Hanson v. Fergus Falls National Bank & Trust Co. , 242 Minn. 498 ( 1954 )

Frank T. Gallagher, Justice.

The material facts in this case are not seriously in dispute. The action was brought to quiet title to a parcel of land in Otter Tail county containing about 134 acres. The land originally was patented by one Stengrim Hanson. On October 22, 1925, he executed a mortgage thereon to the Fergus Falls National Bank and Trust Company. Hanson died in 1931. On March 19, 1932, the bank bid the land in at a foreclosure sale of the above mortgage for $4,961.06 and secured a sheriff’s certificate of sale.

At the time of the foreclosure sale, Ole S. Bergerud, a son of Hanson, was in possession of the farm. He made a demand upon the sheriff that the farm be sold in separate parcels, which was done. March 19, 1933, which would have been the last day for redemption, fell on a Sunday, so the time for redemption expired on March 20, 1933. On that date, the Fergus Falls National Bank and Trust Company, as vendor, and Ole S. Bergerud, as vendee, entered into a contract for deed in the usual form under the terms of which the bank agreed to sell the farm to Bergerud for $5,258.72, the amount for which the land was bid in at the foreclosure sale plus interest to the date of the contract, all of which was to be payable on October 1, 1933. The contract contains a reservation reading: “All hunting rights are reserved by vendor * *

Ole S. Bergerud made an application to the Federal Land Bank of St. Paul for a loan which was dated sometime prior to November 14,1933. The application was approved for a loan of $4,200. On November 14,1933, the president of the Fergus Falls National Bank and Trust Company wrote to the treasurer of the Federal Land Bank asking to have the loan approved for a larger amount, which was refused. On November 28, 1933, the Fergus Falls National Bank and Trust Company executed a quitclaim deed of the premises to Bergerud, who thereupon executed a first mortgage to the Federal Land Bank to secure the sum of $2,800 and a second mortgage for $1,400 to the Land Bank Commissioner, both dated December 1,1933. The quitclaim deed and both mortgages were duly recorded on December 30, 19,33. The Fergus Falls bank received and accepted the net proceeds of the loan as payment in full. In the quitclaim deed from the Fergus Falls bank was the following reservation:

“Reserving However To The Fergus Falls National Bank And Trust Company, Or Assigns All Shooting And Hunting Privileges Together With The Right Of Passage Or Travel Over For The Purpose Of Hunting During Hunting Seasons.” (Italics supplied.)

On December 6, 1935, the Fergus Falls National Bank and Trust Company executed an assignment which reads as follows:

“For Value Received, Fergus Falls National Bank and Trust Company a Corporation, does hereby assign all their right, title and interest in the shooting and hunting privileges, together with the right of passage or travel over for the purpose of hunting during the hunting seasons, * * * unto H. G. Dahl and J. S. Ulland, their heirs and assigns, Forever.”

The consideration actually paid for this assignment was one dollar.

After the death of Ulland, his heirs executed an assignment reading as follows:

“For value received, I, * * * do hereby assign all my right, title and interest in the shooting and hunting privileges, together with the right of passage or travel over for the purpose of hunting during the hunting seasons, * * * unto H. G. Dahl, his heirs and assigns, forever.”

On April 19,1937, the Federal Land Bank foreclosed its mortgage and became the owner of the land a year later. In 1938, the Federal Land Bank sold the farm to plaintiff on a contract for deed. Plaintiff thereafter complained to the Federal Land Bank about the hunting reservation, as the result of which the Land Bank entered into negotiations with the Fergus Falls National Bank and Trust Company. At the conclusion, of these negotiations, the Federal Land Bank credited plaintiff’s account with $1,000. He in turn agreed to “take these hunting rights over.” On July 20,1943, the Federal Land Bank executed a limited warranty deed to plaintiff “Subject to- all existing easements and rights of way.” In order to pay the bank, plaintiff procured a loan of $3,500 from the Prudential Life Insurance Company and executed a mortgage to that company on the premises for that amount, which mortgage is subject to the reservation of record held by Dahl. Again in 1949, plaintiff executed a mortgage, subject to the reservation, to Prudential Life Insurance Company.

