Case Name: María Ríos Méndez, Plaintiff and Petitioner, v. Banco Popular de Puerto Rico, Defendant and Respondent
Court: Supreme Court of Puerto Rico
Jurisdiction: Puerto Rico
Decision Date: 1959-05-27
Citations: 81 P.R. 368
Docket Number: No. 11461
Parties: María Ríos Méndez, Plaintiff and Petitioner, v. Banco Popular de Puerto Rico, Defendant and Respondent.
Judges: Mr. Justice Belaval dissented for the reasons stated in separate opinion.
Reporter: Puerto Rico Reports
Volume: 81
Pages: 368–425

Head Matter:
María Ríos Méndez, Plaintiff and Petitioner, v. Banco Popular de Puerto Rico, Defendant and Respondent.
No. 11461.
Resubmitted August 9, 1957.
Decided May 27, 1959.
Antonio J. Amadeo for petitioner. Damian Monserrat, Jr., Gabriel de la Haba and Rafael Baragaño, Jr. for respondent.

Opinion:
Mr. Justice Saldaña
delivered the opinion of the Court.
The fundamental question raised in this appeal, in brief and precise terms, is as follows: When does the limitation period of the subsidiary action of damages arising from the nullity of a mortgage foreclosure begin to run? Bearing in mind the nature of such action and the provisions of § § 1864 and 1869 of the Civil Code (1930 ed.), 31 L.P.R.A. § § 5294 and 5299, it seems unquestionable that the limitation period begins to run from the moment the marshal, in representation of the debtor, adjudicates the mortgaged property to the purchaser after the sale and the bidding have taken place and the purchase money is paid. It is necessary to consider this adjudication as a sort of sale, for it produces a conveyance for a price, in which, by operation of law, the owner's consent is substituted by the act of a public officer. The properties are "auctioned" and "sold" at that instance and, if the purchaser so requests, he would also be immediately placed in possession thereof. 32 L.P.R.A. § 1142. Cf. Lloréns v. Arbona, 61 P.R.R. 270 (1943). In other words, the sale takes place by the mere adjudication, even though thereafter it be set up in a public deed which serves as ownership title for the purposes of its registration in the registry. Thus, if the foreclosure proceeding is null, the adjudication results in the deprivation of the property, it impairs the right of the debtor which may be revendicated immediately, and there arises the corresponding action to accomplish this, either through revendication with return of the fruits, as long as the properties have not passed into the hands of a third-party mortgagee, or through an equiva lent or subsidiary action for damages when it is impossible to obtain the specific return of the properties with their fruits. And since there is no special provision to the contrary, the limitation period of the action of the aggrieved debtor should be counted from the day in which his right of action undoubtedly accrues. Section 1869 of the Civil Code (1930 ed.), 31 L.P.R.A. § 5299.
In the case at bar, the alleged nullity of the summary foreclosure proceeding instituted by the Banco Popular de Puerto Rico was based on the fact that the creditor collected default interest which were not secured by mortgage. Although the defendant in its original answer objected to the nullity, it thereafter admitted that the summary proceeding was void and that the property had passed into the hands of a third-party mortgagee, relying exclusively on its defense that the action for damages had prescribed. The evidence heard at the corresponding hearing before the lower court showed that the initial petition of the foreclosure proceeding was filed on March 15, 1934; that process was served on the debtor by the marshal on March 20, 1934; that the mortgaged properties were auctioned and awarded to the creditor Banco Popular de Puerto Rico on June 26, 1934; that on June 30, 1934, the deed of award at judicial sale was executed by the marshal before Notary Public Damián Monserrat y Suro in favor of Banco Popular; and that the real property was sold thereafter by the said Banco to Trinidad Soler by public deed executed on November 16, 1934. The Superior Court held as a question of law: first, that the mortgage foreclosure proceeding instituted by the Banco was null and void, according to the defendant's admission; second, that since the property passed into the hands of a third-party mortgagee, as admitted by the defendant, the action brought by the debtor, based on the nullity of the summary proceeding, was not an action of revendication of the real property and return of the fruits thereof, but rather the equivalent or subsidiary action for damages against the foreclosing creditor; third, that such subsidiary action for damages, brought by the plaintiff on June 20, 1949, is an ex contractu action which prescribes within 15 years; and, fourth, that the prescription period of such action begins to run from the date demand for payment is made by the marshal. Based on the foregoing conclusions, the lower court held that the action to recover the damages resulting from the nullity of the mortgage foreclosure had prescribed, and rendered judgment dismissing the complaint. The plaintiff alleges before this Court that the Superior Court erred in holding that her action had prescribed. In our opinion, she is right: the action was brought before the expiration of 15 years counted as of the sale and adjudication of the mortgaged properties, that is, as of June 26, 1934, and the prescriptive period should be counted as of that date and not from the service of process by the marshal.
