Lynch v. Seymour, (1888) 15 SCR 341

Supreme Court of Canada

Lynch v. Seymour, 15 S.C.R. 341

Date: 1888-03-15

John lynch and Another (Defendants) Appellants;

and

Frederic E. Seymour (Plaintiff) Respondent.

1887: November 27; 1888: March 15.

Present: Sir W.J. Ritchie C.J. and Strong, Fournier, Henry, Taschereau and Gwynne JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Written instrument—Construction of—Lease or license—Authority to work—8 Anne ch. 14 s. 1.

In an indenture describing the parties as lessor and lessees respectively the granting part was as follows: “Doth give, grant, demise and lease unto the said (lessees) the exclusive right, liberty and privilege of entering at all times for and during the term of ten years from 1st January, 1879, in and upon (describing the land) and with agents, laborers and teams to search for, dig, excavate, mine and carry away the iron ores in, upon or under said premises, and of making all necessary roads, &c., also the right, liberty and privilege to erect on the said premises the buildings, machinery and dwelling houses required in the business of mining and shipping the said iron ores, and to deposit on said premises all refuse material taken out in mining said ores.” There was a covenant by the grantees not to do unnecessary damage and a provision for taking away the erections made and for the use of timber on the premises and such use of the surface as might be needed.

The grantees agreed to pay twenty-five cents for every ton of ore mined, in quarterly payments on certain fixed days, and it was provided how the quantity should be ascertained. It was also agreed that the royalty should not be less than a certain sum in any year. The grantees also agreed to pay all taxes and not to allow intoxicating drinks to be manufactured on the premises or carry on any business that might be deemed a nuisance. There were provisions for terminating the lease before the expiration of the term and covenant by the lessor for quiet enjoyment.

In an interpleader issue, where the lessor claimed a lien on the goods of the lessees for a year’s rent due under the said indenture by virtue of 8 Anne ch. 14 sec. 1,

Held, per Ritchie C.J., and Henry and Taschereau JJ., that this

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instrument was not a lease but a mere license to the grantee to mine and ship the iron ores, and the grantor had no lien for rent under the statute. Strong, Fournier and Gwynne JJ. contra.

APPEAL from a decision of the Court of Appeal for Ontario[1] affirming the judgment of the Queen’s Bench Division[2] by which a verdict for the defendants on the trial was set aside and judgment entered for the plaintiff.

This is an interpleader issue under the following circumstances:

The defendant Lynch having obtained judgment against the Hastings Iron Co., the goods and chattels in question were seized under an execution issued on said judgment. The plaintiff claimed that $2,400 was due him for rent of the premises on which the goods were seized, under the statute 8 Anne ch. 14, and the issue was brought to test his right to the goods on such claim. The defendant Barnum was made a party as being interested in said judgment.

The sole question to be determined in this case is whether the instrument under which the plaintiff claims such rent to be due is a lease or a mere license. Such instrument is as follows:—

This indenture made in duplicate this twelfth day of November, in the year of our Lord One Thousand Eight Hundred and Seventy-Eight, in pursuance of the Act respecting short forms of leases.

BETWEEN Frederick Elisha Seymour, of the Township of Madoc in the County of Hastings and Province of Ontario, gentleman, known hereinafter as the lessor of the first part, and Charles J. Pusey, of Sodus Point, in State of New York, gentleman, and A.W. Humphreys, of the city of Brooklyn, in the State of New York, gentleman, jointly and severally, and known hereinafter as the lessees of the second part.

