Colonial Mortgage v. Washington
Case Date: 08/02/1999
Court: United States Court of Appeals
Docket No: 98-2273
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For the First Circuit No. 98-2273 IN RE: COLONIAL MORTGAGE BANKERS CORPORATION, Debtor. __________ CREFISA INCORPORATED, Plaintiff, Appellee, v. WASHINGTON MUTUAL BANK, F.A., Defendant, Appellant. __________ HANS LOPEZ-STUBBE, TRUSTEE, Appellant. APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO [Hon. Carmen Consuelo Cerezo, U.S. District Judge] Before Selya, Boudin and Lipez, Circuit Judges. Ivan R. Fernandez-Vallejo with whom Rodriguez & Fernandez, Jorge Souss and Goldman Antonetti & Cordova, P.S.C. were on brief for appellants. Luis R. Montanez-Aviles with whom Montanez & Alicea Law Offices was on brief for appellee. August 2, 1999 BOUDIN, Circuit Judge. This appeal is taken from a decision of the United States District Court for the District of Puerto Rico reversing a decision of the federal bankruptcy court. In substance, the district court sustained a claim by Crefisa, Inc., requiring the bankruptcy trustee of Colonial Mortgage Bankers Corporation ("Colonial") to pay over approximately $557,000 comprising security for a note held by Crefisa. The background events are somewhat complicated. In the 1980s, Colonial was engaged in the business of servicing mortgages. One of its clients was the Bowery Savings Bank ("Bowery") (Washington Mutual Bank has now been substituted for Bowery but it simplifies matters to refer only to Bowery). By agreement, Colonial collected mortgage payments due to Bowery and deposited them into Colonial accounts--in trust for Bowery--in two different Puerto Rico banks: Financiero and Banco Santander. The president of Colonial was Milton J. R |