Case Name: BANCO POPULAR DE ECONOMIAS Y PRESTAMOS DE SAN JUAN, Complainant, v. ELIAS B. WILCOX, Dft.
Court: United States District Court for the District of Puerto Rico
Jurisdiction: United States
Decision Date: 1916-08-25
Citations: 9 P.R. Fed. 193
Docket Number: No. 946
Parties: BANCO POPULAR DE ECONOMIAS Y PRESTAMOS DE SAN JUAN, Complainant, v. ELIAS B. WILCOX, Dft.
Judges: 
Reporter: Porto Rico Federal Reports
Volume: 9
Pages: 193–196

Head Matter:
BANCO POPULAR DE ECONOMIAS Y PRESTAMOS DE SAN JUAN, Complainant, v. ELIAS B. WILCOX, Dft.
San Juan,
Equity,
No. 946.
Real Property — Mortgages.
1. The purchaser of real property whose deed recites that he takes subject to recorded encumbrances takes subject to a mortgage which was not recorded at the time of the purchase, in the absence of clear evidence that there was mistake or fraud affecting the mortgagee.
Mortgages — Foreclosure—Procedure.
2. When an action to foreclose a mortgage is removed into the United States district court, that court will follow neither the procedure established by the Civil Code for mortgage actions nor that established by the mortgage law for summary foreclosure, but will follow the usual course of equity procedure in foreclosure actions, and will allow the mortgagor a reasonable time to redeem the property before sale.
Opinion filed August 25, 1916.
Messrs. Damian Monserrat, Jr., and Frank Antonsanti for complainant.
Mr. Willis Sweet for defendant.

Opinion:
HAMILTON, Judge,
delivered tbe following opinion:
Tbis is a proceeding for foreclosure of mortgages. It was begun in tbe local district court at San Juan, and removed by tbe defendant, an American, to tbe Federal court, where a reformed bill of complaint was filed June 9, 1914. No question is raised as to tbe first mortgage by Rafael Lopez Landron and wife upon tbe property dated July 29, 1909, for $4,600 principal. Tbe real contention is as to wbetber a second mortgage by tbe same parties also to tbe plaintiff, dated December 3, 1912, for $1,700, is binding upon defendant, Wilcox. Tbe second mortgage in question is registered Jan. 28, 1913, in tbe registry of property of San Juan, § 1, at folio 72, volume 24, of San-turce, property No. 2115, triplicate, lOtb inscription. Tbe question in tbe case arises from tbe fact that Rafael Lopez Lan-dron and wife made on January 14, 1913, before tbe notary public Damian Monserrat, at San Juan, tbe same notary before whom were executed tbe two mortgages, a deed whereby tbe grantors sold to said Wilcox tbe same property, a bouse and lot on Park street in Santurce, San Juan. Tbis deed contains a direct assumption by the defendant of registered encumbrances on tbe property; but tbe contention of defendant is that tbe second mortgage in question bad not been registered at that time, and was not within tbe contemplation of tbe parties.
A good deal of evidence was taken pro and con, that of tbe plaintiff tending to show that not only was tbe defendant informed of tbe existence of this second mortgage, bnt that be distinctly assumed it. On tbe other band, tbe defendant testifies bimself, and bas other testimony to tbe effect, that be was not informed of tbe second mortgage, and whatever recitals are contained in tbe deed to him were not read by him, as be trusted tbe notary. Tbe case, therefore, is not without difficulties upon tbe question of fact. Tbe conclusion of tbe court, however, is that tbe deeds are tbe primary source of evidence in tbe transaction, as in all similar transactions, and must control unless tbe evidence is very persuasive that there was a mistake or fraud of some kind affecting tbe plaintiff bank. Tbe court cannot say that it is convinced by a preponderance of evidence that such was tbe case, and must therefore-be guided by tbe documents themselves. It would seem that tbe plaintiff is entitled to recover. Sententia Sup. Ct. Spain, Sept. 29, 1897.
Tbe original suit was brought under tbe local mortgage law, whose proceedings are in great detail. Tbe question arises whether tbe proceeding, when transferred into tbe Federal court on its equity side, is to follow these details. It bas been decided in Porto Rico that there are two remedies for foreclosure, tbe first being under tbe proceedings set out in tbe mortgage law, which is summary in its nature, and, second, a plenary declaratory action following tbe usual course of proceedings under tbe Code of Civil Procedure. When a suit reaches tbe Federal court, however, and becomes in form and in nature a bill in equity, there is a third procedure allowed. There is no question that a court of equity bas jurisdiction to foreclose a mortgage, tbe theory being in equity that, time is not of tbe essence of tbe contract, and that tbe defendant should be allowed a time to redeem before tbe property is sold. Under tbis a decree is entered fixing a reasonable time witbin wbicb tbe defendant may pay the debt, and directing that if be does not comply tbe property shall be sold by tbe master after due advertisement. In tbe case at bar there would seem to he no necessity for tbe appointment of a special master, and tbe clerk will do wbat is necessary.
A decree will therefore be entered fixing tbe amount of the debt as shown by tbe evidence, permitting redemption witbin ninety days, and directing a sale of tbe property to satisfy tbe debt after tbe expiration of that period.
It is so ordered.