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WITNESSETH: That the said party of the first part, for and in consideration of the rents and royalties to be paid, and of the covenants, agreements and conditions hereinafter named to be kept and performed by the said parties of the second part, their heirs, executors, administrators, assigns and successors hath and by these presents doth give, grant, demise and lease unto the said parties of the second part, their successors or assigns, the exclusive right, liberty and privilege of entering at all times, for and during the term of ten years from the first day of January, in the year of our Lord one thousand eight hundred and seventy-nine, in and upon that certain tract of land situated in the township of Madoc aforesaid, consisting of the west half of lot number eleven, in the fifth concession of the said Township of Madoc, containing by admeasurement one hundred acres of land, be the same more or less, reserving that portion thereof occupied or hereafter to be occupied as roadway by the Belleville and North Hastings Railway, and with agents, laborers and teams, to search for, dig, excavate mine and carry away the iron ores in, upon or under said premises, and of making all necessary roads for ingress and egress to, over, and across the same, to public roads or places of shipment; also the right, liberty and privilege to erect on the said premises the buildings, machinery and dwelling houses required in the business of mining and shipping the said iron ores, and to deposit on said premises all refuse material taken out in mining said ores. The said parties of the second part to do no unneccessary damage to said premises, and at the termination of this indenture, and for three months thereafter, as well as during its continuance, the said parties of the second part, their successors and assigns are to have the right to take down and remove their erections before named and to

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take away ores mined, and to use such timber as may be found on the premises as may be required in carrying on mining operations and such use of the surface as may be needed for all other purposes appertaining thereto.

In consideration whereof, the parties of the second • part, their heirs, executors, administrators, assigns and successors agree to pay to the party of the first part, his heirs and assigns, twenty-five cents of lawful money of Canada for every ton of twenty-two hundred and forty pounds of clean and merchantable iron ore mined and taken away from the said premises by them the quantity of the iron ore so taken away to be ascertained by the scales and records of the Belleville and North Hasting Railway Company or the books of the lessees of said railway, access to whose books and. records is hereby assured to the lessor, whenever desired by him in order to ascertain the quantity of ore shipped and the amount of royalty due to him Payments of royalty are to be made quarterly on first days of January, April, July and October in each and every year at the village of Madoc, in the county of Hastings, during the continuance of this lease, the first payment to be made on the first day of April, one thousand eight hundred and seventy-nine.

Then follows certain covenants by the lessees as to getting out a specified quantity of ore each year, due payment of the royalties, payment of taxes, &c., and a provision for termination of the lease before the expiration of the term. There is also a covenant by the lessor for quiet possession and a warranty of title.

On the trial a verdict was given for the defendants, the learned judge holding that the above instrument was not a lease but a license. The Queen’s Bench Division reversed this decision and on appeal to the Court of Appeal the court was equally divided and

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the judgment of the Queen’s Bench Division was sustained. The defendants then appealed to the Supreme Court of Canada.

Northrup for the appellant.

There is only the one question to be determined, namely, whether this document is a lease within the statute of Anne or a mere license to dig and mine.

That it cannot be held to be a lease is clear on the authority of Doe d. Hartley v. Wood[3].

In the case of Roads v. Overseers of Trumpington[4] relied on by the respondents the circumstances were very different and that case does not apply.

Clute for the respondent.—The document is called a lease by the parties and contains the usual provisions of a lease. The lessee had the exclusive right of entry. Roads v. Overseers of Trumpington⁴ is strongly against the appellant.

Sir W.J. RITCHIE C.J.—(After reading the material portion of the lease his lordship proceeded as follows):

The only question in this case is as to the character of the instrument of the 12th November, 1878, made between the plaintiff of the first part and Pusey and Humphries of the second part. Was it a lease of the premises mentioned or a mere license to enter and search and take the iron ore? If a lease it is conceded that the respondent should succeed.

I think it is no lease but an exclusive license or liberty to enter on the premises mentioned in the instrument for the purpose of searching for and severing and carrying away the iron ores in, upon or under the said premises.

The intention of the parties must be collected from the terms of the instrument. The language of the

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statute under which it is claimed these goods are not liable to be taken, 8 Anne ch. 14, is as follows:—

No goods or chattels whatsoever lying and being in or upon any messuage, lands or tenements which are or shall be leased for life or lives for term of years at will or otherwise, shall be liable to be taken by virtue of any execution.

And in the second clause, which applies to the fraudalent removal of goods different words are used:

Any messuages, lands or tenements, upon the demise whereof any rents are or shall be reserved or made payable.

