Opinion
July 19, 1879.
Gen. Stat. R.I. cap. 132 and cap. 133 secure the benefit of the oyster fisheries in Rhode Island primarily to the people of the State. They do not, however, prohibit the citizens of other States from acquiring and holding a derivative benefit and emolument from the fisheries. Gen. Stat. R.I. cap. 132, § 10, "No person not a citizen of the State shall be allowed to fish for oysters or other shell-fish within the waters of this State," applies only to the "free and common oyster fisheries" of Rhode Island. Gen. Stat. R.I. cap. 133, § 14, "The oysters planted or growing on any private oyster ground leased as aforesaid shall, during the continuance of the lease, be the private personal property of the lessee," . . . . protects such oysters as personalty and makes them the legal property of the lessee, but does not apply to equitable rights derived from the lessee. A., an inhabitant of Rhode Island, and B., a resident in Massachusetts, agreed that A. should lease certain oyster grounds in Narragansett Bay, plant them with oysters, and ship the oysters to B.B. was to furnish the required capital, direct the business, and pay A. Large investments were made, and the business was conducted under the agreement for several years. A. then repudiated the agreement and held the property intrusted to him. B. filed a bill in equity against A., to enforce the agreement, to compel A. to account, and for an injunction. A. demurred, alleging the statutory illegality of the agreement. Held, that the demurrer could not be sustained. Query, whether relief was to be given in the form prayed for.
BILL IN EQUITY, praying for an account and for an injunction. On demurrer to the bill.
The bill charges that Frederick W. Holbrook and others of Boston, in the State of Massachusetts, formed a copartnership under the name of the New England Oyster Company, to carry on the business of planting and selling oysters; that wishing to use for this purpose certain upland and tide-flowed ground at Conimicut Point in Narragansett Bay, and learning that leases of tide-covered oyster grounds from the State of Rhode Island could by statute be granted only to inhabitants of Rhode Island, they arranged with the respondent, allowing him proper compensation, as follows: he to take in his own name, but for them, and at their expense, leases of tide-flowed oyster grounds from the State of Rhode Island, and to obtain for them and in their name a lease of adjacent upland; that the defendant obtained the lease of the oyster beds, but took the lease of the upland in his own name. The bill continues:
"And after the execution of the said leases, pursuant to the understanding by and between your orators and the said McGarvey, it was agreed between them that your orators should procure and plant oysters in said grounds, and should procure and furnish at their expense all the necessary material and supplies for the transaction of said business, and that said Alexander McGarvey should, under the direction of your orators, procure the necessary laborers, such as were not provided by your orators, at the expense of your orators, and have the general superintendence of said business and laborers; and in consideration of his taking and holding of said lease of grounds under tide-waters, and of such his superintendence, your orators agreed to pay the said Alexander McGarvey the large compensation of eleven hundred dollars the first year, and since then at the rate of twelve hundred dollars per annum.
"That under said agreement it became and was the duty of the said Alexander McGarvey to plant on said grounds, and to take up and forward to your orators in Boston, for the sole and exclusive benefit of your orators, oysters from said grounds from time to time, in such quantities as your orators should request, and at their expense.
"That under said agreement your orators conducted said business from about the day of A.D. 1872, performing on their part all the conditions of said agreement by them to be performed, and paying to said McGarvey said salary as agreed, until about the 1st day of January, A.D. 1879, when the said Alexander McGarvey refused to perform the conditions of said agreement by him to be performed: in this, among other things, he refused to take up and forward oysters from said grounds to your orators when requested; he made claims upon your orators for the expenses of said grounds and business which had not been incurred by him; he made claims upon your orators for the wages of laborers not employed under the direction of your orators; he took the oysters belonging to your orators and fraudulently converted them to his own use; and while refusing to perform the conditions of said agreement by him to be performed, he claimed possession and control of said grounds, and has forcibly prevented your orators from entering upon said grounds for the purpose of taking up their oysters; and while refusing to allow your orators to have possession and control of their own property, has demanded of your orators large sums of money as a condition of allowing your orators to have possession and control of the same.
"And your orators further represent that they have been ready and willing to settle all controversy and difficulty arising out of the failure of the said McGarvey to perform his agreements entered into as aforesaid with your orators, and have made what effort in that direction they have been able to, but the said McGarvey has wholly refused to comply with the reasonable requests of your orators in that behalf, and through the refusal of said McGarvey all efforts to make a fair and equitable adjustment have failed.
