San Miguel Fertilizer Corp. v. Puerto Rico Drydock & Marine Terminals

94 P.R. 403
CourtSupreme Court of Puerto Rico
DecidedMay 4, 1967
DocketNo. R-64-185
StatusPublished

This text of 94 P.R. 403 (San Miguel Fertilizer Corp. v. Puerto Rico Drydock & Marine Terminals) 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
San Miguel Fertilizer Corp. v. Puerto Rico Drydock & Marine Terminals, 94 P.R. 403 (prsupreme 1967).

Opinion

Mr. Justice Ramírez Bages

delivered the opinion of the Court.

We are concerned here with the interpretation of a contract for the discharge of bulk material brought by vessel to Puerto Rico. The question for determination is whether under such contract the enterprise which bound itself to perform the discharge operations, through its facilities, may collect mooring and wharfage charges. The collection of said items was authorized by the Public Service Commission, by means of its Order of January 10, 1957. For the reasons set forth below we conclude that it may not, and that the judgment of the trial court to that effect should be affirmed.

The Controversy

Prior to the year 1951, respondent, San Miguel Fertilizer Corporation (hereinafter called San Miguel) received the bulk material which it imported through the facilities of Puerto Rico Lighterage. On July 14, 1951, San Miguel and petitioner, Puerto Rico Drydock & Marine Terminals, Inc. (hereinafter called Drydock), signed a contract which, insofar as pertinent to the question under our consideration, provides that:

“1. — That Drydock has leased at the present time from the United States Navy the dry dock owned by the latter with all its adjacent facilities.
“2. — That San Miguel receives frequently and by sea bulk material . . .
“3. — That both parties have entered into a contract for the discharge of all bulk material which San Miguel may receive from now on by sea, through the above-mentioned facilities and of which Drydock is the lessee, . . .”
[406]*406“CLAUSES
“First: San Miguel binds itself to discharge all bulk material it may receive by sea from now on . . . through the facilities of Drydock, and Drydock, in turn, binds itself to discharge all bulk material received by San Miguel by sea from now on . . .
“Second: Drydock will be entitled to collect, and San Miguel will be bound to pay, within a reasonable term after discharge, the rate agreed upon of $1.20-1/2 (one dollar twenty and a half cents) for each ton of 2,000 pounds of bulk material of San Miguel unloaded by Drydock under the conditions herein stipulated.
“Third: The unloading by Drydock will be carried out from the vessels in which the material arrives to the funnels which Drydock has specifically installed for this purpose and to any other facilities which Drydock may instal in the future after an agreement with San Miguel.
“Fifth: The effectiveness of this contract will be the same as that of the lease contract not expired which exists now between Drydock and the United States Navy on the aforementioned facilities, and will be subject to the conditions and contingencies thereof; provided, however, that any one of the parties, at any time, shall be entitled to request from the other a revision or adjustment of the rate of one dollar twenty and a half cents ($1.20-1/2) per ton agreed upon, provided it is justified by an increase or decrease in the cost of discharge.”

On February 8, 1955 San Miguel and Drydock executed a complementary contract in which they agreed to clarify and implement the fifth clause of the contract executed on July 14, 1951. Said clause refers, insofar as pertinent, to the determination of the compensation for discharge services fixed on the basis of so much per ton, subject to revision or adjustment as a result of increase or decrease in the cost of discharge. To that effect it was stated in the complementary contract the cost items to be considered in the determination of the discharge rate per ton. Besides, it stipulated the pro[407]*407ceeding to be followed for determining future discharge rates per ton. The aforesaid items are the wages of stevedores, foremen, crane operators, and firemen, other miscellaneous wages, wages for cleaning the area, for lost time (crane operators-firemen), an item for fuel oil, maintenance and repairs, depreciation, and finally, profits.

On August 29, 1958 San Miguel filed a petition for declaratory judgment in the Superior Court, San Juan Part, alleging that on July 14, 1951 it had signed the aforesaid contract; that it had been modified by a document executed by the parties on February 8, 1955; that a real and true controversy has arisen and exists between the contracting parties concerning the right of Drydock to collect from San Miguel, in addition to the items enumerated in the contract in force, as amended, certain mooring and wharfage charges, San Miguel’s contention being that it has never been and is not bound to pay the aforementioned items nor any money on that account to Drydock, while the latter’s contention is that San Miguel has always been bound to make such payments.

In its answer, Drydock alleged that San Miguel’s obligation to pay for the mooring and wharfage charges does not arise from the contract executed as amended since it neither provides nor covers the mooring and wharfage charges. It indicates that said obligation arises from the Puerto Rico Public Service Act, from the orders and decisions of the Public Service Commission of Puerto Rico and from charter party agreements existing between San Miguel and the owners of the ships which bring the materials imported by the former since they specifically provide that the mooring and wharfage charges shall be for the account of the consignees and/or owners of the cargo.

The trial court decided that San Miguel was not bound to pay the mooring and wharfage charges to Drydock. It reached this conclusion on the basis, principally, of the par[408]*408ties’ conduct in enforcing the contract executed between them. It concluded, further, that neither San Miguel nor Drydock were parties to the said charter party agreements and therefore said contracts could not bind San Miguel to pay for mooring and wharfage.

Assignment of Errors by Drydock

In support of its petition for review, Drydock assigns the following five errors allegedly committed by the trial court:

I — Said court committed error in deciding that San Miguel is not bound to pay mooring and wharfage charges to Drydock by virtue of the charter party agreements.

The trial court concluded that “Charter party agreements ... do not create rights nor obligations between the litigants because said contracts are obligations between other contracting parties, neither San Miguel Fertilizer nor Puerto Rico Drydock being parties therein; § 1209 of the Civil Code, 1930 ed., 31 L.P.R.A. § 3374, establishes that ‘contracts shall only be valid between the parties who execute them and their heirs, . .

Drydock argues that San Miguel is bound to fulfil the condition of the payment of mooring and wharfage charges provided in the aforesaid charter party agreements, first because San Miguel was a party therein for they were nearly always signed by SMH Trading Corporation and this corporation and San Miguel are the same legal entity; and second, because, even if it were not, San Miguel was estopped from alleging the contrary, since it was the beneficiary of such contracts and upon accepting them and receiving benefit therefrom it was bound to assume the obligation to pay the mooring and wharfage charges provided in those contracts. Ramírez v. Gautier, 87 P.R.R. 470 (1963).

[409]*409 We do not agree.

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94 P.R. 403, Counsel Stack Legal Research, https://law.counselstack.com/opinion/san-miguel-fertilizer-corp-v-puerto-rico-drydock-marine-terminals-prsupreme-1967.