Rubert Hermanos, Inc. v. People of Puerto Rico, No. 3417.

CourtUnited States Courts of Appeals. United States Court of Appeals (1st Circuit)
Writing for the CourtWILSON, Circuit , and PETERS and MAHONEY
Citation106 F.2d 754
Docket NumberNo. 3417.
Decision Date27 September 1939
PartiesRUBERT HERMANOS, Inc., v. PEOPLE OF PUERTO RICO.

106 F.2d 754 (1939)

RUBERT HERMANOS, Inc.,
v.
PEOPLE OF PUERTO RICO.

No. 3417.

Circuit Court of Appeals, First Circuit.

September 27, 1939.


106 F.2d 755

Henri Brown, of San Juan, P. R. (Jaime Sifre, Jr., of San Juan, P. R., on the brief), for appellant.

William Cattron Rigby, of Washington, D. C., and Miguel Guerra-Mondragon, of San Juan, P. R. (B. Fernandez Garcia, Atty. Gen. P. R., Rafael Rivera Zayas and Paul Defendini, both of San Juan, P. R., and Nathan R. Margold, of Washington, D. C., on the brief), for the People of Puerto Rico.

Before WILSON, Circuit Judge, and PETERS and MAHONEY, District Judges.

WILSON, Circuit Judge.

This is an appeal from a judgment of the Supreme Court of Puerto Rico in a complaint or information in the nature of a quo warranto proceeding against the appellant, Rubert Hermanos, Inc., brought in 1936 by the People of Puerto Rico through its Attorney General, in which the petitioners seek to declare a forfeiture of the franchise of the appellant corporation and dissolve it, and to impose a statutory fine.

The reasons for the forfeiture assigned in the complaint are a violation of Sec. 3 of the Joint Resolution No. 23 of Congress approved May 1, 1900, 31 Stat. 716, 48 U.S. C.A. § 752; and of Section 39 of the Organic Law of Puerto Rico enacted March 2, 1917, known as the Jones Act, 48 U.S.C. A. § 752; and a violation of the appellant's Articles of Association, together with an allegation that the defendant has violated the public policy of the Island of Puerto Rico as established by the acts above referred to and by Act No. 33 and Act No. 47 of the Puerto Rican legislature both enacted in 1935, all of which expressly limit the holding of land by a corporation organized under the corporation laws of Puerto Rico and engaged in agriculture to not exceeding 500 acres.

A motion to strike portions of the original complaint was allowed, but a motion to strike certain statements in the amended complaint was disallowed; and a demurrer to the amended information was filed by the respondent and overruled. The respondent then filed an answer in which was admitted certain of the allegations of the complaint, viz.: that it is a corporation organized under the laws of Puerto Rico; that it is engaged in the cultivation of sugar cane and the manufacture of sugar on the Island; that it owns over 12,000 acres of land devoted to that business; but it denies that the ownership of so large an acreage of land in Puerto Rico is contrary to the public policy of the Island as established by the Acts of Congress and the statutes of the Puerto Rican legislature above referred to; or that it conflicts with the economic welfare of the People of the Island; that the People of Puerto Rico have recognized this large ownership by the appellant by collecting taxes thereon with full knowledge of its extent ever since the organization of the corporation in 1927; and not until the year 1935 has any question been raised as to the illegality of the corporation's real estate holdings, but it denies jurisdiction of the Supreme Court of Puerto Rico under Acts of the Puerto Rican legislature hereinafter referred to, since it contends that Acts No. 33 and No. 47 enacted by the Puerto Rican legislature in 1935 vesting jurisdiction of these proceedings in the Supreme Court of Puerto Rico are each null and void.

At the close of the plaintiff's case the respondent corporation offered no evidence in support of the allegations of its answer, but moved to dismiss the information substantially on the same grounds on which its demurrer and answer were based.

The insular Supreme Court on the overruling of the defendant's demurrer and denial of its motion to dismiss, entered

106 F.2d 756
judgment in favor of the People of Puerto Rico, with the following pronouncements or reasons for its judgment

"* * * that the defendant corporation Rubert Hermanos, Inc., is engaged in agriculture and is guilty of owning and controlling 12,188 acres of land in violation of the provisions of Joint Resolution No. 23 of the Congress of the United States (31 Statutes at large 716, U.S.C.A., Title 48, sec. 752), of Section 39 of the Organic Law of Puerto Rico and of its own articles of incorporation, by all of which provisions the said defendant corporation is expressly limited and restricted to the ownership and control of lands not in excess of 500 acres."

The insular Supreme Court is a statutory court. Its jurisdiction in a complaint that acts of a corporation are merely contrary to the public policy of the Island is not a sufficient allegation alone to warrant a forfeiture of the franchise of a corporation. If made a ground of jurisdiction of the insular Supreme Court in quo warranto proceedings, the complaint must be based specifically on the statutes which declare the public policy.

The Acts of Congress and of the Puerto Rican legislature applicable to these proceedings are as follows:

Sec. 3 of the Joint Resolution of Congress, No. 23, approved May 1, 1900, 48 U.S.C.A. § 752, provided that:

"No corporation shall be authorized to conduct the business of buying and selling real estate or be permitted to hold or own real estate except such as may be reasonably necessary to enable it to carry out the purposes for which it was created, and every corporation hereafter authorized to engage in agriculture shall by its charter be restricted to the ownership and control of not to exceed five hundred acres of land."

Sections 34 and 39 of the Organic Act of 1917 provide:

"Sec. 34. That * * * all laws enacted by the Legislature of Porto Rico shall be reported to the Congress of the United States, as provided in section twenty-three 842 of this Act title, which hereby reserves the power and authority to annul the same. * * *"

"No bill, except general appropriation bills, shall be passed containing more than one subject, which shall be clearly expressed in its title; but if any subject shall be embraced in any act which shall not be expressed in the title, such act shall be void only as to so much thereof as shall not be so expressed."

"No law shall be revived, or amended, or the provisions thereof extended or conferred by reference to its title only, but so much thereof as is revived, amended, extended, or conferred shall be reenacted and published at length." 48 U.S.C.A. §§ 826, 832, 835.

"Sec. 39. 2d par. That nothing in this Act contained shall be so construed as to abrogate or in any manner impair or affect the provision contained in section three of the joint resolution approved May first, nineteen hundred, with respect to the buying, selling, or holding of real estate. That the Governor of Porto Rico shall cause to have made and submitted to Congress at the session beginning the first Monday in December, nineteen hundred and seventeen, a report of all the real estate used for the purposes of agriculture and held either directly or indirectly by corporations, partnerships, or individuals in holdings in excess of five hundred acres." 39 Stat. 964, 48 U.S.C.A. § 752 note.

Act No. 30 of March 9, 1911, Sec. 3, Par. 4, referring to the powers of corporations organized under this Act provided:

"* * * That the power of any agricultural corporation (The Act of 1902 reads `any corporation', omitting the word `agricultural', Rev.Stats. & Codes of 1902, supra, Civil Code, Sec. 32-(4), p. 759) organized under this act to hold real estate shall be subject to the prohibition contained in section three of the joint resolution of the Congress of the United States, of May first, nineteen hundred."

Prior to 1935 exclusive jurisdiction of quo warranto proceedings was vested in the insular District Courts of Puerto Rico. It was not until the passage of Act No. 33 of July 22, 1935 (Laws of Puerto Rico, Special Session, 1935, p. 418), and Act No. 47 of August 7, 1935 (Laws of Puerto Rico, Special Session, 1935, p. 539), that the legislature of Puerto Rico enacted several statutes, the common purpose of which was to provide the necessary remedial measures for curbing existing land monopolies and preventing further violations of the provisions of Sec. 3 of the Joint Resolution No. 23 of Congress and Sec. 39 of the Organic Act approved March 2, 1917.

Act No. 33 of the Puerto Rican legislature approved July 22, 1935, conferred on the Supreme Court of Puerto Rico exclusive original jurisdiction to take cognizance

106 F.2d 757
of all quo warranto proceedings for violations of the provisions of Section 752, Title 48, U.S.C.A., and was entitled: "An Act To Confer Upon The Supreme Court Of Puerto Rico Exclusive Original Jurisdiction In Quo Warranto Proceedings That The Government Of Puerto Rico May Institute For Violations Of The Provisions Of Section 752, Title 48, United States Code 48 U.S. C.A. § 752, And For Other Purposes", and provides

"Section 1. There is hereby conferred upon the Supreme Court of Puerto Rico exclusive original jurisdiction to take cognizance of all Quo Warranto proceedings that the Government of Puerto Rico may hereafter institute for violations of the provisions of Section 752, Title 28, United States Code, and for that purpose it is provided that the violation of said provisions shall constitute sufficient cause to institute a proceeding of the nature of Quo Warranto."