"And your orators further represent that since the refusal of the said McGarvey to perform his agreement with your orators, your orators are informed and believe it to be true, and therefore aver, that the said McGarvey has taken from said grounds leased for the sole benefit of your orators, and secreted large quantities of oysters, which he should have forwarded to your orators, and which your orators requested him to forward to them, and has converted them or proposes to convert them to his own use.
"And your orators, since said refusal of the said McGarvey to keep his said agreements with your orators, have been further informed and believe it to be true, and therefore aver, for a long time past he has been in the habit of taking oysters from said grounds without permission, direction, or knowledge of your orators, and disposing of them in various ways, for his own benefit and profit.
"And now your orators further represent that it is vital to the prosecution of their said business that they should not only be in receipt of a supply of oysters from said grounds in season to meet the demands of their business, which they have relied upon, but that they should have the use of said grounds as they had anticipated they would have, at once, for the the purpose of planting oysters for the next season.
"And your orators further represent that they have expended large sums of money in the construction and erection of buildings and improvements upon said upland, leased as aforesaid for their benefit, and upon the upland adjacent to said grounds, for the purposes of conducting said business, and upon the faith of said agreements made with the said McGarvey.
"But now your orators represent and complain that by reason of the refusal as aforesaid of the said defendant to perform the conditions of the agreements entered into with your orators as aforesaid, they are entirely cut off from their supply of oysters, which they had counted upon receiving from the said McGarvey upon their orders; and by reason of the said McGarvey refusing to allow your orators to go on to said grounds, or to have possession or control of them, they are prevented from taking oysters themselves therefrom; they are deprived of the use of their said buildings, and improvements made thereon, and on the upland as aforesaid, and they will be also debarred and prevented from using said grounds as they expected to, within a few days, for the purpose of planting oysters therein; all of which is of very great damage and loss to your orators, as well in the present as in the future.
"And your orators aver that all said refusals on the part of said McGarvey, and all his said acts and doings herein set forth, are in violation of the agreements made and entered into between the said McGarvey and your orators, to the effect that said ground, and improvements should be held for the benefit of your orators, the said McGarvey receiving a salary as aforesaid from your orators as compensation for his services, which your orators are and ever have been ready and willing to pay; and your orators had well hoped that the said McGarvey would have complied with the requests of your orators to fulfil his part of said agreements, and allowed your orators to proceed with their said business, connected with said grounds and improvements, in accordance with said agreements, and that the said McGarvey would have complied with the reasonable requests of your orators, to adjust and settle all difficulties growing out of the refusal of the said McGarvey to perform the conditions of his contracts with your orators; but now so it is, that the said McGarvey wholly refuses to perform his part of said agreements made with your orators, declining to forward any oysters to your orators upon their order, but secreting them from your orators, and refusing to allow your orators to exercise any control over said grounds or the buildings and improvements connected therewith; declining to transfer said leases to any other party for the benefit of your orators, pretending that said leases are in some way for his own benefit, without reference to said agreements, and that the oysters upon said grounds are his property, and the buildings and improvements for his benefit, and demanding that your orators shall pay an exorbitant sum of money to him for a transfer of said leases, and the possession of their own property; all which refusals, actings, doings, pretences, and demands are contrary to equity and good conscience."
The bill prays for an account, that McGarvey may be compelled to transfer the leases of the tide-flowed oyster grounds to some citizen of Rhode Island, to be designated by the complainants, and to transfer the lease of the upland to the complainants, the complainants to give bond to protect McGarvey; that McGarvey may be enjoined from interfering with the complainants' control and management of the oyster business, oyster grounds, and upland; and that the oyster business may, during the term demised of the oyster grounds, be prosecuted by the complainants, under the direction of a master in chancery, and for general relief.
To this bill the respondent demurred for want of equity, also because the contract or trust set forth was illegal, and in violation of the statutes of the State. Gen. Stat. R.I. cap. 132 and cap. 133.
A. A.D. Payne and Colwell Colt, for complainant.
Miner Roelker, for respondent.
The defendant contends, in support of the demurrer, that it is the policy and design of our statutes to confine the benefit of the oyster fisheries of the State to the people of the State, and that, therefore, any contract which attempts to secure an interest in the fisheries to citizens of other States is a fraud on the statutes and for that reason void.
The legislation on the subject is contained in Gen. Stat. R.I. cap. 132 and cap. 133. Cap. 132 relates to the free and common oyster fisheries. It provides that "no person not a citizen of this State shall be allowed to fish for oysters or other shell-fish within the waters of this State," and it prescribes a penalty for the violation of the provision. Cap. 133 relates to private and several oyster fisheries. It authorizes the shell-fish commissioners to lease, in the name of the State, to any person, being an inhabitant in the State, any piece of land within the State, covered by tide-water at low tide, and not within any harbor line, to be used as a private and several oyster fishery."
