Havemeyer v. Public Service Commission of Puerto Rico

• Decision Date: 10 January 1935
• Docket Number: No. 2905.,2905.
• Citation: Havemeyer v. Public Service Commission of Puerto Rico, 74 F.2d 637 (1st Cir. 1935)
• Parties: HAVEMEYER et al. v. PUBLIC SERVICE COMMISSION OF PUERTO RICO et al.
• Court: U.S. Court of Appeals — First Circuit

74 F.2d 637 (1935)

HAVEMEYER et al. v.PUBLIC SERVICE COMMISSION OF PUERTO RICO et al.

No. 2905.

Circuit Court of Appeals, First Circuit.

January 10, 1935.

Ralph S. Rounds, of New York City(Francis E. Neagle and Rounds, Dillingham, Mead, Neagle & Boyd, all of New York City, on the brief), for appellants.

William Cattron Rigby, of Washington, D. C. (Benjamin J. Horton, Atty. Gen., of Puerto Rico, and Nathan R. Margold, of Washington, D. C., on the brief), for appellees.

Before BINGHAM, WILSON, and ANDERSON, Circuit Judges.

WILSON, Circuit Judge.

This is an appeal from a final judgment of the Supreme Court of Puerto Rico, affirming a judgment of the District Court of San Juan, dismissing an appeal by the appellants from an order of the Public Service Commission of Puerto Rico, and affirming the order of the commission.This court has jurisdiction to review this case on either of two grounds: (1) That the construction of a United States statute, or (2) the necessary jurisdictional amount is involved.Municipality of Rio Piedras v. Serra, Garabis & Co., Inc. (C. C. A.)65 F.(2d) 691.

It is urged by counsel for the appellees that the individual appellants, as members of the Sociedad en Comandita, Russell & Co., a form of limited partnership, organized under the Code of Commerce of Puerto Rico(1930)§ 95, have no standing here as appellants, since the Supreme Court in People of Puerto Rico v. Russell & Company et al., 288 U. S. 476, 53 S. Ct. 447, 77 L. Ed. 903, held that it was a juridical entity, at least, for the purpose of giving the insular courts jurisdiction, it having its domicile in Puerto Rico.It is of no importance whether the individual members of Russell & Co. are parties to this appeal.

The order to show cause was issued to "Russell & Company, S en C, a limited partnership."That company is here.Throughout the entire proceedings it has been designated as a civil agricultural partnership, or a limited partnership, as it appears it is, sections 125,156 of the Commercial Code,Civil Code(1930)§ 1590, and every order and judgment has been against it in that capacity.It is too late now to raise the point.Russell & Co. as a Sociedad en Comandita, having been proceeded against and consented to be treated in the proceedings as a civil agricultural partnership, we think it may be considered bound by whatever judgment may be rendered.

The facts found by the Supreme Court, briefly stated, are as follows: The executive council of Puerto Rico in 1901 granted to the Guanica Land Company, a New Jersey corporation, and its assigns, a franchise whereby it was authorized to take 20,000,000 gallons of water daily from Guanica Lake, but solely for the proper irrigation of lands owned or leased by it.

More particularly the franchise provides:

"I.That the Guanica Land Company, (a corporation organized and existing under and by virtue of the laws of the State of New Jersey), and its successors and assigns, be and they are hereby authorized and empowered to erect, construct, maintain and operate a dam of masonry work or other proper materials across the Cano Negro, or outlet from the Lake of Guanica, in the Municipality of Yauco and upon such lands of abutting owners as may have been acquired by consent or by process of law, for the purpose of retaining, storing and conserving the waters of the said Lake of Guanica, and of restraining and regulating the flow of the water from said Lake, through the said Cano or otherwise, for the purposes hereinafter set forth.

"II.That the said Company and its successors and assigns be and they hereby are authorized to take from the said Lake of Guanica, or from the said Cano or outlet, such quantity of water not exceeding 20,000,000 gallons during each day, as shall be necessary or sufficient for the proper irrigation of the lands now or hereafter owned or leased by the said Company, or by its successors or assigns, or any of them.The water so to be taken from the said Lake or Cano may be taken from such part or parts thereof, adjacent or contiguous to said lands, as the said Company or its successors or assigns may see fit, and may be taken by gravity through proper channels, or by pumps, or by any other method that may be advisable, or by any two or more of such methods.

