Case Name: Banco Territorial y Agrícola v. Puig
Court: Supreme Court of Puerto Rico
Jurisdiction: Puerto Rico
Decision Date: 1904-02-11
Citations: 5 P.R. 279
Docket Number: No. 29
Parties: Banco Territorial y Agrícola v. Puig.
Judges: Chief Justice Quiñones and Justices Hernández and Mac-Leary concurred.
Reporter: Puerto Rico Reports
Volume: 5
Pages: 279–301

Head Matter:
Banco Territorial y Agrícola v. Puig.
Appeal from the District Court of Arecibo.
No. 29.
Decided February 11, 1904.
Unlawful Detainee — Who May Institute Same. — All persons legally entitled to the possession of an estate, as owner, have a right to institute an action of unlawful detainer against any person enjoying the usufruct thereof.
Encumbrances Entered Subsequent to an Award. — All encumbrances on an estate, entered subsequent to the date of an award thereof in payment of a debt, shall upon the record of said award be considered canceled.
Eight op Purchaser op a Leased Estate. — The purchaser of a leased estáte has a right to terminate the lease in force at the time of making the sale, unless the contrary has been stipulated and without prejudice to the provisions of the Mortgage Law.
Owners op Accessions Not Mortgaged. — While under article 113- of the Mortgage Law, the owner of accessions and improvements not mortgaged with an estate transferred to other persons, has a right to demand indemnification therefor from the new owner, he cannot prevent the latter from exercising such rights as are derived from his ownership of the property.
An Agricultural Colony Not Exempt Prom Action op Unlawful Detainer. —The benefits of an agricultural colony are independent of, and do not preclude, the right of the new owner to institute an action of unlawful detainer against the "colonists” settled thereon, provided they have been given thirty days’ notiee to depart.
Judgments — Dependants in Default. — A judgment rendered with respeet to defendants who have appeared in a suit should be made extensive to such defendants as may have been declared in default.
Id. — Costs.—Costs should be imposed ujion litigants whose claims have been totally rejected, for which reason it is not proper to tax same against defendants in default, who, not having appeared, have not presented any claim or demand in the suit.
STATEMENT OP THE CASE.
We have examined the record in these proceedings prosecuted in the District Court of Arecibo, by the “Banco Territorial y Agrícola, ’ ’ established in this city, represented in this Supreme Court by its counsel, Juan de Guzman Benitez, as respondent, against Miguel Valentín Puig Enseñat, a property-owner, represented by his counsel Jacinto Texidor, as appellant, in an action of unlawful detainer; the other defendants, namely, Lorenzo Joy and Calixto Arocho, having been declared in default, who also failed to appear before this court, the judgment with respect to them having been ren dered after due notificación, which, case is pending before ns on appeal in cassation, now appeal, taken by Miguel Valentin Pnig Enseñat, from the judgment which literally reads as follows:
“Judgment No. 5. — Areeibo, February ninth, one thousand nine hundred and three. The oral and public hearing has been had in this District Court, of an action of unlawful detainer instituted by the ‘Banco Territorial y Agrícola,’ of San Juan, represented by its counsel, Juan de Guzman Benitez, against Francisco Castañer, Calix-to Aroeho and Lorenzo Joy, property owners and residents of Ciales, in their own right and as representatives of Valentín Puig Enseñat, the former represented by his counsel, Elpidio de los Santos Laguar-dia, and the other two declared in default.
