Camunas v. Porto Rico Ry., Light & Power Co., 1460.

• Decision Date: 15 March 1921
• Docket Number: 1460.
• Citation: 272 F. 924
• Court: U.S. Court of Appeals — First Circuit
• Parties: CAMUNAS et al. v. PORTO RICO RY., LIGHT & POWER CO.

272 F. 924

CAMUNAS et al. v. PORTO RICO RY., LIGHT & POWER CO.

No. 1460.

United States Court of Appeals, First Circuit.

March 15, 1921

Charles Marvin, of New York City (Salvador Mestre, Atty. Gen., of Porto Rico, of San Juan, P.R., on the brief), for appellants.

Carroll G. Walter, of New York City (Edward J. Patterson, of New York City, and J. Henri Brown, of san Juan, P.R., on the brief) for appellee.

Before BINGHAM, JOHNSON, and ANDERSON, Circuit Judges.

ANDERSON Circuit Judge.

The plaintiff (appellee) is a Porto Rican corporation owning and operating steam railroad and electric railway lines in Porto Rico. The defendants (appellants) are Porto Rican officials charged with the duty of administering and enforcing the Workmen's Compensation Act of February 225, 1918.

On August 27, 1919, the plaintiff filed in the court below a bill in equity seeking an injunction against the enforcement of the Compensation Act as against it. The bill alleges the passage of the Compensation Act, describes its administrative machinery, and sets forth That in section 10 thereof it is expressly provided that:

'All public carriers operating railroads shall be included in this act while carrying on their business in Porto Rico.'

That the defendants have assessed yearly insurance premiums upon the plaintiff of $4,560.18, which the plaintiff has refused to pay, being advised that the Compensation Act is void so far as it purports to apply to employees of the plaintiff's railroad and railway because the federal Employers' Liability Act (Comp. St. Secs. 8657-8665) is in force in Porto Rico and excludes local legislation upon that subject. That proceedings, civil and criminal, have been threatened by the defendants, or some of them, against the plaintiff and its property. That the Compensation Act is void, not only by reason of conflict with the federal Employers' Liability Act, but because of lack of due process of law, in that it 'does not provide for or require notice to complainant and an opportunity to be heard upon claims presented to the Workmen's Relief Commission. ' That plaintiff has no adequate remedy at law, since, even if it complied with the Compensation Act, and paid the premiums and assessments under protest, it would be left subject to numerous suits brought by employees under the federal Employers' Liability Act, pending the determination of such suit to recover premiums. That one such suit under the Liability Act, to recover for the death of an employee occurring since the Compensation Law went into effect, was already pending.

On December 6, 1919, the defendants moved to dismiss on the following grounds:

(1) Complete and adequate remedy at law.

(2) No irreparable injury nor multiplicity of suits.

(3) The federal Employers' Liability Act not in force in Porto Rico.

(4) Even if the Liability Act is in force, plaintiff is not thereby relieved from obligation to file reports under the Compensation Act and comply with the other provisions of the same.

On December 9, 1919, a supporting affidavit was filed by the plaintiff's president and general manager, setting up that there was then pending in the same court under the federal Employers' Liability Act a suit to recover for the death of one Lopez; that, notwithstanding the pendency of this suit, the Workmen's Relief Commission, without notice to the plaintiff, and without affording it an opportunity to be heard, investigated the death of said Lopez, and fixed the damages to be paid to his widow and children in the sum of $3,500, and that the treasurer of Porto Rico had demanded payment of this sum, and threatened to attach plaintiff's property on failure to pay the same; that, as the court below has held the federal Employers' Liability Act in force in Porto Rico, the plaintiff would thus, by reason of the conflict of jurisdiction, be left subject to large expense in defending suits brought under the Liability Act while compelled to pay premiums and indemnities fixed by the Workmen's Relief Commission under the Compensation Act.

On January 5, 1920, the motion to dismiss was denied, and an injunction pendente lite granted. From this order granting an injunction the defendants appealed.

The decision of the court below rests upon the proposition that the federal Employers' Liability Act is applicable to railroads in Porto Rico, and excludes, ex proprio vigore, the local Workmen's Compensation Act. New York Central R.R. v. winfield, 244 U.S. 147, 37 Sup.Ct. 546, 61 L.Ed. 1045, L.R.A. 1918C, 439, Ann. Cas. 1917D, 1139.

Although the first assignment of error asserts that no federal question is involved, this proposition was abandoned at the argument. Both counsel agree-- and we accord with their view-- that the question presented is one 'arising under the laws of the United States' within the meaning of section 24 of the Judicial Code (Comp. St. Sec. 991).

