Lakin v. Sierra Buttes Gold-Min. Co.

• Court: United States Circuit Court, District of California
• Citation: Lakin v. Sierra Buttes Gold-Min. Co., 25 F. 337 (U.S. Cir. Ct., D. Cal. 1885)
• Decision Date: 26 October 1885
• Parties: LAKIN v. SIERRA BUTTES GOLD MIN. CO.

25 F. 337

LAKIN v. SIERRA BUTTES GOLD MIN. CO.

United States Circuit Court, D. California.

October 26, 1885

Vanclief & Gear, for complainant.

Garber Thornton & Bishop, for respondent.

SAWYER J.

This case was submitted more than a year ago, but soon after its submission I was requested by counsel not to take the case up for decision, as negotiations for settlement were pending and probably it would not be necessary to decide it at all. Consequently I laid it aside. I have been informed recently by counsel that there is no hope of settlement, and a decision of the court will be necessary. I mention this as a reason for the long delay in deciding the case.

This is a suit in equity to enforce a constructive trust in favor of the complainant in certain lands and mines patented to the Mammoth Gold Mining Company, and which were afterwards conveyed to the defendant. The material allegations of the bill, which are established by the evidence, are as follows:

In the year 1865, a certain quartz ledge in Plumas county, known as the 'Mammoth Ledge,' with the appurtenances thereto 2,100 feet in length along the vein, was owned and possessed by James M. Thompson and John B. McGee, who severally mortgaged their interests therein to John Conly & Co. On November 4, 1865, said Thompson and McGee, in company with others, located an extension of said Mammoth ledge of the length of 2,000 feet, the title to nine-tenths of which has since passed by mesne conveyances to the complainant. After the location of said extension in the year 1867, said Thompson and McGee made a survey of their said claim, and also made at the Marysville land-office an application for a patent for the whole 4,100 feet of the ledge, including a tract of surface ground consisting of 252 95-100 acres, they at the time owning the whole, subject to said mortgages on 2,100 feet. Notice of the application for a patent was duly published, in pursuance of the statute, for the required period, and no adverse claims were filed. This survey and application covered the 2,100 feet mortgaged to Conly & Co., and the 2,000 feet subsequently located by Thompson and McGee. The act of congress of 1866 having been complied with, the right of Thompson and McGee to receive a patent to the whole of said tract became vested, as the result of said proceedings, upon payment of the purchase money required by law. The mortgages to Conly & Co., mentioned, of the original 2,100 feet were subsequently foreclosed, and title to the mortgaged premises passed, by sale, under the decree of foreclosure, to Conly & Co., and, by subsequent conveyances, to the Mammoth Gold Mining Company, which, at the time of the issue to it of the patent in question, had no other title than that which passed under and by virtue of said mortgages and sale. The sale of the original Mammoth ledge of 2,100 feet, with the appurtenances, and the foreclosure having been made, said application for a patent was allowed to rest without further action until the year 1876. Conly, Tranor, and Luther, constituting the firm of Conly & Co., having conveyed to the Mammoth Gold Mining Company on June 9, 1870, the title to the 2,100 feet derived under the sale upon the foreclosure of their mortgages, seven years afterwards, in 1877, executed another deed to said corporation, whereby they sold, remised, and quitclaimed to said corporation all their right, title, and interest to the whole 4,100 feet. This deed contained this clause:

'A deed having been executed by the first parties to the second party, dated June 9, 1870, conveying two thousand one hundred linear feet of the said Mammoth quartz claim, the intent of this indenture is to vest in said second party all the title of said first parties of, in, and to the said Mammoth claim.'

But neither at that time, nor at any other, did said grantors own any interest in any part of said claim except the 2,100 feet purchased under their decree of foreclosure, and they could not convey any interest in the other 2,000 feet. The Mammoth Company had sold all of its stock to the Plumas Eureka Company in the year 1872, and the latter company, which was beneficially owned and controlled by the corporation defendant, had taken possession of said original Mammoth ledge or claim of 2,100 feet, and the ground adjacent thereto, and made improvements thereon; but at that time took no possession of any other ground, made no efforts to do so, and expended nothing towards the working or development of the said extension to said ledge, which was not included in any conveyance to them, but was still owned and possessed by Thompson and his associates, who expended considerable money and labor, at various times, in endeavors to prospect the same; having, especially in 1875, erected a cabin, and run a tunnel of some 100 feet in length for the purpose of prospecting said extension, expending in the aggregate about $1,000.

