2 Alaska 134 | D. Alaska | 1903
(after stating the foregoing admitted facts in narrative form). This suit is brought upon the theory that the defendants who located the Bonanza group of copper mines were at that time the agents of the plaintiff, and that their locations became, were, and now are, the property of the plaintiff. Some testimony is offered by the plaintiff to prove that defendants locating used food supplies and horses belonging to the plaintiff in making the discoveries and locations, but this evidence is offered as additional proof of the direct contract of agency, and it is not sought thereby to establish a mere grubstake interest with the defendants in the property by implication. In his argument before the court the leading counsel for the plaintiff declared that the controversy was “a simple question of contract,” and the pleadings
“The locators were our agents, employed, supported, and paid by us, under a specific contract to locate mines in this particular neighborhood for us. They did locate these mines for us under that agreement. We paid them, and they have no interest in the property, but hold it as mere naked trustees for us.”
The defendants deny the contract of agency, and allege that the mines were located for the McClellan prospecting party by Warner and Smith under their prior contract with the members thereof.
Mining claims on public lands are “property” in the fullest sense of the word, which may be sold, transferred, mortgaged, and inherited without infringing the title of the United States. Forbes v. Gracey, 94 U. S. 762, 24 L. Ed. 313. A mining-claim perfected under the law is “property” in the highest sense of that term, which may be bought, sold, and conveyed, and will pass by descent. Belk v. Meagher, 104 U. S. 279, 26 L. Ed. 735. The character of the title acquired by the defendants in the Bonanza group upon the locations made by Warner and Smith is even more particularly described in another case, where the Supreme Court says:
“They were the discoverers of the claim. They marked its boundaries by stakes, so that they could be readily traced. They posted the required notice, which was duly recorded in compliance with the regulations of the district. They had thus done all that was necessary under the law for the acquisition of an exclusive right to the possession and enjoyment of the ground. The claim was thenceforth their property. They needed only a patent of the United States to render their title perfect, and that they could obtain at any time upon proof of what they had done in locating the claim, and of subsequent expenditures to a specified amount in developing it. Until the patent issued, the government held the title in trust for the locators or their vendees.” Noyes v. Mantle, 127 U. S. 348, 8 Sup. Ct. 1132, 32 L. Ed. 168.
It is upon this class of real property that plaintiff seeks to fasten a trust arising out of an oral contract of agency.
“An oral agreement to locate a mining claim for the benefit of another need not be in writing. If a party in pursuance of such an understanding, at the expense of another, locates the claim in his own name, he holds the legal title to the ground in trust for the benefit of the party for whom the location was made; and such party could, upon making the necessary proofs, compel the locator of the mining claim to convey the title thereof to him, although the agreement so to do was not in writing. This familiar principle has been often applied in cases where a party has entered into an oral agreement to locate mining ground for the joint benefit of himself and others, and makes a location in his own name. It has always been held that such oral agreements are not within the statute of frauds. Gore v. McBrayer, 18 Cal. 582; Moritz v. Lavelle, 77 Cal. 10, 18 Pac. 803, 11 Am. St. Rep. 229; Hirbour v. Reeding, 3 Mont. 15; Welland v. Huber, 8 Nev. 203.”
The burden of proof is upon one who seeks to establish a trust in a mining claim against both the record and the quiet possession of the locator. The court will refuse to move until the trust is clearly established in favor of the party alleging it. To establish the existence of a trust, the onus probandi lies on the party who alleges it. Prevost v. Gratz, 6 Wheat. 482, 5 L. Ed. 311; Dalton v. Dalton, 14 Nev. 419.
The Bonanza group was located by the defendants in July and August, 1900. This suit was begun August 11, 1902. The defendants remained in quiet and peaceable possession of the property for two years, under a clear, unclouded, complete,
The bottom rule in such cases was so clearly stated in an early case in the English chancery courts that it has since been quoted and followed by the American courts:
“In the great case of Cook v. Fountain, 2 Swanston, 591, it is well said that ‘there is one good, general, and infallible rule that goes to both of these kinds of trusts — express and implied.’ It is such a general rule as never deceives; a general rule to which there is no exception, and that is this: The law never implies, the court never presumes, a trust, but in case of absolute necessity. The reason of this rule is sacred, for if the chancery do once take the liberty to construe a trust by implication of law, or to presume a trust unnecessarily, a way is open to the lord chancellor to construe orpresum'e any man in England out of his estate; and so at last every case in court will become casus pro amico.” Dalton v. Dalton, 14 Nev. 419.
