Butte Superior Copper Co v. Realty Co

• Decision Date: 03 March 1919
• Docket Number: No. 598,CLARK-MONTANA,598
• Citation: 63 L.Ed. 447,39 S.Ct. 231,249 U.S. 12
• Parties: BUTTE & SUPERIOR COPPER CO., Limited, v. REALTY CO. et al
• Court: U.S. Supreme Court

249 U.S. 12

39 S.Ct. 231

63 L.Ed. 447

BUTTE & SUPERIOR COPPER CO., Limited,

v CLARK-MONTANA REALTY CO. et al.

No. 598.

Argued Jan. 10 and 13, 1919.

Decided March 3, 1919.

[Syllabus from pages 12-14 intentionally omitted]

Messrs. William Wallace, Jr., of Helena, Mont.,

[Argument of Counsel from pages 14-17 intentionally omitted] W. H. Dickson, of Salt Lake City, Utah, J. Bruce Kremer, of Butte, Mont., and William Scallon, of Helena, Mont., for appellant.

[Argument of Counsel from pages 17-20 intentionally omitted] Mr. John P. Gray, of Coeur d'Alene, Idaho, for appellees.

Mr. Justice McKENNA delivered the opinion of the Court.

A contest between mining claims as to the right to the ores that may be not only inside the surface lines of the claims but outside their vertical side lines—dip or extralateral rights. It was commenced in the United States District Court for the District of Montana by a bill filed therein by the appellees Clark-Montana Realty Company and Elm Orlu Mining Company against appellant Butte & Superior Copper Company, Limited, under a statute of Montana authorizing an action to be brought by any person against another who claims an estate or interest in real property adverse to him, for the purpose of determining such adverse claim.

The appellees (plaintiffs in the suit) obtained a decree in the District Court quieting their title and decreeing an accounting. Clark-Montana Realty Co. v. Butte & Superior Copper Co., 233 Fed. 547. The decree was affirmed by the Circuit Court of Appeals, 248 Fed. 609, 160 C. C. A. 509. To review the latter action this appeal is prosecuted.

We are confronted with a motion to dismiss on the ground that the decree of the Circuit Court of Appeals was final, the jurisdiction of the District Court having been, in legal effect, rested, it is asserted, upon diversity of citizenship. To judge of the motion requires a consideration of appellees' statement of their grounds of suit. An outline of them is only necessary.

At the outset we may say there is a diversity of citizenship, the parties being respectively corporations of Washington and Arizona, and it was so averred.

The predecessors of appellees (so run the allegations) on April 18, 1875, discovered a vein or lode of mineral-bearing rock in the ground described as the Elm Orlu. Discovery was followed by location of the claim and other acts of its appropriation prescribed by the mining laws, proof of which was duly made; and such steps were taken that on December 30, 1882, application for patent was made and patent issued for the claim January 31, 1884. The locators and their successors in interest held, worked, possessed and actually occupied the claim continuously from the date of discovery for more than five years thereafter and during all that time were in the open, notorious, exclusive and uninterrupted possession of it.

The Clark-Montana Realty Company became the owner of the claim and entitled to its possession and of all veins, lodes or ledges having their tops or apices therein throughout their entire depth between the end lines of said claim extended northerly in their own direction. That company leased the claim to appellee, Elm Orlu Mining Company, which is occupying it by virtue of the lease.

The appellant is the owner of the Black Rock, Jersey Blue, Admiral Deway and Silver Lode Mining Claims which adjoin the Elm Orlu claim on its north side. Their locations progressed to patent.

In the Elm Orlu claim there is a vein or lode known as the Rainbow lode, which crosses the west end line of the Elm Orlu claim and proceeds in an easterly direction through it. It was upon this lode that the discovery of the claim was made. Its downward course through the side line of the claim drawn vertically is northerly and it extends downward and passes below the surface of appellant's claims.

Appellant claims an estate or interest adverse to appellees' in the Rainbow lode, the exact nature of which claim is unknown to appellees, but it is false and groundless.

The value of the Elm Orlu claim is given, and it is averred that appellant has by means of secret underground works in its possession willfully penetrated the Rainbow lode and has extracted and is extracting large amounts of ore therefrom, the exact amount being unknown, but exceeding in value the sum of $50,000.

It is prayed that appellant declare its title and, when declared, that it be adjudged without merit; that appellees' title be established and appellant enjoined from further assertion of rights adverse to appellees, and for an accounting.

