París v. Canety

73 P.R. 386
CourtSupreme Court of Puerto Rico
DecidedApril 28, 1952
DocketNo. 10533
StatusPublished

This text of 73 P.R. 386 (París v. Canety) 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
París v. Canety, 73 P.R. 386 (prsupreme 1952).

Opinion

Mr. Justice Marrero

delivered the opinion of the Court.

Ignacio Jorge and his wife filed a complaint in the District Court of Puerto Rico, San Juan Section, alleging that on December 31,1948, they sold to Manuel Canety and wife a house and lot for $11,000, of which sum they received when the deed was executed, $900 in bank notes; $6,000 which the purchasers reserved to cancel in due time a mortgage which encumbered the property; $2,100 in ten promissory notes for $200 each and another for $100, endorsed by the purchasers to the vendors; and a $2,000 promissory note to bearer, signed by Adalberto C. Iturrondo, maturing on October 18, 1949; that all of the above-mentioned notes have been paid except the $2,000 note to bearer; and that Iturrondo, as well as the defendants, has refused to pay the amount of the latter note, with interest at the agreed rate, notwithstanding that it has matured.1 The defendants admitted in their answer having refused to pay the amount of the note in question and alleged that the agreement between the parties was that the vendors would accept and receive said note in payment of that part of the price represented by the sum of $2,000 and that, according to that agreement, when the deed of sale was executed, they transferred their title to, right and interest in the promissory note to bearer by delivering the latter to the plaintiffs who accepted it in payment and satisfaction of $2,000 of the total selling price. The case was tried and the lower court entered judgment founded on a cogent opinion, overruling the complaint.

On appeal the plaintiffs claim that the lower court erred: (1) in finding that the defendants transferred their title to, right and interest in the $2,000 note to bearer, and that there was no contract or agreement in any way limiting ac[388]*388ceptance of the note; (2) in rejecting the oral evidence offered by the plaintiffs tending to show the intention of the contracting parties to the effect that said note was not accepted as final payment of a part of the selling price; and (3) in disposing of the case by dismissing the complaint, without hearing oral evidence.

In discussing the first assignment the plaintiffs stress ■§§ 1111 and 1124 of the Civil Code, 1930 ed.2 To this we reply that the note to bearer was delivered by the defendants and accepted by the plaintiffs and that even admitting that the provisions of the second paragraph of § 1124 applied to promissory notes to bearer, as the one involved in this case, such statutory provision could not be enforced here for said note is governed by the Uniform Negotiable Instruments Act, Act No. 17 of April 22, 1930 (Sess. Laws, p. 172), and not by the Civil Code. We say this because said Uniform Act is not only subsequent to the Civil Code, which in this respect conflicts with the latter, but also because it is a special Act on this subject and must prevail over any other applicable rule of a general character. Pursuant to $ 2 thereof “An instrument to be negotiable must conform to the following requirements: 4. Must be payable to order or to bearer;.. (Italics ours.) As in the instant case the promissory note in question was to bearer, it was clearly negotiable and the Act is applicable thereto.

According to the terms of the deed executed by the parties, and as clearly disclosed by the evidence offered, the $2,000 [389]*389note was delivered by the defendants to the plaintiffs and accepted by the latter. It is admitted that it was not endorsed. Pursuant to the provisions of § 66 of the Uniform Negotiable Instruments Act, supra, “Every person negotiating an instrument by delivery or by a qualified indorsement, warrants: (1) That the instrument is genuine and in all respects what it purports to be; (2) That he has a good title to it; (3) That all prior parties had capacity to contract; (4) That he has no knowledge of any fact which would impair the validity of the instrument or render it valueless . . . .” (Italics ours.) However, pursuant to § 67 of that same Aet “Every indorser who indorses without qualification, warrants to all subsequent holders in due course: (1) the matters and things mentioned in subdivisions one, two and three of the next preceding section; and (2) That the instrument is at the time of his indorsement valid and subsisting. And in addition, he engages that on due presentment, it shall be accepted or paid, or both, as the case may be, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it.” (Italics ours.) Therefore, since in this case the note to bearer involved in the complaint was merely delivered, without being endorsed by the purchasers, the latter, in harmony with the above-quoted provisions of the Uniform Aet, did not bind themselves to pay the amount thereof in the event that the vendors failed to obtain payment from the drawer. See also 42 Yale Law Journal, p. 25; Brannan’s Negotiable Instrument Law, Sixth Ed., p. 803 et seq; 5 U.L.A., second part, pp. 309 et seq.

On the other hand, the second clause of the deed of December 31,1948, executed by the parties, recites as follows:

“The price or consideration of this contract is the agreed sum of eleven THOUSAND dollars ($11,000) in money of legal tender in the United States of America, which amount is paid by the purchasers to the vendors, as follows: nine hundred dollars [390]*390($900) delivered in this act in bank notes of the denomination agreed to, six thousand dollars ($6,000) which said purchasers reserve to cancel in due time a mortgage which encumbers this property, the terms of which are known to and accepted by the purchasers, TWO thousand dollars ($2,000) in a promissory note to bearer for that, amount, signed by Adalberto Iturrondo and two thousand one hundred dollars ($2,100) in ten promissory notes for two hundred dollars ($200) each, maturing monthly, and endorsed by the purchasers to the vendors and another ONE HUNDRED DOLLARS ($100) promissory note in favor of the purchasers and endorsed by these to the vendors. These eleven promissory notes are signed by Asia widow of Eivas. These amounts of money and securities delivered total eleven thousand dollars which is the selling price fixed. The vendors set forth that they accept the obligations or notes endorsed and delivered to them in this act.”

It appears from that clause that the $2,000 note to bearer formed part of the sum paid by the purchasers to the vendors as consideration in the sale of the house, and from the deed as a whole no agreement or contract appears limiting acceptance of the note to bearer. Taking the foregoing into consideration, the lower court did not err in deciding that said note was transferred without limiting its acceptance.

Nor were the other errors assigned committed. Said court refused to admit in evidence oral testimony tending to establish, according to the plaintiffs, the real intention of the parties. In discussing these errors the appellants insist that the clause of the deed copied above is ambiguous and that, therefore, evidence of the nature mentioned should have been admitted to show the real agreement between the parties regarding the note in question. In this connection appellants state “that said deed is ambiguous because it does not specify thoroughly whether the $2,000 note signed by Adalberto C.

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