CASE OF EDIFICACIONES MARCH GALLEGO S.A. v. SPAIN
No violation of Art. 6-1
C. Russo
7. Edificaciones March Gallego S.A. is a public limited company set up in 1985 and its registered office is at Benidorm (Alicante). Mr Federico March Olmos was its sole director. 8. On 11 December 1989 proceedings for payment (juicio ejecutivo cambiario) were brought against the applicant company and, as guarantor, Mr March in Valencia Court of First Instance no. 10 by another company, Manuel Codesido Marí S.L., which claimed the sum of 4,367,842 pesetas on a bill of exchange. The court registry was instructed to inform the defendants that in default of payment their property would be seized and that they could apply to have the proceedings set aside. 9. As the applicant company did not have its registered office at the address indicated on the bill of exchange, the plaintiff company requested the court on 21 February 1990 to order, under Articles 1444 and 1460 of the Code of Civil Procedure, that the applicant company’s property should be seized without any prior demand for payment and to summon the company to appear by edictos (see paragraph 24 below). 10. On 26 February 1990 Mr March appeared before the Court of First Instance, which assessed what part of his property could be seized and gave him three days in which to indicate that he intended to apply to have the proceedings set aside, if he so wished (see paragraph 24 below). Notice of the proceedings and of the property to be seized was served on Mr March’s wife. 11. On 1 March 1990 Edificaciones March Gallego S.A. appeared before the same court and declared their intention of applying to have the proceedings against the company set aside. The document giving notice of that intention, which was submitted by the company’s lawyer (procurador), Mrs I., stated “… on 26 February last the summons and copies of the application for proceedings for payment were handed to my client…”. 12. On 6 March 1990 the applicant company was given four days by the court to make its submissions, adduce evidence and apply to set aside, in accordance with Article 1463 of the Code of Civil Procedure (see paragraph 24 below). The court noted that Mr March had not appeared within the three-day period he had been granted on 26 February 1990 and declared that he was in default. 13. On 9 March 1990 Mrs I., acting on behalf of Mr March in accordance with “the authority to act in the file of the proceedings” formally applied to have the proceedings in question set aside, within the four-day period granted to the applicant company by the court. In the application to set aside the court was requested to declare that the bill of exchange in question was void since, in view of the amount for which it had been drawn up, an insufficient amount had been paid in compulsory tax on bills of exchange. 14. On 15 March 1990 the court held that the application to set aside was inadmissible (se tuvo por no formulada) on the following grounds: “1. Mr Federico March Olmos did not appear timeously or comply with formal requirements; 2. the lawyer [who submitted the application to set aside] had not received authority to act from the aforementioned person [Mr March] or, at the very least, that authority had not been formally submitted and is not in the file; 3. the only party which gave notice of intention to apply to set aside within the prescribed time is Edificaciones March Gallego S.A., who had duly authorised Mrs [I.], in accordance with requirements…; 4. the debtors are two persons that can be clearly distinguished: on the one hand, a company, Edificaciones March Gallego S.A., and, on the other, a natural person, Mr Federico March Olmos…” It was also stated in the decision (providencia) that it was unnecessary to summon the applicant company by edictos, as Manuel Codesido Marí S.L. had requested on 21 February 1990 since, although the applicant company did not have its registered office at the address indicated, it had appeared timeously in accordance with Article 261 of the Code of Civil Procedure. It was noted in the decision that Mr March had not appeared (see paragraph 12 above), unlike the applicant company, which, however, had not formally applied to set aside (see paragraph 13 above) in accordance with Articles 1462 and 1463 of the Code of Civil Procedure (see paragraph 24 below). 15. On 20 March 1990 the applicant company’s lawyer made a reposición application to the Court of First Instance, arguing that the application to set aside had been made on behalf of the company, that the fact that Mr March’s name appeared in the application had been merely a typing error and that it was clear that the intention had been to apply to set aside on behalf of the applicant company and not of Mr March. 16. In a decision (auto) of 30 March 1990 the court upheld the impugned decision. 17. On 6 April 1990 the applicant company appealed. In a decision (auto) of 23 October 1991 the Valencia Audiencia provincial upheld the decision of 30 March 1990. The court stated that the mistake went to the applicant company’s and Mr March’s locus standi in that although the first name, “March”, was identical in both cases, the second was different, the application to set aside having been made in the name “March Olmos”, the name of the natural person, and not of “March Gallego”, the name of the company of which the natural person was the sole director. 18. In the meantime, on 9 June 1990, the Valencia Court of First Instance, having found that Mr March had not appeared and that Edificaciones March Gallego – who had not been summoned but who, having indicated in time their intention of applying to set aside, had been deemed to have appeared – had in the end not applied to set aside, ordered that the proceedings for payment of the bill of exchange should continue (sentencia de remate). 19. On 14 June 1990 the applicant company appealed against that judgment. On 23 October 1991 the Valencia Audiencia provincial dismissed the appeal on the ground that the applicant company’s application to set aside had been refused by Valencia Court of First Instance no. 10 on 30 March 1990. 