Le Brun v. Romero
Le Brun v. Romero
Opinion of the Court
delivered the following opinion:
This is another phase — and we hope it is the last — of the now somewhat celebrated Sixto-Sarria controversy in this court, with which we have already had so much trouble. The complainant seeks to force respondents Romero, Sixto, and Sarria to ligitate their respective rights to the whole or most of a fund of $16,500 that has been on deposit in the registry of this court for nearly two years last past.
In September, 1902, the respondent Adolfo Sixto brought a suit at law in this court (No. 158, docket) against the respondent Laureano Sarria, to recover his share of some 16,000 pesos Porto Rican currency, alleged to be due from Sarria to the estate of said plaintiff’s father, and to said plaintiff himself as an heir thereto. Much litigation about the matter had theretofore taken place between said parties and others in the insular courts during several years previous to American occupation of
When the cause was remanded to this court, another- trial was had on April 17, 1905, which, under the mandate, resulted in a judgment in favor of Sixto for the sum of $13,475.50, including costs. Sixto thereupon immediately began supplementary proceedings against Sarria with a view to collecting the money thus found due him, and, on April 24th following, cited into court the present complainant, one Carlos Le Brun, of Vieques, Porto Pico. Prom him it was ascertained that he was indebted to the judgment debtor, Sarria, on a note, dated about two months previous (March 1, 1905) in the sum of $24,000 and interest, which would be due the 31st of October following in that same year. A previous incumbent of this bench then at once issued an order against Le Brun commanding him to hold enough of the money due on that note to satisfy the judgment, and commanded him that when the note was due, he should pay enough of the money into court to answer the same purpose.
Shortly after receiving the note from Le Brun here in Porto Pico, on March 1, 1905, Sarria left for Spain, and was absent in that country at the time the final judgment on the mandate from the Supreme Court was rendered against him on the 17th of April of that year. In a little over' a month after Le Brun was garnisheed or the money impounded in his hands, as afore
This was the situation when the present incumbent of this bench qualified in June, 1906, and several hearings took place before us on new phases of this application for a writ of habeas corpus during the ensuing two or three months. Furthermore, a good deal of controversy was had as to the right of the court to the possession of this money so paid into the registry by
When Sarria testified in tbe supplementary proceedings, he claimed that be bad indorsed the note in question on tbe 7 th of April, 1905, a little over a month after be received it, to one Pedro Eomero, of Orense, Spain, for full value, less some ordinary commercial discount, and that Hornero was then, and bad been since such date, tbe owner thereof, and was an innocent purchaser for value without notice in tbe premises.
Some time before tbe note actually became due, it was sent from Spain to a local bank in Porto Eico, ostensibly by Eomero or bis agent, for collection, and on tbe day that it was due it was presented to Le Brun for payment. He tendered tbe receipt of tbe clerk of this court for tbe deposit be bad made under its order, into tbe registry, and tbe balance of tbe amount of the note and interest in cash, to tbe bank, but tbe latter refused to receive tbe same as full payment in tbe premises. Thereupon, tbe note was duly protested for nonpayment, and shortly thereafter Eomero brought a suit against Le Brun (No. 339, law docket [2 Porto Rico Fed. Rep. 168]) through Henry P. Hord, Esq., as bis attorney, who was and is also the attorney defending Sarria in tbe supplementary, contempt, and other proceedings aforesaid. It is stated, however, that Mr. Hord’s employment in this latter suit was casual, and bad no connection with tbe fact of bis employment by Sarria in tbe other litigation.
Evidently not knowing what else to do, Le Brun thereupon paid said balance and interest so due on the note, which be had thus tendered to tbe bank, into this court, and brought a suit (No. 355, law docket) to restrain Eomero from prosecuting bis said suit for tbe collection of tbe note until tbe matter should
It will thus be seen that the decision here will result in either the dismissal of the other two proceedings and the satisfaction of the judgment in the main case, or in their being permitted to proceed, and the money in the registry returned to Le Brun for the payment of his note to Bomero.
The court of course takes a judicial notice of its own records and has full knowledge of all the evidence in the supplementary proceedings given by Le Brun, Sarria, the local banker, and others, and of the exhibits in the same, and is, of course, bound by the findings of the Supreme Court of the United States as to Sixto and Sarria. But aside from that, all necessary por-
(1) If the note in question is an ordinary negotiable instrument to which the law merchant fully applies, and if Romero is an innocent purchaser thereof, without notice, and for value, before it became due, then, in law and in fact, he is the owner thereof, and the fund impounded in court should be applied to ithe payment of his note.
