Pan American Match Inc. v. Sears, Roebuck and Co.

• Decision Date: 10 January 1972
• Docket Number: No. 71-1152.,71-1152.
• Citation: 454 F.2d 871
• Parties: PAN AMERICAN MATCH INC., Plaintiff, Appellant, v. SEARS, ROEBUCK AND CO. et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

454 F.2d 871 (1972)

PAN AMERICAN MATCH INC., Plaintiff, Appellant, v. SEARS, ROEBUCK AND CO. et al., Defendants, Appellees.

No. 71-1152.

United States Court of Appeals, First Circuit.

Heard November 16, 1971.

Decided January 10, 1972.

COPYRIGHT MATERIAL OMITTED

Arturo Aponte Pares, San Juan, P. R., for appellant.

Ruben Rodriguez-Antongiorgi, San Juan, P. R., with whom Fiddler, Gonzalez & Rodriguez, San Juan, P. R., was on brief, for appellees.

Before COFFIN, Circuit Judge, VAN OOSTERHOUT^*, Senior Circuit Judge, and STEPHENSON^*, Circuit Judge.

VAN OOSTERHOUT, Senior Circuit Judge.

This is an appeal by plaintiff Pan American Match Inc. from final judgment dismissing its complaint with prejudice. Plaintiff brought the present action against Sears, Roebuck and Co., (Sears), and Sears Roebuck de Puerto Rico, Inc., (Sears P.R.), asserting diversity jurisdiction under 28 U.S.C.A. § 1332, and jurisdiction under the Civil Rights Act,¹ seeking to recover title and possession of 10,058 square meters of real estate in San Juan, Puerto Rico, previously owned by it, and damages.

The land here in controversy was condemned in 1958 by the Commonwealth of Puerto Rico for the benefit of the Puerto Rico Industrial Development Company (PRIDCO), a government instrumentality created by statute to promote industry and commerce. Just compensation as determined in the condemnation action was paid plaintiff. On August 26, 1959, PRIDCO sold such real estate together with some adjoining land to Sears, who later sold and conveyed the land to its wholly owned subsidiary Sears P.R. A first class Sears store was erected upon the premises.

Plaintiff in its complaint asserts the sale to Sears is a nullity because the sale to Sears was not for an authorized public purpose and PRIDCO failed to comply with the provisions of 28 L.P.R.A. §§ 6, 11, 12, 13 and 14, which in substance provide that when land condemned by the government has ceased to be of public utility, the persons from whom the land is taken shall be given a preferential right to reacquire the land and shall be given ninety days notice of intended sale. No notice of sale was given. Plaintiff filed a motion for summary judgment which was denied.

Defendants filed a motion to dismiss and a motion for summary judgment, asserting the action should be dismissed (1) for failure to state a cause of action; (2) for failure to join the Commonwealth and PRIDCO, who are asserted to be essential parties; and (3) upon the ground that the cause of action here asserted was fully and finally adjudicated against plaintiff in civil case No. E-65-187 before the Superior Court of Puerto Rico, entitled Pan American Match Inc. v. Sears Roebuck de Puerto Rico, Sears Roebuck and Co., the Commonwealth of Puerto Rico and Industrial Development Company of Puerto Rico. The federal trial court (Judge Cancio) sustained defendants' motion to dismiss and for summary judgment by order, memorandum opinion and judgment dated February 8, filed February 9, 1971, basing its decision on failure to state a cause of action and failure to join indispensable parties. The court also determined that the plaintiff's cause of action was fully adjudicated on the merits by the Commonwealth court and that such judgment became final, and under the doctrine of res judicata barred the present action. The action was dismissed with prejudice.

Plaintiff's motion for reconsideration and additional findings was denied by order dated March 19, filed March 23, 1971. The order for dismissal with prejudice was reaffirmed. Included in the court's order is the following:

"As set forth in this Court\'s memorandum opinion, the Court finds that no cause of action against defendants flows out of the statute relied upon by the plaintiff. Moreover, plaintiff\'s claim was litigated before the Commonwealth courts and plaintiff elected not to seek a writ of review in the Commonwealth Supreme Court. Under the circumstances, the Court reaffirms its prior ruling of dismissal with prejudice."

This timely appeal followed. Plaintiff urges the court erred in dismissing its complaint upon each of the grounds urged in the defendants' motions. We are convinced the dismissal on the ground of res judicata is fully supported by record. Dismissal upon such ground is dispositive of this appeal.

The record before the trial court and before us consists of the pleadings in the present case, detailed affidavits, the complaint and the comprehensive findings of fact, conclusions of law and judgment entry made by the Commonwealth court in case No. E-65-187 and an agreement that no appeal was taken from such judgment. We find no dispute exists between the parties with respect to material facts.

It is undisputed that the defense of res judicata is applied by Puerto Rican courts. We may accept for our present purpose the rule urged by the plaintiff in its brief, as quoted from Melendez v. Cividanes, 63 P.R.R. 4, 11, which reads:

"The plea of res judicata arises from the necessity of putting an end to litigation. Hence, in order to invoke that doctrine successfully, a substantial identity between the subject matter, the causes of action, the parties and the capacity in which they acted, as well as the fact that the former adjudication was on the merits, must be established."

The Commonwealth court judgment relied upon was on the merits and final and involved the same subject matter as the present action, to wit the validity of the title to the land condemned by PRIDCO and conveyed by it to Sears and by Sears to Sears P.R. for commercial purposes.

Plaintiff urges res judicata does not apply because: (1) The parties defendant in the present action are not the same as the parties in case No. E-65-187. (2) The causes of action in the two cases are not the same. Plaintiff concedes that it was plaintiff in each suit. It points out that the defendants in the prior suit were Sears P.R., The Commonwealth and PRIDCO, while only Sears and Sears P.R. are defendants in the present case.

Sears was named as a...