O'Hanlon v. Ruby Gulch Mining Co.

• Decision Date: 11 October 1913
• Citation: 135 P. 913,48 Mont. 65
• Parties: O'HANLON ET AL. v. RUBY GULCH MINING CO.
• Court: Montana Supreme Court

135 P. 913

48 Mont. 65

O'HANLON ET AL. v. RUBY GULCH MINING CO.

Supreme Court of Montana

October 11, 1913

Appeal from District Court, Choteau County; Jno. W. Tattan, Judge.

Action by Thomas J. O'Hanlon and another against the Ruby Gulch Mining Company. From an order granting a motion for new trial after judgment for plaintiffs, they appeal. Order affirmed.

Cooper & Stephenson, of Great Falls, for appellants.

H. G. & S. H. McIntire, of Helena, for respondent.

BRANTLY C.J.

On April 20, 1908, the defendant, claiming to be the exclusive owner of the Divide quartz lode mining claim situate in the Little Rocky mining district, in Choteau county, made its application to the United States for a patent therefor through the land office at Glasgow. The plaintiffs, each claiming an undivided one-sixth interest therein as a tenant in common with the defendant, brought this action to have their rights established and determined as an adverse claim in pursuance of the requirements of the federal statute. Rev Stat. U.S. § 2326 (U. S. Comp. St. 1901, p. 1430). The pleadings were framed and the issues made up in accordance with this theory. At the trial, however, the plaintiffs omitted to introduce evidence showing that they had obtained a stay of the patent proceedings by filing their adverse claim in the land office, apparently having adopted the theory that, though the patent should issue to the defendant it would be held trustee for the plaintiffs to the extent of their respective interests, and that the filing of the adverse claim and bringing timely action thereon was unnecessary. In any event, the trial proceeded as in an ordinary action to quiet title or to determine an adverse claim under section 6870 of the Revised Codes. The court found the issues in favor of the plaintiffs, and entered a decree accordingly. Pending a motion for a new trial, Hon Frank N. Utter, the judge a quo, was disqualified. He thereupon ordered that the action be transferred to the other department of the court over which Hon. John W. Tattan presides, who sustained the motion, and ordered a new trial. The plaintiffs have appealed. The notice of intention assigns as grounds for the motion irregularities in the proceedings, insufficiency of the evidence to justify the findings, and errors in law occurring at the trial. The order does not indicate upon which of these grounds it was based, therefore, under the rule heretofore observed in such cases, it must be affirmed if it can be justified upon any one of the grounds assigned. Welch v. Nichols, 41 Mont. 435, 110 P. 89.

The plaintiffs insist that the court abused its discretion in granting the order, for the reason that upon the facts as disclosed by the evidence the right to the interests claimed by them was clearly established, and that under the rules of law applicable the court could not have found and decreed otherwise than it did. Counsel for defendant insist that the motion was properly granted on any one of four different grounds, viz.: (1) That the court erred in excluding material evidence; (2) that it was incumbent upon the plaintiffs to prosecute the action as an adverse suit, in conformity with the provisions of the federal statute, at the peril of losing their right; (3) that the evidence discloses conclusively that the plaintiffs were guilty of laches in asserting their claims; and (4) that the interests of plaintiffs were abandoned by them long prior to the bringing of this action. In making this statement of the contentions of counsel, we have for convenience deviated somewhat from the order pursued in the brief.