(2) If, on the other hand, as is strenuously contended, the mote in question is not one to which, under the code of commerce of Porto Rico, the law merchant applies, not having Arisen out of a “commercial transaction,” but is a mere chose in action, not negotiable, but, at most, merely assignable, but ■subject to all the equities of the maker against the payee, and .also subject to the claim of attaching or garnisheeing creditors of the payee, before notice of the transfer to the maker, then, as the money was garnisheed in Le Brun’s hands before such notice, it is contended it should be applied to the payment of*232 the Sixto judgment, under the rule laid down in Golsan v. Powell, 32 La. Ann. 521.
(3) Of course, the additional position is taken that, even though the note should be held to be fully negotiable, if, as matter of fact, the court shall find and hold on the evidence as. it is urged to do, that the note never was, in truth or in good faith, assigned at all, and that the alleged transfer thereof to Romero is only colorable, and is in fact collusive, that their Sarria should be held to be still the owner thereof, his disclaimer and evidence to the contrary notwithstanding; and the fund should be applied to the payment of Sixto’s judgment and costs, as well as to the payment of reasonable costs, expenses,.- and attorney’s fee to Le Brun, for the unnecessary trouble he has. been put to, brought about by such collusive action of Sarria and Romero in the former’s efforts to avoid the payment of the-judgment.
It máy be well not to forget, as we proceed, that Sarria, the judgment debtor in these supplementary proceedings, and the p'ayée of the note; vehemently disclaims any interest in the fund,, on the ground that he has sold it to Romero for full value, and! therefore, in a measure, this present controversy is between Sixto and Romero.
We must not forget, either, that while it looks like a hardship that any man should have to pay a debt twice, as it is contended Sarria will have to do if he pays this debt, yet, as was properly pointed out by Mr. Justice Day of the Supreme Court of the United States in the Sixto v. Sarria Case (196 U. S. 191), the money wás paid by Sarria to one Antonio Roig with his eyes open, in a proceeding to which Sixto was not a party, and at a' time when Sarria had full notice of his rights in the premises.
A fair translation of the note in question is as follows:
For $24,000.00.
Pedro Romero
034,065
,. Orense.
I owe and shall pay upon demand or order of Don Laureano-Sarria y Gonzalez, on the thirty-first day of October, nineteen hundred and five, the sum of twenty-four thousand pesos, American gold, and shall likewise pay to said Mr. Sarria, or his order,, every month, a sum equal to eight per centum per annum on the' aforesaid amount of twenty-four thousand dollars, as interests agreed upon. At the same time I shall now state that, the said sum has been given to me by Mr. Sarria in current coin to my entire satisfaction, to be used in meeting the expenses of the plantation known as Santa Maria, of which I am the manager in this island, and, as such, I bind all my present and.*234 future property to the compliance of everything herein stated, signing it at Vieques this first day of March, 1905.
(Signed) Oh. Le Brun.
Let it be paid upon order of D. Pedro Romero, for value received.
Orense, April 7, 1905.
(Signed) L. Sarria.
(Rubber Stamp)
Laureano Sarria
Orense.
Let it be paid upon order of Messrs. J. T. Silva & Co., value on account. Orense, Sept. 13, 1905.
(Signed) Pedro Romero,
p. p. Basilio Dominguez.
It is nearly always somewhat of a surprise to a lawyer familiar only with the rules of the law merchant that govern commercial paper in England and in practically all of the states of the United States, to be brought to a realization of the fact that, 'in civil-law countries, the law merchant does not apply to all formal promissory notes. “The general rule of the common law [of course] is that, except by a sale in market overt, no one can give a better title to personal property than he has himself. The exemption from this principle, of securities, transferable by delivery, was established at an early period. It is founded upon principles of commercial policy, and is now as firmly fixed as the rule to which it is an exception.” This is the language of Mr. Justice Swayne of the Supreme Court of the United States, in the leading case in America upon this important subject, of Murray v. Lardner, 2 Wall. 118, 17 L. ed. 858. It but calls attention to the comparatively recent period of
In Spain and Porto Eico, however, such transactions have been governed by the Spanish code of commerce; and since American occupation in this island, if the local code of commerce is in force, — which we are not now deciding,— then it would seem, at least under this code, as if the law merchant, as we understand it, applies only to promissory notes payable to order, that arise out of commercial transactions of merchants; in other words, that under §§ 1, 2, and 582 of the code of commerce, the parties making the instrument must probably be merchants or shopkeepers, and the subject-matter involved must be a commercial transaction as defined by the code.
Counsel on the respective sides of this controversy have cited ns to many cases from the Supreme Court of Spain, some of them decided under the old code of 1829 and others under the modern ■code of 1885, which latter code resembles the one said to be now in force in Porto Kico, and which cases are intended by counsel citing them to convince ns that the note in question is or is not the result of a commercial transaction, and hence is -or is not negotiable in the American or law merchant sense. To onr mind, — and we have taken some pains to read these cases in the original Spanish text, — they are, on the whole, rather conflicting. The cases referred to, and which we insert for the convenience of future searchers, are: Barbon y Cia. v. Marques de Villalda y otro, March 24, 1871, 23 Id. 626; Boom v. Terry, January 29, 1859, 4 Jurisprudencia Civil, 146; Orthenbach &
Of course, we are well aware that ‘the courts of the United States are not controlled by the decisions of state courts on questions of general commercial law,” as was held in Swift v. Tyson, 16 Pet. 1, 10 L. ed. 865; Brooklyn City & N. R. Co. v. National Bank, 102 U. S. 14, 26 L. ed. 61, and other cases. In fact, it has occurred to us that perhaps even this court would not be bound by even the local code of commerce if it is in force', as claimed, in so far as it may attempt to continue the civil-law rule as to the law merchant. It may be — but we are not, of course, asserting it — that, Porto Pico not being a sovereign state, like Louisiana, the civil-law rule as to the law merchant would be held to be contrary to the organic act on general principles.
It would, however, seem to be the rule that, in the absence of evidence to the contrary in any particular case, a promissory note made payable to order will, even by the Spanish courts, be presumed to be the result of a commercial transaction, and hence, we presume, be considered negotiable. This position was taken by the supreme court of Porto Rico in the recent case of Hernadez v. Muñoz, decided in January, 1906, 3 Castro pamph. 201, p. 6 and is based on a decision of the Supreme Court of Spain of January 25, 1898, in the case of Ayoldi, v. Barrio de España, 83 Juris. Civil, p. 160. However, in this particular case there is abundant evidence that neither
But, in the view we take of this case, it is unnecessary for ns to decide whether or not the note in question is one made and •circulated by merchants, or whether it did or did not arise out of a commercial transaction, within the meaning of the code, because we are convinced, as’matter of fact, on the evidence, ■and so hold, that the note never was in good faith transferred by ¡Sarria to Komero, and that it and the debt it represented were, ;and still are, in truth and in fact, the property of Sarria, and that the whole transaction regarding the sale or discount of the note to Bomero was and is, in fact, simulated and collusive. We have no hesitation in making this finding on the evidence; and so that it can be seen how well founded the position is, we here review some of the evidence, facts, and circumstances in the cause that justify our finding and belief in that regard; but a full reading of it is necessary to a real understanding of our reasons for the finding. We may state, before proceeding, that we fully realize, as was in effect held in Goodman v. Simonds, 20 How. 343, 15 L. ed. 934, and Kneeland v. Lawrence Bros., 140 U. S. 209, 35 L. ed. 492, 11 Sup. Ct. Rep. 786, and many other cases, that a bona fide purchaser of negotiable commercial paper for value, without notice, before it is due, takes it free from all equities that might have been set up against the •original holder, and, further, that the burden of proof is on him who assails the bona fides of such purchase.
At the outset of the discussion of this branch of the case, it is proper to state that this is a suit in equity as to the owner
We have several times called attention to the holding of the
We do not hesitate to say tbat, from beginning to end of this interpleading controversy, Mr. Romero bas not only taken no proper interest in tbe collection of bis money, and this is all tbe more astonishing when it is considered tbat it is such a large amount, but, to tbe contrary, bas studiously, as it appears to us, refrained from so doing, and avoided giving tbe court information wbicb was easily in bis power to give, and of tbe necessity for wbicb be bad ample notice. We can only account for this silence on tbe theory tbat be is not the owner of this large amount of money, and hence takes no interest in what becomes of it. Tbe reasonableness of men’s actions cannot but have weight with courts and juries. It is not reasonable to believe tbat Romero would virtually abandon this large amount of money here if it was in truth and in fact bis. Of course, bis counsel is doing bis best in tbe case, and filed an uncommonly able brief in bis behalf, but we are speaking of Romero himself.
In the case of Gulf, C. & S. F. R. Co. v. Ellis, 4 C. C. A. 454, 10 U. S. App. 640, 54 Fed. 481, it was held tbat “it is a well-settled rule of evidence tbat wben tbe circumstances in proof tend to fix a liability on a party who bas it in bis power to offer evidence of all tbe facts as they existed, and rebut tbe inferences wbicb the circumstances in proof tend to establish, and be fails to offer such proof, tbe natural conclusion is tbat tbe proof, if
We are well aware of the rule that a court may not arbitrarily or capriciously refuse to consider unimpeached and credible evidence, as well as fundamental propositions of law; but, on the other hand, a court is not bound to be satisfied by the testimony of a single witness, and, of course, need not be satisfied with a mere presumption of law, where it is apparent to the court that the side claiming the benefit of this evidence or this presumption has it in its power to produce satisfactory evidence in the case, and fails to do so. This was held to be the true rule in United States v. Lee Huen, in the Northern district of New York in 1902, 118 Fed. 442.