The case was tried to the court without a jury. The court found in effect that the quitclaim deed from the Fergus Falls National Bank and Trust Company reserved a valid easement; -that plaintiff accepted and retained the sum of $1,000 from the Federal Land Bank on account of the hunting reservation, which sum plaintiff accepted and retained with the understanding that the real estate would remain subject to and be encumbered by the reservation; that plaintiff recognized the validity of the reservation in mortgages and instruments which he executed and which were recorded in the office of the register of deeds; that for more than 18 years plaintiff, with full knowledge that the reservation was in existence and recorded against the land and with full knowledge that rights were claimed by Dahl and Ulland thereunder, did nothing to question the reservation and at all times recognized the same; that by reason thereof, even if plaintiff had any right to attack the reservation, he had lost the same both by laches and by permitting the statute of limitations to run against him; and that the reservation and easement are legal and binding, run with the land, and are assignable. The court ordered title quieted in Dahl as to said easement and reservation. Judgment was entered, and this appeal is from such judgment.

The first contention of plaintiff is that, when the Fergus Falls National Bank and Trust Company and Bergerud executed the contract for deed on March 20, 1933, the time for redemption had not expired; that the bank was not then the owner of the land; that the contract for deed was intended as an extension of the time for redemption from the foreclosure sale; and that, as a consequence, the bank could not reserve the hunting rights since it never became the owner of the land.

There are several reasons why this position is not tenable. We have no doubt that the parties could have extended the time for redemption had they desired to do so (Tice v. Russell, 43 Minn. 66, 44 N. W. 886), in which case the ownership of the property would have remained as it was. The difficulty in this case is that, even if we were to so hold, the extended time at best would have expired on October 1, 1933, the date specified for payment under the contract. It is further -clear that redemption was never made by Bergerud but that he took title under a deed, not under a certificate of redemption.

Plaintiff next contends that the interest created by the reservation involved in this case is not such as can be held or owned by a banking corporation. We disagree with that contention, as it is our opinion that it can.

The almost universal holding from early times has been that the right to hunt on the premises of another is an incorporeal right designated as a “profit a prendre.” Minnesota Valley Gun Club v. Northline Corp. 207 Minn. 126, 290 N. W. 222; Davies’s Case, 3 Mod. 246; Wickham v. Hawker, 7 Mees. & W. 62; Ewart v. Graham, 7 H. L. Cas. 331; Bingham v. Salene, 15 Ore. 208, 14 P. 523, 3 A. S. R. 152; Salene v. Isherwood, 55 Ore. 263, 106 P. 18; Isherwood v. Salene, 61 Ore. 572, 123 P. 49, 40 L.R.A.(N.S.) 299, Ann. Cas. 1914B, 542; State v. Mallory, 73 Ark. 236, 83 S. W. 955, 67 L. R. A. 773; St. Helen Shooting Club v. Mogle, 234 Mich. 60, 207 N. W. 915; Council v. Sanderlin, 183 N. C. 253, 111 S. E. 365, 32 A. L. R. 1527; 17 Am. Jur., Easements, § 6; Annotation, Ann. Cas. 1914B, 545. A profit a prendre is defined as a right exercised by one man in the soil of another, accompanied with participation in the profits of the soil thereof, or a right to take a part of the -soil or produce of the land. Black, Law Dictionary (3 ed.) p. 1440; 17 Am. Jur., Easements, § 6; 28 C. J. S., Eastements, § 3f. A profit a prendre, like an easement, may be appurtenant or in gross. 17 Am. Jur., Easements, § 6. When it is appurtenant, it may not be severed from the dominant estate but passes with it. It is considered an interest in land and is within the statute of frauds. 28 C. J. S., Easements, § 3f; Webber v. Lee [1881] 9 Q. B. D. 315, 51 L. J. Q. B. 485; Annotation, Ann. Cas. 1914B, 545; Bingham v. Salene, 15 Ore. 208, 14 P. 523, 3 A. S. R. 152. A profit a prendre in gross may be assignable or inheritable. Minnesota Valley Gun Club v. Northline Corp. 207 Minn. 126, 290 N. W. 222; 28 C. J. S., Easements, § 3f.

