tensive, and only coextensive, with the lia- | sets of said company, upon the claim of the bility of the original insurance company. "For instance, suppose an insurance company in the city of Chicago wishes to go out of business. It has money enough to reinsure all its risks, and does so, and goes out of the insurance business. That company does not keep a fund on hand any longer for the purpose of meeting losses as they fall in, but depends upon its reinsur ance. "Now, it is to my mind absurd to say, if a loss occurs on one of those reinsured policies, that the company primarily liable is to have its claim against the reinsuring company limited by its ability to meet its obligations to its original policy holders. The very object of making the policy of reinsurance was to place the company in funds with which to make its policy holders whole, | and that is defeated if the construction which is insisted upon by the assignee in this case is the true one. "The fair, liberal construction, it seems to me, of this clause, and the salutary one, is to assume that the true intent of it-the judicial meaning-is that the liability of the reinsurance company is to be no greater than that of the original company; that they are not to be compelled to pay any faster than the original company would be compelled to pay; that they are to have the benefit of any defense which the original company*would have had. Any deduction-any equitywhich the original company would have had against the original insured is to inure to the benefit of the reinsuring company. "I am of opinion that the Republic is liable on these policies to the extent of the adjusted losses, even if the Lorillard had not paid a cent." In Cashau v. Northwestern Nat. Ins. Co. 5 Biss. 476, Fed. Cas. No. 2,499, in the reinsurance policy there was a clause that the reinsurer shall "pay pro rata at and in the same time and manner as the reinsured." It was held that the reinsurer was to have all the advantages of the time and manner of payment specified in the policy of the reinsured, but that it had no reference to the insolvency of the reinsured. The court in that case said: . "The insolvency of the original insurer is no defense, in whole or in part, to a suit against the reinsurer. It is claimed on the part of the defendant that the condition in its policy is an exception to this position of the law. The condition in that policy that, 'in case of loss the company shall pay pro rata at and in the same time and manner as the reinsured,' cannot mean that, in case of the insolvency of the Fulton company, the defendant shall only be obliged to pay the pro rata of the dividends of the as first insured. It cannot have such application. The condition means that the defendant shall pay at and in the same time and manner as the reinsured company shall pay or be bound to pay according to its policy, and that the defendant shall have all the advantages of the time and manner of payment specified in the policy of the Fulton company, otherwise the defendant's policy would not be the contract of indemnity intended, and endless litigation might ensue." Bearing in mind what the contract of reinsurance, pure and simple, means, and how these contracts have been enforced in the past when some special language has been introduced in regard to the payment under a reinsurance policy, the question arises whether, by the use of the language of the eleventh subdivision, the contract of reinsur ance, while still bearing that name, has been so changed as to deprive it of its chief value. As is stated by Judge Johnson, in regard to the language used in 56 N. Y., supra, to give this language this construction will, in substance, subvert the whole contract of reinsurance as hitherto understood. We agree with the court below, that the language of the eleventh subdivision, taken in connection with the fact that it is used in a contract designated by the parties as one of reinsurance, means that the reinsuring company shall not pay more than its ratable proportion of the actual liability payable on the part of the reinsured, after deducting all liability of other reinsurers. To hold otherwise is to utterly subvert the original meaning of the term "reinsurance," and to deprive the contract of its chief value. The losses are to be payable pro rata with, in the same manner, and upon the same terms and conditions as paid by the reinsured company under its contracts. This means that such losses, payable pro rata, are to be paid upon the same condition as are the losses of the insurer payable under its contract. And the liability of the reinsurer shall not be in excess of the liability of the insurer under its original contracts, after deducting therefrom any and all liability of other reinsurers of the contract of the insurer or of any part thereof. It is the ratable proportion for which the other reinsurers are liable, that provision is made for deducting, and