Kasey v. Molybdenum Corp. of America

• Decision Date: 17 December 1959
• Citation: 176 Cal.App.2d 346,1 Cal.Rptr. 393
• Court: California Court of Appeals Court of Appeals
• Parties: J. Bryand KASEY, Plaintiff, Cross-Defendant and Appellant, v. MOLYBDENUM CORPORATION OF AMERICA, etc., et al., Defendants, Cross-Complainants and Respondents. Civ. 5902.

Page 393

1 Cal.Rptr. 393

176 Cal.App.2d 346

J. Bryand KASEY, Plaintiff, Cross-Defendant and Appellant, v. MOLYBDENUM CORPORATION OF AMERICA, etc., et al., Defendants, Cross-Complainants and Respondents.

Civ. 5902.

District Court of Appeal, Fourth District, California.

Dec. 17, 1959.

Scudder & Forde, Guy Richards Crump, Los Angeles, for plaintiff and appellant.

Schultheis & Laybourne, Everett B. Laybourne, Los Angeles, Lonergan & Jordan, John B. Lonergan, San Bernardino, for defendant and respondent Molybdenum Corp. of America.

SHEPARD, Justice.

This is an action for declaratory relief respecting plaintiff's alleged right to use certain roads and develop certain ore deposits in the Clark Mountain Mining District of San Bernardino County; for an injunction to prevent interference with such rights; and for the determination of the title of the parties to certain mining claims. By answer and cross-complaint defendants dany the existence of the public character of the roadways (except Highway 91); the right of plaintiff to use the same; deny plaintiff's right to work certain claims as alleged in the complaint; allege exclusive title in themselves and characterize plaintiff as a trespasser. After judgment on the merits, plaintiff appeals.

From the record before us it appears that during the years 1924 to 1950, twelve lode mining claims were located in a portion of the Clark Mountain Mining District of San Bernardino County under such names as Sulphide Queen Nos. 1 and 2, Lead Mountain Nos. 2, 3 and 4, East Extension; Wash Queen; Wash Queen 2; Hard Rock Queen and Sulphide King Nos. 1, 2 and 3. Defendant Molybdenum Corporation of America (hereinafter called Company) acquired these unpatented claims. In the year 1950, plaintiff J. Bryant Kasey, Maryann Kasey, his wife, and Julius A. Paskan (all of whom will hereinafter be referred to as Kasey) apparently located or acquired in the same general area some twenty lode mining claims under such names as Sleeper, Dymius, Somnabulist, Morpheus, Celanthus, Galenite, Neola, La Prase and Neodymius, together with nine placer mining claims with such basic names as Lantham Nos. 1 to 6, Alluvium 1 and Aqua.

Some overlapping occurred between part of the Kasey claims and part of the Company claims, and the parties or their predecessors in interest were involved in disputes and litigation, the character and extent of which is not clearly shown by the record. On June 11, 1951, Kasey and Company entered into an option agreement (hereinafter referred to as Contract) wherein Kasey gave Company as option to purchase all of the above named claims (called in the Contract the 'Primary Claims') and also the option to purchase all other claims (called 'Secondary Claims'), mill sites and appurtenant rights and property located within a radius of ten miles of the north quarter corner of Section 13, Township 16 North, Range 13 East, S.B.B. & M. Included in appurtenant rights were water rights, pipe lines, pole lines, easements, rights of way, improvements, tools and equipment located on or pertaining to the claims.

During the period of the option Company was granted the right of possession with the right to mine, explore and work the claims for testing purposes. $15,000 was paid for the option and $135,000 was to be paid upon the exercise of the option and royalties thereafter on certain percentages of net production, which would finally terminate if the total royalties, plus original payments, reached the sum of $2,000,000. Kasey warranted that the primary claims were good, valid and subsisting claims and agreed to defend title as against all third parties in the event the option was exercised; agreeing further that Company might by consent take judgment in a then pending court action quieting Company's title in the Sulphide Queen group of claims as against any of the Primary Claims hereinbefore referred to, but provided further that such consent to a judgment quieting title should not prejudice Kasey's rights to royalties as elsewhere in said agreement provided.

The intent of three paragraphs of the agreement are of such importance in determining the issues here before us that their quotation appears advisable.

