Case ID: pr_4/html/0045-01.html
Source: Caselaw Access Project
Author: {"author": "Mb. Chief Justice. Quiñones, Mr. Justice MacLeary,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Ex Parte Fernández.
    Appeal from the District Court of Mayagüez.
    No. 20.
    Decided June 18, 1903.
    Suspension op Payment — Common Debtors. — Article 1814 of the revised Civil Code refers only to ordinary debtors and does not repeal section 1 of General Order No. 224, series of 1899, according to which any merchant can make legal announcement of his having suspended payment within forty-eight hours, next following demand for payment of the obligation due and payable by him.
    Commercial Transactions. — Commercial transaction or acts are governed by the provisions of the Code of Commerce and such others as are complementary thereto, in which matters, as in all others governed by special laws, the provisions of the revised Civil Code are applicable only as a supplementary law.
    STATEMENT OF THE . CASE.
    In the appeal in cassation, now appeal, pending before us, taken by Fernando Vázquez,'Esq., on'behalf of Constantino Fernández a merchant of Aguadilla, from a decree made by the District Court of Mayagüez, in proceedings in suspension of payments of aforesaid Fernández, which, decree, literally transcribed, reads as follows:
    “Mayagüez, February twenty-ninth, one thousand nine hundred and three. Fernando Vázquez, on January 24, 1903, requested on behalf of Constan-tino Fernández, a merchant of Aguadilla, that the latter be legally declared in suspension of payment, because an extrajudicial demand having been made upon him for the payment of a debt, he was unable to satisfy the same. The court issued an order taking cognizance of the request and ordered that the provisions of section 2 of General Ordei; No. 224, series of 1899, be •complied with.
    Counsel for Fernández then produced a statement of his client’s liabilities and assets, signed by said Fernández,' showing an excess of assets over liabilities amounting to one thousand five hundred and seven pesos and eight centavos, accompanied by a report of the causes which led to his present embarrassment and a proposition made by him for settlement with his creditors. The court, after requiring a compliance with certain formalities, by an order dated February 10, dismissed the request for a decree declaring the suspension of payment.
    Thereupon Vázquez applied for a rehearing, alleging in support thereof such legal grounds as were deemed pertinent. This application was refused by the court which ratified its order of February 10, for the reasons set forth therein, adding that after General Order No. 224, series of 1899, had taken effect on January 1, 1900, the Civil Code was published, section 1814 whereof provides in explicit terms, that a debtor whose liabilities are greater than his assets, and who may have failed to meet his current obligations, must file a petition in bankruptcy in a competent court, as soon as he is aware of being in such condition, a provision which accorded with article 870 of the old Code of Commerce, inasmuch as the latter provides that only a merchant who, possessing sufficient property to cover all his debts, forsees the impossibility of meeting them, or lacks the means to meet them iu full, may suspend payments, whence it follows that in order to attain such a condition the liabilities must not exceed the assets, for then it would be impossible to meet all the debts and much less satisfy them in full.
    The court finally holds that under both the present and the former legis lation, as well as under either commercial or civil law, no person can secure the benefits of suspension of payments or of composition and respite, except where the assets are sufficient to offset the liabilities. The application for a rehearing is hereby denied, and the order of the 10th of the present month is affirmed. The foregoing judgment was concurred in and signed by the judges of the court, to which I certify. — Arturo Aponte — J. A. Erwin — R. Rovira — Juan Arroyo Mestre.
    
      From this order and the order of January 10, counsel for Constantino Fernández took an appeal in cassation for violation of law, which appeal was allowed. The record having been forwarded to this Supreme Court, the appellant entered an appearance and in the appeal the court followed the procedure provided for by an “Act establishing the Supreme Court of Porto Rico as a court of appeals, approved March 12, 1903.’’ A day was set for the hearing, which was duly had, counsel for appellant failing to appear.
    
      Mr. Fernando Vázquez, for appellant.
   Mb. Chief Justice. Quiñones,

after making the above statement of facts, delivered the opinion of the court as follows:

The findings of fact set forth in the order appealed from are accepted.

Under section 1 of General Order No. 224, series of 1899, which was in force before the publication of the new Civil Code, any merchant could make legal announcement of his having suspended payment within forty-eight hours next following the judicial or extrajudicial demand for payment of an obligation due and payable by him.