the liability of the insurer means such liability after that deduction, and does not mean there must be an actual payment of such liability by the insurer before it can have any benefit of the contract of reinsurance which is made with defendant. Subdivision 10 of the contract does not result in any different conclusion. This subdivision does not and cannot mean that there is to be no liability unless the re *337 insured should pay the loss sustained. The reinsured company under its provisions is bound to forward to the reinsuring company a statement of the date and the probable amount of loss or damage, and it is provided that after the reinsured company shall have adjusted, accepted* proofs of, or paid such loss or damage, it shall forward the proof of its loss and claim and a copy of the receipt taken for payment. It means that if the loss or claim has been in fact paid, then a copy of the receipt is to be sent; but it does not mean that there must be payment before any liability on the part of the reinsuring company exists. We do not think that the language of these two subdivisions was intended to entirely nullify and tear up by the roots the construction given to the contract of reinsurance for so many years throughout the civilized world and upon which its chief value is based. The nature of the contract is accurately described in its commencement. It is described as a "compact of reinsurance;" and there has been no doubt as to the meaning of such contract for the last two centuries. The judgment of the Court of Appeals is right, and is affirmed. Appeal from Porto Rico district court-review of facts. 1. Only matters of law can be considered apparently flowed therefrom, to avoid collaterally decrees of the Porto Rican courts concerning the same, and to set aside, as in virtue of the title apparently vested by simulated and fraudulent, the sales made the settlement, where such bill, though alleging that the property transferred to the mother by such settlement was acquired by the husband by inheritance, contains no averment concerning the property allotted to the daughters which tends to rebut the legal presumption of community as to the property acquired during marriage, which the bill seeks to administer and distribute. Evidence-judicial notice. 3. Judicial notice is taken by the Federal Supreme Court that the distinctions between law and equity, in a technical sense, do not obtain in the local law of Porto Rico. * Courts-conflict of jurisdiction-probate matters-district court of Porto Rico. 4. The district court of the United States for the district of Porto Rico has no jurisdiction of a bill which seeks to administer decedents' estates which are open in a local court and subject to the power and authority of such court, because such bill also seeks to liquidate a community existing between husband and wife, to annul for fraud a family settlement of the estates, and to set aside, as simulated and fraudulent, sales made in virtue of the title apparently vested by such settlement, where the relief sought in this regard is merely ancillary to the prayer for the liquidation and settlement of the estates. Courts probate jurisdiction Rican courts. Porto 5. The Porto Rican courts, as an incident of their general and probate authority, and their power over all personal and real actions concerning decedents' estates, have jurisdiction to determine whether a decedents' estate has been closed by a family settlement which is attacked as fraudulent, to determine whether the property transferred to the widow by such settlement still remains a part of the estate, and to liquidate and settle the community exist ing between the husband and wife. [Nos. 141, 142, 604.] April 6, 1908. by the Federal Supreme Court on the ap- Argued February 27, 28, 1908. Decided peal authorized by the act of April 12, 1900 (31 Stat. at L. 85, chap. 191), § 35, to be taken from the district court of the United States for the district of Porto Rico in the same manner and under the same regulations as from the supreme courts of the territories. 2. The mother's estate and her children by a second marriage are necessary par ties defendant to a bill which seeks to set aside for fraud a family settlement made between the mother and the children of the first marriage, to annul the title which A PPEALS from the District Court of the United States for the District of Porto Rico to review a decree setting aside, for fraud, a family settlement and the title which apparently flowed therefrom, avoiding collaterally decrees of the Porto Rican courts concerning the same, and setting aside sales made in virtue of the title apparently vested by the settlement. remanded with directions to dismiss the bill for want of jurisdiction. Ed. Note.