Stinson v. Hardy

Opinion by Mr. Justice Wolverton. — 589 — The vital question for our determination is whether O. B. Hardy, in the light of the foregoing contract, and within the spirit and purview of this act, was or was not a lessee when the work was performed for which these liens are claimed. It is contended on the one hand that the contract or agreement is a lease, and upon the other that it is a mere license, and that the liens attach to the mines in the hands of the owners. The distinction between a lease and a license is thus aptly stated by Bean, C. J., in Christensen v. Pacific Coast Borax Company, 26 Or. 302 (38 Pac. 128): “A lease is a contract for the possession and profit of land by the lessee, and a recompense of rent or increase to the lessor, and is a grant of an estate in the land; * * * a license is an authority to do some act or series of acts on the land of another for the benefit of the licensee, without passing any estate in the land; and when the license is to mine upon the land of another, the right of property in the minerals when they are severed from the soil vests in the licensee. ” This shows a clear and indubitable distinction between the two, and they are further distinguished in that the one is a corporeal and the other an incorporeal hereditament. Licenses are, however, frequently granted with terms and conditions and upon considerations which ally them so closely to leases that it is difficult to determine when the border line has been transcended, and whether or not they are in reality leases instead of licenses. A mere license, while it remains executory, is revocable at the pleasure of the licensor, is indivisible, and nonassignable. But a license may confer either a sole or exclusive right, or simply a right in common. And it has been said that if it simply confers a right to take ore or to work in a mine, it is not exclusive, and the licensor may himself take ore from the same land or mine, or license others to do so. So a license to dig and carry away all the ore to — 590 — be found in certain lands does not confer an exclusive right. Such a grant shows the extent of the license, but not its exclusiveness. It is a license without stint as to quantity, and has been likened to the grant of a right sans nombre, which does not exclude the owner: Grubb v. Bayard, 2 Wall. Jr. 81 (S. C. 9 Morrison’s Min. Rep. 199, Fed. Cas. 5849); East Jersey Iron Company v. Wright, 32 N. J. Eq. 248. It has also been held (Caldwell v. Fulton, 31 Pa. St. 475, 72 Am. Dec. 760,) that a grant of an exclusive right and privilege for a consideration presently paid to take ore, in that case “stone coal,” without limitation, operates of a grant of ore in place, and not merely a license or incoporeal right; and so, in Massot v. Moses, 8 Morrison’s Min. Rep. 607, it was held that a grant, upon sufficient consideration, of the exclusive right and privilege of working mines for minerals therein contained, for a term of years, operates as a demise of the minerals for the term. Again, it is said (Funk v. Haldeman, 53 Pa. St. 229,) that a license coupled with an interest is a grant of an incorporeal hereditament, and that such a license is irrevocable, and also assignable. So a grant of the privilege of raising ore on the lands of the grantor at a certain price per ton is an incorporeal hereditament, irrevocable; but an agreement to lease land for a term of years with the exclusive right to bore for and collect oil, giving one fourth to the lessor, passes a corporeal interest: Blanchard and Weeks’ Leading Cases on Mines, 486; Chicago Oil and Mining Company v. United States Petroleum Company, 57 Pa. St. 83. So we find here, from the illustrations which these cases afford, how closely a license may assimilate a lease, and whether it shall be called the one or the other often depends upon the nature of the consideration by which it is upheld and supported, and whether by its terms the grant is of an exclusive right or privilege. — 591 — That the consideration mentioned was single for the entire subject conveyed by the deed was a strong feature which inclined the court in Caldwell v. Fulton, 81 Pa. St. 475, (72 Am. Dec. 760,) to construe the deed as a grant of the minerals, and as evidencing an intention that the whole mineral contents of the mine should pass. So in Massot v. Moses, 8 Morrison’s Min. Rep. 607, the fact that the consideration was a gross sum to be paid presently was a circumstance which entered into the consideration of the court, and by which .the intent of the grantor was determined, and the instrument therein construed to be a lease instead of a license: Gloninger v. Franklin Coal Company, 55 Pa. St. 9 (93 Am. Dec. 720); Groves v. Hodges, 55 Pa. St. 504, and Stockbridge Iron Company v. Hudson Iron Company, 107 Mass. 290, are instances wherein the nonexclusiveness of the grants was ¿he prevailing fact which impelled their construction as licenses, and not leases., Another test in the construction of an instrument or grant whether a license or a lease is whether the grantee has acquired any estate in the land in respect of which he may maintain ejectment: Bainbridge on Mines, 246, cited in Funk v. Haldeman, 53 Pa. St. 243; Boone v. Stover, 66 Mo. 434. But a license may amount to a lease if conferred in such a manner as to give it validity. Such is the case where an interest in the land is given, or where the license is for a definite period: Woods’ Landlord and Tenant, § 227; Branch v. Doane, 17 Conn. 401. In the light of these observations and authorities let us examine the agreement in question