Nor will a court of equity adjudge the locator of a mining claim, who is in peaceable possession under a clear record title, to be a trustee of that title and possession for another, upon an alleged prior oral contract to locate it for the other, unless the case is established by full, clear, and satisfactory evidence. Hopkins v. Grimshaw, 165 U. S. 342, 17 Sup. Ct. 401, 41 L. Ed. 739, citing with approval Prevost v. Gratz, 19 U. S. 481, 5 L. Ed. 311; Slocum v. Marshall, 2 Wash. C. C. 397, Fed. Cas. No. 12,953; Smith v. Burnham, 3 Sumn. 435, Fed. Cas. No. 13,019. In Slocum v. Marshall, supra, Associate Justice Washington, of the Supreme Court of the United States, wrote-the opinion, and upon the point above stated he says:
“It is sufficient to say, in answer to the first question, that there is no evidence of a declaration of trust, either written or parol, by which the nature of that trust can at all be understood, and the attempt to-create and to enforce a specific trust from the loose and equivocal*146 expressions of the parties, made at different times and upon different occasions, would be inconsistent, not only with the spirit and policy of the statute of frauds, but with the general rules of evidence. In this case, it is true, the statute of frauds is not pleaded or relied apon; but it is still necessary that the parol declarations of a trust should be plain and unambiguous, before the court can change the absolute nature of the conveyance, and decree an execution of a trust not expressed in the deed.”
In support of the general rule the following additional authorities .are cited: Perry on Trusts (3d Ed.) vol. 1, §§ 86, 137; Millard v. Hathaway, 27 Cal. 120; Anthony v. Chapman 65 Cal. 73, 2 Pac. 889; Dalton v. Dalton, 14 Nev. 419.
It is not every location of a mine by an employé or agent which will be held to be in trust for the employer or principal. The statute declares the valuable mineral lands of the United States to be free and open to exploration and purchase by all citizens of the United States. The right of an employé of a mining company to explore and locate mining claims on the public domain in his own name and interest is equally as valid as that of his employer. The mere fact of his employment in the employer’s mine to do either assessment or development work, or labor in extracting its mineral wealth, will not of itself, restrict his independent right to locate other claims. He is not limited either as to place or quantity by such emplojunent; he may locate adjoining claims, however valuable they may seem to the employer. Many of the richest claims and mining camps in the west have been located by miners who worked for other claim owners for a sufficient grubstake to enable them to prospect for themselves another part of the year, and rich claims are frequently located while the locators are engaged for hire upon adjacent claims. Nor have such facts by themselves ever been held by the courts to create the relation of trustee and cestui que trust between the locator and his employer”in relation to such locations. As long as the employé does not assume such a position of trust or confidence toward his employer, or such a fiduciary rela
Nor is it every position of trust and confidence, nor every fiduciary relation, which bars the trustee from independent action in locating mining claims. However close the relationship may be, however much the employer or principal may depend upon the honesty, integrity, and fiduciary relationship existing between himself and his employé or agent, if these relations are limited by their acts or contract to certain bounds, and these do not forbid the location of mines by the agent or employé for his own use — do not make such location inequitable, or in fraud of his employer’s 6r principal’s interests— he will not be declared to be a trustee for his employer or principal. In the case of Pierce v. Pierce, 55 Mich. 629, 22 N. W. 81, the manager of a mine acquired the lease of and developed an adjoining mine. Upon a suit to enforce a trust therein for his employers the Supreme Court of Michigan, by Cooley, C. J., held that the fact that he was such manager did not, of itself, create the relation of trustee and cestui que trust between them in relation to the newly acquired mine, and said:
“Such a ease must rest upon fraud, either actually intended or resulting from a failure to recognize and observe the rules of business integrity.”
The plaintiff has not failed to recognize the correct rule in its bill. It alleges that the locators of the mines in controversy were at the time its agents, and were employed, supported, and paid to locate these claims for it, and did discover and locate them under contract with it, and while so employed, supported, and paid by it. These allegations are as certainly denied by the defendants, and the question of agency thus stands at the threshold of the case. Were the locators of the Bonanza mines at the time of the discovery and location agents of, under contract with, paid and supported by, and acting in the interests
The first real struggle in this case begins over the extent of the agency assumed-by R. F. McClellan as superintendent of the plaintiff company in Alaska in 1900. That he acted as such superintendent in doing assessment work on their scattered mines and development work on the Nicolai group for patent is admitted. The plaintiff seeks to extend his agency to include the location of the Bonanza group, while the defendants deny that it can have such bounds. Perine and Millard testify that they made the agreement with McClellan by parol, and Cordrey, the secretary of the board of directors of the plaintiff company, testifies that McClellan was present on March 23,. 1900, when that contract was stated to the board by the president, and ratified by that body for the company. The contract so stated and ratified, is in the following words:
“The president then stated that Mr. R. F. McClellan had been engaged to act as superintendent for this company in Alaska for the year 1900, to attend to such assessment work as is required by law, to obtain U. S. patents to the several mines owned by the company,, and to locate and have located all other mines and water rights in that vicinity for the company, and hire men for those purposes and all other work of development and location as is necessary, and that he had agreed to pay Mr. McClellan for his services $125 per month for the year 1900. On motion of Director J. P. Fraser, seconded by Director Grant Cordrey, the action of the president in employing Mr. McClellan to act as superintendent of this company at a salary of $125 per month for the year 1900 be approved, and, on motion being put, it was unanimously carried.” See page 337, vol. 2,. “Depositions.”
