Sancho v. Valiente & Co., 3228.

• Decision Date: 08 December 1937
• Docket Number: No. 3228.,3228.
• Parties: SANCHO, Treasurer, v. VALIENTE & CO.
• Court: U.S. Court of Appeals — First Circuit

93 F.2d 327 (1937)

SANCHO, Treasurer, v. VALIENTE & CO.

No. 3228.

Circuit Court of Appeals, First Circuit.

December 8, 1937.

Col. William C. Rigby, of Washington, D. C. (B. Fernandez Garcia, of San Juan, P. R., and Nathan R. Margold, of Washington, D. C., on the brief), for appellant.

Edelmiro Martinez Rivera, of San Juan, P. R., for appellee.

Before BINGHAM, WILSON, and MORTON, Circuit Judges.

BINGHAM, Circuit Judge.

This is an appeal from a judgment of the Supreme Court of Puerto Rico affirming a judgment of the District Court of San Juan.

The plaintiff, a mercantile firm established under the laws of Puerto Rico, brought an action at law against the Treasurer for a refund of taxes in the sum of $88.14, paid under protest, together with interest and costs. In its amended complaint the plaintiff alleged, as its first and only cause of action, that the taxes in question, on 35,256 pounds of leaf tobacco grown on the plaintiff's farm, were levied under Joint Resolution No. 13 of the Legislature of Puerto Rico, approved July 8, 1929, which imposed a tax of one-fourth of a cent a pound on all tobacco harvested in Puerto Rico; that the taxes were paid under protest; and that the plaintiff sought their refund because it claimed that the resolution under which the taxes were imposed was invalid.

The plaintiff set out seventeen different grounds wherein it alleged that Joint Resolution No. 13 was invalid, but the one upon which the District Court and the Supreme Court, in rendering judgment for the plaintiff, based their decisions was the seventh, which reads:

"Seventh. Because said tax is levied by a joint resolution of the Legislative Assembly of Puerto Rico and not by a law, thus violating Section 34 of the Organic Act of Puerto Rico."

The defendant's answer asserted the validity of the Joint Resolution and of the taxes.

The District Court held that the Resolution was invalid as a law and entered judgment for the plaintiff. The Supreme Court affirmed the judgment of the District Court and the defendant appealed to this court. The basis of the decision of the Supreme Court was that, inasmuch as section 34 of the Organic Act of 1917, 48 U.S.C.A. § 824, provided that "No law shall be passed except by bill" and the tax was imposed by a joint resolution, the alleged law was unconstitutional and void.

The appellant contends that the only question now before us for decision is the seventh ground of invalidity above set forth. The appellee, however, contends that it is open to it to rely upon all or any of the grounds of invalidity alleged in the complaint, although only the seventh was passed upon by the Supreme Court. We think the appellee is correct in its position, but, owing to the view we take of the case, we shall consider only the question whether Joint Resolution No. 13 is a valid law within the provisions of section 34 of the Organic Act of 1917, 48 U.S.C.A. §§ 822-841, 843, 844.

The portion of the Joint Resolution imposing the tax is section 2, which reads as follows:

"Section 2. — For the purpose of carrying out the provisions of this Act, a tax of one-quarter (¼) cent shall be levied or collected on each pound of tobacco harvested in Porto Rico; Provided, that said tax shall be collected but once each year at the time of sale by the grower, who shall be bound to leave in the hands of the buyer the one-quarter cent a pound of tobacco provided for in this section. Buyers shall in turn pay said tax to the Treasurer of Porto Rico in such form as the latter may by regulation prescribe. Such tax shall be considered as a preferred lien on the harvested product. The Treasurer of Porto Rico shall levy and collect the aforesaid tax, and he is hereby authorized to make such rules and regulations as may be necessary for the collection of the tax."

