Donaldson v. Henning , 4 Alaska 642 ( 1913 )

FUELER, District Judge.

The first contention of the defendants is that the lien claimants are at most entitled to a lien only upon the small dump of unwashed gravel, and upon that only to the extent of the amount of their labor for the time actually taken to hoist this dump, and that, at most, this cannot be more than two or three days for any of the claimants., It is further contended that as the evidence does not show, on the part of any claimant, the actual time he was employed while this dump was being hoisted and placed on the surface, there is no evidence to show the amount in which any claimant is entitled to a lien, and that the evidence therefore is altogether insufficient to sustain the actions. It is also contended that, as far as the dump of tailings is concerned, no reference is made to it in any of the recorded claims of lien, and that, by reason of such omission, no lien was ever acquired thereon; also that inasmuch as no notice of the commencement of the actions in the commissioner’s court was posted upon the pile of tailings, even if the statement in the notices could be construed to include such tailings, the court is without power to adjudge that a lien exists upon them.

While the evidence undoubtedly shows that the small dump of unwashed ground was the result of only a few days’ labor, and that the greater part of it accumulated during a few days while the machinery was broken down and sluicing could not be carried on, it also appears that some gravel was placed upon this dump at various times during all the period that Henning was operating, and it seems that it -should be considered as the result of all the work done under his lease, and of the labor performed by all the claimants, rather than as the result of the labor during the hours that gravel was actually being dumped thereon. The labor performed in sinking the shaft, running tunnels, and developing the mine prior to the time the dump was actually being piled up contributed more or less towards producing this dump, and the object of the act seems to be to give to each one performing labor upon the mine, while the mine is being developed and operated, a lien upon the dump produced. In this case it would be impossible to segregate the labor directly expended in excavating, hoisting, and piling the ground in this dump from the labor performed in and about the mine during all the time mining operations were carried on by the claimants. So to restrict the terms of the act will either defeat its purpose altogether, or limit its benefits to the few who could prove that the dump was the direct product of their labor, whereas the labor of these same men at other times, or of their coemployes, was as necessary, and tended as directly to the production of such dump, • as the labor actually performed in piling the gravel thereon. It follows, therefore, that each of the claimants was entitled to a lien upon this dump for the balance due him for the labor performed in and about the mine. The evidence shows that the amounts for which they were entitled to a lien were as found by the commissioner’s court, except in the case of Fred Irving, in which the amount should be $167.50, instead of $67.50, with a corresponding increase in the allowance for attorney’s fees, and in the case of the individual claim of John Dunn. The statement in Dunn’s notice of lien is as follows:

“That H. M. Henning & Co. employed claimant to perform such work and labor upon the following terms and conditions: That the claimant was to receive the sum of $8 per day for part of said services, and the sum of 810-50 per day for the remainder of said services. That said contract has been faithfully performed and fully complied with on the part of the claimant, who performed labor thereunder- aforesaid for the period of 37 days. That said labor was performed between the 13th day of December, 1910, and the 19th day of January, 1911, and the rendition of said services was closed on the 19th day of January, 1911, and 90 days have not elapsed since that time. That the amount of claimant’s demand for said services is 8363.50. That no part thereof has been paid except the sum of 810, and there is now due and remaining unpaid thereon, after deducting all just credits and offsets, the sum of 8353.50, in which amount he claims a lien upon said property.”

The evidence was that Dunn was employed and worked for a certain number of days at $8 a day; that he then made an agreement with Henning by which he was to receive $10.50 a day for his services and the use of a boiler. The evidence did not show exactly the number of days that he worked at either rate. It also appeared that he sold a cable to Henning, 'the exact price of which did not appear, and that the amount of $363.50, stated as the amount of his demand, was made up of these three different items. Evidently no attempt is made to segregate these items in the notice of lien, and the evidence itself does not show with any certainty the amount due for the different items. The statute gives a lien for labor alone, and clearly no lien could be had for the amounts due for the use of the boiler or for the cable. It may be that the intention of the parties was to allow $2.50 a day for the use of the boiler, and $8 a day for the services of the claimant; but this is not the agreement testified to by the claimant, and it is not competent for the court to make a new contract, separating the items, in order that the claimant may have an agreement entitling him to a lien.

