O'Hanlon v. Ruby Gulch Mining Co.

209 P. 1062 | Mont. | 1922

MR. JUSTICE HOLLOWAY

delivered the opinion of the court.

A sufficient history of the transaction out of which this controversy arose will be found in the statement preceding the opinion upon the former appeal. (48 Mont. 65, 135 Pac. 913.)

The remittitur was filed in the district court in November, 1913, but nothing was done thereafter until July, 1918, when plaintiffs filed an amended complaint. An answer- to that complaint was made, and thereafter the answer was amended, and plaintiffs replied. The second trial, which occurred in June, 1920, resulted in a decree in favor of defendant based upon findings supporting the defense of laches and the defense of abandonment.- Plaintiffs appealed from the decree, and now urge that the trial court was without authority to find upon either of the issues mentioned, grounding the contention upon the theory that the action is one at law.

In the original complaint upon which the first trial was had it was recited that on February 12, 1908, defendant made application for patent for the Divide lode claim, the property in controversy. It was then alleged that within the sixty-day period of publication, plaintiffs filed in the local land office their verified adverse claim, which was allowed, and within thirty days thereafter this action “is now commenced and prosecuted by plaintiffs in support of their said adverse claim, to the end that plaintiffs’ said interest, to-wit, their said one-third interest in and to said Divide lode claim may be adjudged and determined to be the property of plaintiffs, and that their title therein and thereto may be quieted and that the wrongful and unlawful claims of the said defendant thereto may be held and adjudged to be invalid, wrongful, and void as against plaintiffs,, and that plaintiffs may have granted to them, as they are of right lawfully entitled, a patent to said undivided one-third interest of, in and to the said Divide lode claim and of all veins and minerals therein contained.”

Those allegations were put in issue by the answer, but upon the trial plaintiffs failed to offer any evidence in support of them. That trial resulted favorably to plaintiffs, but upon motion of defendant a new trial was granted, and plaintiffs appealed from the order. In this eourt it was held that certain evidence offered by defendant and excluded by the court was admissible in support of the defense of laches and the further defense of abandonment, and the order granting a new trial was affirmed.

To reach the conclusion that the court had erred in excluding the offered evidence it was necessary for this court to determine the character of the action, and ex industria an extended and critical examination of the subject was made. In the course of the opinion we said: “While it is true that the excluded cotenant may bring his adverse suit and have his rights determined so that patent will convey directly to him whatever interest he shows himself entitled to, yet he is not bound to do so.” It was pointed out that at the time this action was commenced, alternative remedies were available to the plaintiffs. They might wait until patent issued to defendant, and then institute suit to have a trust declared, or they might prosecute an adverse suit under the federal statute (Rev. Stats., sec. 2326 [U. S. Comp. Stats., sec. 4623]) and our section 6882, Revised Codes of 1907 (sec. 9500, Rev. Codes 1921), or, if the defendant was not in possession of the property, a suit to quiet title under section ‘6870, Revised Codes of 1907 (sec. 9479, Rev. Codes 1921), would afford ample relief. However, since plaintiffs had alleged in their original complaint that defendant was in possession and excluding them therefrom, we held that the complaint did not state a cause of action under section 6870, and, since plaintiffs had not offered evidence tending to prove that they had taken the necessary steps in the land office, they had not made out a case under section 6882. In concluding the opinion we said: “If upon another trial plaintiffs furnish proof of the filing of the adverse claim, this infirmity in their case will be cured; otherwise they cannot maintain the action at all.”

Whatever difference of opinion may be expressed by the authorities upon the proposition whether, where one co-owner applies for patent in his own name to the exclusion of his cotenants, the omitted associates may institute adverse proceedings in the land office, the fact remains that this court upon the former appeal decided that an adverse suit may be maintained under such circumstances, and that the present action is of that character.

The amendment made to the complaint in 1918 did not change the character of the action in the least. Its only effect was to make somewhat more specific the allegations which detailed the proceedings taken in the land office. In the complaint as amended, plaintiffs declare that their object in prosecuting the suit is to establish their claim to the end that they “may have granted to them, as they are of right lawfully entitled, a patent to said undivided one-third interest of, in, and to said Divide lode claim and of all veins and minerals therein contained.” Upon the second trial plaintiffs introduced evidence, the purpose of which was to prove that they had filed their adverse claim in the land office within the time allowed by law, and that the claim had been allowed.

Plaintiffs cannot be heard to say, at this late day, that their action is not an adverse suit prosecuted under section 6882, Revised Codes of 1907 (sec. 9500, Rev. Codes 1921) : First, because this court decided upon the former appeal that it is such an action, and that decision became the law of the case, binding upon the trial court, and this court alike. (Davenport v. Kleinschmidt, 8 Mont. 467, 20 Pac. 823; Neary v. Northern Pac. Ry. Co., 41 Mont. 480, 110 Pac. 226; Walsh v. Hoskins, 53 Mont. 198, 162 Pac. 960.) Second, because the allegations of the amended complaint give to the cause of action the character of an adverse suit; and, third, because the action was tried as an adverse suit, and upon no other possible theory could plaintiffs justify their action in offering evidence to prove that they had taken the proper proceedings in the land office. The rule is settled in this jurisdiction that when a party has adopted one theory upon the trial of his case, he may not change the theory on appeal. (Gay v. Lavina State Bank, 61 Mont. 449, 18 A. L. R. 1204, 202 Pac. 753.)

Having determined that this is an adverse suit, it follows that the defense of laches and the defense of abandonment were available to the defendant, since the action is essentially of equitable cognizance. (Mares v. Dillon, 30 Mont. 117, 75 Pac. 963.) That the allegations of the amended answer are sufficient to raise these defenses is not questioned; but counsel for plaintiffs do insist that the evidence does not support either of them. If either defense is established, it is conclusive. Plaintiffs must bear the burden of showing that there is not any correct finding which will sustain the decree (In re Williams’ Estate, 52 Mont. 192, Ann. Cas. 1917E, 126, 156 Pac. 1087), and they must also assume and maintain the burden of showing that the evidence having to do with either of these defenses, preponderates against the trial court’s findings. (Mason v. Swee, 60 Mont. 32, 198 Pac. 356.)

Summarized briefly, the evidence tends to establish the following facts: Thomas O’Hanlon died intestate in 1898, leaving as his sole surviving heirs two sons, Thomas J. O’Hanlon and Henry O’Hanlon. In 1901 Henry O’Hanlon conveyed his interest in the estate to Thomas J. O’Hanlon, and in 1902 Thomas J. O’Hanlon conveyed the same interest to his uncle, Henry J. O’Hanlon. The Divide claim was not mentioned in the inventory of the property belonging to the estate of Thomas 0 ’Hanlon, deceased; neither was it mentioned in the deed from Henry O’Hanlon to Thomas J. O’Hanlon, nor in the deed from Thomas J. O’Hanlon to Henry J. O’Hanlon. The representative of the O’Hanlon estate did not, neither did the O’Hanlon heirs or either of them, or Henry J. O’Hanlon, or any one for them, or for any of them, contribute anything whatever toward the annual representation work done upon the Divide claim after 1898. For the years 1899 to 1903, inclusive, Carter and McKenzie kept the claim alive by doing the required work. For the year 1904 Carter alone did the work, and since then the defendant herein has alone discharged that obligation. In 1900 Carter and McKenzie made an attempt to forfeit the O’Hanlon interest for failure of the representatives of that interest to contribute to the assessment work for 1899, and they failed in their attempt only by reason of the fact that they made personal service of the notice upon the administrator of the O’Hanlon estate instead of upon the O’Hanlon heirs. Knowledge of that attempt and of the prior interest of Thomas O’Hanlon in the Divide claim and the assertion of exclusive ownership by Carter and McKenzie were brought home to Thomas J. O ’Hanlon in 1901. In 1905 Carter caused the interest of McKenzie to be forfeited for failure on the part of McKenzie or his heirs to contribute to the annual representation work for 1904, and thereafter Carter assumed to be the sole owner of the Divide claim. During the year 1905 Carter gave to the defendant, Ruby Gulch Mining Company, an option to purchase the Divide claim and two other claims, and in 1906 the option was taken up and the transaction completed by the payment of $25,000, the purchase price. The mining company purchased without notice or knowledge of any outstanding claim, and expended $40,000 or more in developing the property, and thereby greatly increased its value. Some time during 1905 employees of the county, in constructing a public road across the Divide claim, uncovered a considerable body of low-grade, but valuable, ore. In 1906, after ■ defendant company had purchased the property, plaintiff Henry J. O’Hanlon was informed by Mr. Phillips, the president of the mining company, that the purchase had been made, and at that time Henry J. O’Hanlon made no claim to any interest in the property, but was concerned in an attempt to collect from Carter the amount of an account which Carter owed to the O’Hanlon estate. Since 1905 defendant company has been in the exclusive possession and claiming sole ownership of the property, and during all that time plaintiffs stood by without asserting any interest until application for patent was made in 1908, and in the meantime McKenzie, one of the original locators of the Divide claim, died.

It is an elementary principle of equity that a person claiming an interest in property must be diligent in asserting his claim. “The law helps the vigilant, before those who sleep on their rights.” (Sec. 8756, Rev. Codes 1921.) In no other class of cases is the doctrine of laches enforced more relentlessly than in that class involving mining claims, and the reason for the rule is apparent. There is no other class of property subject to more violent fluctuations in value. A promising claim may by expensive development prove to be utterly worthless, while, on the other hand, a location which has no salable value to-day may be developed into an immensely valuable property. Time and money may be expended almost without limit and without appreciable results, when suddenly ore bodies may be uncovered which will net a fortune. So long as the Divide claim was a mere prospect, these plaintiffs stood by speculating upon the efforts of others, unwilling to bear their just proportion of the cost of development work, but willing to share in full in the fruits of whatever discoveries might be made. For ten years they failed to contribute anything towards the representation work necessary to keep the claim alive. They were willing that defendant should assume alone the hazards of the undertaking if they obtained an equal share of the profits.

While it is true that the statute of limitations had not run against the claim now asserted by plaintiffs, that fact alone does not determine their rights. The delay which will bar relief in equity is not necessarily measured by the period prescribed by the statute. It may be much less, depending upon the peculiar circumstances of the case, and in determining whether laches shall bar a particular claim it is proper to consider whether a party or an important witness has died, and the party against whom the claim is asserted has been deprived thereby of important testimony (Foster v. Mansfield etc R. R. Co., 146 H. S. 88, 36 L. Ed. 899, 13 Sup. Ct. Rep. 28 [see, also, Rose’s U. S. Notes]), or whether the property involved has increased in value (Connely v. Rue, 148 Ill. 207, 35 N. E. 824), or whether the property has passed into the hands of an innocent third party. (Graham v. Boston etc. R. Co., 118 U. S. 161, 30 L. Ed. 196, 6 Sup. Ct. Rep. 1009 [see, also, Rose’s U. S. Notes]), or whether the position of the parties is so changed otherwise that an injustice will follow a failure to apply the doctrine (Steinbeck v. Bon Homme Min. Co., 152 Fed. 333, 81 C. C. A. 441). These rules have been enforced repeatedly in this court, and further reference to the authorities need not be made. (Kavanaugh v. Flavin, 35 Mont. 133, 88 Pac. 764; Horsky v. Moran, 21 Mont. 345, 53 Pac. 1064; Mantle v. Speculator Mining Co., 27 Mont. 473, 71 Pac. 665; Riley v. Blacker, 51 Mont. 364, 152 Pac. 758; Crosby v. Robbins, 56 Mont. 179, 182 Pac. 122.)

It is a fair inference from this evidence that, if the time and money expended upon the Divide claim had failed to disclose anything of value more than appeared in 1901, this alleged interest would not have been asserted, and this action would not have been instituted. Certainly it cannot be urged seriously that the evidence in its entirety preponderates against the finding that .plaintiffs were guilty of laches.

We have not overlooked the contention of plaintiffs that defendant has been in possession of the property, working it since 1905. However, the evidence fails to disclose that any net profits have been obtained, or that defendant has even been able to reimburse itself for expenses incurred. Plaintiffs cannot insist that because Carter was indebted to Thomas O’Hanlon at the time of the latter’s death, upon an account contracted prior to the time O’Hanlon became interested in the Divide claim, the annual representation work performed by Carter thereafter inured pro tanto to the benefit of Thomas 0’Hanlon’s successors in interest. In the absence of a contract that the work should be done in discharge of the indebtedness. Carter was not under any obligation to perform the work, and the fact that he did perform it while indebted to the O’Hanlon estate did not lessen the obligation of 0’Hanlon’s successors to contribute their proportional part. The only evidence touching the subject matter is that Carter agreed to pay the old account from the first moneys he received from the undertaking. Thomas 0 ’Hanlon obtained his interest in the Divide claim by virtue of an agreement made with Carter and McKenzie that he would furnish them with provisions for a one-third interest in the claim, and he did furnish such provisions to the amount of $300 per year for two or three years, but even for those amounts Thomas J. O’Hanlon demanded payment from Carter in 1901. The agreement between Thomas O’Hanlon, on the one part, and Carter and McKenzie on the other, constituted the three tenants in common, but did not create a mining partnership. (Roberts v. Date, 123 Fed. 238, 59 C. C. A. 242; 3 Lindley on Mines, 3d ed., sec. 799.)

Since we conclude that the defense of laches is sustained, it is unnecessary to consider whether the further defense of abandonment is likewise supported by the evidence.

The judgment is affirmed.

Affirmed.

Associate Justices Farr, Cooper and Galen concur.