Vidal v. Fernandez

• Decision Date: 13 June 1939
• Docket Number: No. 3411.,3411.
• Citation: 104 F.2d 606
• Parties: VIDAL v. FERNANDEZ, Atty. Gen. of Puerto Rico, et al.
• Court: U.S. Court of Appeals — First Circuit

104 F.2d 606 (1939)

VIDAL v. FERNANDEZ, Atty. Gen. of Puerto Rico, et al.

No. 3411.

Circuit Court of Appeals, First Circuit.

June 13, 1939.

Henri Brown, of San Juan, P. R., for appellant.

William Cattron Rigby, of Washington, D. C. (B. Fernandez Garcia, Atty. Gen., of San Juan, P. R., and Nathan R. Margold, Solicitor, Dept. Interior, of Washington, D. C., on the brief), for appellees.

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

WILSON, Circuit Judge.

This is an appeal from a decision of the District Court of the United States for Puerto Rico by Felipe F. Vidal, the receiver theretofore appointed by that court for the Benitez Sugar Company, a corporation organized under the laws of Puerto Rico, and for the Communidad Jose J. Benitez e Hijos against the Attorney General of Puerto Rico and the Commissioner of Agriculture and Commerce of Puerto Rico to enjoin the enforcement by said officials of Act No. 112 of the Puerto Rican Legislature approved May 13, 1937.

Petitioner's motion for a preliminary injunction was denied; an amended petition was filed, the respondent answered and a hearing was held. The District Court made findings of fact and conclusions of law, and on August 18, 1938, entered its final decree upholding the validity of the Act, and finally denying the prayer for a permanent injunction and dismissed the bill.

From this decree an appeal was taken to this court.

The petitioner, receiver, assigned, among others, the following errors on which he relies:

"1. Act No. 112, approved May 13, 1937, is invalid because it violates the provisions of Section 34 of the Organic Act of Puerto Rico regarding the subject and title of statutes and the amendment of laws.

"2. Whether the said Act be construed as a statute fixing maximum tolls to be charged by Centrals for grinding and processing sugar cane, or as fixing minimum prices for sugar cane to be paid by Centrals, such tolls or prices make it impossible for the Receiver to continue the business of manufacturing sugar without serious loss and result in an unlawful taking of the property confided to his custody and destruction of the business which he is charged with the duty of continuing.

"3. The statute is an arbitrary and unreasonable infringement of property rights, an unwarranted and oppressive interference with liberty of contract, denies the equal protection of the laws, and is for these reasons in violation of the Organic Act of Puerto Rico.

"4. The statute is invalid because it is without the powers of the legislature of Puerto Rico.

"5. The penalties imposed by the statute are so severe as to deprive Centrals of the equal protection of the laws and to violate the due process clause of the Organic Act of Puerto Rico."

Section 34 of the Organic Act, 48 U.S. C.A. §§ 832, 835, provides that:

"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."

The trial court overruled this objection, citing Gallardo v. Porto Rico Ry., Light & Power Co., 1 Cir., 18 F.2d 918, saying on page 922:

"The court below found it unnecessary to decide this point. It is without merit. The title shows clearly that a special tax is to be levied `for * * * the construction of works for the development of the water power of the island of Porto Rico.' This states a single main object; and is fully sufficient to guard against the evil confusion prohibited by the Organic Act. Carter County v. Sinton, 120 U.S. 517, 7 S.Ct. 650, 30 L.Ed. 701; Jonesboro City v. Cairo & St. Louis R. Co., 110 U.S. 192, 4 S.Ct. 67, 28 L.Ed. 116; Louisiana ex rel. Southern Bank v. Pilsbury, 105 U.S. 278, 26 L.Ed. 1090; Benedicto, Treas., v. Porto Rican American Tobacco Co. (C.C.A.) 256 F. 422."

The Supreme Court in Carter County v. Sinton, 120 U.S. 517, page 522, 7 S.Ct. 650, page 653, 30 L.Ed. 701, stated the purpose of such provisions as follows:

"The provision of the constitution of Kentucky relied on is article 2, § 37, as follows:

"`No law enacted by the general assembly shall relate to more than one subject, and that shall be expressed in the title.'

