Hansard Mining, Inc. v. McLean

• Decision Date: 29 July 2014
• Docket Number: No. DA 13–0469.,DA 13–0469.
• Citation: 2014 MT 199,335 P.3d 711,376 Mont. 48
• Parties: HANSARD MINING, INC., a Montana corporation; and Donald Hansard, an individual, Plaintiffs and Appellees, v. Barry A. McLEAN, an individual; Estate of Glen Harold McLean; Montana Department of Revenue, an agency of the State of Montana; Madison County, Montana, a municipality of the State of Montana; John Does 1–100, inclusive; and all other persons, unknown, claiming or who might claim any right, title, estate or interest in, or lien or encumbrance upon, the real property described in the complaint, adverse to Plaintiffs ' ownership or any cloud upon Plaintiffs' title thereto, whether such claim or possible claim be present or contingent, Defendants and Appellants.
• Court: Montana Supreme Court

376 Mont. 48

335 P.3d 711

2014 MT 199

HANSARD MINING, INC., a Montana corporation; and Donald Hansard, an individual, Plaintiffs and Appellees

v.Barry A. McLEAN, an individual; Estate of Glen Harold McLean; Montana Department of Revenue, an agency of the State of Montana; Madison County, Montana, a municipality of the State of Montana; John Does 1–100, inclusive; and all other persons, unknown, claiming or who might claim any right, title, estate or interest in, or lien or encumbrance upon, the real property described in the complaint, adverse to Plaintiffs' ownership or any cloud uponPlaintiffs' title thereto, whether such claim or possible claim be present or contingent, Defendants and Appellants.

No. DA 13–0469.

Supreme Court of Montana.

Submitted on Briefs March 12, 2014.

Decided July 29, 2014.

For AppellantsBarry A. McLean and Estate of Glen Harold McLean: Jack H. Morris, Morris Law Firm, PLLC, Helena, Montana.

For AppelleesHansard Mining, Inc., and Donald Hansard: Donald V. Snavely, Snavely Law Firm, Missoula, Montana.

Opinion

Justice LAURIE McKINNONdelivered the Opinion of the Court.

¶ 1 Hansard Mining, Inc., and Donald Hansard(the Hansards) filed this quiet-title action in the Fifth Judicial District Court, Madison County, against Barry A. McLean and the Estate of Glen Harold McLean(the McLeans), the Montana Department of Revenue, and Madison County, Montana.The Hansards sought resolution of a dispute with the McLeans concerning overlapping property rights.The Department of Revenue and Madison County disclaimed any interest in the case and did not participate in the litigation.The Hansards and the McLeans each moved for summary judgment.The District Court granted judgment in favor of the Hansards, and the McLeans now appeal.

¶ 2 The issue on appeal is whether the District Court erred in determining that the Hansards' mining patents have priority over the McLeans' homestead patent.

BACKGROUND

¶ 3The parties' competing claims derive from conflicting patents issued by the United States.In 1943, the United States granted 326.60 acres to Arvilla McLean, the McLeans' predecessor in interest.This land is situated in Madison County in Sections 19and30 of Township 3 South, Range 1 East, Montana Principal Meridian.Arvilla McLean's patent states that it was issued pursuant to the Homestead Act(Act of May 20, 1862, 12 Stat. 392,43 U.S.C. §§ 161 –284 ) and acts supplemental thereto, including the Stock–Raising Homestead Act (SRHA)(Act of Dec. 29, 1916, 39 Stat. 862,43 U.S.C. §§ 291 –302 ).The Homestead Act permitted a qualified person to enter unappropriated public lands for the purpose of establishing a homestead, with a maximum allowable claim of one-quarter section(160 acres).43 U.S.C. § 161.Under the SRHA, however, the maximum allowable claim was increased to 640 acres for lands designated by the Secretary of the Interior as “stock-raising lands.”43 U.S.C. § 291.Such lands were defined as those whose surface was chiefly valuable for grazing and raising forage crops and which did not contain merchantable timber, were not susceptible of irrigation from any known source of water supply, and were of such character that 640 acres were reasonably required for the support of a family.43 U.S.C. § 292.To obtain a patent, the person was required to reside on the land for three years and to make permanent improvements upon the land tending to increase the value of the land for stock-raising purposes.43 U.S.C. § 293;Watt v. W. Nuclear, Inc.,462 U.S. 36, 38, 103 S.Ct. 2218, 2220–21, 76 L.Ed.2d 400(1983).¹

¶ 4Section 9 of the SRHA provided that “[a]ll entries made and patents issued under the provisions of [this Act] shall be subject to and contain a reservation to the United States of all the coal and other minerals in the lands so entered and patented, together with the right to prospect for, mine, and remove the same.”43 U.S.C. § 299.This provision, in effect, severed the mineral rights from the surface rights.In accordance with this section, Arvilla McLean's patent contains the following language: “Excepting and reserving, however, to the United States all the coal and other minerals in the lands so entered and patented, together with the right to prospect for, mine, and remove the same pursuant to the provisions and limitations of the [SRHA].”