“The rule seems to be that where lienable and nonlienable items are included in one contract for a specific sum, or are made the basis of a lump charge, so that it cannot be perceived, from the contract or account, what proportion is chargeable to each, the benefit of the Mechanic’s Lien Law is lost. In such case the court cannot, by extrinsic evidence, apportion the amount of the entire charge or contract price between the lienable and nonlienable items; but where the claimant’s demand, made in good faith, consists of several different items separately charged, some of which are by law a lien upon thé property, and others do not come within the scope of the statute, he may enforce his lien so far as given by law, and it is not vitiated because he has included therein nonlienable items.” Allen v. Elwert, 29 Or. 428, 44 Pac. 823, 48 Pac. 54; Williams v. Toledo Coal Co., 25 Or. 426, 36 Pac. 159, 42 Am. St. Rep. 799; Harrisburg Lumber Co. v. Washburn, 29 Or. 150, 44 Pac. 390; Kezartee v. Marks, 15 Or. 529, 16 Pac. 407; 27 Cyc. 204, 777.

Neither the notice of lien nor the evidence given upon the trial was sufficient to sustain a lien upon the property, and the claim of the claimant Dunn must therefore be disallowed.

The next contention of the owners of the mining claim is that although the claimants may have valid liens upon the dump, so far as the interest of Henning therein is concerned, these liens cannot bind the interest of the owners, inasmuch as their right to one-fourth of the gold in the dump was fixed by the terms of the lease made between them and Henning on the 2d day of June, 1910, and prior to the date of the act giving a lien for labor upon dumps of gold-bearing gravel produced from placer mining claims. This act was approved and went into effect June 25, 1910. Prior to that time the only right a laborer had to a lien for work done upon a placer claim was a right to a lien upon the-claim or mine itself for labor performed in the improvement or development of the mine. Pioneer Mining Co. v. Delamotte, 185 Fed. 752, 108 C. C. A. 90; Andrews v. Ladd, 188 Fed. 313, 110 C. C. A. 291.

Where the labor was performed for others than the owner, and not for the owner directly, the owner could prevent the attachment of the lien upon his property by posting proper notice thereon within three days after the beginning of the performance of the labor. If such notice were posted where a mine was worked under a lease, as in the. present cases, only the interest of the lessee therein would be subject to the lien, and the interest of the owners would be exempt. The act of June 25, 1910, under which the present liens are claimed, contains no such provision, but the entire dump extracted from a mining claim, and all interests therein, are subjected, without reservation, to a lien for the labor performed in producing the dump. The act provides:

“The said lien shall be prior to and preferred over any deed, mortgage, bill of sale, attachment, conveyance, or other claim, whether the same was made or given prior to such labor or not; Provided, that this preference shall not apply to any such deed, mortgage, bill of sale, attachment, conveyance, or other claim given in good faith and for value prior to the approval of this act.”