We must first explain the nature of the action herein which is based on the nullity of the summary proceeding. As already pointed out, it is not an action of revendication of the real property but the equivalent or subsidiary action for damages against the foreclosing creditor. This action is based on art. 38 of the Mortgage Law (30 L.P.R.A. § 63) and art. 169 of the Regulations for its Execution (30 L.P.R.A. § 1090). The first of those articles in its pertinent part provides that " . . . In any case in which the resolutory or rescissory action can not be brought against a third person in accordance with the provisions of this section the proper personal action may be brought for the recovery of damages from the person who may have caused them" (Italics ours.) The second article, namely, art. 169 of the Regulations, provides in its pertinent part: ". . . The [initial] petition referred to in this section, which shall always be authorized by the signature of an attorney at law, shall enumerate the facts and the legal reasons supporting the correctness, the subsistence and the demandability of the claim and the jurisdiction of the 'Court; it shall specifically state the exact amounts collected 'by way of interest or on account of the principal of the 'debt, stating also the net amount of the claim which, by the mere act of instituting- the proceedings the creditor will contract, assuming liability for any loss or damage the debtor or interested third persons may suffer through malice or negligence in not making a true statement of facts and of the circumstances which the judge must take into consideration in authorizing the institution of the proceedings and continuing them." (Italics ours.) It is well to point •out that the Spanish foreclosure trial (art. 1429 et seq. of the Law of Civil Procedure) requires "the protest of effecting legitimate payments" (art. 1439). As pointed out by De la Plaza in II — 1 Derecho Procesal Civil Español 1412-13 (3d ed. 1955), this ritual requirement is actually a mere historical survival. Cf. 5 Manresa, Comentarios a la Ley de Enjuiciamiento Civil 467 (3d ed. 1910). Therefore, the sole purpose of the liability provision of art. 169 of the Mortgage Regulations ". . . which, by the mere act of instituting the proceedings the creditor will contract . . . , " was to relieve the latter from making the protest required by the Spanish procedural law in the petition of the ordinary foreclosure proceeding. See González Alegre, Los Procedi-mientos Judiciales de la Ley Hipotecaria 93 (2d ed. 1955). In our law, that provision no longer plays any role, since the requirement of protest of effecting legitimate payments and also the foreclosure proceeding of the Spanish civil procedure have disappeared.
