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business of taking fur seals on the islands of St. George and St. Paul, in the territory of Alaska, and for royalties upon the seals taken, and for the revenue tax on the skins, the judgment of the Circuit Court being in favor of the United States for $94,687.50, with interest and costs amounting to $107,257.29. Judgment of Circuit Court reversed, and cause remanded with direction to enter judgment in favor of the United States for $76,687.50 with interest from April 1, 1894, etc.

See same case below, 74 Fed. Rep. 145.

Statement by Mr. Chief Justice Fuller: This was an action brought by the United States against the North American Commercial Company to recover the sum of $132, 187.50, with interest, for rent reserved for the year ending April 1, 1894, under a so-called lease, bearing date March 12, 1890, made by the Secretary of the Treasury to the company, and royalties upon 7,500 fur-seal skins taken and shipped by the company that year in virtue of that instrument, and for 111] the revenue tax of $2 on *each skin. The claim of the government consisted of these

items:

[blocks in formation]

$60,000 00

15,000 00

57,187 50 $132,187 50

And interest thereon from April 1, 1894. The case was tried by the circuit court without a jury. The court found for the United States in the sum of $94,687.50, with interest, and judgment was entered in their favor for $107,257.29, principal, interest, and costs. 74 Fed. Rep. 145.

The company having taken a writ of error to the circuit court o: appeals for the second circuit, that court certified a certain question arising in the cause concerning which it desired the instructions of this court for its proper decision, whereupon this court ordered that the whole record and cause be sent up for consideration. A counterclaim of the company against the United States for breach of the lease was disallowed and dismissed by the circuit court, but not on the merits, and without prejudice to the right of the company to enforce the same by any other proper legal proceeding.

The agreement of lease out of which the cause of action arose is as follows:

"This indenture, made in duplicate this twelfth day of March, 1890, by and between William Windom, Secretary of the Treasury of the United States, in pursuance of chapter 3 of title 23, Revised Statutes, and the North American Commercial Company, a corporation duly established under the laws of the state of California, and acting by I. Liebes, its president, in accordance with a resolution of said corporation adopted at a meeting of its board of directors held January 4, 1890, witnesseth: That the said Secretary of the Treasury, in consideration of the agreements hereinafter stated, hereby leases to the said North American Commercial Company for a term of twenty years from the first day of

[112] May, 1890, the exclusive *right to engage in 171 U. S.

the business of taking fur seals on the Islands of St. George and St. Paul, in the ter ritory of Alaska, and to send a vessel or vessels to said islands for the skins of such seals.

"The said North American Commercial Company, in consideration of the rights secured to it under this lease above stated, on its part covenants and agrees to do the things following, that is to say:

"To pay to the Treasurer of the United States each year during the said term of twenty years, as annual rental, the sum of sixty thousand dollars, and in addition thereto agrees to pay the revenue tax or duty of two dollars laid upon each fur seal skin taken and shipped by it from the islands of St. George and St. Paul, and also to pay to said Treasurer the surther sum of seven dollars sixty-two and one half cents apiece for each and every fur seal skin taken and shipped from said islands, and also to pay the sum of fifty cents per gallon for each gallon of oil sold by it made from seals that may be taken on said islands during the said period of twenty years, and to secure the prompt payment of the sixty thousand dollars rental above referred to the said company agrees to deposit with the Secretary of the Treasury bonds of the United States to the amount

of fifty thousand dollars, face value, to be held as a guarantee for the annual payment of said sixty thousand dollars rental, the interest thereon when due to be collected and paid to the North American Commercial Company, provided the said company is not in default of payment of any part of the said sixty thousand dollars rental.

"That it will furnish to the native inhabitants of said islands of St. George and St. Paul annually such quantity or number of dried salmon and such quantity of salt and such number of salt barrels for preserving their necessary supply of meat as the Secretary of the Treasury shall from time to time determine.

"That it will also furnish to the said inhabitants eighty tons of coal annually and a sufficient number of comfortable dwellings in which said native inhabitants may reside, and will keep *said dwellingsin proper repair, and[113] will also provide and keep in repair such suitable school-houses as may be necessary, and will establish and maintain during eight months of each year proper schools for the education of the children on said islands, the same to be taught by competent teachers, who shall be paid by the company a fair compensation, all to the satisfaction of the Secretary of the Treasury, and will also provide and maintain a suitable house for religious worship, and will also provide a competent physician or physicians and necessary and proper medicines and medical supplies, and will also provide the necessaries of life for the widows and orphans and aged and infirm inhabitants of said islands who are unable to provide for themselves; all of which foregoing agreements will be done and performed by the said company free of all costs and charges to said native inhabitants of said islands or to the United States.

