Instruction: 1. Mention the parties involved in the case, duly identified as plaintiffs or defendants, etc. 2.
Question:
Instruction:
1. Mention the parties involved in the case, duly identified as plaintiffs or defendants, etc. 2. What is the main controversy that arises in the case. (The controversy It is always that question that the court asks itself to which it must respond to solve the problem at hand). 3. It needs a summary of the facts that led to the case reaching court. (Those particularities that gave rise to the conflict between the parties). 4. It needs a summary of the legal reasoning that the court used to resolve the controversy. 5. Indicate what the verdict was, that is, what was the final disposition made by the court supreme on the case. 6. What effect does that verdict or sentence have?
JUDGMENT
In San Juan, Puerto Rico, on October 18, 2006. This appeal allows us to resolve whether the manufacturer of cans for packaging food, which delivers them with a manufacturing defect that causes contamination of the canned food in them, responds to the buyer for the action of remedy for hidden defects only or if he is responsible for the breach of the contract of sale of the cans, as regulated by both actions by the Commercial Code and additionally by the Civil Code of Puerto Rico. As an obligatory sequel to this first question, we must resolve whether the corresponding action is time-barred, upon expiration of the term of the alleged express warranty offered by the manufacturer, or whether, being the appropriate action for breach of contract, it is subject to the limitation period of 15 years. that is assigned by the common Civil Code to this type of claim.
In the case at hand, we resolve that the express warranty offer for a product presupposes that it meets the conditions of suitability contracted by the parties at the time of delivery and that the manufacturer guarantees such suitability for the stipulated period. If, since the product is delivered to the buyer, it no longer has the necessary constitution to fulfill the specific use for which it was acquired and could never have been used for that purpose because it was unusable for that purpose, the criteria of the doctrine of aliud pro are met. alio, as accepted by the jurisprudence of the Supreme Court of Puerto Rico, which recognizes an action for breach of contract in such circumstances, especially if the cans had a defect or defect that could not be detected until after financially compromising the buyer in the execution of their own business activity, that is, after packaging the food and experiencing it rotting. The prescriptive period for this action, on the date the events occurred, was 15 years, counted from the date the contractual violation occurred. The appellant brought the action within the time limit set for the claim for breach of contract.It is necessary to modify the
Article 940, for the date on which the events in controversy occurred, said: "Actions that by virtue of this Code do not have a specific period to be deducted in court will be governed by the provisions of common law." 10 L.P.R.A. sec. 1902.
However, through Law 272 of November 9, 1998, its text was amended. to replace the phrase "shall be governed by the provisions of common law" with "shall prescribe after five (5) years." Law 272 itself provides that the change will be applicable "to events that occur after its effective date. Valid agreements agreed upon before the effective date specified in Section 3 will be governed by the Law in effect at the time they were agreed upon." Sec. 2 of Law 272, already cited. The supplementary rule in the case at hand, if article 940 is applied, is the one prior to the Law
appealed judgment regarding this point and restore the cause of action of the appellant because it has not prescribed. Let's look at the foundations of our determination.
I
The appellant, A.J.M. Meat Packing, Inc. (AJM), asks us to revoke the partial ruling of the Court of First Instance, Superior Chamber of Bayamn, which dismissed by statute of limitations the cause of action initiated against Bayamn Can, Inc., regarding 7,972 boxes of cans defective of a total of 8,318 boxes acquired from the appellee. The court a quo treated the action as one of recovery for defects hidden details of the purchased item, subject to an express warranty period of one year, and concluded that it was presented outside the period prescribed by law.
As for the other 336 boxes, the court a quo ordered the proceedings to continue because the claim was submitted within the express guarantee period. It also declared admissible the lawsuit for collection of money that Bayamn Can filed against AJM, for overdue and unpaid invoices, and ordered AJM to pay interest, costs and attorney's fees.
272, relating to the 15-year period established by the Civil Code, if the action proceeding did not have a deadline established in the commercial code.
The reason for the amendment, as explained in the explanatory memorandum of Law 272, was "that a prescriptive term of fifteen (15) years is too long." for actions related to commercial law"... "so continuing with the modern trend aimed at shortening prescriptive terms to elucidate the actions, [the] Legislative Assembly considered[d] appropriate to amend it for the purposes of establish the prescriptive term of five (5) years for actions that do not have a specific period to be deduced in court, instead of applying the term prescriptive period of fifteen (15) years provided by common law." Exhibition of reasons of Law 272 of November 9, 1998. Law 272 modified the doctrine
established in the case of S.M.C. Construction v. Master Concrete, 143 D.P.R. 221, 235 (1997), regarding the term applicable to the action for breach of contract for configuring the aliud pro alio in its various aspects.
There is a small discrepancy in all of the defective can cases. Of On the one hand, the documents referred to mention a total of 8,310 boxes of defective cans, while the appealed ruling expresses 8,318 boxes, therefore that we take the amount of the sentence as correct.
Dissatisfied with the determination of the court a quo, AJM imputes six allegations of error that, in essence, question the appreciation of the evidence and the interpretation and application of the Law. AJM specifically alleges that the appellate court erred in determining that its contractual relationship with Bayamn Can was subject to a one-year warranty; when applying the regulations that regulate hidden defects of the thing sold; by denying compensation between AJM's debt and its claim against Bayamn Can; by imposing interest for late payment; and by convicting her of recklessness and imposing the payment of attorney fees.
Having both parties appeared in support of their respective positions, and after denying the two motions to dismiss that Bayamn Can and ACE Insurance Company presented before this forum, we proceed to resolve the issues raised.
II
For more than 10 years, AJM periodically acquired cylinder-shaped cans model 404 x 700 m-enamel on credit from Bayamn Can to package the food products it processes and sells. Bayamn Can provided the tin cylinder with the metal bottom cover installed and sealed. Once AJM packaged the product, it had to seal the cylinder with the upper metal lid that Bayamn Can also provided.3 Every time AJM purchased cans from Bayamn Can, it carried out a visual inspection to verify that the can did not have any defects, so less noticeable to the eye.
