Olazagasti v. Eastern Sugar Associates

79 P.R. 88
CourtSupreme Court of Puerto Rico
DecidedApril 2, 1956
DocketNo. 11574
StatusPublished

This text of 79 P.R. 88 (Olazagasti 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
Olazagasti v. Eastern Sugar Associates, 79 P.R. 88 (prsupreme 1956).

Opinion

Mr. Justice Marrero

delivered the opinion of the Court.

Domingo Olazagasti filed in the San Juan Part of the Superior Court of Puerto Rico a claim for wages against the Eastern Sugar Associates (a trust). The complaint was granted and the defendant was ordered to pay to the former the sum of $11,562.54 for wages due, plus the costs and expenses and $1,500 for fees for plaintiff’s attorney.

The following abstract is taken from the elaborate opinion rendered by the lower court in support of its judgment: [90]*90Plaintiff worked as a mechanic in Central Pasto Viejo’s mill, owned by the defendant, from December 4, 1948 to August 18, 1954, which is the period involved in the complaint, by virtue of a contract in the form of a letter which the former signed at defendant’s request. The Central Pasto Viejo is engaged in the manufacture of sugar, which is an article of interstate commerce, the defendant being thereby covered by the provisions of the Federal Fair Labor Standards Act.1 The contract in question is similar in form to the “Belo” type contracts.2 By that contract the defendant bound itself originally to pay to plaintiff a basic rate of compensation of $0.75 per hour during the grinding season and $0.923 ■during the “dead season”; it guaranteed a weekly salary of ■'$48 provided he worked no less than 56 hours a week during the grinding season and 48 hours during the dead season; .and it further agreed that “time worked in excess of 8 hours a day or on the rest day provided by law” would be compensated “at double the applicable basic wage rate,” and that “time worked in excess of 40 hours a week during the dead •season” would be compensated “at the rate of one and one half the applicable basic wage rate.” 3

[91]*91The contract between the parties was in force during the' full period involved in this litigation, and the hourly wage' rate for the grinding season was always lower than that'' for the dead season. Notwithstanding the terms of that contract, “the defendants did not pay to plaintiff the amount which should have corresponded to him under the terms thereof and under the legislation in force with respect to the hours worked in excess of 8 hours a day and 40 hours a week.” Plaintiff’s work hours did not fluctuate from week to week as respects the basic period of 40 hours a week. His working hours were rather regular. He worked a daily [92]*92shift of 8 hours, and the defendant could require his services during extra hours if it suited its interests., Plaintiff’s work hours were fixed and specific. Plaintiff’s contention is that he is entitled to receive compensation for the hours worked in excess of 8 hours a day, both during the grinding and the dead season, and for the hours worked on the weekly day of rest, at double the basic rate which would be computed by dividing the weekly wage by 40, and that the hours worked in excess of 40 hours a week, both during the grinding and the dead season, should be compensated at the rate [93]*93of one and a half the same basic rate. He also maintains that his claim rests, in its substantive part, on laws and legal provisions of Puerto Rico.4

The defendant appealed from the judgment rendered against it. The errors assigned on appeal are addressed exclusively to the conclusions of law made by the lower court. These errors will be discussed in the order of assignment.

The defendant first maintains that “the lower court erred in holding that the Belo type contract or contracts between appellee and appellants 5 were null and void.” In the course of the opinion the lower court stated that: [94]*94The trial court next proceeded to apply to the facts of the present case the doctrine of the Peña case supra, and to draw, by virtue of such application, all the proper juridical consequences.

[93]*93“The defendants allege that the contracts are valid under the doctrine in the case of Walling v. Belo Corporation, 316 U.S. 624. Let us see whether they are correct. The facts of the claim under consideration are substantially identical to those in Peña v. Eastern Sugar Associates, 75 P.R.R. 288 ... In the Peña case the defendants raised the same issue of the existence and validity of the Belo type contract. Their allegation did not prosper. The Supreme Court held that the contract was null and void for failure to meet the essential requirements of the Belo type; that the hourly rates for the grinding season and the dead season were fictitious and arbitrary; that the so-called weekly guaranty constitutes the real wage, etc. . . .
“The decision ... of the Supreme Court in the Peña case is squarely applicable to the case at bar by reason of the substantially identical circumstances in either action.”

[94]*94Besides arguing that the facts herein involved are different from those of the Peña case supra, appellant urges that we reject the doctrine therein established as to Belo type contracts. Walling v. Belo Corporation, 316 U. S. 624-640, 86 L. Ed. 1716. Its argument is that the limitations on this, type of contract, as established in that opinion, were not a part of the original doctrine in the Belo case supra. As a consequence thereof, it alleges that “the lower court, following the Peña doctrine, misinterpreted Belo . . .” and cites many cases decided under the Belo doctrine supra, which did not bear, in its judgment, the limitations adopted by our Court in the Peña case.6

The doctrine announced by this Court in Peña v. Eastern Sugar Associates, 75 P.R.R. 288, regarding the Belo type contracts may be summarized as follows:

This contract is one which, if valid, enables the employer to pay a uniform weekly wage which includes overtime pay for workweeks of variable lengths. To be valid, it must comply with the following requirements: the regular rate per hour stipulated in the contract must be equal to or greater than that fixed by the law. It must provide for the payment of time and a half for hours worked in excess of 40 hours a week. It must fix a guaranteed weekly wage. If the hourly rate stipulated in the contract is such that it does not reasonably determine the weekly wages, which it proposes to pay for regular as well as for extra hours currently worked, such hourly rate would be fictitious and void. The nature of the employee’s work must require irregular [95]*95work hours, and the number of hours actually worked by the employee must fluctuate from week to week. The contract must be legal in all respects. The extra compensation provided therein must be actually paid and this must be done promptly. The validity of the contract will be judged by the employee’s work record and not merely by the bare terms of the contract.

In the present case the contract subscribed by plaintiff and the work which, as a matter of fact, he performed thereunder did not fully comply with the foregoing requirements, especially the requirement that his work should require irregular hours.

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