Guerra v. American Colonial Bank

21 F.2d 56, 1927 U.S. App. LEXIS 2695
CourtCourt of Appeals for the First Circuit
DecidedJuly 26, 1927
DocketNos. 1871, 2112
StatusPublished
Cited by3 cases

This text of 21 F.2d 56 (Guerra v. American Colonial Bank) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Guerra v. American Colonial Bank, 21 F.2d 56, 1927 U.S. App. LEXIS 2695 (1st Cir. 1927).

Opinion

ANDERSON, Circuit Judge.

These two cases are by agreement submitted together. Both grow out of the relations of Gabriel Guerra to the bank as financial backer of the Specialty Shop for Automobiles, Inc., and have as their present object the payment of alleged obligations of Guerra out of property claimed to have been inherited by his minor children from their deceased mother, Mercedes.

No. 1871 began on February 9, 1921, as an action at law by the bank against Gabriel Guerra and the Specialty Shop, to recover on four notes. The first is dated November 26, 1917, for $6,000; the second, December 4, 1917, for $9,000 — both signed by the Specialty Shop only. The third, for $1,100, is dated May 7,1919, with a Chandler car as collateral security. The fourth, for $44,500, is dated July 20, 1920, reduced by payment to $39,-500. These two notes are signed by both defendants. Judgment was sought for the aggregate of these alleged obligations ($55,-600), with interest at the rate of 8 per cent, from January 31, 1921.

Gabriel Guerra’s alleged liability on the first two notes is grounded.on a “notarial document,” executed by the bank, Gabriel Guerra, and the Specialty Shop, November 26, 1917, by which, as is alleged, the defendant Guerra made himself “responsible as principal joint debtor” for said notes and the agreed interest thereon. This instrument recites that the hank had agreed to extend a credit of $15,000 to Guerra and the Specialty Shop on terms which, so far as now material, are as follows;

“The deliveries of moneys by reason of this eredit shall he made by the bank by moans of promissory notes to the order of the bank, which shall be signed by the Specialty [58]*58Shop for Automobiles, Inc., for the terms and interest that may be agreed upon in each ease at the time of the execution of the obligation and the delivery of the money, although the term shall not exceed the period of two years, reckoned from this date — that is, from the 23d of November of the year 1917 — which date is fixed for the final liquidation of the credit, except that such period may later be extended by agreement of both parties.

“The said promissory notes may be signed only by the Specialty Shop for Automobiles, Inc., but it shall be sufficient that in the promissory note the statement be made that it refers to the present credit, so that it may have the same force and effect as if it had been signed by the other joint debtor Gabriel Guerra Acosta, who to that end gives the necessary and irrevocable power to the Specialty Shop for Automobiles,. Inc., to sign the said promissory notes and to receive the amounts thereof, and it is understood that, even though they may not bear the signature of Mr. Guerra, he and the Specialty Shop for Automobiles, Inc., constitute themselves as joint debtors, without any other limitation, save that the amount to be owed hereunder shall not exceed the sum of $15,000, and that the statement be made in the promissory, notes to be signed that they relate to this credit.”

No extension of this instrument is alleged or proved; but the notes of the Specialty Shop given under it were extended and interest paid by the Specialty Shop to January 31,1921.

The Specialty Shop was defaulted, and on March 25, 1922, adjudicated bankrupt. The record does not disclose what assets, if any, it had available for its creditors.

Guerra’s answer sets up that the three notes, of $6,000, $9,000, and $1,100, had all been extinguished by the fourth note of $44,-500, which is pleaded as payment of the other three notes, or -a novation of them and of other obligations of the Specialty Shop; that, as $5,000 had been paid on the $44,500 note, the defendant was liable for $39,500 only. Guerra also pleaded that under the instrument of guaranty he never authorized the bank to take demand notes from the Specialty Shop, and that said notes were not presented for payment within the two years specified in said instrument.

The case was tried by the court (Odlin, J.) without a jury; but no written stipulation waiving a jury was filed under R. S. § 649 (Comp. Stat. § 1587). Bond v. Dustin, 112 U. S. 604, 5 S. Ct. 296,. 28 L. Ed. 835.

The court entered judgment for the full amount claimed, $55,600, with interest from January 31, 1921. Execution issued, under which the marshal, on June 5, 1923, collected an attached deposit of Guerra in the National City Bank of New York to the amount of $4,469.05.

On June'7, 1923, execution for the unpaid portion of the judgment against Guerra, to the amount of $51,130.95, was levied on attached properties, including No. 20 Tetuan street, San Juan. On July 11, 1923, Mercedes, Gabriel, and Arturo Guerra — minors represented by their father and natural guardian Gabriel — filed in the same case a “bill of intervention,” setting up that their mother, Mercedes, died intestate in New York City on December 18, 1919; that the interveners were the owners of No. 20 Tetuan street, acquired by inheritance from their mother, as appeared by public deed executed on December 9, 1920, and recorded in the registry of property on February 10, 1921; that they were not made parties defendant in said action, so as to have their day in court; that it appeared on the face of the complaint that the fourth cause of action therein was a promissory note for $44,500, executed July 20, 1920, by their father, after the death of their mother.

The purpose of the bill of intervention was to obtain an injunction — at first preliminary, then permanent — against the sale of the property of the children to satisfy the judgment against their father. It was an appropriate ancillary proceeding in equity to prevent the judgment from being enforced against the property of others than the defendant. Krippendorf v. Hyde, 110 U. S. 276, 4 S. Ct. 27, 28 L. Ed. 145. It raised no issue, and none is now before us, as to the validity of the judgment against Gabriel Guerra.

The gist of the petition was that the children’s property could not be subjected to payment of any debts until those debts had been established against them, or against the property inherited by them, by due process of law.

The bank promptly (12 days later, on July 23, 1923) adopted the theory of the interveners as to its proper legal remedy against the property inherited by them from their deceased mother by -bringing against them a suit at law — now here as No. 2112. In this suit the father, Gabriel, is joined as natural guardian of the three minors, but not as alleged debtor, surviving partner of the conjugal partnership, or administrator of his deceased wife’s estate.

[59]*59The complaint in this suit sets forth that during the conjugal partnership, Gabriel, as administrator thereof, executed and delivered to the bank five promissory notes, on the following dates and the following amounts, to wit:

“Note dated July 7,1919, for the sum of $3,000.
“Note dated July 18, 1919, for the sum of $12,000,
“Note dated September 8, 1919, for the sum of $11,700.
“Note dated October 1, 1919, for the sum of $7,500.
“Note dated October 29,1919, for the sum of $1,200.
“That the note herein referred to, dated September 8, 1919, for the sum of $11,700, was subsequently reduced by payment on account thereof to the sum of $6,500.

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Bluebook (online)
21 F.2d 56, 1927 U.S. App. LEXIS 2695, Counsel Stack Legal Research, https://law.counselstack.com/opinion/guerra-v-american-colonial-bank-ca1-1927.