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the premises. The land was thickly wooded and the granite dis-
covered was overlaid by soil from four to six feet deep. Prior
to the defendant's purchase, the vein had been uncovered to some
extent, and some work had been done by the defendant's grantors
in getting out granite for market. The defendant took imme-
diate possession of the premises under its deed, and commenced
active operations in developing the granite, and up to June, 1890,
when the plaintiff acquired his alleged title, the defendant had
expended, in opening the ^^^ quarry, erecting buildings and
machinery, and in necessary work for conducting the business,
the sum of about thirty-five thousand dollars.

The determination of the controversy in this case depends
upon the interpretation of the second deed from Baldwin to
Bridgford and others of May 18, 1871. Under the deed of March
30, 1871, which conveyed only the "mineral ores'* on the lot, it is
plain that the granite did not pass. The word "ore" has a defin-
ite signification, and designates a compound of metal and other
substance. Granite, neither in a popular or scientific sense, is a
mineral ore. The second deed conveys the "minerals and ores,**
and also amplifies by words, if not in law, the mining privileges
and the right to use the surface given by the first deed. There
is no explanation of the circumstances which led to the giving
of the second deed. There is nothing to show that it did not
express the real intention of the parties. We think the neces-
sary inference from the comparison of the two deeds is, that the
second was intended to convey rights not included in the prior
grant, and that the words "minerals and ores'* cannot be cut
down to the same meaning as "mineral ores'* in the first deed,
upon any theory that no new consideration was given for the sec-
ond deed, or that the whole purpose of the second deed was to
define more clearly than was done by the first deed the incidental
mining privileges intended to be granted, and not to enlarge



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686 Armstboko v. Lake Champlain Gbanits Co. [New York,

fhe grant as to the kind of minerals granted. If the first deed
has any importance in the case, it strengthens, rather than
weakens, the position of the plaintiff.

The whole question, as above intimated, tarns on the inter-
pretation of the words ^^minerals and ores" in the second deed.
In view of the conclusion we have reached, and to avoid possible
misconceptions in the future, it is proper to state that in our
opinion the evidence given and admitted on behalf of the de-
fendant under objection by the plaintiff, that the purpose of
Bridgford and his cograntees in securing the deeds of 1871 was
to acquire the iron ore then supposed to exist on the premises, and
of their statements, contemporaneously *"^ with the purchase,
that they had purchased the iron ore on the lot, was incompetent
to explain or confine the meaning of the words '^minerals and
ores'^ in the deed of May 18, 1871. The evidence would have
been incompetent if it had related to the motives of the parties
to the deed sought to be established by the oral statements or
negotiations between them prior to or contemporaneous with its
execution. The words of a deed, unambiguous in themselves,
cannot be controlled by proof that the parties used them with a
definite and limited meaning, for the purpose of that particular
instrument. Such proof might, under some circumstances, be
competent in an action between the parties to reform the instru-
ment, but not in determining the rights of the parties under the
instrument as written. The incompetency of the evidence re-
ceived as to the motives of the original grantees and of their
statements as to what they intended to purchase or had pur-
chased is still more manifest in view of the fact that they were
disclosed and the statements made to third parties not connected
with the sale: See Voorhees v. Burchard, 55 N. Y. 98. The de-
fendants were also permitted, under objection, to give evidence
of witnesses who lived or had owned property in the Champlain
valley, that the word "minerals'* was understood "about there*'
to mean iron ores. It is unnecessary to determine in this case
whether the usage or understanding in a particular district of
the meaning of words used in a deed of mining property,
which limits and controls their general meaning, is admissible
for the purpose of fixing rights thereunder. It is sufficient to
say that the evidence offered and received upon that subject in
this case only went to the extent of showing that certain persons
understood that the term "minerals,** when used, did not in-
clude granite, but ores containing metals. The evidepce was
quite insufficient to establish a settled and recognized usage



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Nov. 1896.] Abm STRONG V. Lake Champlain Obamits Ca 687

whieh ihall oyerride the legal meaning of the word. It was not
shown that any transaction had taken place based npon the
alleged nsage^ or that snch nsage was known to either of the parties
to the deeds of 1871. In a mining case (Tucker v. *^** Linger,
L. S. 21 Ch. Diy. 18), Jessel, M. R, speaking of a custom relied
npon in that case, said: '^he custom must be collected, not from
what witnesses say they think the custom is, but from what
was publicly done throughout the district^': See Midland By.
Co. V. Kobinson, L. R. 37 Ch. Div. 386^ and remarks of the vice-
chancellor in Darvill v. Roper, 3 Drew. 301.