“On September 23, 1902, the ‘Banco Territorial y Agrícola,’ of San Juan, through its counsel Juan de Guzmán Benitez, Esq., brought an action in this court against Francisco Castañer, Calixto Aroeho and Lorenzo Joy, in their own names and as representatives of Valentín Puig y Enseñat, setting forth that by a deed executed on Juanuary 18, 1896, before Notary Mauricio Guerra, Lorenzo Joy y Colón mortgaged in favor of aforesaid bank a coffee plantation called ‘Honradez,’ which belonged to him and is described in said deed as follows: ‘Rural property: a coffee plantation called “Hon-radez,” situated within the municipal district of Ciales, in larrio “Cialitos,” which is crossed by the river called “Cialitos,” running from southwest to northeast, said property measuring six hundred and forty-eight cuerdas, and sixty-six hundredths of a cuerda, equal to two hundred and forty hectares, ninety-four ares and ninety centares of land, of which four hundred cuerdas are planted with coffee and plantains, twenty with pasture grass, malojillo and sugar-cane, the remainder being natural pastures, woods and underbrush. The following buildings are situated upon the aforesaid property, to wit: a two-story house built of native wood and having a galvanized iron roof, the upper floor of which serves as a dwelling for the owner and his family, the ground floor being intended for storage; another turn-story house built of wood and masonry, seventeen meters in front by twenty deep, having now four compartments and roof of galvanized iron, wherein are installed the machinery for handling coffee, consisting of the following apparatus: machinery for pulping coffee, “grand model”; mechanical washer, vertical rotation; centrifugal. coffee-wiper; mechanical hot-air drier, Guardiola system, No. 2; polishing and cleaning mill, with circular pounders of twenty-five rotations per minute; mechanical fanners and cleaners; coffee classifiers in five groups; combined machinery for raising and drawing coffee to the various apparatus; and a large hydraulic wheel which operates all this machinery, five meters in diameter by ninety centimeters between the string-boards, using as motive power one hundred and twenty-five litres of water per minute, derived from the river “Cialitos” within the same property, and carried over by means of a hydraulic conduit of masonry; another two-story frame house, with galvanized iron roof, the top floor of which is occupied by overseers and employees, the ground floor being used for the storage of provisions and other commodities; another two-story frame house, zinc-roofed, the lower part of which is used as a stable and the top floor as a warehouse and lodging for peons in the service of the establishment; another one-story frame house, covered with zinc, in which there is an oven and implements for baking bread for the farm’s consumption; there being, besides, scattered about the place, thirty-nine rustic houses for the accommodation of day laborers; three frame, zinc-roofed barracks, each with accommodation for ten laborers; the butcher-shop, standing on the property’s plaza, and the slaughter-house on the banks of the river “Cialitos.” The aforesaid property is bounded on the east by lands belonging to José Ramón Figueroa Lebrón, Raimundo de la Cruz, Estate of Luisa de la Cruz, lands of Alejo Aponte, of the signer of the document, of Lorenzo Joy and of José García; on the north, by lands belonging to said Garcia and Joy and those that were brought by Joy and Mayol into the agricultural copartnership of Alberty & Co.; lands belonging to Federico Monge, formerly M. Frau y Hermanos, and those owned by Eugenio Fernández; and on the south by lands belonging to Jaime Co-lón and the aforesaid M. Frau y Hermanos, now Federico Monge.
“Said mortgage was duly recorded on folio 48, volume 9, of the municipal council of Ciales, property 212 triplicate, entry 29 of the registry of Arecibo.
“That by another deed executed on July 22, 1899, before Notary José Félix Lajara, of Manatí, the aforesaid Lorenzo Joy y Colón and Miguel Valentín Puig, the latter being represented by Ramón Ríos Cerpa, as attorney in fact, by substitution of power conferred upon hiiu by said Lorenzo- Joy y Colón, signed a contract for the lease of certain houses belonging to the 'Honradez’ plantation, said leased bouses being tbe following: a two-story bouse built of native lumber, witb a galvanized iron roof, tbe upper floor of 'which is intended for the dwelling of a family and the ground floor for storage purposes; another two-story frame house, with a zinc roof, the lower part of which is intended for a stable and the top floor for storage and the accommodation of peons employed on the premises, and a terrace for drying coffee; another single-story frame house with a zinc roof, in which there is an oven for baking bread and the utensils necessary therefor, for the consumption of the estate; and another frame house, the lower part of which is built of masonry, seventeen meters in front by twenty-four deep, with a galvanized iron roof, wherein is installed the machinery for handling coffee, and annexed thereto the terraces used for drying the bean, and containing the apparatus hereinbefore described; which buildings stand on the ‘Honradez’ plantation, now an agricultural colony, said lease appearing to have been made for eight years and -was to expire on July 22, 1907.
