Porto Rico Tel. Co. v. PUERTO RICO COMMUN. AUTHORITY

• Decision Date: 08 May 1951
• Docket Number: No. 4504.,4504.
• Citation: 189 F.2d 39
• Parties: PORTO RICO TEL. CO. v. PUERTO RICO COMMUNICATIONS AUTHORITY et al.
• Court: U.S. Court of Appeals — First Circuit

189 F.2d 39 (1951)

PORTO RICO TEL. CO. v. PUERTO RICO COMMUNICATIONS AUTHORITY et al.

No. 4504.

United States Court of Appeals First Circuit.

May 8, 1951.

S. Hazard Gillespie, Jr., New York City (Jaime Sifre, Jr., and Gonzalo Sifre, both of San Juan, P. R., on brief), for appellant.

Edgar S. Belaval, Asst. Atty. Gen. (Vicente Geigel Polanco, Atty. Gen. of Puerto Rico, and A. Torres Braschi, Asst. Atty. Gen., on brief), for appellees.

Before MARIS (by special assignment), WOODBURY and HARTIGAN, Circuit Judges.

MARIS, Circuit Judge.

This is an appeal by the plaintiff, Porto Rico Telephone Company, from a judgment of the United States District Court for the District of Puerto Rico dismissing for want of equity its complaint seeking an injunction against the defendants, Puerto Rico Communications Authority, the Governor of Puerto Rico and the Commissioners of the Interior and of Agriculture and Commerce of Puerto Rico.

The complaint asserts, and the defendants by their answer admit, that they propose and are about to condemn and take immediate possession of a portion of the telephone system of the Telephone Company in the island of Puerto Rico. The complaint avers that this action will deprive the Telephone Company of the immediate use of a portion of its property, will dismember its homogeneous telephone system and will destroy the unitary service which it is giving to the public. The complaint further asserts that this prospective action, although purporting to be under the Puerto Rico Communications Authority Act,¹ as amended, and the Eminent Domain Act,² as amended, will in fact not be authorized by those Acts but will be in violation of them and of Section 2 of the Organic Act of Puerto Rico, 48 U.S.C.A. § 737, and that it will be an illegal taking and use of said property which will deprive the Telephone Company thereof without due process of law. The complaint accordingly prays for a preliminary and permanent injunction enjoining the defendants from proceeding to take the portion of the telephone system which they propose to condemn.

A preliminary injunction was issued as prayed for and the case was referred to a special master for consideration and report. After the special master filed his report recommending the entry of a permanent injunction and after the filing of exceptions thereto the district court entered the judgment appealed from which dismissed the complaint on the ground that the court was without equitable jurisdiction to grant the injunction prayed for because the Telephone Company has an adequate remedy at law under the Eminent Domain Act. 89 F.Supp. 922.

Upon this appeal the Telephone Company strongly urges that the threatened condemnation would violate its franchise, the Puerto Rico Communications Authority Act and the Organic Act of Puerto Rico and would be an arbitrary and capricious act not authorized by the Eminent Domain Act. Upon the premise that the prospective condemnation proceeding would for these reasons be illegal and abortive the plaintiff contends that the district court had equitable jurisdiction to restrain that proceeding from being instituted or carried on. It bases this contention upon its assertion that under the Eminent Domain Act the defendants could take immediate possession of the portion of its telephone system in question, thereby dissipating, if not wholly destroying, its system before that action could be declared illegal, and that the plaintiff would be thereby irreparably injured.

It is settled that a federal court may not grant the extraordinary equitable remedy of an injunction if the complaining party has a plain, adequate and complete remedy at law.³ And if the complaining party seeks to enjoin the threatened prosecution of a legal action the same rule applies. An injunction will not be granted if it appears that the party will have an adequate opportunity in the legal action itself to interpose by way of defense and fully to avail himself of the grounds upon which he seeks to enjoin the prosecution of the action.⁴ Moreover the federal courts are particularly cautious not to intervene by injunction, except upon a clear showing of irreparable injury, where, as here, the exercise of sovereign power by a state or territory is involved in the proceeding sought to be enjoined and the grounds urged in support of the injunction are that the statutes relied on to authorize the exercise of the power in question do not, when properly construed, support its exercise.⁵ For the federal courts seek whenever possible to leave such questions of statutory construction to be decided by the courts of the state or territory involved.⁶ And these principles have been specifically applied to condemnation proceedings.⁷ Accordingly the Telephone Company's case must stand or fall upon the proposition which it advances, that the Eminent Domain Act does not afford it an adequate remedy for the defense of its right to retain possession of its property against the alleged illegal condemnation and seizure thereof by the defendants. If in that proceeding the Telephone Company will be afforded an adequate opportunity to have the legality of the condemnation and seizure of its property determined before it is required to part with possession of it, the judgment of the district court which was based upon the conclusion that such a remedy was afforded by the laws of Puerto Rico, must be affirmed.