¶ 5 In 1990, the Hansards purchased seven patented mining claims: Golden Treasure, Boaz Lode, Josephine, Mighty Monarch, Mighty Hawk, Jack Pot, and Hi Hi Lode.With one exception noted below, the lands covered by these claims partially overlap the lands conveyed in the 1943 patent to Arvilla McLean—specifically, Government Lots 12, 13, and 26 in Section 19—as shown here in Diagram I.²

Diagram I

¶ 6 The patents for the mining claims were issued pursuant to §§ 2318 to 2352 of the Revised Statutes of the United States, and legislation supplemental thereto.These statutory sections, which concern mineral lands and mining resources, derived from various acts of Congress, primarily the General Mining Act of 1872(Act of May 10, 1872, 17 Stat. 91, as amended,30 U.S.C. §§ 21 –54).The United States issued the patents to the Hansards' predecessors in interest in the following sequence: Boaz Lode, 1878; Hi Hi Lode, 1944; Golden Treasure and Jack Pot, 1950; and Josephine, Mighty Monarch, and Mighty Hawk, 1953.

¶ 7 The Hansards commenced the instant lawsuit seeking to quiet title to both the surface and the subsurface rights of their mining claims.The McLeans conceded that the Hansards “own all of the mineral rights for all seven of the patented mining claims.”They denied, however, that the Hansards “own any of the surface rights of the overlapping lands of six (6) of the seven (7) mining claims.”³Relying on the SRHA, the McLeans argued that “[w]hen the United States government issued the homestead patent to Arvilla McLean in 1943, it severed or split the estate into 1) property rights to the surface of the land, which were conveyed to Arvilla McLean; and 2) the subsurface mineral rights, which were reserved and held as property of the United States.”The McLeans reasoned that the United States subsequently conveyed to the Hansards' predecessors only the subsurface mineral rights.

¶ 8The District Court held a hearing on the motions for summary judgment.During the hearing, the parties agreed that there were no genuine issues of material fact and that the dispute could be resolved as a matter of law.Additionally, the McLeans indicated that they no longer were contesting the Boaz Lode mining claim because this claim had been patented in 1878, long before the homestead patent was issued to Arvilla McLean.Thus, the McLeans maintained a challenge to five of the seven mining claims: Josephine, Mighty Monarch, Mighty Hawk, Jack Pot, and Hi Hi Lode.

¶ 9The District Court entered an order granting summary judgment to the Hansards.The court agreed with their argument that, although the patents for Josephine, Mighty Monarch, Mighty Hawk, Jack Pot, and Hi Hi Lode were issued afterArvilla McLean's 1943 homestead patent, each mining patent “relates back” to a date, before1943, when the mining claim was first located.Hence, the District Court concluded that the Hansards owned both the surface and the subsurface rights.The court rejected the McLeans' reliance on the SRHA, noting that the SRHA reserved mineral rights in patents issued for stock-raising homesteads, but did not reserve surface rights in patents issued for mining.

STANDARD OF REVIEW

¶ 10We review a district court's ruling on a motion for summary judgment de novo, applying the criteria set forth in M.R. Civ. P. 56.Yorlum Props., Ltd. v. Lincoln Cnty.,2013 MT 298, ¶ 12, 372 Mont. 159, 311 P.3d 748.“The judgment sought should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.”M.R. Civ. P. 56(c)(3).The moving party bears the initial burden of establishing the absence of any genuine issue of material fact and entitlement to judgment as a matter of law.If this burden is met, the burden shifts to the nonmoving party.To avoid summary judgment, the nonmoving party must establish with substantial evidence, as opposed to mere denial, speculation, or conclusory assertions, that a genuine issue of material fact exists or that the moving party is not entitled to prevail under the applicable law.Semenza v. Kniss,2008 MT 238, ¶ 18, 344 Mont. 427, 189 P.3d 1188.

¶ 11 In the present case, the facts are not disputed.The question is whether the Hansards, or the McLeans, are entitled to judgment as a matter of law.

DISCUSSION

¶ 12Whether the District Court erred in determining that the Hansards' mining patents have priority over the McLeans' homestead patent.

¶ 13 The McLeans maintain that the lands at issue consisted of surface property rights, which were conveyed to Arvilla McLean in 1943, and subsurface mineral rights, which were reserved by the United States and subsequently conveyed to the Hansards' predecessors in interest.Based on the premise that “[t]he United States no longer owned the surface rights to the McLean homestead after 1943,” the McLeans contend that the United States could not have conveyed those surface rights to the Hansards' predecessors in interest in the 1944, 1950, and 1953 mining patents.

¶ 14 The McLeans' analysis is contrary to the laws governing patents, and the District Court was correct to reject it.“A patent from the United States operates to transfer the title, not merely from the date of the patent, but from the inception of the equitable right upon which it is based.”U.S. v. Detroit Timber & Lumber Co.,200 U.S. 321, 334–35, 26 S.Ct. 282, 286, 50 L.Ed. 499(1906).This is the “doctrine of relation,” which applies where a series of acts or proceedings are necessary to complete a transaction, such as a conveyance or...