Title: ROCK SPRINGS CORP v PIERRE

State: montana

Issuer: Montana Supreme Court

Document:

No. 14667 IN THE SUPREME COURT OF THE STATE OF MONTANA 1980 ROCK SPRINGS CORPORATION, and LAWRENCE McCUNE, Plaintiffs and Respondents, W. H . PIERRE, d/b/a W.H. PIERRE & ASSOCIATES, LTS., and L.B.M. CONSTRUCTION I INC . Defendants and Third Party Plaintiffs and Appellants. Appeal from: District Court of the Fifth Judicial District, Hon. Robert J. Boyd, Judge presiding. Counsel of Record: For Appellants: Richard J. Llewellyn argued, Helena, Montana For Respondents: R. Thomas Garrison argued, Virginia City, Montana Submitted: May 23, 1980 Decided: 4UG I1 1 9 ! Filed: M r . Chief J u s t i c e Frank I. Haswell delivered the Opinion of the Court. Rock Springs Corporation (Rock Springs) and Lawrence McCune, not p a r t i e s i n t h i s appeal, brought t h i s a c t i o n i n t h e F i f t h J u d i c i a l D i s t r i c t f o r conversion of mine t a i l i n g s i n Madison County, Montana. Defendants-appellants, W. H. P i e r r e d/b/a W. H. P i e r r e & Associates and L.B.M. Construc- t i o n ( P i e r r e and L.B.M.), f i l e d a t h i r d p a r t y complaint a g a i n s t Camilla Gage, respondent herein, seeking t o hold her l i a b l e based on her claims of ownership. The jury returned a v e r d i c t i n favor of Rock Springs and McCune and a g a i n s t Pierre and L.B.M., and f u r t h e r found i n favor of Gage i n t h e t h i r d p a r t y action. P i e r r e and L.B.M. now appeal s o l e l y from t h e v e r d i c t i n t h e t h i r d party action. I n t h e Rochester Basin, west of Twin Bridges, Montana, t h e r e a r e t a i l i n g s from t h e Watseca mine which a r e located on t h e "Concentrator Tailings Placer Unpatented Mining Claim." The competing claims of ownership of the t a i l i n g s gave rise t o t h e D i s t r i c t Court action. The mining claim had been located on f e d e r a l land i n 1934 by William Gage and relocated by h i s wife, Camilla Gage, i n 1941 following h i s death. The t a i l i n g s r e s u l t e d from t h e processing of mater- i a l s from t h e Watseca Mine and o t h e r claims located approxi- mately one m i l e north of Camilla Gage's claim. The m i l l , known a s t h e Clark Concentrator, processed t h e minerals and deposited t h e t a i l i n g s upon what i s now M r s . Gage's claim between t h e l a t e 1860's and 1898. Lawrence McCune i s t h e successor i n i n t e r e s t t o t h e Watseca Mine and other claims near it which w i l l be r e f e r r e d t o cumulatively as t h e "Watseca. " Tailings a r e a l s o located on McCune's "Concentrator Quartz Lode Mining Claim." These t a i l i n g s w i l l be r e f e r r e d t o a s t h e "upper t a i l i n g s " while t h e t a i l i n g s located on M r s . Gage's claim w i l l be c a l l e d t h e "lower t a i l i n g s , " ~ h i r d p a r t y p l a i n t i f f - a p p e l l a n t W. H. P i e r r e m e t t h i r d p a r t y defendant-respondent Camilla Gage i n 1967 while he was a t t e n d i n g t h e School of Mines i n Butte. M r s . Gage was and p r e s e n t l y is a r e a l e s t a t e broker i n Twin Bridges. P i e r r e w a s very i n t e r e s t e d i n t e s t i n g both t h e lower t a i l i n g s and t h e upper t a i l i n g s i n 1967, and he contacted both M r s . Gage and Lawrence McCune. M r s . Gage authorized P i e r r e t o test t h e lower t a i l i n g s , and McCune authorized him t o test t h e upper t a i l i n g s during a l i m i t e d t i m e period which ended i n December 1967. P i e r