99

"The annual rental, together with all other | ing of one male or bull and many females or

payments to the United States provided for
in this lease, shall be made and paid on or
before the first day of April of each and every
year during the existence of this lease, be-
ginning with the first day of April, 1891.

"The said company further agrees to employ the native inhabitants of said islands to perform such labor upon the islands as they are fitted to perform, and to pay therefor a fair and just compensation, such as may be fixed by the Secretary of the Treasury; and also agrees to contribute, as far as in its power, all reasonable efforts to secure the comfort, health, education, and promote the morals and civilization of said native inhabitants.

"The said company also agrees faithfully to obey and abide by all rules and regulations that the Secretary of the Treasury has heretofore or may hereafter establish or make in pursuance of law concerning the taking of seals on said islands, and concerning the comfort, morals, and other interests of said inhabitants, and all matters pertaining to said islands and the taking of seals within the possession of the United States. It also agrees to obey and abide by any restrictions or limitations upon the right to kill seals that [114]the Secretary of the Treasury shall judge necessary, under the law for the preservation of the seal fisheries of 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."

"The said company further agrees that it will not permit any of its agents to keep, sell, give, or dispose of any distilled spirits or spirituous liquors or opium on either of said islands or the waters adjacent thereto to any of the native inhabitants of said islands, such person not being a physician and furnishing the same for use as a medicine.

"It is understood and agreed that the number of fur seals to be taken and killed for their skins upon said 'slands by the North American Commercial Company during the year ending May 1, 1891, sha'd not exceed sixty thousand.

"The Secretary of the Treasury reserves the right to terminate this lease and all rights of the North American Commercial Company under the same at any time on full and satisfactory proof that the said company has violated any of the provisions and agreements of this lease, or in any of the laws of the United States, or any Treasury regulation respecting the taking of fur seals or concerning the islands of St. George and St. Paul or the inhabitants thereof."

The circuit court made eighteen findings, including the following:

cows; that the young or male seals, or bache-
lors as they are called, are not admitted to
the breeding ground, but are driven off by
the older males and oftentimes destroyed by
them; that until such bachelor seals arrive
at the age of three or four years they occupy
other portions of the islands and can be
driven away from the breeding ground and
killed without disturbing the seals on the [115]
breeding grounds; that a large proportion of
these young bachelor seals may be so killed
without diminishing the birth rate of the
herd, and their skins are a valuable article of
commerce and are more valuable than the
skins of the females or older males; that by
protecting the females and restricting the
capture to the bachelors the fisheries are ca-
pable of a permanent and annual supply of
skins which would afford a valuable source
of revenue.

"Seventh. That after the making of the
said lease by the said plaintiff and the said
defendant, the said defendant entered upon
the enjoyment of the right thereby granted
it; but on account of the enforcement by the
said plaintiff of the provisions of a conven-
tion or agreement made and entered into by
the said plaintiff with the government of

Great Britain it prohibited and prevented the

said defendant, during the years 1890, 1891,
and 1892, from taking on the said islands as
many seals as might have been taken without
diminution of the herd, and far less in each
year than the number mentioned in the said
lease for the first year; the numbers taken in
those years being in 1890, 20,995; in 1891,
13,482; and in 1892, 7,547.

"Eighth. That for the said years of 1890,
1891, and 1892, it was agreed between the
Secretary of the Treasury and the said de-
fendant that the said defendant should pay
to the said plaintiff for the seal skins taken
by it on the said islands the tax and such
proportionate part of the rental of $60,000 and
the per capita sum of seven dollars sixty-two
and one half cents, as the number of seals
taken bore to one hundred thousand, except
that for 1890 the per capita of seven dollars
sixty-two and one half cents was not so re-
duced.

"Ninth. That by a convention or agreement with the government of Great Britain, commonly called the modus vivendi, the United States promised, during the pendency of the arbitration between those two governments relating to the Behring Sea controversy and the preservation of the seals resorting to those waters, to prohibit seal killing on the said islands in excess of 7,500 to be taken from the islands for the subsistence of the natives, and to use promptly its best efforts to insure the enforcement of the prohibition.

