Court Opinion

ID: 3547974
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:00:34.317424+00
Date Added: 2024-06-11T13:39:01.986302
License: Public Domain

The written instrument which is the basis of this action is as follows:
"Know all men by these presents, that Eugene Howell, of the county of White Pine, State of Nevada, the party of the first part, and Frank Paul, of the same county and state, the party of the second part, do covenant and agree, and by these presents do covenant and agree, that the said party of the first part hereby leases unto the said party of the second part a one-third interest in and to that certain mine known as and called the `Homestake Mine,' situated in Swansea canon, near Shermantown, White Pine mining district, White Pine county, State of Nevada. This lease to take effect and go into force from this day, and to continue for a period of one year up to and including June 13, 1897. The provisions of this lease to be as follows: The party of the second part hereby agrees to work the said mine in a workmanlike manner, and leave the mine in as good a condition as it is at this time. The said party of the second part agrees to pay over to the said party of the first part, or to the sheriff of White Pine county, or to C. A. Mathewson, of Hamilton, White Pine county, Nevada, as shall be directed by the said party of the first part, royalty from all ores and ores taken out, extracted, and shipped from the said Home-stake mine by the said party of the second part or by any one during the continuance of this lease, as follows:
"The party of the second part agrees to pay one dollar ($1) per ton net money for all ores shipped and worked from said mine which is at the rate of three dollars ($3) per ton for all ores taken out and shipped under this lease. This royalty to be net over everything, and no expenses of any nature to be deducted from same. Said royalty to be paid upon the first day of every month to the party or parties as hereinbefore named, together with duplicate statements of *Page 322 
ores worked by smelters. The said party of the first part empowers the party of the second part to ship all ores that may be out on the dumps and extracted from said Home-stake mine at this time, the ores representing the one-third interest as named in this lease, paying the royalty therefor as herein named. All ores to be marked in the name of the Homestake mine. The party of the second part agrees to post a notice upon said mine at once that said mine and interest will not be responsible for any debts, obligations, expenses, wages, or dues of any nature or character whatsoever during the term of this lease, to read as follows: `Know all men by these presents, that a one-third interest in the Homestake mine has been leased unto Frank Paul, and said mine will not be responsible or said Eugene Howell will not be responsible or holden, or said mine holden, for any debts, obligations, wages of men, expense of mining supplies, or any dues of any nature or character whatsoever during the term of this lease. In witness whereof we have this 13th day of June, 1896, set our hands and seals at Carson City, Nevada. Eugene Howell. [Seal.] Frank Paul. [Seal.]' We unite in the above lease, and agree upon and accept its terms and conditions upon the understanding that the royalty or rental mentioned therein shall be paid to C. A. Mathewson, to be by him held in trust and on special deposit, to be paid over when it is determined to whom the same belongs. Irene M. Robinson. [Seal.] Robt. M. Clarke. [Seal.]"
The parties have called it a lease, but the name they have attached to it can make no difference as to its legal effect.
Bainbridge, in his work on the Law of Mines and Minerals (page 236), says: "There is a great distinction between a lease of mines and a license to work mines. The former is a distinct conveyance of an actual interest or estate in lands, while the latter is only a mere incorporeal right to be exercised in the lands of others. It is a profit aprendre, and may be held apart from the possession of land. * * * In order to ascertain whether an instrument must be construed as a lease or a license, it is only necessary to determine whether the grantee has acquired by it any estate in the land, in respect of which he might bring an action of ejectment. *Page 323 
If the land is still to be considered in the possession of the grantor, the instrument will only amount to a license, and, though the grantee of the license will certainly be entitled to search and dig for mines according to the terms of his grant, and appropriate the produce to his own use, on payment of the stipulated rent or proportion, yet he will acquire no property in the minerals till they are severed from the land, and have thus become liable to be recovered in an action of trover."
Another distinction is that a lease is a contract for exclusive possession, whereas a license merely gives the licensee the right to use the premises for a specified purpose, the possession remaining in the licensor.
"The authorities are agreed that a license to dig and take ore is never exclusive of the licensor, unless expressed in such words as to show that that was the intention of the parties. Where the license simply gives the licensee the right to dig and take ore, the licensor may take ore from the same mine at the same time, and also grant permission to others to exercise the same right." (Silsby v.Trotter, 29 N. J. Eq. 233; Malcomson v.Wappoo Mills (C. C.), 85 Fed. 907.)
It will be noticed that under the provisions of the instrument above set forth respondent acquired no estate in the mine, and that his possession was not exclusive. I conclude, therefore, that the instrument is a license, and that plaintiff acquired no interest thereby except as to ore extracted by him. As to ore not extracted, there was no change of ownership.
For these reasons I dissent from the judgment.
                      UPON PETITION FOR REHEARING.