AJM supplied its packaged products to the School Lunch Program of the Department of Education, after obtaining the
The tin cylinder is made from aluminum sheets that are cut into pieces and which are then given the desired shape. Enamel is used inside to protect the sterility of the packaged product. (T.P.O., page 72.) contracting through traditional auctions. Through auction 96-106, AJM agreed to supply slices of mango in syrup and through auction 98-032 it had to supply "chicken and beef meat loaf." AJM packed both products in the cans it acquired from Bayamn Can.4
According to the evidence in the file, the mango slices in syrup were packed in a total of 22,050 boxes (264,600 cans) between September 1995 and October 1996. Of the packed boxes, AJM delivered 16,000 boxes to School Canteens. through 4 deliveries (October 2, 1995; December 1, 1995; February 1, 1996; and April 1, 1996). Of those boxes, Comedores Escolares returned 2,260 to AJM because the cans were "oozing" and, therefore, the contents had been damaged. For the same reason, AJM was also unable to deliver another 6,050 boxes to School Canteens, for a total of 8,310 boxes seized and destroyed.5 The Department of Health even intervened and ordered another 1,000 boxes to be seized and destroyed due to the advanced state of filtration. of the cans, which put other cans stored in the same place at risk of contamination.
On July 15, 1997, for the first time, AJM verbally complained to Bayamn Can and on the 29th of the same month and year it did so in writing. Mr. Sandy Martn, vice president of operations at Bayamn Can,
Bayamn Can, for its part, alleged that it offered AJM a one-year guarantee on the cans that it sold to him, counted from the delivery of the cans, although that guarantee does not It was in writing. Ordinarily, there was no specific period of time between moment when Bayamn Can delivered the cans and the moment when AJM He packaged his products and delivered them to School Canteens. That is, AJM could Use the cans immediately as months could pass between delivery of cans and their use.
On August 26, 1997, 2,136 boxes were seized; On September 19, 1997, They seized another 2,511 boxes; and on December 1, 1997, the Department of Health ordered the rest of the cans to be seized, which was done at the landfill of Toa Baja in the presence of personnel from the Department of Health and a representative of CIGNA (ACE). (Appendix to the appeal, pp. 1-8.) alleged that the claim was made outside the warranty period, because the disputed cans had been delivered to AJM more than 1 year ago, an unwritten warranty period that covered the cans from its delivery.6
In August 1997, after a period of talks to settle the matter, AJM informed Bayamn Can that the cost of the seized cans was $387,007.25. Although Bayamn Can raised the defense of statute of limitations of the express warranty, it referred AJM's claim to its insurer.7
Both AJM and Bayamn's insurer Can took samples of the product and sent them to two different laboratories in the United States. AJM sent his samples to ABC Research Corp. in Gainesville, Florida. While the insurer sent its samples to
Since it was not offered in writing, the respondent presented the testimony of Mr. Sandy Martn to prove the data. In the direct examination made by Atty. Martnez Llorens, Bayamn Can's lawyer, declared:
Q: Don Sandy, what did Bayamn Can do?
A: The manufacturing of cans.
Q: And what business did Bayamn Can have with A.J.M.?
A: I supplied cans.
Q: Did those cans have a warranty period?
A: It was never specified, it was never specified in writing.
Q: Umju.
A: But in the industry, that is, years are understood to be one year.
Q: And was that understanding what you had, as an officer of Bayamn Can
when sales were made to A.J.M.
A. That is correct.
Q. And what, for you as an official of [Bayamn Can], and according to your
industry knowledge does that guarantee mean?
[...]
Atty. Martnez Llorns:
Q: I mean, I mean, what does that guarantee imply?
A: Well, any claim for defects was determined to that period
of time.
Transcript of the oral evidence, pp. 51-52.
Previously, the insurer was known under the corporate name CIGNA Insurance Company, but later changed its name to ACE Insurance Company, name by which it is known today.
The National Laboratories, Inc., in Dublin, California. The content of these reports was stipulated by the parties, although the defendants did not stipulate the defect described therein as the cause of the damages alleged by AJM. Both expert reports concluded that the content leak came from small holes (pin holes) in the enamel that covered the metal lid at the bottom of the cylinder, whose lid Bayamn Can placed on the can before delivering it. The ABC Research report concluded that the pressure placed on the can by a defective machine in the manufacturing process caused the enamel to crack, allowing the food to come into contact with the exposed metal and rust it.
Subsequently, in January 1998, AJM made a second claim to Bayamn Can for other cans that it used to package "beef and chicken meat loaf", corresponding to auction 98-032. He alleged that the tin in these cans began to stain 24 hours after the product was packaged.9 AJM had to stop the delivery of this product to School cafeterias. Bayamn Can also referred this claim to his insurer. From that moment on, AJM did not order any more cans from Bayamn Can, and was left owing $106,716.24.
The ABC Research report specifically concluded:
1-Both cans showed visible perforations on the lid of the uncoded end at the inner base of countersink.[...]
2-The path of product leakage was through perforations in the lid of the uncoded end. Perforations of this type are normally caused by excessive pressure during the formation of the double seam at the uncoded end. This excess pressure causes fracturing of the interior enamel and exposes the underlying tin-plate to attack by the food acids. [...] Therefore, the most likely cause of the fracture is unusual wear pattern on the chuck, the circular metal plate against which the seaming rolls apply pressure during formation. The presence of burrs or tool marks on the chuck can cause enamel fractures of
the type seen in these cans and appears to be the most likely cause of the problem.
This claim was because Bayamn Can supposedly delivered some cans different from those purchased, since they had a lower tin content than specified by AJM on the purchase order. This cause of action was settled by the parties.
