Moral & Co. v. Díez

16 P.R. 314

Opinion

Me. Justice Wolf

delivered the opinion of the court.

This was an action to set aside two conveyances which the appellees in this court alleged were made fraudulently. The prayer of the complaint is as follows:

“By virtue of the foregoing the plaintiff prays the court to render a judgment declaring that the alleged action, attachment and sale from José Díez S. en C. to José B. Martínez, and the alleged sale from José Martínez to Antonio Diez are nnll and void, and that the same were fraudulently made, and ordering the record to be made of the deed to said property executed by the marshal of this court on February 8, 1909, before the notary public, Mariano Riera Palmer, with costs against the defendants, including therein a reasonable sum as fees of counsel for the plaintiffs.”

Neither in the complaint nor in their proof did the ap-pellees set forth the nature of the first alleged fraudulent transfer, namely, the one by which José E. Martinez became possessed of the property which the appellees desired to have placed on record in the registry of property in their favor. However, it is conceded by them, and the proof of the appellants shows, that the marshal of the District Court of Mayagiiez, on July 8, 1907, conveyed several pieces of property to José E. Martínez, and that these pieces of property were sold by the said marshal as a result of a suit begun by José E. Martinez against José Díez, sociedad en comandita.

These facts are likewise set up in a deed from José E. Martínez and his wife to Antonio Diez. Antonio Diez is a brother of José Díez, and the two brothers and José E. Martinez are charged with conspiracy and fraud against the rights of the appellees, Moral & Co., in this case. The pieces of property are described as follows:

“ (a) A parcel of land situate in the ward of Arenas, municipal district of Las Marias, containing about 12 cuerdas, with coffee trees, plantains, pasture, bush and forest, and whose borders are as follows: Starting from the east at a quarry near a creek, the border line extends toward the west to.an agave plant, bordering along this line on lands of the estate of José María Montes; then it follows a northern direction to reach a point in front of an emajagua tree, whence, going toward the west, it reaches another old emajagua tree, bordering along this line on lands of the estate already mentioned, then from that tree toward the north to a royal palm stump, bordering along this line on lands of Ulpiano Rivera, and then toward the east and bordering on lands of Pedro Mayoral to an emajagua tree on the bank of the above-mentioned creek, closing the line on lands of María and Diego González.

“(b) Rural property containing 84 cuerdas, with coffee trees, pasture and bush, wooden dwelling house, situate in the ward of Furnias No. 1, of the municipal district of Las Marias, bordering on the east and north on lands of the coffee plantation called Juanita, belonging to the Banco Español de Puerto Rico, on the south on land of the coffee plantation of Rafael Oliveneia, and on the west on road No. 13 from Mayagtiez to Las Marías, and on lands of Eladio Pruna; and

“(c) A two-story wooden house roofed with galvanized iron, with a third story at the back, measuring 8 meters and 70 centimeters in front by 9 meters and 75 centimeters deep, and there is annexed to it a shed with a bakery oven, measuring 9 meters and 60 centimeters long by 5 meters wide, situate in the town of Las Marias, bordering on the north on the street, on the east on the property of Pedro Oli-veneia, on the south on lands of José Guicafré, and on the west on a common lot belonging to the municipality.”

José Diez was indebted to the appellees, Moral & Co.; in the sum of $630.' They brought a suit against him on August 24, 1908, and at the same time issued an embargo against property lettered A. The suit went to judgment, and on February 8, 1909, the marshal executed a deed on said property to Moral & Co. for the sum of $100 and the assumption of the mortgage of $250 owing to the Bank of Porto Rico.

When the deed was offered for record after the original embargo, the. registrar refused to record it because it was directed against José Diez and the property was recorded in the name of José Diez, sociedad en comandita, but made a cautionary notice. When the deed was finally offered for record, the registrar refused to record it because the same property then appeared in the name of Antonio Diez, the alienee of José Martínez who took from José Diez.

At the trial it was shown that José Diez had made many overtures of settlement to Moral & Co., and, among other things, had written them a letter, in which he offered to secure the debt by mortgaging a piece of property which his brother, Antonio Diez, owned. There was also proof that after the date of the transfer by the marshal to Martínez and up to some time in 1909, José Diez continued to pay the instal-ments of the mortgage debt 'originally dne from him to the Bank of Porto Rico. There was also proof that José Diez asked one of his brothers, Manuel by name, to attend to this debt, because he was in jail at the time; also a statement of the president of the bank of a letter received from José Diez while in jail. There was no proof as to the crime or the reason why José Diez was in jail. There was no proof of the nature of the suit brought by José E. Martinez against José Diez, sociedad en comandita, no proof of whether the judgment against such firm was obtained by default or after a contest, and no proof of the amount claimed by José E. Martínez. The proof is silent as to the relations, if any, that existed between José E. Martínez and José Diez. There is, on the other hand, nothing to show why the conveyance of the marshal to Martínez and the conveyance of the latter to Antonio Diez were not recorded until after the sale by the marshal to Moral & Co.

