Pérez v. Claudio

48 P.R. 559
CourtSupreme Court of Puerto Rico
DecidedMay 29, 1935
DocketNo. 6916
StatusPublished

This text of 48 P.R. 559 (Pérez v. Claudio) 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
Pérez v. Claudio, 48 P.R. 559 (prsupreme 1935).

Opinion

MR. Justice Cordova Davila

delivered the opinion of the-court.

On March 12, 1930, José Claudio and South P. R. Sugar Co. entered into a contract entitled “Private Contract of Purchase and Sale of Cane.” Under the terms of the contract, the planter (colono) agreed to plant and cultivate, for the grinding seasons from 1931 to 1935 inclusive, a certain number of acres (cuerdas) of sugar cane. By other stipulations, Claudio in addition sold to the intervener South P. R. Sugar Co. all the cane to be raised on those plantations during-the crop-year's from 1931 to 1935. All expenses of planting, cultivation, and harvesting were to be for the account of Claudio, and those of manufacture for the account of the factory. The intervener agreed to pay to' Claudio periodically, as the cane should be processed, certain sums which were to be determined according to the degree of sucrose-contained in the cane and the average price of sugar in the-New York market. Out of the sums so payable to Claudio, the intervener was authorized to retain whatever portion, thereof should be required to cover any amounts of principal and interest owing to it by the planter as sums due or becoming due each season.

The sixth paragraph of the contract reads as follows:

“Should the planter need funds for attending properly to the-planting and cultivation of the said cane, the Central may supply to In'in, by way of advance, for account of the respective value and price of the cane and under such terms as may be agreed, but without any obligation to do so, the precise sums required; and the instrument evidencing such advance will form an integral part of the within contract.”

Clause “K” of the said contract provides that in the event it should be impossible for the Central to grind the cane of the planter at the proper time, he may grind the same wherever he may deem best, it being stipulated that the cane so ground “will not be understood to be included in the present sale, unless the Central should -have made any [561]*561advances ox loans to the planter,” in which case the net proceeds of the said cane will remain at the disposal of the former “as far as it may he necessary” to fully cover- said advances or loans. The signers of this instrument, designated as one of purchase and sale of cane, agreed that the contract set forth therein should have legal effect in accordance with the provisions of the Act regarding contracts for agricultural advances and grinding of cane, approved March 10, 1910. The said instrument was presented in the registry of agricultural contracts where it was endorsed on May 12, 1930, as follows: “The contract for agricultural advances contained in the foregoing instrument has been recorded. . .”

The intervener advanced moneys to Claudio for the financing of the 1931 crop, and at the end of the grinding season of that year and upon the account being liquidated, the planter was found to be indebted to the factory in the sum of $1,252.55. The planter acknowledged this debt in a promissory note, which was secured by a mortgage on certain personal property. Similarly, the intervener advanced moneys for the 1932 crop, at the end of which Claudio was found to be owing the total sum of $1,316.20, which included the indebtedness carried over from the preceding year.

On January 31, 1933, Cancio Pérez brought a suit against José Claudio to recover the sum of $2,068, together with interest thereon. He obtained an order to secure the effectiveness of the judgment and attached all right, title, action, and interest which the defendant Claudio might have in the cane existing and ready to be harvested on the properties covered by the contract of - purchase and sale of cane to which we have made reference. The plaintiff was appointed custodian and manager of the cane, and the latter was ground in the factory of the South P. B. Sugar Co. The sugar produced was sold and yielded a net total sum of $1,324.89, after making certain deductions to which the parties have agreed. The intervener South P. B. Sugar Co. then intervened in the action, answering the complaint filed by Cancio [562]*562Pérez and claiming to be entitled to preference with respect to the proceeds of the attached cane for the amount of its credit against the defendant amounting to $1,316.20. Judgment was rendered adjudging Claudio to pay to the plaintiff the sum claimed and holding that the intervener’s credit for agricultural advances was entitled to priority over that of the plaintiff with regard to the proceeds of the cane attached.

Prom that part of the judgment which acknowledges priority in favor of the credit of the intervener, the plaintiff has appealed and has assigned three errors, which may be reduced to two, namely; That the court erred in holding that the contract of March 12, 1930, between the planter and the intervener was one for agricultural advances and not of purchase and sale; and in deciding that the said contract prejudiced the plaintiff, notwithstanding it had not been made to appear of record in the registry that any sum had been advanced to Claudio for financing the cane.

The position taken by the appellant in claiming that the agreement entered into by the parties has the character of a contract of purchase and sale, of cane and not for agricultural advances and grinding, would not seem to favor him. The appellant knows that the sale of the cane necessarily implied for Claudio the loss of the ownership thereof in 1930, long before the commencement of the present action, and on the assumption that a contract of sale is involved it is clear that the attachment levied on February 6, 1933, could not affect rights previously acquired by the purchaser of the said cane, South P. R. Sugar Co. However, we agree with the lower court that the contract was one for advances and grinding of cane rather than one of purchase and sale. The cane was to remain in the possession of the planter, who paid all the expenses incidental to the raising of the crop and assumed all the risks until the said cane were converted into sugar. The factory did not bind itself to pay the value of the cane, but to liquidate the sugar produced on the basis [563]*563of the New York market price. Logically, it must be inferred that the intention of the parties was not to sell the cane, but to contract for the grinding thereof. This is specially emphasized by clause “El” of the contract to which we have already referred, which provides, in short, that such cane as could not be ground in the Central would be understood to be excluded from the agreement, unless the said Central should have furnished advances to the planter, in which case the proceeds of such cane would be held at the- disposal of the factory for the purpose of attending to the payment of such advances.

Although the contract deals primarily with the grinding of cane, it also comprises advances for the financing thereof which must be paid from the proceeds of the cane. It is stipulated in the sixth paragraph that if the planter should need funds for attending to the planting and cultivation of the cane, the Central may furnish the same by way of advance chargeable to the value and price of the cane, and the planter authorizes the Central to retain out of the proceeds of the sale of the sugar any sums that may be necessary to cover all advances made. By the tenth paragraph the parties agree that the contract is to have legal effect in accordance with the Act regarding contracts for agricultural advances and grinding of cane, approved March 10, 1910.

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48 P.R. 559, Counsel Stack Legal Research, https://law.counselstack.com/opinion/perez-v-claudio-prsupreme-1935.