 149. See also, Daniel J. Mador, Appellate Subject Matter Organization: The German Design from an American Perspective, Hastings I,it'l and Comparative Law Review, Vol.5:27. '4 "Reform of civil procedure can appear to be a very technical problem, but it provides a good perspective from which to analyze the logic of the civil trial and the ideas of legal culture that suppron it as a social institutioni." Maria Rosaria Ferrarese, Civil Justice and the Judicial Role in Italy, The Justice Systemn Journal. Volune 13, Number 2 (1988-89). Crisis de la Justicia y Reformas Procesales, I Congreso de Derecho Procesal de Castilla y Le6n, Ministerio de Justicia, Secretaria General Tecnica, Centro de Publicaciones, Madrid, 1988; and Ignacio de Otto, Estudios Sobre el Poder Judicial, Ministerio de Justicia, Secretarta General Tenica, Centro de Publicaciones, Madrid, 1989. - 40 - * Permit oral argument anong opposing lawyers and the judge. * Provide for hearings on a certain date so that the judge may hear both parties arguments, take evidence, and decide then how to proceed. * Permit direct notification by the parties of steps in the case, with copies sent to the court. * Permit copies for the record to be xeroxed or faxed. * Eliminate the requirement that copies for the record be physically sewn into the legal record; introduce a modern computerized filing system that keeps track of disparate evidence like xerox copies, faxes, electromagnetic media, and videotapes. * Use a computerized system for marking case material that permits multiple access to avoid delays associated with having legal documents missing from the records when counsel or the judge needs to consult it.85 * Introduce the technology and skills training required to speed the case, including copying machines, fax machines, and computers; train a professional group of court administrators to administer such systems instead of judges. * Provide financial support for new courts, hearing rooms, and higher salaries for judges. ' "it is time for the court system to modernize its operational infrastructure. Fax technology provides a method for the prompt transmission of information with a minimum of human effort. Must court business be done with volumes of paper that have to be transported from place to place and carefully filed and store? Why, for example, couldn't the courts have a central fax computer center serviced by toll-free telephone numbers which would automatically file complaints, answers and other pleading? This central facility could automatically retransmit to appropriate local forums. All the information would be on tape. The information could be rapidly furnished to any computer station. The savings to the court system of space would be monumental and the labor used to move papers from courtrooms to storage facilities would be substantially eliminated. If every judge had a tie-in computer printer available, records could be made instantly available as needed. A relatively small additional fee for filings would pay for the cost of the system. In exchange, lawyers as well as the courts would save time, labor and storage space.... There is no reason why the courts couldn't develop standardized forms for actions involving motor vehicle accidents, collection cases and simple divorce. At the very least it would reduce the volume of the paper in the system... they could be designed so that computers could read them, sort them and schedule and assign the matters automatically." 21 Century Pleading (automating of pleading procedures), editorial, V 129 New Jersey Law Journal, p. 282. See also, Joyce Plotnikoff, The Future of Court Technology: Lessons from North America, V2 Computers and Law, Feb '91, p.5; Janet Stidman Eveleth, Automation Expedites Court System, V23 The Maryland Bar Journal, Nov-Dec '90, p. 27; Paul Mitchell, computerize Docket Systems, V20 Colorado Lawyer, June '91, p. 1185. - 41 - VII. Enforcing Judgment 130. To conclude the judgment process, the victorious plaintiff must enforce judgment. Because the Code of Civil Procedure sets out lengthy steps for enforcement, the same economic problems arise as in obtaining judgment.' 131. Suppose the debtor fails to perform, the creditor sues, and the court finds in the creditor's favor. How does the creditor gain physical possession of the collateral? the right to sell the collateral? the right to the proceeds from the sale of the collateral? the right to seize more of the debtor's property if the sale of the original collateral is insufficient to cover the debt? Depending on the relief requested from the court, the plaintiff may obtain a court judgment stating: * The defendant owes the plaintiff a specific sum of money. * The defendant is liable to the plaintiff for certain expenses incurred by the plaintiff but not yet determined. - The defendant is liable for specific performance, such as returning the collateral. While these are the most common outcomes, few general restrictions apply to how the plaintiff may request the court to rule. 132. Arbitration. Even when contracts specify that disputes will be arbitrated and not taken to court, the final holdings of the arbitrator will be enforced under the procedure described in the preceding paragraph (Proceso de ejecuci6n de sentencia).' The steps followed will vary depending on what the final arbitral decision says, as in any of the different court's decisions.8' 133. In principle, the Bolivia Code of Civil Procedure could provide for rapid enforcement: final decisions are to be enforced within three days, if the decision itself does not determine another time limit. Enforcement may not be delayed by the interposition of any motion, and appealing an interlocutory decision during this procedure will not suspend its execution (apelaciones s6lo en efecto devolutivo).9 134. The procedure, however, has numerous steps. If any of these steps is not followed, the aggrieved party may file a motion to void the procedure and the process must be repeated. Therefore, most courts comply meticulously with each of the steps for attachment and seizure, public auction, and payment set forth in the enforcement of judgment procedure. Nor may parties agree in the contract to a speedier The (proceso de ejecuci6n de sentencia), literally translated: "enforcement of judgment procedure," C6digo de Procedimiento Civil, Articles 514 to 561. ^ C6digo de Procedimiento Civil, Article 556 (Arbitration). ^ During that process arbitrators do not have any power to enforce or compel any order, interlocutory or final, by themselves. Rather, upon request of the interested party, they should petition the appropriate judicial court to enforce any court order. C6digo de Procedimiento Civil, Article 726. Therefore, the enforcement of any arbitral decision will follow the rules in the Code of Civil Procedure. "9 C6digo de Procedimiento Civil, Article 516. - 42 - resolution: any contract that attempts to waive these rights are held void by the court as contrary to public policy. A contract that reads, in part, "I, borrower, agree that creditor may repossess my car at any time if I do not pay and I agree that I will not press criminal charges but, rather, will only sue in civil court to get the return of my collateral" would be unenforceable in a court and would give the creditor no additional protection. It would be pointless to include it. 135. Enforcement of judgment typically moves through three stages: the court determines the amount owed; the court orders the attachment and seizure of the collateral; and the court orders the public auction of the collateral. Final decisions that involve specific performance, such as determining an obligation to give something back, must be specified in the contract. For example, suppose a vendor sells a machine reserving the ownership of the machine until the purchaser completely pays the purchase price; suppose the purchaser defaults on the payment, and the vendor claims possession of the machine. The final holding in the case might order the purchaser to give the machine back to vendor, because the original contract specified that the creditor retain title to the goods in question, and the creditor so petitioned (Interdicto de recobrar la posesi6n).' Otherwise, the Court may not adjudicate the goods back to the creditor but must proceed as before with attachment, seizure, and public auction. Since the process for attachment, seizure, and public auction is very slow, sellers draft agreements reserving the ownership of the goods to avoid these steps and, instead, seek a final decision to recover the goods. 136. The final decision to recover the goods will be enforced under a judgment procedure for repossession. A court order is issued to seize the goods and give them back to creditor; this order will be enforced if necessary by the judicial police.9' 137. However, if the debtor does not comply with the court order, and the judicial police cannot enforce it (for example, the police break into debtor's house to seize the property but find nothing), or there is a deficiency judgment (for example, when the current value of the collateral does not cover the debt), the court will proceed through the steps to determine a specific amount owed, attach and seize enough of the debtor's movable or immovable assets to satisfy the debt, and publicly auction these assets. Determining the Amount Owed 138. If the final decision to enforce does not determine a specific amount owed, the parties will generally disagree, and the court must determine the amount. For example, suppose a creditor sues a debtor over a debt for $1,000 that was due and payable a year ago. The plaintiff could obtain a judgment that the debt is valid, but the parties might disagree about the amount now owed. What interest rate should cover the amount outstanding on the loan since the original contract expired? What allowance should be made in the principal for inflation or exchange rate depreciation? What allowances for additional damages or lost profits such as depreciation and wear and tear of the collateral? 139. In the event of such a disagreement, either party may request that the court reopen the case to receive additional evidence. The court will hear both parties if there is any controversy. With few C6digo de Procedimiento Civil, Articles 607 to 613. Any court order may be enforced by using force if so required, with the assistance of the judicial police. For example, if at the time for seizure the defendant does not open the door for the officer of the court, the officer will request that the police (usually judicial police will accompany the officer) break into the dwelling. - 43 - exceptions, evidence for this purpose will be taken under the relatively slow rules for evidence set out in the Code of Civil Procedure. Under these rules, the court typically would not comply with the three- day deadline the code requires. 140. Once the plaintiff has obtained a judgment that specifies the amount of money owed, the plaintiff returns to the court to obtain a judicial order to enforce the money judgment. The plaintiff will petition the court to attach the debtor's assets until the plaintiff recovers the amount due. As under other legal systems, certain property of debtor may not be attached.92 The court generally orders attachment and seizure concurrently.93 An officer of the court, assisted by the judicial police, carries out these court orders, but, under Bolivia's law, the officer will not immediately sell the goods.94 Attachment and seizure95 141. The plaintiff will request a court order to attach and seize the debtor's movable or immovable assets up to the total amount due the creditor. Within the court order, the judge will specify a date for a public auction where the assets attached will be sold. 142. The attachment and seizure procedure differs with the type of property. For personal property, the officer of the judicial police who attaches and seizes goods may give the goods to a bailee appointed by the parties or, if the parties do not agree, to a bailee appointed by plaintiff. The bailee holds the goods until the public auction.96 Once the officer has executed the court order (mandamiento), he will file the appropriate report with the court describing the assets attached9". If the assets of the debtor are real or licensed personal property, the attachment will be perfected by filing the court order for attachment, or judgement security interest, in the appropriate registry.98 For example, movable office furmiture, Cod. Proc. Civ., Art. 498icle or any other exempt property, Cod. Proc. Civ., Article 179. 9 This is done with a (mandamiento) (C6d. Proc. Civ., Articles 497 to 506), which is similar to a writ of execution to levy and seize the debtor's property. '" In some other legal systems, the law officers can sell the goods. For example, is the United States, the sheriff's office would directly auction such goods within 10 days. The winning party may also file a motion requesting gamishment of the salary of the losing party until the amount due is totally recovered. In this case, the plaintiff obtains a court order for gamishment, filing the (officio) of the court order for the judge's signature, delivering the (officio) with the appropriate employer, and filing a stamped copy with the court. 9h C6digo de Procedimiento Civil, Article 497. 97 The (acta de embargo) (Cod. Proc. Civ., Article 501). 98 Cod. Proc. Civ., Article 502. The lien may be extended to other assets of debtor if later the assets originally attached do not totally cover the amount due (Cod. Proc. Civ., Article 506). - 44 - Public auction 143. Bolivian law makes no provision for private sale,' where a creditor, without further recourse to a court, can dispose of the collateral provided by the debtor. All liquidations occur at public auction which involves substantial costs and additional delays. If the amount raised by this sale fails to cover the judgment, the plaintiff will return to court for another order to seize and sell other property of the debtor. This process continues until the judgment is satisfied. 144. Appraisal. Before auction, and as part of the enforcement of judgment procedure, the court will order the appraisal of property (trarmite de tasaci6n) by independent experts if the parties disagree about its value."4 This appraisal sets a floor as protection to the debtor. The court orders the appraisal by filing a subpoena notifying the expert of the appointment. The independent expert has three days to accept or reject the appointment. If the expert does not accept the appointment, the court repeats the process until one accepts. The independent expert must, in three days, file an appraisal. The appraisal must be approved by the court and parties may file opposition. Afterwards, the judge will determine the real estate base price in an interlocutory decision. 145. Preparation for the auction. For registered and licensed property such as real estate or cars, the court undertakes several steps before the auction. The court will request that the registry inform the court about the status of ownership and security interests on the property. The court does not do this directly; rather, the plaintiff petitions the court for a court order (oficio or memorial) to the appropriate registry asking for this record. The plaintiff types the court order on court stationary and files it with the court for the judge's signature. When the judge has signed the order, the interested party takes it to the appropriate registry, filing a stamped copy with the court."5 146. The auction cannot proceed until this record is obtained from the registry. For some registries, this may take a long time. Registries have a great backlog of documents to process and cumbersome, time consuming retrieval methods. The auction of real property requires additional steps. Before the public auction, the judge will require certifications of taxes due, certifications of fees on the administration of the property, and certifications of mortgages or security interests on the property. This is also done through court orders and also requires consulting the appropriate governnment registries. 147. Auction schedule. A public auction does not take place immediately and, even where an order granting a writ of execution states a date and time, the requirements are not generally observed because of typical delays in getting information from the registries. Once the appraisal is approved, the court sets a new date for a public auction. This decree must be served by the court on all other creditors that have w However, if seller sold the goods under a sales agreement with reservation of title and the entforcement of such final decision was a court order repossession that brought those goods back to seller, seller may sell those goods without any further acknowledgments by the court. This private sale procedure takes place if, and only if. seller had previously obtained a final decisioni in the matter that supported his title and possession of the goods sold. This is a trial that will establish that defendant is in default and that notifies the debtor or the creditor's claim in the collateral. The final decision will consider any surplus but will not re(quire the debtor's agreement to a strict foreclosure. It is not until after this final court decision is enforced, that seller may privately sell the goods or may adjudicate them to himself. "' Cod. Proc. Civ., Article 534. The appraisal report must be served on the parties which have three days to file oppositioni. "' Cod. Proc. Civ., Article 525. - 45 - perfected security interests or security interests on the goods subject to the auction,"6 and must be published."7 The draft of the publication must be filed by the plaintiff for the signature of the judge, then taken to the appropriate newspaper and published, then filed with the court again in the published format. 148. Operation of the auction. The auction must be performed by a public auctioneer. The buyer must pay the purchase price within three days. If payment is not made, the buyer will lose the bond deposited at the auction and the plaintiff must request the court to issue a second order for date and time of auction and the whole auction procedure will be repeated. 149. If nobody buys the property, the base price will be reduced by 15 percent. If the property still does not sell, the creditor may petition the court to adjudicate the property to the creditor for 80 percent of the adjusted base. Otherwise, the court may give the property back to debtor (prenda pretoria) until a new auction. Under any situation in which a new public auction must be held, all steps for notification and publication must be repeated. The steps for appraisal of the property will be repeated only if considerable time has passed."8 Payment 150. The plaintiff will not receive payment immediately after the auction. Once the property or the goods attached or given as collateral are sold, the proceeds of the sale are deposited with the court and held until the judge issues an order approving the outcome of the auction."9 The court pays the proceeds of the sale only after the plaintiff files a final claim for liquidated damages (liquidaci6n) and the court approves it. The final claim will contain the total amount that the debtor owes to date, accounting for inflation, devaluation, or adjustment to the current exchange rate if the amount was payable in a foreign currency and the legal fees of the winning party. Any legal interest is accrued at 6 percent. The other party may oppose, on the grounds that the accounting is wrong, and the court will hear arguments on both sides.'"' This process for payment typically takes at least three weeks. Problems and Options for Solution 151. The length of time required to obtain and execute judgment makes it unprofitable to lend against collateral with a short economic life or collateral whose value falls short of the typical legal fee to obtain and execute a judgment. The options include procedural rules that regulate the creditor-controlled sales of collateral in a law of secured transactions. The policy framework for those rules must balance a debtor's rights to due process against the need for expeditious foreclosure. The law should set a procedure to assure that sales will take place in a commercially reasonable manner. That will assure a llb Cod. Proc. Civ., Article 525. 117 Cod. Proc. Civ.. Article 526. 1 Cod. Proc. Civ., Articles 542, 543, and 544. 9 Cod. Proc. Civ., Anicle 545. 120 Cod. Proc. Civ., Article 545. - 46 - reasonable market price for the collateral. The law should not attempt to specify such features as how mnany times the auction should be announced, in what location, or in what newspaper.'2' Rather, the procedures should regulate the standard of commercial reasonableness. * Creditor-controlled sale. Instead of prohibiting the parties from stipulating private sale in their contracts, Article 880 of the Commercial Code and Articles 1340 and 1409 of the Civil Code should be abolished and a sale controlled by the creditor must be specifically provided for.'" To protect debtors against an unfair disposition of the collateral, a standard of commercial reasonableness should be enacted, requiring that the seller be held to such standard. For example, a standard of commercial reasonableness requires creditors to sell goods in the customary manner for dealers in that type of goods. Delay in the disposition of perishable collateral, or any goods likely to reduce in value speedily, may constitute failure to act in a commercially reasonable manner and the creditor would lose any rights to a deficiency if the sale did not cover the debt. * Creditors should be required to notify debtors and junior secured creditors before any resale. The law must allow the secured creditor any deficiency, only if he complies with the legal requirements for private sale. The law must always allow debtor a redemption period, during which collateral can be reclaimed upon payment.'" The law should void any stipulation allowing the debtor to waive his right to redeem collateral before foreclosure. The debtor may also recover damages arising from any wrongful repossession, including cases where the debtor actually did not default or where the creditor in fact had no security interest in the repossessed property. 1' - Strict foreclosure in limited cases. Once the secured creditor recovers collateral, he may keep the collateral in satisfaction of the secured debt (strictforeclosure). As a policy matter, the law may provide that the parties may not agree to strictforeclosure in advance of debtor's default and after notice, or may prohibit strictforeclosure against a consumer that has (a) paid 60 percent of the debt or (b) objects. Strict foreclosure may not allow the creditor any deficiency, nor does it protect the debtor of any surplus. 12 For example, pursuant to the policy followed by the Model Code of Civil Procedure, the parties can agree to sell the property in the judicial public auction without reserve and without base (C6digo Procesal Civil y Procesal Penal Modelo para Iberoamerica, Article 325.1). In A creditor-control sale can be either a public sale -- for example an auction arranged by the creditor, not by the court -- or a private sale in which the seller negotiates with an individual buyer. 123 Such a provision is made under U.S. law; see UCC §9-506. 124 NationIal procedures differ: legal costs are not always recoverable under U.S. law; U.K. law and Bolivian law does permit recovery of legal costs by the winning party. See also, C6digo Procesal Civil y Procesal Penal Modelo para lberoamerica, Article 328. Appendix I: Economic Cost of Deficiendes in Bolivia's Collateral Law - 49 - Appendix I: Economic Cost of Deficiencies in Bolivia's Collateral Law"25 1. As the text indicates, deficiencies in Bolivia's collateral laws lead to higher interest rates for loans on movable property. These higher interest rates make it less profitable for producers to hold capital; therefore, they produce less. Hlow much less? This annex examines that question. It shows, under plausible assumptions, that Bolivia could lose as much as $230 million to $690 million annually as a result of deficiencies in collateral laws. This represents between 3 percent and 9 percent of Bolivian GDP. By contrast, the comprehensive legal changes that are needed could be studied and implemented for well under $1 million. 