Porto Rico Ry., Light & Power Co. v. Colom
| Citation | 106 F.2d 345 |
| Decision Date | 04 December 1939 |
| Docket Number | No. 3404.,3404. |
| Parties | PORTO RICO RY., LIGHT & POWER CO. v. COLOM, Com'r of Interior of Puerto Rico, et al. |
| Court | U.S. Court of Appeals — First Circuit |
COPYRIGHT MATERIAL OMITTED
Carroll G. Walter, of New York City, and Henri Brown, of San Juan, P. R., for appellant.
William Cattron Rigby and Robert E. Sher, both of Washington, D. C., and A. Cecil Snyder, of San Juan, P. R. (Nathan R. Margold, of Washington, D. C., and B. Fernandez Garcia, of San Juan, P. R., on the brief), for appellees.
Before WILSON, Circuit Judge, and PETERS and MAHONEY, District Judges.
Writ of Certiorari Denied December 4, 1939. See 60 S.Ct. 263, 84 L.Ed. ___.
This is an appeal from a decree of the District Court of the United States for Puerto Rico dismissing a bill of complaint brought by the Porto Rico Railway, Light and Power Company against certain officials of the Insular Government of Puerto Rico, and certain officials of the federal government. The purpose in bringing the bill of complaint was to enjoin the insular government from the construction of certain proposed or contemplated plants and lines for the distribution of electric power in the franchise territory of the appellant, and to enjoin the use of federal funds in such construction.
The appellant is a Puerto Rican corporation, was organized on March 15, 1911, and under its articles of incorporation is authorized to conduct business as a public utility. The corporation is also empowered by its articles to take assignments of and operate under franchises held by certain other companies. After incorporation, the appellant acquired the properties of the Porto Rico Power and Light Company, and the San Juan Light and Transit Company. Included in the property acquired from said two companies was a franchise granted to the Porto Rico Power and Light Company by the Executive Council of Puerto Rico in 1906; a franchise granted to the Porto Rico Power and Light Company by the Executive Council of Puerto Rico in 1909; and a franchise granted to the San Juan Light and Transit Company in 1909. In addition to the three franchises acquired by assignment, the appellant has two other franchises, namely one granted to it by the Executive Council of Puerto Rico in 1911, and one granted to it by the Public Service Commission of Puerto Rico in 1927.
In the record in this case, the franchise granted to the Porto Rico Power and Light Company in 1906 is designated as the 1906 franchise; the franchise granted to the Porto Rico Power and Light Company in 1909 is designated as the 1909 franchise; the franchise granted to the San Juan Light and Transit Company in 1909 is designated as the San Juan franchise; the franchise granted to the appellant in 1911 is designated as the 1911 franchise; and the franchise granted to the appellant in 1927 is designated as the Rio Blanco franchise. Under the 1906 franchise the grantee, and its successors and assigns, were granted the right to build a dam across La Plata River at Comerio Falls and to do all things necessary and proper for developing the water power of La Plata River, and generating and distributing electric energy for profit in the City of San Juan and in certain other municipalities, including Manati and Santa Isabel and "all municipalities to the east thereof". Under the 1906 franchise there was reserved to Puerto Rico the right to take 260 cubic feet of water per minute from La Plata River and the grantee agreed to furnish current at reduced rates, and also undertook to keep in reserve a steam plant, with capacity sufficient at all times to properly light the streets of the municipality of San Juan.
The 1909 franchise amends the 1906 franchise by authorizing the building of additional dams and power stations on La Plata River, by excluding from the franchise territory certain areas granted by the 1906 franchise, and by adding a section containing a provision similar to one contained in the "Carite Agreement", so called, and which will be dealt with more fully later herein.
The San Juan franchise gives the right to maintain and operate an electric power plant for the furnishing of electric power, light and heat to the public for profit, and to extend poles, wires, and transmission lines for that purpose.
The 1911 franchise approves the acquisition by assignment of the 1906, 1909 and San Juan franchises, and reenacts and regrants the same to the appellant. Under the terms of the 1911 franchise the appellant agreed to furnish free of charge electric current to the executive mansion of Puerto Rico.
Under the Rio Blanco franchise, the appellant acquired the right to construct a plant at Rio Blanco Falls on the Rio Blanco River, and to generate and distribute electricity. This franchise also required the appellant to connect the new plant with the plants operated under the earlier franchises so that they would be interconnected. At this time the appellant released to Puerto Rico an additional amount of water from La Plata River, agreed to reduce its rates, and to relieve Puerto Rico of the obligation to deliver to appellant certain power by the Carite Agreement. The appellant also agreed to pay to Puerto Rico a royalty on power generated at the plant authorized under the Rio Blanco franchise.
Under the 1906 franchise the appellant's predecessor built a dam across La Plata River at Comerio Falls, a canal, a pipe line and power station. Under the 1909 franchise, the appellant built another dam and canal, pipe line and power station. These plants are now known as Comerio No. 1 and Comerio No. 2. These two plants are also interconnected and a transmission line runs from them to San Juan. A steam plant, as required by the 1906 franchise, has been and is maintained, with sufficient capacity to light the streets of San Juan, and the steam plant is electrically interconnected with the Comerio plants. In accordance with the Rio Blanco franchise, the appellant has constructed below a site known as Rio Blanco Falls, dams, pipe-lines, pen-stock and power house, and a transmission line to San Juan. The Rio Blanco plant is electrically interconnected with other plants operated by the appellant, with the result that all the plants of the appellant constitute one system. The appellant also has 136 miles of transmission lines and 500 miles of distribution lines which extend into thirty-five different municipalities, and service is rendered to the municipalities and the inhabitants thereof. Included in the places served are San Juan, Rio Piedras and Guaynabo, and in these places the appellant serves both the municipalities themselves, and the inhabitants thereof. In these places the appellant supplies lighting for streets, and for public buildings, and power for the water works. Appellant also serves numerous buildings and dependencies of the insular government located in San Juan, Rio Piedras and Guaynabo. Large sums of money have been invested by the appellant and its predecessor in the San Juan steam plant, and in equipment for the supplying to the water works, street lights and electric service to the insular and municipal dependencies in San Juan, Rio Piedras and Guaynabo.
About two years after the granting of the 1906 franchise, it became evident that the insular government intended to engage in irrigation projects, and in the production and distribution of electric power. By legislation approved September 18, 1908, provision was made for the construction by the insular government of an irrigation system for the territory situated approximately between the River Patillas on the east and the River Portugues on the west. To effect this end, the insular government proposed to divert some of the waters of La Plata River through a tunnel in the mountains into a water shed on the south side of the island. Controversy arose as to the right of the insular government to divert water as proposed, in view of the existence of the 1906 franchise held by the appellant's predecessor, and the right to make such diversion was challenged by the appellant's predecessor. For the purpose of adjusting this difference, an agreement was entered into on May 28, 1909, between the appellant's predecessor and the People of Puerto Rico, said agreement being dated nine days after the granting of the 1909 franchise. This agreement, which has become known as the "Carite Agreement", recites that the People of Puerto Rico proposes to create electrical energy by the use of water to be taken from the headwaters of the La Plata River, and to supply light, heat and power to places within a reasonable distance from the point known as "Carite", and whereas differences have arisen between the parties concerning the right of the People of Puerto Rico to use the waters of said La Plata River for the purposes contemplated, and that it is to the advantage of all that the differences be settled without litigation, the agreement is entered into. Under the terms of the agreement it is provided that the People of Puerto Rico are permitted to take all the waters of the tributary of La Plata River flowing through the ward of Carite at and above the site of a proposed dam, and to divert the same through a tunnel in the mountain divide; that Porto Rico Power and Light Company renounces its rights under the 1906 franchise to supply light, heat and power to the inhabitants of certain towns and territory therein set out; that the People of Puerto Rico will exercise its right to utilize the 260 cubic feet of water per minute from the Carite branch of La Plata River above the dam to be constructed; that to compensate the Porto Rico Power and Light Company for loss resulting from taking more than 260 cubic feet of water per minute, the People of Puerto Rico agreed to deliver to Porto Rico Power and Light Company a specified amount of electrical energy and the right of the Porto Rico Power and Light Company to such...
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