People of Puerto Rico v. Shell Co.
| Decision Date | 20 November 1936 |
| Docket Number | No. 3168.,3168. |
| Citation | 86 F.2d 577 |
| Parties | PEOPLE OF PUERTO RICO v. SHELL CO. (P. R.), LIMITED, et al. |
| Court | U.S. Court of Appeals — First Circuit |
William C. Rigby, of Washington, D. C. (B. Fernandez Garcia, Atty. Gen., of Puerto Rico, and Nathan R. Margold, of Washington, D. C., on the brief), for the People.
William D. Whitney, of New York City (Jaime Sifre, Jr., of San Juan, P. R., and Hugh A. Fulton and Cravath, de Gersdorff, Swaine & Wood, all of New York City, on the brief), for appellee Shell Co. (P. R.) Limited.
James R. Beverley, of San Juan, P. R. (Jose Lopez Baralt and Ryder Patten, both of San Juan, P. R., on the brief), for appellees Texas Co. (P. R.), Inc., and others.
Oscar B. Frazer, of New York City (Hartzell, Kelley & Hartzell, of San Juan, P. R., on the brief), for appellees Pyramid Products, Inc., and Ernest Yates, and others.
Before BINGHAM, WILSON, and MORTON, Circuit Judges.
This is an appeal from a judgment of the Supreme Court of Puerto Rico of December 20, 1935, dismissing an appeal from a judgment of the District Court of San Juan, where the cause was dismissed for want of jurisdiction.
It appears that on May 28, 1934, the prosecuting attorney for the District of San Juan filed in the court for that District an information against certain named corporations engaged in the distribution and sale of gasoline and other by-products of petroleum in the Municipality of San Juan; against certain individuals, as officers, managers, agents, and employees of said corporations; and against certain other individuals engaged in the distribution and sale of gasoline at retail in connection with the business of the corporations and their several agents, managers, and employees.
The information charged that the defendants had entered into a conspiracy to restrain competition and to fix prices for the sale and distribution of gasoline at wholesale and at retail in the Municipality of San Juan.
The defendants demurred to the information on the ground, among others, that the court was without jurisdiction to entertain the prosecution because the Act of March 14, 1907, on which the prosecution was based, was null and void and not in force; that the Legislature of Puerto Rico was without authority to enact the legislation as Congress had sole jurisdiction over the matter to which it related and had legislated thereon. In the District Court the demurrer was sustained and the information dismissed on the ground that the Puerto Rican Act of March 14, 1907, was without legal effect, as the Sherman Act (15 U.S.C.A. §§ 1-7, 15 note), as supplemented and added to in 1914 by the Clayton Act (15 U.S.C.A. §§ 12-27) covered the whole ground of the local statute. And the Supreme Court, following its earlier decision in United Theatres, Inc., v. District Court of San Juan, 47 P.R.R. 725, dismissed the appeal, thereby affirming the decision of the court below.
The Act of Puerto Rico of March 14, 1907,1 is substantially the same as the Act of Congress known as the Sherman Anti-Trust Act of July 2, 1890, 26 Stat. 209, c. 647 (15 U.S.C.A. §§ 1-7, 15 note). The opening words of the act of 1907 — "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade, commerce," — are identical with the opening words of section 3 of the Sherman Act (15 U.S.C.A. § 3). After the word "commerce" in this sentence of section 1 of the Act of 1907, the Legislature of Puerto Rico inserted the words "business transactions, and lawful and free competition in a town, or among the several towns of Porto Rico," which words are not found in the Sherman Act; although in section 3 of the latter act the word "commerce" is followed by the phrase "in any Territory of the United States or of in the District of Columbia. * * *"
The words "business transactions, and lawful and free competition" used in section 1 of the Act of 1907, do not enlarge the meaning of the word "trade" found in section 3 of the Sherman Act (15 U.S.C.A. § 3), for the Supreme Court, in Atlantic Cleaners & Dyers, Inc., v. United States, 286 U.S. 427, 436, 52 S.Ct. 607, 610, 76 L. Ed. 1204, held that the word "trade" is not there "used in its most restrictive sense, and as equivalent to traffic in goods, or buying and selling in commerce or exchange," but in a broader sense "as equivalent to occupation, employment, or business, whether manual or mercantile." This being so, if the Sherman Act of 1890 had been extended to and was in force in the organized territories of the United States at the time this action was brought; or if the Sherman Act, as extended and added to by the Clayton Act of October 15, 1914, was so extended and in force, then the provisions of section 3 of the Sherman Act, as respects Puerto Rico, cover the entire ground and relate to the same subject-matter as is embraced in section 1 of the Puerto Rican Act of March 14, 1907.
It is conceded by both parties to this controversy that the provisions of the Sherman Act are applicable to Puerto Rico, an organized territory of the United States, though not incorporated in it, and therefore in force there; that its provisions were so extended by Congress in the enactment of section 14 of the Organic Act of April 12, 1900, 31 Stat. 80, c. 191 (48 U.S.C.A. § 734 and note) re-enacted word for word in section 9 of the Organic Act of March 2, 1917, 39 Stat. 951, 954, c. 145 (48 U.S.C.A. § 734). This section reads as follows:
The provisions of the Sherman Act, as they have existed since February 12, 1913, are found in sections 1 to 11, inclusive, of chapter 1, title 15 U.S.C. and the provisions of that act, as extended and enlarged by the Clayton Act of October 15, 1914 (38 Stat. 730, c. 323) are found in sections 12 to 27 of chapter 1, title 15 U.S.C. (15 U.S.C.A. §§ 12-27). In section 1 of the Clayton Act, which is section 12, c. 1, title 15 U.S.C. (15 U.S.C.A. § 12), the word "commerce" as there used is defined as "trade or commerce among the several States and with foreign nations, or between the District of Columbia or any Territory of the United States and any State, Territory, or foreign nation, or between any insular possessions or other places under the jurisdiction of the United States, or between any such possession or place and any State or Territory of the United States or the District of Columbia or any foreign nation, or within the District of Columbia or any Territory or any insular possession or other place under the jurisdiction of the United States: Provided, That nothing in this Act the aforesaid sections contained shall apply to the Philippine Islands." (Italics supplied.)
In view of the foregoing, we think that Congress understood, at the time of its enactment of the Clayton Act, that the Sherman Act had previously been extended to and was in force in Puerto Rico and that it intended the Clayton Act should be extended and in force there also. It thus appears that the Sherman Act was in force in Puerto Rico in 1907 when the local act, upon which this prosecution is based, was passed, and manifestly so on and after October 15, 1914, and when this prosecution was begun on May 28, 1934.
Having reached this conclusion, the question remaining to be considered is whether the Act of March 14, 1907, was superseded or invalidated by the Sherman Act of 1890.
The contention of the appellant is that the Sherman Act did not supersede or invalidate the local act of 1907; that the latter act was not in conflict with the former, either as to the subject-matter involved in the two acts defining the crime, or as to the jurisdiction of the respective courts over the same.
It is to be noted that section 1 of the local act of 1907 makes the same act or acts criminal in Puerto Rico that section 3 of the Sherman Act (15 U.S.C.A. § 3), also in force in Puerto Rico, likewise makes criminal there, and that jurisdiction of the offenses denounced in the local act is conferred upon the island District Courts, while jurisdiction of offenses denounced by the Sherman Act is conferred on the federal District Court for the island. In this situation it can hardly be said that these provisions of the act of 1907 are merely supplementary to the provisions of the Sherman Act and do not cover the same ground and conflict with its provisions.
As these provisions of the two acts, both of which relate to Puerto Rico, cover the same ground and are necessarily in conflict with one another, does the act of Congress supersede or invalidate the local act?
The Supreme Court of Puerto Rico had previously considered this question in United Theatres, Inc., v. District Court of San Juan, 47 P.R.R. 725. It based its ruling in that case largely upon the decision of the Supreme Court of the United States in El Paso & N. E. R. Co. v. Gutierrez, 215 U.S. 87, 30 S.Ct. 21, 54 L.Ed. 106. That case arose under the Employers' Liability Act of June 11, 1906, 34 Stat. 232, the court having previously held that the portion of the act relating to interstate commerce was unconstitutional. Two questions were involved: (1) The constitutionality of the act as applied to trade and commerce in the territories of the United States; and (2) if constitutional as applied to trade and commerce in the territories, whether it was the exclusive and paramount law, the enforcement of which the territorial Legislature of New Mexico could not limit or destroy by the enactment of a law making it a condition precedent to the injured employee's right to maintain an action under it, that, within 90 days after the accident and 30 days before the commencement of a suit, he should serve upon the defendant an affidavit covering certain particulars as to the...
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People of Puerto Rico v. Shell Co
...Court of Puerto Rico accepted that view and dismissed the appeal; and its judgment was affirmed on appeal by the court below. (C.C.A.) 86 F.2d 577. The single question which we have to decide is whether the existence of section 3 of the Sherman Act (15 U.S.C.A. § 3) precluded the adoption o......