Consolidated Mut. Oil Co. v. United States

• Decision Date: 20 August 1917
• Docket Number: 2787,2788.
• Parties: CONSOLIDATED MUT. OIL CO. et al. v. UNITED STATES (two cases).
• Court: U.S. Court of Appeals — Ninth Circuit

245 F. 521

CONSOLIDATED MUT. OIL CO. et al. v. UNITED STATES (two cases).

Nos. 2787, 2788.

United States Court of Appeals, Ninth Circuit.

August 20, 1917

Rehearing Denied October 8, 1917.

Gilbert Circuit Judge, dissenting.

U. T Clotfelter, of Los Angeles, Cal., and A. L. Weil, Charles S Wheeler, and John F. Bowie, all of San Francisco, Cal., for appellants.

E. J Justice, F. P. Hobgood, Jr., Frank Hall, Jas. W. Witten, and A. E. Campbell, Sp. Asst. Attys. Gen., all of San Francisco, Cal., and Albert Schoonover, U.S. Atty., of Los Angeles, Cal., for the United States.

Before GILBERT, ROSS, and HUNT, Circuit Judges.

ROSS Circuit Judge.

The subject-matter of case No. 2787 is the northeast quarter, and of case No. 2788 the northwest quarter, of section 28, township 31 south, range 23 east M.D.M., and the oil contents of those lands. The facts in each case being substantially the same, the cases have been argued and submitted together.

The appellants, who were defendants in the court below, being in the possession of and claiming the right to the land and the oil it contained, which oil they were extracting by means of numerous wells, the government, on the 25th day of October, 1915, commenced the suits to recover both the lands and the value of the oil extracted, to quiet its title to the property, and also prayed for an injunction and the appointment of a receiver in each of the suits. A receiver having been appointed in each of them, the present appeals were taken from those orders.

Concerning the material facts, there seems to be no dispute; the differences between the parties involving only questions of law. Government lands, containing petroleum or other mineral oils, and that are chiefly valuable therefor, not withdrawn or otherwise reserved, may be entered and patented, and, indeed, only can be entered and patented, under the provisions of the laws relating to placer mining claims. 29 Stat. 526 (Comp. St. 1916, Sec. 4635). It appears from the records that the predecessors in interest of the appellants located these lands, as also the other portions of the said section, under and by virtue of the laws governing placer claims.

Section 2329 of the Revised Statutes provides as follows:

'Claims usually called 'placers,' including all forms of deposit, excepting veins of quartz, or other rock in place, shall be subject to entry and patent, under like circumstances and conditions, and upon similar proceedings, as are provided for vein or lode claims; but where the lands have been previously surveyed by the United States, the entry in its exterior limits shall conform to the legal subdivisions of the public lands.'

Section 2331 of the same statutes, so far as pertinent, is as follows:

'Where placer claims are upon surveyed lands, and conform to legal subdivisions, no further survey or plat shall be required, and all placer mining claims located after the tenth day of May, eighteen hundred and seventy-two, shall conform as near as practicable with the United States system of public land surveys, and the rectangular subdivisions of such surveys, and no such location shall include more than twenty acres for each individual claimant.'

The provisions regarding veins and lodes are contained in sections 2320, 2322, 2323, and 2324 of the Revised Statutes (Comp. St. 1916 Secs. 4615, 4618, 4619, 4620), and they include the requirement that the location must be distinctly marked on the ground so that the boundaries can be readily traced, and that a discovery of mineral be made within such boundaries. A location made by an association of persons, as said by Mr. Justice Henshaw, speaking for the Supreme Court of California in the case of Miller v. Chrisman, 140 Cal. 440, 449, 73 P. 1083, 1085 (98 Am.St.Rep. 63)-- 'by the very terms of the law, is one location covering 160 acres, and not eight locations, each covering 20 acres. The boundaries required to be marked are the boundaries of the 160 acres, and not the boundaries of each separate 20 acres. The expenditure of $500 before patent issues is an expenditure required upon the whole land, and not an expenditure upon the 20-acre subdivisions thereof, and the only assessment work required is labor to the value of $100 upon the single location, and not upon any 20-acre subdivision thereof. Logically, therefore, since in marking boundaries, doing assessment work, and expenditure for patent the 160 acres are treated as an entirety under one location, for the purpose of discovery it should be treated in the same manner; and this is the ruling, with some conflict in its earlier decisions, which the Land Office of the United States has finally returned to and settled upon. In the case of Union Oil Co., 25 L.D. 351, it is explicitly declared: 'A placer location, if made by an association of persons, may include as much as 160 acres. It is nevertheless a single location, and as such only a single discovery is by the statute required to support it.' With this declaration we are in full accord.'

