Court Opinion

ID: 6901759
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:55:39.31131+00
Date Added: 2024-06-11T16:06:11.869699
License: Public Domain

Mr. Justice King
dissenting.
10. The principal contention of defendant relates to the revocability of the license. There is a great conflict in the authorities upon this question, which are thoroughly reviewed in notes to Stoner v. Zucker, 148 Cal. 516 (83 Pac. 808: 113 Am. St. Rep. 301), in 7 Am. & Eng. Ann. Cas. 706, to Gyra v. Windler, 40 Colo. 366 (91 Pac. 36), in 13 Am. & Eng. Ann. Cas. 843, and to Pifer v. Brown, 43 W. Va. 412 (27 S. E. 399), in 49 L. R. A. 497. In the note to the first case mentioned, the author, at page 706 of 7 Am. & Eng. Ann. Cas., says:
“The cases are practically agreed that on strict common-law principles a bare license is revocable at the will of the licensor, even though executed; but it is held by a very respectable line of authorities, as in the reported case, that on principles of equity the revocation of a license after the licensor has stood by and permitted the licensee to incur considerable expense on the faith of the license would amount to a constructive fraud, working an estoppel in the licensee’s favor.”
This court long ago adopted the rule that a parol license cannot be revoked after it has been executed by the licensee, who, in reliance.thereon, has expended money in permanent valuable improvements. In Curtis v. La Grande Water Co., 20 Or. 34, 44 (23 Pac. 808, 810), Justice Lord, who wrote the principal opinion, says:
“An executed license is treated like a parol agreement in equity; it will not allow the statute to be used as a *213cover for fraud; it will not permit advantage to be taken of the form of the consent, although not within the statute of frauds, after large expenditures of money or labor have been invested in permanent improvements upon the land, in good faith, upon the reliance reposed in such consent. To allow one to revoke his consent, when it was given or had the effect to influence the conduct of another and cause him to make large investments, would operate as a fraud, and warrant the interference of equity to prevent it, under the doctrine of equitable estoppel. The ground of the jurisdiction is to prevent injustice or fraud.”
He there held that the executed license estopped the licensor and his grantee with notice, but that, in the change of the location of the dam and pipe line, the plaintiff’s silence or acquiescence did not estop her, or constitute an irrevocable license, and he affirmed the decree of the lower court. But, on rehearing, it was held by Mr. Justice Strahan that, because of plaintiff’s silence and acquiescence while the expenditures were being made it amounted to an implied license and was irrevocable, and the decree was modified accordingly. But this part of that decision was expressly overruled in Ewing v. Rhea, 37 Or. 583, 587 (62 Pac. 790: 52 L. R. A. 140: 82 Am. St. Rep. 783), where it was held by Mr. Justice Moore that a mere naked license by acquiescence is not rendered irrevocable by the expenditure of money on the strength of such acquiescence or implied license. The same justice, in Miser v. O’Shea, 37 Or. 231, 237 (62 Pac. 491, 493: 82 Am. St. Rep. 751), states the rule thus:
“This court has adopted the rule that if a party, relying upon the faith of an express parol agreement, make permanent valuable improvements upon an estate, which may inure to the advantage of the owner thereof, the license upon the faith of which the improvements are made cannot be revoked to the prejudice of the party executing it.”
*214And again, in Ewing v. Rhea, 37 Or. 583, 587 (62 Pac. 790: 52 L. R. A. 140: 82 Am. St. Rep. 783), it is said “that if a party has paid a consideration therefor, or been encouraged by any participation in a common enterprise, or induced by a definite oral agreement to expend money in making permanent valuable improvements, the parol license upon the faith of which he has acted in executing it cannot be revoked to his prejudice.” To the same effect are Lavery v. Arnold, 36 Or. 84 (57 Pac. 906: 58 Pac. 524) ; Hallock v. Suitor, 37 Or. 9, 13 (60 Pac. 384) ; Brown v. Gold Coin Mining Co., 48 Or. 277, 284 (86 Pac. 361) ; Sumpter Ry. Co. v. Gardner, 49 Or. 412 (90 Pac. 499) ; Falls City Lumber Co. v. Watkins, 53 Or. 212 (99 Pac. 884). These cases seem to determine the law in this state upon this question to the effect that a license implied from silence or acquiescence with knowledge of the expenditures is not made irrevocable by expenditures made in permanent improvements in reliance thereon, but an express license, under such circumstances, is irrevocable; and we think this is supported by the weight of authority: Ruthven v. Farmers’ Co-op. Creamery Co., 140 Iowa 570 (118 N. W. 915) ; Gyra v. Windler, 40 Colo. 366 (91 Pac. 36).