"III.That the said Company and its successors and assigns may erect, construct, operate and maintain upon those parts of the lands now or hereafter owned or leased by it or them, which lie within six meters of the bank of the said Cano, or within twenty meters of the shore of the said Lake or of the harbor or bay of Guanica, such pumping station, channels and pipe lines as may be necessary or proper for the taking or conveyance of said waters; Provided that no public road lying within or partly within said limits shall be obstructed to any extent whatever thereby.

"IV.That nothing herein contained shall be held or construed to authorize or permit the said Company or its successors or assigns to raise or maintain the level of the waters of said Lake of Guanica above the customary level thereof during the rainy season, as the same exists in years of average and usual rainfall; and all damage sustained by abutting owners by reason of unduly raising the level of the waters of said Lake, or by unduly lowering the level of the waters of said Lake, shall be borne by the said Company, its successors and assigns and action for damages shall lie against said Company, its successors and assigns for such damage by such abutting owners, in any court of competent jurisdiction."

It also authorized the Guanica Land Company to construct a private railroad for the transporting of its own products to a private wharf in Guanica Harbor, which it was authorized to construct, having first obtained permission of the Secretary of War.

It appears in the record of the proceedings that at some time prior to 1917, the Guanica Land Company assigned the entire franchise to the Guanica Central, which afterward assigned it to the Ensenada Estates, Inc., which assigned to Russell & Co. that part of the franchise authorizing the taking of 20,000,000 gallons of water daily from Guanica Lake; that is, "to be more specific, the rights contained under paragraphs I to IV, inclusive, of said franchise."

In 1929 the municipality of Lajas in Puerto Rico adopted a resolution which it forwarded to the Public Service Commission of Puerto Rico, complaining that by reason of engineering work carried on in Negro pond, which is the outlet of Guanica Lake, the lands and public roads in the municipality of Lajas had been flooded for a long period of time.The Governor of Puerto Rico also called the attention of the commission to the flooded condition of the lands in Lajas by forwarding a letter from the Commissioner of the Interior, in which it is claimed that the increased volume of water in the lake was due to a violation of the terms of the franchise granted to the Guanica Land Company in 1901.

Upon these complaints the commission issued a show cause order to Russell & Co., the Ensenada Estates, Inc., and the Guanica Central, and any other person or legal entity having any rights in the above franchise, to appear and show cause why the franchise granted to the Guanica Land Company in 1901 should not be canceled.

The South Porto Rican Sugar Company, a domestic corporation of Puerto Rico, apparently having acquired rights under the franchise to the railroad and wharf, and Russell & Co. as a Sociedad en Comandita, appeared specially and filed a motion to dismiss the proceedings before the commission on the following grounds:

"1.That the Public Service Commission lacks jurisdiction over this case and that it does not have jurisdiction to cancel the franchise mentioned in the order to show cause issued by the Commission on May 26, 1928.

"2.That none of the parties appearing in this cause is a public service corporation or a public service partnership, or is engaged in any manner in public service, and that this Commission does not have jurisdiction over these parties or over any one of them."

The motion was denied and, after hearing, the commission issued its order that so much of the franchise issued to the Guanica Land Company, which refers to the taking of water from Guanica Lake for purposes of irrigation, should be canceled, but to take effect nearly four months later.The order provided that in the meanwhile the parties in interest would be permitted to file further petitions requesting the commission to fix the highest point at which the waters of Guanica Lake could be maintained by owners of the franchise, which, of course, they could not do without conceding the jurisdiction of the commission, which they still deny.

From this order, Russell & Co. appealed to the District Court of San Juan, assigning as errors by the commission: (1) That the commission was without jurisdiction in the premises, since neither the Guanica Land Company nor the civil agricultural partnership, Russell & Co., was a public or quasi public corporation, and the franchise granted was entirely of a private nature and its amendment, modification, or cancellation was not within the powers vested in the commission under section 38 of the Organic Act of 1917(48 USCA §§ 750,751,753);(2) that the commission erred in not holding that the floods in the valley of Lajas were caused by torrential and extraordinary rains, or a vis major; (3) that the commission erred in holding that any work done by Russell & Co. within the bed of the Rio Loco contributed to the height of the waters in Guanica Lake; (4) that the commission erred in holding that Russell & Co. was bound to know the natural level of the waters in the lake, above which they should not permit the waters of the lake to be raised, except in case of extraordinary rains.These and many other errors were assigned on appeal to the District Court of San Juan.The District Court, however, held that the...