SILVER JET MINES INC v SCHWARK
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No. 8 3 - 1 9 6 IN THE SUPREME COURT OF THE STATE OF MONTANA 1984 SILVER JET FIIWES , INC. , a Mont. corp. , Plaintiff, Respondent & Cross-Appellant, FRANKLIN SCHWARK, Defendant and Appellant., APPEAL FROP4: District Court of the Fourth Judicial District, In and for the County of Sanders, The Honorable Jack L. Green, Judge presiding. COUNSEL OF RECORD: For Appellant: Garlington, Lohn & Robinson; Paul C. Meismer, Missoula, Montana For Respondent & Cross-Appellant: Baxter, Fletcher & Hanson; Robert L. Fletcher, Thompson Falls, Montana Submitted on Briefs: Filed: MAY 19 1984 .." Clerk March 1, 1 9 8 4 Mr. J u s t i c e J o h n Conway H a r r i s o n d e l i v e r e d the Court. t h e Opinion of T h i s a c t i o n was b r o u g h t by S i l v e r J e t M i n e s , Inc. to q u i e t t i t l e i n i t s e l f t o f o u r unpatented l o d e mining c l a i m s in the Burns Mining District in Sanders County, Montana T i t l e to three which a r e a l s o c l a i m e d by F r a n k l i n Schwark. o f t h e c l a i m s was f o u n d t o b e i n Schwark and t h e f o u r t h i n S i l v e r Jet. Schwark appeals as to the claim quieted to S i l v e r J e t and S i l v e r J e t c r o s s a p p e a l s a s t o t h e r e m a i n i n g three. Silver Jet the is successor in interest to certain m i n i n g p r o p e r t i e s o n c e h e l d by t h e Montana S t a n d a r d M i n i n g Company. The c l a i m s i n d i s p u t e h e r e a r e a p p r o x i m a t e l y t e n m i l e s s o u t h w e s t o f Thompson F a l l s , Prospect In Creek. the Montana i n t h e a r e a o f 1 9 3 0 ' s Montana Standard obtained p a t e n t s t o t e n claims l y i n g south of P r o s p e c t Creek. creek r u n s t h r o u g h were worked south, by away unpatented t h e bottom of means from of the claims here a v a l l e y and t h e c l a i m s several creek in The tunnels into the dispute which extended hillside. were not The located by Montana S t a n d a r d u n t i l t h e 1 9 5 0 ' s and l i e o n t h e o p p o s i t e s i d e of t h e v a l l e y , n o r t h o f P r o s p e c t C r e e k . Three of the four claims in dispute, "Bettye," " T u c k e r " and "Mary" w e r e o r i g i n a l l y l o c a t e d a s m i l l s i t e s i n 1954, b u t amended n o t i c e s o f changing claim, location them to lode "Riverside" claims. was on R i v e r s i d e l o c a t i o n were Also located. a l l occurred in filed 1957 in 1957 the fourth Discovery and corner i n 1957. Mining work c o n t i n u e d on t h e p a t e n t e d c l a i m s a n d o n R i v e r s i d e u n t i l 1 9 6 0 a t w h i c h t i m e a l l m i n i n g o p e r a t i o n s b y Montana S t a n d a r d i n the area ceased. There was intermittent assessment work done by Montana Standard, Silver Jet after it obtained the claims, and several would be locators until approximately 1980, when this dispute arose. Schwark is a long time resident of the area and had noticed rock outcroppings in the area during hunting trips. In 1979 he inquired of the Bureau of Land Management concerning the existence of claims north of Prospect Creek, and was informed there were none. In September 1980, Schwark and Donald Grimm located several unpatented claims known as the "Grub Stake" group. Six of these claims overlapped with the four unpatented Silver Jet claims. In the summer of 1981, Schwark began extracting ore samples from his unpatented claims. Remos Killian, president of Silver Jet, observed Schwark conflict. and notified him of the Discussions as to ownership ensued, and a