P.R. Laws tit. 27, § 2056
In case a medallion is burdened and the holder cannot satisfy the obligation contracted, the creditor may place the medallion in public auction, upon previous notice by certified mail with acknowledgment of receipt to the holder and to the Commission not less than forty-five (45) days in advance of the date in which the auction is held.
The Commission, within fifteen (15) days following the receipt of the creditor’s notice, shall proceed to investigate if among the first twenty (20) persons recorded in the registry of eligibles, regardless of the order in which they appear, there is any person who can assume the burden of the liens encumbering the medallion.
Should an eligible person appear, the Commission shall take the necessary steps for the conveyance of the medallion and the settlement of the lien. It shall, likewise, enter the conveyance in the registry of medallions in the name of the new holder.
If no eligible person appears after performing the above-mentioned steps, the Commission shall notify the creditor of such fact and shall send at least twenty (20) days in advance of the date of the auction, a true copy of the registry of eligibles and a certification of the status of the medallion to be auctioned, as appears in the registry of medallions. If in the registry of medallions there have been recorded other lien transactions at variance with those which caused the auction and there is no recording of its cancellation or settlement, the creditor shall notify the other creditors of the date and other circumstances of the auction. If there are various creditors for the same medallion, the auction may be initiated only by the creditor who has in his favor the most extortionate credit and in default thereof the most ancient [sic] credit. Likewise the creditor who initiates the auction shall proceed to publish, on his own, two edicts giving notice of the auction which shall be published once a week during two consecutive weeks in a newspaper of general circulation in Puerto Rico.
At the auction there shall be present an authorized representative of the Commission who shall direct same and shall receive and hold in custody the moneys derived from the auction and deliver to the creditors the sums corresponding thereto.
The medallion shall be offered at the auction only for the total amount of the obligation or obligations for which it was burdened and may be awarded only in favor of one of the persons included in the registry of eligibles, regardless of the order in which they appear in same. In case there is no award at the first auction, the medallion may be auctioned two (2) times more, following in each occasion the mentioned service and notice proceeding. In case none of the persons included in the registry of eligibles appear at the third auction or, on having appeared, have not been able to satisfy the amount of the auction, the representative of the Commission shall authorize the award of the medallion to the highest bidder. After the auction has finally been awarded, the representative of the Commission who was in charge of same, shall draw a memorandum which shall contain the most significant particulars of the auction. This memorandum shall become a part of the registry of medallions in the record appertaining to the medallion awarded.
The Commission shall proceed to cancel in said registry the name of the original holder and shall enter therein the name and other particulars of the new holder, who shall have the same rights, duties and obligations with respect to the medallion by the original holder.
The original holder of a medallion auctioned or awarded by the Commission as herein stated shall become disqualified to obtain a new authorization or franchise and corresponding medallion for a term of five (5) years to be reckoned from the date of the award.
History —June 8, 1972, No. 7, p. 353, § 6.