11. A distinction is made by counsel between a license and an easement. The latter, he contends, can only be created by solemn writing. The rule is that an easement can only be created by writing under seal, but there are exceptions-well recognized in equity. It may be created by adverse user, by estoppel, or part performance of a parol agreement.
12. An express oral license may be revocable at any time before it is executed, for it creates no interest in the land; but if executed — that is, if expenditures be made in permanent improvements in reliance thereon, inuring to the benefit of the licensor — -then it becomes irrevocable, *215and if it relates to the use or occupation of real estate it becomes an easement. This is recognized in many cases. In Curtis v. La Grande Water Co., 20 Or. 34, 44 (23 Pac. 808, 810), Mr. Justice Lord, quotes with approval from Jackson v. Railroad Co., 4 Del. Ch. 180, which, in laying stress upon the necessity for a clear case to make a license irrevocable, says that the effect will be to convert what was originally a bare privilege into an easement in the licensor’s land, perpetually binding it and transmissible from the licensee. The author of the note at 49 L. R. A. 497, says: “The moment it [the license] ceases to be so revocable it creates an interest in the land, and rises to the dignity of an estate or an easement.” See, also, Pope v. Henry, 24 Vt. 560; Snowden v. Wilas, 19 Ind. 10 (81 Am. Dec. 370) ; Metcalf v. Hart, 3 Wyo. 513, 546 (27 Pac. 900: 31 Pac. 407: 31 Am. St. Rep. 122).
13. The licensee’s right to relief is on the ground of fraud, against which equity will always relieve by estoppel on account of the fraud or by specific performance of an oral agreement partly performed to prevent fraud, whether the fraud be actual or constructive, intentional or nonintentional: Metcalf v. Hart, 3 Wyo. 513, 547 (27 Pac. 900: 31 Pac. 407: 31 Am. St. Rep. 122). See note to Hall v. Chaffee, 13 Vt. *157, by Mr. Justice Redfield. In Metcalf v. Hart, 3 Wyo. 513, 547 (27 Pac. 900: 31 Pac. 407: 31 Am. St. Rep. 122), it is said:
“Cases may arise and have arisen where a license to occupy land has been intended and understood as a mere personal favor to the licensee to give him a place to live, or to occupy for some other beneficial purpose not transmissible, but revocable at will. Then expenditures would naturally be made accordingly. In other cases the granting of the license has been in terms an assurance of permanent possession. It is evident that the same rule cannot apply to both classes of cases. The revocation of the license even after expenditures made in consequence of it, in the one case is a right, in the other a fraud. No *216general rule can be made as to the revocability of such licenses after such expenditures. Each case stands upon its own circumstances. When we have traveled through the mass of decisions, cloudy and conflicting at times, and have arrived at the principle that equity will relieve where there is fraud, actual or constructive, we have arrived at a principle in regard to which there is no conflict. And courts of equity * * are very generally agreed that the revocation of a parol license to permanently occupy and improve realty after any considerable expense has been incurred on the faith of such license, under circumstances such that the parties cannot be placed in statu quo, is either actual or constructive fraud.”
Much of this language is quoted evidently with approval as a conclusion to the note in 7 Am. & Eng. Ann. Cas. 717. See, also, Mason v. Hill, 27 E. C. L. 15; Liggins v. Inge, 20 E. C. L. 304, and Loiue v. Adams, 2 Ch. (Eng.) 598, in which a doubt is expressed as to whether Wood v. Leadbitter, 13 Meeson & Welsby’s Rep. 538, which seems to hold to the contrary and is frequently quoted as expressing the rule in England, is good law.