We think the defendants' contention that the plaintiff has a plain and adequate remedy at law cannot be sustained. The case is, on the facts, easily distinguishable from that of Camunas v. New York & P.R.S.S. Co., 260 F. 40, 49, 171 C.C.A. 76. Moreover, the views expressed in that case, to the effect that the employer had a plain and adequate remedy at law for any unlawful assessment under the Workmen's Compensation Act, were grounded upon the language of section 3 of the Porto Rican Act of March 9, 1911, entitled 'An act to provide for the payment of taxes under protest,' which provides in explicit terms that the party paying under protest may 'sue the said treasurer * * * in a court having competent jurisdiction thereto. ' On the record then before the court there was no reason suggested for construing the words 'in a court having competent jurisdiction thereto' as not being broad enough to cover the federal court, if, by reason of diversity of citizenship or other ground for federal jurisdiction, the party alleging wrongful assessment had a right to resort to the federal court. Neither the Act of April 13, 1916, entitled 'An act to authorize suits against the people of Porto Rico,' nor the decisions of the Supreme Court of Porto Rico in Sauri & Subira v. Sepulveda, 25 P.R. 224, and Union Life Insurance Co. v. Gromer, 20 P.R. 80, were brought to the attention of the court. As it now appears that the Supreme Court of Porto Rico has construed the statute authorizing suits against the treasurer as suits against Porto Rico, and therefore permissible only to the extent authorized by the sovereign power (Porto Rico v. Rosaly, 227 U.S. 270, 33 Sup.Ct. 352, 57 L.Ed. 507), and as under section 10 of the Act of April 13, 1916, it is provided 'that all such cases shall be brought only in the insular district courts,' it is plain that the remedy for the recovery of taxes, paid under protest, under section 3 of the Act of March 9, 1911, is not an adequate remedy for a party having otherwise a right to resort to the federal court (Smyth v. Ames, 169 U.S. 466, 516, 517, 18 Sup.Ct. 418, 42 L.Ed. 819; Reagan v. Farmers' Loan & Trust Co., 154 U.S. 362, 391, 14 Sup.Ct. 1062, 38 L.Ed. 1031; Benedicto v. Porto Rican American Tobacco Co., 256 F. 422, 425, 167 C.C.A. 550, and cases cited).

The main question is whether the Porto Rican Compensation Act is applicable to Porto Rican railroads. As Porto Rico has in explicit terms undertaken to include railroads, the problem is really whether this act is ultra vires the Organic Act. We think it was not. The Organic Act of March 2, 1917 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, Secs. 3803a-3803z), vests very broad general powers in Porto Rico. In section 5 Porto Rican citizens are declared to be citizens of the United States. Porto Rico is now sovereign. Porto Rico v. Rosaly, 227 U.S. 270, 33 Sup.Ct. 352, 57 L.Ed. 507

By section 37, the Legislature is given broad and inclusive powers:

'The legislative authority herein provided shall extend to all matters of a legislative character not locally inapplicable, including power to create, consolidate, and reorganize the municipalities so far as may be necessary, and to provide and repeal laws and ordinances therefor; also the power to alter, amend, modify, or repeal any or all laws and ordinances of every character now in force in Porto Rico or municipality or district thereof in so far as such alteration, amendment, modification, or repeal may be consistent with the provisions of this act.'

Manifestly this grant of power is nearly, perhaps quite, the equivalent of the power of a state Legislature to enact all laws not inconsistent with the federal or the state Constitution. The Organic Act is the practical equivalent of a state Constitution. The fact that it remains subject to amendment or repeal by Congress is for present purposes immaterial. In that regard, Congress stands as to Porto Rico in the place of the people of a state, acting directly or indirectly through a constitutional convention.

By section 58, all inconsistent laws are repealed, and all existing, consistent laws are retained, until the Legislature shall by new and consistent legislation otherwise provide. It reads as follows:

'All laws or parts of law applicable to Porto Rico not in conflict with any of the provisions of this act, including the laws relating to tariffs, customs, and duties on importations into Porto Rico prescribed by the act of Congress entitled 'An act temporarily to provide revenues and a civil government for Porto Rico, and for other purposes,' approved April twelfth, nineteen hundred, are hereby continued in effect, and all laws and parts of laws inconsistent with the provisions of this act are hereby repealed.'

That Congress intended the Porto Rican Legislature to have full police powers is apparent, not only from the language of ...