In May 1998, AJM filed the lawsuit against Bayamn Can and its insurer in which it claimed economic damages suffered as a result of the aforementioned defects in the cans. (Appendix to the appeal, pp. 1-8.) For its part, Bayamn Can reiterated the defense of prescription and counterclaim for the payment of invoices not paid by AJM. (Appendix to the resource, pp. 9-14, 15-41.) AJM proposed that his debt be offset by the claim for damages filed against Bayamn Can.(Appendix to the resource, pp. 48-56.)
The parties subsequently settled the second cause of action, relating to stains on the tin. Regarding AJM's first cause of action, for the cans that were used to package the mango in syrup, and the lawsuit for collection of money from Bayamn Can, it filed two motions for summary judgment.
The court a quo held an evidentiary hearing in which both parties presented extensive testimonial and documentary evidence1and on September 13, 2004, it issued the partial judgment appealed from, in which it resolved the following:
[...]
to. The collection lawsuit filed by BCI [Bayamn Can, Inc.] against AJM is declared admissible and consequently AJM is ordered to pay the sum of $106,716.24, plus interest accrued from the due date of each of the invoices, computed as of August 31, 2004, at an interest of 5% annually, which amount to $141,544.63, the item for interest is subject to increase over time.
On behalf of Bayamn Can, the following witnesses testified: (1) Sandy Martn, vice president of operations of Bayamn Can; (2) Joaqun Arbona Lago, president from AJM; and (3) Sabbah Yassin, quality control manager and plant manager AJM. On behalf of AJM, Mr. Arnaldo Prncipe, operations manager of AJM. As documentary evidence, the invoices from Bayamn Can were presented to AJM, several letters that the parties sent to each other, lists of the cans delivered, the transcript of depositions, the communications in which the Department of Education complained to AJM about the damaged food and the certificate issued by the United States Department of Agriculture (USDA) for AJM. (Appendix to the resource, pp. 60-62.) Likewise, AJM admitted that it had not paid overdue invoices. (Appendix to the resource, p. 63.)
over time, at a rate of $14.62 per day, until the principal amount owed is satisfied. We also expressly resolve that AJM acted recklessly in denying this claim, for which reason it is imposed upon it to pay all interest accrued by said principal, the costs of the procedure, and the sum of $6,000.00 as attorney's fees.
b. Regarding AJM's "first cause of action," AJM's claim for damages attributable to 7,972 boxes of mango slices in syrup is dismissed because said claim is time-barred.
c. Proceedings are ordered to continue regarding AJM's claim for damages attributable to the 336 boxes that were presented within the warranty year.
d. This ruling should be considered final regarding the controversies raised by the parties in the case DCD1998-1796, since there is no reason to postpone issuing it until the complete resolution of the lawsuit, which is why it is ordered
expressly to the Secretary of the Court to register and notify the same as provided in Rule 43.5 of Civil Procedure. [...]
Disagreeing with that determination, AJM comes before us. Since the first three points of error presented in the appeal at hanre related to each other, we will discuss them together.
II
There is no doubt that the dispute at hand revolves around a commercial contract, since it refers to a contract concluded between two merchants: one who is dedicated to the manufacture of canned food and another who supplies the cans in which it is packaged. food for human consumption. In accordance with article 2 of the Commercial Code,
10 L.P.R.A. sec. 1002, this legal transaction is governed by the provisions contained therein and, "failing that, by the customs of commerce generally observed in each place, and in the absence of both rules, by those of common law [Civil Code]." Article 81 of the Commercial Code expressly provides that commercial contracts, "in everything related to their requirements, modifications, exceptions, interpretation and extinction and the capacity of the contracting parties, will be governed, in everything that is not expressly stated. established in this Code or in special laws, by the general rules of common law", that is, the Civil Code. 10 L.P.R.A. sec. 1301.
Regarding commercial sales,11 article 263 of the Commercial Code imposes on the seller the obligations of sanitation and eviction typical of this type of contract, 10 L.P.R.A. sec. 1721, whose effects are partially regulated by articles 254 and 260, 10 L.P.R.A. secs. 1712 and 1718. This last provision provides a prescriptive period of 30 days to present a complaint to the seller for "internal defects of the thing sold." However, the application of this precept to some products and businesses of a commercial nature has not been an easy or peaceful task, as we will see later. The regulations relating to commercial law applicable to the instant case are completed by articles 939 and 940 of the commercial code. Article 939 establishes that the terms established in this Code "for the exercise of actions arising from commercial contracts, will be fatal, without restitution being given against them." 10 L.P.R.A. sec. 1901. On the date on which the events in controversy occurred, article 940 of the Commercial Code, as we already indicated in the footnote number, said: "Actions that by virtue of this Code do not have a specific period to be deducted in trial will be governed by the provisions of common law." 10 L.P.R.A. sec. 1902. However, through Law 272 of November 9, 1998, its text was amended to replace the phrase "they will be governed by the provisions of common law" with "they will expire after five (5) years." Law 272 itself provides that it will be applicable "to events
Regulated by articles 243 to 263 of the Commercial Code, 10 L.P.R.A. secs. 1701 to 1721.
that occur after its effective date. Valid agreements agreed upon before the effective date specified in Section 3 will be governed by the Law in effect at the time they were agreed upon." Sec. 2 of Law 272, already cited. The supplementary rule in the instant case, if article 940 is applied, is the one prior to Law 272, that is, the 15-year period established by the Civil Code if the appropriate action did not have a period established in the commercial code.
This important amendment did not affect the general rule that governs the claim at hand: when addressing any dispute generated by commercial business between merchants, we must first abide by the provisions of the Commercial Code and the special laws that govern the matter, but, In the absence of express provisions to resolve the problem raised, we must refer to the rules set forth in the Civil Code for analogous situations, on an additional basis.Cndido Oliveras, Inc. v. Universal Insurance Company, 141 D.P.R. 900, 921 (1993).