Putting aside, therefore, the extraneous evidence received upon
the construction of the words "minerals and ores" in the deed of
1871, the questions arise: 1. Whether, under a grant of "min-
erals," on specified premises, granite is included in the absence
of limiting words; and 2. Whether, if comprehended in the gen-
eral term, it is excluded from the deed of ^fay 18, 1871, by reasoA
of the context in connection with the fact that it can only be got
by quarrying. It is plain that an owner of land who grants the
minerals to another does not use the word as synonymous with
mineral substances, because, if this meaning was attached to the
grant, it would amount to a grant of the whole land, as the soil
and all below it would be embraced in that description. The
question of what are minerals within a grant or reservation of
mines and minerals has been frequently considered by the Eng-
lish courts, and the almost uniform conclusion has been that the
word includes not only metals and metal bearing rock, but any-
thing mineral in character which can be got by mining. In one
of the cases (Earl of Rosse v. Wainman, 14 Mees. & W. 859),
which was affirmed (Earl of Rosse v. Wainman, 2 Ex. 800), the
question arose under a reservation to the lord of the manor, in an
inclosure net. of "all mines and minerals" l>nnp within or under
the common or waste lands inclosed by the act, and it was held that
beds of building stone were within the resei*vation. Parke, B.,
in his opinion, said: "The term 'minerals* here used, though
more frequently applied to substances containing metals, in its
proper sense includes all fossil bodies or matters dug out of
mines.** In Bell v. Wilson, 1 Ch. App. 303, under a conveyance
of land reserving^ to the grantor "all mines or seams of coal and
other mines, metals or mineral*?." it was held tlint the reservation
included freestone. Hext v. Gill, L. R. 7 Ch. App. 699, is *^ an
important case on the subject, beonuse Mellish, L. J., in his opin-
ion formulates as the result of the adfiidired cases the principle
npon wliich the cases proceed, and which has been followed and



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688 Armstrong v. Lake Champlain Granite Go. [NewTork,

applied in several subsequent cases. That was a case of a reser-
vation in a private grant by the lord of a manor of ''all minps
and minerals within or under the premises/' and the question
was whether beds of china clay, the product of the disintegration
of granite, not known to exist in the land at the time of the grant,
were embraced witliin the reservation, and the court decided that
they were. Mellish, L. J., said: "The result of the authoritis,
without going through tliem. appears to be this, that a reserva-
tion of 'minerals* includes every substance that can be got from
underneath the surface of the earth, for the purpose of profit
unless there is something in the context or in the nature of the
transaction to induce the court to give it a more limited mean-
ing.'* The same principle was expressed in another form hr
Bowen, L. J., in the case of Earl of Jersey v. Guardians, L R 22
Q. B. Div. 555, following the case of Hext v. Gill, L. R. 7 Cb.
App. 699, in which he said that the word applies to all substances
of a mineral nature which have *'a use or value of their own, in-
dependent of their being constituents of the soil." The question
in that case was whether, under a reservation in an ordinary
grant of ^'all mines of coal, culm, iron, and all other mines and
minerals whatever, except stone quarries within and undff,** etc,
brick, earth, and clay were reserved, and it was held that they were.
Ijord Eomilly in Midland Ry. Co. v. Checkley, L. R. 4 Bq. Cai
19, construing a reservation in an act for the compulsory taking
of land for canals, of ^^all mines and minerals within and under
the land," in which the question was whether the right to quarry
paving stones was reserved, said: "Stone is, in my opinion, dearly
a mineral, and, in fact, everything, except the mere surface which
is used for agricultural purposes; anything beyond that which is
useful for any purpose whatever, whether it is granite, marUe,
fire clay, or the like, comes within the word *mineral,' when
there is a reservation of the mines and ^^^ minerals from
a grant of land. Every species of stone, whether marble,
limestone, or ironstone comes in my opinion in the same
category." We shall refer only to another English case, the
latest on the subject (Attorney General v. Welsh Granite Ca,
35 Week. Rep. 617), decided in 1887, which held that gran-
ite was a mineral within a reservation of "mines and min-
erals.'* There are but a few American cases which we have
found bearing on the subject. In Moore v. Brown, 16 N. T. Supp.
592, 139 N. Y. 127, it was assumed, both in the supreme court
and in this court, that garnet discovered in Essex county on
fltate lands was a '^valuable mine or mineral/' and subject to a



