Case Name: FREDERICK ARMSTRONG ET AL., Complainants, v. ISABEL LOPEZ CRUZ ET AL., Respondents
Court: United States District Court for the District of Puerto Rico
Jurisdiction: United States
Decision Date: 1922-05-23
Citations: 12 P.R. Fed. 420
Docket Number: No. 1092
Parties: FREDERICK ARMSTRONG ET AL., Complainants, v. ISABEL LOPEZ CRUZ ET AL., Respondents.
Judges: 
Reporter: Porto Rico Federal Reports
Volume: 12
Pages: 420–423

Head Matter:
FREDERICK ARMSTRONG ET AL., Complainants, v. ISABEL LOPEZ CRUZ ET AL., Respondents.
San Juan,
Equity,
No. 1092.
Opinion filed May 23, 1922.
Mr. Jaime Sifre for complainant.
Mr. Jaime Sifre and Mr. J. Henri Brown for Charles W. Fowler.
Mr. O. B. Frazer for minor heirs.
Mr. II. Or. Molina for receiver.

Opinion:
OdliN, Judge,
delivered the following opinion':'
It is conceded that Enrique Bird Arias, previous to the year 1919, purchased certain real estate in Porto Pico and as part payment therefor executed a mortgage to the seller for something like $550,000. On or about March 5, 1919, the said Enrique Bird Arias died, leaving a widow, three children who are now over twenty-one, and seven children who were then under twenty-one.
It is also conceded that certain payments were made upon the said mortgage and that the amount now due and unpaid is $365,000, more or less, and that there has been a default of tho payment on a certain instalment due upon said mortgage, either of principal or interest, or both.
By consent of the representative of the widow and all the heirs of said Enrique Bird Arias, this court in this proceeding appointed a receiver, on or about the 8th day of July, 1921. The purchase-money mortgage, above referred to, was transferred to Charles W. Bowler and he has ashed leave to file a bill of foreclosure in this court. Opposition thereto has been filed by the said heirs of the deceased Enrique Bird Arias by a formal paper filed in the office of the clerk of the corirt on May 20, 1922, and there has likewise been presented to this court oral opposition to the petition by counsel for the receiver.
The court is of the opinion that it would be unjust to Charles AY. Eowler to deny him the right to file this bill of foreclosure of the mortgage. It is my belief that Charles AY. .Fowler acted lawfully in acquiring this mortgage, even though he did not use his own personal funds for that purpose, but that he used funds which were contributed by a number of the creditors of the said Bird estate. I believe that any one creditor, or all the creditors, or any group of creditors, had a perfect legal right to purchase that mortgage if the holder of the mortgage was willing to sell it. I feel convinced that Charles AY. Fowler to-day has exactly the same rights to apply to this court as the original owner of the property would have if he had not parted with his said purchase-money mortgage.
Emphasis has been laid upon the fact that seven of the children of the deceased Enrique Bird Arias are minors, and that this co art should either deny or postpone indefinitely the application of Charles AY. Fowler by reason of the minority of these seven heirs. I am not impressed by the force of this .argument It seems to me that if that were sound doctrine, no man could safely loan his money to any borrower except a corporation. If that doctrine were carried to its extreme it would mean that any person who loaned his money might be safe in his rights to enforce his lien as long as the borrower lived, but that if the borrower died, leaving one or more minor children and a default arose, his rights to enforce his lien would bo seriously impaired, if not destroyed.
In conclusion, feeling convinced, as I do, that these minor heirs cannot have any greater rights in this court than their father would have were he living, arad here in court today, I believe it is my duty to permit this bill of foreclosure to be filed, but the court, in permitting it to be filed, expressly reserves the right of its control over all questions touching the sale, not only of the property covered by this mortgage now held by Charles W. Fowler, but also respecting the sale of all of the property in the hands of the receiver.
The court believes that this receivership should be deemed as having been created to protect the rights of all the parties to this suit, and that if the claims of creditors can be paid by a careful and wise administration, or by a sale thereof, at a proper time, all the proceeds of such sale, after the satisfaction of the claims of all lawful creditors, should pass to the heirs of the deceased Bird; but to deny the right of Charles W. Fowler to file in this court his bill to foreclose a mortgage, which it is admitted is a first lien upon certain property, would in my opinion be a gross abuse of the discretion of this court.
It is so ordered.