20. On 21 November 1991 Edificaciones March Gallego and Mr March lodged an amparo appeal with the Constitutional Court on the basis of Article 24 § 1 of the Constitution (see paragraph 23 below), alleging that the courts’ refusal to rectify the clerical error in the application to set aside was a breach of fair procedure. 21. On 3 December 1991 the amount of the bill of exchange was paid to the plaintiff company. 22. On 19 December 1994 the Constitutional Court held, contrary to the opinion of its Crown Counsel’s office, that there had not been merely a rectifiable error in the identification of the persons who had applied to set aside but a want of diligence that could not be remedied and dismissed the applicant company’s appeal. It pointed out, firstly, that as the right to bring an action and obtain a reasoned decision from the courts was subject to statutory requirements, the courts were bound to apply the rules of procedure in the light of the aim that had been sought to be achieved by the legislature, while avoiding both excessive formalism that would breach the fairness of procedure guaranteed by Article 24 of the Constitution and excessive flexibility such as would render nugatory the procedural requirements laid down in statutes. The court noted the difference in legal status between the applicant company (a legal person) and Mr Federico March Olmos (a natural person), and said: “The difference in legal status between the parties concerned – one of them a legal person and a public limited company (Edificaciones March Gallego S.A.) and the other a natural person (Mr Federico March Olmos) –, the obvious identity or divergence of their interests due to the similarity of their names and the fact that Mr Federico March Olmos, as sole director of the company, had given its statutory representatives authority to act – as was noted in the decision of 15 March 1990 – do not justify holding, as the interested parties maintained, that there was an error in the identification of the persons that had formally applied to set aside. On the other hand, those factors do justify finding, like the ordinary courts, that there was a want of diligence in the proceedings that cannot be remedied; nor must it be overlooked that it would have to be remedied after [the procedure of formally submitting] the application to set aside had been completed. That fact makes it impossible for the Court to hold that there was merely an irregularity, omission or imperfection that could be cured by supplying the missing element. In the instant case, apart from the fact that the omission in question concerned an essential element of the act and related to the person carrying it out, it would have to be cured outside the mandatory time-limits laid down for formally submitting an application to set aside (Article 1463 of the Code of Civil Procedure, in conjunction with section 241 of the Judicature Act), and in such cases of late rectification of an essential element of a procedural step subject to mandatory time-limits, this Court has held that failure to rectify [the error] does not infringe the right to effective protection by the courts.” 23. Article 24 § 1 of the Constitution provides: “Everyone has the right to effective protection by the courts in the exercise of his rights and his legitimate interests, and in no circumstances may there be any denial of defence rights.” 24. The relevant provisions of the Code of Civil Procedure are the following: “Any service of process or summons that does not comply with the requirements of this section [of this code] shall be invalid. However, where the person on whom service is being effected or the summons served learns of it during the proceedings, the service of process shall be fully effective as if it had been carried out as prescribed by law. …” “If the debtor’s permanent address or place of residence is unknown, the Court may decide, on an application by the plaintiff, to order a seizure without giving notice to pay…” “If the debtor’s permanent address or place of residence is unknown, the debtor shall be summoned by edictos…” [In the procedure of summons by edictos the summons is posted up on the notice-board of the judicial body concerned and, where appropriate, published in the Official Gazette and in the main newspapers of the province (Article 269 of the Code of Civil Procedure).] “Within a period that may not be extended of three working days from the day following the summons the debtor may apply to set aside the proceedings for payment by appearing in court assisted by a lawyer [procurador].” “At the end of the period referred to in the foregoing two Articles, a debtor who has not appeared, assisted by a lawyer, shall be deemed in default and the proceedings shall follow their course without it being necessary to summon him again or to send him any notifications other than those provided for in law…” “If, within the time laid down and having satisfied the formal requirements, the debtor gives notice of his intention to apply to set aside, he shall be deemed to be making such an application and must formally submit his application to set aside within a period of four days, which cannot be extended, and shall raise such defences and submit such evidence as he considers necessary…” “Only the following objections shall be admissible in proceedings for payment: … All other objections that may be raised by a debtor shall be reserved for ordinary proceedings and shall not prevent delivery of the judgment in which payment is ordered [de remate].” “Judgments delivered in proceedings for payment [juicio ejecutivo] shall not be final, the parties being entitled to bring ordinary proceedings relating to the same issue.” 25. The relevant provisions of the Judicature Act are the following: “In accordance with the principle of effective protection laid down in Article 24 of the Constitution, the courts shall always rule on claims and may only dismiss them on the ground of a formal defect where that defect cannot be remedied, or at least not in accordance with the procedure laid down by law [for that purpose].” “Procedural steps carried out after a time-limit shall only be annullable if that is permitted by the nature of the time-limit in question.” “Manifest clerical errors and arithmetical errors shall be rectifiable at any time.”