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Soi, 1895.] Armstrong v. Lake Champlain Granite Co. 689

<Mm under chapter 411 of the laws of 1890. In Hartwell v.
Camman, 10 N. J. Eq. 128, 64 Am. Dec. 448, it was held that
^'paint stone/' useful for grinding into paint, procured by mining
passed to the grantee of ''mines and minerals," although its ex-
istence was not known at the time of the grant, but copper min-
ing had before the grant been to some extent prosecuted on the
premises-

Upon the authorities we think we should not be justified in
holding that granite was not embraced in a reservation or grant
of 'Unerals'^ in the absence of qualification. It is no doubt true
that this word in its more common application in a grant
<rf "minerals'* would be deemed to refer to metallic substances.
This, perhaps, grows out of the fact that mining is to a great
extent prosecuted for the purpose of obtaining gold, silver, iron,
and other metals, and grants of "nunerals" or reservation s
thereof in conveyances of public lands are most frequently made
vith reference to mineral bearing ores or deposits. But it would
be an unwarrantable limitation of such a grant or rescrvntion to
exclude from its operation beds of coal or other nonmetallic min-
eral deposits of commercial value, or to confine it to such minerals
as were known or supposed to be on the premises at the time.
The grant or reservation of minerals in a deed contemplates sub-
stances to be severed and taken away from the premises, and it
is difficult to suppose that the parties to such a deed intended to
exclude from the grant any description of valuable mineral which
•^ would come within the legal meaning of the word, which
might thereafter be discovered. We are of opinion, therefore,
that the words "minerals and ores,*' in the grant of 1871, standing
alone, would include the granite upon the premises.

But these words do not stand alone, but are connected with a
context which clearly indicates, in our judgment, that the parties
had in view only such minerals as are to be got by mining in llie
ordinary sense of that term; that is, by underground, and not by
open, workings. The grantor, Baldwin, owned the fee of the
land. He did not part with his general title to the surface, but
he granted special rights therein, for the purpose of effecting the
grant of the "minerals and ores.** He accompanied these words
with a specification of the rights granted, that is to say, rights
essential to and connected with usual mining operations, and in
respect to the surface he granted '^sufBcient land to erect suitable
bnildingB for machinery and other buildings necessary and usual
in mining and raising ores.'' The evidence is, and the fact would

AtU m. BV^ VOk ZLIZ.-M



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690 Abm BTRONO V. Lake Champlaiv Gbanitb Ca [New Yoik,

be suffidently manifest in the abeence of afBrmatiTe proof, that
granite can only be obtained by open quarrying, to the Asstme-
Hon of the surface so far as the granite may be nncoyered. We
think the reasonable construction of the grant limits the li^ti
of the grantee to minerals obtained by underground worldng,
and as granite is not so obtained it did not pass under the con-
veyance of 1871. The principle of construction is stated by
Turner, L. J., in a case already referred to, speaking of the qnea-
tion whether freestone was a mineral and included in the reser-
yation in that case. He said it must be deemed included, nnles
''either that the freestone is not a mineral, or that, being a min-
eral, the nature or' context of the deed shows that it was not inr
tended to be included." The context of the deed here fumishea,
we think, the eyidence that granite was not intended to be in-
cluded. It may be that if we followed some EngUsh cases tiie
conclusion would be that the granite did ppss, but that it conld
not be taken by open quarrying: Bell y. Wilson, 1 Ch. App.
303; Hext y. Gill, L. E. 7 Ch. App. 699. Instead of recogniang
this barren right, we prefer ^^^ to place our judgment on the
ground that under this grant no title to the granite passed at all.
We have been referred to several English cases where the right
of open quarrying has been held to accompany a grant or r^er-
yation of mines and minerals. The cases generally have arisen
on the construction of reservations contained in acts of Parlia-
ment of rights to landowners whose land has been compnkorily
taken for public purposes or by public authority. In every case
which has come to our attention involving the right of open
quarrying, it has been sustained upon some special language in
the act which indicated that the right of open quarrying was
intended to be reserved: See Midland Ey. Co. v. CheckleTr
L. R. 4 Eq. Cas. 19; Midland Ry. Co. v. Robinson, 15 App.
Cas. 19; 37 Ch. Div. 386; Attorney General y. Welsh Granite
Co., 35 Week. Rep. 617; Earl of Rosse y. Wainman, U Mees. k
W. 859. In Midland Ry. Co. v. Robinson, 16 App. Cas. 27,
Lord Herschell said: 'T[n such agreements, in the absence of a
distinct indication of the contrary intention, it is always to be
assumed that the reserved mines are only to be worked in sncb
manner as is consistent with the surface remaining undisturbed.
And if this be true of minerals lying deep below the sarface, it
would be obviously out of question to permit it to be disturbed
by winning minerak which can only be wrought bj sorbet
operations.''



