No. 8 3 - 1 9 6 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 19 1984

.." Clerk Mr. J u s t i c e J o h n Conway H a r r i s o n d e l i v e r e d t h e Opinion of the 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 M i n e s , Inc. to

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 in the Burns Mining District in Sanders County, Montana

which a r e a l s o c l a i m e d by F r a n k l i n Schwark. T i t l e to three

o f t h e c l a i m s was f o u n d t o b e i n Schwark and t h e f o u r t h i n

S i l v e r Jet. Schwark appeals as to the claim quieted to 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 r e m a i n i n g three. Silver Jet is the successor in interest to certain

m i n i n g p r o p e r t i e s o n c e h e l d by t h e Montana S t a n d a r d M i n i n g 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 s o u t h w e s t o f Thompson F a l l s , Montana i n t h e a r e a o f Prospect Creek. In the 1 9 3 0 ' s Montana Standard obtained p a t e n t s t o t e n claims l y i n g south of P r o s p e c t Creek. The creek r u n s t h r o u g h 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 several tunnels which extended south, away from the creek into the hillside. The

unpatented claims here in dispute were not located by Montana S t a n d a r d u n t i l t h e 1 9 5 0 ' s and l i e o n 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 o f P r o s p e c t C r e e k . Three of the four claims in dispute, "Bettye,"

" T u c k e r " and "Mary" w e r e o r i g i n a l l y l o c a t e d a s m i l l s i t e s i n 1954, b u t amended n o t i c e s o f l o c a t i o n were filed in 1957 changing them to lode claims. Also in 1957 the fourth claim, "Riverside" was located. Discovery and corner location on R i v e r s i d e a l l occurred 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 a n d o n R i v e r s i d e u n t i l 1 9 6 0

a t w h i c h t i m e a l l m i n i n g o p e r a t i o n s b y Montana S t a n d a r d 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 of 1982, a t which both parties presented evidence on the

v a l i d i t y of t h e claims, reserving t h e q u e s t i o n of damages.

Findings of fact, conclusions of law and the order were

entered on February 8, 1983. Schwark was found to have

title to the conflicting parts of the Bettye, Tucker and

Mary claims, 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 f o u n d

t o h a v e 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 , T u c k e r and Mary claims.

W 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 o n d i r e c t a p p e a l by e

Schwark, concerning the Riverside claim. Schwark a l l e g e s

two defects in Silver Jet's work on the c l a i m which, he

argues, result in a forfeiture. First he attacks the

s u f f i c i e n c y o f 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

interest, and second he attacks the sufficiency of the

a n n u a l a s s e s s m e n t work d o n e by S i l v e r J e t .

A condition precedent t o a v a l i d mining location is

the, "[Alctual discovery of a vein, lode o r ledge of rock i n

place bearing a valuable mineral deposit." Anaconda Co. v .

Whittaker (Mont. 1 9 8 0 ) , 610 P.2d 1177 a t 1179, 37 S t . R e p .

9 0 2 a t 9 0 4 , c i t i n g Upton v. L a r k i n ( 1 8 8 5 ) , 5 Mont. 6 0 0 , 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 , i t i s incumbent on t h e o r i g i n a l l o c a t o r t o

prove that he has discovered sufficient minerals as w i l l

meet the " p r u d e n t man" test. B o s c a r i n o v. Gibson (Mont.

1 9 8 3 ) , 6 7 2 P.2d 1 1 1 9 , 40 S t . R e p . 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 h a v e b e e n f o u n d and t h e e v i d e n c e 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 the further expenditure of 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 of s u c c e s s , i n developing 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 have been m e t . " Chrisman v. M i l l e r ( 1 9 0 5 ) , 1 9 7 U . S . 3 1 3 , 322-23, 25 S.Ct. 468, 470-71, 49 L.Ed 7 7 0 , 773-74. There is no requirement tha,t ore be found in

sufficient quantity to support a profitable mining o p e r a t i o n , n o r i s it r e q u i r e d t h a t a n y s p e c i f i c q u a n t i t y o f

o r e be found. I n t h e e n d , t h e s u f f i c i e n c y o f d i s c o v e r y is a q u e s t i o n o f f a c t t o be d e c i d e d below. Boscarino, supra.

The t r i a l c o u r t h e r e f o u n d t h e r e had b e e n a s u f f i c i e n t discovery of minerals on the claim and we agree. The

c e r t i f i c a t e of location 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 evidence of the existence of a valid discovery. Section 82-2-102(2), Thomas v. South Butte M i n i n g Co. (9th Cir. 1 9 1 4 ) , 2 1 1 F. 105; motion denied, 34 S.Ct. 999, 234 U.S. 754, 58 L.Ed. 1578. Prima facie evidence will stand unless contradicted and overcome by

other evidence. S e c t i o n 26-1-102(6), MCA. I n t h i s case,

t h e p r i m a 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 o v e r c o m e b y any other evidence presented. Though the 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

deceased, the wife of one of the locators testified that t h e r e was a v e i n s h o w i n g i n a s h a f t o n 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 b e e n e x t r a c t e d . As the discussion i n

Boscarino shows, the burden of proving discovery is not high. The q u e s t i o n o f how much o r e i s 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 b e o v e r t u r n e d i f s u p p o r t e d by s u b s t a n t i a l evidence. Boscarino, supra. Such e v i d e n c e e x i s t e d h e r e . Schwark next attacks the sufficiency of the annual a s s e s s m e n t work p e r f o r m e d o n b e h a l f of S i l v e r Jet. Since 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 or not t h e work d o n e meets this requirement is a

q u e s t i o n o f 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 to the wisdom and expediency of the method

employed for developing t h e mine i n place of t h a t of the

owner. Mann v . Budlong (Cal. 1 9 0 0 ) , 6 2 P. 120. The t r i a l

court's finding that assessment work is sufficient to

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

will n o t b e 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

preponderance of the evidence. New M e r c u r Mining Co. v.