In the fall of 1876 said Thompson proposed to the agents of the defendant, who were also at that time the agents of the Mammoth Company and of the Plumas Eureka Company, all of said corporations being at the time under the same control, that they should unite with him in perfecting the title to the whole of said 4,100 feet of ledge, according to the original locations and survey, and to said tract of 252 95-100 acres, by obtaining a patent therefor under the application of Thompson and McGee already made, with an agreement for an equitable division thereof according to their respective rights; but said agents declined the arrangement upon the plea that too much land had been included in the survey and application, and that the company would not pay five dollars per acre for it. Thompson, who seems to have been the active man, whether intentionally or not, was thus put off his guard, and led to suppose that the defendant's agents would have nothing to do with the survey and application of Thompson and McGee. Said agents of the defendant, however, soon after, in the early part of the following year, took measures to secure secretly, in the name of the Mammoth Company, a patent for the whole of said 4,100 feet of ledge, and tract of surface ground, upon the said original survey and application of Thompson and McGee, without the permission of or notice to Thompson or McGee, or any publication of their proceedings in any manner. They used and prosecuted Thompson's and McGee's survey and application, claiming to be successors in interest to the whole 4,100 feet. In order to make it appear to the land department that they were the successors in interest of Thompson and McGee to the whole of the ground, they first obtained the said quitclaim deed from Conly, Tranor, and Luther, the purchasers under foreclosure, several years after their conveyance of the original 2,100 feet, for the whole 4,100 feet of ledge, under the name and style of the 'Mammoth Ledge;' said name having been applied to the whole 4,100 feet by Thompson and McGee in their application for a patent; whereas, in truth, said purchasers never had title of any kind to more than said 2,100 feet included in the mortgages of Thompson and McGee, and purchased by Conly & Co., under the decree of foreclosure as stated.

This quitclaim deed was never recorded, and all knowledge of its existence was withheld from Thompson and McGee, but was presented to the land-office as part of the claim of title of the Mammoth Company, which claimed the right to a patent as the successor in interest in the entire tract. The Mammoth Gold Mining Company used and prosecuted the application of Thompson and McGee, and appropriated their survey, acts, and work, by procuring a return of the field-notes of the original survey, made for Thompson and McGee by D. D. Brown, the deputy surveyor, which were approved by the surveyor general, for which return they paid Brown the sum of $250, under the caution, and with the express understanding, that he should keep his action secret from Thompson and McGee, which he agreed to do, and did do until long after the patent was obtained, and the facts were otherwise discovered. The patent was obtained without the knowledge of Thompson and McGee, May 18, 1877, in the unusually short time of less than four months after the commencement of their proceedings on it, and it was recorded in the following June. In December, 1877, Thompson employed men to resume annual work on the extension, without any actual knowledge of the patent, or any suspicion of the action of said corporation defendant and its officers. On the twenty-first of December, 1877, the men were ordered from the premises by the superintendent of the Plumas Eureka Company, under a notification, not that the Mammoth Company had obtained a patent under the application and survey of Thompson and McGee, but that 'they,' that is to say, the Plumas Eureka Company, 'had located the ground last summer, and had got a patent for it. ' This was the first knowledge Thompson and McGee had of any adverse claim of title to the 2,000 feet extension in question. Work was resumed in another place during the following January, but no work was done after January. In the fall of the following year, Thompson, having heard that a patent for the ground had been obtained in the name of the Mammoth Company, but still in entire ignorance of the manner in which it had been obtained, began a series of inquiries into the matter. He first wrote, in the month of September, 1878, to the Marysville land-office, and was informed that the papers had been sent to Washington, and that a patent had been issued to the Mammoth Company, but not through that office. Thinking it might have been returned through the Susanville land-office, he then wrote to that office, but received assurance to the contrary, and...