Gold, Silver & Tungsten, Inc. v. Wallace

THE defendants in error, plaintiffs in the court below, were the owners and lessee of the Gray Copper lode mining claim. The plaintiff in error, defendant below, was the owner of the Fitchburg lode mining claim. The parties will be designated herein as they appeared in the trial court. Plaintiffs alleged that certain ores mined by the defendant, although lying within the lateral boundaries of the latter's Fitchburg claim extended downward, in fact, were extracted from plaintiffs' Gray Copper vein, the apex of which was within the territory covered by their claim. Plaintiffs prayed for injunctive relief, a judgment quieting title to the Gray Copper claim in them, and damages for the ore removed and injury to their workings. The answer of defendant alleged that any ore taken from beneath the surface and within the boundaries of its Fitchburg claim was from a vein which had its apex within the area of that claim. By way of cross complaint defendant asserted that through underground mining workings extending from the Gray Copper claim, the plaintiffs had entered Fitchburg territory and mined and removed ore from a vein apexing in the defendant's claim and belonging to it. An accounting of all ores allegedly so removed by plaintiffs, judgment therefor, and injunctive relief were sought by defendant.

The seniority of defendant's Fitchburg claim over plaintiffs' Gray Copper claim is admitted. The southwesterly portion of plaintiffs' Gray Copper claim overlaps in part the northwesterly portion of the Fitchburg claim. The Gray Copper patent excludes the overlapping area and as a consequence the easterly sideline of the Fitchburg claim is a common sideline between the areas of the Fitchburg and Gray Copper claims with which we are here concerned. The Gray Copper vein at its apex crosses the northerly end line of the Gray Copper claim and extends in a general southwesterly direction on that claim between the sidelines thereof along a course which is substantially parallel thereto to a point near the intersection of the easterly sidelines of the two claims, where the vein departs from the Gray Copper claim. The apex of the Fitchburg vein, as involved in this controversy, lies very near the easterly sideline of that claim, and runs approximately parallel to the apex of the Gray Copper vein, about 60 feet westerly therefrom, with the common sideline between the two apices.

The plaintiffs' Gray Copper claim was first developed by a series of shafts sunk from its surface area. Later the Gray Copper vein below the bottom of these shafts was opened and developed approximately 300 feet beneath the surface by means of a horizontal drift known as the Nancy tunnel, about which stopes or raises were made on the vein and connected with the shafts which previously had been sunk from the surface. The defendant's group of claims, of which the Fitchburg was one, had been developed through the Wood Mountain tunnel, the portal of which is located west of the area in conflict and which intersected the Fitchburg ground at a depth of about 500 feet below the surface, and was the defendant's only workings on the Fitchburg at the time this controversy arose. In these prior operations the Gray Copper vein produced a considerable amount of marketable ore; the Fitchburg none. In the fall of 1931 plaintiff Scruggs leased the Gray Copper claim, and in the course of his operations drove a drift from the Nancy tunnel on the Gray Copper vein across the Fitchburg sideline into the defendant's Fitchburg claim to an intersection with the vein therein, here in controversy, where an ore body was encountered and from which a considerable amount of ore was shipped. Upon learning of this work within the vertical boundaries of its Fitchburg claim, defendant made certain investigations and surveys and in 1933 notified plaintiff Scruggs that he was trespassing on the Fitchburg vein. Scruggs, however, claimed that the vein upon which he was working was the Gray Copper vein which on its dip had crossed the sideline of the Fitchburg property. In August, 1934, largely to determine the identity of the vein in the area in conflict, the defendant started to sink the Fitchburg shaft on the Fitchburg vein at the surface and continued this shaft to a depth of about 200 feet, where it encountered a flat of intrusive material which apparently cut off the downward course of the vein. A crosscut was then extended from this shaft to the disputed vein and ore body, and a lateral drift was driven on the vein 70 feet southwest and 33 feet to the northeast to define its course and strike. In January, 1935, Scruggs, who had continued to operate, shipped two carloads of ore from the disputed area to the Golden Cycle mill, upon which, by application of defendant, settlement was withheld. Later by stipulation of the parties the proceeds from this ore were deposited with the clerk of the district court of Boulder county to abide the judgment. Defendant likewise continued with the work through drifts and crosscuts from the Fitchburg shaft, in the progress of which some ore was removed by it, and in October, 1935, this suit was instituted by plaintiffs.

