Arias v. Torres Córdova de Luff

78 P.R. 178

• Court: Supreme Court of Puerto Rico
• Decided: April 29, 1955
• Docket: No. 11172
• Status: Published

Opinions

ON MOTION FOR RECONSIDERATION

Mr. Chief Justice Snyder

delivered the opinion of the Court.

The plaintiff-appellant has filed a motion for reconsideration of our per curiam opinion and judgment of May 17, 1954 affirming the judgment of the Superor Court in favor of the defendants in this case. Our per cwriam opinion reads as follows:

“The plaintiff sued the defendants in the Superior Court for collection of money. After a trial on the merits, the trial court entered judgment in favor of the plaintiff. However, after the defendants filed a motion for reconsideration and furnished the court with the transcript of the evidence, it set aside its first judgment and entered a new judgment in favor of the defendants.

“On appeal, the only assignment of error is as follows:

“ ‘The Superior Court, San Juan Part, through Judge Rodolfo Ramírez Pabón, committed manifest error in its judgment of January 13, 1953, the judgment appealed from here, the said judgment being contrary to the testimony and in addition contrary to law.’

“There was a sharp conflict in the testimony in this case. The result depends on whether the plaintiff or the defendant Carmen Torres told the truth in their respective testimony with reference to the transaction which took place between them. Both parties concede that at the beginning of August 1949, the plaintiff delivered to the defendant Carmen Torres, in three different sums and on three different occasions, $4,334. The plaintiff testified that she made loans to Carmen Torres for several days, without interest, which came due on August 31, 1949, and that on the latter date Carmen Torres delivered to the plaintiff three checks amounting to $4,805, which were returned by the bank because of insufficient funds. On the other hand, the defendant testified that she knew one Elias Lopés, who borrowed money and paid a high interest thereon; that she did business with him, lending him her own money and recommended him to her friends; that Carmen Arias called her in order to give her money to place it with Lopés; that before the delivery of the sums of money in August 1949, Carmen Arias on a number of occasions had given her money to place it with Lopés, and Lopés had paid it with interest; that ■Carmen Torres made nothing on these operations which she ■did for her friend; that Lopés customarily gave a document as a receipt, but at times the document was late and then she, Carmen Torres, gave those checks. She gave the checks, not on August 31, but on August 3, 10 and 5, that is to say, the three dates in 1949 on which Carmen Arias gave her the money that never was repaid; that it was not paid because Lopés disappeared at that time and when he reappeared it was ‘in order for the trial to be held.’

“In addition to the three checks, the plaintiff identified and the defendants thereafter presented in evidence, a paper, the major part of which is in a large handwriting, and which the plaintiff identified as hers, and the rest in a small handwriting, which the plaintiff identified as that of the defendant, Carmen Torres. On this paper the words ‘interest’ and ‘capital’ were written by the plaintiff. The paper apparently shows that the plaintiff had made a loan to the defendant of $4,334 and would receive $4,805 in less than a month, and that the difference of $471 was interest. (This would of course be usurious.) The complaint was originally for $4,805, including interest, although during the trial the plaintiff requested permission, which was granted, to amend the complaint in order to ask for only the sum of $4,334.

“The record contains sufficient evidence to support the finding of the trial court that the defendant Carmen Torres did not borrow any money from the plaintiff, but rather that she received money as an intermediary — in legal effect, as agent— in order to place it on loan with Elias Lopés, and that the checks made out in favor of the plaintiff were a sort of acknowledgment or receipt, which the defendant Carmen Torres gave the plaintiff when the document from Lopés for each loan made to him ‘did not come on time’. We shall therefore not interfere with the findings of fact of the trial court to this effect.

“The judgment of the Superior Court will be affirmed.”