This provision of aforesaid General Order cannot be considered as having been repealed by article 1814 of the revised Civil Code which refers only to ordinary debtors applying for the remedy of composition and respite from their creditors, but not to merchants making legal announcement of their having suspended payment who cannot be declared insolvent but in a state of bankruptcy in a proper case, according to articles 1128, 1168 and 1316 of the Law of Civil Procedure, and 874 of the Code of Commerce, which have not been repealed, but, oh the contrary, should be considered as in force in view of the provisions of articles 1076, 1572 and 1691 and the final provision of aforesaid Civil Code.

Commercial transactions or acts, to which character the announcement of suspension of payments by a merchant, essentially appertains, pursuant to article 2 of the Code of Commerce, are governed by the provisions thereof, and such other provisions as are complementary thereto, to which class belongs General Order No. 224, series of 1899, the latter constituting the law in force with regard to the suspension of payments by merchants, in which matter as in all others governed by special laws, the provisions of the revised Civil Code are applicable only as' supplementary law, as prescribed in a general manner by article 12 of aforesaid Civil Code.

Under article 870 of the Code of Commerce, not only a merchant whose assets exceeded his liabilities, but one who lacked the means wherewith to satisfy all his debts in full could be judicially declared in suspension of payments, and although this provision of the Code of Commerce was after-wards modified by Royal Decree of June 25, 1897, according to which, a merchant who sought to obtain that benefit should own sufficient property to cover all his liabilities, while the extension of time proposed by him to his creditors could not exceed three years, and much less could he ask for a composition or reduction of his debts, his application being otherwise denied, all these provisions of aforesaid Royal Decree were subsequently repealed by General Order No. 224, according to which, every merchant, without any distinction between one who owned and one who did not own sufficient property to cover his liabilities in full, may make legal announcement of his having suspended payment, provided that upon a judicial or extrajudicial demand for payment of an obligation due and payable by him, he shall do so within forty-eight hours next following such demand, which requisite the petitioner claims to have complied with, nothing to the coutrary appearing in the record.

There being, therefore, no reason why the application of the petitioner should not be granted, under the authority of aforesaid legal provisions, we adjudge that we should reverse, and do reverse the order appealed from, dated February 19, last, as also the order concordant therewith of February 10, by declaring Constantino Fernández in ' suspension of payments. The District Court of Mayagüez is directed to make the necessary orders for the purpose of effecting said suspension of payments in accordance with the law.

Justices Hernandez and Figueras concurred.

Mr. Justice Sulzbacher did not sit at the hearing of this case.

Mr. Justice MacLeary,

dissenting.

In the case of Constantino Fernández, a merchant of Aguadilla, on appeal from an order of the District Court of Mayagüez, bearing date of February 19, last, I respectfully dissent from the judgment rendered by my colleagues reversing the decision of the trial court, believing the latter to have been correct.

Under the new Civil Code there is no distinction drawn between merchants and other classes of debtors, but all are in accordance with the general principles of American Law, placed on an equal footing. Article 1814 of the Civil Code passed by the Legislative Assembly, and now in force, makes no exceptions in favor of merchants but applies to all debtors, and requires that their assests should exceed their liabilities in order that they may take the benefit of a declaration of a suspension of payments, and clearly repeals any provision of the Code of Commerce in contravention of it. This is distinctly declared in the “final provision” contained in section 1876 of the said Code. In no part of the Civil Code is the contradictory provision of the Code of Commerce “declared to be continued in force’’. Were any support necessary to show the clear intention of the legislative mind it would be found in paragraph 3 of section 1823 where reference is made, in speaking of preferences, to “goods or securities constituted in a public or commercial establishment”, which terms can be applied to no other class of persons that merchants. But the rule which should be applied in the construction of this provision of the Civil Code, if any construction were necessary, is found in section 13 of the Code itself, which says: “when a law is clear and free from all ambiguity, the letter of the same shall not be disregarded, under the pretext of fulfilling the spirit thereof.” Whether this pretext has been used by my very much respected colleagues or not, the letter of the law has been disregarded in the determined effort to preserve in its entirety the “ Code of Commerce”. There is nothing about this particular Code or General Order which makes a special reference to either of them necessary in a repealing clause. They are included in the very comprehensive terms used and repeated in the “final provision” heretofore cited. Believing that all the acts of the Legislative Assembly should be readily and willingly carried out, regardless of the predilections of judges for particular systems of laws, and disclaiming all powers of legislation by judicial tribunals, I am most clearly of the opinion that the judgment of the District Court of Mayagüez should be in all things affirmed.