Olmedo Wood v. Rivera
Olmedo Wood v. Rivera
Opinion of the Court
delivered the opinion of the court.
Romualdo Rivera married the plaintiff in 1918 and divorced her in 1935. In 1920 the couple acquired a lot on which they built a house in 1922. The said property belonged to the community partnership, which has never been liquidated. Although appraised at $1,500 for tax purposes, the undisputed testimony was that it was worth at least $3,000.
On March 28, 1938 Pablo Melendez —a friend and fellow-accountant of Rivera, who was an Income Tax Inspector— filed suit against Rivera for collection of money. The complaint alleged that Rivera had executed a promissory note in favor of Melendez for $900 on May 15, 1934, and that the note had come due on June 30, 1935 — which was prior to the divorce herein — but had not been paid. The complaint also recited that Rivera was still married, although, as we have seen, this was no longer true.
A default judgment for $900, and $100 for costs and expenses, was entered against Rivera. On April 23, 1938 the latter signed a waiver of his right to appeal in order to enable Melendez to execute on the judgment immediately. On May 25, 1938 the lot and house were sold at a public sale in execution of the said judgment to Philip El Koury for $500. The plaintiff was not a party to the said suit, and was never notified of any of the proceedings.
On July 14, 1938 the plaintiff filed the instant suit against Melendez, Rivera, and El Koury, praying for the nullity of the judgment in the suit by Melendez against Rivera and of the attachment and sale of the aforesaid property to' El
The district judge wrote an able and discerning opinion in which, after analyzing the testimony, he concluded that the note was simulated and was executed with the sole purpose of defrauding the plaintiff of her rights in the property in question. We shall not restate all the testimony. It is enough to say that the conclusion of the lower court on this point is amply supported by the proof, and that we heartily agree with it. This case reeks of fraud, and we shall refer it to the Fiscal of this court to determine if the attorney who represented Rivera when the elaborate scheme herein was concocted and consumated acted improperly. However, in fairness to the present attorneys for the defendants, we make it clear that they came into the case after the present suit was filed.
Rivera, Melendez, and El Koury were all represented in this case by the same attorney at the trial in the district court. At the beginning of the trial he announced that Rivera and Melendez were willing to have judgment entered against them because of the doubt as to whether the judgment against Rivera in the suit by Melendez against the former on the note could afféct the interest of the plaintiff in the community property, in view of the facts that (1) the plaintiff was not notified thereof and (2) the plaintiff and Rivera were divorced prior to the filing of the suit by Melendez. But since this same attorney announced that El Koury would continue to resist the claim herein on the ground that he was a purchaser in good faith -at the public sale of the property, the district court very properly heard proof as to the fraud of Rivera and Melendez in order to determine if El Koury was involved therein. Moreover,
The district court held that “the testimony is not suffi/ciently robust to convince us of the fraudulent participation of El Koury in the conspiracy of Melendez and Rivera?. The lower court nevertheless entered judgment against all three defendants. It found against El Koury on the theory that once the marital ties of the plaintiff and Rivera were severed, the plaintiff acquired a right to one-half of the community property; and that El Koury was not a tercero under the Mortgage Law because, although the Registry of Property showed that the property was recorded in the name of Rivera and the plaintiff as his wife, it was El Koury’s duty to determine if the community partnership had been dissolved by divorce, “which was a judgment in rem, Estate of Lee, 200 Cal. 310, which operates on the matrimonial, status which is the res, and which was notice to the world that such a judgment had been entered, obligatory on everybody, and of which all are charged with knowledge. ’ ’
"We accept the conclusion of the district court on the facts as to the fraudulent participation of El Koury in the scheme to defraud the plaintiff. But we do not stop to examine its theory that El Koury was chargeable as a matter of law with constructive notice of the divorce. We find it unnecessary to examine this theory because we are satisfied from all
We agree with the plaintiff that “the testimony indicates' that El Koury was an agent of Rivera, that he was not a purchaser in good faith, and that he was only a straw man”. Rivera, an Income Tax Inspector, had kept the books of El Koury until a Treasury Department regulation forbade this practice, whereupon Rivera obtained the same job for his daughter. And on cross-examination by the attorney for El Koury, Rivera testified as follows.
