Title: SILVER JET MINES INC v SCHWARK
Citation: N/A
Docket Number: 83-196
State: Montana
Issuer: Montana Supreme Court
Date: May 17, 1984

No. 83-196 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: March 1, 1 9 8 4 Filed: MAY 1 9 1984 .." Clerk Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e Court. 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 Mines, I n c . t o 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 i n t h e Burns Mining D i s t r i c t i n Sanders County, Montana which a r e a l s o claimed by F r a n k l i n Schwark. T i t l e t o t h r e e of t h e c l a i m s was found t o be i n Schwark and t h e f o u r t h i n S i l v e r Jet. Schwark a p p e a l s a s t o t h e c l a i m q u i e t e d t o 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 remaining t h r e e . S i l v e r J e t is t h e s u c c e s s o r i n i n t e r e s t t o c e r t a i n mining p r o p e r t i e s once h e l d by t h e Montana Standard Mining 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 southwest of Thompson F a l l s , Montana i n t h e a r e a o f P r o s p e c t Creek. I n t h e 1 9 3 0 ' s Montana S t a n d a r d o b t a i n e d p a t e n t s t o t e n c l a i m s l y i n g s o u t h o f P r o s p e c t Creek. The creek r u n s through t h e bottom of a v a l l e y and t h e c l a i m s were worked by means of s e v e r a l t u n n e l s which extended s o u t h , away f r o m t h e c r e e k i n t o t h e h i l l s i d e . The unpatented c l a i m s h e r e i n d i s p u t e were n o t l o c a t e d by Montana Standard u n t i l t h e 1 9 5 0 ' s and l i e on 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 of P r o s p e c t C r e e k . T h r e e o f t h e f o u r c l a i m s i n d i s p u t e , " B e t t y e , " "Tucker" and "Mary" were o r i g i n a l l y l o c a t e d a s m i l l sites i n 1954, b u t amended n o t i c e s of l o c a t i o n were f i l e d i n 1957 changing them t o l o d e claims. Also i n 1957 t h e f o u r t h c l a i m , " R i v e r s i d e " was l o c a t e d . D i s c o v e r y and c o r n e r l o c a t i o n on R i v e r s i d e a l l o c c u r r e d 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 and on R i v e r s i d e u n t i l 1960 a t which time a l l mining o p e r a t i o n s by Montana Standard 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 and notified him of the conflict. 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 o f 1982, a t which both p a r t i e s p r e s e n t e d e v i d e n c e on t h e v a l i d i t y of t h e claims, r e s e r v i n g t h e q u e s t i o n of damages. F i n d i n g s of f a c t , c o n c l u s i o n s of law and t h e o r d e r were e n t e r e d on F e b r u a r y 8 , 1983. Schwark was found t o have t i t l e t o t h e c o n f l i c t i n g p a r t s of t h e B e t t y e , Tucker and Mary c l a i m s , because of 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 p r e d e c e s s o r Montana S t a n d a r d . However, S i l v e r J e t was found t o have 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 . Schwark a p p e a l s from t h i s f i n d i n g , 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 , Tucker and Mary claims. W e 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 on d i r e c t a p p e a l by Schwark, concerning t h e R i v e r s i d e claim. Schwark a l l e g e s two d e f e c t s i n S i l v e r J e t ' s work on t h e c l a i m which, he a r g u e s , r e s u l t i n a f o r f e i t u r e . F i r s t he a t t a c k s t h e s u f f i c i e n c y of 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 i n t e r e s t , and second he a t t a c k s t h e s u f f i c i e n c y of t h e a n n u a l a s s e s s m e n t work done by S i l v e r Jet. A c o n d i t i o n p r e c e d e n t t o a v a l i d mining l o c a t i o n is t h e , " [ A l c t u a l d i s c o v e r y of a v e i n , l o d e o r l e d g e of rock i n p l a c e b e a r i n g a v a l u a b l e m i n e r a l d e p o s i t . " Anaconda Co. v. W h i t t a k e r (Mont. 1 9 8 0 ) , 610 P.2d 1177 a t 1179, 37 St.Rep. 902 a t 904, c i t i n g Upton v. L a r k i n ( 1 8 8 5 ) , 5 Mont. 600, 6 P. 66. 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 , it is incumbent on t h e o r i g i n a l l o c a t o r t o prove t h a t he h a s d i s c o v e r e d s u f f i c i e n t m i n e r a l s as w i l l meet t h e " p r u d e n t man" t e s t . B o s c a r i n o v. Gibson (Mont. 1 9 8 3 ) , 672 P.2d 1119, 40 St.Rep. 1931. 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 have been found and t h e evidence 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 t h e f u r t h e r e x p e n d i t u r e o f 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 o f s u c c e s s , i n d e v e l o p i n g 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 s t a t u t e h a v e b e e n m e t . " C h r i s m a n v . M i l l e r ( 1 9 0 5 ) , 197 U . S . 