-For cases in point, see Cent. Dig. vol. 20, Evidence, §§ 36-48. Reversed and *284 See same case below, on motion to vacate of law. As observed by Chief Justice decree, 2 Porto Rico Fed. Rep. 189. The facts are stated in the opinion. Messrs. N. B. K. Pettingill and George H. Lamar for appellants. Waite: 'We are not to consider the testimony in any case. Upon a writ of error, we are confined to the bill of exceptions, or questions of law otherwise presented by the Messrs. Frederic D. McKenney and record; and, upon an appeal, to the stateFrancis H. Dexter for appellee. ment of facts and rulings certified by the court below. The facts set forth in the Mr. Justice White delivered the opinion statement which must come up with the apof the court: These several appeals were taken by the various appellants from the same decree. We dispose of them together. The transcript is voluminous and confused. Following the order of the court below and the direction of the counsel for all the appellants, not objected to by the counsel for the appellee, the transcript contains all the proceedings, all the testimony offered at the hearing, together with the opinion as well as the elaborate findings of fact and conclusions of law by which the court below disposed of the case. The many assignments of errors proceed upon the assumption that every question arising from the transcript is open for our consideration. Our power to review is derived from § 35 of the act of April 12, 1900 (31 Stat. at L. 85, chap. 191), which provides "that writs of error and appeals from the final decisions of the district court of the United States [for Porto Rico] shall be allowed and may be taken to the Supreme Court of the United States in the same manner and under the same regulations as from the supreme courts of the territories of the United States." Our jurisdiction over causes coming from the territories generally was thus stated in Idaho & O. Land Improv. Co. v. Bradbury, 132 U. S. 509, 513, 33 L. ed. 433, 436, 10 Sup. Ct. Rep. 177, 178: "Congress has prescribed that the appellate jurisdiction of this court over 'judgments and decrees' of the territorial courts, 'in cases of trial by jury, shall be exercised by writ of error, and in all other cases by appeal;' and 'on appeal, instead of the evidence at large, a statement of the facts of the case in the nature of a special verdict, and also the rulings of the court on the admission or rejection of evidence when excepted to, shall be made and certified by the court below,' and transmitted to this court with the transcript of the record. Act of April 7, 1874, chap. 80, § 2, 18 Stat. at L. 27, 28." And, as pointed out in the same case, (p. 513), followed since in a long line of cases: "The necessary effect of this enactment is that no judgment or decree of the highest court of a territory can be reviewed by this court in matter of fact, but only in matter peal are conclusive on us.' Hecht v. Boughton, 105 U. S. 235, 236, 26 L. ed. 1018." While the suggestion that because there is no intermediate reviewing court between this and the district court of the United States for Porto Rico, differing from what is generally the case in the territories of the United States, a wider scope of authority should exist in reviewing by appeal the decrees of the district court of Porto Rico, may have cogency, it affords no ground for disregarding the plain command of the statute of 1874, which is here applicable, as expounded by many previous decisions of this court. It follows that the greater part of the transcript is superfluous, and we therefore disregard it and confine our attention to such legal questions as necessarily arise on the face of the record; viz., to rulings concerning the rejection or admission of testimony, duly excepted to, and to the sufficiency of the findings to sustain the legal conclusion or decree based on them. The sole complainant, María Rios de Rubio, a widow, was averred to be "a resident of San Juan, Porto Rico, and a loyal subject of the King of Spain." There was no specific traverse of this averment. The court expressly found "that the citizenship and residence of the parties was as alleged in the bill of complaint." After the findings of fact had been made and the decree entered, and after an appeal by one of the parties, other of the defendants who had initiated appeals, but had not perfected them, moved for an extension of time to perfect their appeals and for an opening of the decree, on the ground that when the bill was filed complainant was not a citizen of Spain, but of Porto Rico, and therefore the court never had jurisdiction of the case. This motion was entertained by the judge then presiding, who succeeded in office the judge by whom the cause was tried. After hearing the evidence offered by both parties and analyzing the same, it was found that the complainant was a citizen of Spain, as alleged. The motion to reopen was therefore denied. Without stopping to review the elaborate discussion of the subject on behalf of the appellants, we content ourselves with saying that we think the facts upon which the court