San Juan Construction Co. v. de Arellano (In re San Juan Construction Co.)

14 B.R. 576, 1981 Bankr. LEXIS 3507
CourtDistrict Court, D. Puerto Rico
DecidedJune 22, 1981
DocketBankruptcy No. B-78-350-A. Index F
StatusPublished

This text of 14 B.R. 576 (San Juan Construction Co. v. de Arellano (In re San Juan Construction Co.)) 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
San Juan Construction Co. v. de Arellano (In re San Juan Construction Co.), 14 B.R. 576, 1981 Bankr. LEXIS 3507 (prd 1981).

Opinion

OPINION AND JUDGMENT

ANTONIO I. HERNANDEZ-RODRIGUEZ, Bankruptcy Judge.

For the sake of clarity the defendants in this case will be referred to by letter in the following manner: Jorge Ramírez de Arel-lano, Jr., María E. Ramírez de Arellano de Quiñones, Segismundo quiñones Torres, Teresita Ramírez de Arellano de Montilla and Eduardo Montilla Amy will be referred to as Co-Defendants “A”; The Hereditary Succession of Jorge Ramírez de Arellano, consisting of Jorge Ramírez de Arellano, Jr., María E. Ramírez de Arellano de Quiñones, Teresita Ramírez de Arellano de Montilla and his widow Ena Aparicio de Ramírez de Arellano will be referred to as Co-Defendants “B”; and the United States of America will be referred to as Co-Defendant “C”.

The present controversy comes to this Court upon the occurrence of the following events:

A. Co-defendants “A” and the predecessor of the co-defendants “B” received in 1972, certain promissory notes as payment for stock they held in a corporation (not in debtor corporation) from San Juan Construction Co., debtor herein. When these notes matured (more than two years prior to debtor’s filing bankruptcy), debtor corporation was unable to pay the principal due.

B. On February 24, 1976 co-defendants “A” commenced a civil action to collect on their notes, and on March 10, 1976 Mr. Ramírez de Arellano, predecessor to co-defendants “B”, started a similar suit. Co-defendants herein sought and obtained a prejudgment provisional remedy on debtor corporation’s real property.

C.Both co-defendants “A” and Mr. Ramírez de Arellano Sr. obtained judgments in default against the debtor corporation, the first on May 24, 1977 and the second on May 23, 1977. These judgments were notified to debtor corporation, plaintiff in the case at bar, defendant in the civil suit herein discussed.

1) Both of the above co-defendants obtained post-judgment provisional remedies in the nature of a judgment lien on debtor’s real property, by filing their respective judgments in the Registry of Judgments of the property registry of Bayamón on October 17, 1977.

E. A certification of said Registry, submitted in evidence by the co-defendants in the hearing before this court, shows that this post-judgment remedy was registered as a lien over certain property of debtor-corporation, known as the Alegría Apartment project, subject of this proceeding.

F. On October 5, 1978 debtor filed Bankruptcy, and within the proceedings of the case, filed a complaint on October 31, 1980 requesting authorization to sell certain real property of the estate to wit, the Al-egría project, mentioned above. The request was to sell free and clear of all liens. A title search of the property disclosed three liens which debtor proposed would be paid from the proceeds of the sale once the validity of these was established. The liens in the Registry of Property are the following:

1. Judgment in the sum of $54,000.00 for costs, Civil case CS-76-445 before the Bayamón Superior Court in favor of Jorge Ramírez de Arellano, Jr., María E. Ramírez de Arellano de Quiñones, Segis-mundo Quiñones Torres, Teresita Ramírez de Arellano de Montilla, and Eduardo Montilla Amy, recorded on October 17,1977 at folio 109, Volume 1, of the Registry of Judgments of the Registry of the Property of Bayamón, First Section.
2. Judgment in the sum of $58,000.00 civil case CS 76-631 in favor of Jorge Ramírez de Arellano, recorded on October 17, 1977 at folio 109, Volume 1, of the [578]*578Registry of Judgments of the Registry of Property of Bayamón, First Section.
3. Attachment in favor of the United States of America in the sum of $31,-593.70 for taxes owed recorded on March 28, 1978 on folio 87 inscription 10 of the Federal Attachments Registry of the Registry of the Property of Bayamón, First Section.

G. On November 10,1980, co-defendants “A” and “B” filed an answer to the complaint, claiming that their liens were in fact valid and that if in effect they were to be paid in full, they had no objection to having the complaint granted as filed.

H. A pre-trial hearing was held on November 14, 1980. Whereupon a stipulation was signed between counsel for plaintiff and counsel for co-defendants “A” and “B”, on November 18, 1980, agreeing to the sale and that the proceeds of the same would be deposited in this court. This stipulation would not be construed as barring plaintiff from contesting the validity of co-defendants’ liens or the amount of their claim. Co-defendant “C” signed a similar stipulation with plaintiff on November 24, 1980.

I. A judgment order was entered by this court on November 24, 1980 authorizing the sale and approving the aforementioned stipulation. It also ordered the Registrar of Property to cancel all liens with respect to the property in question and further ordered that the proceeds of the sale be deposited with the Clerk of the Court and invested in interest bearing instruments.

J. On January 30, 1981 co-defendants “A” and “B” filed a motion requesting that the court establish the validity of their claims and order the payment of said liens from the money deposited by the buyer of the property.

K. On February 6, 1981 Corporación de Renovación Urbana y Vivienda (C.R.U.V.), the buyer of the property in question, consigned the check for the proceeds of the sale in this court in the amount of $418,993.14.

L. On February 23, 1981 debtors filed a reply to the motion requesting the payment of liens filed by co-defendants “A” and “B”, which they also entitled Amended Complaint. They requested therein that co-defendants’ liens be annulled and thus treat said defendant as unsecured creditors; or in the alternative, that the claim of co-defendant “B” be subordinated to unsecured status; or in the third alternative, provide that defendants herein contribute to the payment of administrative expenses.

M. On March 4, 1981, Co-defendants “B” filed, under new legal representation, a motion requesting that the estate of Jorge Ramírez de Arellano, Sr., be allowed to intervene in this action; that the determination of the state court, permitting the attachments that gave rise to the liens herein, be considered to constitute res judi-cata, thus leaving the Bankruptcy Court without the power to relitigate said determination; and finally, requested the payment of the liens held by the estate of the deceased.

N. A pre-trial hearing was held on March 4, 1981 at which time the parties were given a period of time to file memorandums of law.

O. On March 26,1981 debtor-corporation filed a Motion for Partial Summary Judgment and a memorandum of law in support of the same. They requested therein that the court enter judgment as to their first claim for relief, stated in the Amended Complaint of February 19,1981, to wit, that the lack of notification to debtor of the post-judgment lien caused that said lien on the property was not perfected prior to the filing by debtor of his petition in Bankruptcy-

P. Co-defendants “A” filed an opposition to plaintiff’s Motion for Summary Judgment and a request for Summary Judgment in their favor and a memorandum of law in support thereof on March 30, 1981. They alleged therein that they were secured by two independently valid liens, that is, the pre-judgment attachment and the post-judgment lien.

Q.

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Bluebook (online)
14 B.R. 576, 1981 Bankr. LEXIS 3507, Counsel Stack Legal Research, https://law.counselstack.com/opinion/san-juan-construction-co-v-de-arellano-in-re-san-juan-construction-co-prd-1981.