Caribbean Industries, Inc. v. Camacho García

71 P.R. 726
Supreme Court of Puerto Rico·Decided July 28, 1950·No. No. 10131·Published

Opinion

Mr. Justice Marrero

delivered the opinion of the Court.

The plaintiff Caribbean Industries, Inc., maintains two causes of action against Roberto Camacho Garcia. In support of the first it alleges that the latter owes it $4,988.93 for merchandise it sold and delivered to him. In the second it claims payment of $4,000 for merchandise delivered to the defendant on consignment.

The defendant denied all the averments of the complaint and maintained on the contrary that on or about October 30, 1947 the parties agreed that he would represent plaintiff’s products throughout the Island, on an exclusive basis, per payment of a commission of 7 per cent of all the sales made by the latter in Puerto Rico; that in March 1948 they reached an understanding by virtue of which plaintiff would consign on credit with him merchandise valued at $4,000, defendant ’binding himself on his part to answer only for the excess of the aforesaid $4,000, which excess the defendant would pay [728] to the plaintiff weekly and it being subsequently understood that the latter would not present for payment the checks drawn by the defendant in' its favor until authorized by the latter; that in violation of the agreement entered into, plaintiff presented for payment four checks drawn by him in the former’s favor without notifying him thereof, plaintiff having stopped payment of the checks in order to enforce the agreement above mentioned; that in violation of the existing contract, plaintiff filed its complaint without having at any time settled the accounts with the defendant; and that on the date of the filing of the complaint he had, unsold and on consignment, merchandise valued at $2,000. Wherefore, the defendant deems that the amount claimed is not an account stated, and that the action is premature. By way of counterclaim and cross complaint, he alleged, in brief, that early in 1948 the plaintiff authorized him to enter into an advertising campaign for its products, the expenses of which would be paid by the plaintiff; that in connection therewith the defendant incurred expenses amounting to $2,129.55, which plaintiff has not paid either in full or in part; that the plaintiff owes the defendant the commissions corresponding to the sales made in the plant by the former from December 1947 until October 1948, which the defendant estimates in more than ISjOOO.1 The defendant also alleged damages to his credit amounting to $5,000 due to plaintiff’s violation of the contract of commissions as well as damages amounting to $3,000 due to plaintiff’s presentation for payment of the four checks drawn on October 8; 1948.

The case was heard upon these allegations, both parties introducing abundant oral and documentary evidence in support of their respective contentions. After hearing the evidence, the lower court rendered judgment dismissing the complaint, on the ground that the two causes of action alleged [729] therein are premature, and granting the counterclaims, and consequently adjudging the plaintiff to pay to the defendant the amounts of $1,064.77 and $1,226.12 (sic),2 for. the advertising campaign and as commissions, respectively, plus costs and $250 as fees for defendant’s attorney.

Plaintiff appealed from that judgment. It charges the lower court with error in dismissing the two causes of action of its complaint on the ground that they were premature and in awarding $250 as fees for defendant’s attorney.

According to the findings of the lower court “the parties agreed on or about March 1948 that plaintiff would deposit on credit with the defendant merchandise valued at $4,000 without any limitation for payment thereof (save in the case that the parties ceased to do business between themselves and after a final liquidation) the defendant binding himself to pay periodically the balance of the aforesaid $4,000. That business between the plaintiff and the defendant continued in this fashion since that date, both parties establishing as a commercial custom the practice that the plaintiff would not present for payment defendant’s checks until he advised it at the proper time;' that in October 1948 the defendant made out four (4) checks in favor of the plaintiff totalling $4,142.58 which the latter presented for payment in bulk, on the same.day, without the usual previous notification to the defendant and without the latter’s advice; that plaintiff violated the commercial custom established to the effect that defendant’s checks would not be presented for payment until plaintiff were notified thereof by the defendant; ... to sum up, that on the date of the filing of the complaint ho cause of action had arisen in favor of the plaintiffs. The court likewise finds that the amount of $4,000 claimed in the second cause of action was a credit given by the plaintiff to the defendant rather than merchandise sold on consignment.” After stating that in commercial contracts, as well as “in civil [730] contracts the spirit of the obligation prevails,” and citing § 82 of the Code of Commerce,3 the trial court stated, among its conclusions of law, that “plaintiff and defendant established between themselves the practice of not presenting for-payment defendant’s checks until plaintiff was notified by the former in this sense”; that “since this practice was established between the parties, as a commercial custom it had legal force between both, and the defendant was entitled to trust this manner of payment”; and that “in view of the existence of a practice between the parties as to the manner of payment, plaintiff having violated said contractual obligation by presenting for payment defendant’s checks without the usual previous notice and the latter’s notification, no cause of action arose in favor of the plaintiff when the bank refused to pay said checks.”

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Caribbean Industries, Inc. v. Camacho García, 71 P.R. 726 (prsupreme 1950).

71 P.R. 726 (Caribbean Industries, Inc. v. Camacho García) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.