Empire Mill. & Min. Co. v. Tombstone Mill. & Min. Co.

• Decision Date: 29 March 1900
• Docket Number: 450.
• Citation: 100 F. 910
• Parties: EMPIRE MILLING & MINING CO. v. TOMBSTONE MILL & MINING CO.
• Court: U.S. District Court — District of Connecticut

100 F. 910

EMPIRE MILLING & MINING CO. v. TOMBSTONE MILL & MINING CO.

No. 450.

United States Circuit Court, D. Connecticut.

March 29, 1900

Gross Hyde & Shipman and L. P. Waldo Marvin, for plaintiff.

Wm. P Williams and S. C. Dunham, for defendant.

Townsend District Judge.

Demurrers to answer in an action at law. The complaint is in four counts. The causes of action therein alleged arise out of a contract executed by the parties which is as follows:

'Articles of agreement made this 18th day of January, A.D. 1894 between the Tombstone Mill & Mining Company of Connecticut by its general manager, W. J. Cheyney, party of the first part, and the Empire Milling & Mining Company of Maine, by its president, party of the second part.

'First. That said party of the first part, having opened up its mine to within a few feet of the dividing line between the properties of the two companies, affording an opporunity to exploit and develop the Empire mine, the property of the party of the second part, at a cost much less, and in a shorter space of time, than possible to be done through its own shaft, or by any other method now known to the party of the second part, and the party of the second part being desirous that the said exploiting and developing be done to the extent possible under an expenditure of ten thousand dollars ($10,000), the said party of the first part hereby agrees to undertake the said work for and on behalf of the party of the second part, and binds itself to prospect and develop the said Empire mine, using its best knowledge, skill, and care, doing all the said work as thoroughly, perfectly, and economically as if the said work were being done on its own property, to report the result of its work as progress is made, and to complete said work by or before the first day of March, A.D. 1895; the said party of the second part to have all reasonable facilities afforded it for entering the property and inspecting the work, all for the consideration hereinafter named.

'Second. The party of the second part hereby agrees that the party of the first part shall have the right to repair and use the Empire shaft at its discretion, and it hereby agrees and binds itself to pay to the party of the first part such sums of money as may be called for from time to time, the aggregate not to exceed the sum of ten thousand dollars ($10,000).

'Third. Should any marketable ore be extracted in the course of the aforesaid developments, it is hereby agreed that the said party of the first part shall sell the same on the same basis as it sells its own ores, accounting to the party of the second part therefor; and, in consideration of the covenants and agreements hereof it is mutually agreed that the party of the first part shall be alloted and paid such equitable portion of the proceeds of sale of said ores as may hereafter be agreed upon between the said parties.

'In witness whereof we have hereunto subscribed our names and affixed our seals the day and date before mentioned.

'(Seal.)

The Tombstone Mill & Mining Company,

'By W. J. Cheyney, its General Manager.

'(Seal.)

The Empire Milling & Mining Company,

'By D. C. Cutler, President.

'H. S. Vanderbilt, A.c.,

'Empire M. & M. Co.'

The plaintiff is a Maine corporation, owning a mine in the territory of Arizona. At the date of the execution of said contract it had not filed copies of its articles of incorporation with the secretary of said territory, as provided by its laws, nor appointed an agent for the service of process. It is admitted that said contract was not made in said territory. The provisions of the Arizona statute referred to are as follows (Rev. St. 1887, tit. 12, c. 7):

'(1) Any company incorporated under the laws of any other state or territory for any enterprise, business pursuit or occupation proposed to be carried on, or the principal office or place of business is proposed to be located within this territory, shall make and file certified and duly authenticated copies of their acts of incorporation with the secretary of this territory and the county recorder of the county in which its business or principal office is located.

'(2) It shall be the duty of any association, company or corporation, organized or incorporated under the laws of any other state or territory or foreign country, for the purposes of engaging in or carrying on any enterprise, business pursuit or occupation, or acquiring, holding or disposing of any property within this territory, to file with the secretary of this territory and the county recorder of the county in which such enterprise, business pursuit or occupation is proposed to be located or is located, the lawful appointment of an agent upon whom all notices and processes, including service of summons, may be served, and when so served shall be deemed, taken and held to be a lawful personal service on such association, company or corporation for all purposes whatsoever.

'(3) No corporation such as is mentioned in section 1 of this chapter shall transact any business whatsoever in this territory until and unless it shall have first filed its articles of incorporation, and every act done by it prior to the filing thereof shall be utterly void.'

The plaintiff contends that, if the foregoing provisions could be so construed as to extend to single isolated contracts, such as that here in question, the statute would be unconstitutional, because in conflict with the commercial clause of the federal constitution. This statute merely requires compliance by foreign corporations with reasonable requirements as a condition precedent to their right to do business within the territory. It is well settled that such reasonable provisions are valid. Manufacturing Co. v. Ferguson, 113 U.S. 727, 5 Sup.Ct. 739, 28 L.Ed. 1137; Bank v. Page, 6 Or. 431; Paul v. Virginia, 8 Wall. 168, 19 L.Ed. 357; In re Comstock, 3 Sawy. 218, Fed. Cas. No. 3,078; Assurance Co. v. Rosenthal, 55 Ill. 85. But the question also arises whether this contract by which the plaintiff employed the defendant to develop its mine amounts to a carrying on of business in the territory of Arizona, as contended by defendant. The contract provides that, inasmuch as the defendant had opened up its mine in such a way as to afford an opportunity to exploit and develop the plaintiff's mine at less cost and in shorter time than it could possibly be done through plaintiff's shaft, defendant would undertake said work for the plaintiff, and 'binds itself to prospect and to report the results, and to afford to the plaintiff reasonable facilities for inspecting work, etc. The agreement in regard to the taking out of ore is only conditional and incidental, it being provided that, 'should any marketable ore be extracted in the course of the aforesaid developments,' the defendant should sell it, and account to the plaintiff. The single contract for the doing of this work, which presumably, was precedent to a determination by plaintiff whether it would or would not do business in the territory of Arizona, is not a carrying on of business, within the provisions of said statute. It is settled that isolated transactions, such as the making of a single contract for a limited purpose, are not within the prohibition of such statutes. Thomp.Corp. Sec. 7936, and cases cited; Manufacturing Co. v. Ferguson, supra; Paul v. Virginia, supra. The demurrers to the defenses based on this statute are sustained.

The next question raised by the demurrers affects the ownership of the ore beneath the surface. Defendant, in extending its shafts into the territory included within the surface lines of plaintiff's mine, found that in making their original location they mistook the direction of the lode, and made said location crosswise instead of lengthwise of the vein. In following the vein under plaintiff's surface lines, they found that the vein, the apex of which was on their property, extended laterally under the surface of plaintiff's location. The federal statutes of 1872 in regard to the location of mining claims are as follows:

'Sec. 2320. Mining-claims upon veins or lodes of quartz or other rock in place bearing gold, silver, cinnabar, lead, tin, copper, or other valuable deposits, heretofore located, shall be

...