At the first trial plaintiffs contended that the disputed vein, which they designated the West Branch of the Gray Copper vein, was a split from their discovery vein which in its downward course had dipped across the Fitchburg sideline into the disputed area, from whence it continued downward and reunited with the main Gray Copper vein at a point or points in the vicinity of the Nancy tunnel level. The junction below of the disputed vein and the Gray Copper discovery vein is not in serious controversy. The plaintiffs also alleged that the main Gray Copper discovery vein on its dip crossed the Fitchburg sideline into the disputed territory. Upon this premise they asserted extralateral rights and so justified following the vein into Fitchburg territory. U.S.C.A., Title 30, § 26, U.S. R. S., § 2322; Rico-Argentine M. Co. v. Rico Con. M. Co., 74 Colo. 444,223 Pac. 31. The defendant, on the contrary, contended that the main Fitchburg vein and the disputed vein were correlated by a series of footwall branch veins forking from the Fitchburg discovery vein which continued downward and united with the disputed vein; that the area between the Fitchburg vein and the disputed vein, through which these branch veins were alleged to pass, was really a mineralized zone legally constituting a broad lode connecting the two; that the disputed ore body and vein was made by the junction of these footwall branches and mineralized zone therewith, and that the Fitchburg vein was the controlling apex for its branches. Defendant further asserted that even if the vein in dispute was a split from the Gray Copper discovery vein, nevertheless, by virtue of the seniority of the Fitchburg claim, defendant was entitled to the whole vein downward from the point of union of the highest Fitchburg branch vein therewith under the applicable federal statute. U.S. R. S. § 2336, U.S.C.A., Title 30, § 41.

After an extended trial the district court orally announced its findings to the effect that plaintiffs' West Branch vein was a split from the Gray Copper discovery vein and upon the basis of the upward declination of the vein as exposed in certain crosscuts driven from the Fitchburg shaft projected to the surface, concluded that said West Branch vein did not apex within the Fitchburg surface area and said the evidence indicated that its apex was within the surface boundaries of the Gray Copper claim at or near the outcrop of the discovery vein. The court further found that the Fitchburg vein, neither by absorption nor through its alleged footwall branches, made any connection with the West Branch vein.

During the progress of the first trial and in the period allowed for filing motion for new trial, the defendant, had proceeded with its exploration through workings driven from the footwall side of the Fitchburg shaft and in due course filed a motion for a new trial based upon evidence newly discovered in these operations. In the affidavit supporting the motion it was alleged that workings on the disputed vein, at this point said to be a mere veinlet, from or adjacent to a drift driven from the Fitchburg shaft (44 foot level) had disclosed a pegmatite flat where the vein entirely ended and ceased. Defendant asserted that this revelation fixed the highest terminal point of the vein, in effect a blind apex, as being within the lateral boundaries of the Fitchburg claim, extended downward, thus discounting the court's announced conclusion and establishing defendant's right to the vein. Among other matters it was further set out in the affidavits that the extension of another crosscut from the Fitchburg shaft on the 110 foot level showed in its breast a union of the Fitchburg vein with the disputed vein. Defendant claimed that this development demonstrated the soundness of its original contention in this respect and by virtue of the priority of the Fitchburg claim, in any event, entitled it to the vein below the point of the union. At the request of both parties the trial court inspected the premises and after hearing arguments, granted the motion for new trial on the ground of newly discovered evidence.

