Morgan v. Sorenson , 3 Utah 2d 428 ( 1955 )

CROCKETT, Justice.

This is an action to quiet title to realty, known as the Black Jack mining claims in the Erickson Mining District in Jaub County, Utah. Plaintiffs herein are the children and successors in interest of James T. Morgan and Frank A. Cromar, who located the claims in question about 1930. The plaintiffs contend that they have a valid and subsisting interest in the claims and that defendants’ attempt to relocate the same properties beclouds their title. Defendants, on the other hand, assert that they validly relocated the claims in 19S1 after plaintiffs had abandoned them by failing to perform the requisite annual assessment work on the claims for the year 1949-50.

After maintaining the claims for 20 years, James T. Morgan, then over 80 years of age, executed a quitclaim deed of his interest in the claims to his two sons, plaintiffs in this case, on April 19, 1949, and had the deed acknowledged. Shortly thereafter, according to the testimony of his son Walter F. Morgan, the elder Mr. Morgan personally handed the deed to him and received one dollar in consideration therefor, saying that “he just wanted us to have all his personal holdings because he was getting old.” Several weeks later, notwithstanding the delivery of the deed', the elder Mr. Morgan filed in his own name as “co-owner” with the Cromars a “Notice of Intention to Hold Mining Claims” pursuant to the federal statute1 which provides:

“That the provision * * * which requires on each mining claim * * * not less than $100 worth of labor to be performed * * * is hereby, suspended * * * until * * * the 1st day of July, 1949: Provided, That every claimant of any such mining claim in order to obtain the benefits of this Act shall file * * * a notice of his desire to hold said mining claim under this Act: Provided further, That any labor performed * * * during the year ending July 1, 1949, may be credited against the labor or improvements required to be performed or made for the year ending * * * on the 1st day of July 1950.”

The assessment work on the Black Jack claims had been performed for the year ending July 1, 1949. And by complying with the statute Mr. Morgan could have such labor credited against the year ending July 1, 1950 — the year in question.

Defendants urged at trial and upon appeal that because James Morgan had’conveyed his interest in the claims to his sons he was no longer a “claimant” within the meaning of the above statute; that his filing was a nullity; that therefore no labor was credited against 1949-50; and that after July 1, 1950, the claims were forfeit and open to relocation; wherefore, they aver that their location.in June, 1951, is good.

In awarding judgment to plaintiffs, the 'trial court took the position that the deed from James Morgan to his sons was not effective as a conveyance because it was intended as a deed of gift to take effect only upon his death. The court held further, however, “that the Notice of Intention to Hold Mining Claims * * * was sufficient * * * under the Act of Congress aforementioned and operated to avoid a forfeiture of the Black Jack claims under the circumstances of this case, even though it should be held that title to James Morgan’s interest in said claims passed from him to Harold T. Morgan and/or Walter F. Morgan prior to the date of said Notice of Intention.” We first consider the question whether the trial court was corre'ct in the latter conclusion.

Underlying our mining law is a basic policy of encouraging the discovery and development of valuable mineral resources by rewarding and protecting individuals who locate mineral deposits and show good faith and., diligence in . developing their claims.² The law requires as a minimal showing of good faith and diligence, and perhaps to give notice to other interested persons, that at least $100 development work per claim be performed each year.³ But at times when because of panic, war, depression or other hardship⁴ such labor was thought too great a burden, Congress has seen fit to suspend the requirement for short periods to preserve the rights of individuals' actively developing the claims who might otherwise lose them. Coupled with the suspension, however, Congress has each time required- as a showing of 'good faith and diligence in lieu of assessment work the filing of a notice of intention to hold the claims.

Consonant with the law’s general policy of giving succor to the developers of mining claims and of avoiding forfeitures, courts have uniformly been willing to credit the claimholder with work done on his claims.for his use and benefit, despite very tenuous relationships between him and the one who does the labor. Work done by-anyone in, privity with the owner or by anyone having any semblance of legitimate interest in the claim is deemed sufficient;⁵ or even work done by a stranger to the title is counted if it is done with the intention that its benefit inure to the claimholder.⁶ In Anderson v. Caughey ⁷ the locator had attempted to make a gift of a one-fourth interest to his brother which was invalid because oral, but work done by the latter, apparently on his own account, saved the claim. In another case ⁸ one merely “permitted” to work a gold placer claim and keep whatever- he produced was sufficiently “in privity” that his labor counted as assessment work. The case of Emerson v. McWhirter⁹ states this indubitably sound principle, universally applied by courts in controversiés over mining claims where forfeiture for failure to do assessment work is in question:

“Where a valid location of a mining claim has been made, and work done thereon in good faith, possession maintained, and no evidence appears from which an intention to abandon may be inferred, the courts should construe the law liberally, to prevent forfeiture.”

