1. Certiorari will not ordinarily be granted to review decisions
of the circuit court of appeals sustaining decisions of the Supreme
Court of Porto Rico on local questions, but where the judgment of
the court of appeals is a reversal, this Court cannot sustain a
decision of the Porto Rico court without plausible grounds merely
because the question is local. P.
268 U. S.
470.
2. Porto Rican Act No. 9, of May 12, 1920, § 49, provides that
municipal revenues shall embrace license taxes provided by Act No.
26, of March 2, 1914, "hereby declared to be in force," and "(f)
any other . . . tax" that may be levied by two-thirds of the
municipal assembly the object or matter of which is not also the
object of any federal or insular tax.
Held that a
municipal tax of ten cents per cwt. on sugar manufactured in the
municipality is unauthorized, because taxation of the business of
sugar mills is
Page 268 U. S. 470
governed, and limits affixed, by the license tax provision in
the Act of 1914. P.
268 U. S.
471.
295 F.2d. 809 affirmed.
Certiorari to a judgment of the circuit court of appeals which
reversed a judgment of the Supreme Court of Porto Rico refusing to
prevent collection of a municipal tax.
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is a suit to prevent the collection of a tax imposed by a
municipal ordinance of Carolina, Porto Rico, on the ground that the
ordinance is void. The Supreme Court of the Island upheld the tax,
30 P.R. 413, but the judgment was reversed by the circuit court of
appeals,
Central Victoria v. Cami, 295 F. 809, following
its decision on the same day in
Successors of C. & J.
Fantanzzi v. Municipal Assembly of Arroyo, 295 F. 803. A writ
of certiorari was granted by this Court. 265 U.S. 577. Had the
circuit court of appeals deferred to the local interpretation of
Porto Rican statutes, we should not have granted a writ. We
repeatedly have stated the reason for such deference, and we
believe that the appellate jurisdiction was granted with other ends
in view than that of setting the local courts right in their
interpretation of their own laws. But, since the case has been
decided the other way, we cannot avoid dealing with the merits, and
we should not be warranted in reversing the decision under review
unless we thought either that it was wrong or at least that there
was such plausible ground for the judgment reversed by it that the
local decision ought not to be disturbed.
Page 268 U. S. 471
The Supreme Court of Porto Rico expressed an intelligible doubt
whether a bill for an injunction would lie in this class of cases,
but no error was assigned on that ground, and, in view of our
opinion on the merits, there is no sufficient reason for opening
that question. When we come to the merits, we are compelled to
agree with the circuit court of appeals as we understand the
reasoning of that court.
On February 17, 1921, the ordinance complained of was passed,
and imposed a tax of ten cents on every hundredweight of sugar
manufactured in the municipality. The statutes affecting the power
to levy this tax are set out more fully in the principal opinion
below. We give only those that immediately determine the result.
The Porto Rican Act No. 9 of May 12, 1920, § 49, provides that the
municipal revenues shall consist of: (d) License taxes provided by
Act No. 26, of March 28, 1914, "which is hereby declared to be in
force."
"(f) Any other impost, excise or tax that may be levied by two
thirds of the members of the municipal assembly, provided that the
object or matter of taxation is not also the object or matter of
any federal or insular tax."
The Act of 1914 included in its Group C the business of sugar
and molasses mills among those that municipalities were empowered
to tax, and proceeded:
"The rates of taxation for Group C are made as follows: for each
$1,000 or fraction thereof in excess of the first $500 of volume of
business transacted, up to $1,000,000 inclusive $0.25 a year,"
and over that, $0.125. As the Act of 1914 is taken up into that
of 1920, it is difficult for us to believe that in one paragraph
the latter Act gave power to tax up to a specified maximum and. in
another, a general power limited only by the other principles of
taxation. Therefore, when in § 49(f) the later Act allows "any
other impost, excise or tax," we think it must be taken to mean any
tax on other objects of taxation, not any other tax on those for
which a limit already definitely is prescribed.
Page 268 U. S. 472
The petitioner argues that the circuit court of appeals was
mistaken in assuming that the maximum allowed by the Act of 1914
had been reached by a previous tax. The assumption is made,
however, only for the purpose of admitting that an additional tax
of the kind warranted by the Act of 1914 might be imposed within
the limit of the maximum, and, as it is not argued that this tax
can be sustained as that which is authorized by the Act of 1914, it
does not matter whether the limit under that Act had been reached
or not. This is a different tax levied under an interpretation of
the clause in the Act of 1920 authorizing other taxes, which in our
opinion cannot be sustained. We think it unnecessary to add more to
what has been said below.
Decree affirmed.