Successors of M. Lamadrid & Co. v. Torrens, Martorell & Co.

28 P.R. 824
CourtSupreme Court of Puerto Rico
DecidedJuly 31, 1920
DocketNo. 2053
StatusPublished

This text of 28 P.R. 824 (Successors of M. Lamadrid & Co. v. Torrens, Martorell & Co.) 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
Successors of M. Lamadrid & Co. v. Torrens, Martorell & Co., 28 P.R. 824 (prsupreme 1920).

Opinions

Mr. Justice Hutchison

delivered the opinion of the court.

Successors of M. Lamadrid & Co. brought suit against Torrens, Martorell & Co. and Miguel Martorell Torrens, as managing partner, for a debt contracted by the defendant firm.

The complaint alleged, among other things, that the defendant firm had ceased business, closed the establishment and offices, without notice to creditors or payment of debts, [825]*825and removed and concealed the merchandise on hand, without providing for liquidation or leaving any one in charge to deal with creditors, meet their demands or settle the obligations of the firm.

Plaintiffs prayed for judgment against both defendants severally in the sum of $2,589.65 together with interest at the legal rate from the date of the filing of the complaint, the said recovery to be made out of - the property of defendant Miguel Martorell in default of that of the said debtor firm, together with the expenses and costs of this suit, including attorney’s fees.

The defendant firm defaulted. The partner answered, denying the facts alleged in the complaint, and after trial the district court rendered judgment, against the firm for $2,589.65, together with interest, costs and attorney’s fees, “without, prejudice to the institution of any other action that plaintiffs may have against the members of the defendant partnership after discussion of the assets of the firm.”

Plaintiffs appeal from this judgment in so far as the same fails to determine the claim against Miguel Martorell or to adjudge that the plaintiffs should have and recover of the said Martorell, as a partner of the defendant firm and severally liable therewith, the amount demanded in the complaint, together with such other pronouncements as were contained in the said judgment against the firm.

The theory of the court below and the view there taken of the evidence adduced are outlined by the trial judge as follows:

“Plaintiffs introduced at the trial documentary evidence consisting of the deed executed before notary José de Guzman Benitez on October 20, 1917, by Freiría Hermanos, M. Pascual & Co., Malgor, Luiña & Co. and M. Lamadrid & Co. whereby the three firms sell to M. Lamadrid & Co. their accounts against Torrens, Martorell & Co. for the same amounts alleged in the complaint. And on this point defendant Martorell expressly admitted at the trial that the firm of Torrens, Martorell & Co. owe the said amounts to [826]*826the plaintiffs. The fact is well established. It is true that now in arguing the case the defendant alleges that his admission does not affect the partnership of Torrens, Martorell & Co., inasmuch as the admission of a partner after the partnership is dissolved does not affect the firm. But this defendant has forgotten two things: That he has proved that the partnership is in liquidation and that he himself is one of the liquidators. And if the partnership is in liquidation it has not been dissolved; and if he is a liquidator his admissions as to any debts of the partnership liquidated by him are effective and bear no similarity whatsoever to admissions made by a partner who is not a liquidator as to the debts of a dissolved partnership.
“It was shown that the defendant partnership did not keep accounts in form, but in some memorandum books without following a legal method.
“It has not been shown in a manner convincing to the court that this defendant partnership has concealed its property and not paid its general creditors. The averment of the plaintiffs that the partnership of Torrens, Martorell & Co. has not been put in liquidation, nor designated a person to liquidate its accounts, has not been proved; but on the contrary it was shown by the defendants by means of the deed of September 12, 1917, executed before notary Nemesio Canales (Exhibit 2 of the defendant) that a liquidation was formed wherein the three partners Miguel Martorell Torrens, Juan Luis Torrens and Luis Martorell were placed in charge of the liquidation of the partnership. That deed appeared to have been recorded in the mercantile registry of San Juan on October 6, 1917, or 16 days prior to the filing of the original complaint, and this record is a sufficient notice of the existence of the liquidation. ■
“When a mercantile partnership is in liquidation, according to the Code of Commerce, its personality as such partnership subsists as to the collection of credits, extinction of obligations contracted previously and the closing of pending transactions. (See section 228 of the Code of Commerce.) The liquidators represent the partnership for these purposes and the partnership in liquidation continues existing for such effects.
“It has not been shown at this trial that the partnership of Torrens, Martorell & Co., has no property with which to pay its obligations, nor that its liquidation has been concluded and sufficient property has not remained to cover the liabilities.
[827]*827“The fact that one or more witnesses testified before the court that in the store of the partnership there were only some bottles and some boxes of matches does not prove the insolvency of the defendant partnership; because aside from the fact that said witnesses were unable to testify positively as to whether there were other goods in the store, what they have testified does not show that the defendant did not have other .personal property, credits, etc.
“It has not been shown that the said defendant partnership has concealed its property and even in ease there were sufficient proof to establish the fact that goods of the store (the quantity of these being unknown) were transferred to the house of one of the partners and liquidators, we do not think that this would be a fraudulent concealment unless it was shown that the said goods had been made to disappear and that they were privately sold outside of the course of the liquidation.
“Under these circumstances the court would commit a serious erjor in permitting an action against one of the general partners of TorrenS, Martorell & Co. whose legal situation is that of ‘in liquidation’ unless the fraudulent removal and concealment of the property or the insolvency of the said partnership were shown and not prior to the excussion of the property of Torrens, Martorell & Co.”

In disposing of an appeal from an order overruling a motion to quash an attachment levied on property of defendant Martorell, we said:

“If article 237 of the Code of Commerce may be invoked at all in a suit brought not only against the firm but also directly against the member who claims the benefit of discussion, and in which the sworn complaint charges, not on information and belief but as a fact within- the personal knowledge of plaintiff, the cessation of business, the closing of doors, the removal and concealment of goods and the unavailing demands made upon both the firm and the said member, — then we think that such averment together with a good and sufficient attachment bond is a substantial prima facie compliance with the requirement as to discussion of the assets of the firm.
“See also Royal Bank of Canada v. A. McCormick & Co. et al., ante, page 383.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Newman v. Eldridge
107 La. 315 (Supreme Court of Louisiana, 1901)
Stothart v. William T. Hardie & Co.
34 So. 740 (Supreme Court of Louisiana, 1903)

Cite This Page — Counsel Stack

Bluebook (online)
28 P.R. 824, Counsel Stack Legal Research, https://law.counselstack.com/opinion/successors-of-m-lamadrid-co-v-torrens-martorell-co-prsupreme-1920.