No. 14829 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1980 

JOHN V. SCHARA and MARDELL SCHARA, 

Plaintiff and Respondents and 

Cross-Appellants, 

VS. 

THE ANACONDA COMPANY, a Delaware 

corporation, 

Defendant and Appellant 

No. 14800 

TliE ANACONDA COMPANY, 

Relator, 

VS . 

THE HON. JAMES D. FREEBOURN, DISTRICT JDUGE PRESIDING 

IN THE DISTRICT COURT OF THE SECOND JUDICIAL DISTRICT et al., 

Respondents. 

Appeal from: District Court of the Second Judicial District, 

In and For the County of Silver Bow 

Honorable Judge James D. Freebourn and Honorable 

Judge Arnold H. Olstin presiding. 

Counsel of Record: 

For Appellant: 

Poore Law Firm, Butte, Montana 

Urban L. Roth argued, Butte, Montana 

For Respondent: 

McCaffery and Peterson, Butte, Montana 

John L. Peterson argued, Butte, Montana 

Submitted: February 28, 1980 
Mr. Chief Justice Frank I. Haswell delivered the Opinion of 

the Court. 

This is an appeal in which two actions have been consolidated. The first is a condemnation action brought by The Anaconda Company (Anaconda) to condemn approximately two acres of 

land in the Columbia Gardens Addition of Butte, Nontana, The 

property sought to be condemned is owned by John and filardell 

Schara (Scharas), The second is an action brought by khe Scharas 

to enjoin Anaconda from allegedly violating the conditions of a 

restrictive covenant incorporated in deeds to lots in the Col~unbia Gardens Addition. Both actions were filed in the Silver Bow 

County District Court. 

In the first action, the District Court entered incornpL&e findings and was thereafter directed by this Court to comp1et.e 

such findings. 

In the second action, the District Court granteii a mandn-- 

tory permanent injunction enjoining Anaconda from violating t.he 

restrictive covenant which 'ad attached to the Scharas' property, 

Anaconda moved for a stay of the injunction, but the mot-ion was 

denied by the District Court. This Court granted Anaconda a ternporary stay pending determination of the merits of this appeal, 

Anaconda appeals from both District Court judgments, and 

the Scharas cross-appeal from the judgment entered in the condemnation action. 

John and Mardell Sct:a.ra are the owners of approximately 

2-2'704 acres of land, Lots 51, 52 and 54 of the Columbia Gardens 

Addition in Butte, Montana. On September 1, 1978, the Columbia 

Gardens Addition was incorpo.ra.ted under the Master Zoning Plan for 

Butte-Silver Bow and was zoned "Mu for mininy or industrial. Most 

of the 26 acres and the entire mineral estate within the Addition 

is owned by the Ailaconda Company. The only access to the Scharas' 

property and the Addition is Montgomery Avenue. Anaconda owns all 
of the land adjacent to Montgomery Avenue on both sides, plus all 

of Montgomery Avenue to the Columbia Gardens Addition. At the 

present timc, the Scharas are the sole residents of the addition. Since 1970, the Addition and its immediate neighborhood 

have undergone extensive changes, most of which have been prompted 

by Anaconda. The Columbia Gardens Anlusement Park has been razed, 

the Continental East Pit operation located 300 to 400 feet from 

the Addition has commenced, an interstate highway has been constructed through the southeast corner of the ~ddition, the Berkeley 

Pit has expanded and a power line has been constructed through 

the north end of the Addition. The Anaconda Company has, upon 

s:i\rerai occasions, attempted to acquire the Scharas' property 

through negotiation and offers to purchase. 

Anaconda instituted a condemnation proceeding against the 

Scharas to acquire their land. for the purpose of establishing a 

dumping site for mining waste. In support of its claim, Anaconda 

presented evidence that it wished to expand its mining operations, 

that the expansion would require new techniques and expensive 

equipment, that it would be economically infeasible and impractical to d.ump waste on any other land, and that the 1.ancI was es.- 

sential to carrying out Anaconda's long term mining plan. Anacoxrda's testimony reveals that if the land is not acquired it would 

be infeasible to expand the Berkeley Pit eastward; consequen,kly, 

mining would terminate within seven years due to exhaustion of 

the pit, shortening the life of mining in Butte by 14 years. Aria,- 

conda's mining plan requires that Montgomery Avenue as well as the 

Coluntbia Gardens Addition be inundated by overburden by the n1j.d1980's. The Scharas presented contradictory evidence of alternative dumping sites which were not as economically feasible for 

the mining operation but which were being contemplated by rmacorlda 

if the Scharasyand could not be obtained. The Scharas also 

proffered testimony that Anaconda had made inconsistent !~tatcmenl.s 
concerning future mining operations in its petition for the 

Woodville Road closure in 1977. Anaconda had stated at that 

time that with the road closure it could continue mining until 

about year 2000. 

