Sancho v. Texas Co, No. 132

CourtUnited States Supreme Court
Writing for the CourtDOUGLAS
Citation84 L.Ed. 401,308 U.S. 463,60 S.Ct. 349
PartiesSANCHO, Treasurer, v. TEXAS CO. (P.R.), Inc
Decision Date02 January 1940
Docket NumberNo. 132

308 U.S. 463
60 S.Ct. 349
84 L.Ed. 401
SANCHO, Treasurer,

v.

TEXAS CO. (P.R.), Inc.

No. 132.
Argued Dec. 11, 1939.
Decided Jan. 2, 1940.

Page 464

Mr. Wm. Cattron Rigby, of Washington, D.C., for petitioner.

Messrs. Jerrold H. Ruskin and Lionel P. Marks, both of New York City, for respondent.

Mr. Justice DOUGLAS delivered the opinion of the Court.

Respondent brought this action in a Puerto Rico court to enjoin the Treasurer of Puerto Rico from enforcing by distraint, orders of the Puerto Rico Workmen's Relief Commission awarding compensation for the death of each of three laborers while in the employ of respondent. The Supreme Court of Puerto Rico interpreted the Workmen's Accident Compensation Act of Puerto Rico1 as not permitting such collateral attack on orders of the Commission and affirmed a judgment dismissing the bill. 52 D.P.R. 658, 53 D.P.R. 475. On appeal (43 Stat. 936, 28 U.S.C.A. § 225) the Circuit Court of Appeals vacated that judgment and remanded the cause with directions to issue the in-

Page 465

junction. 1 Cir., 102 F.2d 710. We granted certiorari, 308 U.S. 538, 60 S.Ct. 85, 84 L.Ed. —-, because of the asserted violation by the Circuit Court of Appeals of the well established rule that Puerto Rican tribunals must not be overruled on their construction of local statutes in absence of 'clear or manifest error.' Sancho v. Yabucoa Sugar Co., 306 U.S. 505, 307 U.S. 613, 59 S.Ct. 626, 629, 83 L.Ed. 946.

The theory underlying respondent's bill was that it was an insured employer and therefore the awards should have been said out of the state fund,2 and that its remedy at law was not adequate. The bill so alleged, and attacked the orders of the Commission adjudging that it was not an insured employer. The cause was submitted, without an answer, on a stipulation which included, inter alia, an admission by petitioner of 'the ultimate facts of the bill, except the conclusions of fact or of law that it might contain.' The Supreme Court of Puerto Rico in effect treated this stipulation as a demurrer and concluded that petitioner had not thereby admitted that respondent was an insured employer. This seems to have been a reasonable construction certainly not manifest error.

Treating the bill then as one brought by an uninsured employer, the Supreme Court of Puerto Rico construed the Act on two points: (1) the right of respondent to appeal; (2) the power of petitioner to distrain.

Right to Appeal. It held that respondent had an adequate remedy at law under § 9 of the Act which provided that 'the employer may appeal from any decision of the commission when such decision is to the effect that the accident is one for which compensation is granted under this Act.'3 And it indicated that on such appeal the

Page 466

question of whether or not respondent was uninsured was among the issues which could have been reviewed.4 The Commission, however, had directed the awards to the Attorney General on April 24, 1928, for collection under § 7 of the Act, a section providing for collection of awards against uninsured employers.5 But eight years passed and the Attorney General made no attempt to collect. Respondent contended that it did not appeal under § 9 since it was waiting to defend, on the ground that it was insured, an action by the Attorney General under § 7. And though a new method of collection of such awards was created within a few months after these awards were made,6 respondent contended that the new law, in pro-

Page 467

viding that pending litigation was not to be affected,7 preserved its former opportunity to defend under § 7. To this the Supreme Court of Puerto Rico replied that the purpose of the saving clause in the new act8 was merely to preserve the rights of workmen to compensation, not to make the new procedure inapplicable to pending cases in contradiction to the well settled rule that procedural statutes are immediately applicable. It also added that in any event the procedure of § 7 had not survived the issuance of the order by the Commission since by the 1935 amendment that procedure was to be 'followed in such litigations or claims, until their termination'9—the issuance of the orders of the Commission having terminated the case within the meaning of the amendment.

Page 468

The Circuit Court of Appeals disagreed with this construction of the Act. It held that § 9 gave an appeal only to insured employers and that only § 7 provided for review of orders issued against those who were uninsured. It said that when § 9 stated that 'the employer may appeal from any decision of the commission when such decision is to the effect that the accident is one for which compensation is granted under this Act', it meant that only insured employers could appeal since the compensation granted by the Act was payment out of the state fund.10 Hence, in its view, the orders of the Commission here in question were 'to the effect' that the accident was not one for which compensation was granted under the Act, since the Commission had adjudged respondent to be uninsured. Consistently with that construction it held that the remedy of an aggrieved uninsured employer was to defend any suit brought under § 7. For in its view, the procedure under § 7 was not abolished by the amendments, the issuance of the orders of the Commission not having terminated the case within the meaning of the saving clause quoted above. Accordingly, it held that unless petitioner were restrained from collecting the awards, respondent would be deprived of its day in court.

Power of Petitioner to Distrain. The Supreme Court of Puerto Rico concluded that petitioner had the power

Page 469

to distrain by virtue of the amendments to the Act made subsequent to the issuance of the orders of award. By the 1928 amendments11 summary procedure was authorized for collection of a claim 'as if it were a tax levied on such property'. § 25. Although that phrase was eliminated by the 1935 amendments, § 15 of the latter made such claims 'liens preferred over any other charge or lien for taxes or any other cause' with specified exceptions.12 The court held that since under both the 1928 and 1935 amendments petitioner had the duty to collect the claims and since under both the claim had the status or legal effect of a tax, the power to distrain survived.

But the Circuit Court of Appeals disagreed with that conclusion. It reasoned that petitioner had no power to collect in that manner since by § 15 of the 1935...

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61 practice notes
  • Guam v. Guerrero, No. 00-71247.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • May 28, 2002
    ...of local concern absent "clear" or "manifest" error or an "inescapably Page 1214 wrong" interpretation) (quoting Sancho v. Texas Co., 308 U.S. 463, 471, 60 S.Ct. 349, 84 L.Ed. 401 (1940)); EIE Guam Corp. v. Supreme Court of Guam, 191 F.3d 1123, 1127 (9th Cir.1999) ("Although Congress certai......
  • People of Territory of Guam v. Kingsbury, No. 79-1585
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • June 29, 1981
    ...policy" and is designed to assure the orderly development of territorial government in matters of local policy. See Bonet v. Texas Co., 308 U.S. 463, 470-71, 60 S.Ct. 349, 353-54, 84 L.Ed. 401 (1940); Diaz v. Gonzalez, 261 U.S. 102, 105-06, 43 S.Ct. 286, 287-88, 67 L.Ed 550 (1923). In matte......
  • Morales v. Nationwide Ins. Co., No. CIV.01-1815 PG.
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • December 10, 2002
    ...In exercising this power, however, federal courts must be deferential to state courts' interpretations of state law. Sancho v. Texas Co., 308 U.S. 463, 471, 60 S.Ct. 349, 84 L.Ed. 401 (1940). When reviewing the constitutionality of a state statute, federal courts may "only consider the stat......
  • De Castro v. Board of Com Rs of San Juan, No. 349
    • United States
    • United States Supreme Court
    • May 29, 1944
    ...But it felt constrained to affirm the judgment of the Puerto Rican tribunal by our decision and opinion in Bonet v. Texas Company, 308 U.S. 463, 471, 60 S.Ct. 349, 353, 84 L.Ed. 401. In that case, in reversing a decree of the Circuit Court of Appeals, Texas Co. v. Sancho, 1 Cir., 102 F.2d 7......
  • Request a trial to view additional results
61 cases
  • Guam v. Guerrero, No. 00-71247.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • May 28, 2002
    ...or "manifest" error or an "inescapably Page 1214 wrong" interpretation) (quoting Sancho v. Texas Co., 308 U.S. 463, 471, 60 S.Ct. 349, 84 L.Ed. 401 (1940)); EIE Guam Corp. v. Supreme Court of Guam, 191 F.3d 1123, 1127 (9th Cir.1999) ("Although Congress certainly has......
  • Corporacion Insular de Seguros v. Garcia, Civ. No. 87-0431(RLA).
    • United States
    • U.S. District Court — District of Puerto Rico
    • February 24, 1988
    ...be sufficient, if we or the Circuit Court of Appeals merely disagreed with the interpretation.... Bonet v. Texas Co. of Puerto Rico, Inc., 308 U.S. 463, 470-471, 60 S.Ct. 349, 353, 84 L.Ed. 401 Admittedly, neither of these cases dealt directly with the issue of abstention and they were both......
  • Mojica v. Gannett Co., Inc., WGCI-FM
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • September 27, 1993
    ...parte Collett, 337 U.S. 55, 71, 69 S.Ct. 944, 952-53, 93 L.Ed. 1207 (1949) (new rule defining forum non conveniens ); Bonet v. Texas Co., 308 U.S. 463, 467, 60 S.Ct. 349, 351-52, 84 L.Ed. 401 (1940) (new method of enforcing awards). But this case implicates only two provisions relating to p......
  • Morales v. Nationwide Ins. Co., No. CIV.01-1815 PG.
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • December 10, 2002
    ...In exercising this power, however, federal courts must be deferential to state courts' interpretations of state law. Sancho v. Texas Co., 308 U.S. 463, 471, 60 S.Ct. 349, 84 L.Ed. 401 (1940). When reviewing the constitutionality of a state statute, federal courts may "only consider the......
  • Request a trial to view additional results

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