In view of the privileged position of the foreclosing creditor in the mortgage action, the precepts contained in arts. 38 and 169 supra consist in an absolute imposition of the duty to state the truth with respect to the facts and circumstances to be weighed by the judge for the purpose of authorizing the summary proceeding. According to art. 175 of the Mortgage Law Regulations (30 L.P.R.A. ⅞ 1096), the summary proceedings can not be suspended except in three cases: (1) where there is evidence of a criminal proceeding charging the forgery of the mortgage deed in which a complaint shall have been admitted or an order of prosecution has been issued; (2) when an action in intervention of ownership has been filed, based on title of ownership filed on a date prior to the record of the mortgage and not canceled in the registry; (3) when a certificate from the registry of the cancellation of the mortgage, or an authentic copy of the instrument of cancellation bearing a memorandum of its presentation, is presented. According to the express provision of art. 175 supra, " . . . All other claims that may be brought, either by the debtor or by third persons in possession and other persons interested, including those involving the nullity of the title or of the proceedings, or the maturity, truth, extinction or amount of the debt, shall be heard in the proper plenary action, without ever producing the effect of suspending or interfering with the execution proceedings. . ." In other words, the foreclosure proceeding will continue its ordinary course even though the debtor is able to show the inaccuracy or falsity of the facts alleged in the initial petition. That is why the law requires the foreclosing creditor to tell the truth when stating the facts in the initial petition.
The "malice or negligence" referred to in said art. 169 of the Mortgage Regulations refers both to the concealment or falsity of the reality, knowingly, and to incorrectness through error of law or through negligence in the investigation of the facts stated in the initial petition. By operation of law, the creditor is held liable and is bound to compensate the damages caused to the foreclosed debtor by illegalities in the exercise of his action. We have so repeatedly declared in holding: (1) that it is necessary to comply strictly with the procedures and requirements of the summary proceeding, thereby rendering null and void the •acts performed by deviating therefrom; and (2) that the collection of excessive interest or other amounts not secured by mortgage is a substantial error, to the prejudice of the debtor's rights, which renders void the foreclosure proceeding instituted, even though such illegality is due to a mere error of law or to mere negligence in the investigation of the facts alleged in the initial petition. See, among others, Piovanetti v. Vivaldi, 80 P.R.R. 108 (1957) ; Gaztambide v. Heirs of Ortiz, 70 P.R.R. 388 (1949) ; Buil v. Banco Popular, 69 P.R.R. 237 (1948); F. Rodriguez Hnos. & Co. v. Aboy, 66 P.R.R. 498 (1946); Costas v. G. Llinás & Co., 66 P.R.R. 688 (1946) ; De Jesús v. Assad, 63 P.R.R. 131 (1944) ; Figueroa v. Boneta, 58 P.R.R. 811 (1941) ; Vázquez v. Gutiérrez, 52 P.R.R. 162 (1937) ; Gutiérrez v. Longpré, 44 P.R.R. 643 (1933) ; Martorell v. Crédito y Ahorro Ponceño, 42 P.R.R. 632 (1931) ; Santos v. Crédito y Ahorro Ponceño, 41 P.R.R. 934 (1931).
But such penalty is not proper — we must emphasize it— unless there is a showing of the existence of the damage caused by the nonperformance of the obligation assumed by the foreclosing creditor. See Judgment of the Supreme Court of Spain of June 4, 1952, 39 Juris. Civil 76 (2d ed.); 4 Roca Sastre, Derecho Hipotecario 835 (5th ed. 1954) ; and González Alegre, Los Procedimientos Judiciales de la Ley Hipotecaria 93 (2d ed. 1935).
Because this is a fact: in the last instance, the action of the foreclosed owner to recover the damages caused by the nullity of the summary proceeding is based on the non-performancé of a contractual obligation of the mortgagee. In fact, the mortgage contract imposes on the creditor the duty to assert his foreclosure right to the encumbered property without committing illegalities. If he commits any, then he violates the obligation contracted. We so held in Giménez et al. v. Brenes, 10 P.R.R. 124, 127 (1906), in stating that: ". . . The summary procedure for the recovery of mortgage debts is the result of a contract between parties wherein they have agreed upon the prestations and have also stipulated the method of collecting the debt in case of noneompliance, that is to say, in case of failure of the debtor to pay." This notion has deep historical roots. As stated by Prieto Castro, the summary foreclosure proceeding is truly "... an ideological and actual derivation of the agreement of submission to the foreclosure in the primitive Spanish lato." See 177 Rev. Gen. de Legis. y Juris. 493 (1947). The mortgagor accepts that, in the event of nonperformance, the creditor has the right to foreclose directly the mortgaged properties through distraint proceeding, that is, without personal action or adversary suit relative to the credit, outside the usual procedure for determining the correctness, demandability, and subsistence thereof. Such determination is carried out without any trial or adversary proceedings between the parties. It depends on; the facts and circumstances which the foreclosing creditor-' may state in the initial petition whether the judge may order the substantiation of the summary proceeding. 4 Roca Sastre, Derecho Hipotecario 820-87 (5th ed. 1954). The creditor, on his part, is bound by the contract and by the law to comply with. the steps of the foreclosure proceeding; in' order to collect the mortgage. It is easily understood,, then, that " . . . the malice or negligence referred to in art. 169, supra, [of the Mortgage Regulations] originates in a contractual obligation or at least in a contractual antecedent, for if no contractual relationship had been established between the litigants in this case, the obligation of the defendant to indemnify the plaintiff by reason of the failure to prosecute the summary foreclosure procedure in accordance with the provisions of the Mortgage Law, would have never arisen." F. Rodríguez Hnos. & Co. v. Aboy, 66 P.R.R. 498, 609 1946).
It is to be noted that in this action for damages the plaintiff is entitled to recover the market value of the property at the time she was deprived thereof at the sale. She is also entitled to recover the equivalent of the civil fruits and rents yielded by the real property while it was in the hands of the foreclosing creditor, if the latter was the purchaser at the sale, and interest on the value thereof, if the foreclosing creditor did not purchase the real property at the sale or if it sold it thereafter to a third party, from the date of the public sale or of the sale to a third party to the date the judgment of the Superior Court or of this Supreme Court, on appeal, becomes final. On the other hand, in order to determine the amount of- those damages, it is necessary to deduct (1) the taxes paid by the defendant, (2) the principal of the mortgage loan, and (3) the interest from the maturity of the mortgage credit to the date the judgment which may be rendered by the Superior Court or by this Supreme Court, if an appeal is taken, becomes final. See Arvelo et al. v. Banco Territorial y Agrícola de Puerto Rico, 29 P.R.R. 996 (1921) ; Isaach v. Del Toro, 33 P.R.R. 959 (1925) ; Pontón v. Succrs. of de Huertas González, 42 P.R.R. 511 (1931); Santana v. Orcasitas, 47 P.R.R. 695 (1934); F. Rodríguez Hnos. & Co. v. Aboy, supra; and Nogueras v. Muñoz, 67 P.R.R. 413 (1947). In other words, the compensation which the foreclosing creditor is bound to pay to the debtor in this action for damages is determined in accordance with § § 1255 and 1259 of the Civil Code (1930 ed.), which govern the obligations of the contracting parties when the nullity of an obligation is decreed.
Hence, it follows that the action against the foreclosing creditor to recover the damages caused by the nullity of the foreclosure proceeding is an ex contractu personal action rather than ex delicto. And no special term being fixed therefor, such action prescribes after fifteen years from the day it accrues, pursuant to the provisions of § § 1864 and 1869 of the Civil Code (1930 ed.), 31 L.P.R.A* § ⅞ 5294 and 5299. This is the well-established rule of this Court. See, among others, Buil v. Banco Popular, 69 P.R.R. 237, 248 (1948); F. Rodríguez Hnos. & Co. v. Ahoy, 66 P.R.R. 498, 508-11 (1946) ; Gutiérrez v. Longpré, 44 P.R.R. 643 (1933) ; and Arvelo et al. v. Banco Ter. y Agr., 25 P.R.R. 677 (1917). Therefore, the exact moment when prescription begins to run is the day the action could have been instituted against the foreclosing creditor for the damages caused to the debtor's right by the nullity of the mortgage foreclosure proceeding. And, as we know, no reason, or circumstance which does not affect the legal possibility of bringing such action should be taken into account. The question which we ought to ask is, when did' such action arise? The only answer is undoubtedly: when the debtor's. right could have been asserted because it was impaired or violated by the creditor. Hence, the prescriptive period begins to run from the moment the debtor is illegally deprived of his property, that is, from the date of the sale and adjudication of the mortgaged properties. That is the act which impairs the rights of the debtor and which makes it legally possible to exercise the action of revendication. The creditor's obligation consists, in fact, in not depriving the mortgagor of his property without complying strictly with the legal provisions for summary proceedings. It is an obligation not to do an act, that is, it is directed to an omission, wherefore it is necessary to consummate a contrary act in order to give rise to the debtor's action. As long as such act of deprivation of the property, which is contrary to the obligation assumed by the mortgagee, is not consummated, the debtor may not legally bring an action for damages. Prescription begins to run as of that moment. Cf. Judgment of the Supreme Court of Spain of May 8, 1903, 95 Juris. Civ. 736; I-II Castán, Derecho Civil Español, Común, y Foral 716-18 (fith ed. 1955) ; 12 Manresa, Comentarios al Código Civil Español 944-46 (5th ed. 1951); 1 Borrell y Soler, Derecho Civil Español 507-15 (1955).
It is true that, according to the well-established doctrine of this Court, in admitting the summary proceeding the judge actually renders a final judgment based on the contract between the parties. That is why the demand for payment made to the debtor constitutes notice of such judgment. See Vazquez v. Gutiérrez, 52 P.R.R. 162 (1937); Arsuaga v. District Court, 43 P.R.R. 958 (1932); and Perales v. District Court, 43 P.R.R. 865 (1932). However, the mortgagor has a period of thirty days after demand is made to make payment. Moreover, if payment is not tendered, the law provides that notices of the sale shall be published for a period of twenty days. After the public sale is held, the property is awarded to the highest bidder, the purchaser is placed in judicial possession of the property, and the sale is formalized by executing the corresponding deed. Therefore, the summary proceeding does not end when the marshal makes demand for payment. See Salas v. Cabassa, 69 P.R.R. 423, 433 (1948) ; Fed. Land Bank v. Court, 47 P.R.R. 399 (1934); Gratacós v. District Court, 46 P.R.R. 175 (1934) ; and Arroyo v. Zavala, 40 P.R.R. 257 (1929). On the other hand, we have held that ". . . The court does not exhaust its powers in ordering the issuance of the demand for payment nor does it lose all control over the proceeding, but, upon discovering any jurisdictional defect which is apparent on the face of the petition or of the documents attached thereto, it may vacate its original order, either of its own initiative or at the instance of one of the parties to the proceeding." Miranda v. District Court, 41 P.R.R. 616, 620 (1930), and Domenech, Treas. v. Suau, Fiol & Co., 49 P.R.R. 738, 739 (1936). Thus, the nonperformance sensu stricto of the creditor's contractual obligation is not consummated either by the filing of an initial petition containing false or erroneous averments or by the authorization of the summary proceeding by virtue of a judicial order, or by the notice to the debtor of the demand for payment. • As long as the sale and award is not carried out, there is only a future possibility of nonperformance. The latter is consummated only when the marshal awards the properties at the sale to the acquirer or purchaser. At that moment there also arise the damages which, as pointed out before, constitute an indispensable requirement for the exercise of the action for indemnity based on art. 169 of the Mortgage Law Regulations. Judgment of the Supreme Court of Spain of June 4, 1952, 39 Juris. Civ. 76 (2d ser.). There is no question that the mortgage proceeding may be challenged even though the same has not terminated (even before the demand for payment), by the filing of an ordinary personal action. Article 175 of the Mortgage Law Regulations, 30 L.P.R.A. § 1096; Mestre et al. v. Michelena et al., 30 P.R.R. 142 (1932) ; Roca Sastre, op. cit. supra at 882-83. But it is obvious that in this "plenary suit" the debtor could not claim from his creditor damages which he will suffer only when the properties are sold at a public sale. Thus, for example, in Arvelo et al. v. Banco Terr, y Agr., 25 P.R.R. 677 (1917), the property involved in the summary proceeding was awarded to the defendant bank on September 26, 1898, and the action for damages was not brought until September 7, 1913. We held that the action had not prescribed despite the fact that the demand for payment was made on February 23, 1898. If this date had been taken as the starting point for prescription, as alleged by the respondent bank herein, this Court would have necessarily reached a different conclusion otherwise.
It is to be noted, also, that the subsequent conveyance of the properties by the purchaser to a third-party mortgagee and its registration by the latter in the Registry can not logically alter the period of prescription of the action for damages arising from the nullity of the summary proceeding. However, in Carmona et al. v. Cuesta, 20 P.R.R. 215 (1914), we held that the period of prescription of such action begins to run from the day on which the foreclosed properties are recorded in the Registry in favor of a third party. That doctrine is erroneous and should be overruled. The fact that the personal action for the recovery of damages suffered by the foreclosed debtor is "subsidiary" in character, simply means that resort must be had, in the first place, to the principal action of revendication or of mere declaration of the property, if the foreclosure proceeding is null and void and the property has not passed into the hands of a third-party mortgagee. Save in exceptional cases, the normal consequence in our law of the nonperformance of the different classes of obligations, both in the case of an obligation to give or to do and in the case of not to do, is the execution in natura or specific performance of the obligation. See 3 Castán, Derecho Civil Español, Común y Foral 160 et seq. (8th ed. 1954) ; 2 Colin y Capitant, Cours Elementaire de Droit Civil Francais 111 et seq. (10th ed. 1948) ; Szladits, The Concept of Specific Performance in Civil Law, 4 Am. J. Comp. L. 208 (1955). Hence, it is necessary to require specifically the performance of the contractual obligation of the foreclosing creditor, when decreeing the nullity of the proceeding, by the return of the property and the fruits. Only when it is impossible to procure the execution of such obligation in natura there is room for its substitution by the action for damages, which is an equivalent and subsidiary performance. But it could not be maintained that the personal action against the foreclosing creditor for compensation for damages arises or originates whenever the revendication of the real property is impossible at law. In other words, such action for damages is not "subsidiary" in the sense that it arises when, that of revendication is extinguished. It is regarded as an equivalent. or subsidiary action because it substitutes the adequate natural performance of the foreclosing creditor's obligation. Thus, for example, in an action for breach of a bilateral contract of promise to sell, the proper thing is. to demand the specific performance by executing the corresponding deed of sale; but if such a thing is impossible because the property is no longer owned by the promiser, then compensation for damages would be in order. Naturally, the limitation period of the action allowed to the beneficiary of the promise begins to run from the date of the promiser's failure to perform. The prescription of the action for damages does not commence when the specific execution is impossible. Both in that hypothetical case and in the case at bar, the injured contractual right may be forthwith revendicated after the violation thereof is consummated. It is to be noted that the mortgagor's right is definitively injured by the act of the sale. That is why the procedural rule that the summary proceeding does not terminate with the public sale is not significant. As pointed out previously, the adjudication in favor of the purchaser at the sale is a sort of sale and the properties are "sold" as of that moment, as provided by law. The execution of a subsequent deed merely serves as a title for the purposes' of recordation in the Registry. In Puerto Rico, for procedural purposes only, it has been held that the mortgage foreclosure proceeding ends (1) ". . . with the possession of the premises, the execution of the deed of sale and its record in the registry of property" (Arroyo v. Zavala, 40 P.R.R. 257) ; (2) ". . . with the delivery of possession within thirty days, without prejudice to the discretionary power of the court to order the delivery of possession after the expiration of the thirty days" (Gratacós v. District Court, 46 P.R.R. 170) ; and (3) " . . . with the public sale and with the issuance of the marshal's deed" (Salas v. Cabassa, 69 P.R.R. 423). We need not determine when the summary character of the foreclosure proceeding actually ends. That question of a procedural character is not raised in the case at bar. See footnote 3 supra.