At the conclusion of the second trial the court found that the vein in dispute did not terminate at the flat in the 44 foot level, but continued to the surface and apexed within the Gray Copper claim. The findings further were to the effect that at the locus mentioned there was an intersection,but not a union, of a Fitchburg vein and the vein in controversy. Thereafter, considering the evidence introduced in both trials, the court formally found all of the issues generally in favor of the plaintiffs and against defendant, but, in accordance with section 2336 U.S. R. S., awarded to defendant the ore within the space of intersection of the veins mentioned. Judgment was entered accordingly and defendant's cross complaint dismissed. Defendant here seeks a review of the judgment as to the matters adjudicated.

The bill of exceptions comprises in excess of 50,000 words and, in addition, numerous exhibits, including elaborate models, which were offered in evidence by the parties in the course of the proceeding. Much of the testimony comes from expert witnesses and, as often is the case, the evidence of the corps appearing for the respective parties, not only as to opinions expressed but on factual subjects as well, is in substantial conflict. The trial court aptly remarked concerning the expert witnesses: "One sees it and one does not see it; one sees it one way and another sees it another." The exploration work by the parties made feasible a visual inspection of much of the underground structure, ordinarily a matter of conjecture and projection, in cases of this character. By reason of this circumstance the inspection of the premises by the trial judge accorded him an opportunity, we must assume, properly availed, to better understand, apply and weigh the evidence adduced, especially such as related to the physical aspects of the formation and veins in conflict, than would be possible from hearing, to say nothing of merely reading, the testimony.

[1, 2] It is well said in 2 Lindley on Mines (3d ed.) p. 1470: "The legal identity or continuity of a vein on its downward course, as well as on its longitudinal course underneath the surface of adjoining lands, presents at times the most serious questions encountered in the administration of the mining law. It is impossible to prescribe any definite rule as to what degree of continuity or identity in a legal sense the miner must establish when he invades property adjoining the location containing the apex of the vein. Each case presents its own peculiar features." Presumptively the patentee of a mining claim is the owner of all ore found under his surface and the burden of proof to the contrary is on the extralateral claimant. Liberty Bell G. M. Co. v. Smuggler-Union M.Co., 203 Fed. 795, 122 C.C.A. 113; Iron Silver M. Co. v.Campbell, 17 Colo. 267, 29 Pac. 513. To avoid the conclusive effect on review of the findings of the trial court on conflicting evidence', counsel for defendant present ingenuous argument designed to convince that on salient points there was no disagreement in the facts. Notwithstanding this, however, our examination of the record discloses to our satisfaction that with respect to the primary questions the evidence of the parties is in direct opposition. As illustrative of the basic conflict in the evidence, we first refer briefly to the testimony relative to the defendant's contention that the Fitchburg vein forked on its footwall side in its downward course; that these downward forks and branches united with the disputed vein; and that the latter thereby became correlated and part of the main Fitchburg vein, either by this union or through the alleged mineralized belt lying between the two veins. The evidence unmistakably discloses that much of the zone intervening between the Fitchburg vein and the vein in dispute is broken by fractures forming joint planes which contain carbonates. These fractures likely were caused by an adjacent intrusive dike which also may be responsible for the diverse courses of the principal veins on both the Fitchburg and Gray Copper claims. The extent, character, size and mineralization of these carbonate seams, and whether they or any of them have a definite continuity between the two veins, are matters of definite dispute between the witnesses. The defendant's theory, substantiated by the testimony of its witnesses, was that these carbonates were in reality branch veins from the main Fitchburg vein which connected with the vein in dispute, and upon the basis of assays from channel samples its witnesses said these so-called branch veins, as well as the mass of carbonates in the fractured area, were mineralized. Plaintiffs' contention, supported by their witnesses, was that the defendant's so-called branch veins were merely carbonate stringers created by descending solutions; that they were not mineralized and made no continuous connection between the two veins. The witnesses for plaintiffs based their conclusions as to the non-mineral character of the carbonate matter upon what defendant calls an "eye" examination with an ordinary magnifying glass.