2. While these are only rough estimates, the benefits potentially outweigh the gains by so much that they support the importance of placing the solution to this problem high on the policy agenda for government. 3. This appendix first shows how the interest rate determines the total amount of capital in use in Bolivia. Then it discusses how differences in the quality of collateral will lead lenders to charge higher interest rates for movable property and reduce the amount of such property in use. Then it compares lending for movable property in Bolivia with lending for movable property in the United States, where movable property is considerably better collateral. The appendix then assumes that, potentially, lending for movable property could be proportionately as great as real estate lending in Bolivia as it is in the United States. Using this assumption, the appendix then estimates the size of the loss in Bolivian GDP that arises from having a legal framework that limits lending for movable property. The Interest Rate and the Production Function Determine the Total Demand for Capital 4. In a typical production process (f), output (Y) depends on the amount of capital (K), labor (L), and land (T), as well as on the technology used to combine them (a) -- Y=f(a,K,L,T). The marginal product of capital. fK(a,K,L,T), derived from that production function, determines the demand for capital. Private individuals who maximize profit will demand as much capital as they can so long as the marginal rate of return on this capital exceeds the interest rate. For a small country, with financial agents able to borrow at the world market interest rate (iw), and re-lend at a retail interest rate adjusted for risk (i*), businesses would find it profitable to employ K* in capital (Figure 1). At interest rate i-, this economy will use a total capital stock equal to KW. Demand for Capital When One Kind of Capital is Less Risky than Another 5. Suppose there are two kinds of capital -- low-risk collateral (like land and buildings thereon -- KA) and high-risk collateral (like machinery and inventories -- KB). Demand for these two types of capital could be analyzed by partitioning the previous production function into the two types of capital so that Y= f(a,KA,K, L,T). Then the demand for fixed capital that is less risky collateral would be represented 125 1 am obliged to Lance Girton for helpful comments on this section. Any errors are my responsibility. - 50 - Figure 1: Total Demand for Capital When All Capital is Equally Good Collateral ~~~~K 4~~~~~~~ K'~~~~ Dtotal output minus interest payTeneit or interest foregone Eintemeedianin spread GiDinternational interest payments or alternative interest foregone Facing a production function fla,K,L,T), investors find it profitable to add to their capital stock so long as the extra return from additional capital (the marginal product of capital -- fKla,K,L,T) -- exceeds the interest rate. The local interest rate Wii exceeds the world market interest rate li.l because of the cost of the intermediation of funds. The total output of capital is the shaded area under the curve; that total output of capital can be decomposed into payment of foreign interest (or the alternative cost of foreign funds), domestic intermediation costs for financial institutions, and the return to owners of capital over and above the interest cost. wn .. \hfteisig\shar_doc\figl1..a.\Decenbe27, 1 994\rza - 51 - by fKA (Figure 2, panel 1) and the demand for movable capital that is more risky collateral would be represented by fKB (Figure 2, panel 2). 6. Reflecting the lower risk of fixed capital as collateral, lenders offer lower interest rate (.A) when lending for fixed capital than they do when lending for movable capital (iB). Producers would use less capital at the higher interest rate (i,,) than they would at the lower interest rate (iA). Lowering the Risk of Lending against Movable Property 7. To compensate for the greater riskiness of bad collateral, lenders will charge higher interest rates on those loans and lend less at any given interest rate. The higher the interest rate on capital that is risky collateral, the less such capital people will demand. Suppose, however, that improvements in the legal and regulatory system could lower the risk on such collateral. For example, suppose that the environment for lending against movable capital improved so that the interest rate that lenders offered for loans secured by movable equipment fell from 'B to iB (Figure 3, panel 2). 8. With a risky collateral system, the society uses KB in movable capital; with a better collateral system, the society uses K B in capital. The judicial and regulatory system that makes movable capital risky forces society to lose the services of capital because of the higher interest rates that arise from this riskiness. The gain to society of improving the quality of movable property as collateral arises from the increase in output that it could have gotten from that capital. That gain is the shaded area in Figure 3, panel 2 outlined in in a heavy dark line. The gain is divided into three broad shares. International interest payments (or, equivalently, international interest foregone) increases from i. x KB to i. x K B; they are shown as shaded in cross-hatch. Revenues of local financial institutions (shaded diagonally) will rise or fall depending on the sensitivity of the demand for capital (which will always rise) to the drop in the interest rate. The revenues of capital owners (shaded horizontally), over and above interest cost, will always rise. How Big is the Output Loss from Restrictions on Collateral? 9. Figure 3 shows the output loss that results from existing secured transactions laws. But how big is that loss likely to be? The size of the output loss depends in part on the likely impact of this high interest rate on the demand for movable capital in Bolivia. This appendix does not examine this relation. However, it is reasonable to suppose that production technologies in Bolivia are sufficiently similar to those in other countries so that movable and non-movable capital would be demanded in similar proportions when interest rate differentials are similar. (Of course, the lower wage in Bolivia would ensure that even with the same technology, the capital/labor ratio in Bolivia would be much lower than in the United States. However, it is not obvious that a lower wage would affect the relative use of fixed and movable capital. Hence, the assumption that the relative amounts of fixed and movable capital that are demanded will depend on the interest rates charged for loans for fixed and movable capital and not on the wage seems, on its face, plausible.) - 52 - Figure 2: Total Demand for Capital When Some Capital is More Risky Collateral than Other Collateral Panel 1: Less Risky Fixed Capital ("A") Panel 2: More Risky Movable Capital ("B") f KAiu_ fiNt 'e 'A iA iw iw KA K. K'- K-, K' total ourutpimununerest pyntorintetfonrege totai output miuus iuterest puywent or interat ftegoer Lntermeation spread intemediation sprftd E intematumal intenst paiymene or rinteriuive iLterdt foregone nratterai interest payments or altertmve intet fr.g,m The capital stock can be divided, however, into However, investors in capital "B" face a much two types of capital -- fixed capital ("A"), which is higher interest rate (B). This higher interest rate less risky as collateral and movable capital ("B") compensates lenders for the greater risk of making which is more risky as collateral. Lenders assess loans secured by the more risky movable capital the risk in lending against fixed capital and set an ("B"). Facing these higher interest rates, investors interest rate ('A). Investors in capital "A" invest in find it less profitable to invest. They hold an an amount of capital K'A, the amount that can be amount of capital K'B, much less than they would profitably invested at the interest rate 'A* invest at the lower interest rate 'AI shown notionally by the capital stock K B (Figure 2, panel 2). c:\wpwin\fig2 - 53 - Figure 3: Effect of Lower Interest Rates on Investment: Movable Capital Panel 1: Movable Capital Before Reformn--More Panel 2: Movable Capital After Reform--Less Risk, Higher Interest Rates Risk, Lower Interest Rates iB~~~~~K B lB IA~~~~~~~~~~~~~~~~~ iw R tDtal output munus interest payment or iterest foregone K ors itreitosped total otutput minuis intest paynment or interest foregone ttrair&ittpyeoatftieneetf::3n tS mtermediaabon spread PBY~nent~or mtnterenat i~eE ineatonal interest payments or alternative interest fofegme The social cost of the more risky collateral system Panel 2 shows the larger capital stock that would is the output lost from having an interest rate that follow from reducing the riskiness of the collateral. is higher than would be charged by a different and Less risk would lead lenders to charge the lower less risky system. Panel 1 shows the smaller interest rate "B. Comparing the panels 1 and 2, capital stock associated with the high interest rate payments of foreign interest and the profits of with risky collateral. ( same as Figure 2, Panel 2). domestic capital owners (over and above interest costs) will always rise. Total payments to domestic financial intermediaries may rise or fall depending on whether the rise in capital demanded (from K, to K',) compensates for the fall in interest rates. c:\msoffice\powerpnt\fig3 - 54 - 10. Volume of Lending. Improving the collateral laws to permit lending against movable property permits the expansioni of credit for such goods in two important ways: non-banks, such as finance companies, extend credit against movable property, and banks lend more, taking movable property as collateral. 1H. --Expanded Lending for Mlovable Property by Non-Bank Lenders 12. Weak collateral laws Iimit the development of non-bank lenders that specialize in loans secured by movable property. In Bolivia, consequently, commercial banks supply about 89 percent of the credit in the forimial sector (Table 1. I), compared to 30 percent in the United States when considering only the same institutions as exist in Bolivia. The relative importance of commercial banks would be even less if we included other elements of the financial market. No non-banks in Bolivia are important suppliers of credit for movable property -- warehouses amount to only $3 million in credit out of $2. 1 billion total; there are no leasing companiies (Table 1.2). A maximilumii of 2.6 percent of total credit outside banks is used to finance movable property (Table 1.1). TABLE l.l: Outstanding credit of major financing institutions for movable equipment in Bolivia and the United States Bolivia Share ot total UJiiited States Share of total ($ miillion) ($ billion) Commercial Banks $1,870 89.0% $2,944 31.1% Savings Banks $176 8.4% $1,127 11.9% I[surance & Pension na 0.0% $2,860 30.2% Otiel $54 2.6% $2,250 23.7% --Finance comnpanlies na $656 6.9% --Securitized Debt Obligation na $305 3.2% rotal $2,100 100.0% $8,807 100% Note: This table shows only the U.S. financial institutions that are the counterparts of the Bolivian financial institutions. Total private credit in the United States, excluding corporate equities and mutual fund shares, amounted to about $14.2 trillion in December 1992. Source: Government of Bolivia, Superintendency of Banks; also, as cited in Bolivia: Restructuring for Growth: The Remaining Agenda for Public Enterprise Reform and Private Sector Development (Report 11075-BO), September 1992; U.S. data taken from Federal Reserve Board, Federal Reserve Bulletin, July 1 993, table 1 .60. 13. By contrast, in the United States, non-banks extend about 70 percent of the credit. Of this, at least 10. 1 percent of total credit outside banks is used to finance movable property (Table 1.1). - 55 - --Bank Lending for Movable Property 14. Improved secured transactions laws would also increase the willingness of commercial banks to lend against movable property. Of the credit supplied by commercial banks in Bolivia, 48 percent is granted with a real estate guarantee, while 42 percent is granted against a personal guarantee (Table 1.2). But few banks would accept personal guarantees from individuals without real estate. Only 10 percent of the credit is granted to individuals who have neither real nor personal guarantees at the bank. Consequently, no more than a maximum of 10 percent of Bolivian commercial bank credit is used to finance movable property and without requiring other security. TABLE 1.2: Commercial bank lending secured by movable property in Bolivia and the United States Commercial Banks Bolivia Percent of total United States Percent of total ($ million) ($ billion) l Real Estate Loans $561 48.0% $892 30.4% Personal Guarantee $490 42.0% $356 12.1% Guaranteed without real estate $117 10.0% $810 27.6% --commercial & industrial $590 20.1% --agricultural $35 1.2% --lease financing $31 1.1% --non-bank financing $44 1.5% --personal loan with $110 3.7% collateral Total for which $1168 100.0% $2060 100.0% collateral identified Source: Bolivian data taken from table 1.2, below, and from Superintendent of Banks; U.S. data taken from Federal Reserve Board, Federal Reserve Bulletin, July 1 993, table 1.24, 1.55 (for commercial bank car loans). 15. The comparison with the United States is striking. Only 30 percent of commercial bank loans are secured with a real estate guarantee. But only about 12 percent of loans are granted only with a personal guarantee. About 28 percent of loans are granted with some movable property as collateral (Table 1.2). 16. Interest rate. The difference in interest rates between good security and poor security in Bolivia is about 36 percent to 48 percent -- interest rates are 12 percent at the banks on loans secured by real estate while they are 48 percent to 60 percent per year in the informal sector. Some borrowers pay lower informal market interest rates but they give illegal collateral like postdated checks that subject them to prison terms. What is that disutility worth? At the margin, obviously, 48 percent to 60 percent. 17. By contrast, loans in the United States secured only by movable property are typically available for a couple of percentage points over the rates charged for home mortgage loans. Establishing the same - 56 - differential in Bolivia would put the interest rate at 14 percent for movable property. The interest rate decline that would follow from improved collateral laws ranges between 34 percent and 46 percent. Estimating the Impact of Improved Secured Transactions Laws on Bolivian Credit and Capital 18. As figure 3 indicates, the social gain from improving the secured transactions system is represented by the area bounded by the heavy black line. This annex estimates the social gain for Bolivia by asking how much Bolivian lending would increase if lending for movables in Bolivia became as important, relative to real estate lending, as lending for movables in the United States. This standard of comparison depends on the earlier assumption that the relative use of fixed and movable capital would depend on relative interest rates for the two types of loan and be insensitive to differences in relative wage rates. 19. Commercial bank lending for real estate in the United States amounts to $892 billion; commercial bank loans secured by other collateral amount to $812 billion, or about 91 percent more loans than represented by the real estate loans alone. (Table 1.3, lines 1, 3). Commercial bank lending for real estate in Bolivia is recorded at $561 million (Table 1.3, line 1). However, another $490 million in personal loans are outstanding; on the basis of extensive interviews, these personal loans are given only to borrowers who have real estate that could be pledged. The Bolivian banking system may have as much as $1,051 million in loans secured de facto by real estate (Table 1.3, line 1). 20. If Bolivian lending for non-real estate collateral were proportionately as great as that of U.S. commercial banks, it would be 91 percent of real estate lending or between $511 billion and $957 billion (Table 1.3, line 4). The range depends on whether the low or high estimate of Bolivian real estate lending is used. 21. In the United States, non-bank lending secured by movable property amounts to at least $656 billion to $776 billion, between 74 percent and 87 percent of commercial bank real estate lending (Table 1.3, lines 3, 5). If improved secured transactions laws permitted a proportionate amount of non-bank lending, then Bolivian non-bank lending secured by movable property would range between $413 million and $914 million (Table 1.3, line 5). 22. The sums of high and low estimates form the range of total lending against movable property (Table 1.3, line 6), shown as $923 million to $1871 million. The estimated increase in total lending depends on the rise from the original lending against movable property in Bolivia, ranging between $0 and $161 million (Table 1.3, lines 2, 3). The range of differences is between $752 million and $1871 million. Social Gain from Better Collateral 23. The above elements can be combined to estimate the social gain from better collateral. The drop in interest rates from jB to 'b would range between 34 percent and 46 percent; the rise in total lending would range between $752 million and $1871 million. Using the mean value theorem to approximate the area under the triangle, the total gain would range between $230 million and $683 million. These gains represent, respectively, 3 percent to 9 percent of Bolivian GDP. - 57 - TABLE 1.3: If the Bolivian economy had the same legal provisions concerning collateral as the United States: 1. Commercial Bank real estate loans: Bolivia US low $561 $892 high $1,051 $892 2. Commercial Bank other collateral low $0 $812 high $117 $812 3. Non-bank Financial Intermediaries low $0 $656 high $54 $776 Increase in credit over commercial bank real estate lending: 4. Commercial Bank non real estate lending as percentage of real estate lending low $511 predicted 91.0% actual high $957 predicted 91.0% actual 5. Non-bank financial intermediary lending as percentage of commercial bank real estate lending low $413 predicted 73.5% actual high $914 predicted 87.0% actual 6. Sum of the estimates: Sum of the low estimates: $923 predicted - Sum of the high estimates: $1,871 predicted 7. Estimated change in Bolivian Lending: low $752 predicted high $1,871 predicted Source: Table 1.1, 1.2; derivation discussed in text. Appendix II: Results of an Analysis of Bolivian Debt Collection Cases - 61 - Appendix II: Results of an Analysis of Bolivian Debt Collection Cases 1. To supplement anecdotal evidence about the length and effectiveness of judicial procedures, a random sample of debt collection cases was investigated."'' This procedure first analyzed a sample of 516 debt collection cases. It then analyzed in greater detail a sample of 29 contested debt collection cases. A. All Debt Collection Cases Plaintiffs 2. The study investigated 516 debt collection cases. About 60 percent of debt collection cases are brought by corporations and 40 percent by individuals. Among corporations, banks are the most important plaintiffs, amounting to about 45 percent of the total cases (Figure 1). 3. Despite the predominance of banks, only 19 cases were processed under the Proceso Coactivo Bancario only available to banks; 497 were processed under Proceso Ejecutivo rules. Defendants 4. Among the defendants, individuals predominate: Of the 516 cases only in 59 of them the defendant was a corporation. None of the corporations was a bank. Payment Number of Cases Pursued to Completion: 5. Cases can have several outcomes: the plaintiff's suit can be dismissed; the plaintiff's suit can be sustained; the case can be settled out of court; and the case can be dropped. 6. None of the suits examined was dismissed, supporting the view that only strong cases are brought to court. However, only 155 of the 516 or about a third of the cases were resolved in the court system, either settled in the court or brought to the point where final judgment was enforced. That supports the qualitative evidence that the courts are not used to resolve disputes; rather, the courts are employed to threaten the party. As one bank lawyer explained, when a loan falls into arrears, a case would be brought and then kept open, with the threat of resumption of litigation used to keep payments coming. That is, the sanction of the law is the cost of being subjected to the legal process, not the resolution of the legal process itself. Apparently, where 2h The study was designed by the mission and undertaken on behalf of the mission by Instituto Latinoamericano de Naciones Unidas para la Prevencion del Delito y Tratamiento del Delincuente (ILANUD) in Bolivia. The mission is particularly obliged to Eduardo Rodriguez, Director of ILANUD-Bolivia and Cynthia Aramayo Aguilar, for their assistance. Any errors in fact or interpretation remain the responsibility of the mission. The data were ably processed by Babak Fouladi. - 62 - this threat does not suffice, the case is simply dropped. Ihere is little reward froml litisgating the case to its successful conclusion. F-igure I fLERCE lACL 01 fLAN TIl S FOR ALL C AEL (516) Where judgment is obtained, it takes a lon\g timiie: For all cases: 7. The average length of time between the day thiat the case was filed in court anid the first final holding was 269 days. In the first final holdinig the judge rules oni the case. Under the law, this step should take no more than 8 days. - 63 - Figure 2 PERCENTAGL OF DEFENUANTS FOR ALL CASES (516) 8. If thie finial hioldinig is niot appealed, thec execution of judgment is supposed to take place in 3 working days -- typically nio miore thlan 5 calendar days. In fact, including the appeals process, the timie required to execute the judgment was 401 days after the first final hiolding -- a total of 670 days or- jUSt unider two years. 9. The actual average tiime betwveen thec filing of the case and the date of the final payment was 566 days. r-eflectinig thle payment hy somie parties before final judgment was executed. Foi- Baniks alonie: 10. Baniks only did marginially better in gettling a first ruling from the court. The average length ot timie between thle day that the case was filed in court and the first final holding was 261 days. I 1 Banks did somewhat better in thieir overall receipt of final payment, since the average length ot timie between the tflilg oif the case in court and( thle date of the final paymienit was 480 days, compared to 566 daN s thor all creditors. - 64 - 12. Banks, however, did somewhat worse in those cases that required the enforcement of final judgment, taking 442 days after the first final holding for a total of 703 days in those cases requiring the enforcement of judgement. Cases dwindle rapidly as they move forward in adjudication 13. The attrition rate of cases as they move through the court process is rapid, supporting again the view that the judicial process does not itself resolve disputes but rather represents a costly bargaining threat to the weaker party. 14. Of 516 cases, 483 had a filing date; the remaining 33 were dropped by one of the parties, however, only 195, or about 40 percent, received a first final holding from the court. 