Constitutional Court denies Avícola Las Margaritas amparo against cassation dismissal in dividend prescription case
Sep 13 2022
Constitutional Court
The Constitutional Court, acting as an extraordinary amparo tribunal in sole instance, denied as manifestly inadmissible the amparo filed by Avícola Las Margaritas, S.A. against the Supreme Court of Justice, Civil Chamber ruling that dismissed the cassation appeal on substantive grounds in the ordinary proceeding for extinctive prescription of dividend obligations, Expediente 01044-2018-00313. With this ruling, Lisa, S.A. prevailed at the fourth and final level of review, leaving firm the first-instance judgment that rejected the attempt to extinguish by prescription the obligation to pay dividends.
Compraventa de Productos Alimenticios, S.A. (subsequently merged by absorption into Avícola Las Margaritas, S.A.) filed an ordinary action for extinctive, negative, or liberatory prescription against Lisa, S.A., seeking a declaration that the obligation to pay dividends decreed at the ordinary general shareholders' assembly of May 2, 2012, had been extinguished by prescription.
The first-instance judgment of February 28, 2020, issued by the Eighth Civil Court of First Instance of the department of Guatemala, rejected the claim. The court determined that no adequate evidence existed to establish the starting date for the prescription period, nor was there certainty as to whether the defendant had taken action to collect the dividends.
The Fifth Civil and Commercial Court of Appeals, in its ruling of December 1, 2020, dismissed the appeal and confirmed the lower court's judgment. The appellate court reasoned that the obligor (Compraventa) never demonstrated an intention to make payment, that neither the assembly minutes nor the corporate charter established with clarity the date, form, place, and amount of payment, and that without these elements the obligation was not exigible, making it impossible to compute any prescription period.
The Supreme Court of Justice, Civil Chamber, dismissed the cassation appeal on substantive grounds in its ruling of August 11, 2021, finding insurmountable technical deficiencies in the formulation of all submotivos raised. This ruling constitutes the act challenged in the present amparo.
Avícola Las Margaritas alleged violations of the right to defense and the principles of legality and due process. The petitioner argued that the Civil Chamber: (a) dismissed the cassation based on supposed formal requirements that were in fact satisfied; (b) analyzed submotivos jointly when doctrine required separate analysis of each; and (c) created formalistic interpretive criteria that exist neither in the law nor in binding legal doctrine. The petitioner requested that the challenged act be permanently suspended.
The petitioner reiterated its initial arguments. The Office of the Attorney General, through the Constitutional Affairs Division, requested denial of the amparo, stating that the challenged ruling was legally sound and that the Civil Chamber adequately grounded its decision on the technical deficiencies of the cassation appeal. Lisa, S.A., as an interested third party, did not file arguments.
The Constitutional Court examined each of the cassation submotivos raised by the petitioner and determined that the Civil Chamber acted within the scope of its legal authority in dismissing each one.
Error of fact in the appreciation of evidence. The petitioner merely identified certain evidence (Lisa, S.A.'s party deposition and certifications from the Chairman of the Board of Compraventa) without explaining why the appellate court had distorted their content, nor indicating the impact of the alleged error on the outcome of the ruling. The Court confirmed that this deficiency was insurmountable.
Error of law in the appreciation of evidence. Regarding the certification of January 11, 2018, the Civil Chamber reasoned that the cassation petitioner failed to formulate an argument demonstrating how the evidence was erroneously evaluated, nor did she identify the impact of the error on the ruling's outcome. The Constitutional Court found this determination correct.
Violation of law by non-application and improper application. The Court applied the complementarity doctrine between these submotivos: having determined that Article 1506 of the Civil Code (alleged to have been improperly applied) was not part of the legal basis of the appellate ruling, the improper application claim failed, which in turn made it impossible to analyze the alleged non-application of Articles 675 of the Commercial Code and 1401 and 1508 of the Civil Code.
Erroneous interpretation of Article 126 of the Civil and Commercial Procedural Code. The Court determined that this provision is procedural in nature (governing the burden of proof), not substantive, and therefore could not be validly challenged through the submotivo of erroneous interpretation on substantive grounds under Article 621(1) of the Civil and Commercial Procedural Code.
Erroneous interpretation of Article 134 of the Commercial Code. The Court confirmed that this provision was not used as a legal basis by the appellate court, making it impossible to conduct the comparative analysis required for this submotivo.
The Court concluded that the Civil Chamber issued a properly reasoned ruling that addressed each grievance, and that the deficiencies in the cassation appeal's formulation were insurmountable.