*"Tenth. That pursuant to such agreement[116]

the United States prohibited and prevented
the said defendant from taking any seals
whatever from the said islands during the
year 1893, and thus deprived the said defend-

"Sixth. The said islands of St. George and St. Paul in the territory of Alaska are the breeding ground of a herd of seals which in the early spring moves northward to Behring Sea, and are the habitat of that herd during the summer and fall of each year; that the ant of the benefit of its said lease. seals land in great numbers upon the said "Eleventh. That the Secretary of the Treasislands and divide into families, each consist-ury did not exercise the discretion conferred

upon him by section 1962 of the Revised Stat-skins could have been sold, namely, $300,000, utes to limit the right of killing seals when leaves as the net loss sustained by the said necessary for the preservation of such seals, defendant in consequence of the breach of its and did not so limit or restrict the right of the said lease by the said plaintiff, the sum of said defendant to take seals under its said $142,187.50, which is due and owing to the lease for the year 1893, and that during that said defendant by the said plaintiff; and year it was not necessary or even desirable that its claim therefor would be a proper mat

for the preservation of such seals to limit the killing of the seals upon the said islands to the said number of 7,500 specified in the said modus vivendi.

"Twelfth. That in the year 1893 the United States government itself, through the agents of the Treasury Department, took up on the said islands 7,500 seals; that the said defendant was permitted to co-operate in se

ter of counterclaim or credit in this action, if the conditions prescribed by § 951 of the United States Revised Statutes had been complied with by the said defendant."

"Eighteenth. The defendant did not present to the acc accounting officers of the Treas ury for their examination any claim for damages by reason of the losses alleged to have been incurred by the defendant by reason of

lecting the seals so killed, and to take, and the action of the United States in entering it did take and retain the skins of those into the said convention or modus vivendi seals, and in this way, and in this way only, with Great Britain and limiting the catch of the defendant received those 7,500 skins. seals upon the said islands to 7,500; and such

"In accordance with the power reserved to claim was not disallowed by the accounting him in said contract, the Secretary of the officers of the Treasury in whole or in part, Treasury at the commencement of the seal- and it was not proved to the satisfaction of[118] killing season for the year ending April 1, the court that the defendant was at the time 1894, fixed the compensation of the natives of the trial of this action in possession of upon the islands of St. Paul and St. George vouchers not before in its power to procure, to be paid to them by the defendant for kill- or that the defendant was prevented from ing the seals, sorting the skins, and loading exhibiting its said alleged claim at the Treasthem on board the defendant's steamer, at 50 ury by absence from the United States or by cents for each skin taken from the islands dur- unavoidable accident." ing the said season; and defendant paid to the natives said compensation, to wit, the sum of of law: $3,750.

"Thirteenth. That 20,000 bachelor seals could have been killed upon the said islands during the year 1893 in the customary way, without injury to or diminution of the herd, and the said defendant would have taken that number had it been permitted so to do.

"Fourteenth. That if the said defendant had been allowed to and had taken in the vear 1893, under its said lease, 20,000 seal 117]*skins, there would have been due to the said plaintiff the $60,000 rental and for the per capita of seven dollars and sixty two and one half cents and the revenue tax of two dcl. lars per skin, the sum of $192,500, making together the sum of $252.500--that is, twelve dollars and sixty-two and one half cents for each seal skin taken; that for the 7,500 received by the said defendant, as above set forth, it owes to the said plaintiff the said

The circuit court made these conclusions

"First. That the said defendant, having received the said 7,500 seal skins taken from the said islands during the year 1893, is liable to pay the said plaintiff therefor the said sum of $94,687.50, with interest thereon from the first day of April, 1894; and the said plaintiff is entitled to recover in this action said sum, with interest as aforesaid, from the said defendant.

"Second. That by reason of the breach of the said lease by the said plaintiff, prohibiting the said defendant from taking any seal skins during the year 1893, the said plaintiff is liable to the said defendant for the said sum of $142,187.50, with interest thereon from the first day of December, 1894.

"That on account of the same claim of the said defendant against the said plaintiff for damages for breach of the said lease not having been presented to and disallowed by the

sum of twelve dollars and sixty-two and accounting officers of the Treasury, it cannot half cents apiece, amounting to the be allowed as a counterclaim or credit in this sum of $94,687.50. action, and the said counterclaim is therefore

one

"Fifteenth. The defendant could have dismissed, but not on the merits thereof, and

sold 12,500 more seal skins if it had been allowed to take the same on the said islands during the year 1893, at the average market price of twenty-four dollars for each skin; which for the said number of 12,500 which it might have taken, but was prevented from taking by the act of the government of the United States, would amount to $300,000; that for such 12,500 seal skins the said defendant would have been liable to pay, according to the terms of its lease if it had taken 20,000 seal skins during that year, the sum of twelve dollars and sixty-two and one half cents each, amounting to $157,812.50, which, being deducted from the price at which such

without prejudice to the right of the said
defendant to enforce the same by any other
proper legal proceeding."

Mr. James C. Carter for plaintiff in
error.
Mr. John W. Griggs, Attorney General,
for defendant in error.

