
    Gandía & Co., Plaintiffs and Respondents, v. Alonso, Defendant and Appellant.
    Appeal from the District Court of Arecibo in an Action of Debt.
    No. 1196.
    Decided May 5, 1915.
    Pleading — Instrument Made a Past <of Complaint — Complaint and' Answer. — The genuineness and execution of an instrument transcribed in a complaint or annexed thereto shall be deemed admitted unless a verified answer specifically denies the same.
    Id. — Account Current. — In view of the peculiar nature of an account current it cannot be regarded as one of the instruments which the Legislature had in mind when, it established the rule contained in section 119 of the Code of Civil Procedure.
    Id. — Instrument on Which Action or Defense is Pounded — Verification of Plea. — It is a common provision of the statutes that no person shall be permitted to deny on trial the execution of any instrument in writing, whether sealed or not, which is the foundation of the action or defense, unless the person so denying the same verify his plea.
    Id. — Scope of Rule as to Denials Under Oath. — The rule as stated with reference to the necessity of denials under oath applies to articles of association, promissory notes, the cancellation of a revenue stamp neeessary to the validity of an instrument, an order to pay money, bond's, bills of lading, guaranties, deeds, leases, mortgages, subscription papers, insurance policies, receipts, releases and contracts of settlement, tax-sale certificates and tax deeds, and assignments and endorsements. It does not apply to a decree of a court, nor to an account for merchandise, nor to an unprobated will, nor to entries on the stock-books of a corporation.
    The facts are stated in tbe opinion.
    
      
      Mr. Pedro Amado Rivera for tie appellant.
    
      Mr. Antonio Suliveres for tie respondent.
   Mr. Justice del Toro

delivered tie opinion of tie court.

Tiis is an appeal from a judgment of tie District Court of Areeibo- against defendant Francisco Alonso and in favor of plaintiffs Gandía So Co. for tie sum of $728.53, with legal interest thereon from tie date of tie filing of tie complaint and tie costs.

In brief, tie plaintiffs alleged that they had entered into a contract with tie defendant to lease to him a bakery situated in tie ward of Dominguito, of tie district of Areeibo, for a period of two years at a monthly rental of $75, tie defendant agreeing to deliver to tie plaintiffs under certain conditions tie bread to be made by him; that tie defendant entered into possession of tie bakery in November of 1910 and sent several lots of bread to tie plaintiffs in accordance with tie contract, both parties keeping accounts current; that upon striking a balance on November 2, 1912, which was tie date of tie termination of tie contract, tie plaintiffs found that tie defendant owed them. $728.53, and that when they demanded payment thereof from tie defendant tie latter refused to pay it, compelling tie plaintiffs to bring tiis action. Tie account current which tie plaintiffs kept with tie defendant was transcribed in tie complaint.

In iis answer tie defendant admitted that he entered into tie contract and kept an account current with tie plaintiffs, but alleged that- he owed them nothing for tie reason that on November 12, 1911, a’ sanitary inspector ordered him to close tie rented bakery pending certain repairs which were ordered but never made. Tie answer is not verified.

Tie defendant also filed a counter-complaint alleging substantially that on account of tie -closing of tie bakery and tie failure of tie plaintiffs to comply with their obligation to make tie repairs ordered by tie sanitary authorities, he was obliged to cease work in tie bakery from tie date of its closing, or from November 12, 1911, suffering, damages thereby which he lays at.$1,000.

Issue being joined tiras, the case went to trial and both parties introduced and examined their witnesses and submitted the case to the court for judgment, which was rendered in the terms indicated at the outset' — that is, sustaining the complaint and dismissing the. counter-complaint. From that judgment the present appeal was taken.

The judge of the district court carefully analyzed the case and held, in the first place, that as it was alleged in the complaint that there was an account current between the plaintiffs and the defendant which showed a balance against the latter and as the said account was made a part of the complaint and had not been denied by the defendant under oath, its genuineness and execution should be deemed admitted in accordance with law and jurisprudence.

It is true that section 119 of the Code of Civil Procedure is conclusive and that jurisprudence is- clear on this point. See the cases of Sacramento County v. Bird, 31 Cal., 73; Corcoran v. Doll, 32 Cal., 88, and County Bank v. Greenberg, 127 Cal., 26. In the cases of Mendez v. Soto, 13 P. R. R., 366; Chiqués v. Polo, 15 P. R. R., 257, and others, this court upheld the doctrine that the genuineness and execution of an instrument.which has been copied in the complaint, or annexed thereto, shall be deemed admitted unless the answer specifically denies the genuineness and execution thereof under, oath. ...