15. The appeals procedure, potentially lengthy and costly, in fact did not account for much of the delay. Of the 195 cases that had a first final holding, only 14, or about 7 percent were appealed to the appellate court; only one of those, or about 7 percent, was appealed to the supreme court. (See figure 3.) - 65 - Figure 3 NUMBER OF CASES PER STAGE FOR ALL CASES (SI6) loo A acoK n1c rTC m RotE wa w/ niAI B. Contested Debt Collection Cases 16. In some cases, defendants contested the debt collection case. The study analyzed 29 such cases chosen at random from the archives. Of these 29 cases, the plaintiff was a corporation in 19; in the rest, the plaintiff was an individual. As stated before, corporations are categorized into two different sections, Banks and others. - 66 - Figure 4 PERCENTAGE OF PLANTIFFS FOR THE CONTESTED CASES (29) Time elapsed 17. Contested cases took about six months longer to resolve thani unicontested cases. The average time from the first filing to the first finial holding was 202 days. The average time for enforcing the judgement was 499 days. The average timie fr-omi thle frst filinig to the Final payment date was 834 days. - 67 - Figure 5 PERCENTAGE OF DEFENDANTS FOR THE OONTESTED CASES (29) "CMVl as (.b% M| att - 68 - Figure 6 AVERAGE TIIE SPENT BETWEEN PROCESSES FOR T'K CONTESTED CASES (29) IOS No No 7'm too .Di ISH too In0 Appendix m: Legislacion Sobre Garantias Reales Mobiliarias: Terminos de Referenca Este iocumento ha sido redactado por Alejandro M. Garro, Lecturer in Law, Columbia University, por encargo y para uso exclusivo del Banco Mundial. Todo otro uso, distribuci6n o cita de este documento debe requerir la autorizaci6n de su autor (enero 1993). I - 71 - I. INTRODUCCION 1. El borrador del informe del Banco Mundial, de fecha 30 de setiembre de 1992 ("Informe"), contiene un analisis econ6mico y juridico del funcionamiento de las garantias reales mobiliarias en Bolivia.'27 El informe destaca que la legislaci6n vigente, el sistema de publicidad registral y el procedimiento previsto para la ejecucion de las garantias obstaculiza el acceso al credito mobiliario a una parte significativa de la poblaci6n. El Informe es concluyente en el sentido de que el sistema de garantias reales carece de la confiabilidad de entidades financieras, bancos y otras fuentes potenciales del cr6dito mobiliario. 2. Sobre las bases de las conclusiones a las que se lleg6 en ese Informe, se me solicit6 la elaboraci6n de los "terminos de referencia" que podrian enmarcar un anteproyecto de "Ley de Garantias Reales" para Bolivia. Este documento es presentado en respuesta a ese pedido. 3. El mandato encomendado indica que el proyecto de reforma debe inspirarse en los principios que informan al Articulo 9 del C6digo de Comercio de los Estados Unidos ("Articulo 9") y los estudios realizados por la Comisi6n de las Naciones Unidas para el Derecho Mercantil Internacional (C.N.U.D.M.I., aqui citado por sus siglas en ingles, "UNCITRAL"). Los terminos de referencia tambien deben incluir las propuestas de reformas sugeridas en el informe del Banco Mundial citado precedentemente. Ademas, los terminos deben precisar toda disposici6n del ordenamiento juridico boliviano que pueda ser afectada por la reforma, explicar brevemente cada uno de los capitulos que deberian incluirse en una eventual ley sobre garantias reales e incluir cualquier otro tema pertinente al mejor cumplimiento del objetivo encomendado. 4. Antes de proceder a desarrollar el temario de estos terminos de referencia, creo importante apuntar, a modo de aclaraci6n y advertencia, algunas observaciones preliminares. En primer lugar, cabe destacar que la elaboraci6n de una ley sobre garantias reales en materia de bienes muebles es una tarea compleja si se la toma en serio, es decir, si en lugar de limitarse a emprender reformas cosmeticas la tarea es realizada con el prop6sito genuino de facilitar el acceso al credito mobiliario y agilizar la ejecuci6n de las operaciones financieras con garantia real mobiliaria. La complejidad radica en la necesidad de alterar la politica juridica que inspira la legislacion vigente, modificar en forma significativa la tecnica empleada, y verificar su impacto en cada una de las areas del ordenamiento juridico boliviano. 5. Una reforma legislativa que regule de manera completa la constituci6n, formalizaci6n, perfeccionamiento, orden de prelaciones y ejecuci6n de las garantias reales implica tener en cuenta su impacto en el derecho de las obligaciones y de los contratos (en lo que se refiere a los requisitos del acuerdo de garantia, el perfeccionamiento de una cesi6n de creditos con fines de garantia), derechos reales (en lo que se refiere a los efectos reipersecutorios de una garantia real y su publicidad registral), quiebras (en lo que se refiere al efecto de la declaraci6n de quiebra sobre las relaciones juiridicas prexistentes), procedimiento civil (en lo que se refiere al procedimiento de ejecuci6n ante el incumplimiento del deudor) e incluso en lo que atafie a la " The World Bank, Law, Legal Procedure, and the Econiomic Value of Collateral: The Case of Bolivia, September 30, 1992, Confidential Draft, Report No. 10627-BO (green cover). - 72 - garantia constitucional del debido proceso (en lo que se refiere al derecho de audiencia que se le debe al deudor ejecutado). 6. AIn cuando en el Capitulo VIII de estos terminos de referencia se sefialara en forma tan precisa como sea posible aquellas normas del C6digo Civil ("C.Civ."), C6digo de Comercio ("C.Com.") y del C6digo de Procedimientos Civiles ("C.P.C.") que seran afectadas en forma directa por una ley de garantias reales, no es posible a esta altura del proyecto detectar con precision todas aquellas disposiciones que, al ser afectadas en forma directa o indirecta por la ley, deberan ser enmendadas o derogadas. Tampoco es posible precisar en toda su extensi6n las reformas legislativas o administrativas que deberan llevarse a cabo al derogarse algunas normas sustantivas, suprimirse algunas practicas administrativas, o eliminarse algunas reglas de procedimiento, que puedan ser incompatibles con el texto de la nueva ley. 7. Claro esta que al tratarse de una lex specialis, las normas a ser promulgadas en materia de garantias reales no pueden afectar normas mas generales sobre obligaciones, contratos, derechos reales, procedimiento civil, etc. En la medida en que puedan presentarse conflictos con el resto del ordenamiento juridico, la ley sobre garantias reales se aplicara por via de excepci6n a las operaciones financiadas con este tipo de garantias. Esto no empece a perseguir el objetivo de que la ley mantenga una consistencia terminol6gica y doctrinaria con el resto del ordenamiento juridico boliviano, destacando en forma expresa todo desvfo y seflalando las razones por las cuales se adopta una pofitica legislativa diferente a la que insipir6 al codificador. 8. En segundo lugar, cabe anticipar la ley de garantias reales a ser adoptada debe inspirarse en una politica legislativa que en muchos aspectos se desvia de aquella que inspiro- a la legislacion boliviana vigente y el modelo legislativo que se tuvo en cuenta al adoptarla.'2x Mas adelante se explicara porqu6 este cambio de aproximaci6n al temna es necesario para poder cumplir con el objetivo de facilitar y promover el uso del credito mobiliario. Lo importante a sefhalar preliminarmente es que este cambio de enfoque polftico-econ6mico de c6mo se deben regular las operaciones financieras con garantias reales requiere de la comprension y cooperaci6n de aquellos que van a aplicar y vivir bajo la nueva regulaci6n. Me refiero a los operadores del sistema juridico boliviano, sus jueces, notarios, abogados, etc. Abundan los antecedentes de transplantes legislativos, incluso en el area de las garantias reales, que han fracasado debido a la falta de participaci6n activa y discusi6n critica a nivel local de la ley a ser adoptada. De alli la importancia de contar con la participaci6n activa de los abogados y juristas bolivianos durante el proceso de elaboraci6n de un anteproyecto de ley sobre garantias reales. 9. En tercer y ultirrmo lugar, es importante sefialar que la inserci6n exitosa de una reforma legislativa sobre garantias reales en Bolivia reposa en gran parte en la compatibilidad que existe y que podria lograrse en base a un calculo realista entre las normas que se proponen y la cultura juridica, la estructura econ6mico-social y la capacidad admninistrativa y judicial boliviana. Sera necesario adaptar, calibrar y si es necesario ajustar los principios que inspiran al Articulo 9, los estudios de UNCITRAL y las recomendaciones del Inforiie, como asi tambien la formulaci6n de las norimias a ser incluidas en la ley, a los condicioniainientos que iiponigani los usos y I SC ha SeihAlad& qLue en niayur miedida que c ('odigo ( Civil italainl de 1942. el iodclo IeLIC inspir- atl codificador hboliviano tiue la ley espafioIa sohre hipO[eca muchie v prenda silt desplazaTImienito del 16 d e diciembre de 1954. V'as s C'ARLOS MORALES (UIIIlLEN OODIGO CIVIL ('ONCORDAD)O Y ANOTADO, 2a ed. la Pa,'. I1')2 p. ')1(. iota i art 9(() dcl (CCiv. - 73 - practicas, las posibilidades de infraestructura administrativa y otros factores culturales, politicos, sociales y econ6micos propios de la sociedad boliviana. 10. Hecha estas tres salvedades, cabe referirse al disefio de exposici6n de los terminos de referencia. El capitulo II comienza con una descripci6n somera de las formas juridicas que el C6digo Civil y el C6digo de Comercio de Bolivia le otorgan a las diversas garantias reales mobiliarias. En el capitulo III se sefialan aquellos defectos del sistema de garantias reales que -- segun el Informe del Banco Mundial-- entorpecen el funcionamiento amplio y fluido de las operaciones financieras con garantias reales sobre bienes muebles. El capitulo IV incluye una exposici6n de los principios de politica legislativa que deben inspirar una reforma legislativa en este campo. El capitulo V aspira a explicar, en forma sumaria, en que medida el Articulo 9 y los estudios realizados por UNCITRAL incorporan y promueven esos principios. El capitulo VI sefiala en que medida las recomendaciones sugeridas en el Informe del Banco Mundial se ajustan a las directrices que sugieren los modelos enunciados. 11. La parte medular de los terminos de referencia comienza en con el capitulo VII, que destaca las caracteristicas mas relevantes que debe incluir una ley de garantias reales e intenta explicar brevemente cada una de ellas. El capitulo VIII seniala en forma breve pero especifica el impacto que tendra la reforma en la legislacion que se encuentra en vigor. La parte final que se incluye en el capitulo IX incluye un esbozo de los pasos a seguir en la implementaci6n del proyecto de elaboraci6n de una ley sobre garantias reales. - 74 - II. LEGISLACION VIGENTE 12. Bajo Ia legislaci6n boliviana vigente coexiste una amplia variedad de operaciones financieras que tienen por objeto la constituci6n de garantias reales sobre bienes muebles. En la mayoria de los casos, el ropaje juridico de la operaci6n o acto juridico con efectos reales se determina conforme al tipo de bien mueble que puede ser objeto de una garantia real, su caracter civil o comercial, y, ocasionalmente, conforme al tipo de actividad econ6mica para el cual se admite la creaci6n de una garantia real sobre bienes muebles. A continuaci6n se pasa revista al esqueleto normativo que regula las garantias reales en el derecho boliviano. A. TIPOS DE GARANTIAS REALES 13. En la mayoria de los casos, la regulaci6n diferenciada de las garantias reales se refleja su metodo de constituci6n y perfeccionamiento. Esta diferencia de enfoque se incluye en las disposiciones del C6digo Civil (arts. 1395-1429), del C6digo de Comercio (arts. 878-901) y leyes especiales que crean garantias reales adicionales a las reconocidas en los c6digos. Asi, el derecho boliviano distingue por lo menos ocho tipos de garantias reales, cada una de las cuales se encuentra sujeta a una reglamentaci6n particularizada. En muchos casos esta regulaci6n se encuentra intimamente relacionada, lo que se refleja en las remisiones cruzadas del codificador para cubrir posibles lagunas (v.gr., C.Civ., arts. 899, 1402). 14. Prenda con desplazamiento. Luego de incluir disposiciones generales aplicables a la pignoraci6n de bienes en general (C.Civ. arts. 1398-1400), el C6digo Civil regula la prenda clasica, esto es, la prenda sobre "bienes muebles, universalidades de muebles, creditos y otros derechos que tengan por objeto bienes muebles" (C.Civ., art. 1401). La constituci6n y perfeccionamiento de este tipo de garantia real requiere el desplazamiento de la tenencia del bien al acreedor garantizado (C.Civ., art. 1403). A su vez, la prenda con desplazamiento admite una regulaci6n particular dependiendo si la prenda se constituye con la finalidad de garantizar el cumplimiento de una operacion comercial (C.Com., art. 878)."29 Esto resulta en una prenda con desplazamiento civil y otra de naturaleza comercial. 15. Prenda sin desplazamiento. A diferencia de la prenda clasica, cuya constituci6n y perfeccionamiento requiere la transferencia del bien prendado a manos del acreedor, la prenda sin desplazamiento, aunque constituida con el acuerdo de garantia, necesita de la inscripcion registral para ser perfeccionada. La distinci6n entre la prenda civil y comercial se extiende a la prenda sin desplazamiento; un de naturaleza civil (C.Civ., arts. 1417-1429) y otra de naturaleza comercial (C.Com., arts. 886-897). Pero el criterio de distinci6n entre estos dos tipos de garantias reales no esta basada en la naturaleza de la obligaci6n garantizada, sino en el tipo de '2 No resulta facil de explicar la "rernisiin" al C6digo de Comnercio y ]eyes especiales a la que se refiere el art. 1402 del C6digo Cisil, que dice asi: Remisi6n a leyes especiales. "Las disposiciones del Capitulo presente [Capitulo IV, "De la pignoraci6n"] no derogan las del C6digo de Conmercio y leyes especiales concernientes a casos y formas particulasres de constituir la prenda, ni las referenites a las instituci(roes autorizadas para hacer prestamos sobre las prendas". En realidad, esta disposici6n no efectuia una rernision, ni siquiera un reenvio, a otras normas; simplemente deja en claro que otras foirmas particulares de prenda se rigen por su lex specialis. - 75 - bien otorgado en garantia. Asi, por un lado, la prenda sin desplazamiento que regula el C6digo Civil s6lo puede ser constituida por el agricultor y ganadero, el hotelero, y el industrial, sobre determinados bienes que especifica el art. 1418 del C.Civ. y al s6lo efecto de garantizar prestamos de dinero destinados a la explotaci6n agricola, ganadera, hotelera o industrial (C.Civ., art. 1420). Por otro lado, la prenda sin desplazamiento que regula el C6digo de Comercio puede constituirse sobre "toda clase de muebles destinados a una explotaci6n econ6mica o que sean resultado de la misma explotaci6n, salvo las exclusiones legales" (C.Com., art. 886). 16. Prenda de creditos en general. Los diferentes tipos de prenda a los que nos hemos referido, con y sin desplazamiento, de naturaleza civil o comercial, se constituyen sobre bienes corporales (tangibles). Si la operaci6n de financiamiento tiene por objeto crear una garantia sobre "creditos", la garantia real tambien recibe el nombre de "prenda" pero encuentra su regulaci6n en el C6digo Civil (C.Civ., art. 1413). Sin embargo, no toda pignoraci6n de "creditos" se regula de la misma forma; el metodo de constituci6n y perfeccionamiento de la garantia real varia dependiendo si dicho credito ha sido o no incorporado en un papel, es decir, si el derecho se encuentra representado en alg6n documento, instrumento o titulo-valor. En este sentido, los c6digos bolivianos tambien incluyen una regulaci6n especifica. 17. Prenda de derechos diversos de los cr6ditos. Asi, conforme al C6digo Civil, la pignoraci6n de algunos derechos de credito, como los derechos de autor, marcas y patentes, puede encontrarse sujeta a leyes especiales, al menos con respecto a sus requisitos de inscripci6n, que debe realizarse en un registro especial ("Registro de Patentes y Marcas") (C.Civ., art. 1416). 18. Hipoteca gue garantizan los tenedores de titulos valores. Si el credito consta en un documento o titulo de credito, la garantia real recibe el nombre de "hipoteca" y encuentra su regulaci6n en el C6digo de Comercio (C.Com., art. 901). 19. Prenda de mercaderias almancenadas. Las garantias reales sobre derechos incorporados a documentos que representan mercaderfas tienen una regulaci6n especifica en el derecho boliviano, al menos cuando la garantia real es otorgada sobre mercaderias depositadas en almacenes generales. Esta garantia real es objeto de regulaci6n especial en el C6digo de Comercio (C.Com., arts. 689-711, 1189-1204). Conforme a estas disposiciones, el derecho al dominio de las mnercaderias es representado por un titulo valor denominado "certificado de dep6sito". El depositante y titular de las mercaderias puede otorgar una garantia real sobre ellas si solicita al Almacen General un formulario denominado "bono de prenda", cuyo endoso y entrega al acreedor garantizado perfecciona la garantia real (C.Com., arts. 689, 691, 1189). 20. Hipoteca de un establecimiento comercial. Bajo el nombre de hipoteca sobre un 'establecimiento comercial", el C6digo de Comercio contempla en forma especifica la pignoraci6n de una universalidad de bienes, corporales e incorporales (C.Com., art. 900). Ignoro si este tipo de garantia real es o no utilizada en la practica comercial y con que resultado. Sin duda que conocer la experiencia comercial y jurisprudencial boliviana con este tipo de normas sera de gran utilidad para precisar las razones de su falta de uso y los requisitos que debe reunir una ley que tenga mayores posibilidades de exito. 21. Hipoteca sobre bienes muebles suietos a registro. La legislaci6n boliviana tambien contempla otras garantias reales que no se perfeccionan con el desplazamiento de la tenencia del bien al acreedor sino con la inscripci6n registral; pero estos no reciben el nombre de "prenda", - 76 - sino de "hipoteca sobre bienes muebles sujetos a registro".'30 Estas hipotecas tambien son objeto de regulaci6n separada en el C6digo Civil y en el C6digo de Comercio, aunque la regulaci6n de estas uiltimas se remite al C6digo Civil y "leyes especiales respectivas" (C.Civ., art. 899). 22. Por un lado, la hipoteca mueble que regula el C6digo Civil puede constituirse sobre los siguientes bienes: barcos y embarcaciones que tengan mas de una tonelada de capacidad de carga, aeronaves, vehiculos automotores, maquinaria pesada y "otros muebles sujetos a registro por leyes especiales" (C.Civ., art. 1395). El C6digo Civil tambien se admite la constituci6n de una hipoteca mueble en favor de un vendedor, sobre instrumental y equipos destinados a una explotaci6n, y en favor de quienes financien la producci6n de peliculas, sobre los derechos emergentes de las mismas (C.Civ. 1396). 23. Por otro lado, las hipotecas sobre bienes muebles sujetos a registro que regula el C6digo de Comercio tambien admite la constituci6n de un gravamen sobre embarcaciones, aeronaves, vehiculos automotores, maquinaria pesada y "otros bienes muebles sujetos a hipoteca por ley" (C.Com. art. 898). La distinci6n fundamental entre la hipoteca mueble civil y la comercial parece basarse en el mismo criterio utilizado para distinguir las otras garantias reales sujetas a doble regulaci6n, esto es, dependiendo si la obligaci6n garantizada puede ser clasificada como una "operaci6n comercial" (C.Com. art. 878). B. CONSTITUCION DE UNA GARANTIA REAL Y DERECHOS DE LAS PARTES 24. El metodo de "constitucion" de una garantia real se refiere a los requisitos que deben reunirse, incluyendo el metodo de formalizaci6n del contrato de garantia (v.gr., escritura publica y la inclusi6n de determinada informacion en la misma), para que la operaci6n de financiamiento tenga efectos entre las partes. Asi, aunque la prenda con desplazamiento se constituye y perfecciona con la entrega del bien al acreedor, o un tercero designado por las partes (C.Civ., art. 1403), las normas generales aplicables a todo tipo de contratos requiere que este acuerdo de garantia sea realizado por escrito cuando supere una cuantia minima (Civ.C., art. 1328 (1)). La constituci6n de una prenda sobre creditos, en la medida en que presupone un contrato, tambi6n se encuentra sujeta a la formalidad escrita conforme a su cuantia (Civ. C., art. 1328 (1)). 25. La garantias real que se perfeccionan mediante la inscripci6n registral, como la prenda sin desplazamiento, debe ser constituidas por documento publico (C.Civ., art. 1421, C.Com., art. 887). Ademas, la legislaci6n impone, aparentemente bajo pena de nulidad, que dicilo docullmelnto o instrumento publico incluya cierta informacion minima (C.Civ., art. 1421, C.Com., art. 888). Para la hipoteca voluntaria sobre bienes muebles registrales, las nornias aplicables a la constituci6n de hipotecas sobre bienes inmuebles se aplican por analogia. "' Se ha dicho que esta distinci6n fue tomada por el codificador boliviano sguienido a la lev espafiol.a de 16 de diciembre de 1')54. que fundamenta la distinci6n entre "prenda sin desplaziento " e "hipoteca mueble' en base a. respectivainenle, lai nienior o mayvor susceptibilidad de identificaci6n registral del bien gravado. V., C. MORAIES GUILLEN, (ODIGO CIVIL. ('ONCORDADO Y ANOTADO, La Paz, 2a, edici6n, 1982, p. 908. - 77 - 26. Los derechos del acreedor garantizado y del deudor, con respecto al bien en garantia, se encuentran someramente regulados en el C6digo Civil (v.gr., C.Civ., art. 1407-1408, 1422-1423) y el C6digo de Comercio (v.gr., C.Com., art. 883-884, 890-891). Ocasionalmente, las obligaciones y derechos del acreedor garantizado con una prenda con desplazamiento, o aquellos que ejerce el deudor sobre un bien otorgado en garantia pero sin transferencia de la tenencia al acreedor, pueden estar sujetos a las normas generales aplicables a los derechos y obligaciones del depositario con respecto al bien entregado en dep6sito. C. PERFECCIONAMIENTO DE UNA GARANTIA REAL 27. El metodo de "perfeccionamiento" se refiere a los pasos que deben llevarse a cabo para que la garantia real tenga efectos contra terceros y otorgue una determinada prelaci6n al acreedor garantizado. En el derecho boliviano, los requisitos de perfeccionamiento son aquellos que se refieren a la necesidad, el grado y la forma de publicidad posesoria o registral que debe otorgarsele a la garantia real. Tambien estos requisitos se rigen por las normas generales o especiales contenidas en el Codigo Civil y el C6digo de Comercio. D. REQUISITOS DE POSESION E INSCRIPCION REGISTRAL 28. Aquello que se refiere a los requisitos que deben cumplirse para perfeccionar una garantia real mediante la entrega del bien al acreedor o a un tercero designado de comulln acuerdo, no tiene una regulaci6n especifica en las normas sobre garantias reales. Por lo tanto, se aplican las normas generales del C6digo Civil que se refieren a los requisitos del control fisico sobre el bien (corpus) y la intencion del que ejerce dicho poder de hecho de actuar como titular de un derecho real (animnus). Con respecto a las cuestiones que se refieren al lugar, forma y requisitos de la inscripci6n registral tambi6n son reguladas, en forma directa o por analogia, por normas del C6digo Civil sobre registros de derechos reales (C.Civ., arts. 1538-1566) y leyes especiales aplicables a diferentes tipos de garantias reales. 3' E. PRELACION DE LAS GARANTIAS REALES 29. La prelaci6n de cada una de las garantias tampoco cuenta con una reglamentaci6n sistematica y global. Las prioridades deben ser determinadas en base al juego arm6nico de las disposiciones del C6digo Comnercio y del C6digo Civil acerca de la transferencia del dominio sobre bienes nmuebles, el principio de que "la posesi6n vale titulo", los limites y alcances de la reipersecutoriedad de los derechos reales de garantia, y las disposiciones de este uiltimno c6digo '' ase, por ejemplo, Ley del 15 de noviembre de 1887 sobre Registro de los Derechos Reales; Decreto Suprenio (D S.) No. 15.191 del 15 de dicieribre de 1977 sobre el registro de automotores que lleva la Direcci6n General de TrAuisito: D.S No. 16.699 del 5 de julio de 1979, ar. 50, regulando la inscripci6n registral de garantias reales sobre coseclias pendientes junIto al titulo (de domniino del imiiueble al que acceden. - 78 - acerca de los privilegios generales y especiales aplicables a los bienes muebles (C.Civ., arts. 1346-1359). F. EJECUCION DE UNA GARANTIA REAL 30. Con respecto a los medios con los que cuenta el acreedor para realizar o ejecutar una garantia real en caso de incumplimiento del deudor, y la protecci6n que goza este ultimo, las reglas tambien se encuentran dispersas en el C6digo Civil (art. 1409-1410) y el C6digo de Comercio (v.gr., C.Com., art. 880, 891). Las disposiciones mas importantes, sin embargo, se encuentran en el C6digo de Procedimientos Civil. Este c6digo distingue entre una variedad de procedimientos especiales (v.gr., procedimiento ejecutivo, sumario y sumarisimo), pero ninguna de sus normas esta especialmente orientada a regular la ejecuci6n de una garantia real sobre un bien mueble. El procedimiento a seguir, por lo tanto, depende de la naturaleza de la obligaci6n garantizada y la forma o formalidades de con las cuales dicha ha obligaci6n ha sido revestida.'32 31. Sin embargo, algunas disposiciones generales destinadas a ser aplicadas al juicio ordinario se aplican por analogia, a falta de reglamentaci6n especifica, a los procedimientos especiales. "' Ademas, existe otra serie de leyes especiales que regulan los procedimientos de ejecuci6n que pueden llevar a cabo determinados acreedores garantizados, que incluye a ciertos bancos y reparticiones del Estado.'34 Una vez obtenida la sentencia de condena, el procedimiento de ejecuci6n de sentencia tiene su propia regulaci6n en el C6digo de Procedimientos Civiles (C.P.C., arts. 514-551). 