In Mortensen & Lange v. San Juan Mercantile Corp., 119 D.P.R. 345, 351 (1987), the Supreme Court considered the conceptual and practical problem presented by the regulation of prescriptive periods in the Commercial Code. Thus, based on the expressions expressed by the Spanish doctrine on the subject, he pointed out "that the precepts that make up the provisions on prescription of the Spanish Commercial Code, which, like ours, indicate shorter periods than those corresponding to Civil Law, "They do not constitute a systematic and complete set of rules that can be considered as a general doctrine on commercial prescription, but are only rules isolated from special cases." He cited with approval on this matter J.
Garrigues, Commercial Law Opinions, Madrid, Ed. Aguirre, 1976,
Vol. II, p. 841. Furthermore, the Supreme Court stated on that occasion:
In terms of commercial prescription, because these rules are of a precise and imperative nature, the formation of commercial customs generally observed in each place is not admitted, according to the provisions of Art. 2 of the Commercial Code, 10 L.P.R.A. sec. 1002, with preference to the provisions of the Civil Code on this matter. In the absence of specific rules of the Commercial Code, the provisions on prescription of the Civil Code will constitute supplementary law. Garrigues, op. cit., pp. 840-843.
(Emphasis ours.) Mortensen & Lange v. San Juan Mercantile Corp., 119 D.P.R., at page. 351.
On the other hand, let us not forget that because the prescription is "a limitation on the late exercise of rights", the doctrine "requires a restrictive application" of this affirmative defense and the deadlines in which it can be raised, depending on the obligation in question. . Mortensen & Lange v. San Juan Mercantile Corp., 119 D.P.R., at page. 352. Given the short prescriptive period established by the Commercial Code for actions due to hidden or "internal" defects between merchants, the Supreme Court addressed the issue in the cases of Julsrud v. Peche de P.R. Inc., 115 D.P.R. 18 (1983), and S.M.C. Construction v. Master Concrete, 143 D.P.R. 221 (1997). In the first, it was resolved that the 30-day period of article 260 was the period to report the internal defect of the thing acquired, but the period to judicially initiate the action was extended by the six months established by the Civil Code for the action. of sanitation for hidden defects.
At S.M.C. Construction v. Master Concrete, however, addressed the issue from a broader perspective. The court faced the "multiple disputes" that hidden or "internal" defects can generate in a product acquired in the context of a commercial sale and resolved:
The application of the rules relating to hidden defects in the case of commercial sales, as in the present case, can lead to absurd results when, due to the nature of the good purchased, its internal defects cannot ordinarily be perceived for a long time. after delivery. This situation has the practical effect of depriving the buyer of an action that our civil law recognizes in light of the interests involved in the legal transaction.
S.M.C. Construction v. Master Concrete, 143 D.P.R. 221, at p. 235.
As we see, the court distinguished between "quality defects constituting diverse performance or aliud pro alio" and "quality defects constituting a defective performance", but it equated both situations in their adverse effects on the buyer.
In light of this doctrine recognized by the Spanish Supreme Court, commentators have pointed out that non-compliance with the obligation to deliver something other than what was agreed upon or aliud pro alio will occur under the following circumstances: (1) when the thing delivered is objectively different from what was agreed upon; (2) when the delivered object is inadequate for the use for which it is intended, or in addition, (3) when objective dissatisfaction on the part of the buyer occurs.
S.M.C. Construction v. Master Concrete, 143 D.P.R., at p. 239.
Regarding the second assumption, which is the one that applies to the case at hand, the Supreme Court of Puerto Rico adopted the legal doctrine established by its Spanish counterpart in the Judgment of October 20, 1984 (Rep. Aranz. 4906), in the which highlights the inapplicability of the articles of the Commercial Code that regulate cases of hidden defects that make the thing unfit for use.
In cases of lack of quality of the thing sold, invaluable to the naked eye and of course unknown to the buyer, which makes it totally unsuitable for the use for which it was acquired, the total unfitness of the object cannot be classified within the defects. hidden, but in the hypothesis of delivery of the different thing "aliud pro alio", and as a consequence the dissatisfied buyer must be provided with the protection of articles 1,101 and 1,124 of the Civil Code, without damage to traffic safety being an obstacle. commercial property, the consideration of which cannot serve as protection for the incorrect conduct of the seller taking refuge in the hidden nature of a lack of essential quality of the generic object sold, whose
He cited with approval Emilio Langle y Rubio, The contract of commercial sale 73 et seq. (1958), at p. 236 of the opinion.
suitability for the purpose for which it was known to be intended was only revealed a long time after the delivery took place, and of course, after the expiration of the deadlines for the exercise of the building actions that the commercial law establishes.
(Emphasis ours.) S.M.C. Construction v. Master Concrete, 143 D.P.R., at p. 239.
That is, when the thing "does not serve the purpose intended by the buyer" we are faced with a case of aliud pro alio, even when such uselessness is caused by a defect or internal defect, "since the determining factor is, not the qualitative deficiency or quantitative, but rather the uselessness, the frustration of the party upon receiving something that does not constitute the causal provision of the contract.'13 S.M.C. Construction v. Master Concrete, 143 D.P.R., at p. 240. This is so because "the legitimizing presupposition of the claim for aliud pro alio is the discovery by the buyer that the purchased good does not satisfy the requirements required for the use for which it is intended, and that led him to perfect the sales contract." Id., on page. 237.
Of course, the determination of whether or not the thing is suitable for the use intended since it was acquired cannot be left to the discretion of the buyer, "but such qualification must be referred to the very nature of the thing and its normal use, and must be be impossible at all points for the purchaser to take advantage of the thing delivered."
Id., on page. 241.14
By adopting this doctrine, the Supreme Court wanted to provide "greater protection to the buyer of mass-produced goods, as a way of tempering the demands of contemporary commercial traffic."
Quote taken from the Judgment of December 29, 1984 (Rep. Aranz. 6302).
