Exhibit 2 — Oto Analytics, LLC v. Benworth Capital Partners PR LLC (Dkt. 47.3)

Record facts

U.S. District Court for the District of Puerto Rico · No. 3:23-cv-01034-GMM · Doc. 47-3 · 2023-04-24 · Docket on CourtListener

Summary

Exhibit 2, Doc. 47-3, filed April 24, 2023 in Oto Analytics, LLC v. Benworth Capital Partners PR LLC, No. 3:23-cv-01034-GMM, in the U.S. District Court for the District of Puerto Rico. The exhibit reproduces reporter pages from Vol. 20 carrying the opinion in the Almazan v. Lopez case, No. 1053, decided June 4, 1914 on appeal from the District Court of San Juan, Section 1. The headnotes state that a complaint to rescind a conveyance made in fraud of creditors must allege the debt, the fraudulent conveyance, injury to the plaintiff and the lack of any other legal remedy. The opinion discusses sections 1258 and 1261 of the Civil Code and holds that the plaintiff need not be a judgment creditor before suing to rescind. The 10-page exhibit also carries the end of a certiorari opinion and the start of a habeas corpus opinion, No. 685, decided June 5, 1914.

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Case 3:23-cv-01034-GMM Document 47-3 Filed 04/24/23 Page 1 of 10

EXHIBIT 2
Case 3:23-cv-01034-GMM Document 47-3 Filed 04/24/23 Page 2 of 10

502 Suc, ov ALMAZAN v, LOPEZ HY AL. [ Vol. 20, PLR RR,

,
there was no lack of jurisdiction and no error of procedure
was committed, the above question must be answered in the
negative,

Some of the errors assigned und some of the allegations
made by the petitioner in his application are foreign to the
real question at issue and others are oul of place in an extra-
ordinary recourse of certiorari. In cases of this nature we
are called upon only to inquire whether the lower court acted
within its jurisdiction and followed the proper procedure of
law. The weighing of the evidence and of the other circum-
stances of the case rests, as a general rule, with the trial court.
The petition should be denied.

Petition denied.

Chief Justice Hernandez and Justices Wolf, Aldrey and
Hutchison concurred.

Sucocgssion or ALMAZAN, PLarntirr anp RusponpENT, v. LopEz
Er AL., DEFENDANTS AND APPELLANTS. .

AppraL from the District Court of San Juan, Section 1, in

an action for the annulment of a.contract and for dam-
ages,
No. 1053.—Decided Juno 4, 1914.

ACTION TO RESCIND—CONVEYANCE IN PrAuD oF Crepirors—CoMPLAINT.—In an
action to rescind a conveyance made in fraud of creditors, the following
allegations must be made in the complaint: 1, That the defendant is really
the debtor of the plaintif’; 2, That the defendant conveyed his property in
fraud of his ereditors: 3, That tho plaintiff has been injured by such con-
veyance; 4, That the plaintiff has no other logal remedy to obtain roparation
for the damage caused.

ID,—EVIDENCE—JUDGMENT OrepIToR.—In an action to rescind a conyeyance made
in fraud of creditors, the admission in evidence of a copy of the judgment
rendered in another netion ugainst the debtor subsequent to the filing of the
complaint in the action to rescind and adjudging him to pay the debt, is not
error because the essential feature consists in that the plaintiff in the action

to rescind was an actual creditor of the defendant at the time the action
was brought and not that he was a judgment ereditor.

Case 3:23-cv-01034-GMM Document 47-3 Filed 04/24/23 Page 3 of 10

June 4, 14.) Suc, or ALMAZAN 0, LOPEZ BT AL. AOS

In.—CeNvEvANcr IN Fravp or Crepipors—lvinnxer.—In order toa secure the
rescission of a conveyanee made in fraud of creditors, it is not auMleient te
prove the debt between the plainti® and the defendant, but the existence
of frand must be proven.

The facts are stated in the opinion.

Mr. Henry G. Molina for the respondent.

Mr. José Martinez Davila for appellant Victor Lépez
Nussa.

Mr. Justice pet Toro delivered the opinion of the court.

This is an appeal from a judgment of the District Court
of San Juan, Section 1, rescinding a certain deed of bargain
and sale.

A summary of the allegations of the amended complaint
is as follows:

1. Personal conditions and capacity of the parties to sue
and be sued.

2. That the defendant, Salvador Lépez, owes the plain-
hiff the sum of $353.58.

3. That the said defendant, Salvador Lépez, owned only
a certain rural property described in count 5 and that at
present he does not own any property in the Island of Porto
Rico.

4. That said defendant, Salvador Lépez, acquired by in-
heritance from his father an undivided eighth part of the
Property referred to.

d. That by virtue of a deed of June 11, 1910, executed be-
fore Notary Francisco de la Torre, the heirs of Ramén VY.
Lépez, in fulfilment of an agreement for the division of the
inherited property, conveyed to defendant Salvador Lopez
4n undivided fourth part of the property deseribed.

6. That on July 22, 1910, the defendant, Victor Lépez,
acting as the attorney in fact of his brother Salvador, the
Other defendant, assigned the power of attorney to sell which
he held from his brother to José Pérez Guerra and obtained
from Pérez Guerra a conveyance of the fourth part of the
Property described for the stipulated sum of ‘500.
Case 3:23-cv-01034-GMM Document 47-3 Filed 04/24/23 Page 4 of 10

04 Suc. or ALMAZAN v0, LOZ RT Ab. [ Vol. 20, 2. Te ye,

7. That the said sum of $500 was never paid to Salvador
Lopez nor to his substitute attorney in fact, José Pérez Gue-
rra; that there was never any intention to pay the said
amount, and that the contract was made and carried out with
the sole and ostensible object of defrauding the plaintiff
of his rights.

The prayer of the complaint is as follows;

“Wherefore, the plaintif® prays the court to decree that the deed
executed on June 20, 1910, whereby Salvador Lé6pez Nussa sold his
interest of one-fourth of the property herein described, is rescinded
and null and void and that the record thereof in the registry of
property be canceled; that the fourth interest in the property which
belonged to Salvador Lépez Nussa be sold by the marshal of this
court and from the proceeds the plaintiff be paid the sum of $363.48,
with interest at the rate of 6 per eent from January 11, 1908, with
the costs of the action brought before the Municipal Court of San
Juan to recover the same: that both defendants herein be adjudged
to pay the damages caused the plaintiff as a result of the fraudulent
transaction above described and to pay an attorney’s fee of $300
and the costs of this action.”’

The defendant demurred to the complaint on the ground
that it was unintelligible and uncertain and did not state facts
sufficient to constitute a cause of action. The demurrer was
overruled by the court and thereupon the defendants answered
as follows:

1, They admit the first allegation of the complaint.

2. They deny the second allegation as drawn up and allege
that the fact is ‘‘that the plaintiff obtained a judgment against
defendant Salvador Lépez Nussa-for the sum of $353.58, in
December, 1911, or subsequent to the date on which the com-
plaint was filed in this case.’?

3, They deny the third allegation of the complaint.
4, They admit allegations 4, 5 and 6 of the complaint.
5. They deny allegation 7 of the complaint.
A trial was had and the court rendered judgment rescind-
ing the deed of sale referred to in the complaint with costs
Case 3:23-cv-01034-GMM Document 47-3 Filed 04/24/23 Page 5 of 10

Juno 4, 1914] Sue. or AMMAN a Edens ie Ata Ob

against the said defendants and the defendants tool the pres-
ent appeal.

The appellants allege in their brief that the court erred
in allowing the plaintif! to amend his complaint by striking
out a eertain allegation, In the original complaint it was
alleged that defendant Victor Lépez lad promised to pay the
debt of his brother Salvador to Almazin. In the amended
complaint that allegation was suppressed. The appellants
maintain that as the original complaint was verified and as
the said allegation set up an important fact tending to show
that the plaintiff had another means of recovering the debt
besides that of an action for rescission, the court should have
rejected the amended complaint. However, this question
Jacks importance if it be considered that the suppressed alle-
gation as drawn up, examined in relation to the other alleg-
tions of the complaint, could be construed in the sense that
the promise made by Victor Lépez to Almazin was made as
the attorney in fact of his brother and not with the object of
converting himself personally into the real debtor.’

SLES.
edad ats

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LSE errr nr? ern ©
tvs G

The second assignment of error refers to one which the
appellants claim the court committed in not sustaining the
demurrer to the amended complaint on the ground that it
did not set up a cause of action.

The action brought in this case is one for the rescission

of a contract for the sale of a joint-ownership in a certain cy
rural property and is based evidently on subdivision 3 of "|
section 1258 of the Civil Code which provides that contracts | 4
made in.fraud of ereditors may be rescinded when the ered- 3

itors cannot recover what is due them in any other manner.
Considering the said legal provision in connection with

Section 1261 of the same code which provides that an action

for rescission is a subsidiary one and ean be invoked only

when the person injured has no other legal remedy to obtain
Yeparation for the injury, there is no doubt that in an action.
of the nature of the one brought in this case the complaint
Should set up: (a) That the defendant is really the plain-

Case 3:23-cv-01034-GMM Document 47-3 Filed 04/24/23 Page 6 of 10

506 Suc. of ALMAZAN v, LOrrZ ET An, [Vol. 20, P. RR,

t4f’s debtor; (b) that the defendant alienated his property
in fraud of his creditors; (e) that the plaintiff has been in-
jured by such alienation; (d@) that the plaintiff has no other
remedy at law to obtain reparation for the injury suffered
than that of seeking the rescission of the contract of aliena-
tion.

Although the complaint could have been drawn up more
clearly and concisely, it is trne that if read carefully it is
found to contain all the requisites specified in the preceding
paragraph and that, therefore, the district court did not com-
mit the error attributed to it when it overruled the demurrer
referred to.

The third assignment of error refers to that committed by.
the court, in the opinion of the appellants, in admitting cer-
tain records of civil suits in evidence. At the trial the plain-
tiff offered in evidence the record of Civil Case No. 3241
-rought by Almazan against Salvador Lépez for the recov-
ery of a sum of money and a copy of the judgment rendered
against the defendant for the amount claimed by the plain-
tiff. The objection of the defendants was based on the fact
that the judgment was rendered after the complaint had been
filed in this action for rescission.

In our opinion the trial court did not commit the error
assigned. It is not necessary that the plaintiff should be a
judgment creditor before bringing the action for rescission.
What is required is that he be really and truly a lawful ered-
itor of the defendants. If he had a judgment for his credit
before the commencement of the action for rescission or OD:
tained one during the course of the same, this woatd be a ci’:
cumstance in corroboration of the right of the plaintiff, but
the plaintiff could have omitted to plead it and relied solely

cn alleging and proving in the action for rescission his status
as the defendants’ ereditor.

. The fourth assignment of error is that committed by the
district court, in the opinion of the appellants, in weighing

Case 3:23-cv-01034-GMM Document 47-3 Filed 04/24/23 Page 7 of 10

June 4, 1914.) Sve. op ALMAZGN ve. Lave er An. j07

the evidence and concluding that it sustained the allegations
cf the complaint.

The evidence of the plaintiff was as follows:

1. A copy of deed No. 102, dated July 22, 1910, by which
Salvador, Mariano and Rafael Lépez Nussa sold to their
prother Victor their shares, acquired by inheritance from
their father Ramé6n, in a rural property situated in the ward
of Palmas, Bayamén, containing 6.34 cuerdas;

2, The original record of an action of debt brought by
Almazan against Salvador Lopez in which judgment was ren-
dered against Lépez on November 23, 1911;

3. The testimony of Micaela Nussa, widow of Lépez and
mother of the defendants, introduced for the purpose of iden-
tifying certain letters which her son Salvador had written to
ter from Havana, Cuba, to wit: (a) In a letter dated August
- 81911, he said, ‘** * * I much regret the worry which
- the sale of my property is Gausing you. Victor writes an-

nouncing the remittance of $250 which I hope to receive at

any moment * * *.’? (b) In another, dated August 15,

1911, he said, ‘‘* * * Ihave not received further advices
_ from Victor‘ nor, therefore, the remittance. I should be sorry
to have to think that he is trying to do me a wrong; we will
see *# * #9 (c) In another of August, 1911, he said,
_ «*e  * * T have not received further advices from Victor
- and now expect none; it seems incredible that he should
act in this manner towards one who has never done him any
harm * * *,? (d) In another of September 3, 1911, he
said, ‘‘* * * At Jast Victor has broken silence and sent
us twenty dollars, which relieves my immediate difficulties.
I am telling him that I require one hundred dollars at once,
which he certainly will not send although he would not find
it difficult to secure that amount * * *.’’ (e) Another,
Cated September 26, 1911, reads as follows:

“My Dear Moruer: I take pleasure in referring to your favor
f the 11th. From what you say I infer that things have gone just
Case 3:23-cv-01034-GMM Document 47-3 Filed 04/24/23 Page 8 of 10

AOS Sue. or ALMAZAN op, Lares mr Ab. | Vol, 20, BP, Ie Jt,

us btold yon indy last regarding the sale of the property, in whieh
matter Rafael was more fortunete than ft, What are we going to dey
1 ean only have patience and await developments.  Vielor now telly
me that Almazin has sued him and me for failure to comply with
an offer which Vietor says he made him and wants to annul the gale
of the Jand whieh Tomade him on the alleged ground that he lene
that T owed him some money before he had the transaction with me,
Vietor’s attorney says that Almazin has no ground of action and
will get nothing, but he will have to be paid for defending us and J
shall be the one to suffer the consequences, because he informs me
that he eannot make me the remittanee which he intended to send
me this month beeause he has to pay the expenses of the suit. All
these misfortunes are due to Vietor’s improper conduct, for, if he
had paid Almazin in due time the one hundred dollars which he
promised him in my name, nothing of this would have happened.
Let us hope and have patience.’’

The witness also identified another letter addressed by her
son Salvador to Almazan from Havana on February 14, 1910,
which reads as follows:

‘Dear Frrenp: I duly received your favor of December 28 last.
My failure to reply is due to the fact that T mislaid the letter, which
] hope you will exeuse. I reeeived therewith the statement of my
account, which I have not examined but whieh T, of course, regard
us correct. I have only a small interest in the Palmar property which
I have leased free of charge to my brother Victor for five years from
the first part of last January; therefore I am unable to make any
negotiation with regard thereto, which T very much regret because
T am grieved and ashamed at my inability to fulfil my obligation
to you who so kindly and opportunely aided me. At this time I am
living in penury and earning hardly enough to cover our most urgent
necessities, but 1 have some prospects with an American firm by
whom [ am employed, ‘and while it may be little by little, 1 hope
soon to begin to make you some remittances,”

Summarized, this was all the evidence introduced by the
plaintiff. In our opinion it does not prove that the sale of
the joint interest to which the complaint refers was made

with the exclusive and ostensible purpose of defrauding the
plaintiff of his rights,
~——

Case 3:23-cv-01034-GMM Document 47-3 Filed 04/24/23 Page 9 of 10

qyne 4. 1914.) Suc. op ALMAZAN ve Ldérez rr An 500

By the deed of July 22, 1910, not only did defendant Sal-
yador sell his joint interest to his brother Victor, but his other
prothers, Mariano and Rafael, also sold him theirs. If it
ere simply a simulated contract between Salvador and Vie-
tor to defraud Almazan, there is nothing to explain the inter-
vention of Mariano and Rafael.

