Méndez Ríos v. Eastern Sugar Associates

91 P.R. 721
CourtSupreme Court of Puerto Rico
DecidedFebruary 16, 1965
DocketNo. R-62-255
StatusPublished

This text of 91 P.R. 721 (Méndez Ríos v. Eastern Sugar Associates) 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
Méndez Ríos v. Eastern Sugar Associates, 91 P.R. 721 (prsupreme 1965).

Opinion

Mr. Justice Dávila

delivered the opinion of the Court.

In 1923 plaintiffs’ father exchanged some lands with The Juncos Central Company, a sugar-processing concern.' By the fourth clause of the conditions agreed upon for the exchange they stipulated the following:

“It is expressly agreed that the corporation The Juncos Central Company binds itself to respect and perform- the lease contract which the appearing party, Manuel Méndez -Dueño, [722]*722has entered into with Sucreries de Saint Jean, a stock company, to which reference has been made in the third paragraph of this deed, binding itself further to grind in its factory all the cane which may be produced on lands belonging at present to Méndez, his heirs, or successors, on the basis of the most liberal contract which the said corporation may malee, and in exchange for this right Manuel Méndez Dueño, for himself and as attorney in fact for his wife, WAIVES formally and expressly his right to lay his own railway tracks across the tracks of The Juncos Central Company, in pursuance of the stipulation contained in the fifth clause1 of .deed number one hundred thirty-three of May twenty-two nineteen hundred and seventeen, executed before Notary Francisco González Fagundo.” (Italics ours.)

After a series of events and incidents which we need not recite at this time, the lands and mill belonging to The Juncos Central Company passed into the hands of Eastern Sugar Associates, later to Fajardo Eastern Sugar, and finally to C. Brewer & Co., defendant herein.

In 1952 plaintiffs, through their attorney, wrote a letter to Eastern Sugar Associates making reference to the “fourth clause” copied above, and informing that “for several years . . . [plaintiffs] have been grinding with Eastern Sugar Associates the cane produced on lands which at the time of that deed belonged to Manuel Méndez Dueño, at present to my said clients as- heirs and successors.” He also informed Eastern that “we have learned that Eastern Sugar Associates has liquidated contracts to different colonos at a percentage much higher than the liquidation made to Messrs. Méndez Ríos.” And he ended by requesting that “they be compensated and paid [for the cane ground] the balance of [723]*723the difference between the liquidation made to them and the more liberal liquidations made to other colonos.”

The sugar company refused liability. under the clause invoked by the Méndez Rios brothers.

Thereupon the Méndez brothers filed a petition for declaratory judgment. After reciting the antecedents to which we have referred, they prayed, among other things, “this Honorable Court to settle the controversy existing between the parties in this case, and to render declaratory judgment decreeing that, since plaintiffs are bound by the existing waiver made by their predecessors to cross the railway lines in question,2 defendant is bound to perform the agreement which was and has been a condition, object, or consideration for such waiver, namely, to grind all the cane produced on the lands of plaintiffs (heirs and successors of Manuel Méndez Dueño and his wife Micaela Ríos) on the basis of the most liberal contract; consequently, to decree that, since defendant failed to make the liquidation to any of the plaintiffs in any of the years in which they have ground their cane with it, but rather lower liquidations and contracts, the latter should pay them the difference between the contracts and the liquidation which it has made and the contracts and liquidations which it should have made to them; that as to the years in which plaintiffs did not grind their cane with defendant, the latter having nonetheless used this servitude for its benefit, that the Court determine that defendant is bound to pay them for such use, fixing to that effect a rate, as per contracts made and/or assumed by defendant, of 15 cents per ton of cane transported over the tracks laid out on those servitudes; [724]*724[and] to award to each plaintiff, for the claims herein involved, not less than $175,000 or its equivalent in sugar.”

The trial court held that plaintiffs had no right to receive compensation for those years in which they did not grind their cane in defendant’s mill.3 It also held that “The purpose of the contracting parties [in stipulating that the cane would be liquidated to Dueño and his heirs and successors on the basis of the most liberal contract which the said corporation may make] was that, in exchange for the exclusive use of the servitude procured [sic] by Messrs. Méndez to the sugar enterprise, the latter would pay for their cane in the samé manner as the liquidation made to the colono for the cane of greater yield.” In other words, “that the most liberal contract must be that of the colono whose cane has produced the greatest yield in the grinding season of each year.”

We cannot agree with that ruling. It is not the correct interpretation of the clause “on the basis of the most liberal contract which the said corporation may make.”

At the time plaintiffs’ predecessor and Central Juncos stipulated the clause whose interpretation is the object of litigation, it was the practice in Puerto Rico to liquidate the cane to the colonos at a fixed rate of yield. So many pounds of sugar per 100 pounds of sugarcane, regardless of the actual yield in sugar of the cane. Thus, it was agreed to liquidate to the colono 5, 6 or more pounds of sugar for each 100 pounds of cane. The liquidations were not uniform, and the colonos were treated in accordance with their economic solvency. The colono who was in a better position to deal with the central was accorded better treatment. See Vidal v. Fernández, 104 F.2d 606, 609 (1st Cir. 1939). This explains why it was agreed with Dueño to liquidate his cane “on the basis of the most liberal contract which the said corporation may make,” [725]*725pursuant to the practice of according preferential and more liberal treatment to some colonos.

In Polanco v. Societé Anonyme, 33 P.R.R. 227 (1924), we find an example of the foregoing. Polanco agreed with the central to liquidate his cane on the basis of six pounds of sugar for each 100 pounds of cane. He stipulated, however, that the central “during the existence of this contract agrees to pay to Polanco at the same rate as is paid to any other of the mill’s planters.” One of the conditions was that he would cultivate a specific number of cuerdas of cane. Polanco brought action alleging that the central had agreed with other colonos to liquidate their cane on the basis of seven pounds of sugar for each 100 pounds of cane, while the same -was liquidated to him at' six percent. The complaint was •dismissed on the ground that in the opinion of the court plaintiff had not complied with the condition imposed, but on appeal we reversed and rendered judgment in his favor.

This method of liquidating the cane — exasperating because of the privilege accorded to some and denied to others —prevailed for many years. It required legislative action in order to correct it. It was not until 1937 that the Legislative Assembly enacted Act No. 112 of May 13, 1937,4 establishing a uniform- formula for liquidating the cane on the basis of its yield. This statute was followed by Act No. 213 of May 15, 1938, Act No. 221 of May 12, 1942, and Act No. 426 of May 13, 1951.

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Related

Vidal v. Fernandez
104 F.2d 606 (First Circuit, 1939)

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Bluebook (online)
91 P.R. 721, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mendez-rios-v-eastern-sugar-associates-prsupreme-1965.