THE CUBA REVIEW 



New Cuban Law on Sugar Crop Financing 



On March 2, 1922, the Cuban Congress passed a new law affecting liens on 

 growing crops. The law was approved by President Zayas and published on March 

 6. 1922. This legislation is of vital importance in the financing of the Cuban sugar 

 industry, as chattel mortgages or liens on growing crops have always been a subject 

 of much discussion, and many American bankers and merchants have made advances 

 against the same under an erroneous interpretation of the Cuban law. A translation 

 of the new law has been prepared for the Division of Commercial Laws, U. S. 

 Department of Commerce, by a competent adviser on Cuban laws, and immediately 

 following the text will be found an interpretative opinion by a prominent Cuban 

 authority, pointing out the main differences between the old and the new law and 

 their bearing upon the subject of sugar crop financing. 



Chapter 1.- — Contracts of Agricultural Financing 



Article 1. The contract of agricultural financing is that by virtue of which the 

 owner, possessor, usufructuary, lessee, or colonist of a rustic estate, or a part thereof, 

 encumbers the fruits or proceeds of same, for the years or harvests which may be 

 specified, to answer for the payment of the sums which he may receive in loan, their 

 interests and other responsibilities, whether legal or stipulated, for the purpose of 

 applying the sums received to the expense of administration, maintenance, cultivation, 

 exploitation, improvements, building, installation of machinery, and anything else which 

 may tend to the improvement of the estate dealt with. 



Art. II. The failure of the debtor to comply with the application to be given 

 to the loan shall not prejudice the rights and preferences conferred upon the creditor 

 by this law. 



Art. III. The term for which the contract of agricultural financing may be 

 entered into shall be adjusted to the following rules: 



(a) If the debtor for financing is the owner, possessor, or usufructuary, he may 

 not encumber the fruits or proceeds for a term of more than three years or three 

 harvests. 



(6) If he is a lessee or colonist, he may encumber them only for the duration 

 of the lease or colonization agreement. 



(c) If the contract or leasing or colonizing is extinguished without the consent 

 of the lessee or colonist, the encumbrance of the fruits or proceeds shall be extinguished 

 from the same date. 



Chapter 2. — Contract of Colonizing 



Art. IV. The contract of colonizing is that by virtue of which a person to be 

 called colonist, acquires from the owner, possessor, usufructuary, or lessee of a rustic 

 estate or a part thereof the right to sow canes, making the stumps and fruit thereof 

 his own for the time stipulated, paying the compensation which may be agreed upon 

 either in money or in sugar. 



Art. V. In case the contract of colonizing is entered into as a consequence of 

 a contract of leasing, it shall be null for all the time which it may exceed the term 

 of the lease, and it shall cease also whenever the lease ceases by reason other than the 

 consent of the lessee. 



Art. VI. The contract of colonizing makes the stumps and the canes independent 

 from the dominion of all other rights ad rem on the immovable property for the time 

 of its duration. 



Chapter 3. — Contract of Grinding of Cane 



Art. VII. The contract of grinding of cane is that by virtue of which the person 

 or entity representing a sugar mill, as party of the first part, and the owner, possessor, 

 usufructuary, lessee, or colonist of estates or lands, as party of the second part, obligate 