The letters which Salvador wrote to his mother do not
yereal a conspiracy with his brother to defraud Almazan.
In the letter of August 8, 1911, he speaks of the sale of his
property and of a promised remittance of $250 by Victor. It
is not very clearly established what connection this sum may
pave with the proceeds of the sale, but when the other letters
zre taken into consideration it will be seen that they create
the impression that the sale was actually made and it was
stated in the deed to be ‘‘for value received’’ although the
vendee did not pay the vendor the purchase price of the prop-
erty. or at least not the whole of it, and that, therefore, Vic-
tor still owes Salvador $250 on account of the sale.

There is no doubt that Almazain proved that defendant
Salvador Lépez Nussa owed him the amount claimed. Only
one honorable course is open to defendant Salvador Lopez
Nussa in this ease, and that is the payment of his uebt. But
the fact that money is due from the debtor to the creditor
is not sufficient of itself to justify the rescission of a con-
tract of sale made by the debtor and another person. We
have already stated the requisites necessary for the rescis-
sion of contracts entered into in fraud of creditors. The exist-
ence of fraud is absolutely necessary, and, as we have seen,
that has not been proved in this case.

, " ‘ : . 7 1 )-
Therefore, the appeal must be sustained, the judgment ay
nother judgment rendered dis-

pealed from reversed and a nt
special imposition of costs.

missing the complaint without
Reversed,

Chief Justice Hernandez and Justices Wolf and Aldrey

concurred.
Case 3:23-cv-01034-GMM Document 47-3 Filed 04/24/23. Page 10 of 10

510 Ex Panre Sudrey er Au ANDI Provan. [ Vol. 20, P. n, R,

Mr. Justice Hutehison took no part in the decision of
this ease.

Ex parte Sudnrez we at, Peririoners ANd ResPponvEentTs, any
Tur Prorie, Con'restant AND APPELLANT.

Aprean from the District Court of San Juan, Section 1, in
Habeas Corpus Proceedings.

No, 685.—Decided June 5, 1914.

Jiareas Conpus—Discuance cr PerirtcNers—AprreAu.—A decision of a district
court in habeas corpus proceedings may be appealed from to this court by
“any of the parties aggrieved, and when the discharge of the petitioners js
ordered the party aggrieved is the person in whose eustody the petitioners
were.

Ip.—PETITION BY ATTORNEY GENERAL—APPEAL BY Fiscau FROM DECISION Sus-
TAINING PETITION—APPEAL.—When, as in the ease at bar, the district court
sustains the applieation for a writ of habeas corpus presented, by the Attorney
General of Porto Rico in the name of the petitioners, The People of ‘Porto
Rico is estopped from appealing by a fiscal from said decision which was
rendered at its instance and in its favor, and the appeal should be dismissed.

Ip.—ArreEAL—AMiIcus Curtae.—The fact that the court allowed a municipal judge

to appear as amicus curia is no bar to the dismissal of the appeal when the
cireumstances of the case so require.

The facts are stated in the opinion.

Messrs. Wolcott H,. Pitkin, Jr, Attorney General, and
Salvador Mestre, Fiscal at Large, for the respondents.

Mr. Charles E. Foote, fiscal, for the appellant.

Mr, Eugenio Benitez Castaito, amicus curie.

Mr. Justice Auprey delivered the opinion of the cout.

This proceeding was begun by a petition presented to the
Judge of the District Court of San Juan, Section 1, by the
Attorney General of Porto Rico and the Fiscal at Large for
the Island in the names of Darfo Sudrez and Juan Gutiérrez,
who, according to the record, were at that time police detec-
lives in the employ of the Insular Government and were im-
prisoned in the custody of the keeper of the municipal jail
of San Juan under a sentence imposed by the municipal judge

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