United States v. Porto Rico Railway, Light, & Power Co.

9 P.R. Fed. 355

• Court: District Court, D. Puerto Rico
• Decided: January 20, 1917
• Docket: No. 1039
• Status: Published

Opinion

HAMILTON, Judge,

delivered the following opinion:

The facts of this case are voluminous and have been given in the foregoing statement, which is the finding by the court of the facts involved. The elucidation of the law growing out of them depends upon a few leading principles.

1. It may be noted as a preliminary that there is no question that the United States, in succeeding to the rights of Spain under the treaty of Paris of December 10, 1898, did so without prejudice to the rights of citizens and property owners. The United States is bound to respect all rights of private property in Porto Pico at the time of its cession by Spain. It is the usage of all civilized nations, when territory is ceded, to stipulate for the property of the inhabitants. Such an article, so deservedly held sacred in view of policy as well as justice and humanity, is always required and never refused. United States v. Arredondo, 6 Pet. 691, 8 L. ed. 547. And this is the law, apart from treaty stipulations. Soulard v. United States, 4 Pet. , 7 L. ed. 938. It is the duty of a nation receiving a cession to respect all rights of property as recognized by the nation making the cession. Cessna v. United States, 169 U. S. 165, 42 L. ed. 702, 18 Sup. Ct. Rep. 304. Such a provision is expressed in art. 8 of the treaty of Paris. Indeed it is not necessary that these rights be evidenced by a formal grant of the former government. Wherever preliminary steps had been taken which would have justified that government in the issue of a grant, its successor, the United States, will be held to the same measure of duty and will act as if the grant had been actually issued.

There is no difficulty about the proof of the steps in such a proceeding. Where the United States has succeeded to territory, for instance of Spain, and to the official papers connected with grants, courts will take judicial knowledge of the duties of these officers and construe the official papers bearing on the case.

2. A preliminary question, however, arises as to the method of procedure adopted in this case. The theory of the plaintiff is that it is a landlord with right to bring .ejectment for reentry for breach of covenant by the tenant, the defendant in the case. How far this applies will be considered later; the first question is, Does ejectment lie for such purpose in Porto Rico? The usual method of re-entry for default in payment of rent is provided by § 1472 of the Civil Code of Porto Rico, which is as-follows:

“The lessor may judicially dispossess the lessee for any of the following causes:

“1. Upon the expiration of the conventional period or the one fixed for the duration of leases in §§ 1480 and 1484.

“2. Default in payment of the price agreed upon.

“3. Infraction of any of tbe conditions stipulated in tbe contract.

“4. Wben tbe lessee employs tbe thing leased in uses or services not stipulated and wbicb cause tbe same to be impaired. »

This is generally spoken of as “desahucio.” Porto Eico is in tbe anomalous position of having a Spanish Civil Code and an American Code of Civil Procedure, and tbe provision as to action in unlawful detainer (desahucio), and that as to ejectment (reivindicación) both occur in tbe Civil Code, §§ 1472 and 1091. Tbe Code of Civil Procedure, however, also covers claims to recover specified real property, §§ 104, 284, 290, and tbe act of March 9, 1905, specifically establishes unlawful de-tainer on behalf of owners of property entitled to tbe enjoyment of such property. This expressly runs against lessee. Act of March 9, 1905, §§ 1, 2, and 9, p. 184. Tbe subject of nonpayment of rent is expressly covered by this act of 1905 (§§ 2, 9, 15), wbicb provides for tbe ejectment of tbe defendant from tbe premises (§§ 16 and 18). This law has tbe usual repeal of laws in conflict with it (§ 19).

It may be seriously doubted whether tbe TJnited States is bound by tbe local methods of procedure. Technically Porto Eico is a territory created by tbe United States as sovereign. It may be that tbe United States, in suing in a Porto Eican court, would be bound by tbe methods of procedure there prevailing, but it is not so clear that tbe United States, tbe sovereign, are bound by this in its own courts, such as tbe district court of tbe United States for Porto Eico. It is true that this court recognizes and proceeds under tbe local law in ordinary cases under what is called tbe Statute of Conformity. U. S. Itev. Stat. § 914, Comp. Stat. 1916, § 1537. This, however, is largely upon the doctrine of comity, and tbe wording of the stat.ute merely is that such practice shall conform “as near as may be.” It would not apply if there was no satisfactory method of procedure provided by the local law. In the matter at bar the question of the recovery of possession by a landlord for nonpayment of rent, or for other reasons, may be at common law and in the states at large by ejectment. The existence of summary proceedings merely gives the landlord an election; it does not deprive him of his common-law remedy of ejectment. 24-Cyc. 1399. It is not perceived that there is any necessity for construing the local law, even if binding on this court in this case, so as to prevent a recovery by the United States as landlord in a suit of ejectment if it prefers to proceed in that manner. A suit in ejectment is triable before a jury, while that in unlawful detainer ordinarily is tried summarily before a judge. The two rights are alternative, and not exclusive. If, therefore, in the case at bar the United States shall be held to be a landlord, the remedy chosen is not improper.