based its action sustain that conclusion, and therefore the conten 286 tion as to want of jurisdiction, because of the alleged absence of Spanish citizenship of the complainant, is without merit. In approaching the merits we put out of view for the moment the many assignments of error which are addressed to rulings of the court admitting or rejecting evidence, and reserve for ulterior determination whether, in view of the state of the record, such objections are open, and, if they are, whether any of them are well taken. In order to a clear understanding of the origin of the controversy, we state the facts out of which it arose, confining ourselves to those shown by the pleadings or documents made a part thereof or established by the findings below. José María Rios and Manuela Gutman were married in Porto Rico in 1866. There being no marital contract to the contrary, a legal community of property, as defined in the Spanish law, supervened between the spouses. In November, 1887, José, the son by the first marriage, being yet a minor, died intestate, and his mother, Manuela, instituted in the proper court proceedings concerning the estate of her deceased son. It may be conceded that the mother, as the immediate ascendant, was the sole heir of the son, to the exclusion of the sisters, the estate taken by her, however, being only usufructuary in character, since at her death, as the estate of the son had come to him as part of his paternal inheritance (the succession of his father), it reverted to the sisters, children of the father, because of the principle of the Spanish law which took into account the source whence the estate of the son had been derived, for the purpose of regulating its transmission by death. In 1890 the daughter María married one Rubio, and in 1898 Petronila, the other daughter, married one Noya. In the mean-* while five children were born of the marriage between Manuela Gutman and Bustelo, and the latter died, leaving surviving him his widow and these five children. From the death of the first husband, in 1875, to January, 1901, Manuela Gutman possessed and controlled all the property which she entered into possession of at the date of the death of her first husband, without rendering accounts of her administration to the court in which the estate had been opened, although that court had full power to control and direct her administration. The wife, at the time of the marriage, had 8,000 pesos of separate money and the husband about half that amount. During the nine years which intervened between the marriage and September 8, 1875, the husband had become the owner of various pieces of real estate, seven or eight of which were situated in the district of Naguabo, and one, or maybe two or more, in the district of Humacao. On September 8, 1875, the husband, Rios, died, leaving surviving him his widow, Manuela, and three minor children, the issue of the marriage; viz., The daughters, before their marriage, gen. two daughters, the one Petronila and the erally lived with their mother and were eduother María, and a son, José. On the night cated and supported by her, and after their of his death the husband executed a power marriage received some allowance for their of attorney, authorizing his wife to make a support, the extent of which need not be last will on his behalf, and on September 12 considered. It is undoubted that after their following, in virtue of this power, the wife marriage dissatisfaction on the part of the executed the will. As the document was in daughters and their husbands ensued beno respect dispositive, but purely declara- cause of the failure of the mother to account tory of the rule of legal succession, its effect and finally settle the estate of the father. on this controversy may be put out of view. This dissatisfaction culminated a short By the law of Spain the three children were while before January 1, 1901, by the bring. the heirs of the estate of their father, less ing of a suit in the district court of Porto the mother's share of the community estate, Rico, in which the succession of the father if any, subject to the usufruct of the mother was pending, seeking to compel the mother on her husband's estate, and subject to a to account and distribute the estate. In marital fourth in favor of the wife, if the this suit the daughters were both reprecircumstances justified such an allowance. sented by their attorney, Mr. Cuadra. The widow instituted the necessary prelim- Shortly after the commencement of this proinary probate proceedings in the proper ceeding an asserted understanding was had court to open the estate, and became exe- between the mother and her daughters for cutrix and the tutrix of her minor children the entire settlement of all matters relative and usufructuary of their estate, and, in one to the property which had come into her or both capacities, went into possession and possession and under her control, as