r e ' s tests came o u t negative; t h e c o s t of removing, hauling and processing t h e m a t e r i a l would exceed any revenues t o be derived from t h e minerals. I n 1969 t h e predecessor i n i n t e r e s t t o Rock Springs acquired a lease and option t o t h e Watseca claims from Lawrence McCune. Between 1968 and 1972, P i e r r e worked i n various capa- c i t i e s i n t h e United S t a t e s and Canada. I n 1972 he once again contacted M r s . Gage concerning t h e lower t a i l i n g s . P i e r r e had discovered a method which would make t h e extrac- t i o n of t h e minerals p r o f i t a b l e . The method involved t h e t r a n s p o r t i n g of t h e t a i l i n g s t o Butte where they would be mixed with s i l i c a . When s i l i c a w a s added i n s u f f i c i e n t q u a n t i t y , f r e e smelting could be obtained which r e s u l t e d i n t h e e x t r a c t i o n of t h e minerals i n t h e t a i l i n g s with only t h e incurrence of c o s t s f o r t r a n s p o r t a t i o n and t h e s i l i c a it- s e l f . The c o s t of shipping t h e t a i l i n g s t o t h e s m e l t e r w a s approximately $6.50 per ton, while t h e c o s t of s i l i c a w a s $.lo per ton. M r s . Gage represented t h a t she owned t h e t a i l i n g s a s a r e s u l t of her claim. She continued t o a s s e r t t h i s ownership through t r i a l . P i e r r e t e s t i f i e d t h a t he never questioned her ownership. I n l a t e 1972 o r e a r l y 1973 M r s . Gage and L.B.M. Construction, Inc., a company comprised of P i e r r e and two o t h e r s , entered i n t o an o r a l agreement f o r t h e removal of t h e lower t a i l i n g s , A w r i t t e n agreement w a s entered i n t o i n May 1973. I t r e c i t e d t h a t M r s . Gage was t o r e c e i v e $.50 p e r ton of t a i l i n g s removed. I t was a n t i c i p a t e d t h a t t h e r e w e r e 15,000 tons of t a i l i n g s . I n 1973 P i e r r e began e x t r a c t i n g t h e t a i l i n g s and t r a n s p o r t i n g them f o r smelting. Expert testimony revealed t h a t 3539 cubic yards of t a i l i n g s were removed. Also, according t o e x p e r t testimony, t h e amount of gold and s i l v e r removed was estimated t o be 694.4 t r o y ounces of gold and 4539 t r o y ounces of s i l v e r . The h i g h e s t value of gold between t h e t i m e of e x t r a c t i o n i n 1973 and t h e i n i t i a t i o n of t h i s s u i t was $195.25 per t r o y ounce on December 30, 1974, while t h e h i g h e s t p r i c e f o r s i l v e r was $6.06 i n May 1974. According t o t h i s e x p e r t testimony t h e g r o s s value of t h e minerals taken a t t h e h i g h e s t p r i c e w a s $163,087. Further evidence w a s introduced revealing t h e disburse- ments made by t h e Anaconda Company. This information, supplied by Anaconda, shows t h a t f o r t h e months of February through June, 1973, Anaconda paid P i e r r e approximately $70,000 f o r t h e minerals processed a t t h e smelter. his f i g u r e i s t h e n e t disbursement a f t e r t h e c o s t of t h e s i l i c a w a s deducted. P i e r r e a l s o made shipments t o Anaconda i n J u l y through October, 1973; however, Anaconda d i d n o t supply t h e amount disbursed f o r t h i s period. M r s . Gage received $3,000 from L.B.M. f o r t h e removal of t h e t a i l i n g s . Also introduced a t t r i a l were two r e p o r t s prepared by mining engineers i n t h e 1930's. The r e p o r t s w e r e prepared by Uuno Sahinen and W i l l i a m S. Gage, Camilla Gage's