I have been unable, after a most careful perusal and consideration of the document in question, to discover evidence of any intent of the parties that the lands in question shall be leased for a term of years, in other words, that the grantor or licensor should divest himself of the possession of the premises and the licensee should come into it for a determinate period, but the contrary; all that was granted was liberty to search for and work the mines of iron ore, a grant of a smaller interest than might have been passed by the licensor. Had the parties intended that there should be a demise of the land as well as the right to enter, search for, dig and work it might have been done in simple, plain language, which I fail to see in this deed. There is a very broad distinction between a privilege to search for and obtain minerals and a sole and exclusive occupation of the land itself. Humphrey v. Brogden[5], very clearly shows that while the possession of the surface and the mine may go together the two may be separated and then they are as distinct as several closes, and in Keyse v. Powell[6], Lord Campbell delivering the judgment of the court said:—

The surface and the minerals maybe dissevered in title, and be come separate tenements, as appears abundantly from the cases cited; Curtis v. Daniel,[7]; and Humphreys v. Brogden[8]

The deed seems to me to express, very intelligently

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and but for the difference of judicial opinion I should say very clearly, what the licensor intended to grant, viz., in the language of the deed:

The exclusive right, liberty and privilege of entering at all times for and during the term of ten years from the first day of January, in the year of Our Lord one thousand eight hundred and seventy-nine, in and upon that certain tract of land situated in the township of Madoc aforesaid, consisting of the west half of lot No. 11, in the 5th concession, of the said township of Madoc, containing by admeasurement 100 acres of land, be the same more or less/reserving that portion thereof occupied or hereafter to be occupied as road way by the Belleville and North Hastings Railway, and with agents. laborers, and teams,

To do what?

to search for, dig, excavate, mine and carry away the iron ores in, upon or under said premises, and of making all necessary roads for ingress and egress to, over, and across the same, to public roads or places of shipment; also the right, liberty and privilege to erect on the said premises the buildings, machinery and dwelling houses required in the business of mining and shipping the said iron ores, and to deposit on said premises all refuse material taken out in mining said ores.

Here we have not a word as to the occupation or possession of the land except as may be necessary to the mining and shipping the ores discovered on the land authorized to be searched for, but simply a right of entry for a specific purpose and the liberty of erecting the buildings, &c., required in the business of mining and shipping the ores, and for which authority was given to search and mine and carry away; but we have a very significant intimation that the provision quoted was not to apply to the possession and occupation of the land, for the deed, after providing that the parties of the second part should do no unnecessary damage and that at the termination of the indenture and for three months thereafter, as well as during its continuance the parties of the second part should have the right to take down and remove their erections and to take away the ores mined, it then proceeds to deal with the use of the surface; after

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providing that the licensee may use such timber as may be then found on the premises as may be required in carrying on mining operations, it proceeds to provide for the limited use of the surface in these words:

and such use of the surface as may be needed for all other purposes appertaining thereto.

That is, appertaining to the mining operations. Does not this show, negatively, that the licensee is not to have the use or possession of the surface not needed for the positive purposes specified? It appears to me to show conclusively that the possession of the surface and the mine were treated as separate and distinct closes and that the privilege of the use of the timber was confined to what might be required in carrying on mining operations and the use of the surface was confined to purposes appertaining to mining operations and to those alone, and that there was no intention to interfere with the rights of the licensor beyond what was incident to those operations, and therefore that the deed was not intended to interfere with the licensor’s dealing with the surface subject always to the rights of the licensee with reference to searching for and working the mines of iron ore.

I therefore think this instrument cannot be so construed as to prevent the licensor, subject to such rights of the licensee, dealing with and using the surface of the land as if this deed had not been made, either by using it for agricultural purposes or, should a mine of coal or other mineral be discovered on this land, working such a mine or granting a precisely similar privilege or right of entry to any other parties to enter and search for coal or any other minerals and if discovered to work the mine so discovered upon the same terms and conditions as expressed in this license, not, however, interfering, by himself or his

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licensees, with the rights and privileges granted under the deed in this case with respect to the iron ores, the entry under this deed being merely in reference to the iron ore no other mines or rights in other mines being available to the licensee tinder this license.

