People of Puerto Rico v. Shell Co

CourtUnited States Supreme Court
Citation58 S.Ct. 167,82 L.Ed. 235,302 U.S. 253
Docket NumberNo. 18,18
PartiesPEOPLE OF PUERTO RICO v. SHELL CO. (P.R.), Limited, et al
Decision Date06 December 1937

302 U.S. 253
58 S.Ct. 167
82 L.Ed. 235


SHELL CO. (P.R.), Limited, et al.

No. 18.
Argued Nov. 9, 1937.
Decided Dec. 6, 1937.

Page 254

Mr. Wm. Cattron Rigby, of Washington, D.C., for People of puerto rico.

[Argument of Counsel from page 254 intentionally omitted]

Page 255

Messrs. Wm. D. Whitney, of New York City, James R. Beverley, of San Juan, P.R., and Gabriel I. Lewis, of New York City, for respondents.

Mr. Justice SUTHERLAND delivered the opinion of the Court.

This is a criminal proceeding brought by petitioner against the respondents in the insular district court of San Juan, Puerto Rico. An information filed by the district attorney charged respondents with entering into a conspiracy in restraint of trade in violation of the local anti-trust act, passed by the Legislature of Puerto Rico March 14, 1907. Demurrers to the information were sustained by the district court on the ground that the Sherman Anti-Trust Act of 1890 (15 U.S.C.A. §§ 1—7, 15 note), supplemented by the Clayton Act of 1914 (15 U.S.C.A. §§ 12 27), covered the entire field embraced by the local anti-trust act, and the latter, therefore, was void. The Supreme 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 of the local act by the insular legislature.

The pertinent provisions of the Sherman Act and the local act are set forth in the margin.1 Section 3 of the

Page 256

Sherman Act and section 1 of the local act, so far as the question here involved is concerned, are substantially identical. Section 4 of the Sherman Act (15 U.S.C.A. § 4) confers jurisdiction

Page 257

in respect of violations of the act upon the several district courts of the United States. Section 3 of the local act confers jurisdiction upon the district courts of Puerto Rico in respect of violations of that act.

First. Section 3 of the Sherman Act extends to 'any territory of the United States.' But it is urged that Puerto Rico cannot be brought within the intent of this phrase, and, therefore, the section does not apply to that dependency. The point is not well made. When the Sherman Act was passed (1890), we had no insular dependencies; and, necessarily, the application of section 3 did not extend beyond our continental domain; and, undoubtedly, it was this domain which was in the immediate contemplation of Congress. Certainly, Congress at that time did not have Puerto Rico in mind. But that is not enough. It is necessary to go further and to say that, if the acquisition of that insular dependency had been foreseen, Congress would have so varied its comprehensive language as to exclude it from the operation of the act. Dartmouth College v. Woodward, 4 Wheat. 518, 644, 4 L.Ed. 629; Ozawa v. United States, 260 U.S. 178, 195, 196, 43 S.Ct. 65, 68, 67 L.Ed. 199; United States v. Bhagat Singh Thind, 261 U.S. 204, 207, 208, 43 S.Ct. 338, 339, 67 L.Ed. 616. The only question, therefore, is whether the word 'territory,' as used in section 3 of the Sherman Act, properly can be applied to a dependency now bearing the relation to the United States which is borne by Puerto Rico.

In Balzac v. Puerto Rico, 258 U.S. 298, 304, 305, 42 S.Ct. 343, 345, 66 L.Ed. 627, it was held that, although the Sixth Amendment of the Constitution with respect to the right of trial by jury applied to the territories of the United States, it did not apply to territory belonging to the United States which had not been incorporated into the Union; and that neither the Philippines nor Porto Rico was territory which had been so incorporated or had become a part of the United States, as distinguished from merely belonging to it. But it is evident, from a consideration of the pertinent acts

Page 258

of Congress and the decisions of this court with respect to these acts, that whether Puerto Rico comes within a given congressional act applicable in terms to a 'territory' depends upon the character and aim of the act. Words generally have different shades of meaning, and are to be construed if reasonably possible to effectuate the intent of the lawmakers; and this meaning in particular instances is to be arrived at not only by a consideration of the words themselves, but by considering, as well, the context, the purposes of the law, and the circumstances under which the words were employed. Atlantic Cleaners & Dyers v. United States, 286 U.S. 427, 433, 52 S.Ct. 607, 608, 76 L.Ed. 1204; Helvering v. Stockholms &c. Bank, 293 U.S. 84, 86, 87, 88, 55 S.Ct. 50, 51, 52, 79 L.Ed. 211. Thus, although Puerto Rico is not a territory within the reach of the Sixth and Seventh Amendments and may not be a 'territory' within the meaning of the word as used in some statutes, we held in Kopel v. Bingham, 211 U.S. 468, 474, 475, 476, 29 S.Ct. 190, 192, 53 L.Ed. 286, that Puerto Rico was a 'territory' within the meaning of section 5278 of the Revised Statutes (18 U.S.C.A. § 662), which provides for the demand and surrender of fugitive criminals by governors of territories as well as of states. The court said that it was impossible to hold that Puerto Rico was not intended to have power to reclaim fugitives from its justice, or that it was intended that it should be an asylum for fugitives from the United States. The word 'territory' as used in that statute was defined as meaning 'a portion of the country not included within the limits of any state, and not yet admitted as a state into the Union, but organized under the laws of Congress with a separate legislature, under a territorial governor and other officers appointed by the President and Senate of the United States.' And the court concluded: 'It may be justly asserted that Porto Rico is a completely organized territory, although not a territory incorporated into the United States, and that there is no reason why Porto Rico should not be held to be such a territory

Page 259

as is comprised in § 5278.' See People of Porto Rico v. Rosaly y Castillo, 227 U.S. 270, 274, 33 S.Ct. 352, 57 L.Ed. 507. Compare Talbott v. Silver Bow County, 139 U.S. 438, 444, 445, 11 S.Ct. 594, 35 L.Ed. 210.

With equal force, it may be said here that there is no reason why Puerto Rico should not be held to be a 'territory' within the meaning of section 3 of the Sherman Act. We pointed out in the Atlantic Cleaners & Dyers Case, supra, 286 U.S. 427, at page 435, 52 S.Ct. 607, 609, 76 L.Ed. 1204, that in the light of the applicable history and circumstances it was apparent that Congress meant to deal comprehensively with the subject of contracts, combinations, and conspiracies in restraint of trade, 'and to that end to exercise all the power it possessed'; that, while Congress in passing section 1 (15 U.S.C.A. § 1) exercised only the power conferred by the commerce clause, in passing section 3 (15 U.S.C.A. § 3) it exercised a general power, unlimited by that clause. We therefore concluded that the word 'trade' as used in section 3 should be given a more extended meaning than the same word as used in section 1.

If, as we there determined, Congress intended by the Sherman Act to exert all the power it possessed in respect of the subject matter—trade and commerce—it is equally reasonable to conclude that Congress intended to include all territories to which its powers might extend. The same reason which requires the utmost liberality of construction in respect of the word 'trade' also requires the same degree of liberality of construction in respect of the word 'territory'; and we hold, accordingly, that the word 'territory' was used in its most comprehensive sense, as embracing all organized territories, whether incorporated into the United States or not, including Puerto Rico.

Second. The court below held that, although section 1 of the local act contained some words not to be found in section 3 of the Sherman Act, the pertinent provisions were in substance the same; that the act charged in the information as a crime under the local statute was the

Page 260

same as that denounced as a crime in the Sherman Act; and that in each instance the offense was a crime against the sovereignty of the United States. With that view we agree. But that court concluded that the act of Congress pre-empted the ground occupied by the local act and superseded it; and consequently the local district court was without jurisdiction of the offense. With that conclusion we are unable to agree.

1. Section 14 of the Foraker Act, passed April 12, 1900, c. 191, 31 Stat. 77, 80 (48 U.S.C.A. § 734 and note), provided that the statutory laws of the United States, not locally inapplicable, should have the same force and effect in Puerto Rico as in the United States, with certain exceptions not material here. Section 27 (page 82) provided: 'That all local legislative powers hereby granted shall be vested in a legislative assembly.' And by section 32 (pages 83, 84) it was provided that the legislative authority 'shall extend to all matters of a legislative character not locally inapplicable.' These various provisions are continued in force by sections 9, 25 and 37 of the Organic Act of March 2, 1917, c. 145, 39 Stat. 951 (48 U.S.C.A. §§ 734, 811, 774, 821). These provisions do not differ in substance from the various provisions relating to the powers of the organized and incorporated continental territories of the United States, in respect of which this court said in Clinton v. Englebrecht, 13 Wall. 434, 441, 20 L.Ed. 659, that the theory upon which these territories have been organized 'has ever been that of leaving to the inhabitants all the powers of self-government consistent with the supremacy and supervision of National authority, and with certain fundamental principles established by Congress'; and in Hornbuckle v. Toombs, 18...

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