1 Vease, por ejemplo, C.P.C., arts. 486-487 (proceso ejecutivo); Ley de Organizaci6n judicial, art. 146 (proceso Su[ltarisiilo). 'Poer ejemplo, las reglas aplicables a Ia obtencion y producci6n de prueba. C.P.C., anrs. 316, 481, 485, y 510. 14 Vease, v.gr., Ley No. 1178 del 20 de julio de 1990 (regulando el proceso coactivo fiscal, que puede ser utilizado por la Contraloria General de la Naci6n); D.S. No. 18.130 del 19 de marzo de 1981 (en favor del Departamnento del Tesoro y Aduanas); Ley bancaria de 1928, arts. 185-190 (regulando el procedimiento aplicable a la ejecuci6n de hipotecas inmuebles por aquellos bancos que cuentan con la aprobaci6n de la Superintendencia de Bancos). - 79 - III. DEFECTOS DE LA LEGISLACION VIGENTE 32. Uno de los defectos mas relevantes de la legislaci6n vigente es la multiplicidad de formas juridicas reconocidas a las garantias reales por el C6digo Civil y el C6digo de Comercio, cada una de ellas sujeta a requisitos diferentes en lo que se refiere a su constituci6n, perfeccionamiento, prelaci6n y ejecuci6n. En la mayoria de los casos, el trato distinto que recibe cada garantia real carece de unajustificaci6n econ6mica y funcional. La diversidad y consecuente complejidad de esta regulaci6n juridica, especialmente cuando no encuentra justificaci6n en razones funcionales, repercute en la falta de confiablidad del sistema. 33. Un segundo aspecto, no menos importante que el anterior, es el caracter fragmentario con el cual se legislan los derechos de las partes que intervienen en una operaci6n financiera con garantias reales sobre bienes muebles. A fin de colmar lagunas respecto a los derechos y obligaciones de las partes y los terceros, estos derechos y obligaciones suelen determinarse en base a las disposiciones generales del C6digo Civil que no han sido adoptadas con el prop6sito de regular las garantias reales. Las disposiciones a las que me refiero, que conciernen al derecho y transferencia del dominio sobre bienes muebles, el contrato de dep6sito, etc., no han sido establecidas teniendo en consideraci6n el contexto econ6mico y comercial de operaciones financieras. 34. Un tercer defecto a senialar concierne la falta de coordinaci6n y sistematizaci6n respecto a las reglas que determinan la prelaci6n de las diversas garantias reales. El enfoque debe ser global y sistematico y no disperso y fragmentario, considerando los numerosos conflictos que podrian plantearse para determinar prioridades entre acreedores con garantias reales, perfeccionadas y no perfeccionadas, con respecto a los acreedores embargantes, los adquirentes del bien en garantia y la masa de acreedores en el concurso del deudor. 35. Ademas, existen cierto tipo de garantias reales cuya prelaci6n debe ser determinada en base a los problemas especiales que plantea la funci6n comercial que cumplen dichos bienes en el patrimonio del deudor. Este es el caso, por ejemplo, de garantias reales sobre existencias comerciales para la venta y cuentas por cobrar. Tambien es necesario incluir reglas especiales que contemplen la prelaci6n de garantias reales sobre bienes muebles incorporados, o destinados a ser incorporados, a un inmueble (v.gr., una viga de acero, un equipo de aire acondicionado, un horno o maquina empotrada en un edificio). Esta reglamentaci6n se impone a fin de precisar la prelaci6n de una garantia real sobre este tipo particular de bien mueble y la garantia real que ha adquirido, o podria adqurir, el titular de una hipoteca sobre el inmueble en el cual instalaciones fijas han sido incorporadas. 36. Otro vacio legislativo se presenta respecto a bienes que, por su naturaleza, se encuentran adheridos al suelo pero con el destino de ser separados del mismo (v.gr., maderas, frutos, cosechas, minerales y productos analogos). La ausencia de una reglamentaci6n especial que contemple la prelaci6n de una garantia real sobre dichos bienes con relaci6n a la prelaci6n aquellos que constituyen una garantia real sobre el suelo plantea una fuente potencial de incertidumbre, con la consecuente falta de confiabilidad de la garantia real. En ausencia de esta reglamentaci6n y ante la insolvencia del deudor, el acreedor con una garantia real sobre los bienes adheridos al suelo pero destinados a ser separados del mismo puede ser descubrir que su garantia real se encuentra subordinada a una hipoteca posterior constituida por el duefio del suelo. - 80 - En la medida en que esta prelaci6n no se encuentra debidamente legislada, la demora e incertidumbre que requiere un pleito para determinar la prelaci6n constituye un factor inhibitorio para la concesion del credito garantizado con ese tipo de bienes muebles. 37. Comno la efectividad de una garantia real contra terceros depende en gran medida de la oponibilidad que adquiera a traves de la inscripci6n registral, la incertidumbre e ineficiencia del registro publico se traduce en un grave defecto del sistema de garantias reales (Informe, §§62- 72). Cuestions que se refieren a que, d6nde, c6mo y cuando debe inscribirse un contrato o acuerdo de garantia destinado a constituir una garantia real son aspectos fundamentales que hacen a la confiablidad del sistema. Cualquier complicaci6n o incertidumbre con respecto al procedimiento de inscripci6n y su costo en terminos de tiempo y dinero, como asi tambi6n la falta de acceso a la informaci6n que brinda o debe brindar el registro, constituyen aspectos claves para determinar el exito o fracaso de un sistema de garantias reales. 38. Si ademas de la oscuridad con que este teina es regulado se agrega la multiplicidad de garantias reales reconocidas por la ley, cada una de ellas con sus propios requisitos y lugares de inscripci6n, no resulta sorprendente que el sistema de garantias reales sea poco confiable. 39. Otro de los defectos, que ha sido senialado reiteradamente el Informe del Banco Mundial, concierne la lentitud y costo del procedimiento para realizar el valor econ6mico del bien en garantia en caso de incumplimiento por parte del deudor (Informe, §§83-114). Con la noble intenci6n de proteger los derechos del deudor, se ha establecido un sistema conforme al cual se impide a ese mismo deudor acceder al credito. La onerosidad y lentitud del procedimiento judicial no otorga es incapaz de otorgar al acreedor la seguridad de que podra satisfacer su credito con la realizaci6n del valor economico del el bien en garantia. AIn cuando se le permitiera al acreedor obtener el bien en una forma expedita, la necesidad de proceder a la subasta publica del bien no permite que en muchos casos la venta arroje precios similares a los que se habria obtenido en una venta comercial de bienes semejantes (Informe, §§141-153). of - 81 - IV. PROPOSITOS FUNDAMENTALES QUE DEBEN INSPIRAR UNA REFORMA SOBRE GARANTIAS REALES MOBILIARIAS 40. Hay varios enfoques posibles que se podrian adoptar para adecuar la legislaci6n vigente a la necesidad de facilitar el acceso y promover la mayor utilizaci6n del credito mobiliario. Los prop6sitos fundamnentales que deben inspirar toda reforma en este campo se orientan a los siguientes objetivos: simplificaci6n de la regulaci6n de las garantias reales; simplificaci6n y disminuci6n del costo de su constituci6n; claridad y precisi6n en la determinaci6n de su rango con respecto a todo tipo de acreedores; simplificaci6n y claridad con respecto a su publicidad registral; y rapidez y bajo costo de su ejecuci6n. 41. El texto de una ley de garantias reales debera crear un tipo unificado de garantia real. El perfeccionamiento de esta garantia real puede obtenerse mediante la transferencia de la tenencia del bien al acreedor, inscripci6n registral, u otros medios adecuados al tipo de bien y la funci6n que cumple el bien en garantia en el contexto de la operaci6n financiera. Distinciones en lo que respecta al mntodo de perfeccionamiento, al lugar donde debe realizarse la inscripci6n registral, e inclusive los derechos y obligaciones de las partes no deberian basarse en la vestimenta juridica de la operaci6n financiera, sino en consideraciones funcionales. Entre este tipo de consideraciones funcionales cabe incluir la naturaleza corporal o incorporal del bien en garantia, el uso al que normalmente se destina dicho bien, y el prop6sito comercial del financiamiento. Mas adelante, en el capitulo siguiente, se ilustrara este enfoque a la luz de las disposiciones del Articulo 9 del C6digo de Comercio de los Estados Unidos. 42. Exponer los objetivos de una reforma, obviamente, es mas facil que formular su implementaci6n. Hay mas de un enfoque que se podria adoptar, y cada uno de ellos pone en juego cuestiones de politica juridica importantes. Por ejemplo, mientras que la legislaci6n boliviana exige que cierto tipo de garantias reales se constituyan mediante un documento autentico, la forma exigida a los contratos de garantia podria limitarse a un acuerdo por escrito en el cual surja con claridad la voluntad del deudor de otorgar una garantia real sobre cierto tipo de bienes. Este enfoque, sin duda, contribuiria a la simplicidad y bajo costo de la operaci6n. Cabe preguntarse entonces si el temor al fraude y la simulaci6n justifica realmente irnponer la forma autentica o la existencia de "fecha cierta". La experiencia de muchos paises ha sido que estos requisitos formales ha cumplido la funci6n de encarecer el costo y la demora de la constituci6n de una garantia real, como asi tambien ha resultado en la nulidad de muchos contratos de garantia, mas que la de prevenir el fraude y la simulaci6n. 43. Asi comno la legislaci6n boliviana exige que cierto tipo de garantias reales sin desapoderamiento del bien de manos del deudor cumpla con una serie de requisitos, estableciendo la informnaci6n minima que el acuerdo o contrato de garantia debe incluir, la informaci6n a ser incluida en el contrato podria limitarse al minimo indispensable para corroborar la voluntad de constituir la garantia e identificar el bien. A tal efecto, el sistema juridico deberia admitir todo tipo de prueba a efectos de demostrar la voluntad de las partes respecto a aquellos puntos no incluidos en forma explicita en el contrato. 44. Sera necesario especificar, caso por caso, quienes serian los terceros que tendrian prioridad de derechos sobre el bien en garantia respecto del acreedor garantizado y quienes estarian subordinados. A tal efecto, es importante estructurar juridica y administrativamente el - 82 - funcionamiento de registros, centralizados y/o descentralizados, facilitando la indentificaci6n de garantias reales a traves de diversos medios, principalmente en base al nombre del deudor. 45. Tambien es necesario regular el efecto juridico de la inscripci6n registral, y por lo tanto determinar la oponibilidad a terceros de la garantia real, en caso de que los bienes sean desplazados a otro distrito, circuito o departamento registral, de que el deudor cambie de domicilio, o el impacto juridico de los errores tipograficos o de otro tipo que pueda comneter el registrador, a causa de los cuales se impida a los terceros tomar conocimiento de la garantia real. 46. Respecto a los derechos del acreedor garantizado en caso de incumplimiento, la ley podria viabliziar la posibilidad de que el acreedor garantizado adquiera el control fisico del bien a los efectos de disponer del mismo, sin necesidad de intervenci6n de las autoridades p6blicas. En este caso, habria que especificar bajo que condiciones y dentro de que limitaciones el recobro de la posesi6n se podria Ilevar a cabo sin violentar los criterios constitucionales del debido proceso, otorgando al deudor la posibilidad efectiva, aunque ex post, de ser indemnizado por los dafnos y perjuicios que le pueda causar la actitud intempestiva del acreedor garantizado. - 83 - V. MODELOS LEGISLATIVOS A TOMAR EN CUENTA A. El ARTICULO 9 DEL CODIGO DE COMERCIO UNIFORME DE LOS ESTADOS UNIDOS 47. La complejidad e inadecuaci6n general de las legislaciones estatales sobre garantias reales llam6 la atenci6n, durante la decada de los anios 50 y 60, de los circulos comerciales y juridicos de los Estados Unidos de Am6rica. Esta inquietud determin6 la voluntad politica de reunir los recursos humanos y tecnicos necesarios para crear un sistema unificado y coherente de garantias reales. Este sistema normativo fue incorporado al Articulo 9 del C6digo de Comercio Uniforme de los Estados Unidos (conocido por sus siglas en ingles com "UCC"). 48. El UCC ha sido dividido en nueve grandes subdivisiones Ilamadas "articulos", funcionalmente equivalentes a lo que en un c6digo comercial decimon6nico recibirian el nombre de "libros". Estos "articulos" regulan ciertos aspectos del derecho mercantil (v.gr., compraventa, instrumentos negociables, credito documentado o cartas de credito, etc.). El Articulo 9 del UCC regula las garantias reales sobre bienes muebles.'35 49. Se han promulgado diversas versiones del Articulo 9. La ultima modificaci6n importante tuvo lugar en 1972. Algunos estados de la Uni6n americana han adoptado disposiciones no uniformes. Sin embargo, a pesar de no haberse logrado una uniformidad completa, las variaciones existentes del Articulo 9 s6lo difieren en algunos aspectos t6cnicos de detalle, sin afectar su estructura conceptual y sistematica. 50. El Articulo 9 ha sido adoptado por los 50 estados de los Estados Unidos, incluyendo Louisiana, cuyo sistema juridico de derecho privado fue influenciado por la cultura juridica romanista a traves de su herencia juridica francesa y espafiola. El Estado Libre Asociado de Puerto Rico, territorio incorporado a los Estados Unidos de America y de cultura juridica de acentuada raigarnbre espafiola, considera actualmente la reforma de su legislaci6n en materia de garantias reales. El Articulo 9 aporta un model util de reforma porque la legislaci6n comercial vigente en la materia en Puerto Rico fue adoptada, en parte, en base a leyes vigentes en algunos estados de los Estados Unidos, que habia sido sancionada con anterioridad a la sanci6n del Articulo 9. 51. La adopci6n del Articulo 9 no ha sido simplemente motivada por Ia necesidad de armonizar, y hasta cierto punto unificar, el sistema de garantias reales en los Estados Unidos. Un prop6sito fundamental fue la modernizaci6n y simplificaci6n del esquema juridico. En efecto, a pesar de que con anterioridad a la adopci6n del Articulo 9 existian diversas leyes "uniformes" sobre el 135 El Articulo 9 no regula las garantias reales sobre bienes inmuebles, excepto en la medida en que se refiere a aquellos bienes que en algunos paises se ubican en la categoria de bienes inmuebles "por incorporacion", "por su destino" o "instalaciones fijas" (fixtures), es decir, los bienes muebles que se encuentran o estAn destinados a adherirse a un inmueble. La regulaci6n de esta materia ha sido motivada fundamentalmente por la necesidad prictica de contemplar el potencial conflicto de prelaciones entre las garantias reales sobre inmuebles por incorporacion y aquellas que afectan al inmueble mismo. - 84 - tema. la diversidad y formulaci6n tecnica de esta legislaci6n no era del todo satisfactoria.'36 A fin de comprender la magnitud del cambio que introdujo el Articulo 9, es oportuno destacar en forma breve la regulaci6n que tenian las garantias reales en los Estados Unidos con anterioridad a su adopci6n. 52. Antes de la adopci6n del Articulo 9 del UCC, cada formajuridica que adquiria una garantia real bajo el derecho de cada estado se regulaba por normas diferentes. Esta particularizaci6n se extendia a los requisitos formales de validez, los derechos del acreedor garantizado con respecto al deudor y terceros, los requisitos de inscripci6n registral, y los derechos del acreedor a ejecutar la garantia real. Asi, en un mismo estado podian coexistir media docena de sistemas de inscripci6n registral. Algunos de los registros eran locales, a nivel de distrito municipal o condado; otros registros centralizaban la inscripci6n de gravamenes sobre propiedad de deudores domiciliados en todo el estado. Era necesario inspeccionar todos los registros para verificar los gravamenes que podian afectar el patrimonio del deudor y cumplir con los requsitos de inscripci6n requeridos por cada una de las garantias reales reconocidas por la ley. 53. A pesar del gran numero de garantias reales, la legislaci6n vigente en aquella epoca tenia lagunas que dejaban sin respuesta problemas que se presentaban en la practica diaria de las operaciones financieras. En algunos estados no era posible constituir eficazmente una garantia real sobre existencias comerciales para la venta. En otros no se permitia constituir gravamenes sobre bienes en proceso de fabricaci6n que al tiempo de establecerse el gravamen constituian materia prima, pero durante el transcurso de la operaci6n financiera se transforman en bienes semielaborados y al momento de ejecutarse la garantia podrian encontrarse completamente elaborados. En otros estados el perfeccionamiento de una garantia real sobre cuentas por cobrar estaba sujeto a las normas generales aplicables a la cesi6n de creditos, con la consiguiente incertidumbre respecto a la publicidad del gravamen y la determinaci6n de su prelaci6n. En resumen, a pesar de la imperiosa necesidad de facilitar el financiamiento en base a este tipo de bienes, su regulaci6n juridica era deficiente. 54. La falta de uniformidad legislativa entre diversos estados constituia otro problema. Cuando el deudor devenia insolvente, muchos acreedores comprobaban que no podian hacer valer sus derechos porque sus garantias reales no se habian constituido o perfeccionado conforme al derecho del estado en el cual se pretendia ejecutar la garantia. Otros acreedores que conocian la diversidad de requisitos que imponia el derecho interno de otro estado, encontraban que los gastos necesarios de ajustar sus tecnicas de financiaci6n a las exigencias de tantos sistemas diferentes de garantias reales provocaba un aumento en el costo del credito. 55. Uno de los cambios fundamentales que introdujo el Articulo 9 del UCC fue el de regular todas las garantias reales sobre bienes muebles de manera sistematica, unificada y global. Asi, el Articulo 9 introdujo un conjunto de disposiciones aplicables a todas las garantias reales sobre toda clase de bienes muebles, corporales o incorporales, unificandolas bajo el nombre de " La secci6n 9-102(2) del Articulo 9 (§9-102(2)) ilustra esta diversidad de garantias prexistentes al Articulo 9, incluyendo una lista de aquellas garantias reales que, a partir de la adopci6n del Artlculo 9, quedan subsumidas en un tipo unico de "garantfa real" (security interest). Asi, la secci6n 9-102(2) dispone que el Articulo 9 se aplicara "a las garantfas reales creadas por contrato, incluyendo la prenda, la cesi6n, hipoteca sobre bienes muebles, fideicomiso mobiliario (chattel trust), escritura de fideicomiso (trust deed), gravamen de un "factor" sobre cuentas por cobrar y existencias para la venta (factor's lien). venta condicional, fideicomiso de equipo (trust receipt) u otro gravamen o contrato de retenci6n del dominio, arrendamiento y consignaci6n con fines de garantla". - 85 - "garantia real" (security interest). En particular, se eliminaron las diferencias entre los derechos y obligaciones de las partes y los efectos reipersecutorios que le corresponden a un acreedor garantizado coIn la retenci6n del dominio del bien (title) (venta condicional o con reserva de dominio) y el acreedor que s6lo retiene un derecho real de garantia o gravamen (lien) sobre el bien (prenda, hipoteca mueble). 56. Las distinciones que se introducen en la regulaci6n de las garantias reales bajo el Articulo 9 s6lo responden a necesidades comerciales o funcionales. Asi, se establece una distinci6n fundamental entre el rango de una garantia real obtenida para financiar "el importe de compra" del bien en garantia (purchase money security interest) y aquella que no se relaciona con dicho importe. Ademais, las reglas de prioridad del acreedor garantizado con una garantia por importe de compra difieren tomando en consideracion la utilizaci6n comercial al que se destina el bien en garantia. Por ejemplo, se establecen reglas de prioridad diferenciadas entre la prelaci6n que se le otorga a una garantia para financiar la adquisicion de existencias comerciales para la venta (inventory) y otra para financiar la compra de un equipo (equipment). En la medida en que el primer gravamen afecta bienes que se adquieren para ser luego revendidos, la reipersecutoriedad y prelaci6n del mismo es diferente al segundo, que afecta un bien destinado a permanecer en el establecimiento comercial del deudor. 57. El Articulo 9 elimin6 las dificultades que se presentaban para usar como garantia las existencias comerciales y los creditos monetarios no representados por un instrumento o documento, como las cuentas por cobrar (accounts receivables). Bajo el Articulo 9, las cuentas por cobrar pueden ser otorgadas como garantia real a fin de asegurar el cumplimiento de una obligaci6n. La prelaci6n de gravamenes sobre este tipo de bienes muebles se determina en base a la inscripci6n registral. 58. Sin perjuicio de la vigencia de leyes federales o estatales para protecci6n al consumidor, o de aisladas disposiciones destinadas a proteger el derecho de los consumidores, el Articulo 9 no distingue entre garantfas reales conforme la naturaleza comercial o no-comercial de la obligaci6n garantizada, o al caracter de comnerciante o no-comerciante de aquellos que celebran una operaci6n financiera. La financiaci6n con garantia para los industriales, comerciantes, agricultores y consumidores, esta sometida, en gran medida, a una regulaci6n uniforme. 59. Existe un consenso generalizado en los Estados Unidos de que el credito mobiliario reviste una importancia fundamental para el desarrollo econ6mico. Ademas, asi como existia un consenso de que el sistema atomizado de garantias reales creaba dificultades que aumentaba el riesgo y afectaban el costo de las operaciones financieras, tambien hay un acuerdo generalizado de que el Articulo 9 ha resuelto bien los problemas juridicos que plantean las garantias reales. 60. Cabe admitir que la adopci6n del Articulo 9 del UCC responde a ciertas particularidades derivadas de la cultura juridica, estructura socio-econ6mica y politica, y las necesidades comerciales de una sociedad altamente industrializada como los Estados Unidos. Tambi6n debe destacarse que el estilo de redacci6n del Articulo 9 es sumamente detallado y que numerosas excepciones a principios aparentemente de aplicaci6n general lo convierten en un texto de lectura dificil. Sin embargo, la regulaci6n de las garantias reales bajo el Articulo 9 cuenta, por primera vez en la historiajuridica de esta rama del derecho, de un prolijo esquema conceptual, sistematico y global, que a menudo expresa ideas viejas en un idioma juridico nuevo a fin de acentuar el enfoque funcional a los problemas juridicos que se presentan. Por ello es que el Articulo 9 del - 86 - UCC se ha convertido en un modelo legislativo de inevitable consulta y orientaci6n politico- juridica para la adopci6n de una ley de garantias reales en todo pais orientado a establecer una economnia de mercado. B. LOS ESTUDIOS DE LA COMISION DE LAS NACIONES UNIDAS PARA EL DERECHO MERCANTIL INTERNACIONAL 61. La complejidad y falta de adecuaci6n del sistema de garantias reales a las necesidades del trafico comercial, dom6stico e internacional, tambien llam6 la atenci6n de la Comisi6n de las Naciones Unidas para el Derecho Mercantil Internacional (conocida por sus siglas en ingles, "UNCITRAL"). A fines de la decada del 60 y coniienzos de la decada del 70, este organismo internacional convino una reuni6n de expertos con la finalidad de estudiar el papel que desempanian las garantias reales en la creaci6n de un sistema moderno de credito mercantil.'37 62. Tras extensos debates, la reuni6n de expertos destac6 que en muchos paises la legislaci6n sobre garantias reales no responde a las necesidades del comercio moderno dentro del propio pais, y mucho mnenos a las necesidades del comercio internacional.'35 Los principales problemas que destac6 UNCITRAL fue la falta de enfoque de las garantias reales como un todo unificado. 