In consideration of the rights and privileges conferred the parties agree to pay 25 cts. for every ton of 2,240 pounds of clean and merchantable iron ore mined, payments to be made quarterly, the first payment to be made on the first of April, 1879, and the parties agree to mine, &c., in each year a certain number of tons, and the parties of the second part agree to pay all taxes and perform all statute labor assessed upon the premises and not to allow any manufacture or traffic in any intoxicating drinks upon said premises, and will not carry on any business that may be deemed a nuisance thereupon. There is a provision for the termination of the license on non-fulfilment of the conditions and covenants for quiet possession and a covenant that the licensor will warrant and secure the parties “in the rights and privileges herein granted them from all and every other person or persons whatsoever;” which rights and privileges are simply, in my opinion, a license to enter and search and mine the iron ores found and not to meddle or interfere with the surface or the mines beyond the limited permission given to use the surface as before referred to. I can discover nothing in these last provisions which are calculated to interfere with the construction I have indicated or to give the licensees any other and larger rights to or interests in the lands as lessees thereof beyond what is given them by the express terms of the deed.

STRONG J.—The action in the court below was an interpleader issue directed to try the right to certain

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property seized in execution on the 7th of January, 1884, by the sheriff of Hastings under a writ of fieri facias tested the 7th day of January, 1884, issued out of the Queen’s Bench division of the high court of justice of Ontario, upon a judgment of that court recovered by John Lynch at his suit against the Hastings Iron Company; in this issue the respondent, Frederick Elisha Seymour, was plaintiff and the appellant, John Lynch, was defendant.

The goods in question were seized on the west half of lot No. 11 in the 5th concession of Madoc.

The respondent claimed one year’s rent as against the execution amounting to $2,400, under a lease bearing date the 12th day of November, 1876.

The property seized has been sold by the sheriff, and the money, $750, is now in the sheriff’s hands to abide the result of the interpleader issue.

There was at the time of the seizure $6,500 due for rent under the lease.

The lease in question is set out in the report of the case before the Queen’s Bench division in 7 O.R. 471.

The respondent claims the proceeds of sale of the goods to satisfy his rent under 8 Anne, ch. 14.

The appellant resists this claim upon the ground that the instrument or the 12th of November, 1878, is a license and not a lease, and that the statute of Anne does not apply. The question for determination is as to whether the instrument of the 12th of November, 1878, is a lease or a mere license.

The issue was tried before Mr. Justice Patterson without a jury, who gave judgment for the appellants the execution creditors, holding that the instrument in question was not a lease but a license. This judgment was reversed by the Queen’s Bench division and that decision was afterwards affirmed by the Court of Appeal, the judges in the latter court being equally

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divided in opinion, the Chief Justice and Mr. Justice Burton adopting the view of Mr. Justice Patterson, and Mr. Justice Osier and Mr. Justice Ferguson agreeing in opinion with the Queen’s Bench division. The defendants in the issue, the execution creditors, have now appealed to this court.

After some hesitation and fluctuation of opinion I have come to the conclusion that the view of the Queen’s Bench Division and of the learned judges who agreed with them in the Court of Appeal was correct, and that the appeal must be dismissed. ‘

There can be no question that if we are to construe this indenture as conferring upon the lessees an exclusive right of entry upon the land—that is, a right to enter exclusive of the grantor—it amounts to a demise of the land itself. Roads v. Trumpington[9]; Chetham v. Williamson[10]. The words of grant or demise are as follows:—

