WASATCH MINES COMPANY v. Hopkinson

CALLISTER, Justice.

Plaintiff corporation (hereinafter referred to as Wasatch) initiated this action to recover the unpaid balance on the purchase price of 1600 tons of soil removed from plaintiff’s property by defendant during the latter part of 1958. Defendant asserted in the alternative that the plaintiff’s claim was barred by the statute of limitations or that according to the terms of his oral agreement with plaintiff, defendant agreed to pay for the soil only as he sold it.

Defendant filed a counterclaim, wherein he pleaded that by force of certain agreements between the parties he had the privilege of removing soil in the area of certain mining claims of Wasatch for the term of 25 years and that Wasatch had repudiated such agreement to the damage of defendant. Defendant prayed for damages and confirmation of his agreement to remove soil.

Upon a trial before the court, it dismissed Wasatch’s claim by virtue of the fact that the evidence presented clearly indicated that defendant had agreed to pay for the soil as he sold it, and further, that the claim of Wasatch was barred by the statute of limitations. The court dismissed defendant’s counterclaim by virtue of the fact that the terms of the purported contract were so vague and uncertain as to render the contract unenforceable, and, further, that the damages claimed by defendant were so speculative that the court would be unable to determine any damages.

On appeal, defendant asks this court to construe certain documents in evidence as a grant of an incorporeal hereditament, specifically, a profit a prendre, to defendant for a term of years, and to affirm the judgment of the trial court in regard to the claim of Wasatch. The latter cross-appeals and contends that the trial court erred in both of its rulings, namely, that defendant was not required to pay for the soil until it had been actually sold and that its claim was barred by the statute of limitations. However, it asserts the dismissal of the counterclaim should be affirmed.

Wasatch is the owner of certain patented lode mining claims. Several of the officers .and directors of Wasatch formed a new corporation, Alta Wasatch Development Company, to develop the mineral interests on one of its claims. Defendant was a director of Alta and became a majority shareholder in that corporation.

Defendant asserts that he entered into a written agreement with both corporations, about September, 1954; no one has been able to locate this document after a diligent search. This agreement allegedly gave defendant the privilege to remove soil from the boundaries around a drain tunnel for a term of two years at the price of $6 a ton. On February 9, 1956, Alta and Wasatch executed another agreement, wherein it was recited that it was an instrument to amend a lease to Alta Wasatch Development Company. This agreement provided that H. W. Hopkinson & Sons were to be sole distributors of soil in the deposit described in the lease and were to pay $6 per ton F.O.B. mine site. Alta was to receive $4 and Wasatch $2 as their respective shares. This amendment recited that it was for 25 years with an option to renew on the same basis. The agreement prohibited a sale or transfer without the permission of the boards of directors of both Alta and Wasatch. The document provided that in case of the death of H. W. Hopkinson, his sons can accept or reject the lease and amendment. The instrument further recited that it amended the boundaries of the lease, and included all soil in the area removable without damage to buildings or installations on the property or interference with mine dumpings by any operating company. Defendant recorded this agreement on August 17, 1962. There is nothing in the record to indicate that this document was ever acknowledged so as to be entitled to recordation as a conveyance under Section 57-3-1, U.C.A., 1953.

The next document presented by defendant was dated February 11, 1959, and was entitled an amendment to an agency agreement between Alta Wasatch Development and Wm. H. Hopkinson, dba Wm. H. Hop-kinson & Sons. This instrument provided that the original agreement providing for the payment of $6 per ton for soil located on the property of Wasatch and under lease to Alta Wasatch Development Company was changed to reduce the original price by 20 per cent to provide for the moisture content in the soil. The agreement further stipulated that Hopkinson could enter upon the property at any reasonable time for the removal of soil provided that he didn’t interfere with the mining operations of other lessees of Wasatch Mines Company. This document was signed solely by Alta.

