Wong v. Key Finance Corp.

266 F. Supp. 149, 1967 U.S. Dist. LEXIS 7623
CourtDistrict Court, D. Puerto Rico
DecidedMarch 16, 1967
DocketCiv. No. 360-66
StatusPublished
Cited by3 cases

This text of 266 F. Supp. 149 (Wong v. Key Finance Corp.) 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
Wong v. Key Finance Corp., 266 F. Supp. 149, 1967 U.S. Dist. LEXIS 7623 (prd 1967).

Opinion

MEMORANDUM

CANCIO, Chief Judge.

This case has been brought before the Court on several motions.

The facts, as set forth in the complaint of this ease, are essentially these:

On or about September 14, 1963 Plaintiff, Wong, executed and delivered to Banco Crédito a written guaranty which provided that Plaintiff, Wong, guaranteed to Banco Crédito the payment of liabilities of Borinquen Finance Corporation to Banco Crédito up to an aggregate principal sum of $50,000. Shortly thereafter, Banco Crédito loaned to Borinquen Finance $50,000 on a promissory note. Allegedly that amount has not been paid since the note became executory.

Thereafter, Banco Crédito secured judgment against Plaintiff, Wong, in the Courts of New York and is in the process of executing judgment. The Bank has not attempted to recover from the principals of the note. Plaintiff, Wong, now seeks to have this Court enter judgment against Borinquen Finance Corporation and its alleged successors m business, Key Finance Corporation and BFC Corporation, ordering these to make whole the debt of Borinquen Finance Corporation to Banco Crédito and thus exonerate Plaintiff, Wong. Concededly, Plaintiff, Wong, would not be exonerated if the Principal or their subrogates did not comply.

For the sake of clarity, we shall enounce the motions as follows:

1. Motion of Defendant BFC Corporation to dismiss on the following grounds:

a. that there is lack of jurisdiction since the plaintiff, an alien, does not allege that he is not domiciled in Puerto Rico;
b. that the complaint fails to allege a claim against BFC Corporation upon which relief can be granted;
c. that Defendant BFC Corporation is not bound by co-defendant Borinquen Finance Corporation’s alleged obligation to Plaintiff and even so, Plaintiff has no right of action against defendant because:
(1) Plaintiff is a joint debtor and cannot recover until he has paid;
(2) Plaintiff has not made payment to Banco Crédito y Ahorro Ponceño, the creditor, of the amount allegedly owed by Borinquen Finance Corporation;
(3) Plaintiff obligated himself not to bring any action whatsoever against Borinquen until it paid in full any amounts owed by it to Banco Crédito.

2. Motion of Defendants Key Finance Corporation and Borinquen Finance Corporation to dismiss on the following grounds:

a. that an allegation of Plaintiff being citizen of another nation is not enough to give this Court jurisdiction ;
b. that the action filed by Plaintiff is one for contribution to which a joint debtor is entitled, which [152]*152right does not accrue to Plaintiff until he makes payment;
c. that Plaintiff cannot bring this action because he obligated himself not to bring any action whatever until Borinquen Finance Corporation had paid in full all amounts owed to Banco Crédito, which it has not done; and,
d. that the complaint fails to state a claim against the parties.

3. Motion by Plaintiff, Wong, for Summary Judgment.

4. Motion by Defendants Key Finance Corporation and Borinquen Finance Corporation for continuance of Plaintiff’s motion for Summary Judgment.

I

The issues raised under la and 2a set out above are no longer in dispute. Plaintiff, Wong, alleged in paragraph 1 of his complaint that he was a citizen of the Republic of China (Nationalist China: Taiwan); he further asserted in a sworn statement addressed to this Court that he is a resident of Middleburg, Virginia, that he is not domiciled in Puerto Rico, and that he was not domiciled in Puerto Rico at the time the action was commenced. Thus, as regards diversity, this Court has jurisdiction under 48 U.S.C.A. § 863 and under 28 U.S.C.A. § 1332.

II

The allegations under lb and 2d are patently frivolous. Taking the complaint strictly at its face value, if Plaintiff should prevail in his allegations he would clearly have relief from the Defendants herein.

Ill

The allegations under lc(3) and 2c are also frivolous. Granting for the sake of argument that Plaintiff obligated himself so as not to bring any action against Defendant Borinquen Finance Corporation until it had satisfied its debts to Banco Crédito, this cannot be taken as a bar to an action to secure the payment of that very debt.

IV

Plaintiff, Wong’s, motion for Summary Judgment is premature since there are several matters of fact which are far from clear and which will require evidence.

V

Since the motion for Summary Judgment is premature, Defendants Key Finance Corporation and Borinquen Finance Corporation’s motion for continuance of the motion of Summary Judgment is moot, as will be seen further on.

VI

All three defendants involved in these motions have brought up as a defense that Plaintiff, Wong, can not press the action nor seek the relief requested herein because he has no standing. On the one hand, it is alleged that under the terms of the guaranty entered upon by Mr. Wong on behalf of Borinquen Finance Corporation and in favor of Banco Crédito y Ahorro Ponceño, the Plaintiff became a joint and several obligee together with Borinquen Finance. It is further alleged that, as such, he is a principal debtor and cannot claim from a joint debtor until he has paid the debt. This would clearly be so if he were requesting restitution for himself. It is not so clear here, for he is suing for judgment ordering the main debtor under the note to make direct payment to the creditor, who is entitled to recover immediately from either or all joint debtors.

It may be said in passing that in the action pursued in the Supreme Court of the State of New York by Banco Crédito against Mr. Wong, it does not appear that he attempted to implead defendants herein. He had this opportunity and did not take advantage of it.

The marrow of the question to be answered here is the juridical nature of the obligation, entered upon by Mr. Wong in relation to Banco Crédito and Defendant Borinquen Finance Corporation. [153]*153Whatever the relations between the three defendant corporations may be, those are questions of fact requiring a hearing and the submission of evidence. At this time, we are in no way passing upon these latter questions.

Under the terms of the guaranty, Mr. Wong obligated himself as follows:

“ * * * the undersigned, and each of them, hereby guarantees jointly and severally with the borrower, the punctual payment at maturity to you. * * ”

Defendant BFC Corporation contends that where a surety is jointly and severally bound with the principal obligor, he is not a subsidiary debtor and his obligations are governed by the provisions of the Civil Code pertaining to solidary obligations. The Civil Code of Puerto Rico deals with solidary obligations under Article 1090 (31 L.P.R.A. 3101) and following. There, the term used is “solidaria” which has been translated in the English version as “joint”. According to Black’s Law Dictionary, the term “solidary” is treated as follows:

SOLIDARY.

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266 F. Supp. 149, 1967 U.S. Dist. LEXIS 7623, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wong-v-key-finance-corp-prd-1967.