We turn, therefore, to consider the Eminent Domain Act, as amended. Section 5(a) of the Act is set out in a footnote.⁸ This section which was originally added to the Eminent Domain Act by § 2 of Act. No. 2 of April 1, 1941, Laws of Puerto Rico 1941, p. 286, is almost a literal copy of the Act of Congress of February 26, 1931, 46 Stat. 1421, 40 U.S.C.A. § 258a et seq.⁹ The Supreme Court of Puerto Rico has accordingly held that it is to be similarly construed.¹⁰ Section 5(a) authorizes the expropriating party in a condemnation proceeding to file at the time its petition is filed or at any time before a judgment is rendered a declaration of taking for the acquisition and material delivery of the property sought to be expropriated. As soon as such a declaration is filed and a deposit is made of the amount estimated as compensation and specified therein, title to the property vests in the petitioner. Thereupon "the court shall have power to fix the time within which, and the terms upon which, the natural or artificial person in possession of the property the object of the proceeding shall surrender material possession to the expropriating party."

It will thus be seen that while under Section 5(a) title to the property expropriated may be vested in the expropriating party immediately upon the filing of a petition for condemnation and of a declaration of taking, the possession of the property is not required to be surrendered to the expropriating party except upon order of the court and then only at the time and upon the terms which the court shall fix. In construing the similar provisions of Section 1 of the Federal Act of February 26, 1931, above referred to, this court in Puerto Rico Ry. Light & Power Co. v. United States, 1 Cir., 1942, 131 F.2d 491, 494, footnote 3, said: "But if the United States wishes to get immediate possession it must, as it did here, move for judgment on the declaration of taking, ordering the parties in possession to surrender possession on a designated day. In granting such a motion, the court necessarily has to decide, as it did here, that the taking was duly authorized by law."

The procedure under Section 5(a) of the Eminent Domain Act is identical to that under the Federal Act. If, upon a petition by the Communications Authority to obtain possession of the property sought to be condemned, the Telephone Company should raise the questions of illegality which it has raised in the present suit it would be necessary for the court before which the condemnation proceeding was pending to consider those questions and to decide that they were without merit before it could make an order directing the Telephone Company to surrender to the Communications Authority possession of the portion of its system sought to be condemned.

The Telephone Company points to Section 5(c)¹¹ of the Eminent Domain Act as requiring a contrary conclusion. It is true that the first paragraph of that section provides that in any condemnation proceeding "the plaintiff, upon the filing of the petition, or at any time while the proceeding is pending, without regard to whether or not title has been taken under Section 5(a), may take possession of the property or any part thereof to the extent of the interest to be acquired, and may proceed with such use thereof or such works thereon or therewith as have been authorized by law." But the second paragraph of Section 5(c), provides, inter alia, that "The court shall have power to issue such orders as may be necessary to enforce the right of the plaintiff to the possession." The section thus recognizes that the surrender of possession of the condemned property is to be subject to the orders of the court. And before making such an order enforcing the "right of the plaintiff to the possession" the court obviously must, if the legality of the proceeding is challenged, determine whether there is a lawful right to possession on the part of the party seeking it.

Reading Sections 5(a) and 5(c) together we must, therefore conclude that in any case, if a question of the legality of the condemnation is raised, the court may not direct surrender of possession of the condemned property to the expropriating party until it has determined that the condemnation proceedings are legal and valid. It necessarily follows that before the Telephone Company is compelled to surrender possession of the portion of its system sought to be expropriated it will have a full opportunity to assert and secure an adjudication of its defenses to the proposed condemnation in the...