S o u t h Mercur Mining Co. (Utah 1942), 1 2 8 P.2d 269, cert. den. 63 S.Ct. 1 1 6 2 , 3 1 9 U.S. 7 5 3 , 8 7 L.Ed. 1707.

The trial court found that t h e work claimed in the

1380 affidavit of annual assessment was valid assessment

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 be used as the needed base of operations for mining the unpatented

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

directly facilitate the development of the mine and the

extraction of ore. It h a s been held that r o a d work and

r e p a i r work d o n e o n r o a d s t o m i n i n g c l a i m s b o t h c o n s t i t u t e

valid a s s e s s m e n t work, and t h e work claimed here is m o r e

closely related t o development of t h e mine than either of

those. Pinkerton v. Moore (N.M. 1959), 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 w o r k 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,

as noted before, what happened prior t o 1980 is

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 year. The t r i a l judge 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 a s s e s s m e n t work. Schwark n e x t c o n t e n d s t h a t t h i s work was p e r f o r m e d on the patented claims and may not be attributed to the unpatented claim. A s s e s s m e n t work n o t d o n e on a p a r t i c u l a r

claim or group of c l a i m s may only be attributed to the c l a i m ( s ) i f it is done, "[Flor the purpose of developing 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 of o r e therefrom . . . 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 . .. I f t h e work i s n o t a p a r t o f a g e n e r a l p l a n having i n view t h e development o f the group or consolidated claim, s o t h a t t h e o r e may b e 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 e n d , t h e n no m a t t e r what t h e amount of i t i s , i t c a n n o t b e s a i d t o have been done i n t h e development of t h e group." Copper Mountain Mining and S m e l t i n g v. B u t t e and C o r b i n C o n s o l i d a t e d Copper and S i l v e r M i n i n g Co. ( 1 9 0 9 ) , 39 Mont. 487 a t 492-3, 1 0 4 P.540 a t 541-2.

The burden of proving such a benefit to the other c l a i m s i s on t h e o n e s e e k i n g a t t r i b u t i o n . Copper M o u n t a i n , supra. The t r i a l c o u r t f o u n d t h a t S i l v e r J e t h a d 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

assessment work was done off of the Riverside claim. However t h e e v i d e n c e showed t h a t t h e c l e a r i n g i s t h e c l o s e s t

flat area to the unpatented claims, and it would be n e c e s s a r y t o b a s e a n y m i n i n g 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 area. There is also evidence that the dike of mineral evident on t h e R i v e r s i d e claim spans t h e valley onto the

patented claims, where it is tapped by tunnel 83. The R i v e r s i d e c l a i m c o u l d b e mined through tunnel #3. Remos Killian, p a s t p r e s i d e n t of S i l v e r J e t , testified that this was the company's plan; to base their operation on the p a t e n t e d c l a i m s and b r a n c h o u t o n t o t h e u n p a t e n t e d c l a i m s . Although there was testimony that this would be quite

expensive, there has never been a requirement that the easiest or most efficient method of mining a claim be employed. C o u r t s c a n n o t s u b s t i t u t e t h e i r judgment for the miner's. Mann, supra. The e v i d e n c e showed how t h e work

would aid their plan and b e n e f i t the Riverside 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 that it c o u l d 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 c l a i m . 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 o f t h e Mary, B e t t y e and T u c k e r u n p a t e n t e d c l a i m s t o Schwark. Silver Jet c o n t e n d s 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 o f l a w t o require forfeiture. It is t h e i r p o s i t i o n that the court

applied the "marketability" test to Silver Jet's

predecessor's location which would be an incorrect

application of the law as between rival claimants. See B o s c a r i n o v . G i b s o n (Mont. 1 9 8 3 ) , 6 7 2 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 f o u n d t h a t : " P l a i n t i f f was u n a b l e t o p r o v e 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 a n y o f t h e unpatented claims except Riverside. Failure t o e s t a b l i s h a prima f a c i e showing of v a l u a b l e m i n e r a l d e p o s i t s renders the P l a i n t i f f ' s i n t e r e s t i n the B e t t y e , T u c k e r and Mary u n p a t e n t e d c l a i m s invalid. "

Based on t h e a b o v e f i n d i n g t h e c o u r t r u l e d t h a t :

"Plaintiff's interests i n the Bettye, T u c k e r and Mary u n p a t e n t e d 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 a n d f e d e r a l mining law intended t o develop 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." Contrary t o S i l v e r Jet's a s s e r t i o n s , the t r i a l court based i t s 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 - m i n e r a l s , any not a failure to locate a marketable amount. This

conclusion is borne o u t by an examination of t h e testimony at trial. Of t h e w i t n e s s e s who were acquainted w i t h t h e

workings i n the a r e a a t t h e time t h e s e claims were l o c a t e d , none t e s t i f i e d t o any m i n e r a l s being found on t h e s e t h r e e claims or any mining work being done on them. The evidence showed that the Riverside claim was the only unpatented

claim ever worked. T h u s t h e t r i a l c o u r t p r o p e r l y found t h a t

t h e r e had been no v a l i d l o c a t i o n on t h e Mary, Bettye and

Tucker, and Schwark was f r e e t o l o c a t e on t h a t p r o p e r t y . A £ firmed.

W concur: e