and determine its effect. The possession given thereunder is for a definite and fixed term, and the authority, right, and privilege conferred for working the mines and extracting ores therefrom is exclusive and irrevocable during the term, and manifestly Hardy could have maintained his possession under the agreement. It is stipulated in his behalf — 592 — that he will use and operate the mines in a proper and miner-like manner, doing no wilful or unnecessary injury to the same; that the ore raised shall be crushed and the mineral extracted therefrom in a proper manner, and at such intervals, and in such quantities, as is usual in the working of mines of like character in that vicinity; that he shall preserve all machinery and appliances erected thereon free from incumbrances and liens, to the end that the same may be delivered back to the owners unincumbered in the event of his failure to purchase at the expiration of the time agreed upon. And it was further provided that ail expenses incurred in procuring machinery, appliances, assistance, or otherwise in developing and working the mines should be borne by Hardy, and that he should save the owners harmless from all such expense. Hardy is accorded the privilege of applying the net surplus arising from the operations of the mines to the payment of the twenty thousand dollars consideration as the purchase price thereof, but that, in the event of his failure to complete the purchase on or before the time limited, all buildings, machinery, and permanent appliances or improvements erected by him should be forfeited and become the property of the owners of the mines. It is doubtful whether these stipulations contain any provisions for the payment of a rental, reditus, or for any increase to the mine owners, which is essential to a lease. At least there are no positive undertakings on the part of Hardy to do anything that could be said to be beneficial to the mine owners, the doing or not doing of such acts being left optional with him. Again, the absence of words of grant or demise from the agreement would indicate that it was the intention of the parties that the instrument should not operate as a lease. But, whether technically construed as a lease or license, the mine owners parted with their entire su — 593 — pervision and control of the mines for the stipulated time. Hardy was accorded the absolute control and management thereof, together with the possession and profits, under stipulation that they should be operated by him independently of the mine owners, and not as their agent. The mine owners were not to be responsible for any liabilities incurred; on the contrary, Hardy, by express agreement, was to bear all expenses, and to operate the mines entirely upon his own responsibility. They were to have- no interest in the profits arising from working the mines, nor were they in any way to be benefited thereby, except as Hardy might have seen fit to have added to the value thereof by annexing thereto permanent improvements, which, by the terms of the agreement, were to remain and become the property of the mine owners in the event of Hardy’s failure to fulfill his contract of purchase. Possession given under a bond for a deed and an agreement similar to this for the operation of a mine was held to be a lease in Montana, under a statute providing that “every person including guardians, minors, married women, and any company, association, or corporation, not tenants or lessees, for whose use, benefit, or enjoyment any building, structure, or improvement mentioned in section 1 of this act shall be constructed, repaired, or altered, shall be deemed the owner or proprietor thereof for the purposes of this act”: Block v. Murray, 12 Mont. 545; see also Belton v. Minah Consolidated Mining Company, 11 Mont. 281. Our legislative assembly evidently intended that the property of the owner should be subject to a lien, so far as it could be justly permitted, to secure payment for labor or material furnished in the development or operation of a mine. But by the same act it is declared that the lien shall not be deemed to apply to the owner or — 594 — owners when the mine shall be worked by a lessee or lessees. The spirit of the act would seem to imply that when the mine is worked by some person other than the owner, who himself has an interest independent of such owner, and absolutely independent of his supervision and control, and one under which possession can be supported and maintained in any event, as against the owner and all other persons, a lien claimed for work performed or materials furnished the person having such interest should not apply as against the owner or owners of the mine, and hence the lien claimed in the case at bar can-' not affect the reversionary interest of the owners of these mines. It is not, however, to be understood that the granting of a mere license will exempt the owner or owners from the lien; but where, as in this case, the licensee has acquired a license which by its terms is made exclusive and irrevocable, and which, by reason of his expenditures in the development and improvement of the mines, has become a license coupled with an interest, under which possession may be maintained against the grantor and all other persons, such a license amounts to a lease within the spirit and purview of the statute. These considerations render it unnecessary to notice the other questions raised in the briefs and by the argument of respondents’ counsel. The decree of the court below is affirmed, and the cause dismissed at the cost of appellant. Affirmed.