González v. López Quiñones

46 P.R. 814

• Court: Supreme Court of Puerto Rico
• Decided: June 4, 1934
• Docket: No. 6555
• Status: Published

Opinions

Mr. Justice Córdova Davila

delivered the opinion of the court.

In an authentic document' executed before a notary on May 4, 1929, Candelario Quinones acknowledged himself indebted to his nephews, Francisco and Remedios López Qui-ñones, in the sum of $383.40, which, according to the grantor, said nephews inherited from their parents, Pedro López and Faustina Jovita Quiñones, and their grandmother, Lorenza. Quiñones, and which was delivered to Candelario Quiñones.

On November 6, 1930, Francisco López Quiñones brought an action (No. 13450) in the District Court of San Juan against Candelario Quiñones to recover the debt of $383.4G: acknowledged by the latter, with interest at 1 per cent monthly from July, 1894, to October, 1930, the share of the-said Francisco López Quiñones amounting to the sum of $1,027.51.

Candelario Quiñones in his answer to the complaint of his nephew admitted the execution of the deed and alleged, that, owing to the fact that he was advanced in years and had been deserted many years before by his wife, Hermóge-nes Asencio, and with the intention of punishing the latter for her inconsiderate conduct toward him, and since he had no other means of freely disposing of his property, as Ms wife had revoked the power of attorney which she had given him to manage and administer said property which consisted of a rural parcel, the only property he owns, located in the ward of G-uzmán Abajo of Río Grande, he and his two nephews, by mutual agreement and at their instance, decided to-simulate, and did simulate, a debt to them, so that, at his death, the said nephews could attach his property to collect the said debt thus acknowledged by him; that it was in consideration of that false and simulated agreement that the-deed of acknowledgment of the debt was executed, the two-brothers agreeing to execute and sign a private document in which they were to bind themselves not to attempt to collect the said debt during the lifetime of the supposed debtor, and that his said nephews not only had failed to execute the said private document but on the contrary had attempted, and were attempting, to enforce payment of the said debt by judicial action.

On the day set for the trial of this case, the attorney for Candelario Quiñones, who had filed a motion for a continuance which was denied, stated that as he did not have Ms; evidence in court at the time he could not go to trial, and withdrew. After the trial was held, the court rendered judgment, on March 25, 1931, ordering the said Candelario Qui-ñones to pay to the plaintiff, Francisco López Quiñones, the amount claimed.

On March 11,1931, Remedios López Quiñones filed another complaint (No. 14183) in the District Court of San Jnan against the same Candelario Quiñones to enforce payment of $1,027.51 arising from the debt acknowledged in a public deed by the defendant.

The defendant answered under oath, and set up the simulation of the alleged deed of March 4,. 1929, in terms similar to those he used in answering the complaint filed by Francisco López Quiñones.

The defendant Candelario Quiñones died on July 2, 1931, while that action was pending, and his heirs, Juan Bernabe, León Quiñones, and María Hermógenes Asencio asked that they be substituted in the case, and requested a judgment in favor of the plaintiff since, after a thorough investigation, they were convinced that the facts alleged in the complaint by the plaintiff are entirely true. The court then rendered judgment ordering the defendants to pay the amount claimed in the complaint.

On February 13, 1931, the present plaintiff, Luis F. Gon-zález, filed an action (No. 14021) in the district court against Candelario Quiñones to recover the sum of $2,987.78, of which $2,485 was claimed for professional services and $502.78 for cash advances alleged to have been made by González to Qui-ñones. The latter was summoned on the same day, requested an extension of time to answer on February 24, and two days later filed a motion recognizing the truth and legitimacy of the amounts claimed and waiving his right to appeal, in order that the said judgment might become final (firme) and executory immediately. On February 28, 1931, the co'urt rendered judgment as requested.

The present action was brought on the basis of the foregoing facts.

Lnis F. González snes Remedios and Francisco López Quiñones and the heirs (Sucesión) of Candelario Quiñones, consisting of his children and widow, and alleges that the acknowledgment of indebtedness made by Candelario Quiño-nes in favor of his nephews is null and void because it is false and simulated, and because it is the result of a conspiracy in fraud of creditors; and that tlie judgments obtained by Fraimiseo and Remedios López Quiñones against Cande-lario Quiñones in civil suits Nos. 13450 and 14183, are also null and void. It is alleged that these judgments are null and void because the cause of action on which they are based is false and because the acknowledgment of indebtedness is a simulation in fraud of creditors.