[3] The conflict of evidence with respect to the mineralization of this area is not avoided by defendant's contention that its evidence on this score, having been based on fire assays as contrasted with mere visual inspection of plaintiffs' witnesses, should be deemed conclusive, since the different method of arriving at the opinions expressed merely goes to the weight of the evidence. Further, it may be noted that the mineralization or lack of mineralization of the seams claimed to be veins, while a factor which may enter into the determination of the ultimate question, is not controlling with respect to the alleged continuity of the Fitchburg vein through this fractured zone. Iron Silver M. Co. v. Cheesman, 116 U.S. 529,6 Sup. Ct. 481, 29 L. Ed. 712.

[4] During the course of the trials defendant drove a continuous raise upon what it calls the Number One Footwall Branch from the disputed vein to a connection with a crosscut disclosing the Fitchburg vein. A flat pegmatite dike was encountered in this operation. Plaintiffs' witnesses assert that the continuity of this branch vein was broken and the vein cut off by this flat before junction with the vein in dispute. Defendant's experts stated that the branch vein was continuous down to the pegmatite flat, with a width of from three to eight inches; that it then followed along the flat for a distance of five feet with a width of one and one-half inches; then went through the flat with a width of from four to seven inches, and continued down to a union with the disputed vein. The definite factual conflict on this question is made obvious when it is borne in mind that in this area the formation involved was open to actual visual inspection, and yet, notwithstanding this circumstance, the witnesses were unable to agree upon the physical characteristics of the structure. This disagreement, while relating to but a single phase of the controversy, is common with respect to all of the major points involved and is specifically mentioned as being illustrative of the general conflict in the evidence. As to whether there was a vein or no vein; continuity or no continuity; connection or no connection, are essentially questions of fact. Iron Silver M. Co. v. Mike Starr Co., 143 U.S. 394,12 Sup. Ct. 543, 36 L. Ed. 201, 17 Min. Rep. 436.

[5-7] By the findings and judgment made and entered at the end of the second trial the district court unequivocally found that there was no union of the so-called footwall branches from the Fitchburg vein with the vein in controversy, and that there was no absorption of the latter by the former through any mineralized zone or otherwise. Instead of there being a union of any part of the Fitchburg vein with the vein in dispute, the court affirmatively found that there was an intersection and concluded that the veins again diverged after the intersection. As has been mentioned, the court properly awarded the ore at the space of intersection to the Fitchburg by reason of its seniority. It has long been the rule in this jurisdiction that fact findings of the trial court based on substantially conflicting oral evidence and not unwarranted as a matter of law, are almost universally regarded as binding on the appellate court. Mosquito Gold Mines, Inc.v. London-Butte G. M. Co., 96 Colo. 536, 45 P.2d 175;Protheroe v. Bonser, 94 Colo. 95, 28 P.2d 807. If there is evidence which upholds the findings, they will not be disturbed on the ground of insufficient support, simply because there is other evidence which, if accepted, warrants findings the other way. Williams v. Miller, 93 Colo. 541,27 P.2d 502. This is true even though the reviewing court might have concluded differently had it been passing upon the facts in the first instance. Jones v. Milliken,96 Colo. 279, 42 P.2d 467.