It seems inescapable that the pur-' pose of requiring assessment work and of requiring the filing of a “notice of inten-. tion to hold” is the same — to require evi-' dence -of diligence and good faith in developing the claims and to give notice thereof to-others. There seems to be no good reason why the same principles which permit one other than the claimowner to perform assessment work for the latter’s benefit should not apply with equal cogency ' to the filing by one other than the claim-holder of a “notice of intention to hold” for the latter’s benefit. It cannot reasonably be supposed that the difference between the wording in the one statute that the “labor shall be performed” and in the other more explicitly that the “claimant * * * shall file * * * a notice” was intended to make the substantial difference contended for by the defendants here, and adopted in the dissenting opinion. It is apparent from the debates on the first bill suspending .assessment work that Congress understood that the person who should file notice was to be the same person who was obligated to perform the assessment work¹⁰ In both instances the person would ordinarily be the legal owner. We should show the same liberality in construing the suspension statute as has been used in construing the assessment work requirement, for the same purpose of avoiding forfeitures, which are regarded as odious to the law.¹¹ j 1 3 1 3 3 ) t ! ; t s

We-find very few cases concerned with the suspension statutes. Though none touch the exact question here confronting us,- they are generally in accord with the principle just mentioned. In Nesbitt v. De Lamar’s Nevada Gold Min. Co.¹² the Nes-bitt Brothers, believing mistakenly that they had acquired % interest in a mine by purchase at a judgment sale which was in fact void, filed on behalf of themselves and t , , . , r r i 1 their co-tenant Borth a notice in lieu of performing assessment work-. In denying defendant’s contention that their filing was invalid the Nevada court said, after noting that if labor had been performed by Nesbitt Brothers it would have satisfied the statute:

“Evidently, it was the intention of congress * * * that the recording of the prescribed notice should have the sarnie legal effect as performing the labor * * *. The Fraction Mine being represented by one of the locators, A. Borth, and the said Nesbitt Brothers having had said notices recorded * * * at the instance of said Borth, as well as of themselves * * we are of opinion that said mine had not been forfeited nor subject to relocation * * *. The contention of counsel that, in the sense of the Statutes of 1893 and 1894, 'the claimant or claimants’ authorized to secure the benefits of said acts must have a valid claim to the mining ground claimed, is not, in our opinion, tenable.” (Italics ours.)

In that case there was the request by Borth, one of the true owners, that the Nesbitts file the notice. That factor is not shown to be present in this controversy, but the decision illustrates a leniency in construing the suspension statutes consistent with that which we believe should be indulged here.¹³

The Alaska Federal Court’s decision in U. S. Smelting Refining & Mining Co. v. Lowe¹⁴ considered the meaning of the term claimant in a related statute.¹⁵ The court “in keeping with the attitude of the courts toward forfeitures” painstakingly sought out two alternative interpretations for the word claimant which would avoid a forfeiture, neither of which was what defendants in the case before us urge is its plain meaning — that is, the holder of legal title to the claim.

It would be overtechnical and inconsistent with the purpose underlying our mining law for us in this case to place such a restrictive meaning on the term claimant that the filing of notice by the elder Mr. Morgan would fail to preserve the claims for his sons. To hold that the father was not himself a “claimant” or at least that he might not satisfy the statute by filing on behalf of the claimants would ignore Mr. Morgan’s close relation to the claims and the claimowners and the very natural interest he had in protecting these claims he had held for -20 years and until just three months before the filing, and over which he thereafter continued to exercise complete and exclusive control. There is also testimony that he paid for and personally supervised labor on the claims in July, September and November, 1949. His whole conduct was an effort to perserve the claims and negatives any intent to abandon them. If the quitclaim deed in fact conveyed the claims to his sons, filing the notice was merely in implementation of his purpose of perfecting the gift. Beyond any doubt if he had done assessment work it would have protected the claims and would have inured to the benefit of his sons, and his filing the notice should have the same effect.

Furthermore, whatever else may be said or concluded about the conveyance, it cannot be questioned that James Morgan was interested in the claims at least as a possible heir of his sons. Where he had such interest, his filing, coupled with the obvious intent to -preserve the claims from forfeiture, would seem sufficient to permit him to file a notice within the requirements of the statute. If the fact situation were reversed, the reasoning would be even more obvious. Thus, if the sons. of an elderly-father had filed a notice which would preserve claims for him, it would plainly appear that 'they were doing it also to protect their own interest as expectant heirs. This would undoubtedly be deemed sufficient interest for them to qualify as "claimants” finder the statute. .That the situation here is the reverse merely changes the likelihood of realizing the expectancy, nothing else.