WITNESSETH: That the said party of the first part, for and m consideration of the rents and royalties to be paid, and of the covenants, agreements and conditions hereinafter named to be kept and performed by the said parties of the second part, their heirs, executors, administrators, assigns and successors hath and by these presents doth give, grant, demise and lease unto the said parties of the second part, their successors or assigns, the exclusive right, liberty and privilege of entering at all times, for and during the term of ten years from the first day of January, in the year of our Lord one thousand eight hundred and seventy-nine, in and upon that certain tract of land situated in the Township of Madoc aforesaid, consisting of the west half of lot number eleven, in the fifth concession of the said Township of Madoc, containing by admeasurement one hundred acres of land, be the same more or less, reserving that portion thereof occupied or hereafter to be occupied as roadway by the Belleville and North Hastings Railway, and with agents, laborers and teams, to search for, dig, excavate mine and carry away the iron ores in, upon or under said premises, and of making all necessary roads for ingress and egress to, over, and across the same, to public roads or places of shipment; also the right, liberty and privilege to erect on the said premises the buildings, machinery

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and dwelling houses required in the business of mining and shipping the said iron ores, and to deposit on said premises all refuse material taken out in mining said ores. The said parties of the second part to do no unnecessary damage to said premises, and at the termination of this indenture, and for three months thereafter as well as during its continuance the said parties of the second part, their successors and assigns are to have the right to take down and remove their erections before named and to take away ores mined, and to use such timber as may be found on the premises as may be required in carrying on mining operations and such use of the surface as may be needed for all other purposes appertaining thereto.

These words are, no doubt, to a certain extent ambiguous, for it is not clear whether it was intended to give the lessees an exclusive right of entry, with the power to excavate, mine and carry away iron ore superadded, or whether it was the intention merely to give an exclusive license to excavate and carry away the ore and for that purpose, and as incidental thereto, to enter upon the land. The respondent, of course, contends for the* latter construction and the appellant for that first mentioned.

The first observation which it occurs to me to make is. that as there is a real ambiguity in the expressions used the deed is to be construed most strongly contra proferentem, that is, against the grantor; and we are, therefore, to ascribe to it an operation which would confer upon the grantee the largest interest which the words will admit, and this requires us to read the language used in the sense contended for by the respondent, as granting an exclusive right of entry and so amounting to a demise. If, therefore, there was nothing else in the deed confirmatory of this construction I should, upon this consideration alone, be prepared to concur in the judgment of the Queen’s Bench division.

There are, however, other provisions in the instrument which seem to me to be conclusive of the question in controversy. The lessees are to be at liberty to erect on the premises buildings, machinery and dwelling

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houses. Now it is not to be doubted that it was intended that these erections should be and remain, during the term, in the exclusive possession of the lessees who were guaranteed the quiet enjoyment of them, and if the exclusive possession of these houses and buildings was to be in the lessees it follows, of course, that the land on which they were erected should also be and remain in the like exclusive possession of the lessees. Then how is it possible to say that it was intended to discriminate between the land occupied by these erections and the other land comprised in the lease? Further, the liability to pay taxes and perform statute labor is imposed on the lessees, a provision altogether inconsistent with the notion that they are to have no interest in the land beyond that of mere licensees. The lessees also covenanted not to allow any manufacture of, or traffic in, intoxicating drinks upon the premises, and this covenant they could not properly perform unless they had the exclusive occupation and possession of the land itself. They also undertook not to carry on upon the premises any business which might be deemed a nuisance, a provision which, by itself, plainly implies an exclusive occupation by them. There is also the claim of re-entry which, although if it stood alone, might have been insufficient to have stamped the character of a lease on the instrument yet, when considered with the other clauses mentioned, is a circumstance of great weight as warranting the inference that the lessees were to have an exclusive occupation.

All these provisions, although they might not be conclusive if it were not for the ambiguity before pointed out in the operative words of demise, yet, taken in conjunction with those words and with the principle of construction which requires the deed to be read most strongly against the grantor, leave in my

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mind no doubt that the Queen’s Bench Division rightly held this instrument to be a lease, operating as a demise of the land itself and not a mere license to mine and take away the minerals.

There is a plain distinction between this case and that of Doe d. Hartley v. Wood[11], for in that case the instrument which was held to be a license contained no words of demise, like those we find in this indenture, of the exclusive right of entry.; had there been such words there can be little doubt, from what is said by Lord Tenterden C.J. in giving the judgment of the court, that the decision would have been different.