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Nov. 1895.] Armstrong v. Lake Champlain Granite Ca 691

For the reasons herein stated the judgment below should bs
affirmed.

All concur.

Judgment affirmed*

MINES, MINERALS, AND CONVEYANCES-USAGE.— The term
''minerals'' in a grant includea prima facie every substance that can be
got underneath the surface of the earth for profit. If the terms ''mines
and minerals" are used in a grant or exception, the word "mines" will
not, prima facie, be held to be the governing word, so as to restrict the
meaning which would otherwise be attached to the word "minerals."
The term "minerals" includes china clay, and the words "mines and
minerals" in a grant will pass paint stone obtained by the ordinary
means of mining, and found below the surface of the soil, and in strata
distinct from the ordinary earth: See monographic note to Lillibridge
V. Lackawanna Coal Co., 24 Am. St. Rep. 555, on grants of minerals
reservinji the land, or of lands reserving the minerals, and the rights of
the parties thereto. Minerals beneath the surface of land may be con-
veyed bv deeH distinct from the right to the surface: Caldwell v. Ful-
ton, 31 Va. St. 475; 72 Am. Dec. 700; Lilli bridge v. Lackawanna Coal
Co., 24 Am. St. Rep. 544. Stone is a mineral : Johnston v. Harrington,
5 Wash. 73, 78. For differences of opinion, however, as to stone being
• a mineral, see note to Dunham v. Kirkpatrick, 47 Am. Rep. 698. An
express grant of all minerals in land carries by necessary implication
the right to open and work the mines, and to occupy so much of the
sur.ace as may be reasonably necessary for such purpose, but the owner
of minerals and mining riglits cannot so use his own as to unreasonably
injure the owner of the surface or soil: Williams v. Gibson, 84 Ala. 228;
5 Am. St. Rep. 308; note to Lillibridge v. Lackawanna Coal Co., 24 Am.
St. Rep. 555. It sonietimes becomes necessary to construe two separate
dee«l8 together in order to ascertain the true intention of the parties:
^loore V. Fletcher, 16 Me. 6:3; 33 Am. Dec. 683; Knight v. Dyer, 57
Me. 174; 99 Am. Dec. 705. A custom or usage, to be admissible in evi-
dence, must he proved to be known to the parties, or to be so general
and well established that knowledge and adoption of it may be pre-
sumed, and it must be certain and uniform: Baltimore Baseliall Club
v. Pickett, 78 Md. 375; 44 Am. St. Rep. 304; Southwestern Freivrht etc.
Co. V. Standard, 44 Mo. 71 ; 100 Am. Dec. 255. Mere opinions of indi-
viduals will not establish a custom or usage: Marine Nat. Bank v.
National Citv Bank, 59 N. Y. 67; 17 Am. Rep. ?.05; Southwestern
Freikht etc. Co. v. Standard, 44 Mo. 71* 100 Am. Dec. 255; Horan v.
Strachan, 86 Ga. 408; 22 Am. St. Rep. 471. A custom or usage incon-
sistent with a contract cannot be given in evidence to contradict it:
Baltimore Baseball Club v. Pickett, 78 Md. 375; 44 Am. St. Rep. 804;
Boardman v. Spooner, 13 Allen, 353; 90 Am. Dec. 196. Evidence of a
usage is inadmissible to explain the language of a deed not ambiguous
or equivocal : Cortelyou v. Van Brundt, 2 Johns. 357 ; 8 Am. Dec. 439.



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892 National Bank of Auburn v. Dillinoham. [New York,



National Bank op Auburn v. Dillingham.

[147NEW YOBK,e03.]