There are some indications in the record that José Diez continued to be interested in the property lettered A; but they are not inconsistent with the real ownership in good faith of Antonio Diez. In one of the letters introduced in the evidence by the appellees, their attention is drawn by José Diez to the fact that the piece of property, on which a mortgage was existing, and on which he offered to secure Moral & Co., was in the name of Antonio Diez. It may or may not be the property the subject of controversy.

Prom the proof before us there were absolutely no facts which would enable the court to declare that the conveyance from the marshal to José E. Martinez was fraudulent or in fraud of creditors. Every presumption is in favor of a judgment and a sale made thereunder. The appellees alleged that, permitting one creditor to obtain a judgment and not notifying other creditors, shows the fraudulent nature of the transaction. We know of no principle of law or morals, outside of insolvency or bankruptcy proceedings, that requir.es a debtor to notify other creditors of his being sued or of judgment obtained against him. But even supposing that it was a badge of fraud for the debtor to act in this way, we do not see how that fault could be imputed to José E. Martinez, about whose relations with the brothers Diez the record is entirely silent. We have to assume, therefore, that the conveyance to him was a bona fide one. This being so, he had a right to convey the property to anybody that he chose.

Appellees alleged that the deed from Martinez to Antonio Diez contained a false recital, in that it declares that the property was free from encumbrance, while in fact the mortgage was owing to the bank. This may have been an inadvertence, or may have arisen in many different ways. In any event, the registry showing that fact and everybody being presumed to be cognizant of it, we cannot see any badge of fraud in the failure to recite the existence of the mortgage. When Martinez conveyed the property to Antonio Diez within six days after he received his deed, it is possible this may have ended his connection with the transaction. It is to be noted, in passing, that the-complainant asked that this conveyance be set aside entirely, although other properties were conveyed thereby, and the value of these properties given in the deed from Martinez to Antonio Diez in the sum of $1,300; in other words, in order to accomplish the recording of the sale to them by the marshal the appellees have asked that the conveyance of property with which they have no connection should also be set aside.

It cannot be assumed without proof that Martinez had anything to do with the delay of Antonio Diez in recording his deed, as the presumption is that he received his money and was entirely satisfied. The registry is mainly for the benefit of third persons, innocent purchasers and creditors, and after José Martínez had conveyed the property to Antonio Diez, it is easily possible that the recording of the deed was a matter of indifference to him and only of moment to Antonio Diez. Martínez, once owning the property, could convey a perfectly good title to it, and if lie sold for less tiran it was worth or even gave it away, as he had a good title, he could have transferred the same to any one else.

Appellees also maintain that the value of the property in the deed from Martinez to Antonio Diez was given at $200 only. One of their witnesses said the property was worth $1,200 as the result of improvements. We do not know when these improvements were made. But it is also a fact that the property was subject to a mortgage, and that the sale was not offered at a grossly inadequate price is evidenced by the fact that the appellees received the same property at a marshal’s sale for the sum of $100 and the assumption of the mortgage of $250.

There are some suspicious circumstances about the case. It is possible that Antonio Diez is a mere stalking-horse for José Diez; but fraud is never presumed and must be established by clear proof. (Carrero et al. v. Calzada et al. [15 P. R. Rep., 340], decided June 2, 1909; Lamas et al. v. Manuel Roig [15 P. R. Rep., 482], decided June 24, 1909; Wigmore on Evidence, par. 2498; Moore on Facts, sections 51, 52 and 53.)

In the case of Carrero v. Calzada, this court said:

“It requires something- more than mere suspicion to establish fraud in a conveyance of land made by a public document. Fraud must be proven by evidence which is clear, strong and convincing, for all presumptions are against it.”

Even if the real owner of the property is José Diez and not Antonio Diez (which fact was not established by sufficient proof), nevertheless, the complainants mistook their cause of action and should merely have prayed that José, instead of Antonio, be declared the owner of the property, and that, therefore, the record of the sale of the marshal to the said appellees be recorded. In the case at bar the transactions of which the appellees complain took place over a year before the appellees began their action and obtained their embargo. We agree with the appellees that a lack of consideration may always be inquired into where fraud is alleged, but such lack of consideration must be proved. We cannot assume it. Without more proof than exists in this case, no matter what manner of man José Diez is, we cannot declare that Martinez had been guilty of a fraud, or that Antonio Diez is not the rightful owner of the property which appears recorded in his name. There is nothing to show that he was not a man of property, and nothing to show that he might not have desired to prevent the sacrifice at a dull market of a property which had once belonged to his brother; and that there may have been a dull market at Mayagiiez is, moreover, evidenced by the fact that the property lettered A was twice offered at public sale and did not bring its alleged actual value.

We are, therefore, of the opinion that the averments of the complaint as to fraud have not been proved. Judgment must be reversed.

Reversed.

Chief Justice Hernández and Justices MacLeary and del Toro concurred. Mr. Justice Higueras did not take part in the decision of this case.