“According to the terms thereof Puig was to pay Joy an annual rental of two hundred pesos, the latter assigning to the former the benefits which he claims the government has granted him on the estate ‘Honradez’ as an agricultural colony. Said lease was recorded in the Registry of Property of Arecibo, at folio 240, volume 2, of Ciales, property 212, sextuple, entry 39. That owing to default in the payment, as agreed in aforesaid mortgage deed, the bank instituted summary proceedings against the plantation ‘Honradez,’ which was adjudged to the bank, by decision of this court rendered on October 12, 1901. Said decree was duly recorded at folio 246, volume 20 of Cia-les, property No. 212, sextuple, entry 42, all liens subsequent to that of the bank being moreover canceled, including the aforesaid lease, as appears from entry 43 of the same property made at folio 247 of aforesaid volume 20 of Ciales. That on November 8, 1901, possession of the property was given to the bank by the municipal court of Cia-les, in compliance with the order of this court, whereupon the said Joy, on behalf of Puig, entered a protest claiming that the latter was entitled to the crops he had cultivated on the ‘Honradez’ plantation. That when Lorenzo Joy mortgaged the plantation to the bank there were no preferred encumbrances against it other than a mortgage in favor of Pedro A. Mayol, which has been paid and canceled. All the other contracts that Joy may have entered into with Puig or any other person, after recording the mortgage in favor of the bank, whether entered or not in the Registry were made secretly or without the knowledge and intervention of the bank; and that more than thirty-days had elapsed since notice to vacate had been served upon the defendants, who had failed to vacate the property occupied by them as representatives of Puig, and as tenant at sufferance in their own right, without paying rent.
“As legal grounds plaintiff cited the provisions of the Civil Code and the Mortgage Law referring to the right of ownership, and articles of the Law of Civil Procedure governing cases of ejectment from rural estates, and prayed that judgment be rendered ordering the eviction of the defendants.
“After citation of all the parties so that the defendants might be apprised of the complaint brought against them, the oral hearing was had as prescribed by law, at which appeared the representative of the bank, as plaintiff, and Francisco Castañer, Lorenzo Joy and Ca-lixto Arocho, in their own behalf and as attorneys in fact of Miguel Valentín Puig Enseñat, all of whom denied the facts stated in the complaint; whereupon the record was delivered to them, the only one to file an answer thereto being Castañer, represented by his attorney, Elpidio de los Santos Laguardia, who set forth the following facts, to wit: That prior to the year 1899, or to be precise, in 1897, Pixig had leased from Joy several houses on the farm which had become an agricultural colony and within whose grounds Puig had been planting and constructing on the strength of an assignment made by Joy in his favor of the rights conferred upon him by the Spanish Government as founder of such colony, and aforesaid plantations and constructions had not been and could not be taken possession of by the the agricultural bank, which, for this reason, had no right to institute proceedings for unlawful detainer, inasmuch as such proceedings lie only when the property is held at suffrance, which is not the ease in tte present instance.
“As the legal grounds he urged the provisions of the Civil Code with reference to ownership and possession of real property, the law of agricultural colonies, and the Mortgage Law, which allows the institution of summary proceedings only with reference to specially mortgaged property. He finally prayed that the complaint be dismissed, inasmuch as the houses leased by Joy to Puig Enseñat were not included in the mortgage.
“Lorenzo Joy and Calixto Arocbo, Laving failed to answer tbe complaint were declared in default, on motion of tbe plaintiff, and tbe ease continued without again summoning them.
“Tbe plaintiff proposed as evidence tbe confession in court of Francisco Castañer, wbo, at tbe oral trial answered tbe questions propounded by tbe former, and also that of Lorenzo Joy, wbo appeared as a witness, record being taken of bis testimony, wherein be acknowledged tbe authenticity of two private letters in which be reports to tbe bank tbe damages done by tbe cyclone of August, 1899, on bis estate ‘Honradez;’ and as documentary evidence plaintiff also proposed a certificate of tbe decree of October 12, 1901, adjudging tbe estate ‘Honradez’ to tbe Territorial Bank, entered in tbe Registry of Property of Arecibo, and bearing a memorandum to tbe effect that all tbe encumbrances subsequent to tbe mortgage in favor of tbe bank bad been canceled, tbe said certificate being joined to tbe record; a certificate of tbe registrar of property of Arecibo stating that upon recording tbe mortgage deed executed by Joy in favor of tbe bank, by virtue of which tbe estate ‘Honradez’ was adjudged to tbe latter, according to notarial document of January 18, 1896, there existed no lien having priority over that of the bank, except a mortgage in favor of Pedro A. Mayol, of Ponce, which was afterwards canceled; a certificate from tbe registrar of the record of the contract made before tbe notary of Yega Baja, on July 22, 1899, between Lorenzo Joy and Miguel Valentín Puig Ensefiat, whereby tbe former leased to tbe latter certain bouses on the grounds of tbe estate ‘ Honradez, ’ which record was canceled; a certificate from tbe clerk of this district court showing that when demand for payment was made upon Joy, in the summary proceedings instituted by tbe bank against him, Puig, wbo was absent in Spain, was notified by publication, as being interested in responsibilities subsequent to that of tbe bank; a certificate of the proceedings bad in tbe execution of the order giving possession of tbe estate ‘Honradez’ to the bank; proceedings to retain possession, instituted in this court by Miguel Valentin Puig against tbe bank, and dismissed with costs against Puig, said decision being final; a certificate of the Commissioner of the Interior to tbe effect that the declaration of agricultural colony made in favor of Lorenzo Joy, as owner of the estate ‘Honradez,’ by tbe Spanish Government, bad reference only to tbe benefits of articles 8 and 9 of tbe law of agricultural colonies, which declaration was not final, inasmuch as tbe municipal council of dales had taken an appeal for annulment against said declara tion, which appeal was allowed, the proceedings thereon being suspended by reason of the change of sovereignty.
