Todd v. Romeu

Background

A judgment creditor (Todd) sued to reach land that was registered in a woman’s (Anna Merle’s) name, claiming the title was a sham transfer. While the case was pending, another person (Romeu) bought the property and said he was an innocent purchaser. Todd argued Romeu had notice of the pending suit and so could not be treated as innocent. Lower courts enjoined Todd from selling the property, and Todd appealed.

Reasoning

The Court addressed whether a pending lawsuit by itself alters ownership or creates a lien that harms buyers who know about the suit. The Court relied on Puerto Rico’s local mortgage law, which allows a cautionary notice to be recorded only if a court orders it after an application. Because Todd never obtained a court-ordered, recorded cautionary notice, the pending suit did not by itself dismember the owner’s title or create a lien. The Court therefore held that mere knowledge of the suit, without the required judicially ordered and recorded notice, did not convert Romeu into a non-innocent purchaser in this case.

Real world impact

The decision protects buyers who rely on the public registry in Puerto Rico when no court-ordered cautionary notice has been recorded. It requires creditors who want to bind third-party buyers to seek the specific judicial procedure and recording that local law demands. The ruling is limited to the facts and law before the Court and does not decide broader questions about notice versus registry in other circumstances.