Mr. Chief Justice Fuller delivered the
opinion of the court:

By the act of July 27, 1868 (15 Stat. at L 240, chap. 273), the laws of the United States relating to customs, commerce, and navigation were extended over all the mainland, is

law.

[lands, and waters of the territory ceded to the United States by the Emperor of Russia, March 30, 1867, so far as applicable, and by § 6 of that act it was made unlawful for any person or persons to kill any otter, mink, marten, sable, or fur seal, or other fur-bearing animal within the limits of said territory, or in the waters thereof; provided that the Secretary of the Treasury might authorize the killing of any such fur-bearing animal, except fur seals, under such regulations as he might prescribe, and it was made his duty to prevent the killing of any fur seal, and to provide for the execution of the provisions of the section until otherwise provided by On the 3d of March. 1869, a resolution was approved (15 Stat. at L. 348, No. 22), entitled "A Resolution More Efficiently to Protect the Fur Seal in Alaska," declaring the islands of St. Paul and St. George in Alaska "a special reservation for government purposes," and that, until otherwise provided by law, it should be unlawful for any person to land or remain on either of said islands, except by the authority of the Secretary of the Treasury. July 1, 1870, an act entitled "An Act to Prevent the Extermination of Fur-bearing Animals in Alaska" was approved. 16 Stat. at L. 180, chap. 189. By the 1st section it was made unlawful to kill any fur seal upon the islands of St. Paul and St. George or in the waters adjacent thereto, except during the months of June, July, September, and October in each year, or to kill such seals at any time by the use of firearms, or to use other means tending to drive the seals away from said islands. Provided, that the natives should have the privilege of killing such young seals as might be necessary for their own food and clothing during other months, and also such old seals as might be required for their own clothing and for the manufacture of boats for their own use, which killing should be limited and controlled by such regulations as should be prescribed by the Secretary of the Treasury.

By § 2 it was made unlawful to kill any female seal, or any seal less than one year old, at any season of the year, except as above provided; and also to kill any seal in the waters adjacent to the islands, or on the beaches, clifis, or rocks where they haul up from the sea to remain.

[120] *The 3d section read as follows:

"Sec. 3. That for the period of twenty years from and after the passage 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."

The 4th section provided that immediately after the passage of the act the Secretary of the Treasury should lease for the rental mentioned in the 6th section of the act, to the best advantage of the United States, having due regard for the interests of the government, the native inhabitants, parties theretofore engaged in trade, and the protection of the seal fisheries, for a term of twenty years from the 1st day of May, 1870, "the right to engage in the business of taking fur seals on the islands of St. Paul and St. George, and to send a vessel or vessels to said islands for the skins of such seals," giving a lease duly executed, and not transferable, and taking from the lessee or lessees a bond, conditioned "for the faithful observance of all the 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, and for the payment of all taxes and dues accruing to the United States connected therewith; and in making said lease the Secretary of the Treasury shall have due regard to the preservation of the seal fur trade of said islands, and the comfort, maintenance, and education of the natives thereof."

The 5th section read:

*"Sec. 5. That at the expiration of said term [121) of twenty years, or on surrender or forfeiture of any lease, other leases may be made in manner as aforesaid, for other terms of twenty years; and any person who shall kill any fur seal on either of said islands, or in the waters adjacent thereto, without authority of the lessees thereof, and any person who shall molest, disturb, or interfere with said lessees, or either of them, or their agents or employees in the lawful prosecution of their business, under the provisions of this act, shall be deemed guilty of a misdemeanor, and shall for each offense, on conviction thereof, be punished in the same way and by like penalties as prescribed in the second section of this act; and all vessels, their tackle, apparel, appurtenances, and cargo, whose crews shall be found engaged in any violation of either of the provisions of this section, shall be forfeited to the United States; and if any person or company, under any lease herein authorized, shall knowingly kill, or permit to be killed, any number of seals exceeding the number for each island in this act prescribed, such person or company shall, in addition to the penalties and forfeitures aforesaid, also forfeit the whole number of the skins of seals killed in that year, or, in case the same have been disposed of, then said person or company shall forfeit the value of the same.

By the 6th section it was provided that "the annual rental to be reserved by said lease shall not be less than fifty thousand dollars per annum, and in addition thereto, a revenue tax or duty of two dollars is hereby laid upon each fur-seal skin taken and shipped from said islands during the con

tinuance of such lease to be paid into the
Treasury of the United States; and the Secre-
tary of the Treasury is hereby empowered
and authorized to make all needful rules and
regulations for the collection and payment of
the same, for the comfort, maintenance, edu-
cation, and protection of the natives of said
islands, and also for carrying into full effect
all the provisions of this act."

