Case ID: pr_4/html/0561-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Chief Justice Quiñones,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Delgado Et Al. v. Lecaroz & Co.
    Appeal from the District Court of Arecibo.
    No. 78.
    Decided December 7, 1903.
    Insolvency — Agreement with Creditors — Preferred Creditors. — An agreement entered into judicially between an insolvent debtor and Ms creditors, whereby the latter agree to allow the former a certain period of time for the payment of his debts, is not binding upon a creditor whi> refuses to participate in the meeting at which such agreement is effected, where no opposition is made to the action taken in accordance with law, and where such creditor is deemed a preferred creditor by virtue of haying taken steps within the legal period to protect his claim in the appropriate judicial proceeding.
    Id. — When an agreement entered into by an insolvent debtor with his creditors is not opposed within the legal period, the creditors who were present at and participated in the meeting at which said agreement was effected, are bound by the decision of the majority.
    Id. — Commercial Firms in Liquidation — Personality Thereof. — The personality of commercial associations continues in force, after dissolution, for purposes of their liquidation, and, therefore, the personality of their representative appointed for such purpose likewise continues in force after said dissolution.
    STATEMENT OF THE CASE.
    This is a case of voluntary insolvency proceedings and request for a respite instituted by Andrés Avelino Delgado in the abolished court of first instance of Utuado, and afterwards continued in the District Court of Arecibo, which case is pending before us on appeal in cassation for error of procedure and error of law, taken by the creditor Francisco Abreu, through his counsel Elpidio de lqs Santos y Laguardia, from the order 'made by aforesaid court of first instance, and which, literally 'transcribed, reads as follows:
    “Order of approval: — In the city of Utuado, March 23, 1899. The hearing was had before Salvador Pieornell y Cardona, judge of first instance for said city and for tlie district thereof, in these proceedings instituted by Andrés A. Delgado y Abreu, and in his name, having the necessary power of attorney, Carlos B. Buitrago, who requested a respite from his creditors, which request was formulated and presented on the 10th ultimo.
    “A day was set for the meeting and all the listed creditors being duly summoned to appear, the same was held on February 28, 1899, when,a majority of the creditors present agreed to allow the debtor an extension of ten years for the payment in full of all his debts, the same to be made in installments of one-tenth thereof payable in January of each year, beginning with 1900, without interest of any kind.
    “Lecaroz & Co., doing business in Lares, instituted, through their solicitor, Antonio Suliveres, and has pending before the court, an executory action against the debtor, Delgado, for the recovery of fourteen thousand seven hundred and ninety-one pesos and sixty-nine centavos, for which sum an attachment was issued on January 6, 1899, upon the property of the debtor, besides two thousand' pesos for interest and costs, the sequestration being carried into effect through a notice entered on the 7th of the said month of January, in the Registry of Property of Arecibo, after complying with all the legal requirements.
    “Said attachment was ratified by the institution of the proper executory action, on February 10, 1899, the writ of execution being issued on the 28th of the same month and carried into effect on March 1, 1899.
    “Aforesaid solicitor, Suliveres, alleging that inasmuch as his principals, Lecaroz & Co., had entered at the Registry of Property the attachment and sequestration hereinbefore mentioned, and had, moreover, for this reason abstained from attending the meeting of creditors, requested that they be declared preferred creditors for purposes of the approval of the agreement entered into between the debtor and his creditors, and, consequently, that the approval of said agreement does not obligate them to abide by the terms thereof.
    “Although Lecaroz & Co. were summoned as creditors to be present at the meeting, they abstained from attending the same, from which it appears that they took no part in the deliberation and voting, but within the term prescribed for opposition, asked that their right of abstention, and as preferred creditors, be recognized, so as not to be bound by the. agreement entered into at the meeting, thus complying with the requirements provided by law for the purpose of obtaining such a declaration; they, moreover, having in their favor the cautionay notice of their credit entered in the Registry of Property by virtue of a judicial order resulting- from a cautionary attachment, ratified according to law, and the entry whereof antedates by more than forty-eight hours the petition for respite.
    “The ten days having elapsed within which the opposition could and should have, been made by the creditors present at the meeting who discussed and approved the granting of a respite without making such opposition, the resolution adopted by a majority of those present at the meeting is binding upon all those who participated therein.
    “In view of'articles 1917 and 1923 of the Civil Code, and 1142 and 1149 of the Law of Civil Procedure, I say that I should order and do order that the agreement entered into between the debto^ Andres A. Delgado y Abreu, and his creditors, consisting in allowing said debtor ten years for the payment of his debts, by yearly installments of the tenth part thereof, without interest, to begin from January, 1900, be complied with, and declare that creditors not excluded must abide by said agreement; and I do further declare that this decision does not bind L'ecaroz & Co., so far as the agreement is concerned, because they belong to the excluded class, their credit being preferred by reason of the record thereof in due time made at the .Registry of Property, and because of the fact that they abstained from attending and voting at the meeting of creditors. Before signing it is stated that the figures in the third line of this page should read: ‘one thousand nine hundred.’ Thus was it adjudged, ordered and signed before me, to which I certify. — Salvador Picornell Cardona.”
    From this decision counsel for the creditor, Francisco Abreu, took an appeal in cassation for error of procedure and error of law, which was not allowed, whereupon he resorted to the remedy of complaint, which being sustained by this Supreme Court, the proposed appeal in cassation was allowed. The record having been forwarded to this court after citation of the parties, upon their appearance the appeal for error of procedure was heard. At this stage of the proceedings, in compliance with the act of March 12, 1903, converting this Supreme Court into a court of appeals, the hearing had was left without effect, and the record was then delivered to the parties for their information, and upon the return thereof a day was set for the new hearing, counsel for the parties being present.
    
