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$58

tions, quoted above, seems at once to coincide with theories expressed in the text, and to show what the common experience of nations has found necessary and advantageous. If the doubts of the Canadian Courts were well founded, the recognition of foreign corporations and their rights would be so limited as to be illusory.'

"Following out the same principles, the German Courts have recognised and allowed to a foreign company, validly formed according to foreign law, a right of action against German subjects, although the principles of its constitution are forbidden in Germany, and companies so constituted are declared null (Holthausen & Co., v. Comptoir d'Escompte de Paris, App. Ger. Cöln. 28 April 1877). The grounds of this decision are precisely the same as those on which Mr. Justice Lindley defends his doctrine, as stated above."

"It may of course happen, that a company which has its principal office abroad, may have established it there with express purpose of engaging in some trade not permitted in the country to which it truly belongs, and of escaping some restrictions upon the constitution of companies which are imposed by the law of the country to which it truly belongs, i. e., where its directors or managers reside, where its trade truly lies, and where its shares are held; such an illusory establishment will certainly not be recognised so as to oust the penal jurisdiction of the country to which the directors belong, or to dispense with the formalities required by its law (Compagnie de Chemin de Fer du Nord et de Catalogne, C. de Paris, 2nd July, 1877). But a

*On these principles a Convention was concluded between the Netherlands and Italy, on the 11th April 1868 (Staatsblad, 1869, No. 71), with regard to mutual recognitions of Sociétés Anonymes.

mere agency or a subsidiary establishment in France, coupled with the fact that the shares are to a large extent held by Frenchmen, will not make a company amenable to French law, so that any neglect in its constitution of the requirements of French law, which in the case of a French company would involve its directors in criminal responsibility, can be charged against them in a French Court, if the meetings of shareholders have always been held abroad, the capital largely employed abroad, and the chief office situated abroad, the company having been originated and incorporated abroad, (Chandora v. Banque Européenne, 10th February 1881, Trib. Comm. de la Seine). Nor will the establishment of an agency in France give a company the same status as an individual acquires by residence, accompanied by Government licence to reside-viz., a title to bring actions against a foreigner in a French Court (Rubattino v. Kundz & Werder, 25th February 1876, Trib. Comm. de Marseilles). This latter decision is not in conflict with what has been above taken to be the law of England; a company is treated like an individual, and its right to sue is regulated according to its true nationality,-domicile does not, as with us, give a title to pursue an action in France against a foreigner upon a contract; it is a principle of French law that the right to sue, being a droit civil, does not belong to foreigners; hence a mere trading domicile does not give a right to sue in France, where the defender is also a foreigner, but a foreign company, just like a foreign individual, may sue a French debtor in France, while the constitution of a foreign company will be recognised just as the majority of an individual, and no French shareholder will appeal successfully to the Courts of his own

country to protect him against resolutions passed by the shareholders of a foreign company, to which he belongs, in conformity with the requirements of the law of the country to which the company belongs (Buisson v. Ch. de Fer Seville Xeres, Cadiz. Trib. de Comm. de la Seine, 25th June 1875); just as no French creditor can appeal to the courts of his own country to give him redress against a resolution passed in the course of the liquidation of a foreign company abroad by the statutory majority of creditors (Dubois de Lachet v. Cie de Chemin de Fer du Nord de l'Espagne, C. de Cass., Paris, 18th January 1876). But again, just as an individual, residing or trading in France, may be sued there by a French creditor, although he is not by birth or naturalisation a French subject, because it is, according to the French law, the first object of the legislator to protect his own citizens, so a foreign company which has an agent in France may be sued there, upon contracts made in France by their agent (Duché et Fils v. Raymond et Cie., C. de Cass., Paris, 18th August 1875).”

"The Italian Courts have drawn a distinction, which, to a certain extent, accords with the distinctions noted above as existing in France, between the relations subsisting between the company and its shareholders on the one hand, and the relation between the company and third parties, on the other. The shareholders are, by a quasi contract, bound to submit their relations with the company to the law in force at its statutory seat; debtors or creditors are entitled to rely upon the law of their own country, if that be the real seat of that branch of the company's trade with which they have had to do (Florence Land Company v. Guarducci; Appeal Court of Lucca, 9th April 1880)."

"In England and Scotland, the possession of an agency by a foreign company will give jurisdiction to the English or Scotch Courts, in matters arising out of contracts made in the course of the business carried on by these agencies or connected with them (Lindley, page 1485; Mackay, Practice of the Court of Session, Vol. I. p. 182)." *

Books.

Merchant's Books. In order to participate in Merchant's the privileges of the lex mercatoria, the trader is bound to keep proper books, of which the principal is the journal. In this must be entered, day by day, in order of date and without interpolation of blank spaces or marginal notes, his claims or assets and debts, his commercial transactions, drafts, acceptances, his engagements and generally all he receives and pays, without exception. The above is required independently of such other books as are customary in trade, though not explicitly required by the respective Municipal Law. The trader is also bound to preserve the letters he receives and to keep a copybook of those he despatches. He is bound, to draw up annually, in a separate register, to be kept for that purpose, a balance sheet and statement of the position of his affairs and to affix his signature thereto.

Books as evidences

in Law Courts.

The keeping of proper books is of the utmost Merchant's importance to a trader, for by general principle of the lex mercatoria, whenever a transaction is not absolutely denied or when its existence is generally established, established, commercial books, regularly kept and confirmed by oath, or in case of demise of the trader, furnish proof between traders, with regard to their commercial dealings, as to the date or time of the transaction

*Note by G. R. GILLESPIE on § 41 of Prof. von Bar's work, above cited, page 156.

and the delivery, the quality, quantity and price of the goods. Copy-books of letters, properly kept, are likewise admitted in evidence in commercial suits.

With regard to the judicial exhibition of mercantile books, the following rules are generally observed by Law Courts.

1o. No one can be compelled to exhibit his books, balance sheets or other papers relative thereto, except on behalf of persons immediately interested, either as heirs or as concerned in a mutual transaction, as partners or as the party appointing administrators or managers, and lastly in case of bankruptcy.

2o. In the course of a law-suit, the judge, at the request of one of the parties, or ex officio, may order the books to be exhibited, that he may cause the same to be inspected or extracts to be made therefrom, respecting the contested points.

3°. Should such books be kept at another place than that where the Court, before which the case is pending, holds its sittings, such Court is at liberty to rule that the party concerned shall procure, within a fixed limit of time, a judicial inspection and report of the points in litigation out of the respective books, through the proper legal authority at the place where those books etc., are kept.

4°. The party who either neglects to comply with this order of the judge and fails to prove the impossibility to get access to his commercial books and papers, and thus fails to exhibit his books, or refuses to do so, when his adversary is willing, on his side, to comply with the demand on his books and papers, prejudices his own cause, as the judge may accept the adversary's sworn testimony as conclusive evidence.