Rivera v. Heirs of Díaz Luzunaris

70 P.R. 168
CourtSupreme Court of Puerto Rico
DecidedJuly 5, 1949
DocketNo. 9799
StatusPublished

This text of 70 P.R. 168 (Rivera v. Heirs of Díaz Luzunaris) 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
Rivera v. Heirs of Díaz Luzunaris, 70 P.R. 168 (prsupreme 1949).

Opinions

Mr. Chief Justice de .Jesús

delivered the opinion of the Court.

Ramón Pastor Diaz Molinari died on November 4, 1939, leaving an estate of approximately $600,000. His sole and universal heirs were his legitimate son Ignacio Díaz Luzu-naris, his acknowledged natural son Ramón Diaz Rivera,1 a-nd his widow Eustacia Luciano Maldonado. On February 28, 1940 the natural son effected a contract of settlement with his brother before Notary Adolfo Porrata Doria, whereby the former settled all his rights to his share in his father’s estate for the sum of $10,000. To annul this settle[171]*171ment, on January 26, 1945, Ramón Díaz Rivera, who had been previously declared incapacitated to manage his property on the ground of insanity, brought this action, represented by his tutrix his mother Josefa Rivera, against Ignacio Díaz Luzunaris.2 He alleged that at the time the deed "of settlement was executed .he-was mentally unsound and for that reason incompetent to give the consent for the existence of a contract, required by § 1218 of the Civil Code.3

In his answer the defendant denied the mental incapacity of the plaintiff. He alleged that the complaint did not adduce facts sufficient to constitute a cause of action; that the plaintiff was estopped from invoking his incapacity because in the filiation suit, wherein he obtained judgment on the same day he settled his hereditary rights, plaintiff appeared without being represented by a guardian, which according to defendant, induced him to believe that he had the capacity 'to execute a contract. Finally, he alleged that the action was barred because at the time the complaint was filed, more than four years had elapsed from the consummation of the contract of settlement.

The lower court wrote an extensive opinion overruling all the defenses advanced by the defendant. It summarized the testimony of each witness of both parties and after setting forth its findings of fact, it reached the conclusion that the consent given by the plaintiff, who was a mental weakling, [172]*172was void because of the undue influence that certain persons, among them his own attorney, had exerted upon him. On this ground it declared the settlement void and consequently rendered judgment for the plaintiff.4

We can not agree with the lower court that the, settlement is void on the ground that it was obtained by “undue influence”. The doctrine of undue influence of the common law, with the distinction that we shall shortly discuss, is encompassed within the broad range of “deceit” in the Civil Law, embodied in § 1221 of the Civil Code as follows:

“There is deceit when by words or insidious machinations on the part of one of the contracting parties the other is induced to execute a contract which without them he would not have made.” (Italics ours.)

Commenting on § 1269 of the Spanish Civil Code, equivalent to our § 1221 and referring to serious deceit (dolo causante),5 Manresa says:

“The essence of this type of deceit is found in the fraud which obtains the consent of the deceived person, wringing it from him or at least influencing him. This is the meaning of the words 'or insidious machinations’ to which the statute refers and which encompass false promises, the exaggeration of hopes or benefits, embezzlement, misrepresentation of name, capacity or poioer, a thousand ways, in short, of deceit that may induce a contracting party, producing a vitiated consent. . .” Manresa, Comentarios al Código Civil Español, vol. 8, (2d ed. 1907), p. 657. (Italics ours.)

[173]*173Let us now compare the deceit of the Civil Law with “undue influence”, as defined in II Restatement of the Law of Contracts, § 497, p. 954 et seq.:

“Where one party is under the domination of another, or by virtue of the relation between them is justified in assuming that the other party will not act in a manner inconsistent with his welfare, a transaction induced by unfair persuasion of the latter, is induced by undue influence and is voidable.”

It suffices to read .Manresa’s commentary in order to note that the words “or insidious machinations”, within their meaning in the Spanish Civil Law, include the undue influence of the common law.

The distinction which we pointed out previously consists in that, under the Civil Law, when the deceit is exercised by a person who is not a party or does not act with the consent or at least with the knowledge, without objection, of the party benefited, the contract is perfectly valid. Naturally, the prejudiced party may claim damages from the third person who deceived him. This doctrine rests on the theory that in spch a case the two contracting parties act in good faith and there is no reason for imposing on one of them the consequences of the acts of a third person, whom the other party mistakenly trusted. Nevertheless, Manresa says that the deceit of a third person may cause the nullity of the contract when this deceit results in error by the party deceived. In this case it is the error and not the deceit that vitiates the consent. Manresa, op. and vol. cit., p. 854. But whether the consent is vitiated by deceit or by error, the contract is merely voidable. On the other hand, under the common law, the undue influence even -when caused by a third person who is in no way benefited by the contract, vitiates the consent even though without the participation or knowledge of the benefited party. See Annotation, 96 A.L.R. 613.

But our discrepancy is not merely a question of semantics. Whether we adopt the name used in the doctrine [174]*174of the common law or whether we use the appellation given to it under the Civil Law, the fact is that under our Civil Code, if there is deceit, the contract is not void but voidable. And the action for its annulment prescribes four years after the consummation of the contract, as provided by § 1253 of the Civil Code. So that even if we should agree with the conclusion of the lower court that the settlement is void because of undue influence, which is one of the numerous facets of deceit as defined in § 1221 of the Civil Code,6 we would have to reverse the judgment and dismiss the complaint, for the reason that at the time it was filed more than four years had elapsed after the consummation of the contract, and for the additional reason that the court did not find that the person who exerted the undue influence acted with the knowledge or consent of the defendant.

In the instant case we have seen, and it was held by the lower court, that the consideration for the settlement was “ridiculously inadequate”.7 It is clear that the isolated fact that the consideration for a contract is grossly inadequate is not in itself sufficient evidence to show that the prejudiced party lacked the necessary mental capacity to give his consent, which is an indispensable requisite for the existence of a contract. But there is no doubt that grossly inadequate consideration is an important factor in persuading the courts to examine the condition of the prejudiced party in order to determine whether in effect he is mentally incompetent as alleged in the complaint herein.

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70 P.R. 168, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rivera-v-heirs-of-diaz-luzunaris-prsupreme-1949.