Quote taken from Lorenzo Prats Albentosa, The delivery of the thing other than the agreed upon
(aliud pro alio) as a resolutory breach in the jurisprudence of the Court
Supreme, 573 Rev. Gen. Der. 5081, 5093 (1992).
for reasons of social justice"; and recognize the commercial buyer "additional instruments to avoid and rectify trade abuses." Id.
The action reserved for the buyer before the aliud pro alio is the general action for breach of contract. Art. 1040 of the Civil Code, 31 L.P.R.A. sec. 2991; Jos R. Vlez Torres, Obligations Law, 2nd ed., 1997, p. 272. In the event of breach of contract, the Civil Code provides several remedies to the creditor, among them, the power to "choose between demanding compliance or resolution of the obligation, with compensation for damages and payment of interest in both cases. You may also request the resolution, even after having opted for compliance, when this proves impossible." Art. 1077 of the Civil Code, 31 L.P.R.A. sec. 3052. The scope of compensation will vary depending on the specific cause of the breach. Art. 1054 of the Civil Code, 31 L.P.R.A. sec. 3018; see, Lugo Falcn v. E.M. Amy & Sons, Inc., 87 P.R.R. 556, 559-560 (1963) approvingly citing R.R. Pesquera & Co. v. Mari Hermanos, 23 D.P.R. 637 (1916).
Actions for breach of a contractual obligation have a prescriptive term of 15 years in the Civil Code. Art. 1864, 31 L.P.R.A. sec. 5295; S.M.C. Construction v. Master Concrete, 143 D.P.R., at pp. 239-41. This term begins to run from the expiration of the period in which the agreed benefits had to be paid. In the Commercial Code, by virtue of Law 272, already cited, this period was reduced to 5 years, although the amendment does not apply to the instant case, as we warn.
- B -
Correction for hidden defects in the case of civil sales proceeds when, after delivery, the thing presents intrinsic defects that exceed the minor imperfections that can normally be expected in a given product. D.A.C.O. v. Marcelino Mercury, Inc., 105 D.P.R. 80, 84 (1976); Polanco v. Cacique Motors, res. on June 30, 2005, 164 D.P.R.___ (2005), 2005 TSPR 96, 2005 J.T.S. 101, at p. 1486.
Jurisprudence has reiterated that the action to clean up hidden defects is appropriate when the thing suffers from a hidden defect that the purchaser does not know or perceive at the time of delivery; The defect is of such severity that it makes the thing unsuitable for the use for which it is intended or significantly diminishes its value, so that the buyer would not have acquired it if he had known about it; the defect pre-exists the sale; and the action is exercised within the legal period of six (6) months from the delivery of the thing sold. Articles 1373 and 1379 of the Civil Code, 31 L.P.R.A. secs. 3841 and 3847.
The Supreme Court interpreted article 1379 of the Civil Code, 31 L.P.R.A. sec. 3847, to the effect that the prescriptive period of the action to remedy hidden defects in civil sales will begin to run, not from the day of delivery, as provided in the provision, "but from the day on which the procedures were interrupted. of intelligence between the parties that followed him."15 Casa Jaime Corp. v. Castro, 89 D.P.R. 702, 704 (1963). This is due to the fact that the sanitation action in our country recognizes that the seller has
The Supreme Court of Puerto Rico adopts the doctrine of the Spanish Supreme Court, Judgment of June 11, 1926, via Manresa, 10 Comments on the Spanish Civil Code 265 (5th ed., Reus 1950).
right to "clean up", that is, repair or correct the thing sold with defects. The buyer even has the obligation to accept such arrangements. Ferrer Delgado v. General Motors. Corp., 100 D.P.R. 246, 255 (1971).
The above does not prevent the parties from agreeing on a longer or shorter term for the prescription of the actions that generate their particular contractual relationships, unless the term established by law is public order and provided that the agreement does not constitute an uninformed release of responsibility. or illegal for future damages. See on these two aspects, Art. 1055 of the Civil Code of Puerto Rico, 31 L.P.R.A. sec. 3019; Gonzalez v. Agostini, 79 D.P.R. 510, 515 (1956); and Chico v. Editorial Ponce, Inc., 101 D.P.R. 759, 778-779 (1973), respectively.
- C -
On the other hand, before setting the corresponding action, it is imperative to apply the figure of accumulation of actions to the dispute at hand. We know that a plaintiff can accumulate different actions against the same defendant, based on the same facts. To do this, some requirements must be met, in accordance with the doctrine established by our jurisprudence on this matter.
It has been said that "[a]lthough Spanish doctrine is not uniform, the prevailing position is that sanitation action does not in itself exclude other actions of a general nature." Marquez v. Torres, 111 D.P.R. 854, 863-867 (1982).16 In this case the Supreme Court adopted the ideas
See Ramos v. Orientalist Rattan Furnt., Inc., 130 D.P.R. 712, 725 (1992), for the concurrence of contractual and extra-contractual actions.
by Diego Espn Cnovas on the matter.17 In the opinion of this author, the Spanish Supreme Court, "in the not very numerous cases in which it has had to rule on the concurrence of cleanup actions for hidden defects and other general actions, shows a orientation favorable to the admissibility of general actions, as long as there is no opposition with specific precepts of sanitation", that is, as long as there is no incompatibility between them. The jurist concludes "that the [Spanish] Supreme Court has acted with prudence by showing flexibility by deciding in each particular case whether the special rule should be applied to the exclusion of the rule.
general when it opposes it", as cited in Mrquez v. Torres, 111 D.P.R., at pp. 868-869
In order for the special action and the general action to be accumulated, several criteria would have to meet: "(1) from the facts of a case in which an object with defects has been sold, the possibility may arise that the special action of sanitation for hidden defects and/or one or several general actions which are not incompatible in themselves; (2) the affected buyer may choose to exercise the action that it deems most appropriate to protect its rights as long as it does not use the general action to circumvent provisions related to the special action that are applicable and that are incompatible with the provisions of the general action; (3) when determining which of two incompatible provisions is the applicable one, The particular circumstances of the case and the rights claimed by the affected buyer must be examined to determine whether the rule
Ideas collected in his article Concurrence of the sanitation action for vices hidden in the sale and general actions for nullity, resolution or damages contractual, 222 Rev. Gen. of Leg. and Jur. 909 (1967).
special is that which applies and excludes the general." Marquez v. Torres, 111 D.P.R., at page. 869. In this case, the action for breach of contract was admitted, although the remediation action had expired in the case of cattle contaminated with the tuberculosis virus, a remediation action limited to a period of 40 days. Art. 1385 of the Civil Code of Puerto Rico, 31 L.P.R.A. sec. 3853.
