A license in respect to real property is a permission to do a particular act or series of acts upon the land of another without possessing any interest or estate in the land. Kohlleppel v. Owens, 613 S.W.2d 168, 176 (Mo. App. 1981) (citing 53 C.J.S. Licenses § 79, p. 806). Licenses are common transactions and can easily be created through everyday conduct and conversations, often as bare license agreements. For example, a property owner who tells his neighbor he can pick up fallen branches from his land for use as firewood has granted his neighbor a license. In some situations, a license may confer more rights to a licensee than the grantor initially intended. This article will explore the bounds of bare licenses, the doctrine of equitable estoppel, and acquiring easements by estoppel.
Most everyday licenses are “bare” licenses; that is, they may be revoked at any time and for any reason by the grantor and is generally non-assignable. In Kansas City Area Transportation Authority v. Ashley, the Missouri Court of Appeals was tasked with determining whether an agreement for parking space was a license, an easement, or a lease where the agreement was titled as a license and was an agreement made upon personal trust and confidence. 485 S.W.2d 641, 644 (Mo. App. 1972). The court held that a determination of the true nature and legal character of the rights granted under the agreement required a consideration of the intention of the parties, as inferred from the provisions of the agreement and the circumstances surrounding the transaction. Id. The court held that the rights granted by the agreement was more than a bare license because it was not freely revocable at the will of the grantor. The court instead described the relationship as being more similar to that of landlord-tenant.
Although a bare license is largely characterized as being revocable by the grantor, Missouri courts can apply equitable estoppel to a situation where the licensee had made material expenditures of money or labor to secure the enjoyment of using the license. Gibson v. Sharp, 277 S.W.2d 672, 677 (Mo. App. 1955) (citing House v. Montgomery, 19 Mo. App. 170 (1885)). Where great expense has been incurred to enjoy the use of a license, equitable estoppel arises and the relations of the parties must be severed, if at all, on equitable principles. Alle v. Kirk, 602 S.W.2d 922, 925 (Mo. App. 1980) (quoting Sanford v. Kern, 223, Mo. 616, 122 S.W. 1051 (1909)). At least one case–albeit an old one–suggests that a license for valuable consideration should be revocable as any other, if the grantor reimburses the licensee for his expended money. Fuhr v. Dean, 26 Mo. 116, 121 (Mo. 1857). In another case, however, the court suggested that a license supported by consideration is a license “coupled with an interest” and is irrevocable. Lewis v. Kaplan, 5 S.W.2d 699, 701 (Mo. App. 1928).
The Gibson court clarified that, while a licensee may see equitable estoppel, Missouri courts will not allow one in possession under a bare license or permissive use, under such use, acquire a prescriptive easement. 277 S.W.2d at 677-8. “To become of a prescriptive character there must be a distinct and positive assertion of right hostile to the permissive use, notice of which must be brought home to the owner, before it can become adverse.” Id. Acquiring an easement by prescription is analogous to acquiring title by adverse possession, which are as follows: (1) use for more than ten years (2) adverse to the owner, (3) under claim of right (4) and with notice to the owner of the user and of its character and of the claim of right. Id.
In short, bare license agreements are generally revocable at the will of the grantor, but courts will intervene to provide relief where equity requires. When a licensee incurs great expense to use the license, the courts will provide relief to the licensee, such as damages. When the licensee claims a right to the land beyond the grant in the licensee and openly and notoriously holds the lands for ten or more years, the license may become a prescriptive easement.
If you or your business have questions about bare license agreements and prescriptive easements, then call or email Lipscomb Law today to discuss your matter with a licensed attorney.