Holt v. City of Montgomery , 212 Ala. 235 ( 1924 )

Appellant sued appellee for the breach of a certain written contract, recovering a judgment for the full amount sued for, the trial court having given at his request the affirmative charge with hypothesis in appellant's favor. A motion for a new trial was filed by the defendant, and upon consideration of this motion the trial court granted the same and set aside the judgment theretofore entered, and from the judgment of the court granting the motion for a new trial the plaintiff has prosecuted this appeal.

Counsel for appellant treat the case as if count 4 alone appeared in the complaint, and consider that the result of this appeal turns upon a proper construction of the contract made an exhibit to this count. This contract appears in full in the report of the case.

Plaintiff insists that this contract properly construed is in fact a lease of his gravel pit, and that the minimum amount of gravel which the defendant agreed to purchase constitutes rent, while the defendant urges that it was merely a sale by the plaintiff to the defendant of a certain quantity of gravel at a given price, with license to the defendant to go upon the land for the purpose of removing the gravel.

Licenses are often granted upon such terms and conditions and upon considerations which ally them so closely to leases, that it is frequently difficult to distinguish between them. A mere license, as that term is generally used, is revocable at pleasure (17 Rawle C. L. 576; Riddle v. Brown, 20 Ala. 412, 56 Am. Dec. 202), but when coupled with an interest, may lose the quality of revocability. 17 Rawle C. L. 581. In this latter authority, on page 582, it is said:

"That while a license coupled with an interest is irrevocable, this doctrine, although unquestionably correct in a qualified sense, can only be considered as applicable to the temporary occupation of the land, but confers no right or interest in the land itself."

The distinction between a lease and a license appears to be very well stated in a quotation found in Stinson v. Hardy,27 Or. 584, 41 P. 116, as follows:

"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."

The above authority, with that of Massot v. Moses,3 S.C. 168, 16 Am. Rep. 697, contains a very full discussion with a review of the authorities upon this subject and the distinction here involved.

One of the principal tests in determining whether or not the contract is to be interpreted as a lease or a license is whether or not it gives exclusive possession of the premises against all the world, including the owner, in which case a lease is intended, or whether it merely confers a privilege to occupy under the owner, thereby indicating a license. 25 Cyc. 640. See, also, Williams v. Gibson, 84 Ala. 228, 4 So. 350, 5 Am. St. Rep. 368.

Upon the question of exclusive right, it was said in Massot v. Moses, supra, that:

"Grants of a right to enter the lands of the grantor and sever therefrom and appropriate its products or mineral contents, are subject to a presumption not applicable to the case of a sale of personalty, that the grantor did not intend to exclude his own proprietary right to a concurrent enjoyment with the licensee of the power granted. * * * The presumption, indeed, demands some positive evidence of an exclusive intent, but does not influence the force of the evidence of such intent."

Of course, the intent to exclude the grantor may appear by necessary implication of the language used, and the nature of the consideration. As to the latter, however, it has been held that the fact that the grantee is bound to pay for the substance appropriated by him, according to the quantity realized at an agreed rate, whether in kind or in money, does not of itself disclose an intent to exclude the grantor. In Stinson v. Hardy, supra, the court points out other considerations which have had material bearing upon the question of construction of contracts, as to whether or not they were intended as a lease or a license, among them that the consideration mentioned was single for the entire subject conveyed by the title, as in Caldwell v. Fulton, 31 Pa. 475, 72 Am. Dec. 760. Another test is there stated to be, "whether the grantee has acquired any estate in the land in respect to which he may maintain ejectment." Still another important fact given consideration in that authority was the absence of words of grant or demise from the agreement, which, it was held, would indicate that it was the intention of the parties that the instrument should not operate as a lease.

The contract here in question does not purport upon its face to be a lease or a conveyance of an estate, but rather a sale by the plaintiff to the defendant of certain gravel with certain rights as to the removal thereof. Indeed, its first paragraph begins:

"Said Holt hereby sells to the city such gravel as it may during the life of this contract desire to purchase, and shall remove from property owned by him at Pickett Springs."

The right of ingress and egress over the lands of the plaintiff, with a right of way for roads and tracks, expressly granted in the contract, were such rights as would seem to follow by necessary implication from a sale of the gravel in the pit, with the right of the city to remove it therefrom. As said in Williams v. Gibson, supra,

"This is the result of the familiar maxim that when anything is granted, all the means of obtaining it and all the fruits and effects of it are also granted."

We find nothing in the language of the contract, either in express language or by necessary implication, which would exclude Holt, the owner, from possession of the premises, nor, indeed, would the contract seem to exclude Holt from the use and removal of the gravel from his pit, so long as it did not interfere with the express rights granted to the city. One of the principal tests, nonexclusiveness of the the grant, indicates a license rather than a lease, and very clearly under this contract plaintiff could not maintain ejectment against Holt, the owner.

The consideration mentioned was not single, but the city was to pay for the gravel as it removed the same, so much per cubic yard, with monthly installments. The contract appears to have been carefully drawn; it not only contains no words of demise or the grant of an estate in land, but was not witnessed as would be necessary for the conveyance of such an estate.

Without further discussion, however, we are of the opinion that the contract here in question does not meet any of the tests of a lease or a demise of an estate in land, but that the privileges enumerated therein granted to the city, constitute a license coupled with an interest, that is, a right of removal of the gravel during the two years' life of the contract.

We have read with much interest and care the authorities relied upon by counsel for appellant, among them Woodland Oil Co. v. Crawford, 55 Ohio St. 161, 44 N.E. 1093, 34 L.R.A. 62; U.S. v. Gratiot, 14 Pet. 526, 10 L. Ed. 573; Johnston v. Cowan,59 Pa. 275; Bruce Coal Co v. Bibby, 201 Ala. 121, 77 So. 545. But we are not persuaded that these authorities militate against the conclusion which we have here reached. They each involve contracts materially different from that here under consideration, and we do not consider that a discussion of these authorities would serve any useful purpose.

It is insisted in the second place, however, that whether the instrument here in question be considered a lease or a license, the plaintiff was entitled to recover for the minimum quantity of gravel agreed by the city to be purchased and removed, less the amount which the city had already paid. This upon the theory that the valuation of this minimum amount of gravel was fixed by the parties as liquidated damages. The authorities cited deal with leases where a minimum royalty is fixed. Bruce Coal Co. v. Bibby, supra; Johnston v. Cowan, supra.

In the case of Woodland Oil Co. v. Crawford, supra, the contract expressly granted, demised, and let all the petroleum and gas in or under the land therein described, and also the land itself, with the exclusive right of drilling and operating upon said premises; and expressly provided that a yearly rental of $128 be paid for the premises in the event of default on the part of the parties of the second part.

Much stress is laid by counsel for appellant upon the privilege granted to the city of a right of way, and of ingress and egress over the land of the plaintiff, but it is very clear that the essence of the contract was a sale of the gravel, and that these privileges constituted but an incident thereto, and, indeed, under the authority of Williams v. Gibson, supra, may have arisen by necessary implication.

The contract, as we construe it, in its essence, was a contract to sell gravel, and for a breach of such contract the measure of damages is not the contract price, but the difference between the contract price and the market price or selling price at the place and time of default. Patterson Lbr. Co. v. Daniels, 205 Ala. 520, 88 So. 657.

We, therefore, do not find ourselves in accord with the appellant's counsel as to their contention with reference to liquidated damages. We are of the opinion the trial court correctly ruled in granting the motion for a new trial, and the judgment to that effect will be here accordingly affirmed.

Affirmed.

ANDERSON, C. J., and SAYRE and MILLER, JJ., concur.