- D -
Ordinarily, we are required to defer to the factual determinations of the primary forums, unless they are clearly erroneous. Rule 43.2 of Civil Procedure, 32 L.P.R.A. App. III, R. 43.2. This deference towards the primary forum responds to the fact that the sentencing judge is the one who has the opportunity to receive and appreciate all the oral evidence presented, to listen to the testimony of the witnesses and evaluate its merit and reliability. We are only allowed to intervene with the judgment of the trier of fact when the appreciation of the evidence is distanced "from the factual reality or it [is] inherently impossible or incredible." People v. Soto Gonzlez, 149 D.P.R. 30, 37 (1999); People v. Rivero, 121 D.P.R. 454, 471-74 (1988). On this point, in Vda. of Morales v. De Jess Toro, 107 D.P.R. 826, 829 (1978), the Supreme Court warned that "[t]he discretion of the trier of fact is respectable, but it is not absolute. An erroneous appreciation of the evidence does not have credentials of immunity from the reviewing function of [an appellate court]." We are also permitted to intervene with the trier of fact's judgment when he acted out of passion, prejudice or bias, committed gross abuse of discretion, or erred in his interpretation or application of procedural rules or applicable substantive law. Lluch v. Espaa Service Sta., 117 D.P.R. 729, 745 (1986). See also, Melndez v. Caribbean Int'l News, 151 D.P.R. 649, 664 (2000); and Quiones Lpez v. Manzano Pozas, 141 D.P.R. 139, 152 (1996).
In summary, the appellate court will respect and sustain the assessment of the oral evidence carried out by the sentencing court, except in cases of manifest error in the performance of that function, when the careful examination of all the evidence convinces the appellate forum that the court a quo unjustifiably discarded important elements of evidence or based its judgment solely on testimony from of little value, or inherently improbable or incredible.C. Brewer of Puerto Rico, Inc. v. Rodrguez Sanabria, 100 D.P.R. 826, 830 (1972); People v. Luciano Arroyo, 83 D.P.R. 573, 581 (1961).
Furthermore, determinations of facts that are based exclusively on documentary or expert evidence are excepted from the rule of deference, because appellate courts are in the same position as the lower court when examining that type of evidence. Sepulveda v. Dept. of Health, 145 D.P.R., at page.573 n.13 (1998); Daz Garca v. Aponte Aponte, 125 D.P.R. 1, 13-14 (1989); Lopez v. Hosp. Presbyterian, Inc., 107 D.P.R. 197, 204 (1978).
III
The careful examination of the file, in light of the above, convinces us that the trial court erred in the application of the Law by dismissing AJM's cause of action with respect to the 7,972 boxes of cans due to a proven defect in their manufacture.18 Still adopting
There appears to be no doubt between the parties that this is the basis of AJM's claim. This arises from an exchange between the parties' lawyers in the middle of the testimony from Mr. Martin:
Q: And what processes does that sheet, that sheet of tin, go through to
be able to produce this can?
A: By several machines.
Q: For several machines. And could you tell me or illustrate to the court which
Is it the process of those three machines, or several machines?
Atty. Martnez Llorens:
Your honor, permission to approach the court. Permission for
approach the court.
Hon. Judge:
It's not understood.
Atty. Martnez Llorens:
Judge, none of this has to do with the process and the guarantee. There are some allegations that are stipulated in the advance report... with the "pre-trial" report which is the allegation that the problem with the cans was some "pinholes" that were created in one of the machines. We stipulate not the correctness of that allegation, but that in fact that is the allegation. And we understand that all these questions are unnecessary, because it is already known that the allegation, and it is indisputable that their allegation is that the problem was due to a problem in our machines when they created the can, which created some small holes in the can
Hon. Judge:
Yes. (Not understood). Partner.
Atty. Azizi:
No, if the partner accepts that the problem was that the machines were making some... some fractures in the enamels and that that produced the...
Hon. Judge:
The companion in the stipulation is that it was accepted that the...
Atty. Azizi:
That was the claim.
Hon. Judge:
...your claim is that.
Atty. Azizi:
That's why. But...
Hon. Judge:
And, in fact, that is the expert evidence that was stipulated in the records, no.
Atty. Martnez Llorens:
Exact. It was stipulated that that is his allegation. Precisely, because our theory is that even if that were true...
Hon. Judge:
Yeah.
Atty. Martnez Llorens:
...to understand that the application of the guarantee is appropriate, we said four years ago that we are going to see this hearing, because if the guarantee applies, the expert question does not have to be included in this entire process. We are going to assume, for the purposes of this record... of this legal controversy, that that is and is in fact in the allegation. Obviously, we've never accepted that that's what caused it, because...
Atty. Martnez Llorens:
As the factual determinations made by the sentencing chamber in the partial judgment appealed are correct, we resolve that the application of the Law to the case at hand was not correct.
Cans intended for food packaging that have holes (pin holes) in the lower lid installed by the manufacturer are unusable for the sole and immediate purpose for which they were purchased. They constitute a useless thing for use from the moment they are delivered, because they are not susceptible to correction. It is true that, if the holes were not visible to the naked eye, they could constitute a hidden defect and constitute a remedial action, subject to the criteria that regulate that action.