The last document upon which defendant relied was entitled an amendment to lease, was undated but recited that its effective date was March 1, 1959. This agreement identified Alta and Wasatch as lessors, and Wm. Hopkinson & Sons as lessees and recited that it was an amendment to a lease now in operation between the parties pertaining to the payment for soil to be removed by the lessees from the mining property of the lessors situated in Little Cottonwood Canyon, “and particularly known as the surface ground immediately surrounding the entrance to the Wasatch Drain Tunnel.” The agreement recited that the original price of $6 per ton was reduced to $4.80 and that the net proceeds of $4.80 per ton were to be divided among Alta, Wasatch, and Hopkinson, each to receive $1.60 per ton. The document further provided that any rights accruing to Hop-kinson in the settlement of the proceeds were to be considered a personal matter among all parties concerned and were not transferable. The document was signed by Alta and Wasatch and defendant testified that he also signed it, although his signature does not appear upon the copy in evidence.

Wasatch introduced -into evidence an agreement which it proffered to defendant in September of 1956, providing for defendant to recover topsoil for selling and distribution. Defendant refused to sign - this agreement because of a provision requiring him to sell and distribute a minimum of 50 carloads of topsoil before January 1, 1957. Defendant asserted that the soil he removed in October, 1958, was pursuant to a separate oral agreement and was a distinct trans-' action from others that he had conducted pursuant to the written .agreements.

In April of 1963, both Alta and. Wasatph held meetings of their boards of directors for the purpose of formulating some'kind of working relationship with defendant and to determine the matter of payment fpr 1600 tons of topsoil defendant had removed to a stockpile. These meetings were held consecutively, Alta first, Wasatch second. Defendant asserted that he attended only the Wasatch meeting; other witness contradicted him. The minutes of the Alta meeting recited that the lease agreement of March 15, 1953, between Wasatch and Alta had expired and was formally terminated; that the lease agreement of February 9, 1956, between Wasatch and Alta, which designated Hopkinson & Sons as distributors of the soil, was no longer in operation and was in default by Hopkinson’s removal of 1600 tons of soil and his failure to pay therefor; the agreement was declared terminated. The minutes of the Wasatch meeting recited that the purpose of the meeting was to consider a proposition of Hopkinson concerning his desire to obtain a contract to remove soil in the vicinity of the Wasatch Drain Tunnel. The board agreed to meet with him again to consider any proposition he might formulate.

The Wasatch board met with defendant and .his counsel on September 23, 1963; defendant claimed that he had a lease to take soil from all of the claims of Wasatch, which according to the latter’s former counsel included many claims to which it did not own the surface rights. At this meeting, defendant agreed to procure a map and designate the areas from which he proposed to remove soil and to obtain clearances from the Forest Service and the Board of Health.

Defendant received a letter from Wasatch dated August 31, 1964, wherein it directed him not to remove any more soil until he had paid for the 1600 tons already removed and until he met with its board and completed proposals made by his counsel in August of 1963.

Based on the foregoing evidence and written documents submitted, the trial court concluded the agreements between the parties were so vague and uncertain that the court was unable to interpret them.

On appeal, defendant asserts that he has a definite and enforceable right to the soil on the land, a profit a prendre, on all 78 claims of 20 acres each, owned by Wasatch in Little Cottonwood Canyon.

A privilege plus a profit is generally characterized by the authorities as a profit a prendre.¹ A profit a prendre is an interest in land.² Since the creation of a profit a prendre involves a transfer of an interest in land, the better view seems to be that it must be by deed.³

May the documents in evidence be construed as a conveyance of an interest in land?

A careful survey of the documents does not reveal a present intention to convey an interest in real property to defendant. The agreements appear to be an arrangement between two corporations, Wasatch as lessor and Alta as lessee, with a mutual agreement between them that defendant may act as the marketing agent for distribution of the soil. The designation of defendant as a distributor is a clear indication that it was not the intention of the parties that he was to be the grantee of an incorporeal interest in the realty.⁴

The documents do not give a sufficient description of the property to determine the boundaries of the area which the alleged grantee may enter and remove soil. The 1956 agreement indicates “all soil in the area” which defendant asserts granted him an interest in the 78 claims of 20 acres each, owned by Wasatch. However, the document recited that it was to amend a lease between Wasatch and Alta, and there was no evidence presented to indicate the claims upon which Alta had a lease. The 1959 document does designate defendant as a lessee, but describes the boundaries “as the surface ground immediately surrounding the entrance to the Wasatch Drain Tunnel.”