13 63. La reuni6n de expertos lleg6 al consenso de que las disparidades existentes en las legislaciones nacionales constituian un impedimento importante al comercio internacional, como asi tambien a la utilizaci6n de las garantias reales dentro de un mismo pais. UNCITRAL destac6 la conveniencia de proyectar una ley modelo sobre garantias reales que sea aplicable tanto a las transacciones internas como internacionales. A tal efecto, recomend6 un estudio sobre el funcionamiento de las garantias reales en el derecho comparado, ' otro sobre el Articulo 9 del " 'En su octavo periodo de sesiones, U NC ITRALpidi6 al Secretario General "que pro siga el estudio de viahilidad sobre el posible alcance y contenido de las normas unrformes sobre garantias reales en las mercaderias y, a tal fin, que consulte con las organizaciones internacionales interesadas y con las instituciones comerciales y financieras". Documentos Oficiales de la Asamblea General de las Naciones lJnidas, trigesimo periodo de sesiones, Suplemento No. 17, A/10017, parr. 63 (ANUARIO DE LA COMISION DE LAS NACIONES UNIDAS PARA EL, DERECHO MERCANTIL INTERNACIONAL (en adelante "ANUARIO DE UNCITRAL"), vol. VI: 1975, primera part, 11, A, pArr. 63. "' Comisi6n de las Naciones Unidas para el Derecho Mercantil Internacional, Decimo periodo de sesiones, Viena, 23 de mayo de 1977, A/CN.9/13(0. Garantias Reales. Informe del Secretario General (en adelante, "UNCITRAL, Informe sobre garantias reales"). "' UNCITRAL, Informe sobre garantias reales, parr. 6, p. 3: "La explicaci6n de esta gran diversidad de garantias reales parece radicar en el hecho de que hasta fecha reciente la legislaci6n sobre las garantias reales en las mercancias no ha sido considerada como un todo unificado. En vez de ello. como las necesidades del comercio requerian la creaci6n de nuevos tipos de garantias reales, estas fueron creadas a partir de conceptosjuridicos que originalmente tenian otra finalidad. De este modo, varios tipos de garantias reales han sido elaborados segun criterios completamente distintos, dependientes del concepto juridico subyacente, por ejemplo, si el acreedor tiene la propiedad o la posesi6n de las mercancias, aunque en realidad dichas garantias fueron creadas para desempefhar funciones econ6micas similares." '"" UNCITRAL, Informe del Secretario General: estudio de las garantias reales (A/CN.9/131, 15 de febrero de 1977), ANUARIO DE UNCITRAL, vol. V11l: 1977, segunda parte, p. 191 (citado como "UNCITRAL, Estudio de las garantias reales"). - 87 - UCC,141 y otro estudio sobre la posibilidad de establecer nornas uniformes de alcance universal. 142 64. Las conclusiones de UNCITRAL fueron terminantes: "...A pesar de que el uso de las garantias reales es un medio valioso para financiar transacciones comerciales, la legislaci6n de la mayoria de los Estados es rudimentaria y, como tal, no responde a las necesidades del comercio moderno".43 UNCITRAL propuso la elaboraci6n de una ley modelo, aunque consider6 que la unificaci6n del derecho en esta materia no era factible en la actual etapa del desarrollo del derecho. Los estudios realizados tambien sefialaron que "el regimen estadounidense puede considerarse como el sistema mas moderno, racional y amplio de garantias en el mundo actual. " 1 65. Las tareas de UNCITRAL fueron interrumpidas a comienzos de la d6cada del 80,'14 pero los estudios realizados arrojan un numero de recomendaciones dignas de ser tenidas en cuenta por dos razones. Por un lado, dichos estudios se inspiraron en una politica juridica y econ6mica adecuada a las necesidades del comercio moderno. Por otro lado, los estudios realizados por UNCITRAL, al reconocer que la elaboraci6n de una ley modelo constituiria una "empresa formidable", enfatizan la necesidad de adaptar la formulacion legislativa de las garantias reales a los sistemas juridicos de raigambre romanista y a las necesidades econ6micas y practicas comerciales de los paises en desarrollo. 1 66. En este aspecto, cabe apuntar que el criterio orientador del Articulo 9 del UCC no s6lo ha sido propugnado y adaptado por paises del common law como la mayoria de las provincias del Canada, 147 el Reino Unido,148 y la India,'49 sino que tambien ha inspirado proyectos de 14 UNCITRAL, Garantias reales en los Estados Unidos de America, Nota de la Secretarla sobre el Articulo 9 del C6digo de Comercio Uniforme, A/CN.9/132, ANUARIO DE UNCITRAL, vol. VIII: 1979, segunda parte, p. 249. 1'4 Informe del Secretario General: garantlas reales: posibilidad de establecer normas uniformes para ser utilizadas en la financiaci6n del comercio, ANUARIO DE UNCITRAL, vol. X: 1979, segunda parte, p. 82 (citado como "UNCITRAL, Posibilidad de establecer normas uniformes"). 141 UNCITRAL, Posibilidad de establecer normas uniformes, ob. cit., parr. 60, p. 88. UNCITRAL, Estudio sobre garantias reales, ob. cit., parr. 2.6.2.3, p. 237. 14 ANUARIO DE UNCITRAL, XI: 1980, primera parte, parr. 28, p. 11 (destacando que los estudios realizados "pueden resultar provechosos en el caso y en la oportunidad en que el tema sea considerado por otros organismos"). UNCITRAL, Informe sobre garantfas reales, ob. cit., parrs. 10 y 18. 1' Vease, R. C. Cuming, National and International Harmonization: Personal Property Security Law, en COMMERCIAL AND CONSUMER LAW FROM AN INTERNATIONAL PERSPECTIVE, Papers from the Conference of the International Academy of Commercial and Consumer Law, Castle Hofen, Austria, 17-22 July, 1984, p. 471 (ed. por D.B. King, 1986). '' Vease, A. L. DIAMOND, A REVIEW OF SECURITY INTERESTS IN PROPERTY, Her Majesty's Stationery Office, Londres, 1989. '41 V6ase, BANKING LAWS COMMITMTEE (GOVERNMENT OF INDIA), PROJECT STUDY ON PERSONAL PROPERTY SECURITY LAW. PROJECT REPORT, 1976. - 88 - reformas en jurisdicciones con tradici6n juridica neorromanista como Luisiana,'5 Quebec'5' y Puerto Rico.'52 Ademas, un estudio sobre la legislaci6n sobre garantias reales en nueve paises en desarrollo del sudeste asiatico, cinco de los cuales pertenecen a la 6rbita de la tradici6n continental-romanista, tambien propugnaron la adopci6n de una reforma orientada hacia los objetivos perseguidos por el Articulo 9 del C6digo de Comercio Uniforme de los Estados Unidos. '53 "' V6ase, W. HAWKLAND, HAWKLAND'S HANDBOOK ON CHAPTER 9 LOUISIANA COMMERCIAL LAW, Callaghan, 1990. ''' V6ase, Fradette, Les sOret6s r6elles: Apercu des principales nouveautes propos6es par la reforme du Code Civil, LA REVUE DU NOTARIAT, 1987, vol. 89, p. 732. 12 La Academia Puertorriquefia de Legislaci6n y Jurisprudencia se ha embarcado en un estudio de reforma del C6digo de Comercio que incluye la adopci6n de una ley de garantias reales sobre bienes muebles. En los aspectos estructurales, el anteproyecto de la Academia de Legislacion y Jurisprudencia se inspira en el Artfculo 9 del C6digo de Comercio Uniforme de los Estados Unidos. "' D. E. ALLAN, M. E. HISOCK & D. ROEBUCK, CREDIT AND SECURITY. LAW AND DEVELOPMENT FINANCE IN ASIA (St. Lucia, Univeristy of Queensland Press, 1974; New York, Crane, Russack and Co., 1974). - 89 - VI. EL INFORME DEL BANCO MUNDIAL Y SUS RECOMENDACIONES 67. El Informe del Banco Mundial al que se ha hecho referencia al comienzo de este documento no s6lo destaca sino que tambien ofrece pruebas empiricas acerca de la demora que el sistema judicial boliviano impone al proceso de ejecuci6n de una garantia real. Tambien sefiala el Informe la falta de confianza en el sistema de garantias reales y el costo que ello implica para la economia boliviana (Apendices I y II, pp. 59-71). El Informe describe los procedimientos alternativos e ilegales a los que suelen recurrir los acreedores a fin de sortear los inconvenientes del sistema juridico. Obviamente, estos procedimientos no aportan una soluci6n eficaz a los problemas planteados; no s6lo porque son ilegales, sino tambien por su falta de idoneidad para reducir el riesgo y por lo tanto el costo del credito (Informe, §§156-168). 68. Luego de realizar un analisis del esquema juridico boliviano de las operaziones financieras con garantia real, el Informe incluye una serie de recomendaciones a corto y largo plazo. Estos terminos de referencia, en la medida en que estan destinados a disefiar el marco de una reforma sustancial y a largo plazo del sistema de garantias reales, no tiene en cuenta ni entra a juzgar acerca de la conveniencia o viabilidad juridica de reformas "a corto plazo". El Informe parte de la base de que las reformas seran Ilevadas a cabo a traves el proceso legislativo que determina y permite el ordenamiento constitucional boliviano, y que dichas reformas estan fundamentalmente destinadas a dotar a la legislaci6n boliviana de un instrumento juridico 6til, global y relativamente perdurable. 69. Entre las diversas recomendaciones que realiza el Informe, se acentuan aquellas que se se refieren al sistema de inscripci6n registral, incluyendo la organizaci6n administrativa, operatividad y tecnologia computarizada con la que deben contar los registros donde se inscriben gravamenes sobre bienes muebles (Informe, pp. 20-28). Otro aspecto que recibe especial consideraci6n en el Informe se refiere al procedimiento judicial que debe seguirse para obtener la realizaci6n de la garantia real (Informe, pp. 29-50). 70. En estos terminos de referencia se propicia una reforma tanto del sistema de publicidad registral como de ejecuci6n judicial de las garantias reales, pero incluye a la vez aspectos estructurales del sistema de constituci6n, perfeccionamiento y prelaci6n de las garantias reales. 71. Las propuestas de reforma que incluyen los terminos de referencia se refieren en forma especifica al sistema de garantias reales. Debe quedar en claro, por lo tanto, que estos terminos de referencia destacan la necesidad de reformar el funcionamiento de los registros publicos y el procedimiento de ejecuci6n s6lo en la medida en que el sistema registral y la administraci6n de justicia entorpece la eficacia de las garantias reales. Cuestiones relacionadas con el sistema registral inmobiliario y aspectos generales del procedimiento civil caen fuera de la 6rbita de estos terminos de referencia. 72. Como la tarea legislativa a realizar se limita al campo de las garantias reales, una ley sobre la materia, aun cuando regule sobre aspectos relacionados con el registro puiblico y el procedimiento judicial de ejecuci6n de sentencia, no tiene otro alcance mas que el que le confiere su categoria de lex specialis, esto es, el de derogar toda disposici6n legal que sea incompatible con ella, pero s6lo en la medida en que afecte el regimen de garantias reales. La importancia de este punto justifica insistir en el en los capitulos subsiguientes, al analizar el campo de aplicaci6n de la ley de garantias reales y la manera en que dicha ley afecta el resto del ordenamiento juridico boliviano. - 90 - VII. PROPUESTAS DE REFORMA 73. El prop6sito de este capitulo es el de explicar brevemente la estructura que tendra la ley de garantias reales y explicar brevemente los diversos titulos, partes, o capitulos en los que se considera conveniente subdividir su contenido. Previo a ello, conviene dejar en claro dos aspectos fundamentales: (A) La conveniencia de dotar a esta legislaci6n del caracter de ley especial, fuera del marco de los c6digos civil, comercial y de procedimiento; y (B) la conveniencia de regular las operaciones financieras con garantias reales independientemente de la dicotomia clasica civil y comercial en la que se divide el derecho privado. Con posterioridad, se discuten las reformas mas importantes que debera contener esta legislaci6n (C). A. CONVENIENCIA DE REGULAR LAS GARANTIAS REALES COMO "LEY ESPECIAL" Y FUERA DEL MARCO DE LOS CODIGOS 74. Como se destac6 anteriormente, el C6digo Civil y el C6digo de Comercio de Bolivia integran la regulaci6n de las garantias reales dentro de sus disposiciones.1'54 Desde un punto tradicional y purista de metodologia legislativa, el tema de las garantias reales podria encontrar un lugar adecuado en los c6digos, ya sea en la parte que regula los contratos especiales, los derechos reales de garantia, o en otro titulo especial. Sin embargo, soy de la opini6n de que, al menos en un principio, las garantias reales deberian ser objeto de una ley especial. 75. Una de las razones en apoyo de esta metodologia es el caracter comprensivo o global que recibiran las garantias reales, que no reconoce divisiones, como se anticip6, en base a la dicotomia tradicional entre la materia civil y comercial. Ademas, esta materia no s6lo incluye aspectos relacionados con la constituci6n de un contrato de garantia y el derecho real que surje del mismo al ser perfeccionada, sino aquellos relacionados con el sistema registral y el procedimiento de ejecuci6n de la garantia. Existirian razones, por lo tanto, para desparramar el contenido de una ley sobre garantias reales en mas de un c6digo sustantivo o procesal. 76. Existe una raz6n de mayor peso para que este tema sea objeto de regulaci6n separada y especial, fuera del marco de los c6digos. Aunque la legislaci6n que se proponga debe ser objeto de un cuidadoso analisis a fin de detectar su compatibilidad, armonia o conflicto con las disposiciones de los c6digos, en muchos aspectos la politicajuridica y la terminologia que inspira a esta ley se aparta de la que orient6 la incorporaci6n de normas similares en los c6digos civil y comercial. De alli la conveniencia de que, al menos en un principio, la legislaci6n sobre garantias reales se incorpore a una ley especial. Esta metodologia facilitaraa su revisi6n peri6dica. En el caso de ser necesario ajustar o calibrar algunas de sus disposiciones a las necesidades o problemas que indique su aplicaci6n practica, siempre sera mas facil Ilevar a cabo esos ajustes en una ley especial que embarcarse en la modificaci6n de un c6digo. 's' C6digo Civil, Libro V ("Del Ejercicio, Protecci6n y Extinci6n de los Derechos", Titulo 11 ("De la Garantia Patrionial de los Derechos'); C6digo de Comercio, Libro III ("De los Contratos y Obligaciones Comerciales"), Titulo 11 ("De los Contratos Mercantiles en Particular"). - 91 - 77. Obviamente que lo expresado no importa una salvedad a la imperiosa necesidad de armonizar la ley de garantias reales con el articulado de los c6digos civil y comercial. Sera necesario derogar o reformar dichos c6digos en la medida en que to requiera la imperiosa necesidad de mantener la congruencia del ordenamiento juridico. Este tema sera tratado con mayor detalle en el pr6ximo capitulo. B. REGULACION DE LAS GARANTIAS REALES CON INDEPENDENCIA DE LA NATURALEZA CIVIL 0 COMERCIAL DE LA OBLIGACION GARANTIZADA 78. Se destac6 con anterioridad que algunas garantias reales en el derecho boliviano reconocen una distinci6n, en muchos aspectos meramente nominal, conforme a si la obligaci6n garantizada puede ser calificada como operaci6n comercial. En otras circunstancias, el codificador ha decidido regular la hipoteca y prenda sin desplazamiento sobre ciertos bienes muebles en el C6digo Civil, mientras que otras garantias reales que revisten la misma forma juridica, pero se constituyen sobre otro tipo de bienes muebles, han sido incorporadas al C6digo de Comercio. Bajo estos terminos de referencia, se recomienda regular las garantias reales independientemente de la categoria comercial o civil de la obligaci6n garantizada e independientemente del caracter de comerciante del acreedor garantizado o del deudor. 79. Bajo ciertas circunstancias, a ser claramente especificadas en la misma ley, las garantias reales que se constituyan sobre bienes muebles destinados al consumo personal del deudor pueden encontrarse sujetas a reglas de prelaci6n o a un metodo de ejecuci6n diferente al que sea aplicable a garantias reales sobre bienes que no estan destinados al consumo personal del deudor. Tampoco podria esta ley descartar la aplicaci6n de otra legislaci6n boliviana especialmente dirigida a proteger los derechos de los consumidores. Independientemente de lo que exprese la ley de garantias reales, las normas de protecci6n al consumidor suelen considerarse de orden p6blico, no susceptibles de renuncia por las partes a quienes dichas normas intentan proteger y por lo tanto de aplicaci6n inmediata. Estimo conveniente, empero, que todo conflicto eventual entre la ley de garantias reales y los derechos de protecci6n al consumidor sean materia de discusi6n y evaluaci6n durante el transcurso de la elaboraci6n de la ley sobre garantias reales. C. MATERIAS A SER CUBIERTAS POR UNA LEY DE GARANTIAS REALES SOBRE BIENES MUEBLES 80. La Ley de Garantias Reales debera cubrir las siguientes materias: - (1) Un titulo introductorio que se ocupe de determinar el campo de aplicaci6n de la ley, las definiciones que sea conveniente incluir a fin de precisar la terminologia a ser empleada y otras disposiciones de caracter general. - (2) Un titulo que se ocupe del contrato o "acuerdo de garantia" destinado a crear una garantia real, regulando los requisitos de forma y sustancia que deben acompafiar la - 92 - "constituci6n" de una garantia real y prescribiendo la extensi6n de la garantia real con respecto a la obligaci6n garantizada y los bienes gravados. - (3) Un titulo dedicado al "perfeccionamiento" de una garantia real, esto es, especificando los pasos que deben Ilevarse a cabo a fin de otorgar a la garantia efectos reales u oponibilidad, y por lo tanto protecci6n, frente a terceros. - (4) Un titulo que prescriba los pasos a seguir para inscribir una garantia real en un registro p6blico, especificando el lugar, requisitos y efectos de la inscripci6n registral. - (5) Un titulo que incorpore las reglas de prelaci6n de una garantia real frente los diferentes tipos de "terceros" que pueden competir por el reconocimiento de un rango preferente sobre los bienes gravados. Entre estos "terceros" deben incluirse los acreedores desprovistos de una garantia real, adquirentes (incluyendo compradores) del bien gravado, otros acreedores con una garantia real sobre el mismo bien, acreedores hipotecarios con gravamen sobre un inmueble al que se ha incorporado en forma fija un bien mueble gravado con una garantia real, acreedores privilegiados o con un gravamen otorgado por ministerio de la ley, y el sindico que representa a la masa de acreedores en la quiebra del deudor. - (6) Finalmente, la ley incluira un titulo especialmente dedicado al procedimiento de ejecuci6n en caso de incumplimiento del deudor. 1. Campo de Aplicaci6n y Disposiciones Generales 81. En esta parte introductoria debe especificarse que la ley abarca todo tipo de garantia real constituida en forma consensual, excluyendo por lo tanto los gravamenes creados por disposicion de la ley (privilegios), excepto en lo que se refiere a la prelaci6n de estos frente a las garantias reales de origen consensual. 82. Distinciones tradicionales entre prenda, hipoteca sobre bienes muebles y prenda sin desplazamiento, reconocidas en los c6digos vigentes, quedarin sin efecto a los fines de determinar c6mo se constituye una garantia real, cuales son los derechos de las partes, la forma de perfeccionar la garantia, la prelaci6n que se le ha de otorgar y el procedimiento de ejecuci6n a seguir. Es decir, nada impide que la doctrina o las partes llamen o califiquen a una operaci6n financiera como "hipoteca" o "prenda", pero los efectos juridicos seran los que determine la ley y no dependeran de quien retiene la titularidad del dominio sobre el bien gravado. 83. En la medida en que las reglas de prioridades distinguen entre diferentes tipos de bienes muebles para determinar su prelaci6n, esta parte tambien debera precisar las diferentes categorias de bienes muebles que reconoce la ley, remitiendose, cuando corresponda, a la terminologia y categorizaci6n de los bienes muebles establecida por el C6digo Civil (v.gr., bienes muebles, creditos) y el C6digo de Comercio (v.gr., titulos-valores). En caso de ser necesario, debera expandirse la subdivisi6n de bienes muebles, creando conceptos especificamente diseniados para regular las garantias reales (v.gr., "instalaciones fijas", "cuenta por cobrar", etc.) - 93 - 84. A menos que las normas de derecho internacional privado vigentes en Bolivia contemplen especificamemnte la problematica que se presenta para reconocer efectos juridicos a las garantias reales constituidas o perfeccionadas en el extranjero, seria conveniente establecer normas de conflicto apropiadas a fin de que dichas garantias puedan ser reconocidas en Bolivia cumpliendo con ciertos requisitos. Las normas de derecho internacional privado deben incluir en forma especifica aspectos relacionados con la ley aplicable al perfeccionamiento y modo de perfeccionamiento de las garantias reales, contemplandose el caso en que un bien mueble sujeto a una garantia real perfeccionada en el extranjero sea trasladada posteriormente a Bolivia. 85. Otra disposici6n de caracter general, ya incorporada al derecho boliviano pero que debe sujetarse a las excepciones que se determinaran al regularse las prelaciones, es que una garantia real debidamente constituida continua afectando el bien en garantia aun cuando este salga del patrimonio del deudor. Un corolario de este principio es el efecto de subrogaci6n real automatica que se produce cuando el bien sale del patrimnonio del deudor, voluntaria o involuntariamente. Conforme a esta disposici6n, cualquiera sea la naturaleza de la enajenacion del bien y del producido de dicha enajenaci6n, el acreedor garantizado adquiere automaticamente una garantia real sobre ese producido, siempre y cuando pueda ser identificado como un bien que reemplaza o sustituye al que originalmente se encontraba sujeto a la garantia real. 2. Constituci6n 86. En la medida en que la ley abarca todo tipo de garantias reales nacidas del consentimiento de las partes, es necesario precisar en esta parte qu6 se entiende por "acuerdo de garantia" y que requisitos minimos debe cumplir dicho acuerdo, de forma y sustancia, para su validez entre las partes. Asi, el acuerdo de garantia real debera constar por escrito, firmado por el deudor y debera contener una descripci6n general del bien otorgado en garantia. 87. Sera necesario volver a examinar axiomas referentese al principio de especialidad, en cuanto a la obligaci6n garantizada y en cuanto al bien en garantia, a la luz de la politica juridica que se persigue. Con respecto a esto 1ltimo, la descripci6n del bien sera juridicamente suficiente en la medida en que permita identificar razonablemente lo que describe. Con respecto a la obligaci6n garantizada, no sera necesario identificar con precisi6n su naturaleza y terminos; a lo sumo se podria requerir informaci6n acerca del monto maximo cubierto por la operaci6n financiada con una garantia real. 88. Si bien el acuerdo de garantia por escrito puede celebrarse tan pronto las partes lleguen a un acuerdo, la garantia real no quedara debidamente "constituida" hasta que surja una obligaci6n principal y el deudor adquiera derechos sobre el bien en garantia. Nada impide, obviamente, que el acuerdo se celebre con anterioridad a que se cumplan estos dos ultimos requisitos, pero la garantia real no tendra validez o eficacia ni siquiera entre las partes hasta que surja la obligaci6n garantizada y el deudor adquiera derechos sobre el bien. La forma escrita no s6lo facilita la prueba del acuerdo, sino que tambien sirve para el proposito de la inscripci6n registral. 