The doctrine on the commencement of prescription which was adopted in the Carmona case is also unacceptable for practical reasons. Prescription exists for reasons of social need and usefulness. As stated by Castán, I op. cit. supra at 705, ". . . it insures the stability of the property and the certainty of the other rights ." [and] "... it facilitates or renders unnecessary evidence of perfectly legal juridical situations which at times it would be costly or impossible to justify." Naturally, the period of prescription has to be arbitrary to a certain extent, but it should not be fixed in such a way as to make it unreasonable. We have held, however, that the action to request the annulment of the foreclosure proceeding never prescribes. See Gaztambide v. Heirs of Ortiz, 70 P.R.R. 388, 402 (1949); Sucrs. de Huertas González v. Díaz, 72 P.R.R. 501, 505 (1951) ; Costas v. G. Llinás & Co., 66 P.R.R. 688, 697 (1946). This means that the action for damages against the foreclosing creditor, under the Carmona theory, could in many instances be brought within a period of fifteen years after the expiration of thirty years of the extraordinary usucapion. Such a situation would be unreasonable and dangerous for the economic and juridical stability in Puerto Rico.
Although the action for annulment of the mortgage foreclosure proceeding never prescribes because "prescription does not run against that which is nonexistent [and] the course of time cannot insufflate life to that which legally never had it," it might be impossible to obtain the return of the property and its fruits as, for example, (1) when the foreclosing party sells the property to another person who is a third party, pursuant to art. 34 of the Mortgage Law, and (2) when the foreclosing creditor acquires title by extraordinary usucapion. Cf. Gaztambide v. Heirs of Ortiz, 70 P.R.R. 388, 400 (1949) ; Díaz v. Quiñones, 68 P.R.R. 232, 235-37 (1948) ; Costas v. G. Llinás & Co., 66 P.R.R. 688, 697 (1946). We have already stated that the action for damages, based on art. 38 of the Mortgage Law and aft. 169 of the Mortgage Law Regulations, is not "subsidiary" in the sense that it arises whenever the revendication of the real property is legally impossible. It merely substitutes the specific performance of the foreclosing creditor's obligation, to wit: the return of the property and its fruits. Since the action for damages prescribes after fifteen years counted from the date the properties are awarded by the marshal at the sale, the inaction of the debtor could place him in a disadvantageous position if the foreclosing creditor sells the property to a third-party mortgagee shortly before the expiration of those fifteen years. In such event, the debtor would forfeit all his rights at the expiration of the period of the action for damages. But this can not be brandished as a valid objection against our theory. The difficulty pointed out would arise from the debtor's own negligence. Furthermore, it is indispensable for the economy of the country that in such case a lapse of fifteen years should produce a state of unassailable right.
Briefly, the adjudication in favor of the foreclosing creditor Banco Popular was made by the marshal of the former District Court of San Juan where the summary foreclosure proceeding was heard on June 26, 1934. That is the date which serves as the starting point for computing the 15-year period of prescription. Since the action in the case at bar was brought on June 20, 1949, it is evident that it had not prescribed. The lower court therefore erred in dismissing the complaint on that ground.
The judgment appealed from will be reversed and the case remanded to the Superior Court, San Juan Part, for further proceedings consistent with this opinion.
Mr. Justice Belaval dissented for the reasons stated in separate opinion.
Mr. Justice Santana Becerra concurs only in the result for the reasons stated in separate opinion.
