Earth Products Co. v. Oklahoma City

• Decision Date: 26 March 1968
• Docket Number: No. 41568,41568
• Citation: 1968 OK 39,441 P.2d 399
• Parties: EARTH PRODUCTS COMPANY, a corporation, and Sand Products, Inc., a corporation, Plaintiffs in Error, v. OKLAHOMA CITY, a Municipal corporation, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 399

441 P.2d 399

1968 OK 39

EARTH PRODUCTS COMPANY, a corporation, and Sand Products, Inc., a corporation, Plaintiffs in Error, v. OKLAHOMA CITY, a Municipal corporation, Defendant in Error.

No. 41568.

Supreme Court of Oklahoma.

March 26, 1968.

Rehearing Denied June 4, 1968.

Syllabus by the Court

1. The rights and obligations of a licensee under a license agreement depend upon the provisions of the agreement.

2. A license created by valid contract which specifies the period of its duration and which is based upon legal consideration is not a 'mere' or 'bare' license revocable at the will of the licensor.

3. The assignability of a contract depends upon a consideration of the nature of the contract, the skill and personal quality or circumstance of the party contracting as to distinctive characteristics, the pecuniary responsibility of such party, or the personal trust and confidence reposed in such party by the other; the presumption is that, if a contract is to be nonassignable, the parties thereto will so expressly provide. Otherwise, the same is to be considered as assignable.

4. A contract in which the delectus personae is not material, and is an agreement for services which may be as well performed by one person as another, and which is silent as to assignability, is assignable.

5. Unless consideration of the items referred to in paragraph '3' above, clearly establishes, or the terms of the contract itself state or clearly imply, that the contract was intended by the parties to be nonassignable, use in the contract of such terms as 'heirs', 'successors', and 'assigns' indicates that the contract should be assignable.

Appeal from District Court of Oklahoma County, Oklahoma; Clarence M. Mills, Judge.

Action for Temporary Injunction granted. Reversed and remanded.

Bryan Mitchell, Richard D. Hampton and Jack Highley, Oklahoma City, for plaintiffs in error.

Roy H. Semtner, Tom B. McGee, Oklahoma City, for defendant in error.

HODGES, Justice.

Plaintiff, City of Oklahoma City, brought this action against Curtis R. Hurst, an individual, Earth Products Company, Incorporated, and Sand Products, Incorporated, to cancel a certain contract between itself and Earth Products Company, an unincorporated company owned by Curtis R. Hurst. In addition to other relief sought, plaintiff sought a temporary injunction against the defendants and their employees or agents.

At the hearing on the application for temporary injunction, the trial court stated the stipulations of the parties agreed upon at a previous hearing not reported in the record. They are that the parties agreed upon the identity of the contract involved. They agreed that the contract had been properly executed; that the property referred to in the contract is plaintiff's; that various assignments had been made of Hurst's interests and rights in and to the contract without formal notice to or consent of plaintiff; and that Sand Products, Inc., which was then removing sand from the premises under its assignment is the ultimate and current assignee of the contract. Plaintiff refused to introduce any evidence. It apparently relief upon the stipulations. After defendants had produced evidence in support of their positions, the trial court reaffirmed its conclusions of law previously made upon the stipulations, and rendered judgment for plaintiff granting the temporary injunction.

By the written contract here involved plaintiff had granted the unincorporated Earth Products Company the exclusive privilege of removing sand in any quantities disired from the city property described for a year with the right of renewal by the company for each of five successive years thereafter. A fixed sum per cubic yard was agreed upon. Upon removal, the sand becomes the sole and exclusive property of the company. There are provisions for the company's obligations as to slopes, distances from certain banks and depth in certain locations in the excavation and removal of sand. Rights and obligations of the company as to removal of trees are specified.

The trial court held that the contract created a mere license, granted only a privilege to remove sand, was not assignable without the consent of plaintiff, and was revocable at the will of plaintiff, the licensor.

Of the nine assigned errors upon which the corporate defendants seek reversal, we choose to consider only the alleged errors of law and the sufficiency of evidence in connection with the duration, revocability, and assignability of the contract. We will consider the question of duration of the 'license' and its revocability at the will of the 'licensor'. We will then consider the assignability of the contract.

It is apparent that much consideration has been given by the trial court and the parties to determination of the precise, technical classification of the relationship created by the contract here involved. It has been called a license, a profit, a prendre and a lease. Distinctions have been drawn between a lease and a license, a lease and an easement, and an easement and a license. The relationship could have been considered in relation to 60 O.S.1961, §§ 49 through 59, which relates to land burdens and servitudes upon land. In our view, however, a determination of the technical classification of the relationship is not decisive, so, without deciding that it is a license, we will for the purpose of this opinion consider the contract to have created a license.

In Durell v. Freese, 151 Okl. 150, 3 P.2d 175, a thorough discussion of the variable nature of a license appears. It can be permanent or temporary. It can be revocable or irrevocable whether permanent or temporary. We recognized there that revocability of a license is dependent upon the facts in each case; that there is apparent conflict in the cases in this country as to the applicable tests therefor; and that the courts of equity have tried to apply rules of equity to accomplish justice for the parties. We acknowledged the rule relied upon by plaintiff, to-wit:

'It is an ancient and well-settled doctrine of the common law that a Mere license, whether by deed or parol is revocable at pleasure, unless coupled with an interest or grant.' (Emphasis supplied.)

In Durell v. Freese, supra, by quoting with approval from the cases of Rerick v. Kern, 14 Serg. & R. (Pa.) 267, 16 Am.Dec. 497, and Metcalf v. Hart, 3 Wyo. 513, 27 P. 900, 31 P. 407, 31 Am.St.Rep. 122, 123, we reiterated in Oklahoma the doctrine that a license can rise to the dignity of an agreement and clothe the licensee with the rights and privileges of a purchaser for a valuable consideration. This doctrine is well stated in 53 C.J.S. Licenses § 84, as follows:

'A Bare license is not a contract. However, a license may become an agreement for a valuable consideration, as where the enjoyment of it must necessarily be preceded by the expenditure of money; and Where a license constitutes, in effect, a contract, the rights and obligations of the parties under such license agreement depend on the provisions thereof.' (Emphasis supplied.)

It necessarily follows that where, as in this case, we begin with a contract 'in fact' which creates a license, we need not follow any process of judicial logic to ascertain whether a 'bare' or 'mere' license constitutes 'in effect' a contract. Unquestionably, whatever the rights or privileges or the nature of the relationship of the original parties as to the removal of sand from the city property, they were created by the written contract.

A valid consideration for a written contract is presumed by the law. 15 O.S. 1961, §§ 114 and 115. Thus, the original party, Hurst's unincorporated company, became a purchaser for value. The contract involved a legitimate subject matter (removal of sand), a valid consideration (presumed by law and inherent in the agreements to pay for the sand and to retain and maintain certain conditions on the land), and parties capable of entering into such contract. The contract was, therefore, a valid and whole one.

In McKenna v. Williams, 196 Okl. 603, 167 P.2d 368, we held that the license there was irrevocable during the period prescribed in the instrument creating it, to-wit:

'* * * so long as the same (a driveway) is maintained and used for such purpose * * *.'

In Towery v. Garber, 196 Okl. 78, 162 P.2d 878, which involved a bare license...