REECE V. ARIELA
REQUEST OF CERTIORARI to review a SENTENCE of Angel González
Roman, J. (Mayagüez), that declared that in certain demand to receive a money not
it proved the capacity of the manager of a corporation to accept in dación in payment one
merchandise that would replace the owed money. Revoked.
Jose M. Biaggi Junquera, lawyer of the petitioner; Manuel E. Miranda, lawyer of
resorted.
The JUDGE ASSOCIATE MR. ALONSO ALONSO expressed the opinion of the Court.
We expressed ourselves on the nature of a mercantile contract, on inherent faculties
of the regional managers of a corporation and on the dación in payment of the due thing.
§ I
The 5 of December of 1985 Reece Corporation, in ahead Reece, were in the Court
of District, Room of Mayagüez, one demands in collection of money against Ariela, Inc., in
it advanced to Ariela, protesting to him the amount of $4.037,01 by concept of debts arisen
by slow canons of machinery renting.
The demand-recurrent one, Ariela, answered the demand and denied the existence of the debt,
alleging that the amount of $3.157,48 had paid by means of “dación in payment” in
merchandise and the owed balance of $879,53 in check.
Page: 274
The Court of District concluded then that the demanded one did not have anything to the plaintiff ,
it had happened a dación in payment. The Court, found proven that the plaintiff -
who on sale dedicates and renting of machines of seam and pieces of
spare part reorganized its corporative function in the 1980. As a result of that process of
reorganization, Reece notified the demanded part to him, that could not rent to him in
subsequent the machines to sew, but that were at readiness to sell them to it if she
thus it interested it.
The demanded one - who is dedicated to the business of manufacture of clothes informed to him to Mr. Kemp
House, Regional Manager of Reece in Puerto Rico, that was not On guard of being able
to buy the machines to him to sew and that would come to give back them to it. It indicated to him in addition, that
it would give back all those pieces that had acquired like replacements or spare parts.
These pieces were in possession of Ariela, since by virtue of the contract of
renting, she came forced to give maintenance to the machines and to use
mentioned pieces to conserve the machinery in good state.
The Court of District concluded in addition, that according to an agreement obtained between Ariela
and the regional manager of Reece, Ariela sent to Reece all the pieces to him that were in
its power, whose value ascended to $3.157,48, to settle with it part of the debt.
Jointly, and in fulfillment in the agreement, the demanded corporation sent
check by the amount of $879,33 with which it settled the totality of the debt.
The Court of District concluded that Reece did not honor the agreement or commitment that Mr.
Kemp House had carried out with Ariela. Also it concluded that Reece accepted
originally the payment agreement, but that later revoked it of unilateral form
and without explaining the reasons it stops
Page: 275
to have taken that determination. In view of those facts, the Court declared without place
demand.
The Superior Court, to which the opinion of the Court of District was appealed, revoked
determination of District, to understand that the demand-recurrent one had to prove that
Sr.Kemp House like Regional Manager of Reece, had the faculty to accept in
dación in payment the pieces given back instead of the suitable money. In Opinion of the Court
Superior test over the capacity of Mr. had not gone Kemp House to force a
the corporation and for that reason could not be concluded that the plaintiff had accepted like
dación in payment the value of the totality of the pieces.
It does not conform, Ariela resorts before us by means of resource of Certiorari.
The 18 of November of 1987 we ordered the plaintiff who showed cause by which
we did not have to revoke Sentencia of the Superior Court of Puerto Rico, to consider
that Mr. Kemp House was authorized because of position that occupied and by the form
in which it had carried out it, to force to the corporation in taken transaction a
end.