The appeal should be dismissed with costs.

FOURNIES J. was also of the opinion that the appeal should be dismissed.

HENRY J.—I entirely concur in the views contained in the judgment delivered by the learned Chief Justice. This document must be read in connection with the surrounding circumstances and with the knowledge derived from the admissions of the parties.

The instrument undertakes to give to the parties named as the lessees, their heirs, executors, &c., the exclusive right, liberty and privilege of entering at all times. What is the meaning of that? It is the exclusive right of entering at all times on the land of the lessor. No more than that. If they were only to enter once it would have been very easy to say, in so many words, “we lease you the land for so many years on these conditions.” But here the words used are “give, grant, demise and lease.” These are words referring to certain absolute conveyances of land and have a well known, definite meaning which can be

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applied to the construction of any document. Here, under a grant or demise for ten years the grantees had an exclusive right to enter at all times. Now, as I stated before, if they were only to enter once why was it necessary to provide that they could enter at all times?

The privilege of entering at all times was given for the purpose of allowing the grantee to search for, dig, excavate, mine and carry away the iron ores, and to make all necessary roads for ingress and egress over the premises to public roads or places of shipment. But if the grantees were to have a lease of the land there was no necessity to give them this special license. They were also to have the, right, liberty and privilege of erecting on the premises the buildings, machinery and dwelling houses required in the business of mining and shipping the said iron ores. That is a limited license. They were to erect buildings on the land but for a special purpose. There is no general authority under this document to put up dwelling houses, stores or barns, but a special authority to erect certain buildings required in the mining of said ores.

Then there are other provisions. The grantees were to deposit on the premises all refuse material taken out in mining said ores. These parties had a license to work, to mine, to take and carry away the ore, and here was a special authority given them to pile their refuse stuff on the premises. Again, they were to do no unnecessary damage, and were to be allowed the use of the timber on the premises for their mining operations “and such use of the surface as might be needed for all other purposes appertaining thereto.” Their use, then, of the surface was limited and they were to have a special right to use such timber on the premises as might be required for their purposes.

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Now looking at the whole of this document what does it after all amount to? Could any one say that this was a lease which would deprive the lessor from working, say, a coal mine found on the land? That is the way documents of this kind are to be looked at. We must look to see what the words in it apply to, and if they only apply to the subject of license we must construe them accordingly. Words that are inapplicable should not be considered.

I would, therefore, look at this document with the construction I think the whole of it bears, taking it altogether and leaving out the effect of the two or three words “grant, demise, &c.” These words we must limit, I take it, in this way—“I grant you, demise to you, etc., the special right of doing so and so for ten years.” It is not a lease by which anything more* than this is given.

Under these circumstances I cannot come to the conclusion that this is a lease. Under the statute referred to the grantor has no lien for rent and therefore I think the judgment should be in favor of the execution creditors. The appeal should be allowed and the judgment of the court below reversed.

TASCHEREAU J.—The question in this case, which seems to be a very simple one at first sight proves to be not so clear after all. On the trial Mr. Justice Patterson ruled that it was a license; the Queen’s Bench Division held it a lease and in the Court of Appeal two judges held it the one and two the other. In this court we are divided, three to three. I am of opinion that it is a license and not a lease. Mr. Justice Ferguson calls it a lease coupled with a license.

My judgment would be to allow the appeal. I would adopt the reasoning of Mr. Justice Burton in the Court of Appeal.

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GWYNNE J.—In my opinion the indenture is a lease of the whole lot with liberty to search for and take out ore in any part of it, and the provision near the end, as to taking timber, and as to dealing with the surface, is to enable the lessee to use the timber for mining purposes and so to deal with the surface as might be necessary for mining purposes, which acts could not be done by a lessee of land as a farm; the condition of these acts being authorized being that they should be done bonâ fide for mining purposes.

Appeal dismissed without costs.

Solicitors for appellants: Denmark & Northrup.

Solicitors for respondent: Clute & Williams.