The plaintiff alleges that Remedios López Quiñones has obtained an order of execution of judgment in the action brought against Candelario Quiñones and has set a date for the judicial sale of a 43-acre {cuerdas) parcel of land, which is the only known property of the debtor, to the prejudice of the rights of the plaintiff, who is entitled to preference over the judgments obtained by the defendants, as to the date on which they became final. It is also alleged that, with the exception of the property mentioned, Candelario Quiñones, now represented by his heirs, has no other assets against which the plaintiff can enforce his credit.

The defendants deny the essential allegations of the complaint, and that the judgments obtained by them against Candelario Quiñones prejudice the plaintiff or prevent him from collecting his credit, and allege that Candelario Quiño-nes owned not only the property attached by the defendant, but also another rural property known to the plaintiff and recorded without encumbrance in the registry of property, and certain personal property also known to the plaintiff.

The defendants also deny that the judgment obtained by the plaintiff has. preference over that obtained by Francisco López Quiñones, who, long prior to the judgment entered in favor of the plaintiff, attached the property involved in this suit, and entered notice of his attachment in the registry of property. It is likewise denied that Candelario Quiñones owed any debt to the present plaintiff prior to May 4, 1929, and it is alleged that'after the action brought by Francisco López Quiñones against Candelario Quiñones, the plaintiff and said Candelario Quiñones combined for the purpose of prejudicing the rights of the defendants and, pursuant to their agreement, the plaintiff brought an action against the aforesaid Candelario Quiñones, who speedily acquiesced to the complaint while he delayed his answer to that of Francisco López Quiñones, and requested a judgment against himself, asking that it be declared final and executory immediately, all in order that the present plaintiff might obtain a judgment credit and might allege a preference against these defendants and thus destroy their right to recover from the property of Candelario Quiñones.

The lower court rendered judgment holding the acknowledgment of indebtedness made by Candelario Quiñones in favor of his nephews Francisco and Remedios López Qui-ñones to be null and void, decreeing the nullity of the judgments obtained by Francisco and Remedios López Quiñones against Candelario Quiñones and his heirs, because the cause •of action on which they were based was false and nonexistent and the said judgments were obtained in fraud of creditors, and holding that the credit of the plaintiff was preferred and enforceable against any of the assets of the debtor Candela-rio Quiñones or his heirs. The defendants were also ordered to pay “the costs, expenses, and disbursements of the attorney for the plaintiff, as the court deems that there was manifest contumacy on their part in this action.”

The first assignment is that the court erred in rendering judgment for the plaintiff, since the latter did not show that he has the right to disturb the final judgments rendered in actions to which he was not a party. The defendants con-. tend that the trial court should have upheld their allegation regarding the nullity and nonexistence of the judgment rendered by virtue of the acquiescence of Candelario Quiñones, to the complaint filed against him by Dr. Luis F. Gronzález. The appellants argue that this motion is not signed or sworn to personally by the defendant Candelario Quinones or by his attorney, nor does it contain a sworn statement of the facts giving rise to the debt, nor is it shown that the sum confessed is justly due. The motion requesting judgment and waiving the right to appeal, signed by the attorney for Can-delario Quiñones, reads as follows:

“ Comes now the defendant in this ease, b3r his undersigned attorney, and respectfully shows and prays:

“FiRST: That the defendanthas been duly notified of the complaint filed against him by the plaintiff Dr. Luis F.' González. And, since the debt claimed by the plaintiff in his complaint is true and legitimate, and the defendant does not wish to delay unnecessarily the proceedings in this case, he acquiesces and consents to the entry by this Hon. Court of a judgment for the plaintiff, ordering the defendant to pay the'plaintiff the sum of $2,987.78 as principal, without interest or costs.

‘ ‘ Seoond : That in order that the said judgment may become final and executory immediately, and to avoid unnecessary delay and expense, the defendant waives the right to appeal.

“Therefore: The defendant prays that the Hon. Court accept this motion and, on its merits, render judgment against him ordering, him to pay to the plaintiff the sum of $2,987.78, without interest or costs.

“Río Piedras. P. R., February 26, 1931.

(Sgd.) Rodolfo Ramírez Pabón,

Attorney for the defendant. ’ ’

Tbe defendants maintain that tbe acquiescence thus made is contrary to the provisions of section 359 of the Code of' Civil Procedure, which reads as follows:

“A statement in writing must be made, signed by the defendant and verified by his oath, to the following effects:

“1. It must authorize the entry of judgment for a specified sum..