The rule in England is that an easement in gross, if it exists at all, may not be assigned. Ackroyd v. Smith, 10 C. B. 164; 38 Yale L. J. 141; 22 Mich. L. Bev. 521; see, Restatement, Property, § 450, special note, p. 2901. The weight of authority in this country also follows the same rule, although there is authority to the contrary, and the nonassignability of easements in gross has been severely criticized by some authors. 17 Am. Jur., Easements, § 11; 28 C. J. S., Easements, § 4b; Annotation, 130 A. L. R. 1254 ; 38 Yale L. J. 141; 22 Mich. L. Rev. 521; see, Restatement, Property, § 491. While the trial court found that plaintiff had an easement, we need not determine whether we will follow the rule that easements in gross are nonassignable, which seems to be an open question in this state, for the reason that we are already committed to the rule that the interest which plaintiff has, if any, is a profit a prendre in gross, not an easement in gross, strictly speaking. Minnesota Valley Gun Club v. Northline Corp. 207 Minn. 126, 290 N. W. 222. In dealing with this subject the Restatement treats easements and profits alike, as easements. Restatement, Property, § 450, special note, p. 2901.

The doctrine that the right to hunt on another’s land is a profit a prendre had its origin in the early English cases and was based on the theory that the owner of the land had a property right in the wild animals. Davies’s Case, 3 Mod. 246; Wickham v. Hawker, 7 Mees. & W. 62; Ann. Cas. 1917B, 958. In Ewart v. Graham, 7 H. L. Cas. 331, 344, Lord Campbell said:

“* * * The property in animals, ferae naturae, while they are on the soil, belongs to the owner of the soil, and he may grant a right to others to come and take them by a grant of hunting, shooting, fowling, and so forth; that right may be granted by the owner of the fee simple, and such a grant is a license of a profit a prendre.”

In discussing this subject, Lord Westbury in Blades v. Higgs, 11 H. L. Cas. 621, 631, said:

“* * * when it is said by writers on the Common Law of England that there is a qualified or special right of property in game, that is in animals ferae naturae which are fit for the food of man, whilst they continue in their wild state, I apprehend that the word ‘property’ can mean no more than the exclusive right to catch, kill, and appropriate such animals which is sometimes called by the law a reduction of them into possession.

“This right is said in law to exist ratione soli, or ratione prwilegii, for I omit the two other heads of property in game which are stated by Lord Coke, namely propter mdustriam and ratione impotentiae, for these grounds apply to animals which are not in the proper sense ferae naturae. Property ratione soli is the common law right which every owner of land has to kill and take all such animals ferae naturae as may from time to time be found on his land, and as soon as this right is exercised the animal so killed or caught becomes the absolute property of the owner of the soil.

“Property ratione prwilegii is the right which, by a peculiar franchise anciently granted by the Crown in virtue of its prerogative, one man had of killing and taking animals ferae naturae on the land of another; and in like manner the game, when killed or taken by virtue of the privilege, became the absolute property of the owner of the franchise, just as in the other case it becomes the absolute property of the owner of the soil.”

The early cases in this country proceeded on a similar theory. In Bingham v. Salene, 15 Ore. 208, 213, 14 P. 523, 525, 3 A. S. R. 152, the court said:

“* * * As the owners of the lands which included such lakes, sloughs, and waters thereon, the property of animals ferae naturae, while on the lands or such waters, belonged to the defendants.”

In State v. Mallory, 73 Ark. 236, 248, 83 S. W. 955, 959, 67 L. E. A. 773, in an exhaustive review of the authorities on this subject, the court said:

“* * * the owner of land has a right to take fish and wild game upon his own land, which inheres to him by reason of his ownership of the soil. It is a property right, as much as any other distinct right incident to his ownership of the soil. It is not, however, an unqualified and absolute right, but is bounded by this limitation, that it must always yield to the State’s ownership and title, held for the purposes of regulation and preservation for the public use. * * *

““ * * the right of the landowner to hunt and fish on his own lands is to that extent a special property right, though subordinate to the other.”