89. En la practica comercial, la mayoria de los acuerdos de garantia son redactados en formularios que contienen numerosas clausulas que regulan los derechos y obligaciones de las partes. La ley debera otorgar a las partes amplia libertad para estipular las condiciones que ellas - 94 - consideren mas convenientes. Las limitaciones a la autonomia de la voluntad, en lugar de adquirir el caracter de prohibiciones que fulminen toda omisi6n o apartamiento con la nulidad del acuerdo, seran establecidas al regularse las prelaciones y el procedimiento de ejecuci6n de la garantia. 90. Debe autorizarse expresamente la constituci6n de una garantia real para garantizar un prestamo de dinero que el acreedor se compromete a prestar en algun momento futuro, sin necesidad de que el acuerdo de garantia exprese la cantidad concreta de estos anticipos ni las fechas en que han de realizarse. Tambien en este aspecto es necesario volver a examinar los presupuestos generalmente relacionados con el llamado principio de especialidad. Otras partes de la ley se encargaran de determinar la prelaci6n que se le otorgara a esta garantia real con respecto a otras garantias reales que se hayan perfeccionado con anterioridad a que el anticipo anunciado en el acuerdo sea efectivamente entregado al deudor. 91. Al permitirse este tipo de financiamiento, se habilita al acreedor (bancos, entidades financieras) para otorgar una linea de credito contra la cual el deudor puede girar en el futuro, en la medida en que lo requieran sus necesidades financieras. Esta flexibilidad faculta al acreedor a reservar el rango que obtuvo la garantia real al ser inscripta en el registro. Este mecanismo tambien dispensa al acreedor de la necesidad de celebrar un nuevo acuerdo o de efectuar una nueva inscripci6n registral cada vez que otorga un anticipo. 92. Otra innovaci6n importante que debera incorporar la ley es la posibilidad de que el deudor constituya una garantia real sobre bienes a ser adquiridos en el futuro. Abrir esta posibilidad es importante a los efectos de permitir el financiamiento de prestamos otorgados a comerciantes cuyo activo econ6mico mas importante consiste en existencias comerciales y cuentas por cobrar, bienes que no se habran incorporado a su patrimonio al momento de celebrar el acuerdo de garantia o inscribir el gravamen. 3. Perfeccionamiento 93. Si las partes en una operaci6n de financiamiento se limitan a celebrar un acuerdo de garantia con el fin de constituir una garantia real, dicha garantia es valida contra el deudor pero subordinada a los derechos de la mayor parte aquellas personas que no han sido partes al acuerdo. De alli la necesidad de que la garantia real, ademas de haber sido debidamente "constituida", tambien haya sido debidamente "perfeccionada". 94. El modo de perfeccionamiento de una garantia depende del tipo de bien mueble otorgado en garantia o del tipo de obligaci6n garantizada de que se trate. En este sentido, debe reconocerse la posibilidad de perfeccionar la garantia real de diversos modos, incluyendo los siguientes: - La transferencia al acreedor garantizado, o a un tercero desigando de comun acuerdo, de la tenencia fisica del bien en garantia. - La inscripci6n registral del acuerdo de garantia o de un "formulario" o "declaraci6n" de inscripci6n que contenga la informaci6n necesaria para alertar a terceros acerca de la posibilidad de que los bienes del deudor se encuentren gravados con una garantia real. - 95 - - El perfeccionamiento automatico, es decir, por ministerio de la ley, temporario o permanente, con respecto a ciertos acreedores garantizados, en aquellos casos en que el costo, la demora o inconvenientes que presente la inscripci6n registral o la transferencia de la tenencia del bien en garantia no justifique exigir el perfeccionamiento por via de la entrega manual o la inscripci6n registral. El caso tipico es aqu6l en que el deudor haya otorgado una garantia real que garantize la devoluci6n del precio de compra de un bien mueble adquirido para uso personal, familiar o domestico del deudor. - Cualquier otro tipo de medio de publicidad que se considere conveniente en atenci6n al tipo de bien en garantia. 95. La ley debera especificar que tipo de perfeccionamiento se requiere o se permite para los diferentes tipos de bienes muebles (v.gr., titulos valores, cuentas por cobrar y otros creditos, etc.). Asimismo, deberan indicarse las circunstancias en las cuales cierto modo de perfeccionamiento confieren una prelaci6n mayor al acreedor que si recurriera a otros modos de perfeccionamiento. 4. Inscripci6n Registral 96. El medio mas comun de perfeccionar una garantia real sobre la mayoria de los bienes muebles es la inscripci6n registral. Con excepci6n de garantias reales sobre titulos-valores (instrumentos negociables), que s6lo pueden perfeccionarse mediante la tenencia, las garantias sobre los demas bienes muebles pueden ser perfeccionadas mediante la inscripci6n del acuerdo de garantia o de un formulario de inscripci6n en el registro puiblico correspondiente. 97. Es fundamental distinguir la politica legislativa y la funci6n que cumple la inscripci6n registral de gravamenes sobre bienes muebles, de la funci6n tradicional que se le suele otorgar a dicha inscripci6n bajo el derecho registral inmobiliario. El objetivo de la inscripci6n registral en materia de garantias reales sobre bienes muebles es el de disponer de un sistema simple y poco costoso (tanto para las partes como para la autoridad encargada de administrar el registro) que permita a terceros interesados averiguar el estado financiero o gravamenes que pueden afectar el patrimonio mueble del deudor. 98. De esto se sigue que la "declaraci6n de inscripci6n", a diferencia del "acuerdo de garantia", no requiere otra informaci6n mas que la estrictamente necesaria para cumplir con el objetivo antedicho. No es necesario que el documento a ser inscripto contenga todo tipo de clausula regulando los derechos y obligaciones de las partes. Es suficiente que en la declaraci6n de inscripci6n conste los nombres de las partes, la direcci6n postal del deudor y del acreedor garantizado, al cual pueda dirigirse el deudor para solicitar mayor informaci6n sobre la extensi6n del gravamen o de la obligacion garantizada, que describa en forma "general" el tipo de bienes afectados por la garantia e incluya la firma del deudor. Esta forma resumida de inscripci6n no otorga todos los detalles de informaci6n que puede necesitar un tercero a fin de decidir si otorgar o no un credito al deudor; simplemente indica la posibilidad de que el deudor haya gravado cierto tipo de bienes. Este es el objetivo del sistema registral en materia de garantias reales sobre bienes muebles. - 96 - 99. Otro aspecto importante que debe contemplar la ley de garantias reales, y que tambien se deriva del papel limitado que cumple la registraci6n en el contexto de las garantias reales mobiliarias, es la posibilidad de registrar una declaraci6n de inscripci6n con anterioridad a la celebraci6n de un acuerdo de garantia. La importancia que reviste esta inscripci6n anticipada para el acreedor garantizado consiste en que si en cualquier momento futuro este celebra una acuerdo de garantia con el mismo deudor, y con respecto al tipo de bienes sujeto a la garantia real inscripta, dicha garantia se perfecciona automaticamente al celebrarse el acuerdo. En este caso, no existiria ningun intervalo, ni siquiera de minutos, entre el momento de la constituci6n de la garantia real y el momento de su perfeccionamiento. La ventaja de este mecanismo, como se explica a continuaci6n, es la de reservar la prioridad de rango. 100. Tradicionalmente, los sistemas registrales no contemplan la posibilidad de inscribir un gravamen con anterioridad a que se hayan reunido todos los elementos necesarios para que la garantia real se haya constituido (es decir, adquisici6n de derechos del deudor sobre el bien en garantia y existencia de la obligacion garantizada). El anteproyecto contempla la posibilidad de inscribir un gravamnen potencial. La inscripci6n anticipada del gravamen, aun antes de que se haya "constituido" la garantia real, permite al acreedor garantizado asegurar su prelaci6n a partir del momento de la inscripci6n registral. Esta flexibilidad es crucial para promover el credito garantizado con existencias comnerciales que no se han incorporado al patrimonio del deudor al momento de inscribirse la garantia real. Asi, al momento de la inscripci6n registral, el deudor puede negociar una linea de cr6dito con cargo a la cual el deudor podra girar en el futuro. La inscripci6n anticipada le otorga al acreedor la seguridad de que en caso de insolvencia del deudor, su garantia real afectara, con el rango que le otorga la inscripci6n anticipada, a todos los anticipos de credito que haya otorgado. Este rango otorga una prelaci6n al primer acreedor por sobre la garantia real de los acreedores que hayan inscripto sus gravamenes con posterioridad a la inscripci6n anticipada del priher acreedor. 101. Cabe preguntarse si las declaraciones de inscripci6n deben registrarse en registros locales (es decir, que abarcan una subdivisi6n politica determinada del pais) o en un registro 6nico que informe acerca de los gravamenes existentes sin importar el lugar o regi6n del pais donde se encuentre el bien. Ambos sistemas tienen sus ventajas. Por un lado esta la conveniencia de contar con una fuente de informaci6n crediticia local, que ofrece mayor disponibilidad y facilidad de acceso. Por otro lado, un registro centralizado ofrece la ventaja de concentrar toda la informaci6n en un s61o lugar. ventaja particularmiente apreciable para operaciones financieras en las cuales tanto el establecimiento del deudor o la localizaci6n del bien garantizado son susceptibles de cambio o desplazamiento. 102. La tecnologia de la computaci6n puede ofrecer el beneficio de ambos sistemas, ya que se podria instalar un banco de datos centralizado en la ciudad capital, del cual se podria obtener y el cual podria expedir informaci6n a las terminales de computaci6n ubicadas en diversas regiones del pais. Obviamente que para determinar el efecto juridico de la inscripci6n registral habra que asegurarse primeramente cuales son las posibilidades que ofrece la infraestructura administrativa y la capacidad tecnol6gica del registro. Lo que esta fuera de toda duda es que los registros deben ser publicos y que los registradores deben estar dispuestos a brindar informaci6n mediante la expedici6n de certificados y la utilizaci6n de todo medio de comunicaci6n del cual se pueda dotar al registro (v.gr. telefonos. telefax). - 97 - 5. Prelaci6n 103. El acreedor garantizado tiene interes en hacer valer su preferencia al cobro sobre el valor del bien garantizado frente a varios terceros, principalmente cuatro de ellos: los titulares de privilegios (gravamenes otorgados por disposici6n de la ley), otros acreedores con garantfa real, acreedores embargantes, adquirentes y compradores del bien objeto de la garantia, y el sindico en el concurso civil o quiebra del deudor. 104. Con respecto a los privilegios, la prelaci6n suele ser especificada en la misma ley que crea el privilegio. En caso de que esta no exprese el rango, seria conveniente que las garantias reales prefeccionadas tengan prelaci6n sobre todos los privilegios perfeccionados con posterioridad al momento de perfecci6n de la garantia real. 105. Si el conflicto de prioridades se plantea entre dos garantias reales sobre el mismo bien, ninguna de las cuales ha sido perfeccionada, la prelaci6n le corresponde al primero que ha cumplido con todos los requisitos de su constituci6n (esto es, acuerdo por escrito, existencia de la obligaci6n garantizada y de la obligaci6n principal). Si el conflicto se presenta entre una garantia perfeccionada y otra no perfeccionada, prevalece la primera (aun cuando haya sido constituida con posterioridad a la garantia perfeccionada). El principio general aplicable a conflictos entre garantias perfeccionadas es que prevalece la que primero se haya perfeccionado. 106. Sin embargo, este principio tradicional prior tempore potior jure debe ceder cuando razones de politica legislativa asi lo aconsejen. Una garantia "por el importe de compra" de un bien en garantia puede tener prelaci6n sobre una garantia real perfeccionada con anterioridad. El criterio que inspira a esta regla es que el bien en garantia no existiria en el patrimonio del deudor de no haber sido por el financiamiento que le otorg6 el acreedor garantizado para posibilitar la compra del bien. Cuanto y contra quien se aplica esta regla de prioridad varia conforme al tipo de bien en garantia. 107. En principio, la garantia real, como todo derecho real, persigue al bien en garantia a pesar de que el deudor disponga del mismo. Sin embargo, tambien este principio reconoce excepciones fundadas en razones de politica legislativa. La excepci6n mas importante es la que protege al comprador de buena fe de bienes de consumo o de bienes destinados para la venta. En este caso, el acreedor garantizado podra satisfacer su credito atrapando bajo la garantia al "producido" de la venta, como asi tambien a las existencias comerciales que reemplacen a los bienes vendidos por el deudor. 108. Con respecto al conflicto de prelaciones entre el acreedor garantizado con una garantia real y un acreedor embargante, el principio general es que la prelaci6n le pertenece al que primero haya perfeccionado la garantia real o el embargo. En cuanto al conflicto que se plantea con el sindico de la quiebra, este toma los bienes del deudor sujetos a las garantias reales perfeccionadas con anterioridad a la declaraci6n de quiebra o el estado de sospecha. Si el acreedor garantizado no ha perfeccionado su garantia con anterioridad al estado de insolvencia, entonces no podra pretender en la distribuci6n de los bienes del fallido otra condici6n que la de un mero acreedor quirografario. - 98 - 6. Procedimiento de Ejecuci6n 109. El procedimiento a seguir en caso de incumplimiento del deudor tiene la doble finalidad de: (a) asegurar en la mayor medida posible de que la obligaci6n del acreedor garantizado sera satisfecha con el valor del bien en garantia, y (b) proteger, tambien en la medida de lo posible, el interes del deudor en obtener el mayor valor del bien, como asi tambien su derecho a obtener el valor del excedente, si lo hubiere. A fin de conjugar ambos objetivos, es necesario dotar al acreedor de un metodo expedito de ejecuci6n y asegurar al mismo tiempo que el valor del bien sea obtenido mediante una venta que se lieve a cabo por un metodo "comercialmente razonable" para ese tipo de bienes. 110. El Informe del Banco Mundial concentra gran parte de sus criticas al sistema boliviano de garantias reales en la excesiva demora del procedimiento judicial que debe seguirse para, en primer lugar, obtener una sentencia condenatoria (Informe, §§ 83-127) y, en segundo lugar, ejecutar la sentencia mediante la venta del bien en garantia (Informe, §§ 128-155). Estos terminos de referencia coinciden con el Informe en la necesidad de dotar al procedimiento de ejecuci6n de la celeridad necesaria para que cumpla la finalidad para el cual ha sido destinado. El equilibrio de intereses en juego debe desembocar en un proceso que fortalezca la facultad del acreedor de recuperar en forma inmediata el bien en garantia, responsabilizando al mismo tiempo a ese mismo acreedor por los dafnos y perjuicios que pueda causar al deudor en caso de no cumplir con un procedimiento de venta que sea comercialmente razonable bajo las circunstancias. 111. La intervenci6n de funcionarios publicos, jueces y oficiales de justicia en el proceso de ejecuci6n suele desembocar en un procedimiento lento, administrativamente costoso e incapaz de maximizar el valor econ6mico del bien en garantia al momento de su disposici6n. Esta experiencia indica la conveniencia, para todas las partes, acreedor y deudor, de propiciar que la venta del bien en garantia se desarrolle de la manera mas parecida posible a una venta comercial. Para ello, el acreedor debe ser autorizado a recurrir al procedimiento de venta que considere mas rapido y adecuado. 112. A tal fin, el acreedor puede valerse de aquellas disposiciones del C6digo de Procedimiento Civil aplicables a juicios de ejecuci6n de sentencias en general, o bien puede recurrir al procedimiento especial autorizado especificamente para la ejecuci6n de garantias reales. Este procedimiento especial serA incluido en la 6ltima parte de la ley; sus lineamientos generales se expresan a continuaci6n. 113. Un obstaculo que se interpone a la celeridad del procedimiento radica en la necesidad de contar con un pronunciamiento judicial acerca del incumplimiento de la obligaci6n garantizada. El procedimiento tambien suele entorpecerse en aquellos casos en que el deudor inclumpliente se niega a colaborar, rehusando entregar el bien en garantia o bien negandose a negociar con el acreedor acerca de la mejor forma de realizar el valor econ6mico del bien en garantia. Tambien el acreedor puede abusar de la vulnerabilidad econ6mica del deudor para imponer condiciones de venta que no contemplan el interes del deudor de obtener un precio mayor que el del monto adeudado al acreedor. 114. La politica legislativa que debe orientar a la ley de garantias reales se basa, en primer lugar, en otorgar al deudor la facultad de redimir el bien si cumple con todas sus obligaciones - 99 - dentro de un periodo breve con posterioridad a ser notificado de su incumplimiento; en segundo lugar, en permitir expresamente que las partes, despues del incumplimiento del deudor, se pongan de acuerdo acerca de c6mo disponer del bien; y en tercer lugar, previendo el caso en que no pueda llegarse a un acuerdo y el deudor se niegue a entregar el bien al acreedor para que este disponga del bien, en permitir al acreedor tomar posesion del bien en garantia siempre y cuando proceda sin violencia en las cosas o intimidaci6n en la persona del deudor o quien tenga control fisico sobre el bien en garantia cuya venta se persigue. 115. A fin de estimular a que las partes lieguen a un acuerdo respecto de la mejor forma de disponer del bien, la ley debera expresar que, con posterioridad al incumplimiento del deudor, el acreedor puede proponer al deudor que el primero se quede con el bien dado en garantia. En caso de que el deudor acepte la propuesta, la retenci6n del bien opera como una daci6n en pago. En caso de que el valor de la cosa no cubra el monto de la obligaci6n garantizada, incluyendo los costos y gastos complementarios a su ejecuci6n, el deudor no puede ser responsabilizado por el deficit o saldo insoluto de la obligaci6n garantizada. 116. Si el deudor se niega a aceptar esa propuesta, ya sea porque considera que el bien puede venderse por una suma superior a la deuda pendiente o por cualquier otra raz6n, el acreedor debera venderla conforme a un procedimiento "comercialmente razonable". En este caso, el deudor sera responsable por el deficit y queda facultado a percibir el excedente del precio de venta. 117. Si con posterioridad al incumplimiento de la obligaci6n el deudor se niega a entregar el bien al acreedor, o a acordar con este un procedimiento de venta, el acreedor queda facultado para tomar posesi6n del bien siempre y cuando, como se dijo anteriormente, no recurra ni a la violencia en las cosas ni a la intimidaci6n del deudor o quien tenga el poder de hecho sobre el bien. 118. La experiencia en los Estados Unidos con este tipo de procedimiento ("self-help repossession") no ha dado razones para temer que los acreedores abusen de este procedimiento en forma sistematica. Por el contrario, el hecho de que la legislaci6n autorice al acreedor a reposeer el bien ha creado un incentivo para que el deudor negocie con el acreedor la forma de disponer del bien, de tal forma que su venta arroje el mayor precio posible. En los pocos casos en que se han presentado de abusos, los tribunales han condenado al acreedor al pago de daflios y perjucios. Esta facultad del deudor de accionar por dafios debe ser expresamente reconocida por la ley y cuidadosamente viabilizada mediante un procedimiento sumarisimo. Ademas, deberan contemplarse limites especiales para proteger los derechos de aquellos casos en que el bien en garantia este destinado a ser utilizado para consumo personal, familiar o domestico del deudor. 119. Una vez que el acreedor ha obtenido el bien en garantia, podra disponer del mismo en venta publica o privada, pero siempre en forma comercialmente razonable. Este requisito de razonabilidad incluye la obligaci6n de notificar al deudor con respecto al metodo, tiempo, lugar y condiciones en que se realizara la venta. Si el acreedor no sigue ese procedimiento, la ley podra establecer una presuncion, dependiendo del tipo de bien en juego, de que el precio obtenido de la venta es inferior al que se podria haber obtenido de haber cumplido el acreedor con los requisitos (entre ellos, la notificaci6n al deudor) establecidos por la ley. Ademas, como se destac6 anteriormente, el acreedor sera responsable por todos los danlos irrogados al deudor. - 100 - VIII. IMPACTO DE UNA LEY SOBRE GARANTIAS REALES MOBILIARIAS SOBRE EL ORDENAMIENTO JURIDICO BOLIVIANO 120. Estos terminos de referencia deben citar en forma especifica "toda disposici6n legal contradictoria que sea abolida, de forma tal que establezca un cuerpo juridico congruente con la legislaci6n boliviana, especialmente con relacion a las normas de los C6digos Civil, Comercial y Procesal Civil de Bolivia." 