Court of Appeals upholds rejection of Villamorey's extinctive prescription claim on dividends
Nov 5 2025
Court of Appeals
The Fifth Civil and Commercial Court of Appeals upheld the first-instance judgment that rejected the extinctive prescription action filed by Villamorey, S.A. against Lisa, S.A. regarding dividends decreed on April 27, 2010 and July 5, 2011. The Court rejected all six grievances raised by Villamorey, finding that the plaintiff failed to prove Lisa held specific creditor status for the dividends whose prescription it sought. With this ruling, Villamorey's attempt to extinguish through prescription its own obligation to pay dividends to Lisa failed at both the trial and appellate levels.
Villamorey, S.A., a commercial entity incorporated in the Republic of Panama, filed an ordinary action for extinctive prescription against Lisa, S.A. before the Eighth Multi-Judge First Instance Civil Court of Guatemala City. The claim sought a declaration that the obligation to pay dividends to Lisa, arising from distribution resolutions adopted by Villamorey's Annual Ordinary General Shareholders' Assembly on April 27, 2010 and July 5, 2011, had prescribed and was therefore extinguished. Villamorey alleged that more than five years had elapsed since the obligation became enforceable without Lisa taking action to collect the dividends.
In the judgment of July 11, 2025, the trial court declared the prescription claim without merit. It also declared without merit Lisa's answer and peremptory exceptions, which included: impropriety of the claim due to lack of veracity in the facts alleged, impropriety due to absence of legal prerequisites for invoking prescription, impropriety of the prescription action due to judicial actions that interrupted the prescription invoked, and non-existence of the extinctive prescription claimed. No costs were awarded at first instance.
This action warrants particular attention within the broader litigation: it is Villamorey, the entity that owes the dividends, that sued Lisa, its own shareholder and creditor, to obtain a judicial declaration that the obligation to pay dividends had prescribed. This mechanism inverts the usual dynamic in which the creditor brings the action, and constitutes a use of the judicial system to extinguish obligations that the plaintiff itself created and never fulfilled.
Villamorey raised six grievances before the Court. First grievance. Villamorey alleged the trial court violated the fundamental rights of effective judicial protection and due process by stating it was not entrusted with a mission of investigation, when in Villamorey's view the court had the power to conduct proceedings to clarify facts, such as the auto para mejor fallar (Article 197, Code of Civil and Commercial Procedure).
Second grievance. Villamorey argued the trial court performed an incorrect analysis of the documentary evidence, erroneously concluding that the accounts payable for dividends did not include Lisa. Villamorey maintained that once Lisa's shareholder status was established, it was logically and legally necessary to conclude the dividend payable included her.
Third grievance. Villamorey argued the dividend payment obligation arose the moment the Shareholders' Assembly decreed distribution, with no additional action required by any other corporate body, citing Article 134 of the Commercial Code and Article 675 on obligations without a fixed term.
Fourth grievance. Villamorey reiterated that commercial obligations are immediately due, invoking Article 1401 of the Civil Code and Article 675 of the Commercial Code.
Fifth grievance. Villamorey insisted the accounting certification issued by Certified Public Accountant Eduardo Antonio Arenas Corominal corroborated the obligation's enforceability, and that the trial court erred in discounting it for not specifically naming Lisa.
Sixth grievance. Villamorey invoked rulings from other courts that had allegedly recognized the validity of dividend prescription claims against Lisa in similar cases.
The Court analyzed each grievance systematically. On the first grievance, it shared the trial court's reasoning grounded in Article 126 of the Code of Civil and Commercial Procedure on the burden of proof: the party asserting a claim must prove the constitutive facts of its claim. The Court applied the principle of comunidad de la prueba (community of evidence), confirming that the trial judge properly weighed all evidence presented by both parties.
The central analysis fell on the second and fifth grievances, where the Court drew a decisive legal distinction: the difference between proving shareholder status (accionista) and proving creditor status (acreedor) for specific dividends. The Court determined that Villamorey's documentary evidence (certifications from the Board Secretary and the accounting certification) proved Lisa was a shareholder of Villamorey and that a dividend payable existed for shareholders generally, but did not establish that the dividends decreed at the 2010 and 2011 assemblies were specifically payable to Lisa. The Court noted that a shareholder's creditor right is exercised in its own right and proportionally to the shareholder's participation, so it is not enough to prove shareholder status per se; the plaintiff must demonstrate that the referenced assemblies authorized dividend distribution to the specific party that bears the passive role in the proceeding.
On the third grievance, the Court acknowledged that the economic right to receive profits constitutes the primary interest of corporate participation, but reiterated that Villamorey failed to prove with adequate evidence Lisa's specific creditor status for the decreed dividends.
On the fourth grievance, the Court found that Villamorey failed to individualize the harm caused by the judgment or confront its arguments against the trial court's specific reasoning, which prevented the appellate panel from reviewing the claim.
On the sixth grievance, the Court held it could not base its decision on rulings issued by other courts, in strict observance of judicial independence guaranteed by Article 203 of the Constitution. Proceedings before other courts do not constitute evidence in the present action.
The Court also noted that Villamorey is an entity incorporated in the Republic of Panama, and observed that territorial incompetence should have been raised at the proper procedural stage, making it futile to argue at this point.