Escambrón Development Corp. v. Commonwealth

82 P.R. 662
CourtSupreme Court of Puerto Rico
DecidedMay 18, 1961
DocketNo. 12586
StatusPublished

This text of 82 P.R. 662 (Escambrón Development Corp. v. Commonwealth) is published on Counsel Stack Legal Research, covering Supreme Court of Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Escambrón Development Corp. v. Commonwealth, 82 P.R. 662 (prsupreme 1961).

Opinion

Mr. Justice Pérez Pimentel

delivered the opinion of the Court.

Since the commencement of this suit, the Commonwealth of Puerto Rico has challenged the jurisdiction of the courts to entertain the same, on the ground that it has not given its consent to be sued. This is a preliminary question, which if it prevails, would prevent us from deciding on the merits the controversy between the parties.

By a private contract executed on December 15, 1931, The People of Puerto Rico, represented by its Commissioner of the Interior and by the President of the Commission of [663]*663the Muñoz Rivera Park, Mr. Guillermo Esteves, by virtue of the power granted to him by Act No. 84 of August 2, 1928, leased to Mr. Félix Benitez Rexach a parcel of land in the surroundings of the place called “Escambrón” to be used for the construction of a beach resort and recreation place in the area of the Muñoz Rivera Park.

Clause 4 of said contract provides:

“4. — The lease shall be for a Fifteen-Year (15) term and will begin to run one year after the signing of this contract, whereby lessee Félix Benitez Rexach is bound to invest in the construction a sum not less than Thirty Thousand ($30,000) Dollars, and it being further agreed that for every Two Thousand ($2,000) Dollars invested by Félix Benitez Rexach over the stipulated sum of Thirty Thousand ($30,000) Dollars, he shall have the right to one more year of lease, provided, however, that the lease term will not be more than Thirty (30) years regardless of the sum additionally invested.”

Clause 5 provided that if after the end of one year Benitez Rexach had not yet started the construction, the contract would be rescinded and he would be obliged to pay to the Insular Government a compensation of $1,000 and clause 15 provided the following:

“15. — This contract is subject to the contingency that the Government of the United States conveys the land of the Es-cambrón Reservation to the People of Puerto Rico.”1

On March 10, 1932, Benitez Rexach wrote a letter to Guillermo Esteves, Commissioner of the Interior, informing him [664]*664that the difficulties which had arisen between the military authorities and the Insular Government had caused a delay in the construction of the beach resort at the Escambrón and he prayed that the lease contract be amended in the sense that the same “would begin to run one year after the date when the Federal Government officially conveys said grounds to the Insular Government, thereby paying the rent one year .after they have been released to me.”

By a letter dated March 17, 1932, the Commissioner of the Interior answered Benitez Rexach in the following terms:

“Your request is granted pursuant to clause 15 which appears in an additional explanatory note in the lease contract; that is, that your contract will go into effect on the same date those grounds are conveyed to the People of Puerto Rico, at which time you may dispose freely of the leased land, instead of going into effect on the date on which the contract was .signed as stated in clause 4.
“And for your own knowledge and proper purposes I write this letter.”

The beach resort constructed by Benitez Rexach was inaugurated on December 30, 1932.

On November 8, 1938, the Government of the United States executed a deed of conveyance of the Escambrón grounds in favor of The People of Puerto Rico, and from that date on, The People of Puerto Rico started to collect rentals from Benitez Rexach on said property.

By public deed of February 17, 1940, Benitez Rexach assigned his lease contract to the Escambrón Development .Corporation.

By deed of April 17, 1940, the then Commissioner of the Interior and President of the Park Commission, José Enrique Colom approved the lease contract in all its parts, made by Ms predecessor Guillermo Esteves, after the area of the leased parcel of land was confirmed, and after it was acknowledged that Benitez Rexach had invested in the con[665]*665struction of the beach resort more than $60,000 for which the term of the lease was automatically extended for the additional term provided by clause number four of the private lease contract of December 15, 1931.

In 1955 Escambrón Development Corporation filed an action for a declaratory judgment in the Superior Court, San Juan Part, against the Commonwealth of Puerto Rico alleging that there was a discrepancy in the interpretation of the lease contract mentioned so often, with regards to the date of its expiration. It alleges that respondent’s contention is that the term of the lease begins to run one year after the execution of private contract of December 15, 1931 and that the letter of the Commissioner of the Interior whereby this term is altered lacks validity and legal efficacy, while petitioner alleges that pursuant to the terms of said letter, the term of the lease goes into effect on November 8, 1938, date on which the leased grounds were conveyed to The People of Puerto Rico.

Respondent answered denying that plaintiff’s contention was correct and he further alleged that all the questions of fact or of law involved in the case were previously decided against petitioner’s predecessor in the case of Benitez v. Treasurer, 54 P.R.R. 712.

Respondent also challenged the jurisdiction of the court ■on the ground that it had not given its consent to be sued, an issue which was decided against respondent.

The case having been submitted on a stipulation of facts and the deposition of Guillermo Esteves, the trial court, after making findings of fact and conclusions of law rendered judgment stating that the lease term should go into effect on the date on which the leased grounds were conveyed to The People of Puerto Rico — November 8, 1938 — and that therefore said contract shall expire on November 8, 1968.

Respondent charges here that the trial court committed the following errors:

[666]*666“1 — The trial court committed a serious error of law in deciding that the lease contract expires on November 8, 1968.
“2 — The trial court committed a serious error of law in. assuming jurisdiction in this case.”

We believe that the second error was committed! and this forecloses us from considering and deciding the controversy regarding the interpretation of the lease contract.2-

The doctrine that the state is immune from suit is as; well-known as it is traditional. It has been repeatedly decided in this jurisdiction that the Government of Puerto. Rico; cannot be sued without its consent. Meléndez v. Commonwealth, 81 P.R.R. 798 and cases cited therein. It may, however, waive its immunity and it has done so through general and special Acts approved by the Legislative Assembly. See the Meléndez case, supra.

On August 16, 1955, when this action was filed, Act Nov 104 of June 29,1955 was already in effect authorizing claims; and suits against the Commonwealth.3 In the pertinent part said Act provides:

“Section 2.

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82 P.R. 662, Counsel Stack Legal Research, https://law.counselstack.com/opinion/escambron-development-corp-v-commonwealth-prsupreme-1961.