155 121. Teniendo en cuenta el amplio espectro normativo y doctrinario que abarca la materia de garantias reales, y habiendo destacado que la legislaci6n cuya adopci6n se recomienda tendra el caracter de ley especial y no sera incluida en los c6digos vigentes, estimo apropiado distinguir entre aquellas disposiciones especificas que, a primera vista, se veran "afectadas" por la ley de garantias reales y aquellas otras que, por ser manifiestamente "contradictorias", deberan derogarse al adoptarse la nueva ley. 122. En primer lugar, es necesario identificar las normas del C6digo Civil, C6digo de Comercio y C6digo de Procedimiento Civil que cubren en forma directa el tema de garantias reales sobre bienes muebles. Estas normas deberan ser derogadas para dar lugar a un nuevo esquema juridico general de garantias reales. A. CODIGO CIVIL 123. Parte Segunda, Libro Cuatro, Titulo II ("De la Garantia Patrimonial de los Derechos"): - Capitulo 1: Disposiciones generales (arts. 135-1340). Estas disposiciones son aplicables no s6lo a las garantias reales sobre bienes muebles sino tambien aquellas constituidas sobre bienes inmuebles. En la medida en que las modificaciones que corresponda incluir en este capitulo tambien afectaran al regimen de la hipoteca inmobiliaria, tema que se encuentra fuera de los t6rminos de referencia, sera necesario determinar, articulo por articulo, en que medida se desea extender principios generales sobre garantias reales al derecho inmobiliario. Una alternativa mas congruente con los terminos de este mandato es la de limitarse a llamar la atenci6n de que las garantias reales mobiliarias tienen un regimen especial que, en caso de conflicto, prevalece sobre disposiciones aplicables a todo tipo de garantias reales. - Capitulo II: De los privilegios (arts. 1341-1459). Aunque la ley de garantias reales s6lo se ocupa de los gravamenes consensuales sobre bienes muebles, la ley incluira disposiciones que se refieren a la prelacion de las garantias reales consensuales con respecto a los privilegios. Por lo tanto, sera necesario determinar, articulo por articulo, en que medida el rango de los privilegios bajo este capitulo del C6digo Civil es compatible con el rango que se les confiere a las garantias reales. La preocupaci6n fundamental de armonizaci6n se concentra en aquellos " Caria de fecha 4 de enero de 1993, encomendando la elaboraci6n de los terminos de referencia para una ley sobre garantias reales. - 101 - articulos que se refieren a los privilegios, generales y especiales, sobre los bienes muebles del deudor. - Capitulo III: De las hipotecas (arts. 1360-1397). Estas disposiciones no s6lo cubren las hipotecas sobre bienes inmuebles sino tambien se aplican, en lo pertinente, a las hipotecas sobre bienes muebles (C.Civ., art. 1397). Bajo el C6digo Civil, cabe aclarar, las hipotecas, tanto sobre bienes inmuebles como muebles, reconocen una subdivisi6n entre hipoteca legal, judicial y voluntaria. Por lo tanto, aqui tambien sera necesario analizar, articulo por articulo, la compatibilidad de cada uno de ellos con la regulaci6n de las garantias reales en la ley, que comprende obviamente la hipoteca voluntaria sobre bienes muebles. La Secci6n VI de este capitulo debera ser derogada (arts. 1395-1397). - Capitulo IV: De la pignoraci6n (arts. 1398-1428). Con la excepci6n de las normas que regulan el contrato de anticresis (arts. 1429-1435), todas las disposiciones de este capitulo se refieren a las garantias reales perfeccionadas mediante desplazamiento de la tenencia del bien al acreedor, o mediante inscripci6n registral. Como estas figuras juridicas y su regulaci6n quedaran subsumidas bajo el concepto de "garantia real", se impone su derogaci6n al adoptarse la nueva ley. 124. Titulo V ("De los Derechos Reales") (arts. 1521-1566). Este Titulo no se aplica solamente a las garantias reales, ni tampoco se limita a las garantias reales sobre bienes muebles. Por lo tanto, tambien aqui debe procederse con cautela, articulo por articulo, para verificar, modificar o anotar toda discrepancia que pueda presentarse con el titulo de la ley de garantfas reales destinado a regular la inscripci6n registral de gravamenes sobre bienes muebles. Las disposiciones generales sobre la organizaci6n de los registros publicos (art. 1521-1524), como asi tambien aquellas mas especificas sobre el registro de derechos reales (arts. 1538-1560), contienen disposiciones aplicables, expresa o implicitamente, a la manera de inscribir, anotar, cancelar y formalizar actos juridicos destinados a crear una garantia real sobre bienes muebles. Estas disposiciones deberan ser derogadas o modificadas en la medida que presenten incompatibilidades con las disposiciones de la ley. 125. La ley del 15 de noviembre de 1887 sobre "Registro de los Derechos Reales" se ocupa fundamentalmente de la inscripci6n y anotaci6n registral de derechos reales sobre inmuebles (art. 1). Sin embargo, en la medida en que cualquiera de sus disposiciones pueda ser invocada por via de analogia para ser aplicada en el campo de las garantias reales, sera necesario compulsar articulo por articulo de esta ley para verificar todo posible conflicto de interpretaci6n con las normas que se incluyan en la ley sobre garantias reales. B. CODIGO DE COMERCIO 126. Libro Tercero, Titulo 11 ("De los Contratos Mercantiles en Particular"), arts. 878-901: Deben derogarse todas las disposiciones que se refieren a la prenda, prenda sin esplazamiento, hipoteca de bienes muebles sujetos a registro e hipotecas que garantizan los derechos de los tenedores de titulos-valores. - 102 - 127. Libro Segundo, Titulo II ("De los Titulos-Valores"), Capitulo VIII ("Bonos, cedulas hipotecarias y otros titulos"), arts. 642-723: Deben derogarse todas aquellas disposiciones de este titulo que se refieran a la pignoraci6n de titulos-valores e instrumentos negociables. La ley de garantias reales incluira disposiciones especificamente aplicables a c6mo establecer una garantia real sobre los titulos, instrumentos, o documentos y se ocupara de reglamentar los efectos que dicha garantia tendra frente a terceros. 128. Otras disposiciones del C6digo de Comercio, aun cuando regulan una materia en principio ajena a la constituci6n, perfeccionamiento y prelaci6n de garantias reales sobre bienes muebles, pueden encontrarse indirectamente involucradas en el tema. Dentro del contexto de estos terminos de referencia no es posible efectuar un analisis especifico de cada una de esas normas, y mucho menos determinar en forma especifica en que medida son incompatibles con aquellas que se adoptaran en la ley de garantias reales. Esta tarea ineludible, empero, debera realizarse durante el proceso de elaboraci6n de la ley sobre garantias reales. 129. Entre las disposiciones que deberan revisarse con atenci6n se incluyen aquellas incluidas en el Libro Segundo del C6digo de Comercio que se refieren a la constituci6n y transferencia de derechos sobre bienes muebles tales como una empresa mercantil (Titulo I), diferentes tipos de de titulos-valores (Titulo II), p6lizas de seguro (Titulo III), bienes representados por certificados de dep6sito en almacenes generales (Titulo V), y los dep6sitos bancarios (Titulo VII). 130. Tambien es necesario revisar aquellas normas que se refieren al concurso preventivo y la quiebra y que afectan la prelaci6n y ejecuci6n de una garantia real sobre bienes del fallido (Libro Cuarto, Titulo II, Secci6n VI, arts. 1591-1602). Obviamente que estas normas contemplan el impacto de la quiebra sobre todo tipo de relaciones juridicas establecidas por el fallido, pero es importante especificar en las disposiciones de la quiebra en que medida las garantias reales obtenidas bajo la ley pueden ser opuestas, y por lo tanto prevalecer, sobre los reclamados por la masa de acreedores. C. CODIGO DE PROCEDIMIENTO CIVIL 131. El procedimiento de ejecuci6n de una garantia real, en la medida en que requiera del auxilio judicial, puede encarrilarse por aquellos procedimientos regulados por el C6digo de Procedimiento Civil. Aunque la ley de garantias reales no le niega esta opci6n al acreedor, tambien le confiere un procedimiento especial que sera materia de especial regulaci6n por la ley a ser promulgada. Toda disposici6n de la ley de garantias reales que se refiere a la ejecuci6n de la garantia prevalece sobre las normas generales del C6digo de Procedimiento Civil, especialmente aquellas incluidas en el Libro Segundo que regulan los procesos de conocimiento (Titulo II, proceso ordinario, sumario, sumarisimo), el proceso ejecutivo (Libro Tercero, Titulo I), e incluso el de ejecuci6n de sentencia (Titulo II). 132. Una observaci6n similar merece la legislaci6n especial que contempla un procedimiento especial, en favor de determinados acreedores institucionales, para ejecutar una garantia real. Me refiero al procedimiento coactivo fiscal en favor de la Contraloria General de la Naci6n (Ley No. 1178 del 20 de julio de 1990), coactivo tributario en favor del Departamento del Tesoro (D.S. No. 18130 del 19 de marzo de 1981) y coactivo bancario en favor de entidades bancarias - 103 - autorizadas para realizar pr6stamos hipotecarios por la Superintendencia de Bancos (Ley de bancos de 1928). Si bien nada impide que estas entidades pueden recurrir a este procedimiento, pueden optar por el procedimiento abreviado y extrajudicial que contempla la ley de garantias reales. - 104 - IX. ESBOZO DE LOS PASOS A SEGUIR EN LA IMPLEMENTACION DEL PROYECTO 133. Como no es posible precisar el grado de incompatibilidad entre la legislaci6n vigente y la propuesta de reforma hasta contar con un texto experimental, es aconsejable proceder a redactar un anteproyecto para recien entonces adentrarse a tantear su compatibilidad o rechazo con el ordenamiento vigente. 134. Un borrador inicial de un anteproyecto de garantias reales, redactado dentro del marco de estos terminos de referencia, permitira obtener una visi6n de conjunto de la reforma propuesta. Esta visi6n de conjunto es tan importante como cada una de las normas propuestas. Es trabajar en forma coordinada con una comisi6n legislativa que se encargue de precisar, articulo por articulo, el impacto de cada norma sobre el resto del ordenamiento juridico boliviano. 135. El anteproyecto inicial, cuyas lineas directrices fundamentales deberan inspirarse en el Articulo 9 del UCC y las orientaciones establecidas por los estudios de UNCITRAL, debe especificar la fuente de cada articulo e incluir un comentario explicando las razones de politica legislativa y de tecnica juridica que fundamentan cada una de esas disposiciones. El anteproyecto tambien debera incluir referencias especificas a toda norma de la legislaci6n vigente en Bolivia que se encuentra manifiestamente en conflicto, indirectamente implicada, o en plena conformidad con el articulo propuesto. 136. Con posterioridad a la presentaci6n del borrador inicial del anteproyecto, el siguiente paso consistira en un en estudio detallado del anteproyecto por parte de la comisi6n local. A esta altura del proyecto, es necesario que dicha comisi6n investigue y destaque todas las ramificaciones del anteproyecto en la legislaci6n vigente en Bolivia. Esta tarea posibilitara un debate amplio acerca de los aspectos mas controvertidos de la politica legislativa que inspira al anteproyecto y el enfoque tradicional que mantiene la ley boliviana sobre el tema de garantias reales. Es de fundamental importancia que la comisi6n sea integrada no s6lo por jueces y juristas bolivianos, sino tambien por representantes de bancos, instituciones financieras y abogados experimentados en la defensa de los intereses de los deudores. Esta conjunci6n de fuerzas y recursos facilitara la armonizaci6n de los intereses que pujan por su reconocimiento en una ley de garantias reales sobre bienes muebles. Estos intereses apuntan, sin embargo, a un objetivo comun: facilitar el acceso al credito a la pequefia y mediana empresa, reducir el riesgo y por lo tanto el costo del financimiento basado en garantias sobre bienes muebles, otorgando al acreedor garantizado la confiabilidad imprescindible para otorgar el credito y protegiendo al deudor contra eventuales abusos. * * * Appendix IV: Legislacion sobre Acceso Piblico a los Registros, Bienes Inembargables y Contratos Modelos para el Credito Mobiiiario: Terminos de Referencia Estce documento ha sido redactado por Nuria A. de la Pefia, abogada, por encargo y para uso exclusivo del Banco Mundial. Todo otro uso, distribucion o cita de este documento debe requerir la autorizaci6n de su autor (Mayo 1993). - 107 - TUmninos de Referencia Acceso PNiblico a los Registros de Bolivia Antecedentes: 1. El Banco Mundial investig6 en Bolivia el problema de acceso al cr6dito y su relaci6n con el sistema juridico.'56 Esta investigaci6n estableci6 que los registros puiblicos cumplen dos funciones econ6micas fundamentales. Por un lado, acreditan la propiedad de ciertos bienes; por el otro, son el lugar que la ley designa para la inscripci6n de gravamenes. Cuando los prestamistas exigen la constituci6n de garantias reales, como ocurre en el caso de prestamos por cantidades razonables, para proteger legaimente su cr6dito se requiere inscribir la garantia real en el registro designado por la ley. Los registros, asi, permiten establecer claramente la prioridad de garantias reales sobre un mismo bien. De tal modo, los registros facilitan la ejecuci6n de garantias, aseguran la recuperaci6n de pr6stamos, y promueven el otorgamiento de credito. 2. A pesar de la importancia del sistema registral, los registros en Bolivia aun presentan serias deficiencias. Entre ellas, se destacan principalmente problemas administrativos de archivo de documentos registrales. Con el apoyo del Banco Mundial el gobierno de Bolivia planea ejecutar varias reformas en los registros. El 6xito de estas reformas dependera, fundamentalmente, del acceso a informacion que permitan los oficiales de los registros. El acceso a los registros, no s6lo facilita el conocimiento de informaci6n crediticia, sino que tambien ayuda a controlar el funcionamiento de los mismos. 3. El C6digo Civil Boliviano sostiene el principio de acceso publico a los registros, estableciendo que la informaci6n registrada debera estar a disposici6n de cualquier interesado que desee consultarla [C6digo Civil, Art. 15621. Sin embargo, en la practica, y contrariamente a lo establecido por la ley, los oficiales de los registros niegan el acceso a informaci6n a personas que ellos consideren no interesadas.'57 4. Los terminos de referencia que se detallan a continuaci6n tienen por objeto: (i) verificar la posibilidadjuridica de crear un marco normativo de caracter regulatorio que ordene a los oficiales de los registros la ejecuci6n de las normas legales vigentes de acceso puiblico; y (ii) si el resultado de este analisis fuera positivo, redactar el proyecto de Decreto Supremo y/o resoluciones ministeriales que correspondan. Trrminos de Referencia: 5. El consultor verificara la posibilidad de que un Decreto Supremo regule el acceso publico a los registros. Si el consultor deterniinara que el articulo 1562 del C6digo Civil, su doctrina ' Vr "Law, Legal Pro,2cdure aid dieI Economic Value ol Collaicral Fhe Case liol FbI Ili RI) Rcport No 10627-130 Sep , 1992 Ver, De la Pe6a-Macdoniald, 1 kisig, Nil11cr 'hupro, mig I cgal Regisiries cm IBoliv ac tc ic I cnding", Goherno de Bol via, Miiisierto de Exportaciones y Competitividad Econnisica, Juniio 1992 - 108 - o jurisprudencia o cualquier otra norma relacionada con el tema del acceso publico determinara que lo necesario o aconsejable es una modificaci6n al C6digo o cualquier otra ley, el consultor informara inmediatamente al Banco Mundial de dicho resultado para verificar si el resto del trabajo debe realizarse. Si tal analisis demuestra que a pesar de lo dispuesto en el articulo 1562 del C6digo Civil, es posible reglamentar el acceso p6blico a los registros, el consultor redactara el correspondiente Decreto Supremo y las resoluciones ministeriales que sean necesarias. El Decreto Supremo debera ser consistente con la legislaci6n Boliviana vigente. Si el Decreto Supremo contradijera otras normas legales del mismo o inferior rango, debera citar especificamente las normas que sean abolidas. Debera contener los capitulos que siguen y cualquier otra materia que el consultor considere necesaria para el cumplimiento de los objetivos sefialados. Aplicabilidad: 6. Este capitulo debera establecer claramente los registros que estaran sujetos a las normas del Decreto Supremo. En principio estos seran: todo registro de derechos reales, todo registro de comercio y de sociedades por acciones, todo registro nacional de automotores, el registro de la comisi6n nacional de valores, todos los registros que contengan informaci6n catastral municipal o nacional urbanos y rurales, el registro de aeronaves, el registro de barcos, el registro de la propiedad industrial, el registro civil de las personas, todos los registros municipales o nacionales que otorguen licencias para ejercer actividades comerciales, todos los registros municipales de licencias de vehiculos, todos los registros impositivos, y cualquier otro registro existente, o que en el futuro se establezca, que contenga informaci6n necesaria para la constituci6n de garantias reales sobre bienes muebles, instalaciones fijas o pertenencias, e inmuebles. Asimismo, este capitulo deber5 establecer claramente, para cada registro, quienes seran los oficiales p6blicos responsables de la ejecuci6n del Decreto Supremo. Caracter Publico, Certificados y Testimonios: 7. Este capitulo debera definir el caracter puiblico de los registros [ver, C6digo Civil, articulo 1562]. Penalidades: 8. Este capitulo debera establecer penalidades contra los oficiales de los registros encargados de aplicar el Decreto Supremo que niegen el acceso a informacion que el decreto declare publica, o que permitan el acceso a la misma por medios distintos a los especificados por el Decreto Supremo. - 109 - Deberes y Derechos de los Oficiales Registradores: 9. Entre los deberes de los oficiales registradores, el decreto debera explicar c6mo cada registro permitira el acceso del publico. Por ejemplo, este capitulo puede indicar que el acceso p6blico debe permitirse diariamente en horarios de oficina y los oficiales del registro deben proveer una copia de toda la informacion registrada a un costo razonable para pagar la copia, o permitir que el publico examine directamente los libros en una sala de lectura, o proveer una terminal de computadora. Deberes y Derechos del publico a solicitar informaci6n: 10. Este capitulo debera establecer el derecho del publico a acceder a la informaci6n. Debera definir "p6blico" en su mas amplio sentido, no limitandolo solamente a oficiales, notarios o abogados, sino incluyendo todo individuo o persona juridica. 11. El decreto supremo debe distinguir entre, por un lado el derecho del puiblico en general, en el mas amplio sentido del termino, a solicitar y obtener informaci6n registral; y por otro lado, el art. 1546 del C6digo Civil que autoriza a solicitar la inscripci6n registral a quien tenga "interes legitimo" en asegurar el derecho que se pretende inscribir. El decreto supremo debe clarificar que el articulo 1546 del C6digo Civil requiere interes legitimo para quien solicita una inscripcion pero no se extiende para quien desea obtener informacion acerca de lo inscripto. 12. En caso de que este derecho a solicitar informaci6n sea denegado en violaci6n a lo dispuesto en el Decreto Supremo, el decreto sostendra el derecho de cualquier individuo o persona juridica a acudir a la justicia ordinaria para que un juez competente ordene su cumplimiento. Asi, este capitulo regulara si fuera posible bajo la legislaci6n procesal actual, vigente, y aconsejable, el derecho de ser oido ante un juez civil de inmediato, sin citaci6n del registro demandado, para la obtenci6n de una orden judicial dirigida al director del registro, a efectos de que se le permita al interesado el acceso directo a los documentos registrados. El capitulo establecera un procedimiento sencillo para dictar la orden judicial y para la ejecuci6n de la misma, permitiendo la asistencia policial cuando sea necesaria. Entre los deberes del publico, este capitulo debera destacar el deber del puiblico de abonar los costos que correspondan solamente al acceso a la informaci6n publica requerida. 13. El consultor redactara tambien las resoluciones ministeriales necesarias para dar cumplimiento a este Decreto Supremo. Si fuera necesario, dichas resoluciones indicaran especificamente cual debe ser el procedimiento practico, en cada registro, a efectos de permitir el acceso del puiblico. 14. El consultor dedicara en total 10 dias de trabajo para verificar la viabilidad juridica y, en cuanto corresponda, para la redacci6n del Decreto Supremo y las resoluciones ministeriales necesarias. Debera entregar un primer borrador el 7 de setiembre de 1993 y el documento final a los 15 dias siguientes de recibir los comentarios del Banco Mundial sobre el primer borrador. - 110- Bienes Inembargables Terninos de Referencia Antecedentes: 1. El Banco Mundial investig6 en Bolivia el problema de acceso al credito y su relaci6n con el sistema juridico. 58 En el curso de dicha investigaci6n, se advirti6 la existencia de obstaculos legales en la constitucion y ejecuci6n de garantias. Uno de los obstaculos identificados es el marco normativo sobre bienes inembargables. 2. La legislaci6n Boliviana norma los bienes inembargables en el Art. 179 del C6digo de Procedimiento Civil y por remisi6n en los articulos 449 y 456 del C6digo de Comercio y 498 del C6digo de Procedimiento Civil. Asi como en otros paises, en Bolivia las disposiciones sobre bienes inembargables son disposiciones de orden puiblico. El objetivo de estas es protejer al deudor, permitiendole exceptuar de la satisfacci6n de deudas ciertos bienes de su patrimonio. 3. El C6digo de Procedimiento Civil de Bolivia en su articulo 179 define once tipos de bienes inembargables. Sin embargo, esta norma presenta serias dificultades. En primer lugar, la clasificaci6n de bienes inembargables es sumamente amplia e incluye casi toda clase de bienes de la pequehia y la mediana empresa, asi como todo bien adquirido a credito. En segundo lugar, la ley y la jurisprudencia en la materia no han definido un monto maximo hasta el cual se pueda reclamar la protecci6n de estas normas. Por 6ltimo, la ley omite cualquier regulaci6n especifica para el caso de bienes sujetos a intervenci6n: no se sabe si debera nombarse uno o varios administradores judiciales, o un simple interventor o no tomar medida de garantia alguna. 4. Consecuentemente, las disposiciones de los C6digos Procesal Civil y Comercial determinan una incertidumbre juridica que conlleva a evitar el uso de ciertos bienes como garantia. 5. El objetivo de los terminos de referencia que se detallan a continuaci6n, es crear un marco normativo que de mayor seguridad a las transacciones crediticias, con relaci6n a las disposiciones legales sobre inembargabilidad de bienes. Terninos de referencia: 6. El consultor estudiara las disposiciones legales aplicables y verificara la posibilidad de reglamentar por decreto supremo la aplicabilidad de los principios generales de inembargabilidad de bienes. En la medida de los posible el consultor redactara un cuerpo normativo, de caracter regulatorio, que debera enmarcarse en un Decreto Supremo. Este Decreto Supremo regulara los articulos 498 y 179 del C6digo de Procedimiento Civil y los articulos 449 y 456 del C6digo de Comercio, de acuerdo a las consideraciones siguientes: '' Ver "law, Legal Procedure and die Economic Value of Collateral Tne Case of Bolivia", IBRD Report No 10627-BO - III - 7. Generalidades: El Decreto Supremo debera clarificar ciertos principios generales correspondientes a toda determinaci6n de inembargabilidad de bienes, siempre sujeto a la opini6n del consultor sobre la factibilidad de hacerlo por medio de un decreto supremo: a. que son inembargables, ademas de los bienes que sefiala el Art. 179 del C6digo Civil, aquellos otros exceptuados de embargo por leyes especiales, y debera hacer referencia especifica a todas aquellas leyes especiales que determinan la inembargabilidad de bienes. b. que el embargo indebidamente trabado podrd ser levantado de oficio, a pedido del deudor o de su c6nyuge e hijos, aunque la resoluci6n que lo decret6 se hallare concedida, hasta la venta efectiva del bien; y c. que en razon de que el patrimonio del deudor es la garantia comun de los acreedores, la inembargabilidad es la excepci6n, por cuanto el quien solicita el desembargo tiene la carga de probar que el bien es inembargable y debe apreciarse en cada caso su pertinencia con criterio restrictivo. 8. Bienes de uso indispensable: Con respecto a los incisos 3, 5 y 7 del articulo 179 del C6digo de Procedimiento Civil el Decreto Supremo debe clarificar, nuevamente, siempre sujeto a la opini6n del consultor sobre la factibilidad de hacerlo por medio de un decreto supremo: a. que los bienes de uso indispensable son inembargables s6lo cuando tienen el caracter de -inicos. Por lo tanto, si hay mas de uno, de la misma clase, y para satisfacer la misma funci6n primaria, los otros pasan a ser embargables. b. que debe atenderse a lo indispensable o no que resulte el uso de los bienes; c. que el caracter de bien indispensable debe ser acreditado por quien pide el desembargo (siguiendo la politica general del C6digo de Procedimiento Civil y del C6digo Civil de Bolivia de quien tiene el cargo de la prueba es el que solicita la misma); 9. Bienes sujetos a intervenci6n: Con respecto a las disposiciones del articulo 498 y el inciso 9 del articulo 179 del C6digo de Procedimiento Civil, el Decreto Supremo debe aclarar, siempre sujeto a la opini6n del consultor sobre la factibilidad de hacerlo por medio de un decreto supremo: a. Que la interpretaci6n del Art. 179 (9) del C6digo de Procedimiento Civil debe limitar el caracter de "inembargabables" a aquellos bienes (maquinarias, uitiles, herramientas, etc.) que el deudor acredite que son "indispensables" para el ejercicio de su profesi6n u oficio. En caso de que el deudor no pueda establecer dicho requisito, los bienes podran ser embargados, aim cuando dichos bienes esten afectados al ejercicio de una actividad empresaria. b. Que se permite el embargo de los bienes de una empresa, en forma aislada o conjunta, sin perjuicio de autorizar al juez para que nombre un "interventor" judicial que continue la explotaci6n de la empresa y no se comprometa el proceso de fabricaci6n o comercializaci6n. - 112 - 10. Todas las disposiciones del Decreto Supremo deberan ser consistentes con las leyes Bolivianas vigentes, a tal efecto se considerara que los decretos-leyes que sancionaron los C6digos Civil, Comercial, Penal, Procesal Civil y Procesal Penal tienen el rango de ley. El Decreto Supremo podra abolir otras normas legales del mismo o inferior rango; para esto, debera citar especificamente cada norma que sea abolida. 11. El consultor podra incluir cualquier otro tema necesario para clarificar el marco normativo sobre bienes inembargables o no incluir en el decreto - con explicaci6n y justificaci6n juridica - los subtemas que considere no justificables legalmente. 