313, 322-23, 25 S.Ct. 468, 470-71, 49 L.Ed 770, 773-74. T h e r e is no r e q u i r e m e n t t h a , t o r e b e f o u n d i n s u f f i c i e n t q u a n t i t y t o s u p p o r t a p r o f i t a b l e m i n i n g o p e r a t i o n , nor is it r e q u i r e d t h a t any s p e c i f i c q u a n t i t y of o r e be found. I n t h e end, t h e s u f f i c i e n c y of d i s c o v e r y is a q u e s t i o n of f a c t t o be d e c i d e d below. B o s c a r i n o , s u p r a . The t r i a l c o u r t h e r e found t h e r e had been a s u f f i c i e n t d i s c o v e r y o f m i n e r a l s on t h e c l a i m and w e a g r e e . The c e r t i f i c a t e of l o c a t i o n 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 1957 is prima f a c i e e v i d e n c e of t h e e x i s t e n c e o f a v a l i d d i s c o v e r y . S e c t i o n 82-2-102(2), Thomas v. South B u t t e Mining Co. ( 9 t h C i r . 1 9 1 4 ) , 211 F. 105; motion d e n i e d , 34 S.Ct. 999, 234 U.S. 754, 58 L.Ed. 1578. Prima f a c i e e v i d e n c e w i l l s t a n d u n l e s s c o n t r a d i c t e d and overcome by o t h e r e v i d e n c e . S e c t i o n 26-1-102(6), MCA. I n t h i s case, t h e prima 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 overcome by any o t h e r e v i d e n c e p r e s e n t e d . Though t h e 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 d e c e a s e d , t h e w i f e of one of t h e l o c a t o r s t e s t i f i e d t h a t t h e r e was a v e i n showing i n a s h a f t on 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 been e x t r a c t e d . A s t h e d i s c u s s i o n i n B o s c a r i n o shows, t h e burden of p r o v i n g d i s c o v e r y is n o t high. The q u e s t i o n of how much o r e is 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 be o v e r t u r n e d if s u p p o r t e d by s u b s t a n t i a l e v i d e n c e . Boscarino, s u p r a . Such e v i d e n c e e x i s t e d h e r e . Schwark n e x t a t t a c k s t h e s u f f i c i e n c y of t h e a n n u a l a s s e s s m e n t work performed on b e h a l f of S i l v e r Jet. S i n c e 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 is sufficient, Silver Jet has a valid claim. Thornton v. Kaufman (1910), 40 Mont. 282, 106 P.2d 361. If the 1980 work 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. 28 and Public Service Co. of Oklahoma v. Bleak (Ariz 1982), 656 P.2d 600. It should also be noted that although Schwark's location was done in the calendar year 1980, the prior annual assessment period 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. See 30 U.S.C. 28 and Consolidated Tungsten Mines, Inc. v . Frazier (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 o r n o t t h e work d o n e meets t h i s r e q u i r e m e n t is a q u e s t i o n of 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 t o t h e wisdom and e x p e d i e n c y o f t h e method employed f o r d e v e l o p i n g t h e mine i n place of t h a t o f t h e owner. Mann v. Budlong ( C a l . 1 9 0 0 ) , 62 P. 1 2 0 . The t r i a l c o u r t ' s f i n d i n g t h a t a s s e s s m e n t w o r k is s u f f i c i e n t t o 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 w i l l n o t be 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 p r e p o n d e r a n c e o f t h e e v i d e n c e . New Mercur Mining Co. v. S o u t h Mercur Mining Co. ( U t a h 1 9 4 2 ) , 1 2 8 P.2d 269, c e r t . d e n . 6 3 S.Ct. 1 1 6 2 , 319 U.S. 753, 8 7 L.Ed. 1707. The t r i a l c o u r t f o u n d t h a t t h e work c l a i m e d i n t h e 1380 a f f i d a v i t o f a n n u a l a s s e s s m e n t was v a l i d a s s e s s m e n t work, and w e a g r e e . 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 b e u s e d a s t h e needed b a s e o f o p e r a t i o n s f o r m i n i n g t h e u n p a t e n t e d claims. 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 c o u l d be mined from t u n n e l # 3 . Thus t h e work d o n e on t h e s e d i r e c t l y f a c i l i t a t e t h e d e v e l o p m e n t o f t h e mine a n d t h e e x t r a c t i o n of o r e . I t h a s b e e n h e l d t h a t r o a d work a n d r e p a i r work done on r o a d s t o m i n i n g claims b o t h c o n s t i t u t e v a l i d a s s e s s m e n t work, and t h e work c l a i m e d h e r e is more c l o s e l y r e l a t e d t o d e v e l o p m e n t o f t h e mine t h a n e i t h e r o f t h o s e . P i n k e r t o n v. Moore (N.M. 1 9 5 9 ) , 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 work 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, a s n o t e d b e f o r e , w h a t h a p p e n e d p r i o r t o 1 9 8 0 i s 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 y e a r . The t r i a l j u d g e 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 assessment work. Schwark n e x t c o n t e n d s t h a t t h i s work was performed on t h e p a t e n t e d c l a i m s and may n o t be a t t r i b u t e d t o t h e unpatented claim. Assessment work n o t done on a p a r t i c u l a r c l a i m o r group of c l a i m s may o n l y be a t t r i b u t e d t o t h e c l a i m ( s ) i f it is done, " [ F l o r t h e p u r p o s e o f d e v e l o p i n g 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 o f o r e t h e r e f r o m . . . 