FIRST FEDERAL SAV. & L. ASS'N OF PUERTO RICO. v. Zequeira

• Decision Date: 10 October 1969
• Docket Number: Civ. A. No. 238-67.
• Citation: 305 F. Supp. 37
• Parties: FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF PUERTO RICO, Plaintiff, v. Victor Manuel ZEQUEIRA and Alejandrina Lopez De Zequeira, Defendants.
• Court: U.S. District Court — District of Puerto Rico

305 F. Supp. 37

FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF PUERTO RICO, Plaintiff, v. Victor Manuel ZEQUEIRA and Alejandrina Lopez De Zequeira, Defendants.

Civ. A. No. 238-67.

United States District Court D. Puerto Rico.

October 10, 1969.

Stanley Segal, San Juan, P. R., for plaintiff.

Carlos Carrera Benítez, Rio Piedras, P. R., for defendants.

ORDER

CANCIO, Chief Judge.

The history of this case, briefly summarized, is as follows: A complaint requesting the foreclosure of a certain mortgage was filed by the plaintiff in May of 1967. Defendants were served, default was entered and on July 14, 1969 judgment was rendered in favor of plaintiff. Subsequent to the judgment, but prior to the judicial sale, defendants appeared before this court represented by counsel. It was agreed that plaintiff would postpone the judicial sale. However, said sale was subsequently held as defendants did not comply with a certain payment plan agreed upon. On January 26, 1968 defendants filed a motion to have the judicial sale set aside. Hearings were held, memoranda submitted, and on September 9, 1969 this court denied defendants' Motion to Set Aside the Sale. From the Order of this court denying said motion, defendants filed a Notice of Appeal. Subsequently, they filed a Statement of Points in which specifically the lack of jurisdiction of this court in cases of this nature was relied upon as one of the points in said statement. Defendants' appeal was dismissed by the Circuit Court of Appeals for want of diligent prosecution on March 7, 1969. Subsequently, on May 5, 1969, they filed the present motion entitled "Motion to Set Aside Judgment for Lack of Jurisdiction" in which they alleged again the lack of jurisdiction of this court in cases of this nature.

We are of the opinion that defendants are precluded by the doctrine of res judicata, to collaterally attach the judgment of this court and that their motion should be denied.

Rule 41(b) of the Federal Rules of Civil Procedure provides that a dismissal for failure to prosecute shall operate as an adjudication upon the merits. Since the jurisdiction of this court in cases of this nature was specifically raised before the Circuit Court of Appeals, that matter was adjudicated by the aforesaid dismissal. In other words, the situation is as if defendants had litigated the jurisdiction in the Court of Appeals and received an adverse ruling. Furthermore, it is elementary law that the doctrine of res judicata applies not only to matters that were actually raised before the trial court, but also as to all matters that could have been raised.

The principles of res judicata apply to questions of jurisdiction, whether it is jurisdiction over the subject matter or over the parties. Johnson v. Muelberger, 340 U.S. 581, 71 S.Ct. 474, 95 L.Ed. 552. It is well settled that "jurisdictional facts," once litigated, whether over the person or subject matter, are res judicata. Baldwin v. Iowa State Traveling Mens Ass'n, 283 U.S. 552, 51 S.Ct. 517, 75 L.Ed. 1244; Stoll v. Gottlieb, 305 U.S. 165 (1938). The Supreme Court of the United States extended this doctrine to unlitigated jurisdictional facts in the case of Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 60 S.Ct. 317, 84 L.Ed. 329 (1940). In this case, defendants did not litigate the unconstitutionality of the statute, which was subsequently declared unconstitutional. However, the court held that the judgment could not be collaterally attacked. In this connection, Justice Frankfurter, in his dissenting opinion in the case of Sherrer v. Sherrer, 334 U.S. 343, 367, 68 S.Ct. 1087, 1102, 92 L.Ed. 1429, 1 A.L.R.2d 1355, states as follows:

"Res judicata forecloses relitigation if there has been an opportunity to litigate once, whether or not it has been availed of, or carried as far as possible (cases cited) and it applies to questions of jurisdiction of subject matter as well as to that of persons." (cases cited) (emphasis supplied)

Moore's Federal Practice, Vol. 7, section 60.25(2), page 269, in discussing when a default judgment may be collaterally attacked, states as follows:

"On the other hand if the defendant appears in the original action and contests the jurisdiction of the court over either his person or the subject matter * * * and that issue is decided against him and he thereafter defaults, the default judgment is not subject to collateral attack for lack of jurisdiction of either person or subject matter. Nor is it where he appears but fails to contest jurisdiction. And, although he makes no appearance, if the court had the requisite jurisdiction over him that is needed for the type of judgment—in personam, quasi in rem or in rem—which it renders, the default judgment is valid, not void, and is not subject to collateral attack for lack of jurisdiction."

In an article in Harvard Law Review, Vol. 53, page 652, entitled "Res Judicata and Jurisdiction: The Bootstrap Doctrine," an analysis is made of the evolving concepts in this field, and the following conclusion is reached:

"Res judicata rules supreme in the jurisdictional field. A doctrine applied originally only in cases of contested non-jurisdictional issues with conceded jurisdiction has been expanded to cover not only those jurisdictional facts that have been actually litigated but also those that might have been.

The courts have felt that it was desirable to end litigation once there has been a trial of the issues, and having determined under the doctrine of the much criticized case of York vs Texas that a statute converting a special into a general appearance did not deprive a defendant of due process, a foundation was laid for a long line of authoritative cases which allow a court which has no jurisdiction to bind adversaries personally before it by a finding that it in fact has no jurisdiction." (emphasis supplied)

It is our opinion that every court, in rendering a judgment, has the authority and does, tacitly or expressly, determine its jurisdiction over the parties and subject matters before it. Walling v. Miller, 8 Cir., 138 F.2d 629 (1943).

In any case, this court is of the opinion that it clearly has jurisdiction over this class of claims. The question involved is really whether the transaction giving rise to this action is one arising out of banking in Puerto Rico. The federal statute creating the plaintiff is set forth in 12 U.S.C.A. § 1461 et seq. It is interesting to note that title 12 U.S.C.A. is entitled "Banks and Banking," which fact tends to show that Congress considered federal savings and loan associations as pertaining to "banks and banking," at least for some limited purposes. Thus, their transactions, for those limited purposes, are banking transactions. In synthesis, the statute provides that these associations may receive savings deposits, make loans and invest in certain types of securities, 12 U.S.C.A. § 1464(b) and (c). The pertinent evidence before this court consisted of the original of the mortgage note, the certified copy of the mortgage deed and a sworn statement by the plaintiff's treasurer showing that an account had been...