      Messrs. Díaz and Texidor, for appellant.
    
      Mr. López Landrón; for the respondents Lecaroz & Co.
    The other respondent did not appear.
   Mr. Chief Justice Quiñones,

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

The findings of fact and conclusions of law contained in the decision appealed from are accepted.

None of the errors of procedure alleged by counsel for appellant, Francisco Abreu, can be considered, for, inasmuch as Solicitor Suliveres has not raised, on hehalf of Lecaroz & Co., any incidental issue which should be determined as prescribed by the corresponding section of the Law of Civil Procedure, the violations included under paragraphs 1, 3, 4, 5 and 6 of article 1691 of aforesaid Law of Civil Procedure, upon which the appeal is based, and which were after-wards renewed at the second hearing of this case by counsel for appellant, could not have been committed.

Nor can the lack of capacity of Solicitor Suliveres to represent Lecaroz & Co., which is another of the exceptions pleaded by appellant, be considered, for although under article 9, of the Law of Civil Procedure, the representation of solicitors, when such, office existed, ceased, among other causes, “when the character in which the principal appeared in the action has ceased”, it cannot be maintained that the personality of Lecaroz & Co. had ceased when aforesaid solicitor appeared on their behalf at the meeting of creditors for the purpose of requesting that they be declared excluded from the agreement arrived at between tbe debtor and his creditors, because, although the term fixed for the duration thereof had expired, which is one of the causes which produce the dissolution of commercial firms, their personality nevertheless continued to exist for all the purposes of the liquidation of the firm, one of which purposes is, in fact, the collection of the debts outstanding in favor of the firm, and if the personality of the firm continued to. exist for this purpose, it is logical to infer that the personality of the solicitor, who for the same purpose represented the firm, at the meeting, likewise continued to exist.

As to the substance of the question, no error was committed in declaring that Lecaroz & Co. were not bound by the agreement made between the debtor, Andrés A. Delgado, and his creditors; for having secured, before the meeting of creditors was held, an attachment upon the debtor’s property, duly entered at the Registry of Property, and having abstained from attending the meeting, and thereby abstained from taking part in the deliberations thereof with respect to the agreement arrived at, they are not bound by the action taken by the majority, according to the provisions of article 1138 of the Law of Civil Procedure and 1917, in connection with 1923 of the old Civil Code, which is the one applicable to the matter in litigation.

Therefore, none of the essential forms of the trial having been violated, nor any material error committed, the order appealed from should be affirmed.

We adjudge that we should affirm and do affirm the order of March 23, 1899, appealed from, with costs against appellant.

Justices Sulzbacher and MacLeary concurred.

Mr. Justice Hernández and Mr. Justice Pigueras did not sit at the hearing of this case.