deceased husband, and they d i s c l o s e t h e q u a l i t y and q u a n t i t y of t h e t a i l i n g s i n question. The r e p o r t s d i s c l o s e d t h a t t h e lower t a i l i n g s belonged t o t h e Watseca mining operation. P i e r r e t e s t i f i e d t h a t he had read t h e r e p o r t s and w a s f a m i l i a r with them. Testimony w a s a l s o adduced concerning P i e r r e ' s degree i n mining engineering and h i s extensive experience i n mining. H i s experience i n mining d a t e s back t o 1958, and he received h i s degree from t h e School of Mines i n 1968. Several e x h i b i t s of correspondence between P i e r r e , McCune, Rock Springs Corporation, and Camilla Gage were introduced i n t o evidence. These e x h i b i t s r e f l e c t , t o a c e r t a i n e x t e n t , t h e knowledge of t h e p a r t i e s concerning t h e ownership of t h e claims. This correspondence i s summarized as follows: September 25, 1967 Letter--McCune t o P i e r r e . McCune r e f e r r e d t o a telephone conversation with P i e r r e i n which P i e r r e sought a u t h o r i z a t i o n t o test mine t a i l i n g s i n t h e Rochester Basin. McCune gave P i e r r e permission " t o sample and test t h e Watseca Mine t a i l i n g s and t h e Concentrator t a i l i n g s . . . s u b j e c t t o t h e following: . . . You w i l l agree t o work a t l e a s t one-half of t h e approximately 46,000 tons of t a i l i n g s , i n t h e event a working c o n t r a c t i s entered i n t o . . .'I (This reference t o 46,000 tons i s derived from t h e Sahinen Report which states t h a t t h e two t a i l i n g s dumps i n t h e a r e a contain t h e following q u a n t i t y of tonnage: "Watseca t a i l i n g s " (upper tailings)--31,000 tons, and "Con- c e n t r a t o r t a i l i n g s " (lower t a i l i n g s ) --15,000 tons. ) October 30, 1972 Letter--Pierre t o McCune. P i e r r e a t - tempted t o secure an option on t h e Watseca property. He gave a b r i e f h i s t o r y of h i s p r i o r d e a l i n g s and t e s t i n g s i n t h e a r e a and h i s p r i o r c o n t r a c t with Camilla Gage. P i e r r e s t a t e d t h a t he w a s c u r r e n t l y "shipping t a i l i n g s from another mine i n t h e same general a r e a a s t h e Wasecca [ s i c ] and would l i k e t o re-option t h e Wasecca [ s i c ] . " November 2, 1972 Letter--McCune t o P i e r r e . McCune informed P i e r r e t h a t Camilla Gage a t no time had " a u t h o r i t y t o option m y Watseca property", and t h a t any a c t i o n t o l e a s e t h e property was precluded a t t h i s t i m e a s a r e s u l t of an e x i s t i n g lease. January 2 , 1973 Letter--Pierre t o Rock Springs Corporation. P i e r r e r e f e r r e d t o t h e r e c e i p t of a letter from M r . McLean, t h e p r e s i d e n t of Rock Springs. Unfortunately, t h e letter w r i t t e n by McLean was n o t introduced as an e x h i b i t . P i e r r e i n t h e January 2 letter s t a t e d , "I g r e a t l y appreciated receiving your letter as M r s . Gage l e d m e t o believe condi- t i o n s w e r e q u i t e t h e contrary." The letter's purpose w a s t o again o b t a i n an option t o t h e Watseca. January 30, 1973 Letter--Pierre t o McCune. This l e t t e r a l s o sought an option on t h e Watseca property and contained t h e following statement: "Unfortunately I was misled by M r s . Camillia [ s i c ] Gage of Twin Bridges, Montana as t o t h e ownership." May 25, 1973 Agreement t o Purchase Mining Tailings. This agreement was executed