Libro III Título II. De los procedimientos

The negotiable action shall be exercised:

1º.In case of lack of acceptance or partial acceptance.

2º.In case of lack of payment or partial payment.

3º.When the drawee or the acceptor is declared in a state of bankruptcy, judicial liquidation, suspension of payments, insolvency proceedings, or another equivalent situation.

The negotiable action is direct when it is brought against the principal obligor or his guarantors, and it is an action for recourse when it is exercised against any other obligor.

Through the negotiable action, the last holder of the instrument may claim the payment of:

1º.The amount of the instrument, or, as the case may be, of the part not accepted or not paid.

2º.Default interest at the legal rate, from the day of its maturity.

3º.The expenses of the protest, as the case may be, and the other legitimate expenses, including the expenses of the proceeding.

4º.The commission of exchange between the place where the bill of exchange should have been paid and the place where it is made effective, plus the expenses of situation.

If the instrument is not yet due, the discount, calculated at the legal interest rate, shall be deducted from its amount.

The party liable in recourse who pays the instrument may demand, through the negotiable action:

1º.Reimbursement of what he has paid, less the costs to which he has been sentenced.

2º.Default interest at the legal rate on such sum, from the date of its payment.

3º.The collection expenses and the other legitimate expenses, including the judicial costs.

4º.The commission of exchange between the place of his domicile and that of the reimbursement, plus the expenses of situation.

Against the negotiable action only the following exceptions and defenses may be opposed:

1º.The incompetence of the Judge.

2º.The lack of legal standing of the plaintiff.

3º.The one founded on the fact that the defendant was not the person who signed the instrument.

4º.The fact that the defendant was legally incapable when signing the instrument.

5º.Those of lack of representation or of sufficient powers of the person who has signed the instrument in the name of the defendant.

6º.Those founded on the omission of the requirements that the instrument must contain and that the law does not expressly presume.

7º.The alteration of the text of the instrument, without prejudice to the provisions regarding the signatories subsequent to the alteration.

8º.Those relating to the non-negotiability of the instrument.

9º.Those founded on the release or partial payment, provided that they appear on the instrument.

10º.Those founded on the consignment of the amount of the instrument or on the deposit of the same amount, made in the terms of this law.

11º.Those founded on the judicial cancellation of the instrument, or on the judicial order to suspend its payment.

12º.Those of prescription or expiration, and those based on the lack of the requirements necessary for the exercise of the action.

13º.The personal ones that the defendant has against the plaintiff.

When the defendant opposes the exception that the signature attributed to him is not his, nor that of a person who has represented him, even apparently, if he declares these points, under oath, before the judge, the attachment that has been levied shall be lifted.

The plaintiff may prevent the attachment from being lifted if he gives sufficient surety, in the judge's opinion, to answer for the damages caused to the defendant.

The holder of the instrument may exercise the negotiable action against the drawer, the acceptor, the endorsers prior to him and the guarantors, either jointly or only against one or some of them as principal debtors, without losing in this case the action against the others and without obligation to follow the order that the signatures keep on the instrument. Every obligor who has paid the instrument shall have the same right against the prior signatories.

The last holder of the duly protested instrument, as well as the party liable in recourse who has paid it, may collect what the other signatories owe them by virtue of the instrument:

1º.Charging them and asking them to credit to their account the amount of the instrument plus the legal expenses and costs.

2º.Drawing on them at sight, in favor of themselves or of a third party, for the value of the instrument, plus the legal expenses and costs.

In both cases, the corresponding notice or bill of exchange must be accompanied by the original instrument, with the respective received annotation, by the certified copy of the record of protest if necessary, and by the account of the legal expenses and costs.

The negotiable action of the last holder of the instrument expires:

1º.For not having presented the instrument in time for its acceptance or for its payment.

2º.For not having drawn up the protest in the terms of this Code.

If the holder must mandatorily perform some act in relation to the instrument, and the last day of the respective time limit is a non-business day, the time limit shall be considered extended until the next business day. The intermediate non-business days shall be counted within the time limit. In no term shall the day serving as the starting point be counted.

The terms on which the expiration of the negotiable action depends are not suspended except in cases of force majeure and are never interrupted.

The direct negotiable action prescribes in three years from the day of maturity.

The negotiable action for recourse of the last holder shall prescribe in one year, counted from the date of maturity and, as the case may be, from the conclusion of the presentation time limits, or, if the instrument is with protest, from the date on which the protest has been drawn up.

The action of the obligor in recourse against the other prior obligors prescribes in six months, counted from the date of the voluntary payment or from the date of notice of the lawsuit.

The causes that interrupt prescription with respect to one of the obligors on the instrument do not interrupt it with respect to the others, except in the case of the signatories of the same act.