12. El consultor dedicara en total 10 dias de trabajo para evaluar los aspectos de los parrafos 7, 8 y 9, y segun corresponda, para la redacci6n del Decreto Supremo. Debera entregar un primer borrador el 7 de setiembre de 1993 y el documento final a los 15 dias siguientes a la recepci6n de los comentarios del Banco Mundial sobre el primer borrador. - 113 - Contratos Modelos para el Cr&dito Mobiliario Tnrminos de Referencia Antecedentes: 1. El Banco Mundial investig6 en Bolivia el problema de acceso al credito y su relaci6n con el sistema juridico. 159 En el curso de dicha investigaci6n, se advirti6 la existencia de obstaculos legales al funcionamiento del sistema de garantias. Especialmente, la ejecuci6n de garantias sobre bienes muebles presenta serios problemas debido a la lentitud de los procesos legales para la liquidaci6n de deudas. 2. El C6digo de Procedimiento Civil de Bolivia contiene las disposiciones pertinentes a la ejecuci6n de deudas. Principalmente en Bolivia se utiliza el proceso ejecutivo cuando en virtud de un titulo de fuerza ejecutiva se demandara al deudor moroso el pago o cumplimiento de una obligaci6n exigible. Una vez obtenida la sentencia, y ante el persistente incumplimiento de la sentencia por parte del deudor, el jucio continua bajo el procedimiento de ejecuci6n de sentencias hasta la satisfacci6n definitiva de la deuda -- generalmente, mediante el embargo y remate de bienes del deudor (C6digo de Procedimiento Civil, proceso ejecutivo, arts. 486 a 518 y proceso de ejecuci6n de sentencias, arts. 514 a 561). 3. Los plazos procesales establecidos por el proceso ejecutivo y el proceso de ejecuci6n de sentencias son cortos. A primera vista, la ejecuci6n de deudas bajo estos procedimientos requiere veinte a treinta dias aproximadamente. Sin embargo, de acuerdo a una investigaci6n estadistica en las cortes de Bolivia sobre el tiempo promedio de resoluci6n de estos juicios, en la practica, la liquidaci6n de deudas require un tiempo promedio de dos ainos. Jueces y abogados en Bolivia sostienen que el problema de retardo de justicia es un problema mayor: afecta toda otra clase de litigios. Asimismo, se determin6 que el problema justicial tiene sus raices en dos factores: por un lado, en las normas de procedimiento civil; por el otro, en deficiencias en la administraci6n de justicia, incluyendo la falta de recursos. ' 4. Analizando entonces el problema inmediato que nos ocupa, se hace evidente que las garantias sobre bienes muebles en Bolivia son ineficaces. El tiempo de ejecuci6n supera ampliamente el tiempo de utilidad del bien mueble que se deprecie en su valor con el correr del tiempo (por ejemplo, maquinarias y productos agricolas). 5. El mejoramiento de la administraci6n de justicia, la revisi6n del C6digo de Procedimiento Civil, o la implementaci6n de una nueva legislaci6n del sistema de garantias constituyen soluciones posibles a este problema. Sin embargo, son reformas que requeriran largo tiempo para llevar a cabo. En el corto plazo, es posible investigar la utilizaci6n de normas procesales existentes, cuya implementaci6n pueda acelerar la ejecuci6n de garantias sobre bienes muebles. Ver: Law, Legal Procedure and the Economic Value of Collateral: The Case of Bolivia', IBRD Report No. 10627-HO. Bolivi: Reestinituring for Growth. The Remaining Agenda for Public Enterprise Reform and Privatc Sector Developrnent, IBRD, Report No. 11075-BO. - 114 - 6. El C6digo de Procedimiento Civil de Bolivia ha contemplado la contingencia de que bienes pendientes de ejecuci6n se deprecien en su valor, destruyendo asi la garantia de los acreedores. Dentro del capitulo sobre medidas precautorias, este C6digo permite medidas procesales que aseguren el cumplimiento de la sentencia (C6digo de Procedimiento Civil, Art. 156). Asi, con repecto a los bienes muebles, el C6digo permite su secuestro y su venta en la forma mas conveniente posible. Especificamente estos articulos dicen: Art. 162. (Secuestro). l. Procedera el secuestro de bienes y semovientes en los casos que siguen: 1) cuando el embargo no asegurare por si s6lo el derecho invocado por el solicitante, y siempre que se presentare documento que hiciere verosimil el credito cuya efectifidad se quiere garantizar. 2) Con igual condici6n toda vez que fuere indispensable proceder a la guarda o conservaci6n de bienes para asegurar el resultado de la sentencia. 3) Cuando se tratare de cosas que el deudor ofreciere para su descargo. II. El juez al disponer el secuestro, designara depositario con las responsabilidades que la ley sefiala. Art. 169. (Otras Medidas Precautorias). Fuera de los casos previstos en los articulos precedentes, quien tuviere fundado motivo para temer que, durante el tiempo anterior al reconocimiento judicial de su derecho, este puediera sufrir un perjuicio inminente o irreparable, podra solicitar las medidas urgentes que, segun las circunstancias, fueren mas aptas para asegurar provisionalmente el cumplimiento de la sentencia. Art. 171. (Peligro de Prdida o Desvalorizaci6n). Si hubiere peligro de perdida o desvalorizaci6n del los bienes muebles afectados o si su conservaci6n fuere gravosa o difIcil, el juez, a pedido de parte y previo traslado a la otra con un plazo que fijara segun la urgencia del caso, podra ordenar la venta en la forma mas conveniente, abreviando los tramites y habilitando dias y horas. 7. Como puede observarse, es posible que acreedores, temerosos de perder su garantia, utilicen estas disposiciones legales para aseguarar su derecho, sin necesidad de esperar a la conclusion definitiva de la causa. Sin embargo, en Bolivia, los acreedores recuren escasamente a estas medidas precautorias. 8. Existen varias razones que podrian explicar por que las medidas precautorias citadas se utilizan raramente. Principalmente, el recobro de posesi6n y la posterior venta inmediata (y hasta privada) de bienes, como medidas de caracter precautorio, seran ordenadas por el juez s6lo cuando se pruebe fehacientemente su procedencia. Estos requisitos son sumamente amplios y no existe jurispruencia, normas o regulaci6n procesal alguna en esta materia especifica, que guie el criterio del juez. A6n, si se pudiese determinar claramente la procedencia de estas medidas, no existen regulaciones mas especificas que determinen c6mo se presentara la prueba documental, c6mo se diligenciaran los oficios, c6mo la policia debe ejecutar una order judicial de secuestro, o cuales son los distintos standards para determinar la exigencia de contracautela y su cantidad. A diferencia de la mayoria de los paises latinoamericanos, Bolivia no ha dictado normas de las cortes que regulen detalladamente la ejecuci6n de pasos procesales. Todas estas consideraciones aumentan el riesgo del acreedor y explican, quizas, por que estas medidas nunca se han utilizado. - 115 - 9. El objetivo de los terminos de referencia que se detallan a continuaci6n es redactar contratos modelos que formen parte de un Decreto Supremo. Estos contratos modelos tendran por objeto guiar a los comerciantes en el uso de las disposiciones Bolivianas sobre compra-ventas a creditos y garantias mobiliarias. Trnminos de Referencia: 10. El consultor redactara contratos modelos (1)de compra-ventas a credito y/o de constituci6n de garantias reales, que financien la compra de bienes muebles. El fin sera crear un acuerdo cierto con respecto a la naturaleza de los bienes objeto del contrato y a la posible ejecuci6n en caso de incumplimiento. Estas contratos modelos deberan enmarcarse en un Decreto Supremo y deberan ser consistentes con las leyes Bolivianas vigentes. A tal efecto, se considerara que los decretos-leyes que sancionaron los C6digos Civil, Comercial, Penal, Procesal Civil y Procesal Penal, tienen la jerarquia de ley. 11. El Decreto Supremo podra abolir toda norma contraria a las disposiciones del mismo que sean de rango igual o inferior. Debera citar especificamente cada norma que sea abolida. 12. Los contratos modelos podran explicar de que forma y bajo cuales circunstancias, ante el incumplimiento del deudor, el acreedor podria requerir judicialmente cualquiera de las medidas precautorias del C6digo de Procedimiento Civil. Esta explicaci6n incluira fundamentalmente los contratos de compra-venta a plazos, arrendamiento y prenda. 13. Si fuera posible, el decreto debera explicar c6mo se presentara informacion registrada en los registros publicos a las cortes en caso de litigio. Por ejemplo, c6mo se procesara un oficio por transferencia electr6nica, por telegrama o por facsimil para remitir informaci6n sobre bienes desde El Registro de los Derechos Reales a una corte. 14. El Decreto Supremo debera establecer metas que determinen el periodo de resoluci6n de 6rdenes judiciales de secuestro; y debera ordenar a las autoridades competentes la publicaci6n gratuita de un reporte anual que incluya el tiempo de procesamiento de estas ordenes judiciales. 15. El Decreto Supremo debera establecer metas del periodo de tiempo de ejecuci6n de 6rdenes judiciales de secuestro por parte de la policia; debera ordenar a las autoridades policiales correspondientes la publicaci6n de un reporte anual que incluya el tiempo requerido para la ejecuci6n de estas 6rdenes. 16. Asimismo, el Decreto Supremo podra ordenar la recopilaci6n de estos datos por parte de otras organizaciones publicas. 17. Si fuera posible, el decreto supremo debera disponer sanciones contra oficiales publicos en caso de que incumplan las disposiciones del mismo. 18. El consultor dedicara en total 15 dias de trabajo para la redacci6n de este Decreto Supremo. Debera entregar un primer borrador el 15 de mayo de 1993 y el documento final los 15 dias siguientes a la recepci6n de los comentarios del Banco Mundial sobre el primer borrador. Glossary: English/Spanish - 119 - Glossary' English Spanish Explanation/Comments * answer * contestaci6n de demanda Defendant's answer to the l _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ co m p lain t * antichresis * anticresis * appeal * apelaci6n -- en efecto devolutivo -- does not suspend execution -- does suspend execution -- en efecto suspensivo * as a matter of law, de jure * de puro derecho Under civil law a motion to decide the case as a matter of law is similar to a motion for judgment or a motion for summary judgment. If granted, the judge will immediately decide the case because no material fact is in controversy. * at issue * en controversia The parties are at issue when certain facts or points of law are disputed between them at the litigation. * attachment * embargo * bailee * depositario * bailment agreement * contrato de dep6sito Agreement under which one party (bailor) will deliver personal property to another (bailee) to take care of it. * banking law forclosure * proceso coactivo bancario procedure * bearer paper * documento traspasable, al portador * chattel mortgage * hipoteca mueble * chattel mortgage without * prenda sin desplazamiento conveyance * chattel mortgage with * prenda con desplazamiento conveyance The translation and explanation of words relate specifically to their use in the text. - 120- * chattel, tangible personal * bienes muebles Excludes intangible personal property property. * civil procedures * procedimientos: proceso ordinario proceso sumario proceso sumarisimo proceso ejecutivo * collateral receipt * vale de prenda * complaint * demanda The first pleading of the plaintiff setting out the facts on which the claim for relief is based. * demurrer * excepciones previas In demurring the answering party requests a dismissal of the action on the grounds of misjoinder of parties, lack of jurisdiction, lack of venue, payment, statute of limitation, etc. * deposit in warehouse * contrato de dep6sito en almacenes The certificate issued by the agreement generales warehouse is the warehouse receipt. * discountable bill * letra negociable * discovery * prueba In Civil Code countries there is no pre-trial discovery. * draft, bill of exchange * letra de carnbio * easement * servidumbre * endorsement * endoso * enjoyment of the property of * uso, usufructo Includes appropriation of the another proceeds of the goods or property as different from the mere right to possess: for example, a renter enjoys the use of the property while a consignee does not. * exchange * bolsa de valores * final decision or final * sentencias pasadas en autoridad de judgment cosa juzgada * foreclosure procedure * public auction * holder in due course * tenedor legitimo de buena fe * homestead * bien de familia - 121 - * interlocutory decision * sentecias interlocutorias Intermediate, not final, decisions in the case. * judgment lien * embargo judicial When judgment has been entered in a civil case, and the party liable for the judgment fails to pay it, the judgment creditor may file a lien against the property of the liable party to give notice that the property is subject to sale to satisfy the judgment. * legal acts * actos jurfdicos Any act of a human being that has a legal effect, for example, to contract. * lien * gravamen A security interest in property. * mortgage * hipoteca * mortgage (includes both * pignoraci6n A secured interest on real or mortgage or chattel mortgage personal property. The term and antichresis) denotes both anticresis or prenda agreements. * motion * moci6n, peticion, recurso an application to the court requesting an order or ruling in favor of the applicant * negotiable instrument * instrumento negociable o titulo-valor instruments including, but not limited to: bills of exchange, promissory notes, checks, bonds, mortgage bonds, debentures, etc. They could be pledged without agreement or filing since the security interest is perfected with the physical possession of the instrument. * note, promissory note * pagare * pawnbroker * casa de empeino, monte de piedad * peremptory challenges, * excepciones perentorias -- Peremptory challenges against demurrer a complaint that, if accepted, will dismiss the proceedings, e.g., a demurrer founded on statute of limitation. -- May only delay the proceeding excepciones dilatorias until they are decided. - 122 - * perfected instrument * instrumento perfecto, documento perfecto * pledge of agricultural * prenda agraria It is a "prenda civil sin equipment, or chattel desplazamiento" under the Civil mortgage on farm machinery Code provisions and livestock * pledge, security interest or * prenda, (a type of gravamen) Different types exist: under the lien on personal property - prenda civil con desplazamiento Civil Code and the Commercial - prenda civil sin desplazamiento Code; they can be with or without - prenda comercial con desplazamiento delivery of the goods to the - prenda comercial sin desplazamiento creditor in both cases. * preservation of testimony * audiencia de testigos fuera del perfodo Depositions taken before trial in de prueba case the witness may not be available later * priority * prelaci6n, privilegio * private sale * venta privada de bienes Sale of collateral by the creditor upon default, without judicial intervention. * public policy provisions * leyes de orden publico Provisions that, under civil law, they may not be changed by the contracting parties * real estate * inmuebles * sale with an option to * venta con pacto de retroventa repurchase * security, bond, registered * titulo-valor security, * seizure * secuestro * service of process * notificaci6n Court's communication of the process or the court papers to the defendant. * sheriff notice or receipt after * acta de embargo he has levied and sold property of the judgment debtor * small claim procedure * proceso sumario o proceso sumarisimo * statutory mortgage * hipoteca legal Mortgage established by law * subpoena * c6du!a de notificaci6n court document that sets out a court order - 123 - * suit for payment * proceso ejecutivo similar to a small claim procedure under judgment affidavit. * sum certain * suma cierta * to perfect a security * perfeccionar un documento agreement * warehouse receipt * vale de prenda A negotiable instrument always issued in connection to the warehouse receipt and always attached to it. This instrument incorporates a security interest (prenda) against the goods of the warehouse receipt (Cod. Com., Art. 691) * warehouse receipt * certificado de dep6sito en almacenes under the Civil Law system is generales o "warrant" considered a negotiable instrument * writ * mandamiento, orden judicial a mandatory precept issued to compel a person to do something therein mentioned. It is issued by the court and directed to the sheriff or other officer authorized to execute it. It usually contains directions as to what is required to be done. * writ of execution to levy and * mandamiento de embargo in Bolivia, it will only establish a sell judgment lien on the debtor's property, a public auction will take place latter Glossary: Spanish/English - 127 - Glossary' Spanish English Explanation/Comments * acta de embargo * sheriff notice or receipt after he has levied and sold property of the judgment debtor * actos juridicos * legal acts Any act of a human being that has a legal effect, for example, to contract. * anticresis * antichresis * apelaci6n * appeal -- en efecto devolutivo -- does not suspend execution -- does suspend execution -- en efecto suspensivo • audiencia de testigos fuera del * preservation of testimony Depositions taken before trial in case periodo de prueba the witness may not be available later L bien de familia * homestead * bienes muebles * chattel, tangible personal Excludes intangible personal property. property * bolsa de valores * exchange * casa de empefio, monte de piedad * pawnbroker * cedula de notificaci6n * subpoena court document that sets out a court order * certificado de dep6sito en * warehouse receipt under the Civil Law system is almacenes generales o "warrant" considered a negotiable instrument * contestaci6n de demanda * answer Defendant's answer to the complaint * contrato de dep6sito * bailment agreement Agreement under which one party (bailor) will deliver personal property to another (bailee) to take care of it. * contrato de dep6sito en almacenes * deposit in warehouse The certificate issued by the generales agreement warehouse is the warehouse receipt. The translation and explanation of words relate specifically to their use in the text. - 128 - * de puro derecho * as a matter of law, de jure Under civil law a motion to decide the case as a matter of law is similar to a motion for judgment or a motion for summary judgment. If granted, the judge will immediately decide the case because no material fact is in controversy. * demanda * complaint The first pleading of the plaintiff setting out the facts on which the claim for relief is based. * depositario * bailee * documento traspasable, al * bearer paper portador * embargo * attachment * embargo * judment lien When judgment has been entered in a civil case, and the party liable for the judgment fails to pay it, the judgment creditor may file a lien against the property of the liable party to give notice that the property is subject to sale to satisfy the judgment. * en controversia * at issue The parties are at issue when certain facts or points of law are disputed between them at the litigation. * endoso * endorsement * excepciones previas * demurrer In demurring the answering party requests a dismissal of the action on the grounds of misjoinder of parties, lack of jurisdiction, lack of venue, payment, statute of limitation, etc. * excepciones perentorias * peremptory challenges, -- Peremptory challenges against a demurrer complaint that, if accepted, will dismiss the proceedings, e.g., a demurrer founded on statute of limitation. -- May only delay the proceeding until excepciones dilatorias they are decided. * gravamen * lien A security interest in property. * hipoteca mueble * chattel mortgage * hipoteca * mortgage - 129 - * hipoteca legal * statutory mortgage Mortgage established by law * inmuebles * real estate * instrumento negociable o titulo- * negotiable instrument instruments including, but not limited valor to: bills of exchange, promissory notes, checks, bonds, mortgage bonds, debentures, etc. They could be pledged without agreement or filing since the security interest is perfected with the physical possession of the instrument. * instrumento perfecto, documento * perfected instrument perfecto * letra negociable * discountable bill * letra de cambio * draft, bill of exchange * leyes de orden puiblico * public policy provisions Provisions that, under civil law, they may not be changed by the contracting parties * mandamiento de embargo * writ of execution to levy and in Bolivia, it will only establish a sell judgment lien on the debtor's property, a public auction will take place latter * mandamiento, orden judicial * writ a mandatory precept issued to compel a person to do something therein mentioned. It is issued by the court and directed to the sheriff or other officer authorized to execute it. It usually contains directions as to what is required to be done. * moci6n, petici6n, recurso * motion an application to the court requesting an order or ruling in favor of the .___ ____ ____ _ _ _applicant * notificaci6n * service of process Court's communication of the process or the court papers to the defendant. * pagare * note, promissory note * perfeccionar un documento * to perfect a security agreement * pignoraci6n * mortgage (includes both A secured interest on real or personal mortgage or chattel mortgage property. The term denotes both and antichresis) < < anticresis > > or < < > agreements. - 130(- * prelaci6n, privilegio * priority * prenda con desplazamiento * chattel mortgage with conveyance * prenda, (a type of gravamen) * pledge, security interest or Different types exist: under the Civil - prenda civil con lien on personal property Code and the Commercial Code; they desplazamiento can be with or without delivery of the - prenda civil sin desplazamiento goods to the creditor in both cases. - prenda comercial con desplazamniento - prenda comercial sin desplazamiento * prenda sin desplazamiento * chattel mortgage without conveyance * prenda agraria * pledge of agricultural It is a "prenda civil sin equipment, or chattel desplazamiento" under the Civil mortgage on farm machinery Code provisions and livestock * procedimientos: * civil procedures proceso ordinario proceso sumario proceso sumarisimo proceso ejecutivo * proceso sumario o proceso * small claim procedure sumarisimo * proceso coactivo bancario * banking law forclosure procedure * proceso ejecutivo * suit for payment similar to a small claim procedure under judgment affidavit. * prueba * discovery In Civil Code countries there is no pre-trial discovery. * public auction * foreclosure procedure * secuestro * seizure * sentecias interlocutorias * interlocutory decision Intermediate, not final, decisions in the case. * sentencias pasadas en autoridad * final decision or final de cosa juzgada judgment * servidumbre * easement * suma cierta * sum certain * tenedor legitimo de buena fe * holder in due course - 131 - * titulo-valor * security, bond, registered security, * uso, usufructo * enjoyment of the property of Includes appropriation of the proceeds another of the goods or property as different from the mere right to possess: for example, a renter enjoys the use of the property while a consignee does not. * vale de prenda * warehouse receipt A negotiable instrument always issued in connection to the warehouse receipt and always attached to it. This instrument incorporates a security interest, < < prenda > >, against the goods of the warehouse receipt (Cod. Com., Art. 691) * vale de prenda * collateral receipt * venta con pacto de retroventa * sale with an option to repurchase * venta privada de bienes * private sale Sale of collateral by the creditor upon default, without judicial intervention. MAP SECTION -. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~65- BOL IVIA W- - Mo-T Rood, ReI,.f (mete-E) CI,notIc Zones r-t, Secondo,, Roofi TX Ar> I I 8I(D 1450( -d .1-- COBEI4'~ O , m eBERAfT - Rn I,tlolnloodndo*sg° ,,0) ([U TIEMERATE \pofo > 2 l, > ,, 8 p _: __ _~~~~~~~~~~~~~~~~~R,"C ,i J ta \\2t >,. / t w t t 8~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ R A Z I L (Jr21 J - I / - 1 x 't 'LA PAZ ~ B EntAo N I PR EoM TEEN I~~~~~~~~~~AD -'~~~~L IA r/ ) < - //\ g)Son BoTlo ! 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