In Heirs of Ramírez de Arellano v. Superior Court, ante, p. 347 we pointed out that: "It is not incumbent on the judge to investigate or ' determine the accuracy or falsity of the acts alleged in the initial petition to authorize the summary proceeding. Such responsibility falls entirely on the foreclosing creditor. Nor is it necessary in order for the proceeding to be void that the conduct of the foreclosing creditor be equivalent- to deceit. An error constituting negligence because the allegation is contrary to facts or to the juridical rules is sufficient."
"When the nullity of an obligation has been declared, the contracting parties shall restore to each other the things which have been the object of the contract with their fruits, and the value with its interest, without prejudice to the provisions contained in the following sections."' (Sec. 1255.)
"Whenever a person, who is obliged by a declaration of nullity to-return a thing, can not return it because it has been lost, he must return the fruits collected and the value which the thing had when lost, with, interest from the same date." (Sec. 1259.)
These sections, copied verbatim, read as follows:
"A mortgage action prescribes after twenty years, and those which, are personal and for which no special term of prescription is fixed, after-fifteen years. (Sec. 1864.)
"The time for the .prescription of all kinds of actions, when there is no special provision to the contrary, shall be counted from the day-on which they could have been instituted." (Sec. 1869.)
Once an order is issued to sell the properties at a public sale, the summary proceeding for the collection of mortgage credits must comply in all further proceedings had with the provisions of the Act of March 9, 1905 (32 L.P.R.A. § 1141-47). However, Act No. 69 of 1931 (Sess. Laws, p. 432) reestablished with certain amendments art. 127 of the Mortgage Law. Font v. Registrar, 52 P.R.R. 820 (1938). See 2 Muñoz Morales, Lecciones de Derecho Hipotecario 214-36, and cases therein cited
There is no question that the action designated "principal" arises immediately after the sale. In the real action of revendication which is exercised erga omnes, regardless of the wrongful occupant, it is absolutely rieeessary that the defendant be in possession of the thing claimed. Rosso v. Rosso, 23 P.R.R. 122, 125 (1915), and Estate of Gorbea v. Pérez, 10 P.R.R. 436, 438 (1906). But it is not indispensable that the natural possession of the thing be held by the defendant, the legal possession alone being sufficient. De Buen, Derecho Civil, Común y Foral 238 et seq. (1931). On the other hand, the action of mere declaration or determination of the property " . . . does not require that the defendant be possessor . . ." See Judgment of the Supreme Court of Spain of February 21, 1941, which is commented in 25 Rev. de Derecho Privado 206-07; and 2 Castán, Derecho Civil Español, Común y Foral 114-24 (7th ed. 1950). In other words, that the protection and defense of the property may be exercised by either of these actions: " . . . the classical and proper action of revendication, which serves as a means to protect the ownership as against a privation or illegal possession, it being directed fundamentally to the recovery of the possession, and the action of mere declaration or determination of the property, which does not require the defendant to be possessor, the purpose being to obtain a declaration that the actor is the owner of the thing. . ." Ibid. 115.
If the action for the recovery of damages which the foreclosing creditor causes to the debtor arises or originates whenever the action of revendication (whether the "real" or the declaratory) is impossible, it matters little whether such impossibility is due to the existence of a vested title by the extraordinary prescription, or of a title in a third party by virtue of art. 34 of the Mortgage Law. In either case, the cause of action would be the same. The obligation which art. 169 of the Mortgage Regulations imposes on the foreclosing creditor is, in effect, " . . . assuming liability for any loss or damage the debtor . . . may suffer through malice or negligence in not making a true statement of facts and of the circumstances which the judge must take into consideration in authorizing the institution of the proceedings and continuing them."
See Paradís v. Fernández, 47 P.R.R. 304, 312 (1934) ; Martorell v. Crédito y Ahorro Ponceño, 42 P.R.R. 632 (1931) ; and Arvelo et al. v. Banco Ter. y Agr., 25 P.R.R. 677 (1917).