In the second action, the Scharas sought to enjoin Anaconda from violating one of the restrictive covenants placed 

upon their property. The covenant was the result of a trust 

agreement signed in 1950 between North Butte Mining Company, 

Anaconda's predecessor in interest, and all of the owners of 

Columbia Gardens Addition, one of whom was the Scharasqredecessor in interest. The trust instrument bound successors in 

interest and provided: 

"That in all conveyances, uses or permits there 

shall be a restriction upon the use of said premises that said premises shall be for residential 

use only and that no building, use or operation of 

the premises shall create or constitute a nuisance." 

The District Court denied Anaconda's motion to 2tay the 

restrictive covenant proceedrngs until the outcome of the condemnation action, and Judge Olsen entered judgment against Anaconda 

on March 28, 1979. Pursuant to this judgment, a permansnt injunctlon was issued which restrained Anaconda from using its property 

within the Columbia Gardens Addition for any purpose other than 

residential and from creating or maintaining a nuisance. The 

inlunctlon also commanded Anaconda to remove an electr~c transmission line from the Addition and to repair or remove all vacated 

buildings located upon its property within the Addition. 

Originally the District Court, in the condemnatjon action, 

the Honorable James D. Freebourn presiding, made the foL1.owing 

findings of fact and conclusions of Law on April 19, 19'79: 

"5. At this date, plaintiff has nearly reached 

the maximum depth at which ore can be economically 

mined from the pit; the pit must be expanded 

horizontally in one direction or another; defendants' property lies east and south of the pit; 

expansion to the east and south, instead of some 

other direction, is compatible with the greatest 

public good and least private injury; 
"10. Plaintiff's past, present and continuation 

of future operations have and will accrue as a 

benefit to the public and to the use of the public. 

Acquisition of lots 51, 52 and 54 of the Columbia 

Garde.n Addition, on substantial and satisfactory 

estimations, now in evidence, will continue plaintiff" operations for some 13 or more years. 

"11. Plaintiff has shown, by a preponderance of 

the evidence, that the use and taking of said 

lots is authorized by law; that the taking of said 

lots is necessary to such use; that the need of 

said lots is necessary to continue plaintiff's 

mining operations and such taking, at this definite 

and specific location, is being accon.plished in 

a manner which will be most compatible with the 

greatest public good and the least private injury." 

However, the court took judicial notice of the permanent 

injunction issued on March 30, 1979, by the Honorable Arnold H. 

Olsen in favor of the Scharas and against Anaconda concerning the 

violation of restrictive covenants in the Columbia Gardens Addition. As a result, Judge Freebourn refused to enter a condcmnation award until this Court. reviewed the permanent injunction 

since such an award would amount to a reversal of Judge Olsen's 

injunction. 

Subsequently, Anaconda sought a writ from this Court t.o 

direct Judge Freebourn to complete his findings and conclusions. 

On July 11, 1979, this Court directed the District Court to enter 

those conclusions. Judge Freebourn then made "amended and supplemental" findings of fact and conclusions of law in which he held 

that Anaconda had "more than sufficient land for dumping purposes 

and to continue its mining operations for some 14 or 15 years 

without the need and necessity of the use of defendantsX land," 

and further found that Anaconda" need for the Scharas' property 

would not arise for some "14 or 15 years" in the future. The 

District Court then concluded Anaconda had failed to prove rts 

need of the Scharas' property in the immediate future and because 

of increases in land values over the last five years, the present 

taking of the Schara property for "some 14 or 15 years in the 
future, wou1.d deny defendants just compensation for such use." 