CORPORATIONS — PERSONAL LIABILITY OP TRUSTEES
AND REiMBDY TO ENFORCE IT.— A statute providing that the di-
rectors of a stock corporation creating, or consenting to the creation
of, any debt of the corporation, unsecured by mortgage. In excess of
its paid-up capital stoclc, "shall be personally liable therefor to the
creditors of the corporation," imposes a liability upon the trustees*
creating or assenting to debts in excess of the capital, to the extent
of such excess, not for the benefit of any particular creditor, but for
the benefit of all. This liability is, however, secondary, and can be
resorted to only after the usual remedies against the corporation have
been exhausted. It follows that it must be enforced iu equity in a
suit where all the creditors and the corporation itself are parties, or
represented, where an accounting can be had, all the facts ascer-
tained, and the equities adjusted.

CORPORATIONS-PERSONAL LIABILITY OP TRUSTEES.—
An action at law by a single creditor to recover his own debt as a
primary liability of the trustees cannot be maintained against the
trustees of a stoclc coii)oration, who have disregarded a statute for-
bidding the creation of debts In excess of capital stock.

Action upon certain promissory notes. A demurrer to the
complaint was overruled.

Nelson S. Spencer, for the appellant.

Charles I. Avery, for the respondent.

•^^ O'BRIEN, J. This action was brought to recover upon

four promissory notes, aggregating twenty thousand dollars,
made by the Auburn Woolen Company, a manufacturing cor-
poration created under the act of 1848. The plaintiff brings the
action in its own ^^ behalf against the defendants, who are the
trustees of the corporation, and who, it is claimed, are liable in an
action at law for the amount of the notes, upon the ground that,
before any of them were made, other debts had been created by
the corporation which equaled and exceeded the amount of its
paid-up capital stock, and that the trustees, by assenting to the
making of the notes in this action, became liable under the stat-
ute to the plaintiff for the amount and interest. The corpora-
tion itself is not made a party, nor is it alleged that any judgment
has been obtained against it on the notes, or any suit commenced
for that purpose, or that it is insolvent, or that any proceedings
for dissolution had been commenced. One of the defendants
demurred to the complaint on the grounds, among others: 1.
That there is a defect of parties, in that the other creditors of the
company, and the company itself, are not parties to the action;
and 2. That the complaint does not state facts suificient to oon-



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Deo. 18^6.J National Bank of Auburn v. DiLUNaHAM. 698

stitute a cause of action. The courts below have OTerruled the
demurrer and held that the action was well brought On the
argument in this court, the learned counsel for the plaintiff has
insisted upon some technical objections to the consideration of the
questions decided, based mainly upon the contention that the
necessary facts do not appear upon the face of the complaint to
enable the defendant to raise the questions by demurrer. The
courts below disposed of the case upon the merits, and we think
that the complaint was suflSciently comprehensive to enable the
defendant to present all the questions by demurrer. The plain-
tiff's contention is that each creditor of such a corporation who
holds a debt, created by the trustees or with their assent, in
excess of the paid-up capital stock, may maintain actions at law
against the trustees to recover such debt without any recourse
to the corporation itself and without reference to any other
creditor. The original statute which authorized the creation
of this class of corporations imposed a liability upon the trustees
in case they assented to the contracting of debts in excess of the
paid-up capital stock, as will ®^^ be seen from the following
provision: "If the indebtedness of any such company shall at any
time exceed the amount of its capital stock, the trustees of pn^li
company assenting thereto shall be personally and individually
liable for such excess to the creditors of the company": Laws
1848, c. 40, sec. 23.

In the recent revision of the statute, now known as the "stock
corporation law*' (Laws 1890, c. 564, as amended by Laws 1892,
c. 688), this provision was repealed and the following section,
upon which this action has been brought, was substituted in its
place:

"Sec. 24. No stock corporation, except a moneyed corpora-
tion, shall create any debt, if thereby its total indebtedness not
secured by mortga<?e shall exceed the amount of its paid-up
capital stock, and the directors creating or consenting to the crea-
tion of any such debt shall be personally liable therefor to the
creditors of the corporation. If bonds or other obligations of
the corporation, secured by mortgage, are issued in excess of the
amount authorized by law, or in violation of law, the directors
voting for such overissue, or unlawful issue, shall be personally
liable to the holders of the bonds, or other obligations illegally
issued, for the amount held by them, and to all persons sustain-
ing damage by such illegal issues for any damage caused there-
by.-

The demurrer in this case laiseB the question aa to the true



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694 National Bank of Auburn v. Dillingham. [New York,

construction of this section^ the nature and extent of the liabil*
itj, the proper procedure for enforcing it, and the necessar;



Online LibraryAbraham Clark FreemanThe American state reports: containing the cases of general value and ... → online text (page 79 of 121)