Nor has Congress so far fixed any limit to the number of locations that may be made by the same person or persons-- its policy having always been to encourage the exploration of the public lands and the discovery and development of such minerals as may be found in them. And it has long been the established law respecting such claims that, where two or more contiguous ones are held by the same person or persons, work done in good faith upon any one of them, or outside of the boundaries of either of them, which directly tends to the development or benefit of all of the claims for mining purposes, should be held applicable to each and all of such claims. Anvil Hydraulic & Drainage Co. v. Code, 182 F. 205, 105 C.C.A. 45, decided by this court, where will be found cited many cases to the same effect.

But, as respects oil mining claims, Congress, by act approved February 12, 1903 (32 Stat. 825), limited the number of a group of claims on which the annual assessment work might be done on one of the group for the benefit of the whole group in these words:

'That where oil lands are located under the provisions of title thirty-two, chapter six, Revised Statutes of the United States, as placer mining claims, the annual assessment labor upon such claims may be done upon any one of a group of claims lying contiguous and owned by the same person or corporation, not exceeding five claims in all: Provided, that said labor will tend to the development or to determine the oil-bearing character of such contiguous claims.'

In this connection reference may be made to the decision of the writer in the case of Gird v. California Oil Co. (C.C.) 60 F. 531, which case is cited and relied on in support of the contention of the government in the present cases. The inapplicability of that case to the present ones will clearly appear from the statement that the Whale Oil claim was there sought to be held by reason of work claimed to have been done on others of a group of 80 claims, and from this extract from the opinion of the court in that case (60 F. 542):

'In the case at bar, none of the work done or expenditures made by the lessees of the plaintiffs, relied on to sustain the claim to the Whale Oil, were done or made on any claim contiguous to it. It is true that the evidence shows that, prior to the making of the leases in 1886 and 1887, Udall from time to time, under and pursuant to the local rules of the district, did considerable work in building roads in the district, and on the road that led in the direction of the Whale Oil claim. But the local rules, in so far as they conflict with the act of Congress, are of course, of no avail, and that, as has been repeatedly stated, requires an annual expenditure of $100 in work or improvements on each claim, provided that, where the claims are held in common, such expenditure may be made upon any one claim. But, to come within this latter provision, the claims so held in common must, as said by the Supreme Court in Chambers v. Harrington (111 U.S. 350, 4 Sup.Ct. 428, 28 L.Ed. 452), be contiguous, and the labor and improvements relied on must, as held in Smelting Co. v. Kemp, 104 U.S.at page 655 (26 L.Ed. 875), be made for the development of the claim to which it is sought to apply them; that is in the language of the Supreme Court, 'to facilitate the extraction of the minerals it may contain.' This, I think, cannot be justly affirmed of any part of the large expenditures shown to have been made by the lessees of the plaintiffs in the development of some of the claims embraced by the leases, all of which are remote from, and none contiguous to, the Whale Oil. I have not overlooked the contention of plaintiffs' counsel that by the well the lessees of the plaintiffs commenced on the Kenyon claim they hoped and expected, in years to come, to draw the oil from the Whale Oil claim, which is distant from the Kenyon considerably more than a mile, and between which and the Kenyon is a mountain range. The time when this result might be reached was fixed by the plaintiffs' witness who advanced the theory at from 10 to 100 years. When to this is added the fact that the well that was thus expected to extract the oil from the Whale Oil claim was not commenced until 1891, which was after the location of the Razzle Dazzle claim, upon which the defendant relies, nothing more need be said to show that work upon the well upon the Kenyon claim cannot be counted to maintain the validity of the Whale Oil location.'

It is also the well-established law that in the absence of any intervening bona fide rights-- and there are none in either of the present cases-- the order in which the statutory requirements concerning the making of the locations are complied with is...