United States v. North American Commercial Co.

• Decision Date: 27 April 1896
• Citation: 74 F. 145
• Parties: UNITED STATES v. NORTH AMERICAN COMMERCIAL CO.
• Court: U.S. District Court — Southern District of New York

74 F. 145

UNITED STATES v. NORTH AMERICAN COMMERCIAL CO.

United States Circuit Court, S.D. New York.

April 27, 1896

Wallace Macfarlane, U.S. Atty., and Max J. Kohler, Asst. U.S. Atty.

Carter & Ledyard, for defendant.

WALLACE Circuit Judge.

This is an action to recover rent for the year 1893 accruing under a lease executed March 12, 1890. By that instrument the plaintiffs, by the then secretary of the treasury, leased to the defendant, for 20 years from the 1st day of May, 1890 the exclusive right to engage in the business of taking fur seals on the islands of St. George and St. Paul in the territory of Alaska, and to send a vessel or vessels to said islands for the skins, and the defendant agreed to pay as annual rental the sum of $60,000, and $7.62 1/2 for each fur skin taken and shipped, together with a revenue tax of $2 upon each skin; payment to be made on or before the 1st day of April of each and every year during the existence of the lease. The lease contained the following covenants on the part of the defendant:

'It also agrees to obey and abide by any restrictions or limitations upon the right to kill seals the secretary of the treasury shall judge to be necessary under the law for the preservation of the seal fisheries in the United States and it agrees that it will not kill, or permit to be killed, so far as it can prevent, in any year, a greater number of seals than is authorized by the secretary of the treasury. It is understood and agreed that the number of fur seals to be taken and killed for their skins on said islands by the North American Commercial Company during the year ending May 1 1891, shall not exceed 60,000.'

The plaintiffs allege that the defendant, pursuant to the lease took and shipped 7,500 fur seal skins from said islands during the year 1893, whereby there became due, by its terms besides the $60,000, the sum of $72,187.50,-- in all, the sum of $132,187,-- which was payable April 1, 1894, and has not been paid. The defendant denies that during that year it took any seals from said islands, or shipped any skins whatever under the lease. It alleges that the secretary of the treasury did not limit or restrict the right of the defendant to take seals under the agreement during 1893 pursuant to the authority conferred on him by law to do so to the extent necessary for the preservation of the herd; that, prior to the 1st day of April, 1893, the United States entered into an obligation by treaty with the government of Great Britain whereby they engaged not to permit any taking of seals for their skins upon the said islands, and in order to perform the same prohibited this defendant from taking any seals for their skins at any time during that year; that by reason thereof the defendant could not, during that year, take any fur seals for their skins; that the prohibition was not necessary for the preservation of the seals upon said islands; that, by preventing the defendant from taking any skins under the agreement, the plaintiffs violated their agreement, and subjected the defendant to loss in the sum of at least $283,725; that, prior to the beginning of the suit, defendant duly presented to the accounting officers of the treasury for their examination its demand aforesaid; and that the same has been by said accounting officers disallowed.

The decision of the case requires a determination of the nature and extent of the rights and obligations of the parties under the lease, and whether, upon the facts, there has been an invasion by the plaintiffs of the contract rights of the defendant, whereby it has been deprived of the privileges to which it was entitled. The terms of the covenant which qualifies the exclusive right demised to the defendant of engaging in the business of taking fur seals on the islands are very comprehensive, and the present controversy is the outgrowth of a difference of opinion between the parties respecting its scope and effect. What was intended to be included in the general right granted to the defendant is manifest. It was, not the exclusive right of killing the seals upon the islands, or of killing any specified number of seals, but of engaging in what at the time was known as a business, a definite pursuit, which had been regulated by law and official supervision. By the acquisition of Alaska in 1868 the United States became the proprietor of the seal fisheries appurtenant to the islands of St. George and St. Paul. Those islands are the breeding ground of the herd which, in the early spring, moves northward to Behring sea, and are the habitat of the herd during the summer and fall. The seals land in great numbers upon the islands, dividing into families consisting of a male, or bull, and many females, or cows. The younger seals, or bachelors, are not admitted to the breeding ground, but are driven off and destroyed in great numbers by the bulls, and until they are three or four years old occupy other portions of the islands, passing through lanes out to and in from the sea at intervals. They multiply in such excess of the breeding requirements that a large proportion of them can be killed without diminishing the birth rate of the herd, and their skins are exceedingly valuable. By protecting the females, and restricting capture to the bachelors, the fisheries are capable of a permanent annual supply of skins, affording a valuable source of revenue. The subject soon attracted the attention of congress, and by the act of July 1, 1870, a code of regulations was adopted, designed to protect the fisheries and secure a revenue to the government therefrom. This act made it unlawful to kill seals upon the islands or adjacent waters except during certain specified months, or to kill any female seals; regulated the manner in which the natives of the islands might be permitted by the secretary of the treasury to kill young seals for food and old ones for clothes; and prescribed penalties and forfeitures for violation of its provisions. The act also authorized the secretary of the treasury to lease to proper and responsible parties, having due regard to the interests of the government, the native inhabitants, and the protection of the seal fisheries, for a term of 20 years, the right to engage in the business of taking fur seals on the islands, at an annual rental of not less than $50,000, and at the expiration of said term, or the surrender or forfeiture of any lease, to make other similar leases. He was required, in making leases, to have due regard to the preservation of the seal fur trade of the islands, and to exact from lessees an obligation 'conditioned for the faithful observance of all laws and requirements of congress and of the regulations of the secretary of the treasury touching the subject-matter of taking fur seals, and disposing of the same. ' The act also contained the following provision.

'Sec. 3. And be it further enacted, that for the period of twenty years from and after the passing of this act the number of fur seals which may be killed for their skins upon the island of St. Paul is hereby limited and restricted to seventy-five thousand per annum; and the number of fur seals which may be killed for their skins upon the island of St. George is hereby limited and restricted to twenty-five thousand per annum: provided, that the secretary of the treasury may restrict and limit the right of killing if it shall become necessary for the preservation of such seals with such proportionate reduction of the rents reserved to the government as shall be right and proper, and if any person shall knowingly violate either of the provisions of this section he shall, upon due conviction thereof, be punished in the same way as provided herein for a violation of the provisions of the first and second sections of this act.'

Pursuant to this enactment, and in 1870, a lease was made by the secretary of the treasury for the term of 20 years, to the Alaska Commercial Company. That lessee, during the whole terms of its lease, was allowed to take annually the full quota of 100,000 skins, but during one year contented itself with taking only $75,000.

In the revision by Congress, in 1874, of the laws of the United States, the lease to the Alaska Commercial Company was specifically recognized, and the provisions of the act of July 1, 1870, were substantially reproduced. The revisers treated the act of 1870 as conferring authority upon the secretary of the treasury, after the expiration of the first period of 20 years, to prescribe the conditions of leases except in respect to the length of term and the minimum rental; and they treated the provision in that act fixing the maximum take, and requiring a proportionate reduction of rent in case the secretary of the treasury should reduce it, as applicable only to the 20-year period ending July 1, 1890; and this would seem the natural and reasonable construction of that act. Whether that construction was correct or not, the revision was the legislative declaration of the statute law upon the subject on and after the 1st day of December, 1873; and, in the absence of any obscurity in the meaning, the court cannot look to the pre-existing statutes to see whether or not they were correctly incorporated in the revision. U.S. v. Bowen, 100 U.S. 508. By act of March 24,...