3. It is contended that no suit of any character can be brought under the facts at bar, that the defendant’s rights rest upon a grant by the government of Spain, to which the United States succeeds, and that a forfeiture for condition subsequent can only be by office found or by an act of Congress, which is the •equivalent. There is no question that this is true of a grant by a government. At common law, the sovereign being unable to make an entry in person, the proceeding called an office found was necessary to determine the estate. United States v. De Repentigny, 5 Wall. 268, 18 L. ed. 646. This method of asserting or resuming the forfeited grant cambe exercised by the legislative authority alone. Schulenberg v. Harriman, 21 Wall. 44, 22 L. ed. 551. The same principle is held in the cases of Van Wyck v. Knevals, 106 U. S. 360, 27 L. ed. 201, 1 Sup. Ct. Rep. 336; United States v. Northern P. R. Co. 177 U. S. 435, 44 L. ed. 836, 20 Sup. Ct. Rep. 706; and Spokane & B. C. R. Co. v. Washington & G. N. R. Co. 219 U. S. 166, 55 L. ed. 159, 31 Sup. Ct. Rep. 182; and also United States v. Washington Improv. & Development Co. 189 Fed. 674. These are all cases of grants, generally by patent or act of Congress. The contention of the plaintiff, however, is that the case at bar is not a grant of this character, but merely a suit by a landlord to recover property for nonpayment of rent, which does not rise to the dignity of a technical grant, and is governed by other principles. The word “grant” is appropriate at common law for conveyance of real rights, and the theory of “forfeiture and office found” is under the authorities applicable to real rights, and not to'personal. If the government leases a room in the capitol for a lunch room, it would not require an act of Congress to eject the lessee for nonpayment of rent. Nor is the law of remedy changed because in the civil law a leasehold is a real right and to be registered when for a term of six years (Mortgage Law, § 2). It is not merely a personal right as'at com-, mon law. Whether this transaction was a lease or a grant is therefore a crucial point.

4. The dealings between the government of Spáin and Ubarri did not constitute a license or a tenancy from year to year. It was a cession of land to be used as a tramway terminal for the full length of time that the tramway franchise itself was to run; that is to say, for sixty years. It must be distinguished, however, from the franchise itself. The tramway might run and did run over public lands, and, from its operation by steam and otherwise, required public authorization and public supervision, all of which are implied in a franchise. The land upon which its terminal station should stand need not necessarily be public land. In point of fact, while the evidence is not full, the maps show that the original terminal was a building on the bay shore. It is clear that it was not a building erected originally upon the land now in controversy, because from military reasons no building was erected there until 1891 at the earliest. There might be a recovery by the United States in this suit without affecting the franchise of the defendant company at large. The controversy between the parties is not so much on the point of lease as upon the amount of the rent itself. The defendant admits that it is subject to the payment of rent, and until the suit was brought the United States claimed no more. The parties only differed as to amount of rent which should be collected under the contract in evidence. The Eoyal Order uses the word “lease” '(arrendar) and must be construed to mean what it says.

5. It is perfectly true that contracts must be mutual. The United States may not be bound by the Porto Pican Civil Code, § 1223, which declares this principle, and indeed the Civil Code was not adopted in Spain until 1889, and therefore after the contract in controversy. The principle, however, is one of general law, and may be accepted as applicable to this case, with the qualification that it does not apply where the contract itself provides otherwise as to any particular term. Ordinarily the amount of rent must be certain or capable of reduction to certainty, although otherwise a landlord can recover the value of the use and occupation. Tiffany, Land. & T. §,173. Pent must be certain according to § 1446 of the Civil Code also. To this effect is the Commentary of Manresa, vol. 4, p. 409, and pp. 44-54. This also is general law, and may be accepted, with the above qualification. The lease of January 21, 1881, has-several provisions as to the buildings to be erected, and then provides: “Sixth: That the lots should not be ceded gratuitously, but they are to be leased under such circumstances as may be deemed to be acceptable, turning into the Insular Treasury the rent as contingent revenues thereof.” There is then added that “at the same time it is the will of his Majesty that your Excellency (the Governor General) be authorized to make the proper orders to carry into effect the said lease.” The amount of rent, therefore, was to be fixed by the local Spanish government in Porto Pico; and the facts show that after a good deal of reference from one bureau to another it was finally fixed at 156.-18 pesos, which has been paid ever since up to 1912. The contention of the defendant is that, being once fixed, it could not be changed afterwards at the caprice of the landlord, as otherwise it would be an ambulatory contract, and lack the certainty necessary for all contracts. Certainly all instruments are to be construed so as to give them a definite effect.

There seems to be no doubt that the Spanish government fixed this low rent because the lots in question were at the time of the lease under the guns of the city wall, that is, subject to military rules as to the plane of firing and the like; and the report of Engineer Maese, whose admission was objected to by the defendant, was that the price could and should be raised when the circumstances changed; that is to say, when the land had ceased to be subject to military provisions. It is not clearly shown, however, that this was brought to the attention of the lessee, ITbarri. The evidence shows that there was registered in expediente form “land belonging to tbe state wbicb bis Excellency Don Pablo Ubarri occupies with the tramway and materials belonging to the same at the place called La Carbonera from the Puerta de Es-paña at the left of the road next to the wall near the Castle or Battery of San Francisco de Paula — 1885;—property No. 48.” In this expediente are found inscriptions of this property No. 48 “composed of 4,181 square meters valued at 3,135 pesos, 15 centavos, of which his Excellency Don Pablo Ubarri has the use upon the payment of the annual rent of 156 pesos, 18 cen-taAms.” In 1881 in the same expediente is the report of the register of property dated March 18, 1881, which seems to show that the above was registered in the registry of property. The Mortgage Law was not adopted in Spain until 1893, and was made effective the same year in Porto Bico', and under this, in compliance with art. 43 — 50 of the Begulations for the Enforcement of the Mortgage Law, and for the effect described in the second part of art. 52, there seems to have been an inscription “March tenth one thousand eight hundred eighty-seven.” The former expe-diente contained the rent fixed as above, but the one under the Mortgage Law, while describing the origin of the property and saying that since 1849 the Treasury had been in the uninterrupted possession, renting the property at an annual rental, and that it is used for the present for the station of the tramway as authorized in 1881, and giving boundaries, does not give the amount of the rent, and adds, “There being no other data set forth in regard to the said lands which should be mentioned.” Under these circumstances, was Ubarri chargeable with notice of the variable nature of his rent ? If he is chargeable only with the record under the Mortgage Law just given, then there is nothing said about amount of rent at all, and it would be by all tbe papers making up tbe contract — for a formal lease does not seem to have been executed — a matter entirely left under tbe provisions of 1881, that is to say, “leased under sucb conditions as may be deemed to be acceptable.” Tbis means acceptable to tbe government, for tbe proceedings fixing it show that tbe amount was fixed by tbe government, and Ubarri bad nothing to do with it upon tbe face of tbe papers. On tbe other band, if tbe inventory of 1887 is to be given force, fixing tbe amount of rent at 156.78 pesos, it is impossible to see why tbe other public expedientes contemporary with tbe lease are not also to be taken into account. Tbe result must be that Ubarri accepted tbis land knowing that it was under fire of the fortifications , and therefore for tbe time being granted him at a low rent, subject to being raised at tbe cessation of these disadvantages.

6. Tbe defendant, however, contends that if tbis is true, tbe change of rent could only be made when tbe change of military situation occurred, that is to say, as shown by tbe evidence in 1897; and that, as tbe Spanish government made no change of rent at that time, none could be made afterwards. That is to say, that tbe government, whether it be of Spain or of tbe United States, is estopped from making any change in tbe rent. It is true that while tbe United States is exempt from suit, it is not exempt from tbe incidents of suing. That is to say, if tbe United States chooses to sue, it is bound by estoppel tbe same as other parties. While it is exempt as a defendant, it can sue only as other plaintiffs. Roberts v. Northern P. R. Co. 158 U. S. 1, 39 L. ed. 873, 15 Sup. Ct. Rep. 756; Branson v. Wirth, 17 Wall. 32, 21 L. ed. 566. Where a state claims title, it takes cum onere and subject to all estoppels running with the title. Carver v. Jackson, 4 Pet. 1, 7 L. ed. 7 61. In this respect the United States is a sovereign, and in the same way subject to the same liabilities as any other state.

7. It is not clear, however, that estoppel in pais is binding at law as to land, although it is binding in equity. Kelly v. Hendricks, 57 Ala. 193; Allen v. Kellam, 69 Ala. 442, 443; Harris v. Miller, 71 Ala. 27. In no event does estoppel arise unless the silence or acquiescence of one party is acted upon by another. Moore v. Robinson, 62 Ala. 537, 546. The plea of estoppel is not favored at law (Stephen, Pi. 353), although the defense is not now considered odious.' Caldwell v. Smith, 77 Ala. 157, 158. The grantor is estopped from denying the pecuniary consideration recited. Williams v. Higgins, 69 Ala. 517. But the case at bar is one seeking to estop the grantor from denying a pecuniary consideration which is not recited. Estoppel, if it applies in this case at all, will apply, therefore, only if it is shown that the defendant relied upon the rent remaining at 156.78 pesos, and did some act upon this basis to his disadvantage. Estoppel even in equity is a kind of executed contract. Bis-pham, Eq. § 129. The facts do not show that there has been any change to the disadvantage of Ubarri or his successors. So far as appears, there has not even been a new office building erected. The same story and a half building erected under the original conditions, apparently as a railway shed or depot, appears to remain, and there is no equitable right and no reason for estoppel against the government in the matter. If in 1898 under either Spanish or American regime, Ubarri had made changes in his building or in the use of the land, the case might be different. Changes indeed have been made, but they have been made away from this land. While the acquiescence of the government for so long would prevent its taking advantage — if, indeed, it could do so at any time — of the different use of tbe property now from wbat was contemplated in tbe lease, tbis liberality should not be construed against tbe United States and it be deprived in 1912 of a right which perhaps the then existing government could have exercised in 1897. That the public authorities, of whatever nationality, have voluntarily deprived themselves of several thousand dollars annual rent for fourteen years does not give the defendant any vested right for this oversight to continue for the rest of the sixty years. Ubarri and his ■ representatives must be content with the advantage which they have already acquired.

8. The result, therefore, is that in 1912 tbe landlords had a right under all the circumstances of the case to refix the rental. If they fixed this rental at a higher figure than the facts justified, then they would indeed be transgressing the contract to which they succeeded; and not only would the defendant be pei--fectly justified in refusing to pay the increase, but his tender of the proper amount would defeat the right of the landlord to recover possession. The testimony in the case shows that the property would reasonably be valued in 1912, as at present, at about thirty or forty dollars per square meter. All the 4,181 meters leased under the Spaniards, however, is not in controversy. This suit is only for 2,074 square meters, and the answer admits possession of 1,248.24 square meters. What has become of the surplus is not in evidence. There being no evidence as to amount in possession of the defendant, the plaintiff’s recovery, if it recover, can be only for the amount admitted. The limitation of the amount of land in controversy to this admission, however, has effect going further back than the land to be described in the judgment. The Spanish lease was based upon 5 per cent of the value. Whether this rate is a part of the contract need not be decided, because there is no evidence as to the propriety of any other rate. If the evidence is to be interpreted that the government demanded $4,980 for the rent of 1,-248 square meters, worth perhaps $50,000, it would be demanding practically 10 per cent. This would therefore be improper under the evidence showing 5 per cent as the right rate. However, the,demand of the government was for $4,980 rent for 2,074 meters, and this would be practically at a 5 per cent valuation, and so would not be affected by the fact that, as it turns out, the actual amount of land withheld is 1,248 meters. Moreover, as the pleadings stand, the defendant refused to pay anything over the 156.78 pesos, that is to say, refused to pay any raise at all, and thus put itself in default. It was therefore subject to a declaration of forfeiture by the landlord and a suit for possession of land as in the case at bar.

It follows that the United States is the landlord, that it had the right to refix the rent, that the amount as so fixed is within its rights under the contract, that this amount has not been paid, and therefore it is entitled to recover the land admitted in the answer. No claim is made in the complaint for rents at the old or the new valuation, and it therefore would be impossible, to allow any rentals but for the fact that they have been tendered. This is as binding as an amendment of the pleadings. The amount of the tender cannot be disputed by the defendant, and hence judgment will run at that rate since June 30, 1912. This amount is the equivalent of 156.78 pesos Spanish provincial money, and the court judicially knows that such peso was and is equivalent to 60 cents, as fixed by a military order of President McKinley January 20, 1899. 4 Laws, etc., effective in Porto Rico, p. 2440.

A judgment will be entered accordingly.