“2. If it be for money due, or to become due, it must state concisely the facts out of which it arose, and show that the sum confessed therefor is justly due, or to become due.

”3. If it be for the purpose of securing the plaintiff against a contingent liability, it must state concisely the facts constituting the liability and show that the sum confessed therefor does not exceed the same.”

The English, text of section 358 of the same code says that a judgment by confession may he entered, without action, either for money due or to become due, or to secure any person against contingent liability on behalf of the defendant, or both, in the manner prescribed by this chapter. Such judgment may be entered in any court having jurisdiction for like amount.

The Spanish text says that judgment may be entered without a trial.' This section is identical with section 1132 of the Code of Civil Procedure of California.

The defendants cite several cases from the Supreme Court of that State in support of their contention that the confession should be signed and sworn to by the party, and must state concisely the facts out of which the debt arose. The only case applicable to the question raised is that of Pond v. Davenport, 44 Cal. 481, in which the defendant, after the action had been brought and he had been summoned, and before the time for answering had expired, confessed the debt and agreed that judgment be rendered. In that case the court said:

‘‘The judgment which Corbet obtained against Davenport must be deemed a judgment by confession. The time for answering had not expired and the judgment could not have been taken by default, and does not purport to have been a judgment of that character. On the contrary it was based upon a verified statement made by the defendant, consenting to the judgment, specifying the amount, and undertaking to state the subject matter of the indebtedness, as founded on a promissory note due from defendant to the plaintiff in the action. It was clearly intended to be, and is, in its legal effect, a judgment by confession.”

At the time the above decision was rendered, sections 374, 375, and 376 of the Practice Act, subsequently incorporated in the Code of Civil Procedure as sections 1132, 1133, and 1134, were in force in California. These sections correspond to sections 358, 359, and 360 of our Code of Civil Procedure.

We agree with the Supreme Court of California that a judgment rendered after the defendant has been served with summons and before he has answered the complaint, is a judgment by confession, cognovit actionem; but we do not share the opinion of the said court as to the applicability of sections 374 and 375 to a confession of this nature.

The words “without action” refer to judgments rendered without the institution of an action. The California court, however, considers that the provisions of the Practice Act cover a judgment rendered after an action has been commenced and after the issuance and service of process.

According to the common law, a judgment by confession is one rendered in favor of the plaintiff, where the defendant, instead of answering the complaint, acknowledges the claim, or at any time before the trial withdraws his pleadings and agrees that judgment be rendered against him. Such judgment, obtained by confession after the suit is begun, is to be distinguished from a judgment obtained by confession without the institution of an action, as happens in many jurisdictions and in the State of California.

Prom the treatise “Black on Judgments,” volume 1, page 69, we copy the following:

“All judgments rendered upon the confession of the defendant may be divided into two classes: 1. Those entered in an action regularly commenced by the issuance and service of process; 2. Those entered upon the confession of the defendant, or his warrant of attorney, without the institution of an action. The former class of judgments are well known to the common law and must be tested and sustained by rules and principles existing independently of statutes, while judgments of the latter class derive all their efficacy from positive law and must conform, in order to be valid, to all tbe requirements and formalities set up by the legislature. It is frequently a matter of importance to determine whether a particular judgment belongs to one class or the other, because, if not covered by the statute, it is not impeachable for lack of an affidavit, statement of indebtedness, or other support required by the act. This distinction is recognized by the authorities. Thus a statute which provides that any person may, without process, appear in person or by attorney and confess judgment for any bona fide debt, but, in such case a petition shall be filed, and other acts be, done, does not apply to cases where the party is regularly cited, but only to cases of voluntary appearance without process. So where a defendant accepts service of process and afterwards confesses judgment, the plaintiff’s affidavit of the justness of the claim, required in the ease of confession without action, is held to be unnecessary. Now judgments entered for the plaintiff upon the defendant’s admission of the facts and law, as the same are known to the common law and exist independently of statutes, are of two varieties; first, judgment by cognovit actionem, and second by confession relicta verifieatione. In the former case the defendant, after service, instead of entering a plea, acknowledges and confesses that the plaintiff’s cause of action is just and rightful. In the latter case, after pleading and before trial, the defendant both confesses the plaintiff’s cause of action and withdraws or abandons his plea or other allegations, whereupon judgment is entered against him without proceeding to trial.”