short time later Silver Jet filed this action to quiet title in itself to the four claims. The complaint was filed on October 2, 1981, requesting that Schwark be enjoined from entering onto Silver Jet's mining claims and that title to the claims be quieted to Silver Jet. An order to show cause was issued on October 6, 1981 and a hearing on Silver Jet's request for an injunction was held on October 27. After the hearing, both parties were restrained from performing assessment work, removing minerals or otherwise disturbing the ground on the disputed area of the claims. On February 23, 1982, Schwark filed his answer and asserted a counter claim for damages resulting from the forced cessation of his mining activity. A non-jury trial before Judge Jack L. Green was held in August of 1982, a t which both v a l i d i t y of t h e claims, Findings fact, parties entered title Mary of on to the reserving conclusions February presented 8, because t h e q u e s t i o n of of law and the Schwark was of 1983. conflicting parts claims, evidence found to were have Tucker and i n v a l i d d i s c o v e r y by S i l v e r J e t ' s of However, S i l v e r J e t was f o u n d p r e d e c e s s o r Montana S t a n d a r d . t o h a v e good t i t l e t o t h e R i v e r s i d e c l a i m . from t h i s f i n d i n g , the damages. order Bettye, the on Schwark a p p e a l s and S i l v e r J e t a p p e a l s from t h e f i n d i n g c o n c e r n i n g t h e B e t t y e , T u c k e r and Mary claims. W f i r s t d i s c u s s t h e i s s u e s r a i s e d o n d i r e c t a p p e a l by e Schwark, two concerning defects argues, in the Silver result in a Riverside Jet's work claim. on forfeiture. the First Schwark a l l e g e s c l a i m which, he attacks he the s u f f i c i e n c y o f t h e d i s c o v e r y by S i l v e r J e t ' s p r e d e c e s s o r i n interest, and second he attacks the sufficiency of the a n n u a l a s s e s s m e n t work d o n e by S i l v e r J e t . A the, condition precedent t o a v a l i d mining location "[Alctual discovery of a vein, lode o r ledge of rock i n place bearing a valuable mineral deposit." Whittaker (Mont. 1 9 8 0 ) , 610 P.2d Anaconda Co. v . 1177 a t 1179, 37 S t . R e p . 9 0 2 a t 9 0 4 , c i t i n g Upton v. L a r k i n ( 1 8 8 5 ) , 5 Mont. 66. is 6 0 0 , 6 P. When a s u b s e q u e n t l o c a t o r q u e s t i o n s t h e e x i s t e n c e o f such a d i s c o v e r y , i t i s incumbent on t h e o r i g i n a l l o c a t o r t o prove meet that the he has discovered " p r u d e n t man" 1 9 8 3 ) , 6 7 2 P.2d test. 1 1 1 9 , 40 S t . R e p . sufficient minerals B o s c a r i n o v. 1931. Gibson as w i l l (Mont. The p r u d e n t man r u l e h a s been s t a t e d as, "Where m i n e r a l s h a v e b e e n f o u n d and t h e e v i d e n c e is of such a c h a r a c t e r t h a t a p e r s o n o f o r d i n a r y p r u d e n c e would b e j u s t i f i e d i n the further expenditure of h i s l a b o r and means, w i t h a r e a s o n a b l e p r o s p e c t of s u c c e s s , i n developing a v a l u a b l e mine, t h e r e q u i r e m e n t s of t h e Chrisman v. s t a t u t e have been m e t . " M i l l e r ( 1 9 0 5 ) , 1 9 7 U . S . 