But can the said statute and the jurisprudence cited be applied to this case ? In our , opinion this question must be answered in the negative because, in the first, place, in view of the peculiar nature of an account' current, it cannot be regarded as one of the instruments which the Legislature had in mind when it enacted the provision contained in .section 119 of the Code of Civil Procedure; and, in the second place, even if it could be so regarded, the conclusion is easily reached after a consideration-of the material. allegations of both parties that the contract of lease between the plaintiffs and the defendant, and not the account current, is the instrument on which, the action was brought.'

American jurisprudence upon this matter, as summarized by Cyc., is as follows:

“It is a common provision of the statutes that no person shall be permitted to deny on trial the execution of any instrument in writing, whether sealed or not, which is the foundation of the action or defense, unless the person so denying the same shall verify his plea by affidavit.” 31 Cyc., 529.
“The rule as stated with reference to the necessity of denials under oath applies to. articles of association, promissory notes, the cancellation of a revenue stamp necessary to the validity of an instrument, an order to pay money, bonds, bills of lading, guaranties, deeds, leases, mortgages, subscription papers, insurance policies, receipts, releases and contracts of settlement, tax-sale certificates and tax deeds, and' assignments and indorsements. It does not apply to a decree of a court, nor to an account for merchandise, nor to an unpro-bated will, nor to entries on the stock hooks of a'corporation.” 31 Cyc., 352 and cases cited.

In the light of the foregoing, we will proceed to consider the case on its merits. There is no question as to the existence of the contract of lease. Accepting the account current as a document introduced as evidence, its balance shows the-amount due from the defendant to the plaintiffs for rent.. That the said balance is correct was not denied by the defendant either in his pleadings or by means of evidence. The question really at issue in this case is whether the defendant was actually under the necessity of discontinuing the use of the property for the purposes for which he had rented it. The evidence on this point was ample but contradictory. That for the plaintiffs tended to show that although it is true that on November 1, 1911, a sanitary inspector went to the rented bakery and ordered certain repairs to be made, as: soon as the plaintiffs were notified they were given time to, make the repairs and actually did make them; that the defendant took no steps to rescind the contract, but, on the contrary¿ when such rescission was proposed to him by the lessors he refused, stating that it suited him to continue it. The evidence for the defendant tended to show that the sanitary authorities really ordered him to close the bakery; that it was the duty of the lessors to make the repairs and they did not do so; that he asked the sanitary authorities for ■a permit to reopen the bakery and it was refused, and that .he was unable to operate the bakery after November 12, 1911.

The court gave credence to the witnesses for the plaintiffs and, in our opinion, it acted correctly in so doing. It ^cannot be denied that on November 12, 1911, the defendant was prevented from working by the interference of the sanitary authorities, but it cannot be maintained that the order was to close the bakery and that the defendant was obliged therefore to suspend work absolutely. The evidence shows that the plaintiffs did make repairs to the bakery after November 12, 1911, and before the last day of the said month. Not only two partners of the plaintiff firm but also.the very workman who made the repairs so testified. And the evidence further shows that the defendant refused to rescind the contract, stating that it suited him to continue it, and he showed no interest whatever in continuing to bake bread in the bakery rented from the plaintiffs, there being two circumstances which tend to explain this attitude of the defendant, viz: In the contract of lease between the plaintiffs and the defendant it was agreed that the contract should be rescinded if another bakery were established in the same ward, and it appears from the account current which accompanied the complaint and from the defendant’s own testimony at the trial that the defendant continued to furnish to the plaintiffs bread made by him in another bakery long after November 12, 1911, the last lot having been furnished on October .31-, 1912. From the first fact it is deduced that a condition .sine qua non to the existence of the contract was that no other bakery should be established, and from the second, that the defendant continued in the bakery business without intermission notwithstanding the closing of the bakery in Domin-guito, making bread in another bakery which he had rented at a place near by, and these two facts, when considered in the light of all the surrounding circumstances, show that the chief object of the defendant was to monopolize to a certain extent the bakery business in those wards and that this object could be attained by making the bread at any one of the places, provided, that he could keep the other bakeries closed.

These being the facts shown by the evidence, the judgment appealed from should be affirmed inasmuch as the failure of the defendant to continue making bread in the rented bakery was not due to any acts or omissions of the plaintiffs, but to the defendant’s own determination.

The appeal should be dismissed and the judgment appealed from

Affirmed.

Chief Justice Hernandez and Justices Wolf, Aldrey and Hutchison concurred.  