Bowen v. Chemi-Cote Perlite Corp.

• Decision Date: 20 October 1967
• Docket Number: No. 8497,CHEMI-COTE,8497
• Citation: 432 P.2d 435,102 Ariz. 423
• Parties: Arthur C. W. BOWEN, Appellant, v.PERLITE CORPORATION, a corporation, Appellee.
• Court: Arizona Supreme Court

Page 435

432 P.2d 435

102 Ariz. 423

Arthur C. W. BOWEN, Appellant, v. CHEMI-COTE PERLITE CORPORATION, a corporation, Appellee.

No. 8497.

Supreme Court of Arizona, In Banc.

Oct. 20, 1967.

Rehearing Denied Nov. 21, 1967.

Engdahl, Jerman, Butler & Estep, Phoenix, for appellant.

Kramer, Roche, Burch, Streich & Cracchiolo and Spector & Johnson, Phoenix, for appellee.

UDALL, Justice:

This case was commenced in the Superior Court for the County of Pinal by the appellee, Chemi-Cote Perlite Corporation, against the appellant, Arthur C. W. Bowen. An amended declaratory judgment was entered in Chemi-Cote's favor and Bowen appealed to this Court. The case was transferred to the Court of Appeals, Division Two, for decision and that court, in its opinion, affirmed the judgment of the superior court. Thereafter, an amicus curiae brief and reply was filed by the United States and by Chemi-Cote respectively. The case is here on a petition for review pursuant to Rule 47(b), Rules of the Supreme Court, 17 A.R.S. Chemi-Cote is the successor in interest to two lode claims of twenty acres each located on the public domain in 1944. The required discovery and location work to perfect the claims was performed and all annual assessment work or any alternative notices to hold mining claims without assessment work were filed for each year to the present time. Chemi-Cote and its predecessors in interest have been in continuous possession of said lode mining claims since their location and perlite ore has been mined therefrom since 1945.

Bowen is the successor to locators of two placer claims of one hundred sixty acres each, one of which was located in 1950 and the other in 1954. They include within their boundaries Chemi-Cote's lode claims and are based on the same perlite ore. All of the required discovery and location work was done to give the claims validity and the assessment work was done thereafter.

Prior to the commencement of this action, Bowen filed with the United States Bureau of Land Management of the Department of Interior an application for patent and conformed to the federal mining laws as to notice by posting, publication, etc. Chemi-Cote did not file an adverse claim within the sixty-day period prescribed by federal law, but after expiration of the period it did file a protest with the land department against issuance of a patent to Bowen. Departmental proceedings culminated in a decision dismissing the protest based on Chemi-Cote's failure to file an adverse claim. Chemi-Cote Perlite Corp. v. Arthur C. W. Bowen, 72 I.D. 403 (1965). Chemi-Cote thereafter filed its complaint in this action to quiet title to the two lode claims situated within the boundaries of Bowen's placer claims. Bowen answered and counterclaimed to quiet title to his placer claims and for damages for wrongful removal of perlite from his claims. The trial court asserted jurisdiction of the case and received testimony on the question of whether the mineral in question should be located as a lode or as a placer under applicable federal law. Finding that Chemi-Cote's lode claims were validly located with the knowledge of Bowen, that Chemi-Cote and its predecessors had been in continuous possession and performed necessary annual assessment work on its lode mining claims, that the cause of action was possessory and the court had jurisdiction over the parties and the subject matter, and that the right of possession of Chemi-Cote to its mining claims was superior to that of Bowen, the court entered judgment for Chemi-Cote and against Bowen.

The first question raised on appeal was whether the trial court had jurisdiction of the subject matter of the suit. The Court of Appeals, in concluding that the issue of temporary possession was triable by the state court, determined that the validity of Chemi-Cote's lode claims was not at issue before the Land Department because section 37, 30 U.S.C.A. operated to exclude the lode claims from Bowen's patent application. It reasoned that since a perfected mining claim is property in the highest sense, it is not subject to disposal by the United States, and that once a property right is acquired, it would be violative of basic due process concepts to conduct a hearing on its validity without reasonable notice and an opportunity to be heard.