between P i e r r e and Gage. It purported t o sell mine t a i l i n g s known a s "The Concentrator Tailings" f o r $7,500 payable a t a rate of $.50 per ton. September 17, 1975 Letter--Gage t o P i e r r e . Camilla Gage s t a t e d t h a t she believed t h i s l a w s u i t t o be ''perfectly r i d i c u l o u s " , t h a t she s t i l l f e l t t h a t she owned t h e t a i l - ings, and t h a t "we both acted i n good f a i t h when you hauled t h e t a i l i n g s t o t h e smelter." The following jury i n s t r u c t i o n s w e r e given by t h e D i s t r i c t Court. I n s t r u c t i o n No. 19 was given without objec- t i o n , and I n s t r u c t i o n No. 20 was given over a p p e l l a n t ' s objection. I n s t r u c t i o n No. 19: "You a r e i n s t r u c t e d t h a t i f you f i n d i n favor of t h e p l a i n t i f f s , and t h a t C a m i l l a Gage repre- sented t o William H. P i e r r e o r o t h e r o f f i c e r s of L.B.M. Construction Co. t h a t she was t h e owner of t h e lower t a i l i n g s on Rochester Creek, and i f you f u r t h e r f i n d t h a t W i l l i a m H. P i e r r e and L.B.M. Construction Co. r e l i e d on t h e r e p r e s e n t a t i o n s of ownership made by Camilla Gage, t o t h e i r detriment, then William H. P i e r r e and L.B.M. Construction Co. a r e e n t i t l e d t o r e - cover from Camilla Gage t h e amount they a r e required t o pay t o t h e p l a i n t i f f s . " I n s t r u c t i o n No. 20: " I f you f i n d t h a t t h e Defendants, W.H. PIERRE, doing business as W. H. PIERRE & ASSOCIATES, LTD.,; L B M Construction, entered i n t o a con- t r a c t with t h e Third P a r t y Defendant, CAMILLA GAGE whereby W. H. PIERRE, doing business a s W. H. PIERRE & ASSOCIATES o r t h e L B M Construc- t i o n Company purchased from CAMILLA GAGE m i l l t a i l i n g s s i t u a t e and located on t h e Concentrator T a i l i n g s Unpatented Placer C l a i m on which t h e P l a i n t i f f s cause of a c t i o n i s based and held, used o r converted t h e mine t a i l i n g s under such c o n t r a c t , knowing t h e property belonged t o t h e P l a i n t i f f s , L A W R E N C E McCUNE and ROCK SPRINGS CORPORATION, then t h e Defendant, W. H. PIERRE, doing business as W. H. PIERRE & ASSOCIATES and t h e Defendant, L B M Construction Company i s estopped from denying t h a t t h e P l a i n t i f f s had t i t l e t o t h e mine t a i l i n g s o r t h e r i g h t t o r e t a i n ownership of t h e t a i l i n g s , and you w i l l f i n d i n favor of t h e Third P a r t y Defendant, CAMILLA GAGE. " The jury returned a v e r d i c t i n favor of t h e p l a i n t i f f s , Rock Springs and McCune, and a g a i n s t P i e r r e and L.B.M., i n t h e amount of $76,382.31, which included $53,818.71 f o r conversion of t h e t a i l i n g s and $22,563.60 f o r t h e t i m e and expense involved i n p u r s u i t of t h e converted property. The jury a l s o found a g a i n s t t h e t h i r d p a r t y p l a i n t i f f s , L.B.M. and P i e r r e , and i n favor of t h i r d p a r t y defendant, Camilla Gage. Appellant r a i s e s two i s s u e s Zor t h i s Court,-to consider: 1. Is the D i s t r i c t Court's jury I n s t r u c t i o n No. 20 supported by t h e evidence? 