In Schulte v. Warren, 218 Ill. 108, 121, 75 N. E. 783, 786, 13 L.R.A.(N.S.) 745, the Illinois court said:

“* * * There is no private ownership of wild game, but the exclusive right of every owner of land to kill and take game found from time to time on his land is indisputable. This was regarded at common law as property ratione soli, or, in other words, as property by reason of the ownership of the soil. While there can be no absolute property in animals ferae naturae while at liberty in their natural state, they become the property of the owner of the soil when killed or captured thereon, and the right to kill or capture them is exclusive in such owner. Whenever the owner’s right is exercised, the animal killed or captured belongs absolutely to him, and he has a qualified property in game while on his own land. The title to wild game and birds in this State is in the State, as representing all the people, both by common law and by statute. But this is only true so far as such wild game or birds are capable of ownership. The ownership, such as it is, is not that of a proprietor, but of a trustee for the benefit of all the people in common. The general ownership is in the State for the use of the public, but when wild game or fowl are upon the private grounds of an individual a qualified or special right of property of the individual attaches to it, with the exclusive right to hunt, kill or capture while there. * * * The law does recognize a qualified right of property in wild animals or birds as between the owner of the land on which they are found and a trespasser thereon.”

It is the exclusive right of the possessor of land to hunt and reduce to possession the wild game thereon or in close proximity thereto, which supports the theory that such a right is a profit a prendre. In a discussion of this matter in Restatement, Property, § 450, comment g, we find the following statement:

“An easement may include the privilege to acquire, by reduction to possession, ownership of some substances or things which, were it not for the easement, could be appropriated only by the possessor of the land subject to the easement. * * * Included among such things are those wild birds and wild animals which have not been appropriated and which are in general open to appropriation. If such things come within the space possessed by a possessor of land, his right of exclusive occupation of the land enables him to prevent, for the time being, an appropriation by others. Subject to such paramount authority as may be asserted by the state, he not only has this power to prevent appropriation by others, but an attempt at appropriation by others may be rendered ineffective by his right to claim the benefit of the attempt. Thus, if B, a trespasser, shoots wild game upon land possessed by A, A may claim the game or recover damages for its conversion. An interest which privileges one who is not in possession of certain land to make appropriations on it which, were it not for the existence of the interest, the possessor of the land could prevent is an easement.”

It must be remembered that the Restatement deals with easements, as they were commonly understood in the common law, and profits alike, as easements. See, Restatement, Property, § 450, special note, p. 2901.

The rule laid down in 38 C. J. S., Game, § 4, is that the right of hunting on another’s land may be acquired by grant or lease from the owner, either with or without an interest in other land, and with such limitations as the owner may see fit to impose. A similar rule is laid down in 12 E. C. L. 689.

Summarized, the right of hunting on premises is an incorporeal right growing out of the soil, referred to in law as a profit a prendre, and may be segregated from the fee of the land and conveyed in gross to one having no interest or ownership in the fee, and when so conveyed it is assignable and inheritable. St. Helen Shooting Club v. Mogle, 234 Mich. 60, 207 N. W. 915, and authorities cited therein.

A reservation of a right to hunt over lands granted to another, if owned separate and distinct from ownership of the land, has the character of an estate in the land and may be assigned or inherited. Council v. Sanderlin, 183 N. C. 253, 111 S. E. 365; St. Helen Shooting Club v. Mogle, 234 Mich. 60, 207 N. W. 915; Minnesota Valley Gun Club v. Northline Corp. 207 Minn. 126, 290 N. W. 222; 12 R. C. L. 689, 690; 38 C. J. S., Game, § 4.

We are here concerned with what defendant bank retained or acquired by its reservation. It is contended in effect that it acquired no interest because it could not benefit from or use the right it reserved, since it could not shoulder a gun and hunt, and because hunting is foreign to the purpose for which the corporation exists. While this may be true, it does not follow that it may not segregate and own valuable property interests. In our opinion, the privilege of owning property interests is not dependent upon the ability to exercise the rights conferred. If it were, the result probably would be that loaning corporations would not be willing to extend credit secured by property interests if they were not authorized to exercise the particular rights involved. This could eliminate the extension of credit on all profits a prendre, i.e., sand, ice, timber, oil, gas, coal, and minerals of all kinds, unless the lending corporation was organized for the purpose of exercising the rights and thereby was able to derive direct benefit from such exercise. This would be a serious limitation to place upon such interests — a limitation which cannot be imposed without sound reason and precedent.

Whether or not the corporation exceeded its authority is not a consideration as plaintiff has no standing to question the transaction as ultra vires. 19 C. J. S., Corporations, § 1112; 18 Am. Jur., Corporations, § 780. It must be noted, however, that the bank acquired the interest by foreclosure, which it is authorized to do. Rey. Stat. § 5137, 12 USCA, § 29; Crowe v. Gary State Bank (7 Cir.) 123 F. (2d) 513. Its manner of disposing of it was simply by conveyance of two estates rather than the entire fee.

It appears established that the reservation in question, if valid, was a profit a prendre in gross; that it may be segregated from the fee of the land and conveyed in gross to one having no interest or ownership in the fee; and, when so conveyed, it is assignable and inheritable. St. Helen Shooting Club v. Mogle, 234 Mich. 60, 207 N. W. 915. It also appears that no valid reason has been shown why defendant bank could not segregate the estate which conferred the right to go upon the land and reduce wild game to possession and subsequently assign it to Dahl and Ulland, who were both hunters. In this state there are many farms where the hunting rights are worth more than the land itself; and, if farmers are to be deprived of the right to sell or lease hunting rights to any corporation or to borrow money upon those rights at a bank, it would result in a most serious detriment to such landowners. In the instant case, defendant bank could have segregated the mineral estate and assigned it to a mining company, or it could have segregated and assigned the timber rights to a lumber company, the oil rights to an oil company, or the sand and gravel rights to a construction company. Sound policy leads to the conclusion that it may do so. It therefore does not follow that a corporation may not own any one of these estates, all identical in legal classification, because it is not engaged in one of those businesses. As already suggested, this fact raises only the issue of ultra vires acts of a corporation.

The contention that a banking corporation may not hold title to a profit a prendre was rejected in Meyers v. Central Nat. Bank, 183 Okl. 231, 80 P. (2d) 584. There, the bank acquired the interest as partial payment on a note previously given to the bank, and the court held that the bank had a valid title to oil and gas rights as against the contention that a bank is not permitted to hold realty on the ground that a bank is permitted by statute to purchase, hold, and convey realty where it is acquired in satisfaction of debts previously contracted in the course of its business. In that case the bank did not directly benefit by the exercise of the rights involved nor was there any provision for individuals to be benefited by the exercise. It was simply regarded as a valid estate which the bank had a right to own and sell. In both the Meyers case and the instant case, the banks acquired the interests in satisfaction of debts, which they were authorized to do.

That the decision in the Meyers case applies with equal force to hunting rights is shown by the language of the same Oklahoma court in Rich v. Doneghey, 71 Old. 204, 206, 177 P. 86, 89, 3 A. L. R. 352, where, speaking of oil and gas rights, the court said:

“* * * The right so granted or reserved, and held separate and apart from the possession of the land itself, is an incorporeal hereditament ; or more specifically, as designated in the ancient French, a profit a prendre, analogous to a profit to hunt and fish on the land of another.” (Italics supplied.)

See, also, Miller v. Lutheran Assn. 331 Pa. 241, 200 A. 646, 130 A. L. R. 1245.

From what has been said, there seems to be no good reason why a profit a prendre may not be owned by a bank in the same manner as it may own other real property interests even though it does not intend directly to exercise the rights conferred. That being so, did the bank have an interest or profit it could assign to Ulland or Dahl? It is our opinion that it had and that such interest was assignable. Minnesota Valley Gun Club v. Northline Corp. 207 Minn. 126, 290 N. W. 222.

In view of our conclusion that defendant bank had the power to reserve these hunting rights and to assign such rights to Ulland and Dahl, it becomes unnecessary, in affirming the judgment quieting title to said easement and reservation in Dahl, to pass upon the validity of the trial court’s additional findings that, even if plaintiff had any right to attack said reservation and easement, the same was fully compromised and settled with the Federal Land Bank and is barred by the statute of limitations. Moreover, the question of what Is a reasonable use of the hunting rights reserved is not before us.

For the reasons stated, the judgment appealed from should be affirmed.

Affirmed.