Llambías v. Pagán

65 P.R. 424
CourtSupreme Court of Puerto Rico
DecidedDecember 4, 1945
DocketNo. 9054
StatusPublished

This text of 65 P.R. 424 (Llambías v. Pagán) 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
Llambías v. Pagán, 65 P.R. 424 (prsupreme 1945).

Opinion

Mn. Justiof. Todd, Jr.,

delivered the opinion of the court.

On Glare'll 14, 1940, Isabel (¡armen Llambías. plaintiff herein, executed before a notary a deed of sále, with right of redemption, which in its pertinent part reads thus:

“Fourth: Doña Isabel Carmen Llambías hereby sells to the other party, Don Juan Carlos Pagan, the property described in the first paragraph of this deed with everything within and annexed thereto. It should be understood that the sale carries with it the conveyance of the title, possession, and other natural and civil accretions to the property conveyed. — Price.—Fifth: The selling price of this property is one thousand five hundred dollars, which amount the vendor, Doña Isabel, acknowledges having received from the purchaser, Señor Pagán, prior 1o this act, and for which amount she grants to him a true and valid receipt. — Right of Redemption. — Sixth: It is an express condition formally agreed by the parties herein that the sale was effected with the right of redemption for the period of one year, counted from this date; hence, if Doña Isabel Carmen Llambías returns to Don Juan Carlos Pagán the amount received, one thousand five hundred dollars, within the specified period of one year which shall expire on March 14, 1941, the purchaser, Señor Pagán, should and hereby binds himself to execute the corresponding deed of reconveyance, otherwise the sale of the property herein shall be considered as irrevocably effected. — Seventh.—The parties further agree and bind themselves to the following: that during the course of the aforesaid year, which runs from the date of execution of this deed until March 14, 1941, Don Juan Carlos Pagán will be entitled to receive the monthly rentals of the house conveyed.”

Three days before the expiration of the year specified in the contract, that is, on March 11, 1941, Isabel Carmen Llarri-Mas filed the complaint in this case and prayed for judgment in the following: terms: (a) that the deed of sale of the property with right of redemption be declared void because the plaintiff was a minor at the time of its execution; (b) that if the deed is valid the contract executed is a mortgage and not a sale; (c) that defendant should apply to the principal amount of the debt, the rentals of the house which he has been receiving, after deducting interest at the legal rate: and (d) that defendant be ordered to pay $5,000 as [426]*426damages. The district court overruled a demurrer for mis-joinder of causes of action and, after defendant answered and the evidence of both parties had been introduced, it rendered judgment for plaintiff to the effect that the deed was valid and that the contract referred to was really a mortgage; it granted plaintiff a period of six months — which could not be extended — within which to pay defendant the sum of $1,500 plus interest thereon at the legal rate, and adjudged the latter to pay to the plaintiff the rentals at a monthly rate of $40 beginning on March 15, 1941, together with costs and $250 as attorney’s fees. Defendant appealed,

In his first assignment of error appellant contends that the lower court erred in admitting plaintiff’s testimony to prove that the contracts executed by the parties was a mortgage and not a sale with right of redemption, thus varying, by means of parol evidence, the terms of a written contract, in violation of § 25 of the Law of Evidence.

We have held in Monagas v. Albertucci, 17 P.R.R. 684, affirmed in 235 U. S. 81, that parol evidence is admissible to determine whether the true intention of the parties in a sale with right of redemption was to execute such a contract or simply a loan with mortgage security. In said (‘ase we stated, at page 686:

“The whole case really turns on the question of whether the written instrument in controversy was a mortgage or a conditional sale. If it is the latter, it must be complied with according to its terms; if the former, the plaintiff must be allowed to repay the money received and take a reconveyance of the land. The real intention of the parties at the time the written instrument was made must govern in the interpretation given to it by the courts. This must be ascertained from the circumstances surrounding the transaction and from the language of the document itself. The correct test, where it can be applied, is the continued existence of a debt or liability between the parties. If such exists, the conveyance may bo held to be merely a security for the debt or indemnity against the liability. On the contrary, if no debt or liability is found to exist, then the [427]*427transaction is not a mortgage, but merely a sale with a contract of repurchase within a fixed time. While every case depends on its own special facts, certain circumstances are considered as important, and the courts regard them as throwing much light upon the real intent of the parties and upon the nature of such transactions. Such are the existence of a collateral agreement made by the grantor for tlxe payment of money to the'grantee, his-liability to pay interest, inadequacy of price paid for the conveyance, the grantor still remaining in possession of the land conveyed, and any negotiation or application for a loan made preceding or during the transaction resulting in the conveyance.”

Although it is true that in the above-mentioned case the judgment of the lower court was reversed because it admitted parol evidence relating to’ a contract of sale with tlxe right of: redemption, the dictum of said opinion in connection with the inadmissibility of said parol evidence in cases of this nature was made clear by this court in Ochoteco v. Córdova, 47 P.R.R. 522, where we said, at page 528:

“Tlxe appellants find some comfort in Monagos v. Albertucci, 17 P.R.R. 684. Now, there was a dictum in that opinion which said that parol evidence was inadmissible to show that a contract of sale, with right of redemption, could not be shown to be a mortgage. If, however, the opinion is read with care, it will be seen that this court really decided that there was not enough evidence to show the existence of a mortgage.
“This also appears when one considers the case on appeal to the Supieme Court of the United States, Monagas v. Albertucci, 235 U.S. 81, 87, where the Court, through! Mr. Justice White, said as follows:
“ ‘But when the statement we have made of the case is considered, the proposition rests upon the plainest misconception of the action of the court below since, as we have seen, its conclusion that error had been committed by the trial court'in holding that the contract of- sale was one of mortgage did not arises from a ruling that there was a want of power to admit any testimony for such purpose, but from the fact that the particular testimony which was offered and received over objections was found after considering and weighing it, to bear no legal relation to such purpose and hence not afford any probative force tending to support the varying of the contract.’ ”

[428]*428Tu the more recent ease of Nielo v. Torres, 56 P.R.R. 147, where parol evidence had not been admitted to show the real nature of the transaction made — a contract of sale with right of redemption which was really one of mortgage security — upon reversing the.

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Related

Monagas v. Albertucci
235 U.S. 81 (Supreme Court, 1914)
J. W. Pierson Co. v. Freeman
166 A. 121 (Supreme Court of New Jersey, 1933)

Cite This Page — Counsel Stack

Bluebook (online)
65 P.R. 424, Counsel Stack Legal Research, https://law.counselstack.com/opinion/llambias-v-pagan-prsupreme-1945.