"On behalf of the defendant Francisco Castañer, his counsel, Elpidio de los Santos Laguardia, proposed and introduced as evidence the lease executed by Lorenzo Joy in favor of Miguel Valentín Puig, on July 22, 1899, before Félix Lajara, notary of Vega Baja, and the confirmation thereof before the same notary, on November 27, 1897; the notarial act of March 15, 1900, referring to the ownership of the agricultural colony ‘Honradez,’ and lease thereof made by Joy to Miguel Valentín Puig, and to the fact of the reconstructions and buildings made by Puig, which instrument was recorded in the Registry on March 22, 1900; a document relating to the construction of a house intended as barracks for the Guardia Civil within the estate ‘Honradez,’ and sale of said house by Puig to Joy; a certificate of the secretary of the municipal council of Oiales, relating to the assessment of land taxes for the Insular Treasury, and wherein it is stated that since the fiscal year 1897-98 the designation of colony had been given to what was then a farm consisting of. four hundred and twenty-four cuerdas of land, situated in barrio ‘ Oialitos, ’ upon which, a special tax had been assessed by virtue of the privileges granted by the Spanish Government to Joy, and afterwards ratified by the American Military Government; and a certificate of the secretary of the municipal council of Ciales with reference to a reduction of taxes in consideration of the fact that the estate ‘Honradez’ was an agricultural colony, pursuant to the royal order reproduced in said certificate.
"At the oral trial, counsel for the ‘Banco Territorial’ and for Francisco Castañer being present, this judgment was unanimously approved, the legal provisions having been observed in the conduct of this case. Presiding Judge Felipe Cuchí y Arnau delivered the opinion of the court, as follows:
"A person entitled to the possession of an estate, as owner, shall be considered a legal party to institute an action of unlawful detainer for the purpose of ejecting therefrom the person unduly enjoying the usufruct thereof, and it may be instituted against tenants, laborers and lessees of a farm, according to paragraph 1 of article 1563 of the Law of Civil Procedure.
‘ ‘ The title of ownership of the estate ‘ Honradez, ’ on the strength of which the plaintiff has instituted the present action against the defendants, is a decree adjudging said farm to the ‘Banco Ter ritorial y Agrícola,’ of San Juan, issued by tbe district court under date of October 12, 1901, in foreclosure proceedings against Lorenzo Joy, and recorded in tbe Registry of Property of Areeibo.
“By virtue of tbe record of said award in the Registry of Property, all tbe encumbrances entered subsequently to tbe date thereof were canceled, according to tbe provision of paragraph 2 of article 125 of the Mortgage Law.
“Among tbe encumbrances canceled for this reason were the-leases of bouses belonging to the estate ‘Honradez,’ made by Lorenzo* Joy in favor of Miguel Valentín Puig, as appears from tbe Registry of Property of Areeibo, and hence Puig’s claim as to bis right to continue living upon tbe estate by virtue thereof, notwithstanding the award in favor of tbe bank, has no ground to stand upon inasmuch as tbe record of said leases has been canceled.
“Furthermore, by article 1571 of the old Civil Code and 1454 of the one now in force, the purchaser of a leased estate, whether by deed of purchase and sale or by judicial award, has a right to terminate the lease in force, unless the contrary is stipulated, and without prejudice to the provisions of the Mortgage Law. .
“That which is provided by article 113 of the Mortgage Law, as to the owner of accessions or improvements not mortgaged with the property that has been transferred to other hands by award or purchase, is the right to demand indemnification therefor from the new owner, but in nowise authorizes him to prevent the new and legitimate owner from exercising such rights as are derived from his ownership of the property awarded, as claimed by Puig.