Although the defect occurred during the manufacture of the cans, through the steam and pressure process that Bayamn Can used to place the lower lid of the can, the suitability of the cans for the purpose for which they were purchased was not revealed until some time after Delivery; after AJM had delivered the food packaged in the cans to School Canteens. The 6-month period granted by the doctrine of vices hidden events had already elapsed when AJM became aware of the defect. Certainly, the defective cans that Bayamn Can delivered to AJM were inadequate for packaging the mango slices in syrup. Regardless of whether the pin holes in the cans can be considered hidden defects, the determining factor is that this defect rendered the
No no. No specifications. The specifications was, with all due respect, the second cause of action, which was that the tin content of the can was less than that specified in the purchase order. The allegation regarding mango slices is different. It's just that when the can was created there was a problem with one of the machines
He drilled and created little holes in the can. It has nothing to do with specifications; It has to do with manufacturing.
Transcript of the oral evidence, pp. 72-76.
the cans since they left the hands of the manufacturer and were delivered to the seller, and frustrated the utility and benefits that AJM expected to derive from them.
Furthermore, how can the buyer find out about the defect if it is of the type that manifests itself through a specific future performance, as would be the case of canning the food to determine the ideal condition of the can?20 The contact of the food with the metal was what made the defect evident and that phenomenon occurred after the buyer's economic investment in packaging the food in defective cans had been made. The manufacturing defect was of such a nature that it prevented the usefulness of the cans, an essential element of the contract between AJM and Bayamn Can, which affected, in turn, AJM's contract with Comedores Escolares. Only the rigorous quality control of the cans, before leaving the production line, an act that corresponds to the manufacturer, not the buyer, or the specific experience of the product when coming into contact
with food they could detect the defect. Unfortunately in this case the second method, belatedly, demonstrated the condition in question. Mr. Arbona testified:
Q: Witness, those cans that had that defect, did you understand that those were the
cans that you had bought?
A: No, it is not correct. We never submit purchase orders for defective cans. It must be an intact, complete, properly manufactured can that allows the product to be packaged and the product to have the required shelf life.
Transcript of the oral test, p. 147.)
In this regard, the Uniform Commercial Code provides in Section 2-725:
(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. . . .
(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.
Furthermore, let us not forget that regarding the issue of prescription, in this case there is no written guarantee and the Supreme Court rejected the extension of the use and custom of the square to this issue when it is not expressly included in the Commercial Code.
The alleged period of one year seems to arise from the uses and customs of the industry. Thus
emerged from the cross-examination of Atty. Azizi to Mr. Martn:
Q: But, however, you know that in the industry what is given for the empty can, for this can, is a one-year warranty.
A: Yes.
Q: You know that.
A: Yes.
Q: And where is that, in what pamphlet or what literature is that? Have you not brought any literature to that effect here to court?
A: No.
Q: So, where did you get that from?
A: It is the norm for all can manufacturing.
Q: But it has to be written somewhere.
Atty. Martnez Llorens: Objection, your honor. He is arguing with the witness. He already answered her.
Hon. Judge:
Yes. With place.
Atty. Azizi:
Q: So, you haven't seen it written anywhere.
A: No.
Q: And I ask you, if you have gone to any seminar or course where they say that the empty can has a one-year warranty.
A: I have been to many seminars, but no seminar stipulates the can guarantee.
Q: I ask you if in those invoices that you submitted to the court, if somewhere on those invoices it appears that your empty cans have a one-year warranty.
A: No.
Q: In your experience, witness, how long does it take for this empty can to rust?
A: It can last a year; can last six months. It depends on the optimal conditions, where there is no humidity.
Atty. Martnez Llorens:
Your honor, we have an objection. This is... that is, this is matter that falls outside the reason for this view. Here we are talking about guarantees and the claim that was made. Now she is even entering the expert area.
Hon. Judge:
That's why. But this part has to do with warranty.
Atty. Azizi:
Sorry?
Hon. Judge:
What does it have to do with warranty? You can ask.
(Transcript of oral evidence, pp. 66-67.)
In accordance with the rule established by our Supreme Court in S.M.C. Construction v. Master Concrete, supra, the facts described make up the two actions, that of correction for hidden defects and that of breach of contract, as they constitute one of the modalities of the aliud pro alio.
This determination does not prejudge the final result of the lawsuit, since Bayamon Can questions the causality of the alleged damages regarding all of the batches identified with the manufacturing problem and the handling given to the cans by AJM. This will have to prove that its damages are a direct consequence of such defect. We cannot ignore the fact that AJM's conduct in handling the cans, as emerged from the testimony given at the hearing and from the admitted documentary evidence, will be a factor to consider when evaluating the appropriate causation of the alleged damages. , but, at this moment it cannot be a criterion that nullifies its causes of action.
The court a quo erred by considering only the hidden defects doctrine and partially dismissing AJM's cause of action for statute of limitations. The facts stipulated and proven at the hearing held for the purpose of estimating the defense of prescription are sufficient to admit the action for breach of contract, which subjects AJM's cause of action to a prescriptive term of 15 years. Consequently, the limitation imposed by the unwritten one-year warranty, which Bayamn Can allegedly offered, cannot survive defects that
They attack the very cause of the contract. The AJM's claim was filed on time.
IV
In its fourth statement of error, AJM alleges that the court a quo decided not to apply the doctrine of compensation, because its debt to Bayamn Can is compensable with the claim in this lawsuit. Do not have Rason.
The institute of compensation allows the parties to mutually become debtors and creditors in bilateral obligations to compensate for their respective benefits and, therefore, extinguish them. However, for the compensation to take effect, it is necessary that the obligors be reciprocally the main creditors and debtors of the obligations to be compensated. Art. 1150 of the Civil Code, 31 L.P.R.A. sec. 3222. It is also required that both benefits consist of an amount of money or be fungible goods, that they be of the same type and quality, if this has been designated; that both debts are due, liquid and payable; that there are no claims from third parties notified in a timely manner to the debtor regarding any of the benefits; and that there is no legal prohibition for the figure to operate. Arts. 1150, 1154 of the Civil Code, 31 L.P.R.A. secs. 3222, 3226; Jos R. Vlez Torres, Obligations Law, 2nd ed., San Juan, 1997, pp. 217-223.