To prefer the liens claimed herein to the claim of the owners evidently would not give a preference over any deed, mortgage, bill of sale, attachment, or conveyance, but it would give a preference over a claim of the owners to an interest in the dump. Such claim is fixed and given by the lease executed June 2, 1910, 23 days prior to the date of the approval of the act. That the lease was entered into in good faith is not disputed. Also, evidently, there was a valuable consideration for this claim of the owners. By the terms of the lease Henning agreed to mine the ground, and to pay and deliver to the owners one-fourth part of the gold extracted from the ground, and thereby one-fourth part of the product of the mine was reserved to the owners, and they were thereby “given a claim” against the dump thereafter produced, and a right to part of the gold therein. The consideration for this claim given, or interest reserved, was the grant by the owners to the lessee of the right and privilege to mine the ground and to retain three fourths of the output, and the agreement by the lessee to mine the ground and to deliver to the owners the other fourth part of the output. This is a right on the part of the owners, fixed by the agreement made before the act went into effect, which a proviso in the act excludes from its operation, and to which the preference given to claims for labor does not apply. Even if this proviso were not contained in the act, Congress would be without authority to enact a law making void a legal contract and appropriating the property of one person to pay the debt of another. The contract between the owners and the lessee was made with reference to the law as it stood at the time the lease was executed, and such law was as much a part of the contract as the express written terms thereof. As stated, under the law as it then stood, the owners could maintain their property clear from liens for labor contracted for by the lessee, by giving proper notice. Under the act of June 25, 1910, such right on the part of the owners does not exist. In a lease executed since that date, an owner must contract with reference to the liability imposed by the law, and is presumed to have knowledge of it and to govern himself accordingly in such contracts as he may choose to make. To apply these provisions to a contract made before that date would be to extend the liability to an owner that he did not agree to assume, and from which he had no opportunity to shield himself when making the contract. The Constitution of the United States, and the rights guaranteed thereby, have been extended to the territory of Alaska and its citizens, and though the prohibition against passing any law impairing the obligation of a contract extends only to the Legislatures of the several states, and is not by its terms binding upon the Congress, such provision embodies one of the fundamental principles of natural justice, and no act of Congress should be construed so as to impair the obligation of a contract, if open to any other reasonable construction. The provision of the Constitution guaranteeing that property shall not be taken without due process of law is binding upon the Congress,-and it is without authority to pass any law which would have such effect. To extend the provisions of the act of June 25, 1910, to give the preference to claims for labor performed under a contract made since the enactment, over rights secured and fixed by a contract made prior to that date, would be taking the property of one person by legislative enactment and appropriating it to the payment of the debts of others. This is not due process of law. It is unnecessary, however, to look to the provisions of the Constitution, or to consider how far Congress is limited thereby in legislating for the territory, because the act itself, in the proviso above quoted, clearly provides that the preference given to claims for labor does not apply to any claim or right in good faith and for value, given or fixed prior to the approval of the act. It follows, therefore, that the liens herein sought to be foreclosed are subsequent to the claim of the owners of the mining ground for one-fourth part of the gold contained in the dumps upon the ground.

It is alleged in the different answers of the owners of the mining claim, and in the answer and the complaint in intervention of McMullen, that all the rights of the lessee Henning had become forfeited by reason of his failure to comply with the agreements on his part to be performed, as set out in the lease. The decided weight of evidence seems to point to this conclusion, and to show that Henning’s present claim to the right to wash up the tailings was an afterthought, and that he was led to this conclusion only after he found that some profit might result to McMullen from his (McMullen’s) operations upon the abandoned tailing pile. It results from these considerations that Henning has no further right in the premises, and that McMullen’s agreement with the owners should be upheld, and he be given the right to wash up and sluice the pile of tailings now on the ground, subject to whatever rights the claimants of labor liens have therein.

It is necessary, therefore, to consider whether or not any liens have been secured upon the pile of tailings, as distinguished from the liens upon the dump of unwashed gravel, or what was referred to in the trial as the “small dump.” As before stated, the various notices of lien referred only to a “certain dump.” To determine just what was meant by that term, resort must be had to the evidence of the actual conditions upon the ground, and what dump or dumps were there situated. It appears that the dump of unwashed earth and gravel was about 60 or 75 feet in diameter at the base, and some 12 or 15 feet in height, situated between the shaft and the gin pole used in hoisting from the shaft into a hopper; that the pile of tailings extended over a considerably larger space of ground, and on one side ran up to, and perhaps in places a short distance up, the sides of the smaller dump. It might be that the term “dump” would include both the smaller dump and pile of tailings, but it should also be considered that the terms “dump” and “tailing pile” are usually used by miners with different meanings, and that the term “dump” usually refers to the pile or mass of gold-bearing earth or gravel hoisted from a mine, prior to the time that it has been washed and the gold and gold dust extracted therefrom, and that the term “tailings” or “tailing pile” usually refers to the pile or mass of earth or gravel that has been washed or sluiced, and from which the gold and gold dust has been extracted. If the washing has been done under favorable conditions, in a minerlike manner, the tailings or tailing pile is without value. But conceding that, under the conditions shown to exist upon this mining claim, the tailing pile still contained a certain amount of gold, and was of considerable value, and might be included within the general term of “dump,” it was necessary, in any action to foreclose laborers’ liens, under the act above referred to, to post a notice of the suit upon the dump upon which the lien was claimed. The act provides as follows:

“The officer serving the summons shall also immediately post a copy of said lien notice in a conspicuous place on the dump or mass of mineral-bearing sands, gravels, earth or rock, and gold and gold dust and other minerals therein, upon which the lien is filed, and from the moment of posting the lien notices, the dump or mass of mineral bearing sands, gravels, earth and rock, and gold and gold dust and other minerals therein, shall be in the custody and under the control of the officer.”

It appears from the evidence that the notices posted by the marshal in the various actions begun in the commissioner’s court were posted upon the smaller dump, and in such a position as to indicate to the ordinary observer that a lien was claimed upon this smaller dump, and not upon the pile of tailings. The notices posted by the marshal in the action begun in the district court by McGrath and others were posted upon the pile of tailings, and in such a position as clearly to indicate that a lien was claimed thereby upon the pile of tailings. While the act expressly provides that no mistake, informality, or mere matter of form, or lack of statement either in the lien or notice or pleadings, shall be ground for dismissal or unnecessary delay in the action to foreclose the lien, but the lien notice and pleadings may be amended at any time before judgment, and while undoubtedly the notices and pleadings should be liberally construed to carry out the purposes of the act, and to secure the preference to laborers of a lien upon all dumps produced by their labor, still a reasonable compliance with the terms of the act is necessary, and the notices must be such as to inform any one interested of the extent of the lien claim and of the property upon which it is claimed. Amendments cannot he allowed which will cut out intervening rights, or defeat the rights of those who have incurred expense, or who have pursued a course of action, relying, reasonably and in good faith, upon such information as was imparted by the notices. The penalties prescribed by the act, upon any one interfering with the rights of a lien claimant, are severe; and it is only just that lien claimants be held to a reasonably strict compliance with the terms of the act in giving notice of their claims. If the different acts and proceedings of the different lien claimants in the actions in the commissioner’s court were sufficient to perfect liens upon the pile of tailings, then under the provisions of the law, when McMullen sluiced up and took away a part of the gold contained in this tailing pile, he became liable to all of the lienholders for the full amount of their judgments and costs, and also became guilty of a crime, and could be punished as for the crime of grand larceny. The right of amendment should not be extended so far as to accomplish such results. The acts of these claimants in posting notices of their liens upon the premises, taken in connection with the limited claim of lien in the original notices recorded, are not sufficient to give them a lien upon the pile of tailings. In the action begun by McGrath and others in the district court, however, the notices of lien were posted upon the pile of tailings, and in such a manner as undoubtedly did give notice to any one concerned of the claims of lien upon the pile of tailings as well as upon the adjoining smaller dump; and though it might possibly be inferred from the original notices recorded, and the subsequent acts of the parties, that the original intention was to claim a lien only upon the smaller dump, and that the intention to claim a lien upon the pile of tailings was formed only after it was known that McMullen had begun to sluice them, and their value thereby became probable, still there is no positive act of these claimants showing an intent not to claim a lien upon the tailing pile, and a reasonably liberal construction of their recorded notices, taken in connection with the notices posted, gives a lien to these claimants upon the pile of tailings.