14. The license in this case, as gathered from the letter of Failing, which is: “I have just * * found your letter of the 19th inst., asking for right of way through my land in Powder River Valley. Would say go ahead. The more ditches you build, the better it will suit me”— is express authority to construct the ditch, and', in view of all the circumstances, did not contemplate a temporary affair, but a permanent right of way.
15. It is indefinite as to the location and extent of the ditch; but, when they were located and constructed, both became definite. The whole ditch was constructed at great expense, viz., $6,000 or $7,000, to convey water for irrigation upon plaintiff’s land, and the part upon defendant’s lands is only a small part thereof; the ditch being about sixteen miles long. A permanent way appears to have been the intention of the parties, and *217such intention must control: Brown v. Honeyfield, 139 Iowa 414 (116 N. W. 731) ; Pifer v. Brown, 43 W. Va. 412 (27 S. E. 399: 49 L. R. A. 497, 509).
16. Again, it is urged that, even though the license is irrevocable as to the licensor, it is not so as to his grantee. But the authorities that hold the license irrevocable also hold that it is binding upon the grantee of the licensor who took with notice. 3 Pom. Eq. Jur. § 1295; Bush v. Sullivan, 3 G. Greene (Iowa) 344 (54 Am. Dec. 506) ; Beatty v. Gregory, 17 Iowa 109 (85 Am. Dec. 546) ; Snowden v. Wilas, 19 Ind. 10 (81 Am. Dec. 370) ; Simons v. Morehouse, 88 Ind. 391; Metcalf v. Hart, 3 Wyo. 513, 548 (27 Pac. 900: 31 Pac. 407: 31 Am. St. Rep. 122). Counsel for defendant, in his brief, concedes this, saying:
“We have no doubt that, under the liberal rule established by these cases, the promise of Failing would be enforced by almost any court of equity against Failing, and also against any successor to Failing who took with either actual or constructive notice of the burden existing on the estate in favor of Shaw.”
And as to notice Pomeroy says:
“If a purchaser, or incumbrancer, dealing concerning property of which the record title appears to be complete and perfect, has information of extraneous facts or matters in pais sufficient to put him on inquiry * * respecting some outstanding interest, claim, or right, which is not the subject of record, and he omits to make inquiry, he will be charged with constructive notice of all the facts which he might have learned by means of a due and reasonable inquiry.” 2 Pomeroy, Eq. § 613. See, also, Petrain v. Kiernan, 23 Or. 455, 457 (32 Pac. 158.)
This principle is applied in case of a water ditch in McDougal v. Lane, 39 Or. 212, 214 (64 Pac. 864.) In German Savings & Loan Society v. Gordon, 54 Or. 147, 156 (102 Pac. 736, 739), Mr. Chief Justice Moore, in discussing the same principle, says:
“We are unable to discover any valid reason for a distinction in the rules of law applicable to servitudes *218depending upon whether they are continuous or discontinuous, except in the matter of the greater conspicuity which the former usually affords. An artificial ditch in which water regularly flows must necessarily be a constant reminder of all beholders of the changed condition of the surface of the earth, whereby the dominant tenement is drained or irrigated. * * A discontinuous quasi easement, when evidenced in a similar substantial manner, ought to pass by implied grant as an appurtenant to the dominant tenement, when the latter is severed by a conveyance thereof.”
And in 23 Am. & Eng. Enc. Law (2 ed.) 499, it is said:
“It is generally held that the possession of itself operates as constructive notice, and consequently that it is immaterial that the purchaser was actually ignorant that the land was adversely held, especially where he could have easily acquired knowledge of the fact, but neglected to visit the premises.”
17. Defendant testified that when he and Russell purchased the land there was a ditch coming onto the land at the south and across the land, and onto Shaw’s place on this land, it was our understanding through Mr. Williams (who negotiated the purchase for Russell and Proffitt) the north; and Mr. Russell testifies: “When we bought that there was no writing granted by Mr. Failing, and he was selling it to us. He said Mr. Shaw had no legal right through that place” — showing clearly that, at the time of the purchase, they knew of Shaw’s claim and had talked it over. This was sufficient to put defendant upon inquiry, which constitutes notice, and, taken in connection with their recognition of the ditch thereafter, tends strongly to establish that the defendant was chargeable with knowledge of Shaw’s rights: Carter v. City of Portland, 4 Or. 339. They thereafter recognized Shaw’s rights in permitting him to complete the upper ditch, regarding which Russell testified:
“As I understood he would vacate the lower ditch, and I had talked with Mr. Chenault about getting water and *219putting water down there, and of course we spoke of those ditches, that we could use them for laterals ourselves.”