2. Was t h e r e s u f f i c i e n t evidence t o support t h e j u r y ' s v e r d i c t i n favor of t h e t h i r d p a r t y defendant, Camilla Gage? The i s s u e s r a i s e d on appeal a r e coextensive i n t h a t they both challenge t h e lower c o u r t ' s conclusion t h a t a p p e l l a n t P i e r r e knew of McCune's i n t e r e s t i n t h e t a i l i n g s . This Court has examined t h e record below and concludes t h a t t h e r e was s u f f i c i e n t evidence t o support both t h e i n s t r u c - t i o n and t h e jury v e r d i c t . W e f i n d two t h i n g s p a r t i c u l a r l y r e v e a l i n g i n reaching our conclusion. F i r s t , t h e correspondence admitted i n t o evidence a t t r i a l i n d i c a t e s t h a t i n 1967 P i e r r e received McCune's permission t o "sample and test t h e Watseca Mine t a i l i n g s and t h e Concentrator t a i l i n g s . " From t h i s t h e jury could properly i n f e r t h a t P i e r r e had knowledge of McCune's claimed i n t e r e s t i n t h e lower t a i l i n g s . This is reinforced by t h e letter's reference t o 46,000 tons of t a i l i n g s , a number a r r i v e d a t from t h e 31,000 ton (upper t a i l i n g s ) and 15,000 t o n (lower t a i l i n g s ) f i g u r e s c i t e d i n t h e Sahinen Report with which P i e r r e admitted he w a s f a m i l i a r . W e consider t h i s persuasive evidence of P i e r r e ' s n o t i c e of McCune claimed i n t e r e s t i n t h e Concentrator t a i l i n g s . Appellant argues t h a t M r s . Gage represented t o him t h a t she owned t h e t a i l i n g s on t h e Concentrator c l a i m and t h a t he r e l i e d on those representations. However, an examination of o t h e r correspondence admitted a t t r i a l does n o t prove h i s argwnent. I t does, i n f a c t , l a y a foundation f o r t h e i n t r o - duction of I n s t r u c t i o n No. 20 and t h e u l t i m a t e v e r d i c t . I n t h a t correspondence P i e r r e s t a t e d : " I g r e a t l y appreciated receiving your letter a s M r s . Gage l e d m e t o b e l i e v e conditions w e r e q u i t e t h e contrary" ( l e t t e r t o Thomas McLean, January 2, 1973); "Unfortunately I was misled by M r s . Camillia [ s i c ] Gage of Twin Bridges, Montana a s t o t h e ownership" ( l e t t e r t o L. McCune, January 30, 1973). Even assuming t h a t P i e r r e , supposedly w e l l acquainted with t h e a r e a and t h e i n d i v i d u a l s involved, w a s confused o r mistaken i n t h i s correspondence a s t o what was t h e Watseca claim and what w e r e t h e Watseca t a i l i n g s , w e can presume t h a t a t some p o i n t he doubted M r s . Gage's v e r a c i t y and ceased t o r e l y on her statements a s f a c t . Secondly, t h e record d i s c l o s e s t h a t P i e r r e had been i n t e r e s t e d i n t h e Rochester Basin s i n c e 1967. I t f u r t h e r d i s c l o s e s t h a t he w a s acquainted with t h e contents of t h e mining r e p o r t s made by Uuno Sahinen and William Gage around 1939. The Sahinen Report q u a n t i f i e d t h e Watseca t a i l i n g s e x p l i c i t l y and c i t e d f i g u r e s representing t h e Watseca t a i l - i n g s which could only be a r r i v e d a t by including t h e tonnage i n both t h e upper t a i l i n g s and t h e lower t a i l i n g s . The Gage Report i s p a r t i c u l a r l y enlightening, a s Gage r e p o r t s t h a t t h e two t a i l i n g s dumps i n t h e basin w e r e on Watseca ~ i n i n g Co. property. Since t h e company and McCune have i d e n t i c a l i n t e r e s t s , t h e r e i s evidence t h a t P i e r r e w a s a t l e a s t par- t i a l l y aware of t h e e x t e n t of Watseca ownership. Based on t h e evidence introduced a t t r i a l and considering p i e r r e ' s e x p e r t i s e , we f i n d s u f f i c i e n t evidence t o support t h e t r i a l c o u r t ' s d e c i s i o n t o g i v e I n s t r u c t i o n No. 20. Appellant f u r t h e r asserts t h a t t h e two i n s t r u c t i o n s set o u t above contain c o n f l i c t i n g l e g a l p r i n c i p l e s . W e d i s - agree. he body of t h i s appeal c e n t e r s around elements of "knowledge" and "reliance." I n s t r u c t i o n No. 19, t o which t h e r e was no objection, d e a l s s p e c i f i c a l l y with knowledge and r e l i a n c e . Although I n s t r u c t i o n No. 20 includes r e f e r - ences t o o t h e r l e g a l t h e o r i e s , t h e question it u l t i m a t e l y asks the jury is, "did P i e r r e have knowledge of McCune's i n t e r e s t s ? " Obviously, i f t h e jury found he d i d have knowl- edge, t h e r e could be no good f a i t h r e l i a n c e . Therefore, t h e i n s t r u c t i o n s were n o t inconsistent. When determining whether jury i n s t r u c t i o n s are properly given o r refused, t h i s Court considers t h e i n s t r u c t i o n s given i n t h e i r e n t i r e t y and review them i n l i g h t of t h e evidence adduced. Brothers v. Town of V i r g i n i a C i t y (1976), 171 Mont. 352, 558 P.2d 464. This Court has r u l e d t h a t where t h e jury i n s t r u c t i o n s , taken a s a whole, s t a t e t h e law a p p l i c a b l e t o t h e case, a p a r t y cannot claim r e v e r s i b l e e r r o r a s t o the giving of c e r t a i n i n s t r u c t i o n s . Frank v. Hudson (1962), 140 Mont. 480, 373 P.2d 951; Brothers v. Town of V i r g i n i a City, supra. W e conclude t h a t t h e i n s t r u c t i o n s given, including I n s t r u c t i o n No. 20, w e r e supported by s u f f i c i e n t evidence. I t w a s n o t e r r o r f o r t h e t r i a l c o u r t t o submit both I n s t r u c t i o n Nos. 19 and 20 t o t h e jury f o r consideration. A s t o t h e s u f f i c i e n c y of t h e evidence t o support t h e v e r d i c t , w e a r e guided by w e l l - s e t t l e d l e g a l p r i n c i p l e s , W e a r e mindful t h a t t h e jury i s i n t h e b e s t p o s i t i o n t o weigh t h e evidence and consider t h e c r e d i b i l i t y of witnesses. Thus, i n examining t h e s u f f i c i e n c y of t h e evidence, w e undertake our review i n a l i g h t most favorable t o t h e pre- v a i l i n g p a r t y , and we presume the f i n d i n g s and judgment of t h e D i s t r i c t Court a r e c o r r e c t . Lumby v. Doetch (1979), - Mont. 600 P.2d 200, 202, 36 St.Rep. 1684, 1687, c i t i n g Hellickson v. B a r r e t t Mobile Home Transport, Inc. (1973), 161 Mont. 455, 459, 507 P.2d 523, 525. Further, we w i l l n o t s u b s t i t u t e our view of t h e evidence f o r t h a t of t h e jury. When t h e evidence f u r n i s h e s reasonable grounds f o r d i f f e r e n t conclusions, t h e f i n d i n g s of t h e jury w i l l n o t be disturbed. Adami v. Murphy (1945), 118 Mont. 172, 179, 164 P.2d 150. Directed by t h e s e p r i n c i p l e s w e a f f i r m t h e jury ver- d i c t . A s discussed above, t h e jury could properly i n f e r from t h e correspondence between t h e p a r t i e s , t h e 1967 busi- ness d e a l i n g s and P i e r r e ' s f a m i l i a r i t y with t h e Gage and Sahinen Reports t h a t a p p e l l a n t had n o t i c e of t h e McCune i n t e r e s t s and, t h e r e f o r e , d i d n o t r e l y on M r s . Gage's claims. The record supports t h e i n s t r u c t i o n , t h e v e r d i c t and t h e j udgmen t . Affirmed. Chief J u s t i c e