On the other hand, McClellan denies that he agreed generally to locate mines for the company, and says that to that extent the contract as ratified by the company was and is incorrect. Defendants take the position that McClellan’s contract was limited by his letter of acceptance written to Perine under date of January 9, 1900, from Princeton, Minn., and placed before the board of directors in San Francisco on January 15th. See Plaintiff’s Exhibit No. 5, p. 454, vol. 2, “Depositions.” This may have been the condition of their negotiations on that date, but if he was present before the board of directors on March 23d, and agreed to the contract stated and ratified then, his and all other farmer negotiations, by letter or otherwise, were merged therein, and both parties were bound thereby.
In the view that I take of the evidence in this case, however, it can make no difference whether he agreed to the locating clause in the stated contract or not. Conceding that the contract was as stated by the president and ratified by the board, in what respect was it violated by McClellan? Let us examine it for a moment, and consider what his agreement was according to its terms. In construing it, it may be divided
, Does the evidence show that McClellan acted within the line of the duty agreed upon by that contract, or inequitably, unjustly, or in fraud of plaintiff’s rights? The act complained of was the location of the Bonanza group of copper mines by Warner'and Smith. Was it McClellan’s duty under that contract to disband the McClellan prospecting party, and prevent Warner and Smith from locating any mines in Alaska that year? The contract does not require him to do so, and his prior obligations to these prospectors forbade it so far as their interests were involved. Was it his duty under that contract to prospect generally amid the fastnesses of the Alaskan Alps, or along the numerous tributaries of the Copper river, in search for unknown mines, or was his principal duty.to do
But nothing of this kind occurred. The Bonanza group is not within the vicinity of the Nicolai mines. It is shown by the evidence to be 18 or 20 miles distant by the traveled route, and 8 miles, at least, in an air line, according to the plaintiff’s first notice of lis pendens filed with the recorder at Valdez. It is over valleys and mountains from the Nicolai group, and is not shown by the evidence to be nearer any other of plaintiff’s mines. The water rights thereabout are not shown to be in the vicinity of the Nicolai, or necessary in its develop
So much has been said in this case about the agency of McClellan and his duty to his principal that but little attention has been given to the real facts. The evidence does not ■show that McClellan located the Bonanza mines, but the contrary. The proof is clear, full, and satisfactory on that point. They were located by Warner and Smith without the previous knowledge of McClellan, and in pursuance to their prospecting contract with the McClellan prospecting party made in Valdez in October/ 1899. They had prospected on Prince William Sound from October till December, 1899, when they returned to Valdez. On March 2, 1900, they left Valdez with Sweeney and Kain, afoot, and pulling their sleds, having left the horses belonging to the party at Valdez, to await the expected arrival of McClellan and others. They went to the Amy cache at Ptarmigan drop, sorted the stores there, and took a good- supply with them to the interior. They prospected on the Kuskulana until June, making their headquarters at McCarthy’s cabin. They first heard of McClellan’s superintendency for the plaintiff about June 15th, when he reached the' Tonsina, on his way in to the Nicolai. Sweeney left the party there, and went to the Tanana with Ray, Millard, and Dickey. Kain was employed by McClellan as foreman of development work on the Nicolai. Warner and Smith conducted two of the plaintiff’s employés to some scattered mines near the Kuskulana, and divided their store of food with them. When McClellan with the plaintiff’s party came along .later, Warner and Smith traveled with them to the neighborhood of the Nicolai mines, where they left the party, and went off prospecting for the McClellan prospecting party. There is some evidence offered here that plaintiff’s food supplies were given to Warner and Smith, and that with these and the
Much time was spent in taking testimony recounting disjointed conversations and oral admissions, confessions, or ■statements against interest alleged to have been made by Warner, Smith, McClellan, and Gates after the location of the Bonanza mines. Perine testifies, for instance, that when he visited the Bonanza prospects soon after their discovery, in •company with McClellan, Walker, and the cook, Eastman,McClellan admitted to him that the mines had been located in the names of Warner and Smith, but for the Chittyna Exploration Company, and that he (Perine) desired to have the deeds made-to the company at once, and called for his valise, that he might procure the blank deeds for that purpose. Eastman testifies to the same facts, but Walker and McClellan both deny the facts quite as positively. Eater, at the Nicolai group, Sexton and Pearson testify to admissions- by McClellan which he flatly denies.