The material portions of section 34 of the Organic Act, 39 Stat. 960, 48 U.S.C.A. §§ 822-825, 827, 828, 831-834, 837, 839, provide:

"Section 34. That the enacting clause of the laws shall be as to acts, `Be it enacted by the Legislature of Porto Rico,' and as to joint resolutions, `Be it resolved by the Legislature of Porto Rico.' Except as hereinafter provided, bills and joint resolutions may originate in either house. * * * No bill shall become a law until it be passed in each house by a majority yea-and-nay vote of all of the members belonging to such house and entered upon the journal and be approved by the governor within ten days thereafter. If when a bill that has been passed is presented to the governor for his signature he approves the same, he shall sign it; or if not, he shall return it, with his objections, to the house in which it originated, which house shall enter his objections at large on its journal and proceed to reconsider it. If, after such reconsideration, two-thirds of all the members of that house shall agree to pass the same it shall be sent, together with the objections, to the other house, by which it shall likewise be reconsidered, and if approved by two-thirds of all the members of that house it shall be sent to the governor, who, in case he shall then not approve, shall transmit the same to the President of the United States. The vote of each house shall be by yeas and nays, and the names of the members voting for and against shall be entered on the journal. If the President of the United States approves the same he shall sign it and it shall become a law. If he shall not approve same he shall return it to the governor so stating, and it shall not become a law: provided, That the President of the United States shall approve or disapprove an Act submitted to him under the provisions of this section within ninety days from and after its submission for his approval; and if not approved within such time it shall become a law the same as if it had been specifically approved. If any bill presented to the governor contains several items of appropriation of money, he may object to one or more of such items, or any part or parts, portion or portions thereof, while approving of the other portion of the bill. In such case he shall append to the bill, at the time of signing it, a statement of the items, parts or portions thereof to which he objects, and the appropriation so objected to shall not take effect. If any bill shall not be returned by the governor within ten days (Sundays excepted) after it shall have been presented to him, it shall be a law in like manner as if he had signed it, unless the legislature by adjournment prevents its return, in which case it shall be a law if signed by the governor within thirty days after receipt by him; otherwise it shall not be a law. * * *

"Each house shall keep a journal of its proceedings. * * *

"No law shall be passed except by bill, and no bill shall be so altered or amended on its passage through either house as to change its original purpose.

"No act of the legislature except the general appropriation bills for the expenses of the government shall take effect until ninety days after its passage, unless in case of emergency (which shall be expressed in the preamble or body of the act) the legislature shall by a vote of two-thirds of all the members elected to each house otherwise direct. No bill, except the general appropriation bill for the expenses of the government only, introduced in either house of the legislature after the first forty days of the session, shall become a law.

"No bill shall be considered or become a law unless referred to a committee, returned therefrom, and printed for the use of the members: Provided, That either house may by a majority vote discharge a committee from the consideration of a measure and bring it before the body for consideration.

"No bill, except general appropriation bills, shall be passed containing more than one subject, which shall be clearly expressed in its title; but if any subject shall be embraced in any act which shall not be expressed in the title, such act shall be void only as to so much thereof as shall not be so expressed. * * *

"The presiding officer of each house shall, in the presence of the house over which he presides, sign all bills and joint resolutions passed by the legislature, after their titles shall have been publicly read, immediately before signing; and the fact of signing shall be entered on the journal. * * *

"No bill shall be passed giving any extra compensation to any public officer, servant or employee, agent or contractor after services have been rendered or contract made. * * *

"All bills for raising revenue shall originate in the house of representatives, but the senate may propose or concur with amendments, as in case of other bills.

"The general appropriation bill shall embrace nothing but appropriations for the ordinary expenses of the executive, legislative, and judicial departments, interest on the public debt, and for public schools. All other appropriations shall be made by separate bills, each embracing but one subject.

"Every order, resolution, or vote to which concurrence of both houses may be necessary, except on the question of adjournment, or relating solely to the transaction of business of the two houses, shall be presented to the governor, and before it shall take effect be approved by him, or, being disapproved, shall be repassed by two-thirds of both houses, according to the rules and limitations prescribed in case of a bill."

(Italics supplied except as to the provisos.)

It has been said that section 34 is poorly drawn and that any possible doubt as to whether a law of Puerto Rico could be passed by a joint resolution as well as by a bill could have been avoided by a little care in the phraseology of the draft. But if the intention of Congress with relation to the matter is to be ascertained from the specific assertion in section 34, 48 U.S.C.A. § 824, that "no law shall be passed except by...