From the foregoing, we are compelled to conclude that the judgment of the trial court on defendant’s counterclaim must be affirmed, since the documents do not identify the grantor, the grantee, the interest granted, or a description of the boundaries in a manner sufficient to construe the instruments as a conveyance of an interest in land.

Plaintiff in its cross-appeal asserts that the trial court erred by its dismissal of plaintiff’s claim on the ground that it was barred by the statute of limitations. Defendant pleaded the statute of limitations generally without designating the sections of the statute or statutes upon which he relied.

Rule 9(h), U.R.C.P., provides:

In pleading the statute of limitations it is not necessary to state the facts showing the defense but it may be alleged generally that the cause of action is barred by the provisions of the statute relied on, referring to or describing such statute specifically and definitely by section number, subsection designation if any, or otherwise designating the provision relied upon sufficiently clear to identify it. If such allegation is controverted, the party pleading the statute must establish, on the trial, the facts showing that the cause of action is so barred.

Defendant’s general plea of the statute of limitations was not in accordance with Rule 9(h), U.R.C.P.; this inadequate plea will, therefore, not be considered pertinent on this appeal.⁵

Finally, plaintiff contends that the trial court erred in its finding that defendant agreed to pay for the soil as he sold it. There was sufficient evidence to support this determination; however, there was further evidence that it was within the contemplation of the parties that the soil would be sold in a reasonable time after it was removed from plaintiff’s property in the autumn of 1958. There was undisputed testimony that the stockpiling’ arrangement was for defendant’s convenience during the winter season of 1959; during this interim the sale was contemplated. Therefore, the debt became due after the lapse of this period of time.⁶ Since the trial court, as a fact finder, accepted defendant’s version that the soil was removed under a separate oral agreement, this case must be reversed and remanded to determine the agreed price (whether the $1.60 rebate to defendant was applicable) and the unpaid balance.

Costs are awarded to plaintiff.

TUCKETT, HENRIOD and ELLETT, JJ., concur.

1 . Deseret Livestock Co. v. Sharp, 123 Utah 353, 358, 259 P.2d 607 (1953).

2 . Haynes v. Hunt, 96 Utah 348, 354, 85 P.2d 861 (1939).

3 . 1 Thompson on Real Property (1984 Rpt. Vol.), Sec. 140, p. 527.

4 . See 13 Words and Phrases, 1969 Pocket Supp. 3: “Distributor” means one who or that distributes; a distributor, or an agent or agency for marketing, usually in a particular territory, manufactured goods, or other commodities.

5 . See Westerfield v. Coop, 6 Utah 2d 262, 263, 311 P.2d 387 (1957). It sliould be further observed that there is no similar federal rule to Rule 9(h), which substantially incorporates former section 104-13-7, U.C.A.1943. It has been uniformly held as the law of this state that the applicable section of the statute of limitations must be specifically pleaded. American Theatre Co. v. Glasmann, 95 Utah 303, 306, 80 P.2d 922 (1938); Nelden-Judson Drug Co. v. Commercial National Bank of Ogden, 27 Utah 59, 63, 74 P. 195 (1903); Spanish Pork City v. Hopper, 7 Utah 235, 238, 26 P. 293 (1891).

6 . This finding is implicit in the trial court’s determination that the claim was barred by the statue of limitations, since a cause of action for a debt begins to run when the debt is due and payable. If the statute of limitations bad been pleaded in accordance with Rule 9(h), U.R. C.P., it would have constituted a bar to plaintiff's claim.