the recontrol of the entire property, including insult of the death of her husband and her such property her community estate, if any there was. Two years after the widow married Miguel Bustelo. minor son, the issue of the first marriage. The settlement was embodied in a writing dated the 16th day of January, 1901, and 067. signed by the parties and witnesses, among these witnesses being Mr. Cuadra, the lawyer of the two daughters, and Mr. Landron, a lawyer who represented the mother in the negotiations which preceded the agreement. The agreement, which is in the margin,† purported by way of transaction to adjust all controversies as to the property between the mother and daughters, and, to accomplish this purpose, transferred to the mother in full ownership certain described properties, left by the first husband, situated in the district of Naguabo, and to the two daughters in joint equal undivided ownership a certain estate situated in Naguabo, and also a much larger estate situated in Humacao, both of which also at the death of the first husband stood in his name and had passed into the possession of his widow, in virtue of her administration or usufruct. In April, 1901, Mr. Cuadra, as the attorney of the daughters Marfa and Petronila, and Mr. Landron, as the attorney of the mother, Manuela, instituted in the district court of Humacao a proceeding under the +First. Doña Manuela Gutman, widow of leave each interested party in full possesBustelo, in her own proper right shall deliver sion of what belongs to her by this agreeimmediately to her daughters by her firstment, and furnished with their respective marriage, named Doña María Guadalupe titles of property as inscribed in the books Rios, widow of Rubio, and Doña Petrolina of the registry, free from every charge and Patricia Rios de Noya, all the lands and tene- lien. ments comprised in the plantation known as "San José de las Mulas," situated in this jurisdiction, with the exception of a lot of land 40 cuerdas in extent, belonging now to the succession of her second husband, Mr. Bustelo, and acquired by said succession at a public auction. Second. In the same manner Señora Gutman shall immediately deliver to the abovenamed daughters of her first marriage the lands which form the estate called "Culo Prieto," in the jurisdiction of Naguabo. Third. Doña Manuela Gutman shall retain for herself, and as sole and exclusive owner with all property rights, all the lands that may be found remaining in the jurisdiction of Naguabo, left at the death of her first husband, Don José Rios y Berrios, or, approximately 900 cuerdas. Fourth. In view of the fact that by this instrument the co-ownership, existing until now, in the hereditary estate left at the death of the intestate, Don José Rios y Berrios, becomes finally dissolved, it is by this settlement understood and agreed that each contracting party hereto becomes the exclusive owner of her share without reservation or limitation of any kind. Fifth. As soon as this settlement shall be signed before witnesses by the contracting parties, without prejudice to its being converted into a public document within the space of forty-eight hours following the day of its date, or as soon as the notary of this town may return to his office, the lawyers of Mrs. Gutman and her daughters shall put a stop to all their mutual judicial proceedings, not only as to the voluntary suit touching the estate of Don José Rios y Berrios, but also as to all collateral and appel late matters. Sixth. The lawyers, José María Cuadra and Rafael Lopez Landron, the first representing Doña María Guadalupe and Doña Petronila Patricia, and the second representing Doña Manuela Gutman, become hereby obliged to conclude this settlement in a manner which shall carry the same to conclusion without loss of time, so as to Seventh. The expenses of this settlement, that is, the deeds, the expenses of registration, the means of ratifying this settlement before the courts, aside from the fees of the lawyers, shall be to the exclusive account of Doña Manuela Gutman. Eighth. Moreover, on the occasion of this arrangement, which the interested parties esteem as highly convenient, Doña María and Doña Petronila find themselves satisfied with the correctness observed by their mother in the very troublesome duty of preserving so large an estate for the term of so many years, in spite of the very serious difficulties overtaking the estate; the said Mrs. Gutman reserves to herself the right to present to her daughters solemn proof of the honesty with which she has acted up to this day, and a detailed and approved statement of the very grave misfortunes against which the estate has struggled during the long time in which she has administered it. Ninth. Because of her being better ac- before the witnesses who are present and the (Signed) Manuela G., Widow of Bustelo. Lawyer José María Cuadra. Lawyer Rafael Lopez Landron. M. Argueso. |