Court Opinion

ID: 6685909
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:32:34.417391+00
Date Added: 2024-06-11T16:00:58.043279
License: Public Domain

OdliN, Judge,
delivered the following opinion:
The matter involved in this intervention proceeding is one of very great importance, and has been very thoroughly tried and admirably argued by Mr. Feliu, as special counsel for the receiver, and by Mr. Soto, representing the intervener, who is a widow.
In order to avoid confusion, it is proper to state at the start that Mr. Juan B. Soto, the present counsel for the intervener, is not in any way associated with Mr. Jose Tous Soto, who acted as counsel for the said widow at the time of the transaction which gave rise to this proceeding, and also is in no way associated with Mr. Manuel Tous Soto, who was the notary public before whom was executed the instrument hereinafter referred to.
It is admitted that in the year 1911 a partnership was created by two brothers, one of whom was Enrique Bird Arias, having a two-thirds interest in said partnership, and the other was Arturo C. Bird, owning the other one-third interest. It is also admitted that said partnership continued until the year 1917, when Arturo C. Bird died testate, and the sole devisee under his will was his widow, Maria Matta, the present inter-vener. It is also admitted that in the year 1919, the other partner, Enrique Bird Arias, died; and that his widow and children are the defendants in the present suit as originally brought by L. W. & P. Armstrong, in July, 1921, as a result of which suit *315tbis court appointed as receiver, Mr. Albert E. Lee, wbo took charge of all tbe property described in the bill, which property was thereafter sold, by order of this court, and purchased by Charles W. Eowler, representing creditors of the said estate of Enrique Bird Arias, the claims of said creditors exceeding $1,000,000, and the proceeds of said sale amounted to $750,-000, more or less, most of which has been distributed, but a considerable sum still remains in the hands of the said receiver.
Shortly after the appointment of the said receiver, this court permitted the present intervener, Maria Matta, to bring this proceeding against the receiver, based upon her claim that she had been defrauded, in the early part of the year 1918, after the death of her husband, but while Enrique Bird Arias was living, when a certain deed was signed by her own brother, Enrique Matta Quiñones, acting under a power of attorney, which she had granted him, she being at the time in the state of Pennsylvania, and her said brother residing in Porto Rico. This deed was executed before the notary public Mr. Manuel Tous Soto, and carried into effect an agreement which had been made between her brother, acting for her, and the said Enrique Bird Arias; said agreement transferring for the sum of $46,000 all of the interest, shares, and rights in all the properties of the said partnership which had passed to the said Maria Matta under the will of her husband, the said Arturo C. Bird Arias. It is conceded that in October, 1916, while both brothers were living, Enrique Bird Arias purchased a large amount of property for the sum of $266,666 from Mr. Genero Cautiño et al. which property forms a principal part of the subject-matter of this litigation, and which was included in the sale above re*316ferred. to, made by order of this court, the purchaser being Charles W. Fowler, as aforesaid.
The controversy arises over the claim made by the widow, Maria Matta, that her brother was deceived and misled by Enrique Bird Arias at the time of the sale for the sum of $46,000 of the property heretofore mentioned, it being alleged that the same was accomplished by the said Enrique Bird Arias, who showed to the said brother, Enrique Matta Quiñones, a certain list and inventory, and the said Enrique Bird Arias stated to the said Enrique Matta Quinones that this list and inventory included all the properties then belonging to the partnership, which statement the said Enrique Matta Quiñones believed to be true. It is further alleged that the said Enrique Bird Arias, knowingly and fraudulently omitted from said list and inventory, the shares, interest, and rights of -the partnership in the properties above described as having been purchased from Genero Cautiño et al. Furthermore, it is claimed by the widow that at the time of the said agreement, in the early part of the year 1918, the brother, Enrique Matta Quiñones, acted upon the impression and belief that the properties mentioned in the list and inventory did actually include all the properties, and the only properties, then belonging to the said partnership; and it is further claimed that the said sum of $46,000 paid to the widow was totally inadequate and unfair, because the interest of the widow at the time of said agreement in the properties actually owned by said partnership, had a value of at least $300,000. It is further alleged that after said agreement of February, 1918, and up to the month of July, 1921, the said properties so improperly omitted from the inventory, had earned for Enrique Bird Arias, until his death in 1919, and *317for bis widow and beirs since bis death, tbe large sum of $600,-000, one third of which lawfully belongs to the intervener.
The bill of intervention also states that the intervener remained in the state of Pennsylvania, not returning to Porto Pico until the year 1920, and then she learned for the first time of the alleged fraud which had been practiced upon her brother. The bill offers to return the sum of $46,000 which was actually received, and prays that this court annul the agreement of February, 1918, and declare, that the intervener is the owner of one-third interest in the properties above mentioned, as fraudulently omitted from the said inventory, and that an accounting be had in order to ascertain the actual amount of the rents and profits which should be adjudged to her as a result of the alleged fraud which forms the basis of this intervention.
A large number of witnesses testified in this proceeding, after the receiver had filed an answer denying all the material allegations of the petition in intervention. The matter was thoroughly investigated and argued with great ability by Mr. Juan R Soto, representing the widow, and by Mr. Leopoldo Feliu, who was specially employed to represent the receiver.
The interesting question arises at the outset as to how far this court would be authorized in considering testimony as to' what Enrique Bird Arias stated orally to the brother of the intervener, at the time of the contract in February, 1918, because the brother is still living and testified orally in this case, whereas Enrique Bird Arias died the year following the execution of the instrument.
After careful consideration of this matter, the conclusion which I have reached makes it unnecessary to discuss that point. When the negotiations began for the purchase of the *318interest of the widow, her brother, acting as her Attorney in fact, employed a very eminent member of the Porto Rico bar, Mr. Jose Tous Soto, who acted for him; and Enrique Bird Arias, who was then living, was represented by the Honorable Antonio R. Barcelo, also a very prominent and leading member of the Porto Rico bar. Mr. Barcelo was one of the most important witnesses whom I heard. His testimony impressed me as being a very clear, correct, and frank statement of the facts. I have not the slightest doubt that the transaction at Fajardo, resulting in this agreement, was carried' out' exactly as Mr. Barcelo testified. It seems that Mr. Jose Tous Soto personally went to Fajardo,-was invited by Mr. Barcelo to inspect all the books, records, and papers of the said partnership, and that he had every opportunity to ascertain the exact condition of all. the assets, the enterprise at that time being prosperous and there being not the slightest ground to expect the receivership which came three and one-half years later. It is quite significant that Mr. Jose Tous Soto did not testify. I cannot possibly avoid the conclusion that if Mr. Barcelo’s statements had been incorrect, Mr. Jose Tous Soto would have been called as a witness on behalf of the intervener, who was his client at the time of this transaction. The burden of proof is clearly upon the party alleging fraud to prove it. In order for the court to give a judgment as is sought by this bill in intervention it would, of course, be necessary for the court to be satisfied, not beyond a reasonable doubt, but by a preponderance of the evidence, that fraud and deceit had been practiced by the then surviving brother upon the widow of his former partner.
After listening to all the testimony in this case, and after considering with care, the strong arguments which have been *319made by tbe respéctive counsel, it is imposs'iblé for me to say that there was the concealment and fraud which the widow alleges. There,' therefore, is nothing for me to do but to dismiss the petition for intervention, and it is so ordered.
To'this order and opinion counsel for Maria Matta' excepts.
Done and Ordered in open court at Ponce, Porto Pico, this 8th 'day of March, 1924.