The following issues are before us on appeal: 

(1) Whether the District Court was in error by denying 

Anaconda's motion to stay the restrictive covenant action until 

a final determination of the condemnation action; 

(2) In the alternative, whether the restrictive covenant 

is unen-forcealiie due to the radical changes which have occurred 

in the Columbia Gardens Addition since 1950; 

(3) Whether the District CourL abused iLs discretion by 

not having substantial evidence upon which to base its finding 

that no "necessity" will exist for Anaconda to condemn the Scharas' 

property for 14 or 15 yea.rs. 

The Scharas raise the following issues on cross,-appeal: 

(1) Whether the proposed condemnation is excessive; 

(2) Whether, by reason of the Hardrock Mining Act, a 

valid mining permit is an absolute condition precedent to condomnation for mining purposes; 

(3) Whether section 70-30-102, MCA, which distinguishes 

between copper mining and coal mining as a public use, is unconstitutional under the Equal Protection Clause. 

Looking first to Judge Olsen's denial of Anacoiic~a's soti<,>ri 

to stay the covenant action pending the outcome of the condemnation proceedings, the heart of this issue is the effect that a 

restrictive covenant has upon a proceeding seeking a preliminary 

cendm.%ion award. 

Nichols on Eminent Domain discusses the issue as foLiows: 

"5.73 - Restrictive covenants. . - 

"A rather perplexing situation arises out of the 

existence of what are commonly called 'building 

restrictions.' A large tract of land is often cut 

up into lots and sold for residential purposes, 

and each lot is sold subject to restrictions 

against use for various purposes, the restriction 

upon each lot being for the benefit of all other 

lots in the same development or 'common plan or 
scheme,' reasonable in their character, they are 

enforced by courts of equity in favor of the 

benefitted owner, so long as he continues to own 

any part of the tract for the benefit of which the 

restrictic~ns were createz, as well as in favor 

of the owner of hny one of the lots into which the 

tract was divided, and against the owner of any of 

the lots who attempts to disregard the restrictions. Such restrictions do not, however, have -- an 

inhibiting influencexon The right - - to exercise -- the power of eminent domain . . ." (Emphasis added.) 

Nichols on Eminent Domain, S5.75.- 

This approach is consistent with Montana eminent domain 

statutes. Section 70-30-103, MCA, provides that all real property as well as all classes of private property may be taken 

for public use when such taking is authorized by law, and section 

70-30-104, MCA, states that "such estate or rights as may be 

necessary up to and including a fee simple when taken . . . for 

. a place for the deposit of debris or tailings of a mine . . ." 

are " . . . subject to be t-aken for the public use." 

In our present appeal, the restrictive covenant. is at 

most a part of the fee or something less than a fee. Therefore, 

it is the proper subject of a condemnation proceeding. Once it 

is determined that the property sought is a proper subject of 

condemnation, the court must find that the taking is necessary 

to the public interest and consistent with the greatest public 

good and the least private injury. 

We therefore conclude that a restrictive covenant action 

is moot when a preliminary condemnation action involvinc~ the same 

property is pending. If i. is found that a preliminary condem-. 

nation award is proper, the condemnee may seek compensation which 

takes into account the value of the property pursuant to the uses 

allowed. On the other hand, if the condemnor is not entitled to 

a preliminary condemnation award, the covenantee may proceed with 

a suit on the restrictive covenant. 

The District Court was in error by not granting the motion 

to stay the restrictive covenant proceeding until t.he propriety 
of the condemnation action was finally determined. 

Since we find the restrictive covenant action moot, we 

nerd not reach the xssue involving the unenfo-~cakility of a 

covenant when radical changer; have occurred rn the character of 

a neighborhood. 

Next, with regard to the propriety of the District Court's 

denial of a preliminary condemnation order, it is Anaconda's sontention that substantial credible evidence does not exist to 

support the tlndrng ot no necessxty tor condemnatlon, 

Section 70-30-111, MCA, is entitled "Facts necessarx ., to 

be found before condemnation." .~ It provides, in pertinent part, 

'\ . . [blefore property cart be taken, it must appear: (1) that 

the use to which it is to be applied is a use authorized -- bxL3; 

(2) that the taking is necessary to such use . . ." Section 70- 

30-110, MCA, states that the proposed condemnation "must: be located in the manner which will be most compatible with the greatest 

public good and the least private injury." 