3 1 3 , 322-23, 25 S.Ct. 468, 470-71, 49 L.Ed 7 7 0 , 773-74. There no is sufficient requirement quantity to tha,t ore a support be found profitable in mining o p e r a t i o n , n o r i s it r e q u i r e d t h a t a n y s p e c i f i c q u a n t i t y o f I n t h e e n d , t h e s u f f i c i e n c y o f d i s c o v e r y is a o r e be found. q u e s t i o n o f f a c t t o be d e c i d e d below. Boscarino, supra. The t r i a l c o u r t h e r e f o u n d t h e r e had b e e n a s u f f i c i e n t discovery of minerals c e r t i f i c a t e of location 1957 is prima discovery. S.Ct. evidence other claim 234 754, stand will Thomas The unless 58 v. a valid South Butte 105; motion denied, L.Ed. 1578. contradicted S e c t i o n 26-1-102(6), evidence. agree. we the existence of 1 9 1 4 ) , 2 1 1 F. U.S. and f i l e d by t h e o r i g i n a l l o c a t o r s i n 82-2-102(2), (9th Cir. 999, the f a c i e evidence of Section M i n i n g Co. on Prima and MCA. 34 facie overcome by I n t h i s case, t h e p r i m a f a c i e e v i d e n c e was n o t c o n t r a d i c t e d o r o v e r c o m e b y any other evidence presented. Though the two men who o r i g i n a l l y l o c a t e d t h e c l a i m f o r Montana S t a n d a r d a r e now deceased, the wife of one of the locators testified that t h e r e was a v e i n s h o w i n g i n a s h a f t o n t h e c l a i m and t h a t m i n e r a l s had i n f a c t b e e n e x t r a c t e d . Boscarino high. shows, the burden of As the discussion i n proving discovery is not The q u e s t i o n o f how much o r e i s s u f f i c i e n t t o s u s t a i n a d i s c o v e r y is p r o p e r l y l e f t t o t h e t r i a l c o u r t , and its d e c i s i o n will n o t b e o v e r t u r n e d i f s u p p o r t e d by s u b s t a n t i a l evidence. Boscarino, supra. Schwark next attacks Such e v i d e n c e e x i s t e d h e r e . the sufficiency a s s e s s m e n t work p e r f o r m e d o n b e h a l f of of the annual S i l v e r Jet. Since Schwark did not locate his claim until September of 1980, we only need scrutinize the assessment work of 1980, as the assessment work for prior years in inconsequential. If the 1980 work claim. is sufficient, Silver Jet has a valid Thornton v. Kaufman (1910), 40 Mont. 282, 106 P.2d 361. the 1980 work If is insufficient, even sufficient work from prior years could not save Silver Jet's claim, presuming a valid subsequent location by Schwark. 30 U.S.C. (Ariz 1982), 656 Public Service Co. of Oklahoma v. Bleak P.2d 600. 28 and It should also be noted that although Schwark's location was done in the calendar year annual assessment period 1980, the prior ended on August 30, 1980. For Schwark's location to be valid, Silver Jet's assessment work for the period of time beginning September 1, 1979 and ending August 30, 1980 must be invalid. and Consolidated Tungsten Mines, Inc. See 30 U.S.C. v. Frazier 28 (Ariz. 1960), 348 P.2d 734. The assessment work claimed to have been done by Silver Jet consisted of securing the entrance to "tunnel #3" to prevent unauthorized entry, clearing growth on the path to the tunnel, and clearing approximately 6000 square yards of ground. This work was done on Silver Jet's patented claims, but it claimed attribution to the unpatented claims under Section 82-2-103(2), MCA. Schwark alleges two defects here as well; first, that the work claimed is not proper annual assessment work, and second that it may not be attributed from the patented to the unpatented claim. Generally, assessment work must tend to develop the claim and facilitate the extraction of ore therefrom. Golden Giant Mining Co. v. Hill (N.M. 1921), 198 P. 276. Whether or not t h e work d o n e meets this requirement is a q u e s t i o n o f f a c t , b u t c o u r t s s h o u l d n o t s u b s t i t u t e t h e i r own judgment as to employed for developing owner. the Mann v . court's wisdom Budlong finding and t h e mine (Cal. that expediency of i n place of 1 9 0 0 ) , 6 2 P. assessment method t h a t of the The t