Case Name: Dolores Blondet Martínez et al., Plaintiff and Appellee, v. Guillermo Garáu, Defendant and Appellant
Court: Supreme Court of Puerto Rico
Jurisdiction: Puerto Rico
Decision Date: 1935-01-16
Citations: 47 P.R. 820
Docket Number: No. 6902
Parties: Dolores Blondet Martínez et al., Plaintiff and Appellee, v. Guillermo Garáu, Defendant and Appellant.
Judges: 
Reporter: Puerto Rico Reports
Volume: 47
Pages: 820–827

Head Matter:
Dolores Blondet Martínez et al., Plaintiff and Appellee, v. Guillermo Garáu, Defendant and Appellant.
No. 6902.
Argued January 14, 1935.
Decided January 16, 1935.
T. Bernardini Palés for appellant. Pedro E. Anglade for appellees.

Opinion:
Mr. Justice Córdova Davila
delivered the opinion of the Court.
The plaintiff in this case maintains that the appeal taken by the defendant is frivolous and moves to dismiss.
The action is based on a promissory note which reads ad literam as follows:
"For $1,500.00. — To July 8, 1922. — (One Thousand Five Hundred Dollars American Money.) On the eighth day of July, 1922, we jointly and in solidtm promise to pay to the order of Dolores Biondet the SUm of ONE THOUSAND FIVE IiuNDRED IDOLLARS in united states CURRENCY, for value received. We expressly submit to the jurisdiction of the District Court of Guayama, P. R., and we bind ourselves to pay the costs and expenses that collection thereof might cause, including fees of the attorney who may be engaged by the holder of present instrument for the recovery of the principal and interest at the anual rate of 9 per cent. Tbe interest on this obligation will be paid monthly and in advance by Samuel Martin at the said rate, that is, at the annual rate of 9 percent, and in default of payment of two consecutive months this obligation will be considered due. Guayama, Puerto Rico, July 8, 1922. — (Signed) Samuel Martin.' — (Signed) Berreteaga & Martin. (Signed) Guillermo Garáu."
In his answer the defendant admitted the execution of the document copied above, and among other things he alleged that according to Section 942 of the Code of Commerce in relation with Sections 944 and 950 of the same legal body, •edition of 1911, the action is prescribed, because the signers of the note are merchants and the transaction is purely, a commercial one. The lower court held that the action had not prescribed and sustained the complaint, ordering the defendant to pay the sum of $1,500 with interest thereon, and $250 for costs, expenses, disbursements, and attorney's fees.
According to the findings of fact of the lower court, fully sustained by the evidence, Dolores Blondet saved a certain sum of money to buy a house. Samuel Martin, brother-in-law of said young lady, knowing of the existence of that money, asked for it as a loan at the annual rate of interest of 12 per cent. The plaintiff agreed to loan the money and reduced the rate of interest to 9 per cent, considering that the rate offered was excessive. The promissory note was executed jointly and in solidn/m by the said Martin, by Berreteaga & Martin, and by the defendant Guillermo Garáu. Martín made this loan to meet an outstanding debt. The appellant alleges that the money loaned was used for commercial transactions, and that the cases decided by the Supreme Court of Spain hold that in cases of promissory notes made payable to order, if the parties intended to make a loan for commercial transactions, some of the contracting parties being merchants, said loan must be exclusively governed by Section 311 of the Code of Commerce, edition of 1911, which provides that a loan shall be considered commercial if any of the contracting parties is a merchant or if the articles loaned are destined to commercial transactions. The appellant does not cite any decision of the Supreme Court of Spain upholding the above theory.
Section 532 of the said legal body which was one of the Sections repealed and substituted by the Negotiable Instruments Act of 1930, provides that drafts payable to order between merchants and the bills or promissory notes likewise payable to order, which arise from commercial transactions, shall produce the same obligations and effects as bills of exchange, except with regard to acceptance, which is a quality pertaining to the latter only. This Court has repeatedly construed said Section. Promissory notes made payable to order are subject to the presumption juris tcmtum that they are mercantile in character unless it is shown that they do not arise from commercial transactions. However, the commercial character of promissory notes payable to order is not established by the mere status as merchants of the persons concerned therewith as drawers, indorsers, or holders, but by the essential fact that they arise from commercial transactions.
The above is the doctrine established by the case of Pierluisi v. Monitor, 42 P.R.R. 6, where the adjudicated cases of the Supreme Court of Spain and of this Court are carefully examined. In said ease it was alleged that the promissory note originated in a loan made to the defendant firm by reason of the assignment to said firm of a mortgage credit owner by the plaintiff. It was shown at the trial that one of the partners of the defendant firm sought and obtained from the plaintiff the assignment to him of said mortgage credit in order to transfer it to another person in partial payment of the purchase price of a house, and that he subscribed the promissory note as for value received in the said sum. This Court held that said promissory note did not arise from commercial transactions.
In the case of Salgado v. Villamil et al., 14 P.R.R. 437, it was held that notes payable to order are subject to the presumption that they are mercantile, in the absence of proof to the contrary, and the Court concludes that the notes involved in said case were not commercial as they were derived from purchase and sale of hereditary actions, which by no means can he considered as similar to the commercial transactions enumerated in the Code of Commerce, because only those acts may be considered as commercial in which either in the purchase or in the sale the parties have the intention of making profit.
In the case at bar Samuel Martin obtained from the plaintiff as a loan the savings made by her to buy a house. The transaction was made in 1921, when Section 532 of the Code of Commerce, edition of 1911, was fully in force. The juris tantum presumption that the promissory notes to order are mercantile has been refuted satisfactorily. The promissory note made payable to the plaintiff is not derived from commercial transactions, and therefore, any action thereupon does not prescribe by the lapse of three years as claimed by the defendant, but by the lapse of fifteen years, in accordance with Section 1865 of the Revised Civil Code in relation with Section 943 of the Code of Commerce, edition of 1911, equivalent to Section 1940 of the same code, edition of 1932.
This is the only fundamental question involved in this case, judging from the arguments of the defendant in opposition to the motion to dismiss, and from the careful study that we have made of the evidence introduced and of all the questions set forth by the defendant in his answer and during the trial.
To our judgment the appeal taken is frivolous and it should be dismissed.