From the preceding statutes the key determinations to be 

made are: (1) Whether the proposed use is "authorized by law,'" 

(2) whether "the taking is necessary", and (3) whether the location 

is the "most compatible with the greatest public good aild the least 

private injury." 

The determination involving whether the proposed use is 

"authorized by law" is easily made. Section 70-30-102, MCA, 

enumerates the public uses which are the proper subject oi c$)nde.nnatron and therefore "authorized by law." Mininq, except the 

strip rnininq of coal, is an authorized public use within sectxan 

70-30-102 (15), MCA. 

The determinations of whether the taking is necessary 

and whethes it is conipatible with the greatest public good arid 

the least private injury both involve factual issues. 

With regard to whether the talcing is necessary, this 
Court has consistently held that the necessity need not be absolute. Instead the test is "reasonable, requi-site, and proper 

for the accomplishment of the end in view, under the particular 

circumstances of the case." Montana Power Co. v. Bokma (1969) 

153 Mont. 390, 398, 457 P.2~1 769, 774; State Highway Coinmissron 

a. Yost Farm Co. (19631, 142 Mont. 239, 384 P.2d 277; Butte, 

A, & P. Ry. Co. V. Montana U. Ry. Co. (1895)' 16 Mont. 504, 41 

P. 232- 

This Court made the following statement with regard to 

the determination of "necessity" and "the greatest good" and the 

"least private iL1jllr~i1' in Mmta7aPower Co. v. Bokma, supra. 

"The taking of private property by condemnation 

proceedings must be compatible with the greatest 

public good and the least private injury. . . The 

greatest good on the one hand and the least injury 

on the other are questions of fact to be determined 

in passing upon the question of necessity. . . ?'hese 

questions commonly arise in connection with the 

location of the proposed improvement. Since the 

condemnor has the expertise and detailed knowledge 

of considerations involved in determining 1ocati.on 

of the improvement, i.ts choice of location is given 

great weight. . . Such choice will not be overturned 

except on clear and convincing proof that the taking 

has been excessive or arbitrary, it not being the 

function of the judiciary to dt:.tcrmine as an engineer 

the best location of the proposed improvements. . . On the other hand when the condemnor fails to cunsider the question of the Least private injury between alternate routcs equal in terms of public 

good, its action is arbitrary and amounts to an abuse 

of discretion." (Citations omitted.) 153 Mont. at 

399-400, 457 P.2d at 774-775. 

According to the above approach the condemnor's (Anaconda%) 

choice of location is to be given great weight, it is to be overturned only by clear and convincing proof that the decision was 

excessive or arbitrary, and an abuse of discretion will be found 

if the condemnor fails to study alternatives. The record discloses that Anaconda studied all alternatives and rejected them 

as being economically infeasible. The District Court in its 

original findings found that Anaconda had "shown, by a preponderance of the evidence that the . . . taking is necessary . . 

and will be most compatible: with the greatest public good and 
the least private injury." Mysteriously, in the court" amended 

and supplemental findings of fact and conclusions of law, the 

original findings remain intact, but t!le fcllodi~g inconsistent 

finding is added: 

"Plaintiff has falled to prove by a preponderance 

of the evidence the need and necessity of plaintiff for the use for mining of defendants' land in 

the immediate future and such need and necessity 

will not arise for some 14 or 15 years in the future," 

Normally, the entry c)f inconsistent findings wo~iLd require 

us to remand the case for further proceedings in the District 

Court; however here we find no evidence to support the court's 

latest findings and substantial evidence to support the initial 

findings. We conclude that the findings entered by the District 

Court on April 9, 1979, arc correct and must be entered. 

The record does disclose that mining in the present Berkeley 

Pit will be completed in 1986. In order to increase the life of 

future mining in Butte the Berkeley Pit must be expanded, and accordinq to Anaconda's long term mining plan strippinq of overburden 

must commence by 1983. Anaconda explains that new technoloyy has 

been developed for removing overburden, and in order to have the 

equipment on line by 1983, inmediate action is requi-red. The 

equipment requires a tremendous investment and Anaconda must know 

the result of the condemnation action before it can be ordered. 