r i a l 120. is work the sufficient to p r e v e n t a n u n p a t e n t e d claim from b e i n g opened f o r r e l o c a t i o n n o t b e d i s t u r b e d on a p p e a l u n l e s s c l e a r l y a g a i n s t t h e will preponderance of S o u t h Mercur Mining den. 63 S.Ct. 1 1 6 2 , 3 1 9 U.S. trial The affidavit 1380 the evidence. Co. court of (Utah 1942), annual that was needed base of 269, claimed valid cert. in the assessment T h e r e was e v i d e n c e e l i c i t e d a t t r i a l w h i c h showed t h a t t h e c l e a r i n g c o u l d and would the v. Co. 1707. t h e work assessment Mining 1 2 8 P.2d 7 5 3 , 8 7 L.Ed. found and w e a g r e e . work, New M e r c u r operations for mining the be used as unpatented T h e r e was a l s o e v i d e n c e t h a t t h e u n p a t e n t e d claims claims. c o u l d be mined from t u n n e l # 3 . directly facilitate extraction of the ore. It Thus t h e work d o n e on t h e s e development h a s been of held the mine the r o a d work that and and r e p a i r work d o n e o n r o a d s t o m i n i n g c l a i m s b o t h c o n s t i t u t e valid a s s e s s m e n t work, closely related those. and t h e work t o development of Pinkerton v. Moore claimed t h e mine (N.M. 1959), here is m o r e than either of 340 P.2d 844. Schwark a l l e g e s t h a t t h i s same work h a s b e e n d o n e r e p e a t e d l y i n t h e p a s t , and t h i s s h o u l d l e a d t o t h e c o n c l u s i o n t h a t t h e a s s e s s m e n t w o r k c l a i m e d f o r 1 9 8 0 was i n s u f f i c i e n t . However, as 1980 noted before, what happened prior t o is i n c o n s e q u e n t i a l as Schwark d i d n o t a t t e m p t t o l o c a t e u n t i l t h a t year. The t r i a l judge c o r r e c t l y r u l e d t h a t t h i s was v a l i d a s s e s s m e n t work. Schwark n e x t c o n t e n d s t h a t t h i s work was p e r f o r m e d on the patented claims unpatented claim. claim or and may not be attributed to the A s s e s s m e n t work n o t d o n e on a p a r t i c u l a r group of c l a i m s may only be attributed to the c l a i m ( s ) i f it is done, "[Flor the purpose of developing t h e c l a i m s and t o f a c i l i t a t e t h e e x t r a c t i o n of o r e therefrom I n such c a s e t h e work o r e x p e n d i t u r e m u s t b e f o r t h e purpose of developing a l l t h e c l a i m s . I f t h e work i s n o t a p a r t o f a g e n e r a l p l a n having i n view t h e development o f the group or consolidated claim, s o t h a t t h e o r e may b e more r e a d i l y e x t r a c t e d , and t h e work h a s no r e a s o n a b l e a d a p t a t i o n t o t h a t e n d , t h e n no m a t t e r what t h e amount of i t i s , i t c a n n o t b e s a i d t o have been done i n t h e development of t h e group." Copper Mountain Mining and S m e l t i n g v. B u t t e and C o r b i n C o n s o l i d a t e d Copper and S i l v e r M i n i n g Co. ( 1 9 0 9 ) , 39 Mont. 487 a t 492-3, 1 0 4 P.540 a t 541-2. . . . .. The burden of proving such a benefit c l a i m s i s on t h e o n e s e e k i n g a t t r i b u t i o n . to the other Copper M o u n t a i n , supra. The t r i a l c o u r t f o u n d t h a t S i l v e r J e t h a d m e t t h i s burden, and a g a i n w e a g r e e . assessment work was done A s noted off of above, the a l l t h e 1980 Riverside claim. However t h e e v i d e n c e showed t h a t t h e c l e a r i n g i s t h e c l o s e s t flat area to the unpatented claims, and would it be n e c e s s a r y t o b a s e a n y m i n i n g o p e r a t i o n on R i v e r s i d e i n t h a t area. There evident on t h e R i v e r s i d e patented is claims, also evidence where that it is tapped p a s t p r e s i d e n t of S i l v e r J e t , was company's to by of tunnel through tunnel Killian, plan; dike claim spans t h e valley R i v e r s i d e c l a i m c o u l d b e mined the the base onto #3. the The 83. testified their mineral Remos that this operation on the p a t e n t e d c l a i m s and b r a n c h o u t o n t o t h e u n p a t e n t e d c l a i m s . Although there was testimony expensive, there has easiest most efficient or employed. never this a been method would be Mann, supra. would their plan aid that the mining claim be of The e v i d e n c e and b e n e f i t quite requirement a C o u r t s c a n n o t s u b s t i t u t e t h e i r judgment miner's. claim. that for the showed how t h e work the Riverside unpatented The t r i a l c o u r t c o r r e c t l y r u l e d that it c o u l d be a t t r i b u t e d from t h e p a t e n t e d c l a i m s t o t h e R i v e r s i d e c l a i m . On c r o s s a p p e a l , S i l v e r J e t c o n t e s t s t h e t r i a l c o u r t ' s a c t i o n q u i e t i n g t i t l e t o t h e o v e r l a p p o r t i o n s o f t h e Mary, B e t t y e and T u c k e r u n p a t e n t e d c l a i m s t o Schwark. Silver Jet c o n t e n d s t h a t t h e c o u r t a p p l i e d an i n c o r r e c t r u l e o f l a w t o require forfeiture. applied the It is t h e i r p o s i t i o n "marketability" test predecessor's location would application the of law which as between to rival the Silver be B o s c a r i n o v . G i b s o n (Mont. 1 9 8 3 ) , 6 7 2 P.2d 1931. that an court Jet's incorrect claimants. See 1119, 40 St.Rep. However, t h e t r i a l c o u r t s p e c i f i c a l l y f o u n d t h a t : " P l a i n t i f f was u n a b l e t o p r o v e t h a t t h e y o r t h e i r p r e d e c e s s o r s had l o c a t e d a v a l u a b l e m i n e r a l d e p o s i t on a n y o f t h e unpatented claims except Riverside. Failure t o e s t a b l i s h a prima f a c i e showing of v a l u a b l e m i n e r a l d e p o s i t s renders the P l a i n t i f f ' s i n t e r e s t i n the B e t t y e , T u c k e r and Mary u n p a t e n t e d c l a i m s invalid. " Based on t h e a b o v e f i n d i n g t h e c o u r t r u l e d t h a t : "Plaintiff's interests i n the Bettye, T u c k e r and Mary u n p a t e n t e d l o d e c l a i m s a r e deemed f o r f e i t e d b e c a u s e o f t h e P l a i n t i f f and i t s p r e d e c e s s o r s ' f a i l u r e t o s u b s t a n t i a l l y comply w i t h s t a t e a n d f e d e r a l mining law intended t o develop m i n e r a l d e p o s i t s on t h e p u b l i c domain." Contrary t o S i l v e r Jet's a s s e r t i o n s , based the t r i a l court i t s d e c i s i o n s on t h e f a i l u r e t o l o c a t e - m i n e r a l s , any not a failure to locate a marketable amount. This conclusion is borne o u t by an examination of t h e testimony at trial. Of t h e w i t n e s s e s who were acquainted w i t h t h e workings i n the a r e a a t t h e time t h e s e claims were l o c a t e d , none t e s t i f i e d t o any m i n e r a l s being found on t h e s e t h r e e claims or any mining work being done on them. showed that the Riverside claim ever worked. t h e r e had been claim was the The evidence only unpatented T h u s t h e t r i a l c o u r t p r o p e r l y found t h a t no v a l i d l o c a t i o n on t h e Mary, Bettye Tucker, and Schwark was f r e e t o l o c a t e on t h a t p r o p e r t y . A £ firmed. W concur: e and
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