These provisions as well as others from the prior legislation were carried forward into the [122] Revised Statutes, approved *June 22, 1874, §§ 1954 to 1976 constituting chapter 3 of title 23, relating to the territory of Alaska, and §§ 1956 to 1976 thereof to the subject under consideration.

By § 1960 the killing of any fur seals upon the islands or their adjacent waters was forbidden, except during June, July, September, and October in each year, etc., with the same proviso as in the 1st section of the act of 1870.

Sections 1962, 1963, 1968, 1969, 1972, and 1973 were as follows:

"Sec. 1962. For the period of twenty years from the first of July, eighteen hundred and seventy, the number of fur seals which may be killed for their skins upon the island of St. Paul is limited 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 limited to twentyfive thousand per annum; but the Secretary of the Treasury may limit the right of kill

pany shall, in addition to the penalties and forfeitures herein provided, forfeit the whole number of the skins of seals killed in that year, or, in case the same have been disposed of, then such person or company shall forfeit the value of the same.

"Sec. 1969. In addition to the annual rental required to be reserved in every lease, as provided in section nineteen hundred and sixtythree, a revenue tax or duty of two dollars is laid upon each fur-seal skin taken and shipped from the islands of Saint Paul and Saint George, during the continuance of any lease, to be paid into the Treasury of the United States; and the Secretary of the Treasury is empowered to make all needful regulations for the collection and payment of the same, and to secure the comfort, maintenance, education, and protection of the natives of those islands, and also to carry into full effect all the provisions of this chapter except as otherwise prescribed."

"Sec. 1972. Congress may at any time hereafter alter, amend, or repeal sections from nineteen hundred and sixty to nineteen hundred and seventy-one, both inclusive, of this chapter.

"Sec. 1973. The Secretary of the Treasury is authorized to appoint one agent and three assistant agents who shall be charged with the management of the seal fisheries in Alaska, and the performance of such other duties as may be assigned to them by the Secretary of the Treasury."

ing, if it becomes necessary for the preserva- Pending the adoption of the Revised Stat

tion of such seals, with such proportionate re-
duction of the rents reserved to the govern-
ment as may be proper; and every person
who knowingly violates either of the pro-
visions of this section shall be punished as
provided in the preceding section.

"Sec. 1963. When the lease heretofore

utes, and on March 24, 1874 (18 Stat. at L. 24, chap. 64), the act of July 1, 1870, was amended so as to authorize the Secretary of the Treasury to designate the months in which fur seals "may be taken for their skins on the islands of St. Paul and St. George, in Alaska, and in the waters adjacent there

made by the Secretary of the Treasury to to, and the number to be taken on or about

or

the islands respectively." Thus the Revised Statutes were in effect amended so that[124] whereas by § 1960 the months of June, July, September, and October had been designated

or as the months in which fur seals might be taken on the islands and in the waters adjacent thereto, for their skins, and by § 1962 the maximum number which might be killed on the island of St. Paul was limited to 75,000, and on the island of St. George to 25,000, per annum, the Secretary of the Treasury was authorized by the amendatory act to designate the months in which fur seals might be taken, and the number to be taken on or about each island respectively. The times of killing and the number to be killed were left to the judgment of the Secretary of the Treasury.

'The Alaska Commercial Company,' of the right to engage in taking fur seals on the islands of Saint Paul and Saint George, pursuant to the act of July 1, 1870, chapter 189, when any future similar lease expires, is surrendered, forfeited, or terminated, the Secretary shall lease to proper and responsible parties, for the best advantage of the United States, having due regard to the interests of the government, the native inhabitants, their comfort, maintenance, and education, as well as to the interests of the parties heretofore engaged in trade and the protection of the fisheries, the right of taking fur seals on the islands herein named, and of sending a vessel or vessels to the islands for the skins of such seals for the term of twenty years, at an annual rental of not less than fifty thousand dollars, to be reserved in such lease and se[123]cured by a deposit of United States bonds to that amount, and every such lease shall be duly executed in duplicate, and shall not be transferable."

"Sec. 1968. If any person or company, under any lease herein authorized, knowingly kills, or permits to be killed, any number of seals exceeding the number for each island in this chapter prescribed, such person or com

Manifestly the object the government had in view throughout this legislation was the preservation by proper regulations of the furbearing animals of Alaska, including, and particularly, the fur seals.

The first twenty years being about to expire the Secretary of the Treasury on December 24, 1889, advertised for proposals "for the exclusive right to take fur seals upon the islands of St. Paul and St. George, Alaska,

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