All relations between Spain and Porto Rico having been severed
by the cession of that territory by the Treaty of Paris, a
corporation organized under the laws of Spain for purely local and
charitable purposes in Porto Rico is not to be regarded as a
citizen of Spain within the meaning of the provisions of the Act of
April 12, 1900, c.191, 31 Stat. 77, as amended by the Act of March
2, 1901, c. 812, 31 Stat. 953, relating to the jurisdiction of the
District Court of the United States for Porto Rico, nor is such a
corporation a citizen of the United States within the meaning of
such provision; if it is a citizen of any country, it is a citizen
of Porto Rico.
The people of Porto Rico have been created by Congress and exist
as a body politic subject only to the usual reserved power of
annulment of territorial legislation, and the government of Porto
Rico under the organic act is charged with the creation and control
of corporations strictly local in character, and corporations of
that nature organized prior to the cession of the island are to be
regarded for jurisdictional purposes as citizens of Porto Rico.
While, by Article IX of the Treaty of Paris between Spain and
the United States, provision is made for Spanish subjects, natives
of the peninsula, to preserve their allegiance to Spain, that
article has no reference to corporations; nor is there any other
provision of the treaty providing therefor.
Quaere, and
not decided, what the citizenship now is of Spanish corporations
doing business in Porto Rico prior to its cession by the Treaty of
Paris to the United States.
The facts are stated in the opinion.
Page 213 U. S. 21
MR. JUSTICE Moody delivered the opinion of the Court.
The appellee, alleging itself to be "a charitable corporation,
organized and existing under the laws of the Kingdom of Spain,"
brought a bill in equity in the District Court of the United States
for Porto Rico against the appellants, alleging them to be citizens
of Porto Rico. The object of the suit, generally described, is to
assert title to certain lands in Porto Rico, and its determination
turns upon the construction of the will of Juan Bautista Silva, an
inhabitant of Porto Rico, who died in 1875. The suit therefore does
not arise under the Constitution, laws, or a treaty of the United
States. A decree was entered in favor of the plaintiff, and the
defendants appealed to this Court.
Before entering upon a consideration of the merits of the cause,
the jurisdiction of the court below to entertain it, which is
questioned, must be passed upon. The District Court of the United
States for Porto Rico was created, and its jurisdiction defined, by
the Act of April 12, 1900, establishing a civil government for
Porto Rico, 31 Stat. 77, c. 191, as amended by the Act of March 2,
1901. 31 Stat. 953, c. 812. By § 34 of the first act, it was
provided that --
"Porto Rico shall constitute a judicial district, to be called
the 'District of Porto Rico,' . . . the district court for said
district shall be called the District Court of the United States
for Porto Rico . . . , and shall have, in addition to the ordinary
jurisdiction of district courts of the United States, jurisdiction
of all cases cognizant in the circuit courts of the United States,
and shall proceed therein in the same manner as a circuit
court."
The jurisdiction was further defined in § 3 of the last act,
which provided that
"the jurisdiction of the District Court of the United States for
Porto Rico in civil cases shall, in addition
Page 213 U. S. 22
to that conferred by the Act of April 12, 1900, extend to and
embrace controversies where the parties, or either of them, are
citizens of the United States, or citizens or subjects of a foreign
state or states, wherein the matter in dispute exceeds, exclusive
of interest or costs, the sum or value of one thousand
dollars."
If the court below had jurisdiction, it must be under the
amending act, and because the plaintiff was either a citizen of the
United States or a citizen or subject of a foreign state. No other
ground of jurisdiction has been or can be suggested. It was found
by the district court that the plaintiff was a citizen or subject
of Spain, and the jurisdiction was sustained upon that theory.
Counsel in this Court have attempted to sustain the jurisdiction on
the ground that the plaintiff, if not a citizen or subject of
Spain, is a citizen of the United States. If the plaintiff was
neither a citizen of the United States nor a citizen or subject of
Spain, it is clear that the court was without jurisdiction.
We assume, in favor of the plaintiff, that it was a corporation
organized in 1863 by a decree of the Spanish Crown. That decree
incorporated an asylum of charity in Ponce. The purposes of the
incorporation are described in article 1 of the bylaws, which
follows:
"This association recognizes as its principal object the
alleviation of human suffering, and for this purpose it will
establish an asylum for the poor of the district. When its
resources permit it to give its attention to other objects related
to its purpose, it will establish schools for poor children of both
sexes, under the supervision of Sisters of Charity."
The incorporators were all residents of Ponce, and all the
purposes of the corporation were to be accomplished and all its
business done in that locality.
The first question is whether, after the ratification of the
treaty of peace between the United States and Spain, the plaintiff
corporation continued to be a citizen or subject of Spain.
It is assumed, in passing upon this question, that Congress,
Page 213 U. S. 23
in employing the word "citizen" in this connection, intended to
include corporations, in view of the decisions of this Court that
the word has that meaning when used in the definition of the
jurisdiction of the circuit courts of the United States.
St.
Louis & San Francisco Railway v. James, 161 U.
S. 545.
By the treaty of peace (30 Stat. 1754), Spain ceded Porto Rico
to the United States and thereby parted with all sovereignty over
that island. Careful provision was made that the cession should not
impair the property or rights of corporations, associations, or
individuals. Article VIII. It is clear, however, that thereafter
the duty to protect property and rights within the ceded territory
rested upon the United States. An opportunity was afforded to
Spanish subjects, natives of the Peninsula, to preserve their
allegiance to the Crown of Spain by making, within a limited time,
a declaration to that effect. Article IX. This article obviously
had no reference to corporations. No other provisions of the treaty
seem relevant to the question before us.
We are of opinion that the cession of Porto Rico by Spain to the
United States severed all relations between Spain and this
corporation, and that thereafter it cannot be regarded in any sense
as a citizen or subject of Spain. Spain has no duty to or power
over it. We confine this statement to a corporation like the one
before us, formed for charitable purposes, and limited in its
operations to the ceded territory. A different question (which need
not be decided) would be presented if the corporation had other
characteristics than those possessed by the one under consideration
-- as, for instance, if it were a Spanish trading corporation, with
a place of business in Spain but doing business by comity in the
island of Porto Rico.
The next question is whether the plaintiff corporation is a
citizen of the United States. Its status during the period between
the cession and the passage of the act to provide a civil
government for the island need not be determined. That act created
a form of government for Porto Rico and its adjacent islands in
which there was exhibited, with some modifications,
Page 213 U. S. 24
the characteristic American separation of the legislative,
executive, and judicial powers. The United States has never granted
to any territory organized by act of Congress complete
self-government, and Porto Rico is no exception to the rule.
Indeed, though the act confers a considerable measure of
self-government, for reasons deemed sufficient by Congress, it
stops short of the power usually conferred upon territories within
the continent. This organic act has the provision common to most,
if not all, our territories, whether fully incorporated into the
United States or not, that Congress may, if it deem advisable,
annul all laws enacted by the local legislative assembly. Subject
to these limitations, a body politic, under the name of The People
of Porto Rico, with a citizenship of its own, is created (§ 7);
existing laws, not in conflict with the applicable laws of the
United States, are continued in force until altered, amended, or
repealed by the legislative assembly or by Congress (§ 8); public
property acquired by the United States from Spain is placed under
the control of the local government, and the legislative assembly
is given power to legislate with respect to it (§ 13); the
legislative authority is given "power by due enactment to amend,
alter, modify, or repeal any law or ordinance, civil or criminal,
continued in force by this act" (§ 15); the governor is enjoined
faithfully to execute the laws, and given to that end the
applicable powers of a governor of a territory of the United States
(§ 17); the legislative assembly of Porto Rico is constituted (§
27), and the scope of the legislative power is fully described in §
32, as follows:
"That the legislative authority herein provided shall extend to
all matters of a legislative character not locally inapplicable,
including power to create, consolidate, and reorganize the
municipalities, so far as may be necessary, and to provide and
repeal laws and ordinances therefor, and also the power to alter,
amend, modify, and repeal any and all laws and ordinances of every
character now in force in Porto Rico or any municipality or
district thereof, not inconsistent with the provisions hereof:
Provided, however, That all grants of franchises,
rights,
Page 213 U. S. 25
and privileges or concessions of a public or
quasi-public nature shall be made by the executive
council, with the approval of the governor, and all franchises
granted in Porto Rico shall be reported to Congress, which hereby
reserves the power to annul or modify the same."
In the form of government, which is typically American, the
creation and control of corporations is exclusively a legislative
function. We are of opinion that the effect of the organic act is
to entrust that function, so far as it relates to a corporation of
the kind under consideration, whose essential qualities need not be
repeated, to the government of Porto Rico, and that such a
corporation is now, if a citizen of any country, a citizen of Porto
Rico. We need not consider whether the corporation has more than a
de facto existence, subject to the will of the Porto Rican
Legislature. It follows that the court below had no jurisdiction of
this cause.
The decree is reversed, and the cause remanded to the
District Court of the United States for Porto Rico with
instructions to dismiss the bill, without prejudice, for want of
jurisdiction.