The same author, in referring to judgments by confession without action, on page 51, says:

“One method of confessing a judgment without action or process is by a warrant of attorney. This is an authority given by the debtor to a named attorney, or to any attorney of a given court or in a given jurisdiction, empowering him to appear for the defendant and confess judgment for a designated amount. This differs from a cognovit in that an action must be commenced before a cognovit can be given, but not before the execution of a warrant of attorney. In so far as this procedure may be regulated by statute in any jurisdiction, it must of course comply strictly with the requirements of the law. But in most of the states there are statutes which authorize a judgment to be entered upon the confession of the defendant, without action, upon the filing of a verified statement showing the facts out of which the indebtedness arose, and an affidavit that the debt is just and actual, and sometimes upon the observance of certain additional formalities. This is by far the most usual method of confessing judgments, and therefore will principally engage our attention in this chapter.”

As may be seen, judgments by confession after an action has been brought, are of two classes: Cognovit ¡actionem and relicta verifioatione. The former case occurs where the defendant, after service, instead of entering a plea, confesses the cause of action; the latter case occurs where the defendant, after pleading and before trial, confesses the cause of action and withdraws his answer or other pleading. In each one of these cases the judgment is governed by rules and principles originating in the common law and not by provisions issuing from the legislative power, and authorizing the confession of judgments without action. An action brought and confessed cannot be attacked because it is not accompanied by an affidavit or a statement of the facts out of which the debt arose or other additional requirements.

There is no doubt that the requirements of section 359 of our Code of Civil Procedure should be strictly complied with where a claim is confessed without action. Must these requirements be met where a debt is confessed after the complaint is filed and the defendant is summoned? The Supreme Court of California has decided in the affirmative in the case of Pond v. Davenport, supra. This opinion cannot be supported, in our judgment, unless we reach the conclusion that the requirements for confessions without action are also applicable to confessions made after the action has been commenced. The words of the statute are clear and do not seem to warrant such interpretation.

Section 359 requires that the party who confesses, where the judgment is for money due, state- concisely the facts out of which the debt arose and show that the sum confessed is justly due, or to become due. The purpose of this statement, according to the Supreme Court of California (Cordier v. Schloss, 18 Cal. 582), is to inform the creditors and place them in a position to detect fraud, where it exists. It seems logical not to require said statement where an action has been brought and a statement of the facts out of which the debt arose- has been made in the complaint. In this case the creditors can acquire knowledge of these facts without need for a repetition by the defendant of the allegations of the complaint.-' Section 359, in our opinion, is applicable only to confessions made before an action is brought.

It is further argued that the evidence" is insufficient to support the judgment, and that the court committed manifest error in weighing it. The deed of acknowledgment executed by Candelario Quiñones in favor of his nephews, Francisco and Bemedios López Quiñones, is dated May 4, 1929. The plaintiff alleges that Candelario Quiñones made this acknowledgment for the sole purpose of defeating the rights of his wife and of his creditors at that time. In order to establish that this acknowledgment was made for the purpose of defrauding the plaintiff, the latter should have shown that he was, at the time, a creditor of Candelario Quiñones, who then lacked sufficient assets to cover the obligation acknowledged and the one contracted with the plaintiff. Even so, it could perhaps be said that the acknowledgment of the debt did not prevent the plaintiff from levying on the property of his debtor to recover an enforceable obligation. As to the capacity of the plaintiff as creditor, it was alleged in the complaint filed by him against Candelario Quiñones and confessed to by the latter, that on July 14, 1928, the said Candelario ■owed Dr. González $785 for professional services. The existence of this debt, assuming that it does exist, and the acknowledgment by Candelario Quiñones of an obligation in favor of his nephews do not establish, in the absence of other evidence, the alleged fraud on the plaintiff. What property ■did Candelario Quiñones own when the deed was executed? If he owned sufficient property to cover the obligation acknowledged and the one contracted with Dr. González it cannot be said that there was an intent to defraud. The record contains no evidence as to the property then owned by Can-delario Quiñones, except Ms own allegation in Ms answers to the actions brought against him hy Francisco and Reme-dios López Quiñones, to the effect that his property consisted only of a rural parcel located in the ward of G-uzmán Abajo-of Río Grande. But even this allegation has not been justified, since Candelario Quiñones, who could have appeared to support it at the trial of the action brought against him by his nephew Francisco, announced, through his attorney, that he was withdrawing from the trial because he had no evidence in court at the time.

Nor is there any evidence in the record as to the value of this parcel alleged to be the only property of Candelario-Quiñones. The alleged credit of Dr. González, on July 14, 1928, added to the obligation acknowledged in favor of the-nephews of Candelario on May 4, 1929, gives an approximate total of $2,800. It is not true that Candelario Quiñones owned only one parcel. On the same day, July 14, 1928, Dr. González appears taking a lease of two parcels owned by the-said Candelario Quiñones; one of forty-three acres (cioerdas) and another of nine, both recorded in the registry of property. These two parcels adjoin on one side, and, because-they are contiguous, Dr. González stated that they form one parcel, when he himself admits that there are two parcels in the lease contract the fifth clause of which reads as follows:

“With respect to the fences of the parcels leased, it is clearly and expressly agreed between the parties that the lessor, Mr. Qui-ñones shall go over them as soon as possible so that the two parcels will be duly fenced with maya and wire, the maintenance and repair of said fences thereafter being for the account of the lessee, Mr. Gon-zález, who is obligated to deliver the said fences in the same condition that he receives them.”

The fact that the parcels are adjoining and belong to the same owner does not mean that they have been grouped to constitute a single piece of property and that the 9 acres are included in the “area of the 43 acres” as Dr. González affirms. The lease describes the two parcels with different boundaries and the testimony of the sons of Candelario Quiñones is clear as to the existence of a parcel with an area of 43 acres and another with an area of 9 acres.

The plaintiff alleges that, assuming that the debt acknowledged exists and that it arose in the year 1894, as the deed of acknowledgment states, Candelario Quiñones waived, on May 4, 1929, a right of prescription which he had acquired. The plaintiff contends that he can avail himself of the prescription, even though it has been waived by the debtor.

In accordance with section 1837 of the Civil Code, 1930 ed., the creditors and any other person interested in availing himself of prescription may make use of it despite the express or tacit waiver of the debtor or owner. This power,, however, is subordinated to the provisions of section 1064 of the Civil Code, 1930 ed., according to which the creditors,, after having attached the property of which the debtor may be in possession in order to collect all that is due them, may exercise all of the rights and actions of the debtor for the same purpose, excepting those inherent, in his person. Berríos v. Rev. Carmelite Mothers, 3 P.R.R. 292.

We are of the opinion that the plaintiff, in order to make use of the right granted by this section, should have proved that when the deed of acknowledgment of debt was executed, the assets of Candelario Quiñones were not sufficient to cover his credit and the debt which he considers simulated. There is no evidence on this point in the record. The plaintiff could have enforced and executed his credit on that date. The acknowledgment of debt did not constitute an encumbrance on the property of the supposed debtor, and Dr. González was not prevented, then or thereafter, from exercising his right,, and from enforcing it on the property of his alleged debtor. From May 4, 1929 to November 25, 1930, on which date Francisco López Quiñones attached the parcel of 43 acres recording his attachment in the registry of property, more than 18' months elapsed. The complaint of Francisco López Quiñones was filed on November 6, 1930. During all of this time the said parcel was free from liens and the plaintiff had the opportunity of attaching it. Dr. González sued Candelario Qui-nones on February 13, 1931. The debt was confessed on the 26th of said month and on the 28th judgment was rendered by the court. On July 6, 1931, Dr. González had his judgment entered in the registry of property.

The plaintiff alleges that he has attached all of the property of Candelario Quiñones and that the only property in his possession is the parcel of 43 acres of land which had been attached by Francisco López Quiñones. We have shown that Candelario Quiñones also owned a parcel of nine acres, which appears registered in his name in the registry of property. As we have already said, the value of neither parcel was proved. We do not know, therefore', whether or not these assets are sufficient to cover the debt acknowledged and the claim of Dr. González. Juan V. Quiñones Asencio, son of Candelario Quiñones, states that in addition to the two parcels, his father left half an acre of land on which he had a house at the time of the San Felipe hurricane, and five or six head of cattle which he kept on the parcels leased to Dr. González.

This is a case in which both parties, plaintiff and defendant, accuse one another of having combined with Candelario Quiñones to prejudice the rights of the other. The evidence presented is not as clear as might be desired. Certain evidence which was offered, but not admitted, might have thrown light on the questions in controversy. The acknowledgment of debt may have been simulated and there are indications that it was. The claim of Dr. González is not free from suspicion either. The conduct of Candelario Quiñones in either case cannot inspire confidence. But, as we have already said, even though the credit of the plaintiff were legitimate, it is not possible to render judgment in his favor, because he has not shown that he was prejudiced by the acknowledgment of debt made in favor of the nephews of Candelario Quiñones on May 4, 1929.

The judgment must be reversed and another rendered for the defendant, without costs.

Mr. Justice Wolf concurs in the result.