The Supreme Court of the United States held that uncon-tradicted evidence of interested witnesses to an improbable fact does not require judgment to be rendered accordingly. Quock Ting v. United States, 140 U. S. 417, 35 L. ed. 501, 11 Sup. Ct. Rep. 733, 851.
It was held in the case of National Car-Brake Shoe Co. v. Terre Haute Car & Mfg. Co. 19 Fed. 514, that “if a party shows an unwillingness to let the truth out, and keeps back facts and the means of getting at facts in his power, then the jury is warranted in drawing the strongest possible inferences against him, which may be drawn from the evidence actually given in favor of the other party. But if he. comes forward with his books, furnishes all the evidence in his power, and is fairly candid in the matter, no inferences should be drawn against him, except such as are fairly drawn from the evidence adduced,”
We have read and reread the portion of the evidence taken in the supplementary proceedings, that is before us, and the evidence taken by ourselves on this issue, which is intended to show that this note was transferred in good faith, as stated, to Bomero by Sarria, and we are utterly unable to believe it. As is well said by counsel for Sixto in his brief, — we would not believe it as a man in a business transaction, and why should we be asked to believe it as a judge on the bench ? Nothing but a sort of judicial cowardice or a slavish submission to the sacredness of the presumptions favoring negotiable instruments could induce us to find for Bomero under all the circumstances of this case. In our judgment, he is aiding and abetting Sarria to avoid the payment of at least a legal debt.
Sarria left Porto Bico in 1908 with his family, having retired from business, and evidently depkrted for good for Spain. He had been in business for many years in Yieques. There were large sums of money due him by his neighbors in the island of Yieques when he left. He took quite a large amount of money with him when he went to Spain with his family, and claims-that he did considerable traveling on the continent during the following year. He returned to Porto Bico in the fall of 1905, and he says, “Just to get rid of the severe winter in Spain,” and felt in such easy circumstances, as is apparent from
The evidence further shows that Sarria got this note on the 1st of March, 1905, and that he must have left Porto Rico about the middle of that month for Spain, because he arrived there on April 2d. Le Brun was called into court in these supplementary proceedings on April 2'4th, and, when he found the money impounded in his hands, immediately wrote to Sarria in Spain and may have cabled him to that effect. It did not develop that Sarria had transferred this note to Romero in Orense, Spain, on April 7th, until after Sarria returned to Porto Rico in June following and was called in to testify in the controversy. Le Brun shows that he did not believe Sarria intended to transfer the note, or had any intention or need to transfer it, and, according to his evidence, probably expected to renew it for an additional term when it became due. Sarria gave on the stand a long, detailed account of the illness of his family and the defalcation of his son, who, he said, is an officer in the Spanish army, as accounting for, and the using up of, the large amount of money he had brought with him to Spain, botlron the former and on this last trip, including this note, and produces a little memorandum which he says the banker gave him when he sold him this and another smaller note in April, 1905, at
A reading of the evidence will convince anybody that it is so improbable on its face, under all the circumstances of the case, as to be unworthy of belief. Here is a case where a private banker at Orense, Spain, discounts a $24,000-note for a man from Porto Rico, against a man in Porto Rico, and then, when the fund is impounded here, this purchaser rests upon the legal presumption in his favor, and sends not a word of testi
We do not hesitate to confess, as we have often said during the many proceedings involved in this controversy, that if we had been on the bench at the time Le Brun was summoned into court, we do not think we would have permitted process of garnishment to issue against him, because he distinctly stated that he believed his note that was outstanding was negotiable; but, as the money was impounded and brought into court, and as the parties appeared before us and raised this issue, our duty requires us to ascertain from the evidence, if we can, the truel ownership of the money. We feel that the issue thus raised, considering all the controversy that has taken place between Sixto and Sarria through many years, and the showing made by Sixto in this particular proceeding as to the circumstances that surrounded the alleged transfer of the note in question to Romero, does put the transfer in doubt, and does require from Romero an explanation and some proof more than his mere formal statement, unsworn, in his answer through his attorney, and Sarria’s mere indorsement of the note, as to the bona tides of the transfer to him.
A decree will therefore be prepared and entered, holding this money to be the property of Sarria, and not the property of Romero, and providing for the application of sufficient of the same to satisfy Sixto’s judgment, interest, and costs, and all the costs of this interpleading proceeding, and for the payment of a fee
Reference
- Full Case Name
- CARLOS LE BRUN, Plff. v. PEDRO ROMERO, Dfts.
- Status
- Published