Individual rights in public mineral lands can be acquired and held, and an absolute title obtained through the land office, only upon the terms and conditions prescribed by the mining laws of Congress. Lily Mining Co. v. Kellogg, 27 Utah 111, 74 P. 518 (1903); see also, Old Dominion, etc., Smelting Co. v. Haverly, 11 Ariz. 241, 90 P. 333 (1907). The procedure for obtaining title to mineral land by way of a patent application is set forth in section 29, 30 U.S.C.A. and section 30, 30 U.S.C.A. They read in part:

30 U.S.C.A. § 29:

'* * * The register of the land office, upon the filing of * * * (an application for patent to a mining claim) * * * shall publish a notice that such application has been made, for the period of sixty days, in a newspaper to be by him designated as published nearest to such claim; * * * If no adverse claim shall have been filed with the register of the proper land office at the expiration of sixty days of publication, it shall be assumed that the applicant is entitled to a patent, * * * and that no adverse claim exists; and thereafter no objection from third parties to the issuance of a patent shall be heard, except it be shown that the applicant has failed to comply with the terms of this chapter. * * *'

30 U.S.C.A. § 30:

'Where an adverse claim is filed during the period of publication, * * * all proceedings, except the publication of notice and making and filing of the affidavit thereof, shall be stayed until the controversy shall have been settled or decided by a court of competent jurisdiction, or the adverse claim waived. It shall be the duty of the adverse claimant, within thirty days after filing his claim, to commence proceedings in a court of competent jurisdiction, to determine the question of the right of possession, and prosecute the same with reasonable diligence to final judgment; and a failure so to do shall be a waiver of his adverse claim. * * *'

Congress has not given the Interior Department jurisdiction to resolve disputes as to the right of possession. When a patent to mineral lands is applied for, however, the jurisdiction of the Department becomes exclusive, and can be stayed only by the filing of an adverse claim as provided by section 30. This Court in Warnekros v. Cowan, 13 Ariz. 42, 108 P. 239 (1910), said:

'Upon the filing of an application for patent to public mineral land, the jurisdiction of the Land Office becomes exclusive as to all questions affecting the title to the lands therein applied for, and so remains until the final determination of the application. The exercise of its jurisdiction may be stayed only by the filing of an adverse claim as provided by section 2326 of the Revised Statutes (30 U.S.C.A. § 30) of the United States * * *. Without the filing of such adverse claim, neither the state nor federal courts will exercise jurisdiction in actions affecting the title to lands included within the application.' 13 Ariz. at 45, 108 P. at 239.

In an adverse proceeding, the court may make one of the three determinations: That the plaintiff is entitled to possession of the claim; that the defendant-applicant is entitled to possession of the claim; that neither are entitled to possession. The judgment of the court is conclusive as between the rights of the competing mining claimants, but such decision does not preclude the Department of Interior from refusing to issue a patent. Clipper Mining Co. v. Eli Mining & Land Co., 194 U.S. 220, 24 S.Ct. 632, 48 L.Ed. 944 (1904).

It is so well established as to be axiomatic that a failure to file an adverse claim within the prescribed period operates as a waiver of all rights which were the proper subject of such a claim. See Turner v. Sawyer, 150 U.S. 578, 14 S.Ct. 192, 37 L.Ed. 1189 (1893); Healy v. Rupp, 37 Colo. 25, 86 P. 1015 (1906); South End Min. Co. v. Tinney, 22 Nev. 19, 35 P. 89 (1894). The following language of the Utah Supreme Court in Lily Mining Co. v. Kellogg, supra, is typical of the case law to this effect:

'It follows that in such statutory actions an allegation by the plaintiff that an adverse claim, in due time and form, showing its nature, boundaries, and extent, was filed in the land office, is traversable and necessary to confer jurisdiction upon the court to decide the controversy * * *, and that 'an action brought in support of such adverse claim must be based upon the right asserted in such claim, for the reason that it must be conclusively assumed that no adverse claim exists, except such as has been filed' (Marshal Silver Min. Co. v. Kirtley, 12 Colo. 410--415, 21 P. 492). * * * Under section 2325, Rev.St.U.S. (U.S.Comp.St.1901, p. 1429), when no adverse claim within the time therein prescribed is filed, it must be assumed that the applicant is entitled to a patent, and that no adverse claim exists. In Lavagnino v. Uhlig, 26 Utah 1, 71 P. 1046, this court held that the expression in the mining law, 'It shall be assumed,' must be construed to mean 'conclusively assumed." 74 P. at 519.

In discussing what is the proper subject of an adverse claim contemplated by sections 29 and 30, the United States Supreme Court in Iron Silver Min. Co. v. Campbell, 135 U.S. 286, 10 S.Ct. 765, 34 L.Ed. 155 (1890) said:

'It is true that there are no very distinctive words declaring what kind of adverse claim is required to be set up as a defense against the party making publication; but throughout the whole of these sections, and the original statute from which they are transferred to the Revised Statutes, the words 'claim' and 'claimant' are used. These words are, in all legislation of congress on the subject, used in regard to a claim not yet perfected by...