The plaintiff-resorted one has appeared. In its writing it raises to us that of to have existed
some contract between the parts, he himself must tipificar itself like mercantile, in whose
case, the declaration of witnesses would not be sufficient by itself to prove the existence of
contract. Article 82 of the Code of Commerce of Puerto Rico, 10 L.P.R.A. 1302 ;[Note:
1] Vilá & Hnos.,
[Note to wears]
[Note: 1. “They will be valid and produce obligation and action in judgment the contracts
mercantile, nobodies that are the form and the language in which they are celebrated, class a
that the amount corresponds and that they intend, provided its existence consists
by some of the means that the civil right has established. Nevertheless,
declaration of witnesses will not be by itself enough to prove the existence of
contract, whose quantity exceeds three hundred dollars, not to concur with some other
test . . . “(replaced emphasis) [Aim notices]
Page: 276
Inc. v. Owens Illinois, 86 JTS 83, opinion of 21 of November of 1986. It indicates in addition
resorted corporation, that corresponded to him to the recurrent part to demonstrate that Reece
it had accepted the dación in payment, propose by Ariela.
§ II
We will begin discussing if the purchase constitutes a contract of mercantile transaction
by part of Ariela, pieces of spare part for the maintenance of the machines to sew
rented by the plaintiff, and, of being it thus if the agreement of acceptance of the supply of
dación in payment obtained between Mr. Kemp House and Ariela became one of
mercantile nature.
[1] the Art. 243 of the Code of Commerce of Puerto Rico arrange the following thing:
“The transaction of movable things Will be mercantile to resell them, well in the same one
it forms in which they were bought or in another different one, with spirit to profit in
reventa. “ 10 L.P.R.A. 1701 . (replaced emphasis).
[2] Also Article 244 (1) arranges that:
They will not be reputed mercantile: (1) the purchases of effects destined to the consumption of
buyer or of the person whose order is acquired. “ 10 L.P.R.A. 1702 (emphasis
replaced).
[3-4] the comercialidad element that distinguishes to the mercantile transaction of the civilian,
it is recognized mainly by the intention of the buyer. In the mercantile transaction
the buyer is moved by the double intention to resell the things later
bought and to obtain
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profit. Needing that intention or intention the transaction lacks the mercantile character
that it distinguishes it of those of the civil traffic. Rodrigo Uría, Mercantile Right, 1975, p. 474;
Garrigues Joaquin, Treaty of Mercantile Right, Bowl. II, p. 70. For that reason the purchase of
machinery or of pieces to make the production of an industry, is of civil nature,
then the object is not destined to reventa, but to the consumption or use by the purchaser.
The Spanish jurisprudence has been consisting of concluding the previous thing in its interpretation
of analogous dispositions to ours. See JTS 27-1-1945, Rep. Ar. 120/1945; JTS
I-VII-1947, Rep. Ar. 927/1947. JTS 7-SAW, Rep. Ar. 3285/1969; JTS 14-V-1979,
Rep. Ar 1828/1979; JTS-12-XII-1981, Rep. Ar. 5280/1981. Thus, when analyzing a contract
celebrated between retailers and in who one of the parts bought machinery for
olive oil extraction, the Supreme Court of Spain indicated:
“… [L] to essential characteristic of the purchase mercantile sale is the intentionality of
buyer, that is to be the one to thus resell the things with profit spirit and being it and
referred the contract debated to the transaction of machinery for the molturación of
olive, without spirit to resell the mill, neither its machinery, nor its pieces to obtain
profit in reventa, the contract must be reputed like transaction civil and submissive
rules of the Civil Code. “JTS 7-SAW; Peace-Plow, Innocent, an Economic Theory
On the Mercantilidad de Compraventa, Yearbook of Civil Right, 36 Us. 3 (1983),
p. 976.
The pieces that to him Ariela to Reece bought would use for the consumption and use of the own one
company and does not stop
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reventa with profit spirit. It is for that reason that we cannot describe this transaction
carried out between the parts like one of mercantile character. We cannot either describe as
mercantile the agreement obtained between Mr. Kemp House and Ariela to accept pieces
like dación in payment, since that agreement has its génesis and is sequel of a contract
of civil nature.
[5] On the other hand, the fact that the contracting parts in cars are both
retailers, do not turn the renting of machinery and the sale of pieces acts
mercantile. Let us see:
[6] In today, Pacheco v. National Western Life Ins., opinion of 30 of June of
1988, 88 JTS 93, __DPR__, 1988) we expressed that to define what constitutes an act
of commerce they have been developed to objective theories, subjective and the theory of the accessory, that
it attributes “to mercantile character to the calls transactions commercial by relation”. See yourself,
Bergamo Llabrés, Alexander, Institutions of Mercantile Right, T.I., Ed. Reus, Madrid,
1951, págs. 55-56; Martinez Val, Jose Maria, Mercantile Right, 1979, pág.24.