[8] Nor can it be said with respect to the phase of the case under consideration that the findings of the court were unwarranted as a matter of law. As has been mentioned, positive testimony was given to the effect that there was no union between the so-called Fitchburg footwall branches and the vein in dispute. Likewise, there is evidence to the effect that at the point where the court determined there was an intersection, the veins stood side by side, with the identity of the matrix of the two clearly defined and clearly different as to characteristics. There also was evidence to the effect that the two veins had distinct walls. There likewise was evidence to the effect that the zone between the two veins was not mineralized and that this zone did not have the characteristics of a lode. It has been held that a zone formation impregnated with mineral does not constitute a continuous lode. Hyman v.Wheeler, 29 Fed. 347, 15 Min. Rep. 519. This is especially true where the mineral in the zone is contained in true fissures therein. Mt. Diablo M. M. Co. v. Callison, Fed. Case No. 9886, 5 Sawyer 439, 17 Fed. Cas. 918, 9 Min. Rep. 616. On the other hand it has been adjudged that a belt of porphyry containing mineralized seams is a lode. Bookv. Justice M. Co., 58 Fed. 106, 17 Min. Rep. 617. A broad zone of mineral bearing rock with streaks of mineral and barren spaces was held to be a lode in United States M.Co. v. Lawson, 134 Fed. 769, 67 C.C.A. 587. An examination of these authorities discloses that the divergent conclusions reached, resulted solely from the factual situation presented by the evidence in each, and in the case before us, upon this basis, it cannot be said that the trial court, under the evidence, was not warranted in reaching the conclusion which it expressed.

[9] Likewise analogous, is the conflict of the evidence with reference to the situs of the apex of the disputed (West Branch) vein. It will be recalled that defendant claimed this vein had a blind apex in a pegmatite flat near the 44 foot level of the Fitchburg shaft and within the vertical boundaries of that claim. After defendant's assertion that its work had established this condition, the plaintiffs made an opening from the surface down to the pegmatite flat, and their witnesses, testified that therein the vein is revealed as proceeding through the pegmatite flat to the surface where the apex and strike are shown by open cuts within the Gray Copper claim. Defendant's witnesses contended that what the plaintiffs call the vein from the pegmatite flat up was a mere fracture in the formation, a barren seam with barren rock, and expressed the opinion that the real top or apex of the vein was in defendant's ground immediately below the flat mentioned. As was the case concerning the footwall branch controversy, the testimony of the witnesses for the opposing parties was directly conflicting as to the mineral character, size and general characteristics of the questioned vein and as to whether it was in fact disclosed in the open cuts on the surface of the Gray Copper property. Defendant further argues that the seam, as its witnesses designate it, about the flat, did not have sufficient of the characteristics of the real vein to give extralateral rights to plaintiffs. To confer extralateral rights a vein need be continuous only in the sense that it can be traced by the miner through the surrounding rock. Slight interruptions of the mineral bearing rock are not alone sufficient to destroy the identity of the vein, nor would a short partial closure of the fissure have the effect to destroy the continuity of the vein if the little farther on it appeared or recurred again containing mineral bearing rock. IronSilver M. Co. v. Cheesman, supra; Cheesman v. Shreeve, 40 Fed. 787; Daggett v. Yreka M. M. Co., 149 Cal. 357,86 Pac. 968. The trial court resolved this question in favor of the plaintiffs. Its finding in this respect had the effect of establishing the apex of the disputed vein within the area of the Gray Copper claim and renders futile defendant's extended discussion of the legal principles which might be applicable if the vein in conflict had a blind apex within the vertical boundaries of the Fitchburg claim.

