Gallardo y Seary v. Noble, 236 U.S. 135 (1915)

U.S. Supreme Court

Gallardo y Seary v. Noble, 236 U.S. 135 (1915) Gallardo y Seary v. Noble

No. 141

Argued January 20, 1915

Decided February 1, 1915

236 U.S. 135

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE DISTRICT OF PORTO RICO

Syllabus

A statement of the condition of the record title made by an owner of property in Porto Rico does not necessarily enlarge the scope of an incumbrance mentioned in the statement from what it actually is

Page 236 U. S. 136

or estop the person making the statement; e.g., a reference to a mortgage on crops as being one on the land.

A mortgage on property in Porto Rico held in this case to be one on the crops alone, and not on the land.

The facts, which involve the construction of a mortgage affecting property in Porto Rico and the determination of the question of whether it embraced the land or only the crops, are stated in the opinion.

Page 236 U. S. 137

MR. JUSTICE HOLMES delivered the opinion of the Court.

This is a bill to foreclose a mortgage annexed to the bill, and alleged to create a lien upon the Cacique sugar plantation. It was brought against the appellants, who are the heirs of one Gallardo, a purchaser of the estate. A demurrer and a plea of prescription of thirty, twenty, fifteen, and five years were filed and overruled, subject to exception, and thereafter the bill was taken as confessed and a decree entered as prayed. The mortgage was made on December 22, 1865, and the plaintiffs agree that their claim depends upon its being construed to embrace the land. The construction of the instrument therefore is the main question to be dealt with. It is made more difficult by the fact that still, as when the case was here

Page 236 U. S. 138

before (223 U.S. 223 U. S. 65), there is only an obviously inartificial translation in the record, but enough can be gathered to make the result tolerably plain.

The mortgage, after reciting a debt due from the mortgagor, Don Ramon Ruiz, to the mortgagee, Mr. William Noble, "for the payment of the lease" on the Cacique estate, goes on the say that the mortgagor "binds himself to pay the above-mentioned sum to his creditor Noble, with the proceeds of the first crops which may be ground," etc. It then recites a debt of Ruiz to Goenaga that must be paid in October, 1866,

"thereby being cancelled that deed of refaccion, and Ruiz obliged not to execute any other agreement or deed with damage to this present one. . . . For the better security of the aforesaid, besides the general obligation which he hereby makes of all his property hindering the special obligation, neither the special hindering the general, the appearing party hereto mortgages expressly and especially not only the canes which may be ground in the next crop by the Cacique plantation, . . . but also those which it may grind in the following crops, until the complete payment of the amount herein acknowledged."

The appellee gives the original Spanish:

"y sin que la obligacion general que hace de todos sus bienes impide la especial ni por el contrario esta a aquella, el compareciente don Ram on Ruiz hypoteca expresa y se naladamente no tan solo los frutos que en la proxima cosecha elabore la Hacienda Casique . . . como ya queda precisado, sino tambien los que fabrique en los dem as cosechas venideras hasta el completo pago de la cantidad que deja reconocida."

We agree with the appellant that a negative is left out in the translation, and that the meaning is: without the general obligation of all the debtor's property hindering the special, or conversely this hindering that. So translated, we think it is obvious that the general obligation of all the mortgagor's property is referred to not as the object

Page 236 U. S. 139

or effect of "this" special one, but as something presupposed. It is in fact the general obligation of all a debtor's property that is incident to the existence of a debt; an obligation which is recognized in some degree by every system of law, and shown in ours by the invalidity of conveyances in fraud of creditors, but which in the civil law is more emphasized and expressed. The object of the instrument, and the only object, is to pledge the crops, and to provide for the severance and application of them to the debt -- what is called an anticipatory mobilization. Williamson v. Richardson, 31 La.Ann. 685, 687. It could not well have gone further, seeing that, by the allegations of the bill, Ruiz owned only an undivided interest in the plantation, and was in possession under a lease.

The reference to the canceling of a deed of refaccion has no bearing upon the nature of the present instrument, although that point was argued. The obligation of Ruiz not to execute any other agreement to the damage of the present one is the well known general pact de non alienando, intended to give an additional safeguard to the mortgagee against later aliences of the mortgaged property. Febrero, Part 2, Book 3, c. 2, no. 85. Curia Filipica, Part 2, § 11, no. 11; Tercero Poseedor. Nathan v. Lee, 2 Martin (La.) N.S. 32. The language means any agreement other than the present -- not any deed of refaccion other than the present -- and so we need not consider the nature and effect of such deeds in creating, so to speak, a salvage lien. We turn, therefore, to a so-called acknowledgment that is relied upon as estopping the appellants from denying the operation of the mortgage upon the land. It seems from the bill that Ruiz became bankrupt, that a co-owner, Gallardo, obtained a possessory title, and that, on his applying for registry of the same in 1882, he was required to set forth the encumbrances, and mentioned among them the mortgage to Noble. But even on the allegations of the bill, and still more plainly on looking at the instrument,

Page 236 U. S. 140

which is in the record and is referred to by both parties, this is merely a statement of the condition of the record title. It does not in any way enlarge or purport to enlarge the scope of the original transaction. The mortgage, of course, bound the land in a certain sense, because the crops were land until they were severed. Williamson v. Richardson, 31 La.Ann. 685. But that was the extent to which it bound it, and the recital of it in the registry means no more. At a later date, a registrar declined to recognize the mortgage as a lien upon the property, on the ground that it affected only the products to be manufactured in the plantation. He may have been wrong in his law for the reason that we have suggested, but he was plainly right in his construction of the document. There is no other recognition needing mention.

As our opinion is that the mortgage bound only the crops, it follows without more that the decree must be reversed.

Decree reversed.