March 19, 1901, the executive council of Puerto Rico granted to the Guanica Land Company, a New Jersey corporation, assignable franchises including the privilege to take water from Guanica Lake for the irrigation of the company's lands. Russell & Co., Sucesores, Sociedad en Comandita, a limited civil agricultural partnership composed of Havemeyer and the other respondents as partners, succeeded to that privilege. March 8, 1929, the Public Service Commission of Puerto Rico made an order canceling it. The District Court of San Juan and the Supreme Court successively sustained the order. Respondents' final appeal was to the Circuit Court of Appeals; it held the order unreasonable, reversed the judgment of the Supreme Court, and remanded the case for further proceedings. 74 F.(2d) 637.
Notwithstanding absence of cross-petition, we may consider respondents' insistence that the commission was without authority to make the order. Langnes v. Green, 282 U.S. 531, 536-538, 51 S.Ct. 243, 75 L.Ed. 520. The petition presents two questions: Whether the Circuit Court of Appeals, a constitutional court of the United States, has jurisdiction to review the commission's order; whether the six individual respondents here are parties in interest entitled to appeal. There is another question adequately raised by the petition though not specified formally as are the others or presented in accordance with the best practice. It is whether the Circuit Court of Appeals erred in holding the order to be unreasonable and in reversing upon that ground the judgment of the Supreme Court.
The Organic Act of 1900, c. 191, 31 Stat. 77, 81, authorized the creation of an executive council, section 18, and provided: 'That all grants of franchises, rights, 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.' Section 32, 31 Stat. 83. The Joint Resolution of May 1, 1900, § 3, 31 Stat. 716 (see 48 U.S.C.A. § 752) required that all such grants 'shall provide that the same shall be subject to amendment, alteration, or repeal.'
The franchise, in addition to conferring the privilege of using the water of Guanica Lake for irrigation of their lands, authorized the grantees to construct a wharf in, and to build and operate a railroad along, the harbor of Guanica Bay into which flow the waters of the lake. The irrigation privilege is the only one here involved; its substance follows: The grant was for 99 years and extended to the land company, its successors, and assigns. They were authorized to construct and operate a dam across the outlet for the purpose of regulating the flow of the water from the lake. They were given the right to take up to 20,000,000 gallons a day from the outlet or elsewhere, by gravity, through channels or by pumps, and to construct and operate works therefor. The franchise declared that nothing therein should be construed to permit grantees to raise or maintain the height of the lake above its customary level during the rainy season in years of average and usual rainfall, and they were declared liable for all damage sustained by abutting owners by reason of unduly raising the waters. They were authorized to acquire by eminent domain private lands needed for their works, and were required to have plans for the same approved by the Commissioner of the Interior before commencing work. They were required to pay $300 per year for the irrigation privilege, and in case of default the Commissioner might stop the flow of the water. It was provided: 'That the franchises, privileges and concessions hereby granted, shall be subject to amendment, alteration or repeal.'