State v. Cavour Mining Co.

• Decision Date: 11 July 1919
• Docket Number: No. 21337.,21337.
• Citation: 143 Minn. 271,173 N.W. 415
• Parties: STATE v. CAVOUR MINING CO.
• Court: Minnesota Supreme Court

143 Minn. 271

173 N.W. 415

STATE

v.CAVOUR MINING CO.

No. 21337.

Supreme Court of Minnesota.

July 11, 1919.

Appeal from District Court, St. Louis County; Bert Fesler, Judge.

Action by the State of Minnesota against the Cavour Mining Company. Findings and judgment for the State, and defendant appeals. Affirmed.

Syllabus by the Court

A state mining lease is in fact as it is in form a lease and not a conveyance of ore in place. It provides that there shall be a minimum output of 5,000 tons annually, and that in case such amount is not removed the lessee shall pay the state a royalty of 25 cents per ton on 5,000 tons. There is no provision that if the lessee does not in any one year take such amount the required annual payment paid the state for such year may be applied wholly or in part on ore taken in subsequent years in excess of the stipulated minimum. It is held that the minimum royalty is the agreed compensation for the use and occupancy for a year of the property demised for the purposes and uses and in the manner and with the rights fixed by the lease, and for it the lessee gets, among other things, the right to take within the year 5,000 tons of ore; that it is not the purchase price of 5,000 tons of ore which if not taken within the year may be subsequently taken; that it is not advance royalty; and that the lessee who takes in a given year no ore or less than the minimum cannot have his annual payment of $1,250 for such year applied wholly or in part on royalties accruing in subsequent years on ore mined in such years in excess of the minimum. Leon E. Lum, of Duluth, for appellant.

Lyndon A. Smith, Atty. Gen., and Egbert S. Oakley, Asst. Atty. Gen., for the State.

DIBELL, J.

This is an action by the state to recover the minimum royalty on a state mining lease for a period when no ore was taken. There were findings and judgment for the state and the defendant appeals.

The state lease provides that the lessee shall on the 1st day of August in each year pay to the state treasurer the sum of $100 until by the terms of the lease 1,000 tons is required to be mined. One thousand tons is required to be mined within five years after the completion of a railroad within one mile of the land leased. The lease then provides:

‘And that thereafter there shall be mined and removed therefrom at least 5,000 tons annually, and that in case the party of the second part shall not annually remove from said land 5,000 tons, as above provided, the party of the second part shall pay to the said state treasurer annually a royalty of 25 cents per ton on 5,000 tons, which payment shall be made quarterly as hereinbefore specified.’ Gen. St. 1913, § 5315.

The lessee is given the right to terminate the lease on sixty days' notice.

We have consistently held from the beginning that the state mining lease is not a conveyance of ore in place but that it is in fact as it is in form a lease. State v. Evans, 99 Minn. 220, 108 N. W. 958,9 Ann. Cas. 520; Boeing v. Owsley, 122 Minn. 190, 142 N. W. 129;State v. Royal Mineral Ass'n, 132 Minn. 232, 156 N. W. 128, Ann. Cas. 1918A, 145. This view is accepted by the federal courts. Von Baumbach v. Sargent Land Co., 242 U. S. 503, 37 Sup. Ct. 201, 61 L. Ed. 460;United States v. Biwabik Min. Co., 247 U. S. 116, 38 Sup. Ct. 462, 62 L. Ed. 1017. It is the generally accepted doctrine relative to similar leases. In the case first cited this conception of the character of the mining lease was found important by this court in determining the constitutionality of the mining lease statute; in the second in determining the course of descent; and in the third in determining a question of taxation; and by the federal courts, in the cases cited from them, in determining...