Court Opinion

ID: 6684982
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:32:00.794868+00
Date Added: 2024-06-11T16:00:56.493165
License: Public Domain

HamiltoN, Judge,
delivered tbe following opinion:
Tbis is tbe third litigation connected with tbe question of tbe obligation of E. B. Wilcox to tbe Banco Popular in tbe matter of a second mortgage made by Bafael Lopez Landron and wife. Landron bad executed, July 29, 1909, a mortgage in favor of tbe bank for $4,600, and made another mortgage to tbe bank December 3, 1912, for $1700. Tbe latter mortgage was not promptly recorded, and in tbe meantime, January 14, 1913, Landron and wife made a deed to E. B. Wilcox. Tbe main question is whether Wilcox, at the time of receiving his deed, knew of and was bound by the second mortgage of Landron, which was not recorded until January 28, 1913. Tbe foreclosure bill of tbe bank covered both mortgages, and, making Lan-dron and Wilcox defendants, was filed June 9, 1914. By consent the case lay dormant until 1916, when testimony was taken and decree of foreclosure rendered August 25, 1916. The court having ruled that a cross bill was not germane, defendant Wilcox filed a bill against Landron and the bank on June 30, 1916, in a suit numbered 975 Equity, seeking to reform the deed of sale of January 14, 1913. On December 20, 1916, a decree pro confess© was entered on the new bill, and on January 4, 1917, a final decree was entered against Landron, the bill having been dismissed as against tbe bank. Tbe sale under tbe foreclosure suit No. 946 was had January 6, 1917.
*420It is sought by tbe bill of review now filed in cause No. 946 to have tbe proceedings and decree of foreclosure reviewed and set aside. A rnlmber of reasons are urged. Some of them were passed upon during tbe progress of tbe main suit, and therefore need not now be considered. Others will be discussed.
1. A bill of review will not be allowed if performance of tbe decree is not shown, or a sufficient reason given why it has not been performed. Without this tbe bill is demurrable. If tbe original decree has not been, performed, tbe new bill must ask that it be allowed without performance. Simkins, Fed. Eq. Suit, p. 633; Ricker v. Powell, 100 U. S. 107, 25 L. ed. 528. In tbe case at bar there is an allegation that tbe complainant “has not paid tbe amount of tbe judgment rendered against him in tbe decree aforesaid, and that be is not able to do so under tbe terms of tbe decree and tbe conditions of tbe sale.” This is, as stated, rather a conclusion of tbe pleader than a statement of fact, making up a sufficient reason why tbe decree was not performed. Nevertheless, it is an attempted statement of an excuse for nonperformance, and because amendable may be taken as sufficient upon a motion to dismiss which is not directed to this point in particular. It may possibly be construed to mean poverty, as is argued, and Chancellor Kent has considered tbe pretext of poverty a proper excuse for nonperformance. Wiser v. Blachly, 2 Johns. Ch. 488. This bill of review was filed after leave obtained, so that it is not material whether leave is necessary or not in a bill of review for errors of law. It is held that a bill of review on tbe ground of newly discovered matter can only be filed on special leave, which depends on tbe sound discretion of tbe court to which tbe application is made. Thomas v. Brockenbrough, 10 Wheat. 146, 6 L. ed. 287. This *421court is always ready to reconsider a decision wbicb is doubtful in law.
2. There does not appear to have been a necessity for a bill of review. In case No'. 975 there could have been a consideration of all original- equities between the three parties interested which could not be raised in the answer to the bill in No. 946. This seems to have been contemplated, but at the last moment the plaintiff considered that a decree pro confesso against Lan-dron, who had left the Island and whose representation by counsel was uncertain, would fix all rights in regard to the property. Thereupon the plaintiff dismissed the bill as to the bank, and was left with a decree pro-confesso as to Landron, and relies upon it. He voluntarily gave up the opportunity to litigate the points at issue with the principal party in interest, that is, the bank, which he had by amendment eliminated. But the decree he did obtain was not binding upon the bank, because the bank was no longer a party. It does not seem equitable for a plaintiff to prosecute a bill of review to cover remedies which were obtainable in a suit which he voluntarily dismissed as to the main party in interest..
3. Passing, however, to the merits of the bill of review. It is claimed that the deed from Landron to Wilcox was void because the witnesses were the clerks, servants, and employees of the notary, and because the notary, Monserrat, was attorney and president of the plaintiff bank and one of its large stockholders. The illegality claimed arises -under § 20 of the Notarial Law of Porto Pico of March 8, 1906, being § 1998 of the Compilation of 1911, which is as follows:
“The following public instruments shall be null and void:
“First. Those in which the notary authorizing the same has *422intervened as a party thereto, or which contain any provision in his favor.
“Second. Where the relatives of the parties concerned therein, or the relatives, clerks or servants of the notary authorizing the instrument, are witnesses thereto. . . .”
The notary in question, however, did not intervene as a party to the deed, nor did it contain any provision in his favor. The only interest alleged is that the notary was connected with the bank; but the bank was not a party to the deed now complained of. Moreover, the bank was one individual and the notary was another. It may be bad practice, in connection with matters of proof, for a bank official to act as notary also for the bank, but it does not malee illegal the conveyances certified by the notary.
4. There was no evidence offered that the relatives, clerks, or servants of the notary were witnesses, and the ground upon which this objection is based is technical. The statement that they were such is contained in the sworn answer of the defendant, and, this sworn answer not having been controverted, it is claimed that the result was an admission of the fact, without necessity for offering the answer in evidence. Simkins, Fed. Eq. Suit, p. 437. New equity rule 31 says that “unless the answer assert a set-off or counterclaim, no reply shall be required without special order of the court or judge, but the cause shall be deemed at issue upon the filing of the answer-, and any new or affirmative matter therein shall be deemed to be denied by the plaintiff. ... In default of a reply, a decree pro confesso on the counterclaim may be entered as in default of an answer to the bill.” [226 U. S. 657, 57 L. ed. 1641, 33 Sup. Ct. Kep. XXVII.] The new procedure presents the difficulty that the set-off or counterclaim is a part of the answer and is *423not a separate paper, and so tbe set-off or counterclaim must be determined from tbe contents, and not from tbe form of tbe paper. There was no decree pro confesso on tbe answer as a counterclaim, wbieb would be tbe proper procedure if tbe answer was of tbis character, and so no question arises on this score. On tbe other band, if tbe allegation that tbe instrument is void, on account of the interest of tbe notary and tbe like, is to be deemed new or affirmative matter merely, then, under rale 31, tbis is deemed to be denied by operation of law. In neither view could tbe proceedings in case No. 946 amount to an admission of tbis allegation of tbe answer, and so tbe court did not era in tbis regard in rendering tbe decree actually made.
5. It is also set up that there was an error in tbe decree because tbe second mortgage was void in that it covered interest upon interest. Tbe Porto Pican law avoids tbe usury, not the principal. Act March 1, 1902, § 4; Compilation 1911, § 4115. Tbe new mortgage, however, is not shown to transgress any law. It purports to be for a certain additional advance plus interest then accrued. In other words, tbe transaction amounted to a rest, at which interest then due was figured out and not paid. In such case it ceased to be interest and became a debt, which could be deferred, secured by mortgage, or bandied in any other way tbe parties saw fit. Tbe amount of interest is large, but does not exceed what is allowed by contract under tbe local law. There is no showing that there was any fraud, or that any advantage was taken which calls for tbe interposition of a court of equity. Moreover, if there is any mistake in tbe amount due under tbe decree for foreclosure, it could have been brought up by exception or by motion questioning tbe amount figured by *424the clerk and adopted by the court. There was no need for an independent proceeding in this regard.
Whether, therefore, the bill of review be considered on the ground of practice or on the merits, it is improper under the circumstances, and should either not have been allowed originally or be dismissed now.
It is so ordered.