When we issued the foregoing per curiam opinion,, we of course relied on the conclusion of the trial court that Carmen Torres told the truth as to the transaction between her and the plaintiff. The trial court stated — in coming to that conclusion — that “. . . it has given due weight to the circumstance that the plaintiff departed from the truth with, respect to a relevant part of her testimony, that is to say, she denied persistently that the loan made by her bore any interest, when the proof, especially the documentary evidence^ in the handwriting of the plaintiff herself, shows that the loan to which the plaintiff agreed was on the basis of interest, of usurious interest.” We think, under all the circumstances, that the trial court was entitled to weigh the evidence in this manner. In addition to the figures written by the plaintiff herself on the paper introduced in evidence, the checks made out by Carmen Torres and the original complaint filed herein by the plaintiff are both for $4,805, which includes the usurious interest. These documents tend to discredit the plaintiff’s story that the agreement between the parties was that when the plaintiff cashed the three checks, the plaintiff would reimburse Carmen Torres for the amount included as interest. And if this phase of the plaintiff’s testimony — which was adduced in order to counteract the possible defense of usury — was untrue, the trial court was entitled to take that fact into consideration in determining whether to believe the plaintiff that the loan was to Carmen Torres or whether to believe the latter that she was merely the plaintiff’s agent in making a usurious loan to a third party.

The trial court may also have been led to believe Carmen Torres’ version of the transaction between her and the plaintiff because the plaintiff’s testimony was improbable in other respects. The plaintiff testified that although she and Carmen Torres were old friends and the latter “.. . is a hard-working, honorable and good person . . .”, the plaintiff was not interested and did not find out why Carmen Torres needed the money, which constituted the plaintiff’s lifetime savings. She also testified that although the plaintiff visited Carmen Torres several times seeking to collect the loan, the latter never explained to the plaintiff why she could not pay her. It is unlikely that a person would lend her lifetime savings to a friend without finding out why the latter needed the money. Nor is it likely that an old and honorable friend would not explain why shé could not repay the loan. Under these circumstances it apparently seemed more plausible to the trial court (1) that the reason for the delivery of the money by the plaintiff to Carmen Torres was that the latter was acting as agent for the plaintiff in lending it at usurious interest to a third party, and (2) that the explanation of the non-payment of the loan was that the third party had pocketed the money and disappeared. Accordingly, the trial court did not believe the plaintiff’s testimony that because she trusted Carmen Torres the plaintiff obtained no receipts from the former for the loans the plaintiff made to Carmen Torres on three dates during August 1949, and that the three checks signed by Carmen Torres were given to the plaintiff on August 31, 1949 as payment to the plaintiff for such loans. On the contrary, the trial court placed credence in the testimony of Carmen Torres that the three checks, although dated August 81, 1949, were given separately by her to the plaintiff on each of the three dates she received sums of money from the plaintiff as receipts for the loans which the plaintiff was making to a third party through Carmen Torres as agent. We reiterate the statement in our per curiam opinion that we -find nothing in the record which enables us to interfere with the findings of fact of the trial court in this case.

In her motion for reconsideration the plaintiff insists on two legal points. First, she argues that under the Negotiable Instruments Law the checks issued by Carmen Torres to the plaintiff constitute contracts to pay the money claimed and that the defendants are not entitled to show that they were in fact receipts. If these checks were in the hands of a holder in due course, the defendants could not contend as against the former that they were in fact receipts rather than checks. But the plaintiff is the alleged payee. And as between the drawer and the payee of a check, under the circumstances of this case the drawer may show if she can by competent evidence that the instrument was in fact a receipt rather than a check by virtue of a collateral agreement between the drawer and the payee. This does not violate the parol evidence rule. To hold otherwise would be to close the door against proof by the defendants of attempted fraud on the part of the plaintiff.¹ 3 Williston on Contracts, revised ed., § 644, pp. 1853 et seq.; IX Wigmore on Evidence, 3d ed., § 2438, p. 122; 1 Restatement, Contracts, § 240, Comment b, p. 336, and Comment on Subsection (lb), pp. 337-8; Britton on Bills and Notes, pp. 570 et seq.; Bigas v. Monforte, 76 P.R.R. 289; Annotations, 20 A.L.R. 421, 54 A.L.R. 702, 105 A.L.R. 1346. Cf. II Restatement, Agency, % 324, Illustration 1, as to admissibility of parol evidence to reform a negotiable instrument; Annotation, 75 A.L.R. 1519. See also, 13 L.R.A. 649; 43 L.R.A. 449; 128 Am.St.Rep. 609; Davis v. Davis, 36 S.E.2d 417 (W.Va., 1945); Clarke v. Clarke, 152 P.2d 908 (Okla., 1944); Vincent v. Russell, 201 Pac. 433 (Ore., 1921); Brook v. Látimer, 24 Pac. 946 (Kan., 1890).²

