Van Syckle v. Montilla

Holt. Judge,

delivered the following opinion:

This is a rule against Emilio Montilla to show cause why he should not be held for contempt for failing to obey an order of injunction or decree of the United States provisional court, which was the predecessor of this court. It is claimed the contempt consists in bringing a suit in the insular district court in violation of the order of the provisional court.

It is necessary to see what he was ordered to do or not to do, and then if he is acting in violation of it. It appears that, being the owner of a certain estate named “Santa Cruz,” he executed three several mortgages upon it to José C. Marxuach. Subsequently and on June 23d, 1897, he executed a lease to the same estate to P. Van Syclde, which is still in force. The latter filed a bill in the provisional court, to which both Mon-tilla and Marxuach were party defendants, seeking to be sub-rogated to the rights of the mortgagee by the payment of the mortgage debt to him, and asking that he be ordered thereupon to assign to him (Van Syckle) the mortgage, and that Montilla be enjoined from disregarding the covenants of the lease; also from selling or attempting to sell, or encumbering or attempting to encumber, the property embraced by it to the prejudice of Van Syckle’s rights; also from carrying out any contract with Marxuach for the sale of the property or for the foreclosure of the mortgage. A restraining order, as asked, was granted, and upon final hearing the court entered a decree directing Marx-uach, upon payment of his mortgage debt by Van Syckle, to assign the mortgage to him, and this was done. It also enjoined Montilla as above indicated. Subsequently P. Van Syckle transferred the mortgage debt to P. Van Syckle & Company, and they brought suit to foreclose, and did foreclose it, in the insular district court, becoming purchasers of the property. Under the practice in the insular courts, Montilla could not defend the foreclosure suit, or at least only upon certain specified grounds, but had to resort to his auxiliary suit; and on or about December 4th, 1902, as an incident of the foreclosure suit, he brought the action in the insular district court by which it is now claimed he violated the order of the provisional court. In it be seeks to set up bis defenses to tbe foreclosure of tbe mortgage. He claims that tbe transfer of tbe mortgage to Yau Syckle by virtue, of the decree of tbe provisional .court did not subrogate Van Syckle to tbe mortgage lien, and that it only, by tbe local law, gave him a personal claim against him, Montilla, to tbe extent that be was benefited by tbe payment. In short, that it did not settle bis rights as to tbe claim as a mortgage debt, and that be may yet defend against it as such. He asks a decree to this effect, and that tbe transfer of tbe credit as a mortgage credit to P. Van Syckle & Company, also tbe registration of tbe deeds and tbe foreclosure proceedings, be annulled, and that it be held that P. Van Syckle and P. Van Syckle & Company never were mortgage creditors of bis, or subrogated to tbe rights of Marxuacb as tbe mortgagee. In short, that the judgment of tbe provisional court and tbe transfer by virtue of it did not operate to transfer tbe mortgage right or lien; that there was no subrogation of P. Van Syckle as to it, and that all subsequent proceedings based on such a claim are void; and be asks it be so held.

It is clear to this court that tbe transfer of tbe mortgage by virtue of tbe decree of tbe provisional court subrogated Van Syckle to all tbe rights of tbe mortgagee, Marxuacb. It was not a case of subrogation by arrangement between the individual parties. In such a case it appeal's by tbe local law tbe debtor must consent, or be is only liable to tbe extent of the benefit received by him, in a personal action. But all tbe parties interested being parties to tbe suit, tbe court, as a matter of equity, subrogated Van Syckle to tbe rights of tbe mortgagee, Marxuacb, Van Syckle having an interest in tbe matter, by tbe payment to Marxuacb by Van Syckle of tbe amount of tbe mortgage. Tbe bill in the provisional court shows this was the purpose of tbe suit, and’ tbe transfer in obedience to tbe decree operated to transfer the mortgage rights of Marxuaeh to P. Van Syckle. It operated as a cession of the mortgage credit. It wa.s directly adjudicated. This was the object of the suit, this the effect of the judgment, and, whether erroneous or not, it is now res judicata, and must be held to be final. The substitution of a new creditor is merely the assignment of a chose in action. It was a subrogation, which is a creation of equity, and not of contract between the parties. The equitable jurisdiction of the provisional court, as is true of this court, follows the equitable principles of the common law.

It is to be presumed the insular court in which the suit is now pending, and the bringing of which is claimed to be in violation of the judgment of the provisional court, will hold in . conformity with the above view, as to my mind it is clearly the law. It should not, however, be held to be a contempt in a party to bring a suit claiming he has not been deprived of certain alleged rights by virtue of a judgment, and seeking still to enforce them. He simply questions the extent of the decree. Even a suit to set aside a decree is not such a disobedience of it as to constitute a contempt. Unlesss, therefore, the defendant, Montilla, has, by the bringing of his suit in the insular court, violated in some respect the injunctive order of the provisional court, he cannot be held in contempt. The court had authority to make it; it is yet in force, and must be implicitly obeyed.

Referring, however, to so much of the decree as enjoined the defendant, Montilla, from the doing of certain acts, as above enumerated, and then to his averments and relief sought in the suit brought by him in the insular court, no violation of it appears.

This proceeding is, therefore, dismissed at the cost of P. Van ■Syckle, to be taxed by the clerk, and for which execution may issue.