It is further disclosed that Anaconda considered two alternatives to the condemnaticin of the Scharas' property. One alternative was backfilling the Berkeley Pit with overburclen. This 

alternative was rejected since the long term mining plan contemplates vertically mining ore deposnts located beneath the deepest 

portion of the Berkeley Plt. This future vertical mining plan 1s 

not now feaslbie because of both a lack of technology and current 

market conditions; however, it would be completely precluded if 

Anaccnaa backfilled the pit, The second alternative studied by 

Anaconda was the establishment of a dumping site on a portion of 
its own land. Testimony reveals that although this alternative 

is feasible from an engineering standpoint, it is economicalLy 

infeasible to transport the waste the distance involved.. his 

leaves condemnation of the Scharas' land as the only feasible 

alternative to continue the life of mining in Butte. 

The Scharas contend that since the preceding alternatives 

exist, condemnation of their land is not "necessary" nor "cornpatibSe with the greatest public good and the least private i..njl~:i?y-'' 

We find this contention lacking in merit in light of Montana Power 

Co. v. Bokma, supra. 

As a result, we find substant:ial credible evidence to 

support the findings entered, by the District Court on April 19, 

3.979. 

The Scharas contend on cross-appeal that the amount of 

property sought to be condemned is excessive. The basis for this 

argument is that Anaconda has recognized in its mining plan that 

a portion of the Scharas' land is within the Highway Department's 

proposed right-of-way for expansion of Interstate 15 and that 

Anaconda only contemplates use of the Scharas' property up to the 

proposed highway right-of-way. 

Again this argument centers on absolute necessity, rather 

than the Montana test of necessity, "reasonable, requisite and proper 

for the accomplishment of the end in view, under the particular circumstances of the case." Montana Power Co. v. Bokma, supra. Testimony reveals that Anaconda would not use a small portion of the 

Scharas-and within the proposed highway right-of-way if the Hi-ghway Department does acquire it. Based on this testimony we cannot 

find that the proposed condemnation is excessive merely because 

Anaconda points out to the District Court that the Highway Department may have a superior claim to a small portion of the land. We 

find that condcmnation of the Scharas' property is reasonable, 
requisite, and proper for thc accomplishment of the end in 

view under the peculiar circumstances of the case. The possibility that Anaconda may have to forfeit a small portion of the land 

to a superior claimant at a later date does not render the taking 

excessive. 

The Scharas next contend on cross-appeal that since secation 70-30-111, MCA, requires the use to be "authorized by law" 

before condemnation is allowed, the obtaining of a valid mining 

permit is a condition precedent to condemnation. However, there 

is nothing in either the Hardrock Mining Act, section 82-4-301, 

MCA, et seq., or the eminent domain statutes, section 70-30-101, 

MCA, et seq., to support this position. Section 70-30-102, MCA, 

declares mining to be a public use and it is unquestioned that 

Anaconda is allowed to engage in mining activities. To find that 

"authorized by law" requires that a mining company obtain a valid 

mining permit prior to condemnation would be inconsistent with 

Itontana statutory authority and would bc contrary to the public 

policy of providing expediency in eminent domain proceedings. 

The Scharas' next issue on cross-appeal is that section 

70-30-102(15), MCA, is unconstitutional. The statute provides, 

in pertinent part: 

"Public uses enumerated. Subject to the provisions 

07 this chaoter, the riqht of eminent domain mav 

be exercise2 in behalf of the following public Gscs: 

"(15) to mine and extract ores, metals, or minerals 

owned by the plaintiff located beneath or upon the 

surface of wrowertv where the title to said surface 

vests in others. Gowever, the use of the surface 

for strip mining or open pit mining of coal (i.e., -- - 

any mlnlng method or process zn which the strata or 

overburden is removed-or displaced in order to extract the coal) is not a pubiic use, and eminent -. -- domain may - . . ." 

(Emphasis added.) 

It is contended that since the statute allows the mining 

of copper to be a public use and disallows the strip mining of 
an 

coal as a public use, there is/unconstitutional violation of the 

Equal Protection Clause, However, it is weil established that 

the equal protection clause is very iimited in cases involviny 

eminent domain statutes. This is especially so when the statute 

merely declares the legislative determination as to what is to 

be considered a public use. A11 that is required to survive 

an equal protection challenge in this context is that there be a 

"reasanable" basis for the distinction. Nichols on Eminent Domain, 

S4.15. 