'Ninth: It is understood that Molybdenum has not made or completed an examination respecting the validity of the Primary claims or respecting the existence or value of any rare earth minerals therein and it is agreed that neither the execution of this Agreement nor the exercise of the option herein provided by Molybdenum shall prejudice or impair the right of Molybdenum to assert in good faith the invalidity of any of the Primary or Secondary claims or the exercise by Molybdenum of the full and complete rights of ownership of the Primary and Secondary claims, including, without limitation, the right to determine whether it shall mine (excepting only as otherwise specifically provided in Section Fourth hereof), maintain or abandon any of said claims or any part thereof, provided, however, that if Molybdenum shall abandon any Primary claim or part thereof and relocate the same, such abandonment and relocation shall not relieve Molybdenum from any obligation it might otherwise have to pay royalty under the provisions of Section Fifth of this Agreement.

'Twelfth: Each of the parties hereto will make, execute and deliver all such affidavits, amended location notices, deeds, assignments, bills of sale, stipulations, authorizations, instruments, documents and papers, and will do such other acts and things, as may hereafter at any time, or from time to time, be necessary or desirable to carry out and effectuate the purposes of this Agreement.

'Thirteenth: Following the expiration of three (3) years after exercise of the option hereinabove provided in Section First hereof, in the event the same shall be exercised, and subject to all of the Molybdenum's rights under this Agreement, Owners may mine and remove from Morpheus No. 1, Morpheus No. 2, Morpheus No. 3, Morpheus No. 4, Morpheus No. 5, Laprase and Barito claims mica and the minerals contained in said mica other than any of the rare earths group, radio-active materials, radio-active elements and the yttrium group, and may mine and remove tungsten from the Barito claim. All of such mining and removal shall be conducted without interference with the activities or operations, or contemplated operations, of Molybdenum on said claims or elsewhere, and Owners will save and hold Molybdenum harmless from and against any and all liability or loss from or by reason of the acts or omissions of Owners upon said claims or any of them.'

On July 22, 1951, Company, after having discovered that Kasey had failed to do the required discovery would no Somnabulist Fraction No. 1 claim, to which Company later accepted a deed from Kasey under Contract, caused a new claim to be located named Betty Anne, the discovery point of which was on open public land and which embraced in its area all or part of other claims deeded by Kasey to Company, including the whole of Sommabulist Fraction No. 1 (a triangular parcel 60 X 65 X 80 feet in size). On April 9, 1955, Kasey crossed Company claims and attempted to locate a new claim called Sleeper No. 1 Annex, using as his point of discovery approximately the same location as the original point of discovery of Somnabulist Fraction No. 1. Company caused Kasey to be ejected, and erected barriers on roads leading through said claims. Kasey brought this action for declaratory relief and for injunction to restrain Company from interfering with Kasey's entry and development of Sleeper No. 1 Annex. Company cross-complained. Company claims title to all the lands in question by reason of Contract and the deeds given Company by Kasey on September 21, 1951, and also by the separate filing and improving of Betty Anne lode claim. Company further claims Kaset has only a personal right under Section 13 of Contract; denies the existence of any public roads (except Highway 91) as alleged in Kasey's complaint, and claims that the transfer of all such easements to Company prevents Kasey from entering anywhere on its claims. By counterclaim and cross-complaint, Company affirmatively covers about the same ground except that it additionally puts in issue the title to Somnabulist Fraction No. 1.

The trial court found against Kasey's contentions as to the existance of public roads (except as to Highway 91); that Sleeper No. 1 Annex claim is invalid; that Betty Anne claim is valid; that Somnabulist Fraction No. 1 claim is invalid; and Kasey concedes that these findings were made on conflicting evidence (except to the extent that Betty Anne may be deemed a relocation of Somnabulist Fraction No. 1) and concedes the validity of such findings on appeal (except that he claims Betty Anne perfected for royalty purposes title of Somnabulist Fraction No. 1).

We need not consider, therefore, the attempted location of Sleeper No. 1 Annex claim nor the question of public or private road rights of way, and we are thus left with only two important questions.

Did the location of Betty Anne claim on July 22, 1951, inure to the benefit of Kasey insofar as the right to royalties from Somnabulist Fraction No. 1 are concerned?

What is the nature of Kasey's right to go upon certain mining claims to mine and remove mica and tungsten as is described in Paragraph Thirteenth of Contract?

The question of whether or not the location of Betty Anne claim inured to the benefit of Kasey involved the application of rules of law which have been applied in California for more than 100 years, as well as the interpretation of the contract. The general rule first expressed respecting the rights of a vendee going into possession was expressed in the early case of Hoen v. Simmons, 1850, 1 Cal. 119, 120, in the following language:

'The defendants, having entered into possession, claiming under the plaintiff and in subordination to his title, are estopped from...