It seems grossly inequitable, even 'if the technical legal interest had been in the sons rather than in the father, that the mining claims here in question should be declared forfeit and open to encroachment by strangers to both'father and son- — strangers who admittedly relocated the claims not in ignorance of conflicting interests but with intent to displace the former owners who had actively developed the claims for many years and had given notice that they did not' intend to abandon them. Uncertainty as to the status of title beween father and son should afford no .comfort'to-strangers such as defendants.¹⁶

Protection of the rights of one who lawfully locates a valuable mineral deposit requires us, in reason and justice and consistent with the law’s purpose, to affirm the determination made by the trial court that the filing of notice to hold the mining claims met the requirements of the suspension statute.

Affirmance of the trial court on the ground above discussed renders it unnecessary to treat the other question: whether the evidence could reasonably be regarded as clear and convincing¹⁷ that the deed from James Morgan did not act as a conveyance of his interest in the mining claims to his sons.

Judgment affirmed. Costs to respondents. •

. McDonough, c. j., and. henriod and WADE, JJ., concur. '

2 . Chambers v. Harrington, 1884, 111 U.S. 350, 353, 4 S.Ct. 428, 28 L.Ed. 452; In re Suncrest Packers, Inc., D.C.D.Nev, 1934, 8 E.Supp. 917.

3 . 30 U.S.C.A. § 28.

4 . The requirement of assessment work was first suspended during the panic of 1893-94. It has since been raised during World Wars I and II and during the depression of the 1930’s. With reference to the suspension statute in question here (see note 1 supra) the Senate Report on the bill explains as follows:

“Because of postwar conditions and scarcity of labor, the Eightieth Congress continued the assessment work suspension through the year terminating July 1, 1948. * * * a majority of the members of the committee were of the opinion that conditions in the mining industry as a whole, including the exceptionally severe weather that prevailed' throughout the West during the past winter, warranted suspension of the required work for 1 year, or until July 1» [1949].”

5 . E. g., Rickard v. Thompson, 9 Cir., 1934, 72 F.2d 807; Godfrey v. Faust, 1904, 18 S.D. 567, 101 N.W. 718. Work done by a stockholder inures to the benefit of a corporate claimholder though done voluntarily, Musser v. Fitting, 1915, 26 Cal.App. 746, 148 P. 536, and even where the stockholder testifies that the work was done on his own account, Wailes v. Davies, 9 Cir., 1908, 164 F. 397 (that testimony was here self-serving, however).

6 . Thornton v. Phelan, 1924, 65 Cal.App. 480, 224 P. 259; compare Little Gunnell Co. v. Kimber, 1878, 15 Fed.Cas. p. 629, No. 8,402. While in the Thornton case the person performing the woi-k may have been a stockholder in the corporate claimholder, that relationship is not determined as a fact or made the basis for the holding,

7 . 1906, 3 Cal.App. 22, 84 P. 223.

8 . Schlegel v. Hough, 1947, 182 Or. 441, 186 P.2d 516, 188 P.2d 158.

9 . 1901, 133 Cal. 510, 65 P. 1036, 1038.

10 . Various expressions recorded ' in tlie Congressional Record show ' this. At 2513, Oct. 14, 1893: “* * * the person who seelcs any benefit from the suspension Shall first file a notice. * * *” At 3034, Oct. 31, 1893: “The only people interested in this enactment are the people who. are claimants for unphtfented" mining claims.” At 3068, Nov. 1, 1893: the operation of the law which requires claimants to perform upon- their’-claims $100 worth of labor * * * shall be suspended. * * *” At 3069, Nov. 1, 1893: “ * * * a law which provides that the oioners of claims of this character, must perform a certain amount of work. * '* *»

11 . See, e. g., note 8 supra.

12 . 1898, 24 Nev. 273, 52 P. 609, 610, 53 P. 178, affirmed 177 U.S. 523, 20 S.Ct. 715, 44 L.Ed. 872.

13 . See also Donoghue v. Tonopah Oriental Mining Co., 1921, 45 Nev. 110, 198 P. 553, 15 A.L.R. 937, but see Pine Grove Nevada Gold Mining Co. v. Freeman, 1946, 63 Nev. 357, 171 P.2d 366.

14 . D.C.D.Alaska 1947, 74 F.Supp. 917, 926.

15 . The statute provided that in an action to quiet title to mining claims failure to file au affidavit of annual labor would throw the burden of proving such labor on the “claimant.” The court held that claimant meant either the person who had the burden of proving affirmatively in the ease that the labor was done or the person who had applied for patent. Either interpretation would preserve the rights of the prior locator in that ease.

16 . See Nesbitt v. De Lamar’s Nevada Gold Min. Co., note 12 supra.

17 . Where ..a- deed, executed . and. acknowledged, is found in the hands of the grantee, its invalidity can be established only by clear and convincing evidence, Chamberlain v. Larsen;. 1934, 83 Utah . 420, 29 P.2d 355.