"Undoubtedly the design of this provision was, as is said in Pennington v. Woolfolk, 79 Ky. 13, 20, `to prevent the use of deceptive titles as a cover for vicious legislation, by enabling members of the general assembly to form such opinion of the nature of a bill by merely hearing it read by its title;' but as early as 1859 the Court of Appeals said in Phillips v. Covington & Cincinnati Bridge Company, 2 Metc. (Ky.) 219, 221: `This prohibition should receive a reasonable and not a technical construction; and, looking to the evil intended to be remedied, it should be applied to such acts of the legislature alone as are obviously within its spirit and meaning. None of the provisions of a statute should be regarded as unconstitutional when they all relate directly or indirectly to the same subject, have a natural connection, and are not foreign to the subject expressed in its title.'"

And in Posados v. Warner, Barnes & Company, 279 U.S. 340, 344, 49 S.Ct. 333, 334, 73 L.Ed. 729, the Supreme Court further stated the purpose of such provisions:

"The purpose is to prevent the inclusion of incongruous and unrelated matters in the same measure and to guard against inadvertence, stealth and fraud in legislation. When bills conform to such requirements, their titles serve conveniently to apprise legislators and the public of the subjects under consideration. Courts strictly enforce such provisions in cases that fall within the reasons on which they rest. But, as freedom required or convenient for the effective exertion of the legislative power ought not unnecessarily or lightly to be interfered with, the courts disregard mere verbal inaccuracies, resolve doubts in favor of validity, and hold that, in order to warrant the setting aside of enactments for failure to comply with the rule, the violation must be substantial and plain. Louisiana ex rel. Southern Bank v. Pilsbury, 105 U.S. 278, 289, 26 L.Ed. 1090; Montclair v. Ramsdell, 107 U.S. 147, 153, 2 S.Ct. 391, 27 L.Ed. 431; Read v. Plattsmouth, 107 U.S. 568, 578, 2 S.Ct. 208, 27 L.Ed. 414. City of South St. Paul v. Lamprecht Bros. Co., 8 Cir., 88 F. 449, 451. Johnson v. Harrison, 47 Minn. 575, 50 N.W. 923, 28 Am.St.Rep. 382; Cooley's Constitutional Limitations (7th Ed.) p. 202 et seq."

The District Court was right in overruling this objection and in holding the title of the Act was sufficient to comply with the provisions of Sec. 34 of the Organic Act.

The provision referring to amendment of other laws is not violated. "It must be given a reasonable, although not a narrow or technical, construction." Benedicto, Treas., v. Porto Rican American Tobacco Co., 1 Cir., 256 F. 422, 425.

The District Court further said: "Act No. 112 is a complete law in itself constituting an entire act of legislation on the subject with which it deals, and it may therefore amend or supersede by implication provisions of prior acts. See Southern Pacific Co. v. Bartine et al., C.C., 170 F. 725; Mills v. Smith, 9 Cir., 177 F. 652."

If the legislature were always required in enacting a new statute to search through the entire body of the laws of a state to seek out and to copy into the new legislation, and thus reenact at length every earlier statute that might be affected in any way by the new legislation, the process of legislation would break down. No such thing was contemplated by Congress.

One of the appellant's assignments of error is that Act No. 112 is without the powers of the Legislature of Puerto Rico, but this assignment appears to be answered by the appellee in his brief, in which he states that his petition did not challenge the power of the Legislature to fix prices or otherwise the growing, selling and grinding of sugar cane. For the purposes of his petition the receiver did not dispute the authority of the Legislature over the subject matter.

Apparently the receiver, admitting that Act 112 was a proper exercise of the police power of the Puerto Rican Legislature, now rests his position before this court on the proposition that the method of its exercise in the instant statute is arbitrary and discriminatory, and constituted an unwarranted interference with liberty to contract.

Under the second assignment of error relied on it was said that:

"Whether the said Act be construed as a statute fixing maximum tolls to be charged by Centrals for grinding and processing sugar cane, or as fixing minimum prices for sugar cane to be paid by Centrals, such tolls or prices make it impossible for the Receiver to continue the business of manufacturing sugar without serious loss and result in an unlawful taking of the property confided to his custody and destruction of the business which he is charged with the duty of continuing."

The District Court met this objection in his opinion in which he said:

"It is quite generally known that with the present market price of sugar many centrals operating in the Island of Puerto Rico will show practically no profit this year. I am impressed with the idea that it is the market price of sugar which is primarily responsible for any loss which Central Playa Grande will sustain on the present year's operation."

The appellant's main contention is summed up in his third assignment, in which he states:

"The statute is an arbitrary and unreasonable infringement of property rights, an unwarranted and oppressive interference with liberty of contract, denies the...