The second point made on reconsideration by the plaintiff is that “ . . . the mere testimony of an alleged agent cannot establish agency unless there is corroboration with other evidence or there was an acceptance or an admission on the part of the principal and therefore the testimony of Carmen Torres de Luff in the lower court is not admissible nor can it be considered for the purpose of weighing the evidence in order to determine the credibility of the evidence.” The plaintiff relies on Maceira v. Pietri et al., 30 P.R.R. 545; Fuentes v. Canetty, 39 P.R.R. 160; Cayuga Linen etc., Inc. v. Crédito y Ahorro Ponceño, 41 P.R.R. 462; Fajardo v. Schlüter & Co., Succrs., 43 P.R.R. 263; and Pol v. Suau, Fiol & Co., 44 P.R.R. 67.

These cases do not stand, as the plaintiff seems to believe, for the proposition that the testimony of an alleged agent —as distinguished from his extra-judicial statements — is either inadmissible or must be corroborated. On the contrary, the Fajardo and the Cayuga Linen cases specifically hold exactly the opposite. In the Fajardo case we said at p. 264:

“We agree with the appellant that the district court was mistaken in holding that the testimony of an agent is not of itself sufficient to prove the agency. People v. South Atlantic Fruit Co., 25 P.R.R. 620 and Quintana Reyes v. Lejeune, 37 P.R.R. 682 do not reach such a decision. In Cayuga Linen, etc. Inc., v. Crédito y Ahorro Ponceño, 41 P.R.R. 462, we took occasion to correct a misstatement in regard to the same matter. In other words, the rule is that the declarations made to others are not admissible, but the testimony of the agent himself would tend to prove the agency. . . .”

In the Cayuga Linen case, we stated the correct rule at pp. 466-7 as follows:

“Nov/, while there is a general principle of law that the declarations of an agent are not competent to prove the agency, this only applies to declarations made out of court when quoted by others, and an agent is perfectly competent to testify as to his agency, although the weight of his testimony is a different matter, especially with respect to the extent of the agency. That an agent may so testify is a conclusion to be derived from the following authorities: Render et al. v. Ragan et al., 102 Pac. 427; Joslyn v. Cadillac Automobile Co., 177 Fed. 863; 2 C. J. 933, where it is said: ‘The rule that the declarations of an agent are, as against his principal, inadmissible to prove the fact of his agency does not apply to his testimony as a witness on the trial in which such fact is in issue.’

“Perhaps in some of our opinions we have not made this distinction as carefully as it should have been, because the matter was heretofore never directly involved. For example, in Orange Rice Milling Co. v. Barasorda, 40 P.R.R. 480, 482, we said that ‘Aside from the general principle that an agency is not to be proved by the sole declaration of an agent, the whole record does not reveal any such general agency.’ The case, however, did not turn upon the fact of agency, but the extent thereof, and the statement, so far as it applied to the testimony of the agent in that case, was mere obiter dictum.” ³

In People v. Compañía Insular de Transporte, Inc., 46 P.R.R. 576, which is not cited by the plaintiff, we said at p. 577: “The appellant bases its first assignment of error upon the contention that the testimony of the driver of the truck was inadmissible to show the relationship of the principal and the agent; but in the cases of Cayuga Linen, Etc., Inc., v. Crédito y Ahorro Ponceño, 41 P.R.R. 462, and Fajardo v. Schlüter & Co., Succrs., 43 P.R.R. 263, we decided that the agency might be proved by the testimony of the agent at the trial, a rule of evidence which is also applicable to criminal cases.” Cf. § 397, par. 5, Code of Civil Procedure, 1933 ed.

The doctrine enunciated in our cases is in accord with the rule in other jurisdictions. “The rule that ‘the declarations of an agent are not admissible to prove the fact of agency,’ refers exclusively to declarations made by the agent outside the courtroom, since it is well settled that when on the witness stand, the agent may testify what his principal told him to do, and by such testimony establish the fact of the agency. . . Annotation, 3 A.L.R. 2d 598, 599; 2 Restatement, Agency, § 285(a), p. 642; IV Wigmore on Evidence, % 1078, p. 125, and 1953 Pocket Supp., pp. 51-2,. citing numerous state cases, including People v. Compañía Insular de Transporte, Inc., supra; Posko v. Climatic Control Corp., 84 A. 2d 906, 909 (Md., 1951); Stern v. Dekelbaum, 34 A. 2d 272, 273 (Pa., 1943); Shama v. United States, 94 F. 2d 1, 5 (C.A. 8, 1938); Montgomery Production Cred. Ass’n v. M. Hohenberg & Co., 12 So. 2d 865 (Ala., 1943); Commercial Solvents v. Johnson, 69 S.E. 2d 716 (N.C., 1952); Johnson v. Associated Seed Growers, 3. N.W. 2d 332 (Wis., 1942); Bregman Screen & Lumber Co. v. Bechefsky, 83 A. 2d 804 (N.J., 1951); Freeborn v. Davis, 122 S.W. 645 (Tex., 1938); 23 U. Cin. L. Rev. 269 (1954); 37 Mich. L. Rev. 784; 47 Col. L. Rev. 1227; 60 Harv. L. Rev. 976. Cf. 2 Morgan, Basic Problems of Evidence, pp. 235-7 ; Rule 508, Model Code of Evidence; Annotations, 150 A.L.R.. 623, 80 A.L.R. 604.

In view of the foregoing, the testimony of Carmen Torres showing in detail that she did not borrow the money herein herself but was in fact the agent of the plaintiff in lending it to a third party was admissible in evidence. And her testimony, together with the documentary evidence and the other circumstances of this case, was sufficient to support the judgment of the trial court in favor of the defendants.

For the reasons stated, the motion for reconsideration filed by the plaintiff will be denied.

Mr. Justice Sifre did not participate herein.

1 As we have seen, the said proof was that — using cheeks drawn by Carmen Torres to the order of the plaintiff, but which by agreement of the parties would be receipts for money which the plaintiff gave Carmen Torres to deliver to a third party as loans by the plaintiff to the latter —the plaintiff was attempting to collect from Carmen Torres and her husband for usurious loans which the plaintiff in fact made to the third party through Carmen Torres acting as agent for the plaintiff.

2 The plaintiff relies on í } 538, 377-379, 404, 413, 414 and 436, Code of Commerce, 1932 ed., which are some of the provisions of the Negotiable Instruments Law; Note, 21 L.R.A.(N.S.) 704; 2 Daniel on Negotiable Instruments § 1646; Economy Fuse & Mfg. Co. v. Standard Electric Mfg. Co., 194 N.E. 922 (Ill., 1935); Camas Prairie State Bank v. Newman, 99 Pac. 833 (Ida., 1909); Deal v. Atlantic Coast Line R. Co., 144 So. 81 (Ala., 1932); 5 R.C.L. pp. 478 et seq. We find nothing in these authorities which supports the position of the plaintiff in this case.

3 Similarly, the dictum in Fuentes v. Canetty, supra, 162, that “. . . the testimony of an agent is not proof of the agency . . .” is erroneous; it is not in accord with our cases or the cases elsewhere.

The Maceira and Pol cases are not relevant here. The former merely holds that the testimony therein did not show “by positive proof” that an agent had authority to bind his principal by a lease for a term of years. In the latter we indicated that the testimony of the alleged agent in that ease had in fact been corroborated; but at no point did we say that such corroboration was required as a matter of law.