The effect of this legislation is undoubtedly to secure the benefit of the fisheries primarily to the people of the State. We see little reason to doubt that this was the designed effect. The statutes, however, do not expressly prohibit the citizens of other States from acquiring, through the citizens of this State, a derivative benefit or emolument. If any such prohibition exists, it exists by implication. And when we consider how easily the prohibition might have been expressed, and how probable it is that it would have been expressed if it had been intended, we do not think it is to be lightly implied.
There is no reason to suppose that the object of the statutes was to confine the consumption of Rhode Island oysters to Rhode Islanders for the purpose of cheapening them. Oyster fishing in Rhode Island is an important industry, and, with free exportation, it is capable of very great extension. The State is interested to extend, not to restrict it. Indeed, we do not know that the right of our oystermen to export their oysters has ever been questioned. But if the lessee of a private fishery has the right to export and sell his oysters, why has he not also the right to contract with a citizen of another State to sell to him for consumption, out of the State, the product of his fishery, while it is still growing in its bed, and thus vest in him an equitable interest in it? We find it impossible to say it cannot be done. But if this can be done why can he not also contract, for a valuable consideration, to allow a citizen of another State to plant his fisheries with oysters, and to grow them there, and gather them in their season for exportation and consumption abroad? We do not see why it cannot be done. But if it can be done, then this bill can be sustained, for it is what the defendant has done.
The defendant is not a mere naked trustee who holds the lease of his fishery for the complainants without any possession or control of it or any beneficial interest in it. He remains in possession of the fishery, superintending its cultivation and management, and receiving for his services as lessee and superintendent a handsome compensation. He makes a profit out of his lease under the contract, and probably a larger profit than he could have made without it. There is nothing in the contract which violates the letter of the statutes. The complainants, relying on it and on the defendant's good faith, have planted the fishery at a heavy expense. The defendant has, in consequence, in his possession a large amount of property, which, if the contract is illegal, and the complainants without remedy, he can appropriate to himself, thus perpetrating a monstrous fraud. If the complainants were Rhode Islanders we should not hesitate a moment to enforce the contract. The defendant says the contract is illegal because they are not Rhode Islanders. The court ought to be full satisfied of the illegality before it refuses on that ground to enforce it. The court is not so satisfied.
The defendant calls attention to the provision "that no person not a citizen of this State shall be allowed to fish for oysters or other shell-fish within the waters of this State." The provision is contained in the chapter relating to free and common fisheries, and, notwithstanding the generality of its language, we think it applies only to those fisheries. The words "fish for" more fitly describe the act of raking for native oysters, scattered over the common grounds, than the act of taking up oysters which have been planted and propagated in private beds. The private fisheries are protected from depredation by severe penalties and punishments which are peculiar to them. Finally, we cannot conceive why the lessee of a private fishery should not have the same freedom to employ whom he chooses to take his oysters as he has to dig his potatoes.
The defendant calls attention to section 14 of chapter 133. This section declares that the oysters planted or growing in private grounds "shall be the private personal property of the lessee," and that stealing them shall be larceny. The obvious purpose of the section is to make it clear that the oysters are personal property, and to throw over them the protection which is appropriate to such property. It was not intended to restrict the right of disposing of them by contract or otherwise. At most it merely confines the legal title in the oysters to the lessee while they are in his grounds. It does not prevent his disposing of rights which can be protected in equity. If it did, a contract like that in suit would be invalid, even though it was entered into with Rhode Islanders.
The defendant contends that the contract violates the supreme law of the State, to wit, the Constitution. He refers to section 17 of article 1, which declares that "the people shall continue to enjoy and freely exercise all the rights of fishery and the privileges of the shore to which they have been heretofore entitled under the charter and usages of the State." He contends that the effect of this is to confine the fisheries exclusively to the people of the State. In State. v. Cozzens, 2 R.I. 561, this court sustained the constitutionality of a statute, like that now in force, for the creation by lease of private fisheries. This covers the case at bar. For if such fisheries are constitutional, then it is not unconstitutional for the lessees, while retaining them, to deal with them, and with the product of them, as they deal with their other property, subject of course to the restrictions of the law and of their leases.
The demurrer is overruled. Whether relief shall be administered in the form in which it is prayed for, or in some other form, we will decide on further hearing.
Demurrer overruled.