“If the defendant Miguel Valentín Puig did make reconstructions and improvements on the estate ‘Honradez,’ after it had been mortgaged to the bank, he is entitled only to an indemnification by the latter for the value of said improvements, after an appraisement thereof, but he cannot prevent the bank from exercising, as owner, its right of eviction from the property awarded in its favor, if, as in the case at issue, it has complied with rule 2 of article 1560 of the Law of Civil Procedure requiring the service of thirty days’ notice.
“Nor has the fact that the estate ‘Honradez’ was considered since 1895 as an agricultural colony, with all the rights allowed by the law of agricultural colonies to all estates considered as such, any legal force to prevent the dispossession demanded by the bank, for, aside from the fact that said concession is questionable, inasmuch as the municipal council of Ciales had taken an appeal for annulment thereof, which remained in abeyance owing to the change of sovereignty, aforesaid concession was confined to the benefits of articles 8 and 9 of the law of agricultural colonies, which refer only to exemption from taxation for a period of time more or less extended, but under which the estate can in no manner be prevented from passing into the hands of a third party by any title whatsoever.
“If the ‘Banco Territorial’ holds a legitimate title of ownership to the estate ‘ Honradez, ’ the lease of a portion thereof made by the former owner, Lorenzo Joy, to Miguel Valentín Puig, has ceased; the benefits of an agricultural colony being independent of the right of action exercised in this suit, and the ‘colonists’ or inhabitants thereof having been duly notified to vacate, it is evident that the action of unlawful detainer must be sustained.
“The other defendants, Joy and Aroeho, having failed to contest these proceedings, for which reason they were declared in default, the decision rendered as regards the other defendant, Puig, must be made to apply to them.
“Under rule 63 of General Orders No. 118, series of 1899, costs shall be imposed only upon the litigant who loses his case on all points, and as Francisco Castañer, as attorney in fact of Miguel Valentín Píuig y Enseñat, who resides in Spain, was the only one to contest the complaint, all the allegations adduced by him being over-, ruled, he alone must pay the costs.
‘ ‘ In view of the provisions of articles 348 and-1571 of the Civil Code; 110, 112 and 113 of the Mortgage Law, and those of the regu lations for tbe execution of tbe latter, concordant thereto; 371, 1559, 1560, 1561 and 1587 of tbe Law of Civil Procedure, and General Order No. 118, series of 1899, we adjudge that we should sustain and do sustain tbe complaint in tbe action of unlawful detainer instituted by tbe ‘Banco Territorial y Agrícola’ of San Juan, against Lorenzo Joy, Calixto Arocho and Francisco Castañer, on their behalf and as attorney in fact of Miguel Valentín Puig y Enseñat, and condemn said defendants to vacate tbe estate ‘Honradez,’ situated in barrio ‘Cialitos,’ municipal district of Ciales, within tbe period of twenty days, or be forcibly ejected therefrom, should they fail so to do; with costs imposed upon Miguel Valentín Puig y Enseñat. Thus by this our judgment do we find, order and sign: Felipe Cuchí, Otto Schoen-rich, Enrique Gonzales Darder.”
From the foregoing decision Miguel Valentín Puig y En-señat filed an appeal in cassation for error of law and, the record having been sent up to this Supreme Court, the act of the Legislative Assembly, approved March 12, 1903, was complied with, and a day was set for the hearing, when counsel for appellant and respondent presented such arguments as were deemed pertinent to their respective claims.
Mr. Texidor, for appellant.
Mr. Guzmán Benitez (Juan), for respondent.

Opinion:
Mr. Justice Figueras,
after making the above statement of facts, rendered the opinion of the court.
The findings of fact and conclusions of law contained in the decision appealed from are accepted.
In view of the legal provisions cited therein, the act of the Legislative Assembly of March 12, 1903, and article 872 of the Law of Civil Procedure, we adjudge that we should affirm and do affirm the decision rendered by the District Court of Arecibo, February 9, of the year last past, whereby said court sustains the action of unlawful detainer instituted by the "Banco Territorial y Agrícola," against Lorenzo Joy, Calixto Arocho and Francisco Castañer, on their behalf and as attorneys in fact of Miguel Valentín Puig, with the other pronouncements in the case, and impose the costs of the proceedings on appeal upon the appellant, Miguel Valentin Puig y Enseñat. The record of the District Court of Arecibo is ordered to be returned with the proper certificate.
Chief Justice Quiñones and Justices Hernández and Mac-Leary concurred.
Mr. Justice Sulzbacher did not sit at the hearing of this case.