It will not be necessary to quote all these oral admissions, or ■to marshal the evidence, to show that they are denied by competent and satisfactory evidence, for there is a good general rule in relation thereto, which forbids the court to give them the weight which counsel for plaintiff think they bear. The ■Code of Alaska declares that the oral admissions of a party •ought to be viewed with caution. Section 673, Code of Civil Procedure. Greenleaf adds to this general rule by declaring that they ought to be viewed “with great caution.” This class of evidence, in a case like the one at bar, was considered by Story, Associate Justice of the Supreme Court of the United States, when on circuit, in the case of Smith v. Burnham, 3 Sumn. 435, Fed. Cas. No. 13,019. His opinion is cited with
“And then, again, the whole substance of the case is to be made out, as has been already intimated, by confessions. Now evidence of this sort, especially where it goes to the whole merits of the case, is certainly open to much objection. It was well remarked by Sir William Grant in Lench v. Lench, 10 Ves. 518, where an attempt was made to establish by parol declarations and confessions of a party a trust in real estate, that ‘it is in all cases most unsatisfactory evidence, on account of the facility with which it may be fabricated, and the impossibility of contradicting it. Besides, the slightest mistake or failure of recollection may totally alter the effect of the declaration.’ ”
The case at bar falls within the very evil mentioned by Judge Story. Here the substance of the whole case is sought to be established by oral admissions positively denied by the defendants. The original contract of agency is oral, and is disputed in the most important particular, and depends finally upon the oral statement thereof by the president of the board of directors of plaintiff’s company, who, it is clearly shown, did not make it, and only stated it as told to him by Millard and Ferine. Then we have' an array of other alleged oral admissions testified to by Ferine, Eastman, Millard, Sexton, Pearson, Bradshaw, and Helm, and as fully denied by the opposing witnesses. Then, again, there is a noticeable absence from plaintiff’s testimony of documentary proof, which might even serve as the foundation for a trust in real property. There is not a single writing introduced on the part of plaintiff which can be given this effect, nor is its documentary evidence inconsistent with the strictest business integrity on the part of the defendants. This phase of plaintiff’s case is met by the further criticism of the court in Smith v. Burnham:
“lie added, iu reference to tbe case before him, what is equally true in the case before us, that ‘there are no corroborating circumstances by any writing under his [the party’s] hand. In most of the cases there has been at least something in writing — some account by which it appeared that the fund was laid out.’ ”
“I have read over the whole evidence in this case, and although there is much from the confessions of the defendant, which, if it stood- alone, might lead one to the conclusion that there was some sort of partnership or joint interest intended by the parties in certain purchases made or to be made of lands and lumber in Maine, yet I am not entirely satisfied that it is so definite and satisfactory, as to its nature or extent or the proportions of the parties, as would lead a court of equity to enforce it; for it is a general rule of such courts not to interfere to direct a specific performance of any agreement where the terms of the contract are not at all definite and full, and its nature and extent are not made out by clear and unambiguous proofs. See Story, Eq. Jur. §§ 751, 704, 707, and the cases there cited. But the countervailing proofs on the part of the defendant do certainly throw great doubts and uncertainties over the proofs on the other side, and lead us to the conclusion that there may have been some mistakes and misapprehensions, to say the least, on the part of the plaintiff’s witnesses as to the purport and effect of the conversations of the defendant to which they testify.”
The countervailing proofs on the part of the defendants in the case at bar lead fairly to the same conclusion. There are in this record three formal admissions by the plaintiff which are awakening in their nature: First. The report of McClellan of his superintendency for the plaintiff in Alaska in 1900, and the record of its examination and approval by the board of directors. See Plaintiff’s Exhibit 10, p. 464, vol. 2, “Depositions”; also pages 345-352, supra. This report is a full statement of his work on the company’s mines, and contains the names and amounts paid and the character of the work done. It shows that no claims were located by him for the company during that season. Second. The admission on the plaintiff’s records on January 24, 1902, that plaintiff only claimed an interest with the McClellan prospecting party in he Bonanza group, and the admission that the claims were located by that company; also, the lis pendens made and signed by plaintiff’s officers to like effect, and recorded February 4, 1902, in the recorder’s office at'Valdez. See Plaintiff’s Exhibit 13, p. 467, vol. 2, “Depositions,” Defendants’ Exhibit 56,
The evide’nce in the case shows clearly that defendant Fitch was employed as head packer for plaintiff’s party under McClellan, that Kain was employed as foreman of the development work on the Nicolai mine, and Gates as a laborer thereon. They were so employed when the mines in suit were located, and paid therefor. Their accounts were stated in McClellan’s
It is unnecessary to attempt to review every point made in the case; the court will not do so. It is my judgment that the plaintiff fails to establish such an agency as enables it to enforce a trust upon the real property in controversy, and all other questions are therefore immaterial. Let findings of fact, conclusions of law, and decree be entered in line with-these conclusions. ‘