The collection of a negotiable instrument shall give rise to the executive procedure, without the need of recognition of signature or of another requirement, unless the protest is legally necessary. For the purposes of the procedure, the domicile of the debtor shall be that appearing on the instrument.

The pledge bond must be presented to the corresponding warehouse for its collection, which shall be governed by the provisions of the specific law.

Anyone who has suffered the loss, theft, total or partial destruction of a registered negotiable instrument may request its cancellation, and, as the case may be, its replacement, without the need of judicial intervention, directly from the person in charge of the registry of the instruments; the latter may, if he deems it necessary, require the prior granting of a guarantee.

If a negotiable instrument to order or to bearer deteriorates in such a way that it cannot continue circulating, or is destroyed in part, but in such a way that the data necessary for its identification remain, the holder may obtain, judicially in the voluntary proceeding, that the instrument be replaced at his cost, if he returns it to the principal obligor. Likewise, he shall have the right that the new instrument be signed by the signatories of the original instrument, to whom it is proven that their initial signature has been destroyed or erased.

If any obligor disobeys the judicial order to sign the new instrument, the judge shall sign in his default.

Anyone who has suffered the loss, theft or total destruction of a negotiable instrument to order may request, judicially in the voluntary proceeding, its cancellation and, as the case may be, its replacement.

The holder who is in any of the cases mentioned in the previous article is obliged to carry out the following steps:

1º.To give notice to the drawee or acceptor, in an authentic manner, of the loss or destruction of the instrument, so that he excuses himself from acceptance or payment.

2º.To request, as the case may be, from the competent tribunal, that the drawee be prohibited from acceptance or payment. If the instrument has been accepted before its loss, it shall be requested that payment be prohibited, without the prior granting of a surety by the person presenting the instrument for payment.

3º.To give prompt notice of the loss to the drawer and to his last endorser.

The competent judge to hear the proceedings mentioned in the two previous articles shall be the one of the place where the principal obligor must fulfill the obligations imposed on him by the instrument.

The application for cancellation and replacement must contain the essential data of the instrument, and if some of the requirements are blank, the data necessary for the complete identification of the document. Notice of the application shall be given to those whom the plaintiff designates as signatories of the instrument.

An extract of the application shall be published in the Official Gazette and in another of the newspapers of largest circulation in the country.

The judge, if the plaintiff grants sufficient guarantee, shall order the suspension of the fulfillment of the obligations derived from the instrument and, with the restrictions and requirements he indicates, shall empower the applicant to exercise those rights that could only be exercised during the cancellation proceeding.

The cancellation proceeding shall interrupt prescription, and the terms on which expiration depends shall be suspended.

After thirty days from the date of the publication of the application, if no opposition is filed, a decision ordering the cancellation shall be issued.

The cancellation decision shall become final thirty days after the date of its notice, if the instrument has already matured, and thirty days after the date of maturity, if it has not yet matured.

If the defendants deny having signed the instrument whose cancellation is requested, the proceeding shall be terminated as to them; but, if it is proven that they had indeed signed the instrument, the pertinent certification shall be made so that the provisions relating to the prejudice be applied to them.

If the obligors refuse to make the payment, the person who obtained the cancellation may rely on the certified copy of the judgment, in order to demand the obligations derived from the instrument.

If the instrument is already matured or matures during the proceeding, the plaintiff may ask the Judge to order the signatories to deposit, at the disposal of the Court, the amount of the instrument.

The deposit made by one of the signatories releases the others from the obligation to make it. If several make it, only the deposit of the one who releases the greatest number of obligors shall subsist.

If, when the cancellation of the instrument is decreed, it has not matured, the Judge shall order the signatories to sign the substitute instrument. If they do not do so, the Judge shall sign it in their default.

The new instrument shall mature thirty days after the maturity of the cancelled instrument.

The third party who opposes the cancellation must exhibit the instrument.

Even in the case of not having filed opposition, the holder of the cancelled instrument shall preserve his rights against the person who obtained the cancellation and the collection of the instrument.

Instruments to bearer shall not be cancellable. Their holder may, in the cases established in article 634 of this Code, judicially notify the issuer of the loss or the theft. Once the term of prescription of the rights incorporated in the instrument has elapsed, if a holder in good faith has not presented it for collection, the obligor must pay the principal and the accessories to the complainant.

If it concerns shares to bearer, the replacement shall be made in accordance with the provisions of article 129 of this Code.

Negotiable instruments may be recovered in the cases of loss or theft.

The recovery action shall proceed against the first acquirer and against those who have acquired it knowing or having the duty to know the defects of the possession of the person who transmitted it to them.