Baettenhaussen v. Klugkist

52 P.R. 523
CourtSupreme Court of Puerto Rico
DecidedJanuary 25, 1938
DocketNo. 7597
StatusPublished

This text of 52 P.R. 523 (Baettenhaussen v. Klugkist) is published on Counsel Stack Legal Research, covering Supreme Court of Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baettenhaussen v. Klugkist, 52 P.R. 523 (prsupreme 1938).

Opinion

Mr. Justice Travieso

delivered the opinion of the Court.

The complaint in this case was filed in the District Court for the Judicial District of Arecibo. It is therein averred, in substance, that Theodore Baettenhaussen made advances as loans to the defendant Charles Borda Klugkist of certain sums of money aggregating $63,000; that to evidence these [524]*524loans Borda signed and delivered to Ms creditor sixteen (16) promissory notes, wMcli have not been paid either in whole or in part; that the only property of any value belonging to the defendant Charles Borda prior to January 21, 1932, was a one-third undivided interest in the Hacienda Esperanza, locaetd in Junta y Boca Ward of the municipality of Manatí and recorded in the Registry of Property of Arecibo; that on January 21, 1932, the defendant Charles Borda sold and transferred all his right, title, and interest in the aforesaid property to his wife, Margaret Borda, for an alleged price of $1 “and other consideration,” the title being recorded in favor of Margaret Borda; that the aforesaid transfer by Borda to his wife was made without any consideration whatever and was executed for the sole purpose of defrauding his creditor Baettenhaussen and other creditors and to avoid the payment of a judgment of the Supreme Court of the State of New York entered on November 24, 1931, in favor of Juan Quaremba and against Charles Borda, for $26,477.55, with interest and costs; that on June 29, 1932, the aforesaid Juan Quaremba brought an action in the District Court of Arecibo to set aside the transfer made by Borda to his wife and levied an attachment on the one-third belonging to Borda in the Hacienda Esperanza; that to lift this attachment and to settle the suit with Quaremba, Borda and his wife, on August 10, 1933, executed a mortgage upon the aforesaid undivided interest in favor of the American Colonial Bank ¡& Trust Company of Porto Rico to guarantee the payment of a loan for $38,000 which was used to pay the claim of Juan Quaremba; that on the same date Borda and Ms wife executed another deed by which they sold and transferred to the American Colonial Bank ,& Trust Company the above mentioned undivided interest, to be held by it in trust, the income therefrom to be applied to the payment of the interest and installments of principal on the mortgage in the trustee’s favor and to the payment of a [525]*525certain indebtedness owing to the heirs of Wenceslao Borda; that the aforesaid Bank has been making payments on the debts in accordance with the trust agreement, the balance of the income being delivered to Margaret Borda, and, after her death, to the defendant Charles Borda, for his use and the use of his children; that the transfer in trust was made for the purpose of defrauding his creditor Baettenhaussen; and lastly, that the only property or .goods of any nature belonging to and possessed by the defendant Charles Borda which could have been applied to the payment of his indebtedness to Baettenhaussen is the one-third undivided interest in the Hacienda Esperanza.

The parties ask for judgment declaring (a) that the deed of transfer from Borda to his wife and the trust deed in favor of the American Colonial Bank i& Trust Company are void as having been executed in fraud of creditors; and- (&) that the defendant Charles Borda is the sole legal owner of the co-ownership in question, subject only to the rights of the American Colonial Bank & Trust Company as mortgage creditor. It is further prayed that Borda be required to render an accounting of the sums received by him from Baettenhaussen, and that the aforesaid co-ownership be sold in public auction to satisfy the amount of the indebtedness claimed by the plaintiffs, plus costs, including attorneys’ fees.

The American Colonial Bank i& Trust Company was served, filed a demurrer, and prayed that the case be remove to the District Court of San Juan. The grounds for the motion for removal were: (1) that the action is personal, being an action of debt; (2) that The American Colonial Bank & Trust Company is a domestic corporation, with its principal office in San Juan, and that none of the other defendants reside in the Judicial District of Arecibo; and (3) that for the greater convenience of counsel and of the witnesses who may testify in the case, the trial ought to be held in San Juan.

[526]*526On July 31, 1937, the District Court of Arecibo ordered the case to be transferred to the District Court of San Juan, believing that the latter is the proper court to hear the cause. The plaintiffs,, appealed.

There is a single assignment to the effect that the lower court erred in having held that the action in this case is not included in any of the cases provided for in Section 75 of the Code of Civil Procedure and that Section 81 of the same code is applicable.

Section 75 of the Code of Civil Procedure, in so far as is here material, provides:

“Section 75.—(392 Cal.) Actions for the following causes must be tried in the district in which the subject o.f the action, or some part thereof, is situated, subject to the power of the court to change the place of trial, as provided in this Code:
“1. For the recovery of real property, or of an estate or interest therein, or for the determination in any form of such right or interest, and for injuries to real property.”

The decision of this appeal depends upon the classification which we may make of the action here brought.

A personal action (actio in personam) is one brought against a specified person, founded upon a personal liability, or one in which a remedy is prayed for against a violation of a personal right.

A real action (actio in rem) is one brought against a thing itself, for the purpose of determining its status or condition.

The term quasi in rem is applied to those proceedings, not strictly in rem, which are brought against a defendant personally, but the real object of which is to subject a specified property to the payment of an obligation. See: 1 C. J., secs. 5, 6, p. 929; Holcomb v. Kelly, 114 N.Y.S. 1048, 1051; Cunningham v. Shanklin, 60 Cal. 118, 125.

In ordering the removal of the case to the District of San Juan, the lower court based its order on the principles laid down by the Supreme Court of California in Beach v. [527]*527Hodgdon, 66 Cal. 187, and in Woodbury v. Nevada, etc. Ry. 120 Cal. 463, and by this Supreme Court in Balbás v. Luce & Company, S. en C., 47 P.R.R. 890. Let us examine these cases.

In Beach v. Hodgdon, supra, the action was brought by a creditor who had already secured judgment in his favor, to annul certain conveyances fraudulently made by the defendant Hodgdon to the other defendant Hildreth and to subject the properties to the payment of the judgment. The suit was filed in a county different from that within which the properties were situated. The court expressed itself as follows:

"This is not an action to enforce a lien upon real property, but a bill in aid of execution, to set aside two certain conveyances made by the execution debtor, upon the ground that they were fraudulently executed.

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Wood v. Thompson
90 P. 38 (California Court of Appeal, 1907)
Cunningham v. Shanklin
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Holcomb v. Kelly
114 N.Y.S. 1048 (New York Supreme Court, 1907)

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Bluebook (online)
52 P.R. 523, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baettenhaussen-v-klugkist-prsupreme-1938.