Perez-Cruz v. Estate of Fernandez-Martinez

645 F. Supp. 1253, 1986 U.S. Dist. LEXIS 19566
CourtDistrict Court, D. Puerto Rico
DecidedOctober 6, 1986
DocketCiv. 78-2469CC
StatusPublished
Cited by1 cases

This text of 645 F. Supp. 1253 (Perez-Cruz v. Estate of Fernandez-Martinez) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Perez-Cruz v. Estate of Fernandez-Martinez, 645 F. Supp. 1253, 1986 U.S. Dist. LEXIS 19566 (prd 1986).

Opinion

OPINION AND ORDER

CEREZO, District Judge.

At the pretrial conference held on October 5, 1984 codefendant United States of America argued that the trial to be held three months from that date1 should not be limited to those issues pending in the local court at the time of removal of this action and that all other issues already decided by that court should be relitigated before this forum. Its position, more extensively discussed in its memorandum, is that since the United States was an indispensable party to this action since ■ 1961 when it acquired an interest in the property being revendicated, as insuror of a mortgage on the property, or, since 1966, when it became subrogated in the mortgagee’s rights, any orders of the Commonwealth court issued before its joinder are not binding upon it. The United States goes even further. It contends that it has been so prejudiced by the lapse of time that it cannot now relitigate the issues decided by those orders and, therefore, the action against it should be dismissed.

The United States’ arguments are principally aimed at a 1963 resolution of the Superior Court of Puerto Rico, San Juan Part, affirmed by the Supreme Court of Puerto Rico in Fernández-Martínez v. Superior Court, 89 D.P.R. 754, 89 P.R.R. 737 (1964), where it was held that the judgment by default entered in Civil Case 2852 on November 14,1932 against plaintiffs and in favor of Manuel Fernández-Martínez, the basis for the latter’s title to the property and of his successors in title, was voidable because it was unlawfully entered by the Clerk of the Court against an incompetent defendant and two minor defendants and void “ab initio” for the Clerk lacked authority to enter a default judgment which was clearly for an uncertain sum since neither the incompetent mother nor her minor children could have accepted the sums requested in the complaint. The other orders of the local court, which antedate the joinder of the United States, were issued prior to its acquiring any interest in the property, were favorable to its mortgagor (codefendant Litheda Apartments, Inc.) and, consequently, to the interests of the United States,2 or have been reconsidered by this [1255]*1255court and are, therefore, not the object of this order.3

Plaintiffs aver that since the United States had knowledge of this action and has actively defended against it, together with codefendant Litheda Apartments, the Superior Court’s decisions against the mortgagor should bind the United States.4

We must again remind all concerned that this is a multi-claim, multi-party suit which began thirty-nine years ago as a two-claim suit against a single defendant, Manuel Fernández-Martínez, to declare void the judgment entered in Civil 2852 and the public sale of their property and order the return of the property to the plaintiffs. As slow progress was made through discovery methods, and through chance, to ascertain the identity of more current owners of the property subject of the original cause, other defendants were joined and new causes of action were filed against these defendants.5 These claims, for recovery of property wrongfully transferred to the additional defendants and to nullify any recordings made in their favor, were contingent upon the results of plaintiffs’ original cause of action against codefendent Fernández-Martínez. It was this original cause of action which the Superior Court finally decided in its 1963 resolution.

As stated before, the United States contends that it was an indispensable party to this 1963 determination. At the time, however, the United States’ interest was merely that of an insuror of a mortgage upon the. property subject of the action and it could not have been named a party to the action under the conditions of 28 U.S.C. section 2410. See Haggard v. Lancaster, 320 F.Supp. 1252, 1254-1255 (N.D.Miss.1970). Although the Secretary could have intervened as of right in the local court proceedings if it had known of their existence,6 12 U.S.C. section 1702, Rule 21.1 of the Rules of Civil Procedure of Puerto Rico, cf. Ready Mix Concrete, Inc. v. [1256]*1256Ramírez de Arellano & Co., 110 D.P.R. 869, 872-873 Official Translations of the Opinions of the Supreme Court of Puerto Rico, vol. .10, pp. 1136, 1140-1141 (1981) (title insuror may intervene in action for collection of money where property is attached which is subject to mortgages guaranteed to have priority over other liens and the mortgagee is not joined to the action), as insuror of the mortgage it was not an indispensable party to the action. Neither was the mortgagee an indispensable party where any judgment entered in the case could not have any effect on the mortgagee’s interests unless and until it was sued and given its day in court. See: Venable v. Bank of the United States, 27 U.S. 107, 111-112, 2 Pet. 107, 7 L.Ed. 364 (1830); Heirs of Rodríguez v. Registrar, 35 D.P.R. 104, 107, 35 P.R.R. 96, 99 (1926). Plaintiffs’ claim against the mortgagee being contingent upon their claim against Litheda Apartments, they could have sued the mortgagee after the conclusion of the cause of action against Litheda. In this separate action the mortgagee would have been entitled to raise the same defense it would have raised had it been joined to the principal action, namely, that it is a third party protected by article 34 of the former Mortgage. Law, supra, and any nullity in Litheda’s title should not affect its recorded rights. It would not be able, however, to relitigate the issue of the validity of the original judgment by default. It is no different in this case where, given the fact that if plaintiffs prevail in identifying their property. as that occupied by Litheda Apartments the unusual situation of a double recording will result in the inapplicability of article 34 of the former Mortgage Law, supra, the United States has been joined as mortgagee to ensure a better protection of its rights. This does not mean, however, that the United States may now question the validity of the 1963 resolution, except on legal grounds.7 Its contention that it is prejudiced by its inability to show that plaintiffs’ predecessor was not judicially declared incompetent is without merit since, even if it had been joined prior to 1963, it could not have controverted the record in Civil 2852 by attacking the allegations made by the plaintiff in that case, codefendant Manuel FemándezMartinez herein, as to the incompetency of that defendant in that case. Neither it nor any of the other codefendants in this case were parties to that action or had any interest at the time. Codefendant Fernández-Martinez has never denied the fact, having based his defense solely on the correctness of his actions and of the judgment issued by the Clerk of the Municipal Court in Civil 2852. The Superior and Supreme Courts of Puerto Rico correctly based their decisions solely on the record of Civil 2852, of which a certified copy is a part of the file of this case.

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645 F. Supp. 1253, 1986 U.S. Dist. LEXIS 19566, Counsel Stack Legal Research, https://law.counselstack.com/opinion/perez-cruz-v-estate-of-fernandez-martinez-prd-1986.