825 F.2d 1 (1st Cir. 1987), 86-2033, Medina & Medina v. Country Pride Foods, Ltd.;(Two Cases)

Docket Nº:86-2033, 86-2060.
Citation:825 F.2d 1
Party Name:MEDINA & MEDINA, Plaintiff, Appellee, v. COUNTRY PRIDE FOODS, LTD., Defendant, Appellant. MEDINA & MEDINA, Plaintiff, Appellant, v. COUNTRY PRIDE FOODS, LTD., Defendant, Appellee.
Case Date:July 01, 1987
Court:United States Courts of Appeals, Court of Appeals for the First Circuit
 
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825 F.2d 1 (1st Cir. 1987)

MEDINA & MEDINA, Plaintiff, Appellee,

v.

COUNTRY PRIDE FOODS, LTD., Defendant, Appellant.

MEDINA & MEDINA, Plaintiff, Appellant,

v.

COUNTRY PRIDE FOODS, LTD., Defendant, Appellee.

Nos. 86-2033, 86-2060.

United States Court of Appeals, First Circuit

July 1, 1987

CERTIFICATION

BREYER, Circuit Judge.

This case turns on a question of Puerto Rico law which has not yet been addressed by the Supreme Court of Puerto Rico. Hence, sua sponte, we certify the question of law presented to the Supreme Court of Puerto Rico pursuant to its Rule 27, 4 L.P.R.A.App. I-A, 422-24 (1978). See In re Torruella-Serralles, 684 F.2d 170 (1st Cir.1982).

Background

Medina & Medina ("Medina") is a collective mercantile partnership organized pursuant to the laws of Puerto Rico in 1969. Medina is a distributor of meat and poultry products. The defendant, Country Pride Foods, Ltd. ("Country Pride"), sells poultry products as a corporation organized under the laws of the United Kingdom, with offices in Arkansas. In 1977, Country Pride appointed Medina its exclusive agent and distributor for all their products sold in Puerto Rico. The contract effectively contained no time limit. 1 Prices for the product were based on a formula which depended on Georgia dock prices, a recognized industry guideline, but were open to negotiation. And, in fact, the formula prices were often increased or decreased by mutual agreement after negotiation.

The district court made the following findings of fact. In March 1978, Country Pride demanded higher prices for its products. In May, 1978, Medina accepted an increase in prices. One month later, Country Pride demanded an additional increase in prices. In October, with the increase still under negotiation, Country Pride proposed to change the formula's rigid pricing structure then in effect to an open market pricing structure. In November, Country Pride changed its original proposal to a formula arrangement of higher prices than the ones existing, to begin on December 1 for a ninety-day tryout period. Medina rejected this formula and counterproposed one with lower prices. Country Pride agreed to Medina's formula for a ninety-day period, but all deliveries were to be "C.I.F. San Juan," with payment "sight draft against ocean bills of lading." Medina advised that the sight draft payment condition was unacceptable.

On November 27, Country Pride restated its position: a) Medina's prices at Country Pride's payment terms or b) open price formula. Medina again rejected the payment terms alleging prior problems with shortages and surpluses in the shipments and also shipments of out of date products. Medina counterproposed a sight draft payable fifteen days after receipt of the product. Negotiations continued but by November 30 it was apparent that an impasse had been reached. On December 4, Country Pride advised Medina that a shipment of goods had been sent and payment was due by sight draft against ocean bills of lading. Thereafter, Medina made another proposal relative to payment terms, to wit, payment seven days after receipt of the product. Country Pride rejected this proposal and reiterated its position: "1) our price, your credit terms, 2) your price, our credit terms." Unable to reach an agreement, on December 7th Country Pride announced its withdrawal from Puerto Rico's market; Medina accepted the withdrawal. Payment was then requested for the last shipment but Medina stated that payment

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would be according to pre-November terms. Country Pride demanded a transfer of funds against commercial invoice to be telexed. Medina retorted that title to shipped goods passed upon tender to carrier at port of shipment, and Country Pride had no right to condition delivery upon payment for the goods. Country Pride rejected Medina's claim on December 12 and also advised that the agency agreement was terminated.

Medina subsequently brought suit...

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