There is an averment, however, that requires notice. It is as follows:

'That the jurisdiction of the United States District Court for the District of Montana over this suit is invoked and depends upon two grounds, to wit:

'(1) Upon the ground that the construction and application of sections 2322, 2324, 2325, and 2332 of the Revised Statutes of the United States (Comp. St. §§ 4618, 4620, 4622, 4631) are involved, and the amount in controversy exceeds in value the sum of three thousand ($3,000) dollars, exclusive of interest and costs, all of which will appear from the facts hereinafter set forth.

'(2) * * *'

The averment is explicit and, we may assume, had a purpose; but appellees do not wish to be taken at their word. The confidence they thought and expressed when invoking the powers of the court in the first instance—and providing, we may assume, for review in case of an adverse decision—they now recant and urge that it should not be used to question or disturb their success or become an avenue of relief to their antagonist. This is not unusual and counsel has cited prior examples and the action of the court therein.

The principle of decision which the court then announced is familiar. It is that the ground of jurisdiction in the District Court and ultimately in this court on appeal from the Circuit Court of Appeals is the statement of the suing party of his cause of suit. And there must be substance in it, not mere verbal assertion or the anticipation of defenses. Taylor v. Anderson, 234 U. S. 74, 34 Sup. Ct. 724, 58 L. Ed. 1218; Hull v. Burr, 234 U. S. 712, 720, 34 Sup. Ct. 892, 58 L. Ed. 1557.

Has appellees' statement these defects? As we have seen, there is a confident assertion that the construction and application of the designated sections of the Revised Statutes are involved, and, turning to them, we find that they are the foundation of the rights to mining claims and express the conditions of their acquisition and extent, and, it would seem, are often the basis of controversies as to them and the solution of the controversies. And realizing this, we may suppose, appellees were at pains to set out the conditions and steps they observed, and lest there might be omission, and in remedy of it if there should be, they availed themselves by appropriate allegations of section 2332, R. S.; that is, they alleged that they were in the actual, open, exclusive and uninterrupted possession of the Elm Orlu, working the same for more than five years (the period of limitation under section 2332) continuously from the date of discovery. And counsel admitted upon a question from the bench at the oral argument, that the allegation had jurisdictional purpose and that resort was had to the federal court that appellees might avail themselves of the provisions of section 2332 and of Clipper Mining Co. v. Eli Mining Co., 194 U. S. 220, 226, 24 Sup. Ct. 632, 48 L. Ed. 944, the Supreme Court of Montana having decided¹ that a notice of location which failed to comply, as appellees' did, with a statute of Montana was defective. The allegation, therefore, was part of appellees' case fortified the other allegations as grounds of suit and recovery and made the suit one involving the construction and application of that section. The motion to dismiss is, therefore, denied.

On the merits the case is not of novelty. It is the usual one of priority of rights in a mineral-bearing vein. The averments of appellees we have given. They are met by appellant by denials, counter averments of location and rights, not only by grounds of defense but of affirmative relief; prayers for recompense for trespasses upon its rights and that its title be quieted against the assertion of appellees.

In summary description of the controversies in the case we may say they center in the Rainbow lode, so-called—in regard to which the parties are in absolute antagonism both in averment and contention—and incidentally in other lodes.

Upon the issues thus joined the District Court made certain findings which were affirmed by the Circuit Court of Appeals. We take them up in their order as we shall thereby be able to separate the questions of law from the questions of fact.

1. The court found that the Elm Orlu was located before the Black Rock. Of this finding there can be no doubt if the procedure of the law was observed in the location of the Elm Orlu. The steps in that procedure and their order are well established. The first of them is the discovery of mineral-bearing rock within the claim, and it must precede location. The subsequent steps—marking the boundaries, posting notice, recording—are the declaration of title; the patent is the final evidence of it. Such steps being observed, the right is acquired under the Revised Statutes to the vein on its course and dip to the extent that its top or apex is within the surface boundaries of the claim or within vertical planes drawn downward through them. Lawson v. United States Mining Co., 207 U. S. 1, 28 Sup. Ct. 15, 52 L. Ed. 65; Stewart Mining Co. v. Ontario Mining Co., 237 U. S. 350, 35 Sup. Ct. 610, 59 L. Ed. 989.

It is, however, provided by section 2322, R. S., that there must be not only compliance with the laws of the United States, but with 'state, territorial and local regulations' and appellant asserts that the location of appellees' predecessors did not comply with the territorial s...