[7] the subjective theory agrees with the established thing by the Code of German Commerce that
in its Art. 343 define transactions commercial like “all the made ones by a retailer,
that they belong to the operation of its mercantile industry ". Within this system
straight mercantile it is the right of a class of people: The retailers. But they are
excluded from he himself the acts made by a retailer outside such sphere
professional. Martinez Val, Jose Maria ob. cit., p. 24. Fish market Pink, Inc. v. Lozada,
116 D.P.R. 474 (1982).
[8] In objective theory the mercantile right rather happens to be the own right of one
class of acts, the acts of
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commerce, which are not solely the made ones by the retailers in their character
like such. It lowered to east system the attention is transferred of the person to the act and it is broken contact
the act of the person of the retailer. Inc. Pink fish market v. Lozada, supra: Garrigues
Joaquin, Treaty of Mercantile Right, Volume I, Bowl. I, p. 177.
Uría as far as the doctrinal definition of the mercantile act comments, that the Code of
Commerce Spanish-of which it comes ours-responds to an objective conception of
straight mercantile. This it is mainly centered in the nature of the acts or contracts
in order to attribute to them or to not qualification it of mercantile, independently of the people
that they were in them.
[9-12] Interpreting article 2 of the Code of Commerce of Puerto Rico, we have
outstanding that he himself rejects the enumeration and the doctrinal definition like criteria
in order to establish what constitutes a transaction commercial and opens a wide field to
evolution of the concept according to the changes that happen in the economic reality.
Fish market Pink v. Lozada, supra. “This article, alludes by force to two types of acts:
regulated exclusively by the Code of Commerce and the regulated ones as much by
this one like by the Civil Code. This second group, to which pertenec [and]…
transaction [,]… emphasizes with particular rigor the difficulties in the identification of the act
mercantile. Their analysis demonstrates that the differentiation criterion is in effect multiple….
[By it l] you distinctive factors of the nature, commercial or civil, of a transaction
they vary of case to case…. Outside the particular requirements to different businesses it exists, no
, a wire, a common element between diverse mercantile acts; his
purpose, its connection with the mercantile traffic, its habitualidad, his
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attention to the exchangeable value of the things. “Fish market v. Lozada, supra, p. 4798
(replaced emphasis).
[13] the fundamental criterion that it must be had presents/displays, is that the mercantile right is
straight own of a class of acts. Still in the subjective system of nature but,
it must start off of the act to know who are the retailers. Of there, that cannot
to exist a transaction commercial merely because it makes a retailer. Garrigues, ob.
cit. págs. 177-178.
In the case that occupies an evaluation to us of the transactions made between the parts,
it demonstrates to us that in cars he is not present none of contracts tipificados in
Code of Commerce like mercantile contracts. Therefore we cannot
to assign mercantile character to him to the transactions made between the recurrent one and resorted
by the single fact that both are retailers. It would entail that we adopted one
norm under which we would describe like mercantile to all act in which, with
independence of their substantiva nature, took part two retailers.
[14] we do not have Either to ignore the norm adopted by this Court in terms
of which that part that invokes the applicability of the Code of Commerce to the controversy
it has the weight of the test on its applicability. Fish market Pink, Inc. v. Lozada, supra.
The plaintiff-resorted one of cars has not fulfilled this requirement. It arises in addition to
the cars, that went in the appeal to the Superior Court when it raised by first time
applicability of the Code of Commerce to the controversy and the supposed mercantile nature
of the transactions they will make between the parts.
Page: 281
§ III
The plaintiff argues secondly, who the Regional Manager of Reece, Mr. Kemp
House, did not have authority to force to the corporation by means of the agreement obtained between
the parts, and that own Mr. House was conditional the return of the pieces like
credit, to the acceptance of the same ones by Mr. Clark Blair, who was Regional Director
of Reece.
Soon of it unites careful examination of the presented/displayed documentary evidence in cars, As well as
of the same transcription of the Vista of the case celebrated before the Court of District of
Port Rico, who had before himself the Superior Court, we concluded that Mr. House like
Regional manager of Reece and Ariela, reached an agreement in which Reece would accept
like dación in payment the pieces that Ariela had given back, and that the owed amount
rest would be paid in check. Once it was obtained east agreement is that Reece
it revokes of unilateral form, without disclosing the right that it was for it.
Some as far as the fact that does not exist controversy Mr. Kemp House occupied
position of Regional Manager of Reece in Puerto Rico and that it had to his position
businesses of the corporation within Puerto Rico. (YOU p. 34). Mr. You accept, who
it carried out like President of Ariela at the time of being celebrated the transaction
controverted, it testified during the judgment that Mr. Kemp House was the representative of
Reece in Puerto Rico. Also it indicated that all the businesses that his made
corporation with Reece, negotiated with Mr. House. (YOU p. 59).
Now well, had Mr. Kemp House like Regional Manager of Reece Corp.,
authority to make the different transactions obtained between and that they reported
place to the controversy of cars? We concluded that yes.
[15-16] In absence of corporative documents or another nature that they define with
precision the powers and the authority
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of a general manager, it is understood that this one has like general norm, the authority
implicit to carry out those functions that are framed within the scope of
ordinary subjects of the corporation. Fletcher Cyclopedia of Corporations, Bowl. II A. sec.
667, pág 239; Henn Alexander; Laws of Corporations, p. 599-600. MapleIsland Farm
Inc. v. Bitterling, 209 F2d 867 (1954). The position entails the concession of that degree of
appropriate authority for the accomplishment of the necessary acts for the suitable direction
of the corporative businesses. Fletcher Cyclopedia of Corporations, ob. cit., Bowl. II To, pág
239. In addition to the authority specifically delegated, the corporative managers can
to have an implicit authority, or by the nature of its positions or the way
in which the businesses of the corporation have been lead in the past. Hamilton,
Robert, The Law of Corporations, p. 185 (1983).
[17] Numerous corporations has designated general managers under the title of
general manager and regional manager. Henn, ob. cit., p. 587; Fletcher Cyclopedia of
Corporations, Bowl. II, Sec. 272, pág 32; Sun Printing & Publishing Assoc. v. Moore, 183
U.S. 642 (1902). In that sense it has been maintained that the term of regional manager has
a connotation similar to the one of general manager. It is understood that the regional manager is
that person who has the direction and the control of the corporative subjects in one
region and that has sufficient authority like jeopardizing to the corporation in
scope of the ordinary businesses of this one. Franklin Life Ins. Co. v. Hill, 220 SE2d 707
(1975). The basic difference between the general manager of a corporation and the manager of
a district or region, resides in which the last one shows an authority that falls on one
part or specific section of the business, Fletcher, ob. cit., Bowl. II To, sec 666, pág 235.
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[18-19] the corporation that entrusts to a manager the general supervision to him of one
division or section of its business, in absence of documentation in opposite, has a
this manager with those coexisting prerogatives of general management with the business
or operations that have trusted to him. For that reason, the corporation is forced by
contracts that this one did within the parameters of its authority. Fletcher, ob. cit., Bowl.
II To, sec. 670, p. 251. This way, the manager of division of a corporation
manufacturing, it has the implicit authority to make those contracts directed to
product sale, without the necessity to refer the orders of purchase to the central office
of the corporation, especially when in previous agreements or contracts between those same ones
parts, never the ratification of the contract by the corporation was required. Fletcher, ob.cit.,
Bowl II To, sec. 670; F. W.Stock & Sons v. Owens & Barber, 105 587 (1921).
[20] However, the authority of a corporative manager extends to those matters or
transactions that are incidental to the ordinary subjects of a corporation. Fletcher,
ob. cit., Bowl. II sec. 667, pág 840. At moment at which a general manager has before himself
extraordinary subject, would need the authorization corporative organisms u
corresponding officials to jeopardize to this one. Of not having the manager that
authorization, would be acting outside the scope of its implicit authority. Porshin v.