“Q. If the opposing party had accepted the settlement suggested by the Judge to reacquire that property by paying $500 to El Koury, would you have paid that money, A. I would have paid it. Whatever would have been the result of the trial, I would have paid it. Q. Why did Mr. Philip El Koury intervene in this matter, why was he interested in this house? A. At my suggestion. Q. Why did you make that suggestion? A. I wanted to keep the house, in order that a bidder might not appear and go off with the house. Q. Then, at that time, your daughter was working in the office of Mr. Philip El Koury? A. Yes, sir. Q. Are we to understand then that what you were doing was avoiding that this house fall into the hands of another person from whom you could not reacquire it in the future? A. Exactly. Q. And you say that whatever the result of this suit, that house, sooner or later, will be for your daughters. A. I say that before my daughter and I would not live tranquilly if I did not fulfill that.”
After the “purchase” by El Koury, Rivera, according to the testimony of his daughter, asked his wife through his daughter to sign a document which Rivera called a “mortgage”. When the plaintiff refused to sign it, Rivera told their daughter he would finally obtain the property any way. In the said document, which was never signed but which was introduced in evidence herein, El Koury appears as “selling” the property — worth $3,000 — to Rivera and to the plaintiff for $1,100, and Rivera and the plaintiff appear as mortgaging it to Gonzalo Aponte for $1,100. But Rivera spoke to his daughter of a mortgage, not a sale. He did not mention reacquiring the property; he discussed mortgaging it. Indeed, in his own testimony, forgetting that El Koury had already “purchased” the property, he inadvertently blurted out the truth in speaking of mortgaging it in order to- save the house. And that Rivera was still conducting himself as though he was the owner is also borne out by the tax receipt for 1940-41. showing him as the owner.
There was still another episode which sheds light on the true state of affairs. As will be hereinafter noted, the instant ease was before this court on a previous occasion, when '.it was remanded to the district court for the latter to act on
The last link in this chain of circumstances is that El Koury never appeared in this ease to testify or to explain his position in all the maneuvers which were executed to defraud the plaintiff. The same attorney who represented all three defendants — Rivera, Melendez, and El Koury — chose not to produce the latter as a witness.
The conclusion is irresistible that El Koury must have known the facts. He let Rivera get him into this situation. He must look to Rivera to extricate him from it. But the interest of the wife in this property must under all the circumstances be held inviolate from such a scheme of which we are satisfied El Koury had notice when he purchased the property at the public sale. To hold otherwise would be to allow Rivera to insulate himself against the consequences of his fraudulent conduct by thrusting a straw man between himself and his victim. We hold that El Koury was not a tercero.
This case has been before us on other occasions. It was originally heard on the merits and decided in favor of the defendants by a district judge who died without approv
The appellant strenuously argues here that our original order reserving for the plaintiff the right after remand to move in the district court for a new trial, the order of the district court granting a new trial, and our affirmance of the latter, were all beyond the authority conferred by the statutory law of this jurisdiction. But that question was necessarily decided by our opinions in 57 D.P.B. and in 59 P.R.R., particularly in the latter. The answer there given constitutes the law of this case. Escartín v. Insular Police Commission, 52 P.R.R. 701. Litigation must end at some point. Only in a different case would we be justified in re-examining the rule already laid down to govern this case. For the same reasons, the argument of the appellants that the instant case was res judicata by virtue of our judgment in 57 D.P.R. must be rejected.
We likewise find no merit in the contention that no case was properly pleaded against El Koury. Without examining in detaiPthe allegations themselves, it is sufficient to say that the pleadings must be considered as amended to conform to the proof on the question of the notice of El Koury, particularly as a considerable portion of the testimony on,that question came out, as we have seen, through examination of witnesses conducted by his own counsel. As a matter of fact, El Koury in his answer set up as a defense that he was a tercero.
The final contention of the defendants is that the district court abused its discretion in imposing counsel fees
The judgment of the district court will be affirmed.
The district court quoted extensively from Roemer v. Traylor, 128 S.W. 685 (Tex., 1910), in support of this theory.
As hereinafter noted, this case was tried twice. Rivera testified at the first trial, but not at the second. The quoted testimony is taken from a transcript of his testimony at the first trial, which was introduced as an exhibit by the plaintiff.
On motion of the plaintiff, when apprised of the facts, the district court set aside its order and reinstated the notice of lis pendens.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.