[10, 11] Counsel for defendant generally predicate much of their argument upon certain expressions in the oral findings of the court made at the conclusion of the respective trials, and assert that some of these remarks are inconsistent with the ultimate formal findings incorporated in the judgment and decree. While it may be that in two or three isolated instances technical incongruities may be detected, when the entire oral statement under consideration is scrutinized the effect of these so-called inconsistent observations largely vanish, and may be attributed to misadvertence in expression, so difficult to avoid in the oral discussion of technical subjects. However, in no event are we concerned with the reasoning by which the court below arrived at its ultimate conclusions which are clearly and unambiguously stated in the formal findings and decree. As we stated in Stough v. Reeves,42 Colo. 432, 95 Pac. 958, quoting from Burke v. TableMountain Water Co., 12 Cal. 408: "``The reason given for the conclusion is not res judicata as to him, so as to bind him in any future proceeding. * * * We do not understand that the reasons given for a judgment are judgments. The point decided is the thing fixed by the judgment, but the reasons are not'." While the rule last mentioned makes unnecessary the consideration of the oral remarks of the trial court to which reference has been made, we may in passing say that we cannot give to certain of the trial court's statements the effect contended for by the defendant. In commenting upon the evidence the court in effect said that the West Branch vein above the flat in the 44 foot level would not be sufficient to validate a discovery of that vein. Defendant, under the authority of Golden v. Murphy, 31 Nev. 395, 105 Pac. 99, andMammoth M. Co. v. Grand Central M. Co., 213 U.S. 72,29 Sup. Ct. 413, 53 L. Ed. 702, asserts that if the vein was not sufficient to validate a discovery, it was wholly inadequate to confer extralateral rights. Our perusal of the court's remarks indicate that its purpose in making the statement mentioned was to accentuate the inapplicability of the principle announced in those cases to the factual problems presented by the case at bar. The court had determined, and there seems to be little question upon the point, that the disputed vein united below with a branch of the Gray Copper discovery vein to which plaintiffs were entitled, unless deprived of this right by the split upward of the disputed vein. In other words, here the ultimate question on this issue was whether the plaintiffs lost their extralateral rights by virtue of the West Branch vein, rather than whether that vein conferred upon them extralateral rights. In the light of this situation the upward continuation of the vein to the surface was pertinent principally as establishing that the disputed vein was in fact no part of the Fitchburg vein and had an apex without the Fitchburg boundaries. On review, the record must be viewed in the light most favorable to the party successful in the trial court and every inference fairly deducible from the evidence is drawn in favor of the judgment. Hiner v. Cassidy, 92 Colo. 78, 18 P.2d 309;Roberts v. Deitz, 88 Colo. 594, 298 Pac. 1062. Upon this basis we are satisfied that we would not be justified in setting aside the findings and judgment of the trial court.

[12-14] Defendant further contends that plaintiffs' complaint pertained solely to the Gray Copper discovery vein and did not allege a trespass upon, or an adverse claim to, the West Branch vein, as a consequence of which they urge that in quieting title to that vein in the plaintiffs the judgment was erroneous in that it goes beyond the cause of action pleaded and the issues joined thereunder. While we believe the pleadings themselves clearly are sufficient to warrant the adjudication made and relief granted, under the situation disclosed by the record, we need not enter into a detailed discussion of the point since that question was not raised until motion for new trial was filed, and defendant made no objection to the evidence relating to the West Branch vein when presented on the ground that there was a variance between the proof and pleading in this connection or a departure from the former. It is apparent from the record that from the beginning to the conclusion of the two trials the question of the ownership of the West Branch vein was bitterly contested and without restraint, restriction or limitation, both parties offering evidence in support of their respective theories on this issue. It is obvious under these circumstances that the suggested variance, even if it existed, did not affect the substantial rights of the defendant and, hence, cannot be made grounds for reversal. Code of Civil Procedure, § 84; Otis Co. v. Teal, 74 Colo. 336,221 Pac. 884. Further, in such case the failure of defendant to object to the evidence on the ground of variance amounts to a waiver of the point, since if the pleadings were insufficient, an amendment no doubt would have been allowed under code section 84, supra. Hiner v. Cassidy,supra; Rice v. Franklin L. F. Co., 82 Colo. 163,258 Pac. 223; Perkins v. Russell, 56 Colo. 120, 137 Pac. 907; Tew v.Powar, 37 Colo. 292, 86 Pac. 342.

The judgment is affirmed.

MR. CHIEF JUSTICE HILLIARD dissents.

MR. JUSTICE FRANCIS E. BOUCK and MR. JUSTICE BOCK not participating.

The following dissenting opinion was filed June 12, 1939.