This Act is clearly null and void, see Gallardo et al. v. Porto Rico Railway, Light & Power Co., 1 Cir., 18 F.2d 918; People of Puerto Rico v. Torres, 28 P.R.R. 783.

Act No. 47 of the Puerto Rican legislature approved August 7, 1935, provides:

"Section 1. Section 2 of an Act (of the Puerto Rican legislature) entitled `An Act establishing Quo Warranto proceedings', approved March 1, 1902, is hereby amended as follows:

"`Section 2. In case any person should usurp, or unlawfully hold or execute any public office * * * or any corporation does or omits any act which amounts to a surrender or forfeiture of its rights and privileges as a corporation, or exercises...

To continue reading

Request your trial
3 practice notes
  • Rubert Hermanos, Inc. v. People of Puerto Rico, No. 3631.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • March 31, 1941
    ...up of the affairs of said corporation." This judgment was reversed by us in Rubert Hermanos, Inc., v. People of Puerto Rico, 1 Cir., 106 F.2d 754. In turn, we were reversed on certiorari, Puerto Rico v. Rubert Hermanos, Inc., 309 U.S. 543, 60 S.Ct. 699, 84 L.Ed. 916, and the case was r......
  • People of Puerto Rico v. Rubert Hermanos, No. 582
    • United States
    • United States Supreme Court
    • March 25, 1940
    ...a writ of certiorari, 309 U.S. 642, 60 S.Ct. 467, 84 L.Ed. —-, to review a decision of the Circuit Court of Appeals for the First Circuit. 106 F.2d 754. That court had reversed the judgment of the Supreme Court of Puerto Rico, 53 P.R.R. 779 (Spanish edition) sustaining a proceeding in quo w......
  • People of Puerto Rico v. Rubert Hermanos 8212 1942, No. 96
    • United States
    • United States Supreme Court
    • March 16, 1942
    ...Court of Puerto Rico on the ground that Acts Nos. 33 and 47 exceeded the authority of the Legislative Assembly under the Organic Act. 106 F.2d 754. We granted certiorari, 309 U.S. 642, 60 S.Ct. 467, 84 L.Ed. 996, and on March 25, 1940 reversed the judgment of the Circuit Court of Appeals an......
3 cases
  • Rubert Hermanos, Inc. v. People of Puerto Rico, No. 3631.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • March 31, 1941
    ...up of the affairs of said corporation." This judgment was reversed by us in Rubert Hermanos, Inc., v. People of Puerto Rico, 1 Cir., 106 F.2d 754. In turn, we were reversed on certiorari, Puerto Rico v. Rubert Hermanos, Inc., 309 U.S. 543, 60 S.Ct. 699, 84 L.Ed. 916, and the case was r......
  • People of Puerto Rico v. Rubert Hermanos, No. 582
    • United States
    • United States Supreme Court
    • March 25, 1940
    ...a writ of certiorari, 309 U.S. 642, 60 S.Ct. 467, 84 L.Ed. —-, to review a decision of the Circuit Court of Appeals for the First Circuit. 106 F.2d 754. That court had reversed the judgment of the Supreme Court of Puerto Rico, 53 P.R.R. 779 (Spanish edition) sustaining a proceeding in quo w......
  • People of Puerto Rico v. Rubert Hermanos 8212 1942, No. 96
    • United States
    • United States Supreme Court
    • March 16, 1942
    ...Court of Puerto Rico on the ground that Acts Nos. 33 and 47 exceeded the authority of the Legislative Assembly under the Organic Act. 106 F.2d 754. We granted certiorari, 309 U.S. 642, 60 S.Ct. 467, 84 L.Ed. 996, and on March 25, 1940 reversed the judgment of the Circuit Court of Appeals an......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT