First Federal Savings and Loan Association of Puerto Rico v. Hector L. Ruiz de Jesus, 644 F.2d 910, 1st Cir. (1981)
First Federal Savings and Loan Association of Puerto Rico v. Hector L. Ruiz de Jesus, 644 F.2d 910, 1st Cir. (1981)
First Federal Savings and Loan Association of Puerto Rico v. Hector L. Ruiz de Jesus, 644 F.2d 910, 1st Cir. (1981)
2d 910
Stanley R. Segal, San Juan, P. R., with whom Ramirez, Segal & Latimer,
San Juan, P. R., was on brief for plaintiff, appellant.
Before COFFIN, Chief Judge, CAMPBELL and BOWNES, Circuit
Judges.
LEVIN H. CAMPBELL, Circuit Judge.
This appeal raises the question of whether section 632,1 Title 12 U.S.C.,
continues to confer jurisdiction on the United States District Court for the
District of Puerto Rico to hear cases filed by federally chartered corporations
involving banking transactions in Puerto Rico.
Puerto Rico's territorial status ended, of course, in 1952. Thereafter it has been a
Commonwealth with a particular status as framed in the Puerto Rican Federal
Relations Act. Act of July 3, 1950, Pub.L. 600, 4, 64 Stat. 319; see also Act of
July 3, 1952, Pub.L. 447, 66 Stat. 327. However, nothing in this legislation
expressly or by necessary implication removed Puerto Rico from the reach of
section 632. While Puerto Rico's new status rendered the words "dependency or
insular possession" somewhat obsolete as to it, the language was nonetheless
still sufficient, given the historical context, to encompass the reorganized
Commonwealth. Indeed, until the present it has been taken for granted in
decisions of this court that the section continued to apply to banking
transactions in Puerto Rico. See Fernandez Diaz v. Pan American Federal
Savings and Loan Association, 635 F.2d 30 (1st Cir. 1980); The Chase
Manhattan Bank v. Corporacion Hotelera de Puerto Rico, 516 F.2d 1047, 1048,
n.1 (1st Cir. 1975); First National City Bank of New York v. Gonzalez, 293
F.2d 919, 920 (1st Cir. 1961). Compare People of Puerto Rico v. Eastern Sugar
Associates, 156 F.2d 316, 320 (1st Cir. 1946) (upholding applicability of
section 632 before 1952) The same assumption has until recently prevailed in
the reported cases from the District Court of Puerto Rico: First National City
Bank v. Gonzalez & Co. Sucr. Corporation, 308 F.Supp. 596 (D.P.R.1970);
First Federal Savings and Loan of Puerto Rico v. Zequeira, 305 F.Supp. 37
(D.P.R.1969); Gonzalez Roman v. The Federal Land Bank of Baltimore, 303
F.Supp. 482 (D.P.R.1969). Compare Martinez v. National City Bank of Puerto
Rico, 80 F.Supp. 545, 547 (D.P.R.1948) (a pre-1952 case in which jurisdiction
was assumed under section 632).
If section 42 did in fact remove Puerto Rico from the scope of section 632 it did
so only by implication. The opinions in Conjugal Society and Piovanetti Pujals
attach great significance to the fact that in section 42 "the Commonwealth of
Puerto Rico" stands separate and apart from "territories." It is suggested that
this distinction between the two demonstrates a Congressional intent to treat
Puerto Rico "as something different from a territory or possession," Conjugal
Society, 497 F.Supp. at 49, and "at par with the District of Columbia and the
several States." Piovanetti Pujals, 440 F.Supp. at 731-32. But the fact that the
"Commonwealth of Puerto Rico" is listed separately from "territories" in this
1959 enactment reflects nothing more than Congress' recognition that by 1952
Puerto Rico was no longer a territory but rather a "Commonwealth" a change in
status that, as we have already found, did not in and of itself render section 632
(drafted while Puerto Rico was still a territory) inapplicable to banking
transactions in Puerto Rico. While, moreover, inclusion of Puerto Rico in
section 42 may place the Commonwealth "at a par" with the several states for
purposes of the territorial reach of the banking laws, it also by the same
reasoning places it "at a par" with the United States' "territories and
possessions", to which section 42 makes the banking laws also applicable.
Finally, and most important, the territorial reach of the banking laws, and the
equivalence of Puerto Rico and the several states for this purpose, says little, if
anything, about the scope of federal jurisdiction pursuant to section 632.
8
The district court opinions in Conjugal Society and Piovanetti Pujals suggest
that the separate listing in section 42 modifies section 632 insofar as it
manifests a congressional awareness of the subtle differences between the post
1952 Commonwealth status of Puerto Rico and in the words of section 632
other "dependencies or insular possessions." There is no doubt that specific
reference to Puerto Rico in any statute simplifies statutory construction by
obviating the need to detect whether the statute was meant to extend to Puerto
Rico. See Garcia v. Friesecke, 597 F.2d 284, 293 (1st Cir. 1979), cert. denied,
444 U.S. 940, 100 S.Ct. 292, 62 L.Ed.2d 306 (1979); Moreno Rios v. United
States, 256 F.2d 68 (1st Cir. 1958). But whatever explanation may be given to
the fact that Puerto Rico is listed separately in section 42 note that it is also
listed separately in 12 U.S.C. 1466, a pre 1952 statute we see no reason why
sections 42 and 632 cannot coexist, nor do we see any factor indicating that
they are repugnant to each other. Moreover, section 632 is a jurisdictional
statute (unlike those statutes which define the applications of different chapters
of federal banking laws 12 U.S.C. 40-42, 1466, 1772) which would, in the
absence of any contrary indication, still retain its full effect after 1952.
Examining Board v. Flores de Otero, 426 U.S. 572, 594-95, 96 S.Ct. 2264,
2277-2278, 49 L.Ed.2d 65 (1976). Cf. Posadas v. National City Bank, 296 U.S.
497, 56 S.Ct. 349, 80 L.Ed. 351 (1936) (discussing whether Organic Act for
the Philippine Islands of August 29, 1916 repealed provisions of the Federal
Reserve Act of 1913 which authorized foreign banking by national banking
associations). Finally, we note that the Financial Institutions Act of 1957, see
note 3 supra, which would have made changes in the foreign banking
provisions of the Federal Reserve Act, 12 U.S.C. chapter 6, while adding what
is now section 42, would have left section 632 completely intact, see
S.Rep.No.121, supra at 47-48 ( 52 and 65).
10
12 U.S.C. 632 was enacted as section 15 of the Banking Act of 1933, 48 Stat.
184, to amend section 25 of the Federal Reserve Act of 1913, 38 Stat. 273. It
provides in part:
"Notwithstanding any other provision of law, all suits of a civil nature at
common law or in equity to which any corporation organized under the laws of
the United States shall be party, arising out of transactions involving
international or foreign banking, or banking in a dependency or insular
possession of the United States, or out of other international or foreign financial
operations, either directly or through the agency, ownership, or control of
branches or local institutions in dependencies or insular possessions of the
United States, or in foreign countries, shall be deemed to arise under the laws of
the United States, and the district courts of the United States shall have original
jurisdiction of all such suits ...."
Section 42 provides:
"The provisions of all Acts of Congress relating to national banks shall apply in
the several States, the District of Columbia, the several territories and
possessions of the United States, and the Commonwealth of Puerto Rico."
Section 14 of the 1959 Amendments to the National Banking Laws (12 U.S.C.
42) was originally section 70 of Title I of the Financial Institutions Act of
1957, S. 1451, 85th Cong., 1st Sess. (1957), an act which was passed by the
Senate on March 21, 1957, 103 Cong.Rec. 4140 (1957), but was never enacted
into law. The legislative materials accompanying this Act are also silent with
respect to 12 U.S.C. 632, and Puerto Rico. See S.Rep.No.121, 85th Cong., 1st
Sess. at 31 (1957)
Note for example that the requirement under the Federal Deposit Insurance Act
that national banks insure deposits did not originally extend to deposits in