Upon the argument at the conclusion of this case, the question was not .considered whether or not the rights of the claimants in the different actions might not be different, but a consideration of all these cases seems to render necessary a determination of this matter. From the statement hereinabove made, it appears that several different actions were begun, at different times, by different persons claiming a lien upon the same property. The notices of lien seem all to have been recorded within the' time required by law, and the various actions appear to have been begun thereafter within the time limited. In these respects the liens appear to be of equal rank. The defendants in the different actions, however, are not all the same. In some, Henning is named as the sole defendant; in others, part or all of the owners are joined as defendants with him. However, in all the actions the owners have appeared either as interveners or defendants, and there is no difficulty in determining their rights in the premises. The act under which the liens are claimed does not specify who shall be named as parties defendant, either in the notice of lien or in the action to foreclose the lien. It does provide, however, that all persons who claim any interest in the property, in opposition to the lien claimant, may come in and answer and set up and defend their claims. Under the general mechanics’ or laborers’ lien law, there is an express provision that, in any action to enforce any lien under that law, all persons personally liable, and all lienholders whose claims have been filed for record, shall, and all other persons interested in the matter in controversy, or in the property sought to be charged with a lien, may be made parties; but such as are not made parties shall not be bound by such proceedings. This, however, seems to be only a statement of the law as generally applicable to all actions. In any action, parties interested in the subject-matter, who are to be bound by the judgment, must be either actually or constructively before the court. While the act of June 25, 1910, does not specifically point out who shall be named as defendants, it does provide that every one interested shall have the right to appear in any action to foreclose a lien thereunder, and provides for a posting of notice upon the property,. seemingly with the intention that such notice shall operate as process upon all parties concerned.

The action to foreclose the lien partakes somewhat of a proceeding in rem, and seems to contemplate that the notice posted on the ground shall be sufficient notice to all parties interested. If such is the purposé of the act, and if such posted notice can be held a sufficient notice to all parties in interest, then they are under obligation to appear in the foreclosure action and assert their rights therein, or such rights will be barred by the failure so to assert them. These actions Seem to have been brought upon a different theory, without compliance with either the general law concerning parties to an action, or the general mechanics’ lien law, or the rule implied in the act of June 25, 1910. Each claimant, or at least each aggregation of claimants joining in each separate action, has proceeded without reference to the rights of the other lien claimants, and without any effort to bring such other claimants into the different actions. In the first three actions instituted in the justice’s court, that court seems to have taken notice, of its own motion, of the fact that the actions concerned the same property, and to have consolidated them as provided by the act; and there could be no question that such action was proper, and that, so far as these different claimants were concerned, a proper judgment was rendered. Subsequently another action was begun, asserting liens of equal rank with those formerly adjudicated, and, without any reference to the prior adjudication, the court proceeded to render a judgment similar to that rendered in the former consolidated case, and again directed that the marshal wash up the same dump and return the proceeds into court. Subsequently the action of McGrath and others was begun in the district court to foreclose liens upon the same property involved in the prior actions in the justice’s court, but none of these claimants is made a party, and judgment is sought against the same property without any reference to the prior adjudications thereon in the prior actions in the justice’s court. That such separate proceedings would ordinarily result in trouble and confusion is evident. Since the cases from the justice’s court have been appealed to the district court and consolidated with the action begun herein, conflicts of authority and confusion undoubtedly will be avoided in this particular case, but it does not seem that the order of consolidation has the effect of placing the lien claimants in the three different actions upon the same footing. This could only result from the proceedings had herein, if the suggestion for consolidation is to be construed as a stipulation on the part of the different claimants that their claims and rights are of equal rank, and are to be so considered in this consolidated action. The record itself does not show that such an effect can be given to the proceedings. If, as above suggested, the notice in the first .action in the justice’s court, posted upon the premises, was a sufficient notice to all parties concerned, and operated as process directed to them, then all the lien claimants should have appeared in that action, and have therein asserted their claims of lien; and, by their failure so to do, they are barred from asserting any rights as against the parties to that action, or at least their rights must be held as subsequent and inferior to the rights of the plaintiffs in .that action. As these matters were not considered upon the trial, and as, in view of the limited amounts realized from washing the dump upon which a lien was first claimed, these matters are of vital importance in determining the rights of the plaintiffs in the different actions, the case has been set down for further argument thereon.

Under the statute, in any decree for foreclosing a lien thereunder, provision must be made either that the dump upon which the lien is foreclosed be sold or be washed up by the marshal or by some of the parties, and the proceeds returned into court for distribution to the parties entitled thereto; and, as no evidence was offered concerning the procedure that would be best for all parties concerned, this matter also has been set down for further argument.