People of Porto Rico v. American R. Co. of Porto Rico

• Citation: 254 F. 369
• Decision Date: 04 December 1918
• Docket Number: 1321.
• Parties: PEOPLE OF PORTO RICO et al. v. AMERICAN R. CO. OF PORTO RICO.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

254 F. 369

PEOPLE OF PORTO RICO et al. v. AMERICAN R. CO. OF PORTO RICO.

No. 1321.

United States Court of Appeals, First Circuit.

December 4, 1918

Col Edward S. Bailey, Asst. Judge Advocate General, of Washington, D.C. (Howard L. Kern, Atty. Gen., on the brief) for appellants.

Francis H. Dexter, of San Juan, P.R., for appellee.

Before BINGHAM and JOHNSON, Circuit Judges, and ALDRICH, District judge.

ALDRICH District Judge.

The central and substantial question in this case is whether, at the time in question, the supposed regulatory provision of section 7 of an act of the legislative assembly of Porto Rico dated March 12, 1908, and entitled 'Public Service Corporations' (Comp. Stat. Porto Rico, p. 72), was operative and prohibitive of railroad rate raising without the consent or approval of the executive council of Porto Rico, and we think it was.

The Act of Congress of April 12, 1900, c. 191, 31 Stat. 77, entitled 'An act temporarily to provide revenues and a civil government for Porto Rico, and for other purposes,' now known as the Foraker Act and recognized as the Organic Law of the island, created a local legislative assembly, to consist of two houses, and designated the two houses thus constituted as 'the legislative assembly of Porto Rico,' and provided the manner in which the members should be elected.

As Congress might well do, under its plenary power in respect to territories and possessions of the United States (Clinton v. Englebrecht, 13 Wall. 434, 441, 20 L.Ed. 659; National Bank v. Yankton County, 101 U.S. 129, 25 L.Ed. 1046; Mormon Church v. United States, 136 U.S 1, 10 Sup.Ct. 792, 34 L.Ed. 481; Dorr v. United States, 195 U.S. 138, 24 Sup.Ct. 808, 49 L.Ed. 128, 1 Ann.Cas. 697), it broadly and plainly delegated local legislative powers to the assembly which it thus created. The purpose is gathered from sections 8, 14, 15, 27, 32 (Comp. St. 1916, Secs. 3755, 3762, 3763, 3776, 3781), and from the rather general scope of what was intended as an organic law, creating a temporary civil government to be administered under the auspices of the United States, and we think the plan of government contemplated that the legislative assembly which it created should take the initiative in respect to questions like those relating to local freight rates. Indeed, through section 32 of the act it is expressly declared 'that the legislative authority herein provided shall extend to all matters of a legislative character not locally inapplicable.'

In a period in which considerations of public policy required government restraint and control in respect to railway rates, and acting under supposed delegated authority to legislate with respect to such a subject, the assembly of Porto Rico through the act of March 12, 1908, which was an act for the regulation of public service corporations in Porto Rico, through section 7, declared that--

'It shall be unlawful for any public corporation to charge, demand, collect or receive a greater or less compensation for any service performed by it than is specified in the tariff or schedules, rules and regulations approved by the executive council. ' Comp. Stat. Porto Rico, p. 72.

The railroad in question was a New York corporation and was operating a railway in Porto Rico, and although it had theretofore submitted its schedules to the executive council, rather than to the Interstate Commerce Commission, and had been going along under a schedule of freight rates which had been approved by the executive council of Porto Rico, without authority from that body, and while its petition for permission and authority to increase its schedule of rates was pending before it, put into effect a schedule of freight tariffs for the transportation of sugar cane and its products, which increased the rates twenty per cent. above the schedule which had been approved and under which it had been operating. And the Porto Rican executive council thereafter, in the pending proceeding of the railroad for permission to increase, ordered that no change should be made without its approval.

Upon the general question as to what of the general laws, if any, and upon the question as to which of the acts of Congress having particular reference to a civil government in Porto Rico were exclusively operative and effective there, there was considerable discussion at the arguments in respect to the character of the relation which the island of Porto Rico sustains to the United States-- whether it is that of a territory or that of a possession.

In Downes v. Bidwell, 182 U.S. 244, 21 Sup.Ct. 770, 45 L.Ed. 1088, which was a customs case, and in Kopel v. Bingham, 211 U.S. 468, 29 Sup.Ct. 190, 53 L.Ed. 286, which was a case for the extradition of a fugitive criminal, the relationship of Porto Rico apparently is not recognized as that of a territory fully incorporated into the United States. In Dorr v. United States, 195 U.S. 138, 24 Sup.Ct. 808, 49 L.Ed. 128, 1 Ann.Cas. 697, it was decided that the Philippine Islands were not incorporated into the United States, and it was said that until territory ceded by treaty has been incorporated into the United States, it is to be governed under Congress, without the restrictions which are imposed upon it when passing laws for the United States as a political body of states in union.

To sustain its contention that jurisdiction of the Interstate Commerce Commission was exclusive in the island of Porto Rico under the general provision of section 14 of the Foraker Act of April 12, 1900, which declares that the statutory laws of the United States, not locally inapplicable, have the same force and effect in Porto Rico as in the United States, the appellee chiefly relies upon American Railroad Co. v. Birch, 224 U.S. 547, 32 Sup.Ct. 603, 56 L.Ed. 879, and American Railroad Co. v. Didricksen, 227 U.S. 145, 33 Sup.Ct. 224, 57 L.Ed. 456.

The first of these was a case under the Employers' Liability Act (Act April 22, 1908, c. 149, 35 Stat. 65 (Comp. St. 1916, Secs. 8657-8665)), and the decision was upon the ground that the act expressly applies to Porto Rico, and this, as we understand, was upon the theory that the act by its terms not only included all common carriers in the states, in the territories, the District of Columbia, the Panama Canal Zone, but 'other possessions of the United States. ' Thus the decision was based upon the scope of the statute rather than upon any strict interpretation of the question whether Porto Rico is a territory of the United States, or a possession.

And in the second of these cases, that of Didricksen, involving the question whether the Safety Appliance Act of March 2, 1903 (Act March 2, 1903, c. 976, 32 Stat. 943 (Comp. St. 1916, Secs. 8613-8615)), was in force in Porto Rico, though it did not expressly extend to possessions, it was held that it was; and upon the ground that, while it was not in all respects a territory, that its organization was in most essentials that of political entities known as territories, and upon the theory, as we suppose, that the Safety Appliance Act related to the same subject-matter as that covered by the Employers' Liability Act, which expressly extended to Porto Rico, and was in aid of the protection to life and limb sought to be afforded through legislation upon the subject of the liability of railway common carrier employers. Nor do we consider the Alaska Case, 224 U.S. 474, 32 Sup.Ct. 556, 56 L.Ed. 849, in point, because that involved a continental situation, and a territory acquired by purchase, and a continuous carriage from the state of Washington to a point within Alaska-- a territory which, by an act providing for its government, was designated as one which was to constitute a civil and judicial district, the government of which should be organized and administered as was provided by the act. Moreover, the opinion in that case was written by the same justice who handed down the opinion in the Employers' Liability Case, 224 U.S. 547, 32 Sup.Ct. 603, 56 L.Ed. 879, a month later, in which the Alaska Case was not referred to as having any bearing.

We do not consider, however, that the solution of the question whether Porto Rico is in all respects a 'territory' of the United States, in the strict sense, or whether it is 'a possession of the United States,' in the strict sense in which that term is used, would be altogether controlling upon the question of statutory construction involved in this case. It is not so much a question whether Porto Rico is, or is not, a 'territory' of the United States, to be regarded critically, as an apt question, to be decided with legal exactness under refining rules, as it is the broader and more substantial question, whether, under the actual situation of remoteness, and the character of the relationship, Congress intended to carry the Interstate Commerce Commission powers to the island, to be exercised independently and exclusively of the local assembly.

Porto Rico is at least a 'possession,' and through its organized government, and under the Organic Act of April 12 1900, has many of the essentials of those political entities known as territories, but, notwithstanding that, the substantial fact remains that it is an insular piece of ground, with a considerable population, many miles at sea and widely separated from the states and territories of the government which is charged with the responsibility of seeing that there is a civil government in the island. Therefore, without much regard to a refinement of the question as to which it is, it is the fact that it is an insular possession, or an insular territory, whichever it is, far removed from physical relations with other territories, and possessions, and with no physical relation to any of the states-- with no...