Opinion ID: 475523
Heading Depth: 1
Heading Rank: 1

Heading: the puerto rico case

Text: 2 On October 4, 1977, appellants entered into a written contract with Sergio Miranda Lopo for the formation and operation of a computer service business. The contract provided in pertinent part as follows: appellants would form a corporation to be known as Advanced Computer Services, Inc., and invest in it office space, a computer and certain office equipment and furniture; appellants agreed to advance, with certain limitations, the money necessary for operation, which was to be repaid out of profits; Miranda would get 50% of the profits; appellants agreed to sell and Miranda agreed to buy shares of stock in Advanced to the total amount of the original investment, which was valued at $142,457; Miranda had a three-year option in which to purchase 49% of the stock and an option, after the expiration of the three years, to purchase an additional 31% of the stock of Advanced. An addendum was added to the contract on September 4, 1979, modifying the original contract and transferring one-third of the stock of Advanced to Miranda. 3 On November 3, 1982, a complaint was brought in the Superior Court of Puerto Rico, San Juan Part, by Miranda, his wife, and their conjugal partnership against appellants and Advanced. The complaint alleged, as a first cause of action, that appellants had refused to deliver the certificates of stock and share the profits as agreed under the contract. The second cause of action alleged failure of appellants to carry out their corporate duties and unjust enrichment. 4 A settlement agreement was entered into between the parties on February 15, 1983. On March 30, 1983, the parties moved for a voluntary dismissal of the suit stating: 5 2. That, as part of this settlement, the parties are mutually released, exonerated and freed of all responsibility related to Advanced Computer Services, Inc., except as stipulated in the stock purchase and sale documents of Advanced Computer Services, Inc., dated February 15, 1983, and the executed mortgage deeds on personal property and mortgage on real property, related with same. 6 3. That this release also applies to Computer Maintenance Corporation. 7 The Superior Court of Puerto Rico issued a judgment on April 12, 1983, stating: Judgment of Dismissal because of Voluntary Dismissal of Action, pursuant to the parties' Motion of March 30, 1983, which is made a part of this Judgment, is hereby entered. 8 The pertinent paragraphs of the settlement agreement provided as follows: 9 2. Appellants transferred to Miranda all of their shares and rights in Advanced; all assets were listed in Annex A. 10 3. Advanced agreed to pay promptly all obligations listed in Annex B. The buyers agreed to send sellers evidence of payment of the obligations on or before their due dates. The sellers certified that the list of obligations was complete and correct as of February 14, 1983. 11 The certification was followed by these sentences:If within a term of TWO (2) years there arises any pending obligation that belonged to the Corporation prior to February 1983, the Corporation shall have the right to deduct the amount of said obligation from the amount agreed on paragraph 5. Should such an incident happen, the BUYER shall advise the SELLING party in writing, and the latter shall have the right to answer said claim. 12 5. A debt of $46,413.90 owed to Computer Maintenance Corp., a company owned by appellants, was waived provided that Advanced pay to appellants the sum of $30,000 within two years. This debt was secured by a mortgage on real estate in the amount of $27,500 and a chattel mortgage in the amount of $5,000. 13 8. It was agreed that immediately on the execution of the agreement the parties would stipulate to the dismissal of the Superior Court action. 14 At the end of the list of accounts receivable in Annex A, there is the following: Note: Amount in 'Over 90' column may be uncollectible. 15 On December 14, 1983, Miranda wrote appellants stating that he was deducting $19,902.55 from the $30,000 owed under the settlement agreement and that the debt was, therefore, reduced to $10,097.45. The claimed justification for the reduction was $1,687.63 in undisclosed liabilities of Advanced and $18,214.92 in non-existing accounts receivable. Appellants responded on January 3, 1984. The pertinent portion of their letter states: 16 ACCOUNTS PAYABALE: According to the terms of paragraph 3 that guarantees the amounts to be paid and if it is documented that they are preexisting debts, they must be accepted. 17 VACATIONS: Vacations owed at the signing of the contract were then current exactly as it appears in line 16, Annex B. Claims are not valid. 1 18 ACCOUNTS RECEIVABLE: It was never represented that the amounts in column over 90 were collectible. The note at the bottom of Annex A so expresses and the exclusion of all warranties in paragraph 1. No claim is justified.