18. Defendant further contends that plaintiff cannot rely upon an estoppel, because none is pleaded. A cursory examination of the pleadings will show that no occasion has arisen requiring plaintiff to plead it. The complaint alleges the license, and the facts necessary to constitute it an irrevocable license. The answer in relation thereto contains only admissions and denials; and, there being no affirmative allegation, he is asserting nothing that he ought not to be heard to allege. If by the answer he had raised the question of the statute of frauds, or that the license was in parol, the estoppel might have been raised by demurrer, as the facts are set out in the complaint. This was so held in Oregonian Ry. v. Oregon R. & N. Co. (C. C.) 22 Fed. 245, 249 (10 Sawy. 464, 471), where it is said that, “if this fact did not already appear in the complaint, the plaintiff could not have the benefit of the estoppel, unless he set it up in a replication; and that is the way in which the point is generally made in the pleadings. But in this case the matter which operates as an estoppel — the contract of leasing — is set forth in the complaint. In such case the defendant [plaintiff] may claim the benefit of the estoppel by demurrer to the plea, which contains the defense, of a want of corporate existence or power.” There are many authorities to this effect. See Adams v. Patrick, 30 Vt. 516, and 8 Pl. & Pr. 9, and cases there cited.
19. The allegations of the complaint disclose an irrevocable license, and proof thereof establishes plaintiff’s case. If the question of estoppel arose upon the trial, then plaintiff could establish it by the evidence; but it seems to have been raised in this court for the first time.
Counsel also contend that Failing’s license to Shaw to construct the ditch cannot affect or bind the land then owned by his wife and daughter, and relies upon Houston *220v. Zahm, 44 Or. 610 (76 Pac. 641: 65 L. R. A. 799), as conclusive upon that question. But that case is readily distinguishable from the one before us. In the Zahm case the contract contemplated that the University would purchase certain land and should thereafter open and maintain a public street across the same. This is a. provision for an easement upon the land of the University, when acquired, to be constructed and maintained at the expense of the owner. No expense or act by the grantee is involved. Second, there was no dominant estate. Only an easement in gross was contemplated. Third, the easement did not create a covenant running with the land; that is, it was an agreement concerning land but not an estate in the land.
In the present case Failing was acting as owner, and personally authorized Shaw, who supposed him to be the owner, to construct the ditch on the Failing land, not an easement in gross, but an irrigation ditch appurtenant to his land. This was partly executed by Shaw in good faith at great expense, and thereafter, while recognizing Shaw’s right, Failing acquiring the title, and equity will interpose an estoppel as though he held the title at the time the license was granted, in which case the after-acquired title will inure to the benefit of the licensee: 11 Am. & Eng. Enc. Law (2 ed.) 403. In the Zahm case the street was to be erected, at the owner’s expense, on land thereafter to be acquired by it, which was not done, and estoppel cannot be invoked. In 26 Am. & Eng. Enc. Law (2 ed.) 114, it is said it will not defeat an action for specific performance by a vendor that he did not have title to the property in question at the time the contract was made, provided he will be able to convey at the time of the rendition of the decree. To the same effect is Waterman, Spec. Perf. §409. And the converse of that statement is elementary. If the vendor is able to perform at the time of the suit, he will be required to do so at the suit of the *221vendee, even though he had no title at the time of making the agreement. The same principle will apply in favor of the licensee in a suit to enjoin a revocation of an executed license: Washburn, Easements & Servitudes (2 ed.) says:
“But the ordinary doctrine of estoppel by deed applies in case of a grant of an easement, so that, if a person without title profess to convey an estate, or to grant an easement, his conveyance operates by way of estoppel, if at a subsequent period he acquires the fee, and the subsequently acquired estate is bound thereby, or, as it is termed, the newly acquired estate feeds the estoppel.”
The petition is denied.
Affirmed: Rehearing Denied.