The immediate effect of compensation is the extinction of obligations and its scope is retroactive. Art. 1156 of the Civil Code, 31 L.P.R.A. sec. 3228. Furthermore, setoff is an affirmative defense that must be timely pleaded, otherwise it is waived. Vlez Torres, Law of Obligations, supra, p. 222.
In the present case, AJM seeks to have its claim for damages offset against the debt on overdue invoices when in practical and legal terms the probability of success of a judicial claim cannot be predicted. The outcome of the claim depends on the claimant proving by a preponderance of the evidence that his or her cause of action arises as a matter of law. After the cause of action is adjudicated and the corresponding indemnification judgment is issued, the claim becomes a liquid and enforceable debt. When presenting the cause of action and even at this time, AJM's claim does not meet that sine qua non requirement, so it is not automatically compensable with the debt it owes to Bayamn Can. Although the doctrine admits optional or voluntary compensation when all the criteria for ordinary compensation are not met, it could not occur in the instant case, since the claim has not even been adjudicated. AJM cannot suspend Bayamon Can's rights to collect her credit until she can prove hers.
The appealed court did not err by refusing to apply the figure of compensation to the claims of both parties.
V
In the fifth and sixth points of this appeal, AJM argues that the court a quo also had an impact by imposing interest for late payment and fees for recklessness. He is not right either. It is an undisputed fact that AJM did not pay Bayamn Can the sales price of the cans within the agreed period. Please note that those obliged to do or deliver something incur default from the moment they are judicially or extrajudicially required to comply. Art. 1053 of the Civil Code, 31 L.P.R.A. sec. 3017. See Alvarado v. Bonilla, 86 D.P.R. 490, 505-506 (1962).
In the civil doctrine, only culpable delay in payment constitutes default. Rodrguez Sanabria v. Soler Vargas, 135 D.P.R. 779, 783 (1994), which cites with approval J. Castn Tobeas, Spanish Civil Law, common and foral, 10th ed., Madrid, Ed. Reus, 1967, T. 3, p. 140. See also Valcourt v. Iglesias, 78 D.P.R. 631, 638 (1955). In the instant case, AJM voluntarily delayed payment of the debt it contracted with Bayamn Can. That is to say, his delay is attributable to him, after having been summoned by Bayamn Can, especially when they refused to settle, through optional compensation, their respective claims. The court did not err in setting interest for late payment.
The imposition of interest for late payment at the legal rate on the amount of the judgment is also applicable. In Puerto Rico, the Supreme Court has been emphatic in ordering the courts to impose the payment of these interests. Specifically, in Mun. of Mayagez v. Rivera, 113 D.P.R. 467, 470 (1982), the high forum stated that "it is mandatory for a court, when issuing a sentence ordering the payment of money, to impose the payment of interest at the legal rate on the amount of the sentence without class exception. some". [Emphasis Ours.] From this it follows that it is not a discretionary power.
Regarding recklessness, Rule 44.1(d) of the Rules of Civil Procedure empowers courts to impose attorney fees when "any party or his attorney has acted recklessly or frivolously." 32 L.P.R.A. App. III, R. 44.1(d). Recklessness is defined as "an attitude that is projected onto the procedure and that affects the proper functioning and administration of justice. It also subjects the innocent litigant to the ordeal of the judicial process and exposes him to unnecessary expenses and the hiring of professional services, including lawyers, with sometimes exorbitant charges for his money." H. Snchez Martnez, Rebelde sin costas, Year 4 (No. 2) Judicial Bulletin (April-June 1982), see, Oliveras, Inc. v. Universal Ins. Co., 141 D.P.R. 900, 935 (1996). The purpose of imposing fees for recklessness is to penalize the losing party in a litigation "who, due to his stubbornness, obstinacy, contumacy and insistence on an attitude devoid of foundations, forces the other party, unnecessarily, to assume the inconveniences, expenses, work and inconveniences of a lawsuit." Rivera v. Pitusa Stores, Inc., 148 D.P.R. 695, 702 (1999); Ramirez v. Club Cala de Palmas, 123 D.P.R. 339, 349-350 (1989); fernandez v. San Juan Cement, 118 D.P.R. 713, 718 (1987).
Certainly, the imposition of fees for recklessness rests in the sound discretion of the judge. P.R. Oil Co., Inc. v. Dayco Prod., Inc., res. on April 6, 2005, 164 D.P.R. ___ (2005), 2005 TSPR 41, 2005 J.T.S. 47, at pp. 1062-1063. However, the amount imposed must be appropriate, taking into account "the nature of the litigation, the legal issues involved in it, the amount in controversy, the time invested, the efforts and professional activity that have had to be deployed, and the skill and reputation of the lawyers." Corpak, Art Printing v. Ramallo Brothers, 125 D.P.R. 724, 738 (1990).
As an appellate forum, we are prohibited from varying that amount, unless the amount is excessive, meager, or constitutes an abuse of discretion. Jug Corp. v. Axxis Corp., supra; Ramirez v. Club Cala de Palmas, 123 D.P.R., on page.350.
Given the procedural steps taken in the instant case, in light of the parameters previously set out, nothing moves us to substitute the discretion of the appealed forum for our own. By insisting on a defense lacking foundations, AJM has forced Bayamn Can to wait until the final resolution of this lawsuit to collect a debt that has been due for more than 8 years. The court a quo did not err in ordering AJM to pay reckless fees.
VI
For the reasons stated, we modify the appealed judgment to restore the cause of action of A.J.M. Meat Packing, Inc. Against Bayamn Can because it is not prescribed. Thus modified, the sentence is confirmed and the court a quo is ordered to continue the proceedings in accordance with what is resolved here.
It was agreed upon and ordered by the Court and certified by the Acting Secretary of the Court.