The legislature has provided its basis for the distinction 

between copper mining and coal mining in section 70-30-106, MCA, 

which provides: 

"70-30-106. Eminent domain not to be used for 

coal mining in certain -- cases--pol*. For the 

following reasons the state's power of eminent 

domain may not be exercised to mine and extract 

coal owned by the plaintiff located beneath the 

surface of property where the title to the surface is vested in others: 

"(I) Because of the large reserves of and the 

renewed interest in coal in eastern Montana, coal 

development is potentially more destructive to land 

and watercourses and underground aquifers and 

potentially more extensive geographically than the 

forseeable development of other ores, metals, or 

minerals and affects large areas of land and Large 

numbers of people. 

" (2) In many areas of Montana set forth in (1) hereinabove, the title to the surface is vested in dn 

owner other than the mineral owner, and the surface 

owner is putting that surface to a productive use, 

and it is the public policy of the state to encourage and foster such productive use by such owner, 

and to permit the mineral owner to condemn the surface owner is to deprive the surface owner of the 

right to use his property in a productive manner as 

he determines and is also contrary to public policy 

as set forth in subsection (4). 

" (3) The magnitude of the potential coal devel0~~- 

ment in eastern Montana will subject landowners to 

undue harassment by excessive use of emlnent donialn 

"(4) It is the public policy of the state to encourage 

and foster diversity of land ownership, and the surface 

mining of coal and control of large areas of land by 

the surface coal mining industry would not foster public policy and further the public interest." 
Based upon the immediatei:i preceding legislative policy we find 

a reasonable basis for the distinction between copper rn~ning and 

coal minlng. We conclude that section 70-30-102(15) does not 

viola-te the Equal Protection Clause. 

The judgments of the Distri.ct Court in both. actions are 

reversed. The restrictive covenant action is dismissed. The condemnation action is remanded to the District Court for entry of 

judgment of condemnation in accordance with this opinion. 

Chief Justice 

Wc concur: 
Mr. Justice John C. Sheehy dissenting: 

At the base of this Court" decision and that of Judge 

Freebourn in the condemnation action was the contention of the 

Anaconda Company that unless the Schara property were acquired 

by the company, the company's mining operations would be reduced 

from 20 years in the Butte area to 6 to 7 years of active 

life and we are told "this obviously would be disastrous for 

the public good of Butte-Silver Bow, Deer Lodge Counties and 

the State of Montana." 

The closing threat is not new, It seems to me that I 

have heard this song before. It is from an old familiar 

score. We can only be sure that the decision to go or remain 

be 

will noddependent on the Schara property. 

Judge Freebourn, when this Court forced him by mandate 

to make final findings of fact and conclusions of law so as 

to override Judge Olsenk restrictive covenant decision, 

found that "for dumping purposes" and to continue its mining 

operations for some 14 or 15 years, Anaconda has sufficient 

land already. Therefore he saw no need for the Schara 

property until some 14 or 15 years in the future and conclud.ed 

that to permit condemnation now would deny them just cornpensation for the use of their Land. 

Althouyh Rule 52, M.R.Civ.P. makes it mandatory that firidinys 

of a District Court shall. not be set. aside unless clearly 

erroneous, this Court through the majority opinion not only 

sets Judge Freebourn's findings aside, but proceeds to make 

findings of its own. There is ample support in the record that 

the Anaconda company owns a considerable area of Land which 

could be used for dumping purposes, established in the cross.- 

examination of Wilbur Crisswell. Moreover, Judge Freebourn had 
before him the testimony regarding the East Continental 

Pit. The old highway leading to Woodville had been closed 

to permit the opening of the East Continental Pit, upon the 

representation that such <:losing of the highway would extend 

Butte's mininq life for 22 years. East Continental Pit was 

abandoned after 2 years. 

As a second point, I cannot permit myself to sign an 

opinion which finds it "reasonable" for eminent domain power 

to be granted to open-pit hard rock mining companies, but Lo 

be denied to open-pit coal mining companies. Every reason st.nted 

for denying eminent domain power to the coal mining industry 

in section 70-30-106, MCA, applies with equal force to the 

copper mining industry, There is no real distinction between 

an open-pit copper mine and an open-pit coal mine, except 

that the ie7islature favored cows over people. We give mere 

lip service to the equal protection clause of the federal constitution when we find a distinction without a difference 

in section 70-30-106. 

For these reasons, I dissent.