The facts disclosed by the evidence are in brief the following: The claim was located by Thomas Carter and William McKenzie on January 1, 1894. On October 24th in the same year each of them, by deed duly acknowledged and recorded, conveyed an undivided one-sixth interest to Thomas O'Hanlon, who resided in Choteau county, and was engaged in merchandising at Chinook. The conveyances were made pursuant to an agreement entered into prior to the location of the claim between O'Hanlon and Carter and McKenzie, to the effect that O'Hanlon was to furnish the latter supplies to enable them to locate and hold mining claims, and that they were to convey to him a one-third interest in any claims discovered and located by them. The claim, together with others which were located under the agreement, was thereafter held by the three in common; Carter and McKenzie doing the representation work under the agreement until February 15, 1898, when Thomas O'Hanlon died intestate, leaving his two sons, Thomas J. and Henry, his only heirs. One L. V. Bogy was appointed administrator upon the estate, and continued to serve in that capacity until May 19, 1900, when he resigned. The plaintiff Henry J. O'Hanlon, a brother of the decedent, was appointed in his stead, and served until the estate was finally distributed. The two sons were minors at the time their father died, but attained their majority during the course of the administration, the former in 1899, and the latter early in 1901. Though Bogy knew of the interest of O'Hanlon in the Divide claim, he did not include it in the inventory, nor was it mentioned in the decree of distribution. On June 22, 1901, Henry O'Hanlon conveyed to Thomas J. O'Hanlon, by a writing duly acknowledged and recorded, his entire interest in the estate, subject to the debts of the decedent, but without specific mention of the Divide claim. On February 1, 1902, by a similar writing, Thomas J. O'Hanlon conveyed an undivided one-half interest to Henry J. O'Hanlon. The residue of the estate was distributed to Thomas J. and Henry J., the plaintiffs herein. The claim was not mentioned in the decree. So far as the record shows, Henry O'Hanlon remained in Choteau county. Soon after the death of his father Thomas J. O'Hanlon went to Boston, Mass. He there enlisted in the United States army, and served in the Philippine Islands until his discharge in 1901, when he returned to Choteau county. On February 5, 1900, Carter and McKenzie served on Bogy a notice addressed to him as "administrator of Thomas O'Hanlon estate," that they had done the annual representation work, amounting to $100 for the year 1899, necessary to hold the claim in conformity with section 2324, U.S. Revised Statutes (U. S. Comp. St. 1901, p. 1426), and that, unless he should pay his proportion of this amount within 90 days from that date, his interest as co-owner would be held forfeited. Bogy paid no attention to the notice, and did not, nor did any one else thereafter, pay any part of the expenses for that or any subsequent year, though Carter and McKenzie, and the defendant as their successor, had possession of the claim, and did the work for each year until the beginning of this action. In addition to the work of representation, Carter and McKenzie also did a large amount of development work during the years prior to 1905. During the year 1904 or 1905 the defendant, with a view to acquiring the claim, obtained a lease and bond from Carter and McKenzie. It went into possession, and did development work upon it costing, according to the estimate of some of the witnesses, more than $40,000, uncovering deposits of valuable ores, with the result that on September 6, 1906, it determined to purchase, and did purchase, the claim at the price of $25,000 in cash. The plaintiffs were fully aware of what was being done, and also that Carter and McKenzie, and the defendant as their successor, were claiming to be the exclusive owners under the forfeiture notice given to Bogy in 1900, yet neither protested, or objected, or made any claim of interest; the first assertion of their claim being made by the bringing of this action. During June or July, 1901, Thomas J. O'Hanlon visited Carter, who lived on or near the claim. He made inquiry concerning the interest of his father's estate, and was then told by Carter that the interest of the estate had been forfeited. He was given the notice which had been served on Bogy, and, having read it, returned it to Carter, saying, "That is all right." He had been informed as early as the winter of 1901 that Carter and McKenzie were claiming that the interest of his father had been forfeited. On another occasion, prior to the purchase by the defendant, he went to the claim, and endeavored to induce Carter to sign notes for an account found charged against Carter and McKenzie upon their father's books. This account was about $800, and all but about $270 of it had apparently been charged as the price of supplies furnished to Carter and McKenzie while they were prospecting for the joint benefit of themselves and the father, and keeping up the representation work upon the claims located by them. Again, some time prior to the date at which defendant paid to Carter and McKenzie the purchase price for the claim, Henry J. O'Hanlon questioned B. D. Phillips, the president of the defendant, as to whether it would be possible for him to collect from or through the defendant the amount of the account claimed to be due from Carter and McKenzie. He did not then assert an interest in the claim. The defendant continued to develop and mine the claim, until application was made for patent. There is no material conflict in the evidence. It is true Thomas J. O'Hanlon stated that he had no recollection of reading the notice of forfeiture on the occasion of his visit to Carter in 1901; but he admitted that he had learned in the winter of that year of the claim of Carter and McKenzie that his father's interest had been forfeited, and that during the conversation with Carter the latter had asserted that the O'Hanlon interest had been forfeited.

1. When the defendant offered in evidence a copy of the notice, it was...