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 . . . If t h e work is n o t a p a r t of a g e n e r a l p l a n having i n view t h e development o f t h e group o r c o n s o l i d a t e d c l a i m , s o t h a t t h e o r e may be 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 end, t h e n no m a t t e r what t h e amount of it is, it cannot be s a i d t o have been done i n t h e development of t h e g r o u p . " Copper M o u n t a i n Mining a n d Smelting v. B u t t e and Corbin C o n s o l i d a t e d Copper and S i l v e r Mining Co. ( 1 9 0 9 ) , 39 Mont. 487 a t 492-3, 104 P.540 a t 541-2. The burden of proving such a b e n e f i t t o t h e o t h e r c l a i m s is on t h e one s e e k i n g a t t r i b u t i o n . Copper Mountain, s u p r a . The t r i a l c o u r t found t h a t S i l v e r J e t had m e t t h i s burden, and a g a i n w e a g r e e . A s noted above, a l l t h e 1980 a s s e s s m e n t work was d o n e o f f o f t h e R i v e r s i d e c l a i m . However t h e evidence showed t h a t t h e c l e a r i n g is t h e c l o s e s t f l a t a r e a t o t h e u n p a t e n t e d c l a i m s , and it would b e n e c e s s a r y t o base any mining 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 a r e a . There is a l s o evidence t h a t t h e d i k e of m i n e r a l e v i d e n t on t h e R i v e r s i d e c l a i m s p a n s t h e v a l l e y o n t o t h e p a t e n t e d c l a i m s , where it i s tapped by t u n n e l 8 3 . The R i v e r s i d e c l a i m could be mined through t u n n e l # 3 . Remos K i l l i a n , p a s t p r e s i d e n t of S i l v e r J e t , t e s t i f i e d t h a t t h i s was t h e company's p l a n ; t o base t h e i r o p e r a t i o n on t h e p a t e n t e d c l a i m s and branch o u t o n t o t h e unpatented c l a i m s . Although t h e r e was testimony t h a t t h i s would be q u i t e e x p e n s i v e , t h e r e h a s never been a requirement t h a t t h e easiest o r most e f f i c i e n t method of mining a c l a i m be employed. C o u r t s cannot s u b s t i t u t e t h e i r judgment f o r t h e m i n e r ' s . Mann, s u p r a . The evidence showed how t h e work would a i d t h e i r p l a n and b e n e f i t t h e R i v e r s i d e unpatented claim. 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 t h a t it could 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 claim. 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 of t h e Mary, B e t t y e and Tucker unpatented c l a i m s t o Schwark. S i l v e r J e t contends 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 of law t o r e q u i r e f o r f e i t u r e . I t is t h e i r p o s i t i o n t h a t t h e c o u r t a p p l i e d t h e " m a r k e t a b i l i t y " t e s t t o S i l v e r J e t ' s p r e d e c e s s o r ' s l o c a t i o n w h i c h would b e a n i n c o r r e c t a p p l i c a t i o n of t h e law a s between r i v a l c l a i m a n t s . See Boscarino v. Gibson (Mont. 1 9 8 3 ) , 672 P.2d 1119, 40 St.Rep. 1931. 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 found t h a t : " P l a i n t i f f was unable t o prove 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 any of t h e u n p a t e n t e d c l a i m s e x c e p t R i v e r s i d e . F a i l u r e t o e s t a b l i s h a p r i m a f a c i e showing o f v a l u a b l e m i n e r a l d e p o s i t s r e n d e r s t h e P l a i n t i f f ' s i n t e r e s t i n t h e B e t t y e , Tucker and Mary unpatented c l a i m s i n v a l i d . " Based on t h e above f i n d i n g t h e c o u r t r u l e d t h a t : " P l a i n t i f f ' s i n t e r e s t s i n t h e B e t t y e , Tucker and Mary unpatented 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 and f e d e r a l mining law i n t e n d e d t o d e v e l o p 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." C o n t r a r y t o S i l v e r Jet's a s s e r t i o n s , t h e t r i a l c o u r t based its 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 - any m i n e r a l s , not a f a i l u r e t o l o c a t e a marketable amount. T h i s conclusion is borne out by an examination of the testimony a t t r i a l . O f the witnesses who were acquainted w i t h the workings i n the area a t the time these claims were located, none t e s t i f i e d to any minerals being found on these three claims or any mining work being done on them. The evidence showed t h a t the Riverside claim was the only unpatented claim ever worked. Thus the t r i a l court properly found t h a t there had been no valid location on the Mary, Bettye and Tucker, and Schwark was free t o locate on t h a t property. A£ firmed. W e concur: