Moore v. United Elkhorn Mines

• Decision Date: 26 November 1912
• Citation: 64 Or. 342,127 P. 964
• Parties: MOORE et al v. UNITED ELKHORN MINES et al.
• Court: Oregon Supreme Court

127 P. 964

64 Or. 342

MOORE et al v. UNITED ELKHORN MINES et al.

Supreme Court of Oregon

November 26, 1912

Appeal from Circuit Court, Baker County; William Smith, Judge.

Action by C.A. Moore and another against the United Elkhorn Mines and others. From a decree dismissing the suit, plaintiffs appeal. Affirmed.

C.A. Moore, of Baker, for appellants.

C.A Johns, of Portland, for respondents.

McBRIDE J.

The circuit judge filed a written opinion upon the merits of this case, and, subsequently, a supplementary opinion, which so clearly state the issues involved and the general principles of law applicable thereto that, without committing ourselves to certain expressions therein contained, we adopt it as the opinion of this court. The opinion in chief and the one rendered upon rehearing are as follows:

"This is a suit to quiet title to a certain reservoir, which plaintiffs claim under location and appropriation, with the permission, or a "permit," from the state engineer, dated December 29, 1909.

"The defendant Edward E. McCoy and United Elkhorn Mines answer the other defendants having defaulted, and, after denying the allegations in the complaint, except the incorporation of the United Elkhorn Mines and the assertion and claim of interest by defendants in the reservoir and the waters thereof, which they admit, plead (1) ownership in the United Elkhorn Mines and the actual and exclusive possession thereof in itself and its predecessors in interest since 1884, the year of the construction of said reservoir, and of its water rights; (2) custom in vogue in 1884, under and by virtue of which appropriation and impounding of the waters of Pine creek were effected by construction of said reservoir, and use and possession of the same thereunder ever since. On motion of plaintiffs the said second defense was stricken out as redundant.

"The reply of plaintiffs denies the new matter in the answer saving that setting up the incorporation of the United Elkhorn Mines, and by way of separate reply alleges that the reservoir in question is located upon the public domain; that said corporation, on January 23, 1908, removed from the state, with intent and purpose of changing its residence, and ever since said date has remained absent from the state, and has not used or exercised ownership over the reservoir or water and water rights described in the complaint; and that said corporation has not, nor have its predecessors in interest, operated or exercised any ownership over said reservoir, water, or water rights since the summer of 1895.

"Upon the trial two stipulations of facts were made and filed herein which are to be considered in connection herewith. The said stipulations show that the United Elkhorn Mines owned the reservoir on January 1, 1904, and at that time executed a mortgage thereon to Edward E. McCoy, as trustee for the bondholders; that it was duly recorded on January 20, 1904, in Baker county, Or and that the bonds had been sold for their actual value; that, the United Elkhorn Mines failing to pay the bonded debt, the said trustee began suit in this court, obtained decree of foreclosure about October, 1909, and judgment in the sum of $250,000 and interest, with costs, and that under and by said decree said reservoir, with other property, was ordered sold to satisfy said judgment; that the said sale resulted in the purchase of the said reservoir by J.T. Donnelly, as trustee for the bondholders; that said sale was duly confirmed by this court about May 9, 1910, and that thereafter, there having been no redemption, the said purchaser received his sheriff's deed thereto; that on September 5, 1911, the said trustee, J.T. Donnelly, sold said property, for a valuable consideration, to William Pollman; and that such title as said Donnelly theretofore had is now in said Pollman.

"In the year 1909, and upon the 29th day of December thereof, the plaintiffs made application to the state of Oregon for a permit to construct a reservoir and to store for beneficial use the unappropriated waters of the state of Oregon, to wit, the waters of Pine creek, in Baker county, Or., and on said date the state engineer allowed said application. Thereupon the plaintiffs went in and upon the said reservoir, hereinbefore referred to as a portion of the mortgaged property purchased by said Donnelly at execution sale, as trustee for the bondholders, and by him sold, as such trustee, to said Pollman, repaired the penstock, straightened up the lifting rod controlling the trunk gate thereof, and expended some two or three hundred dollars thereon. Thereupon they bring this suit to quiet title thereto, and, as it appears that the defendants Tice, Patterson, and Pope are in default, and that the United Elkhorn Mines is delinquent to the state for the nonpayment of dues as required by act of 1903, the cause proceeds as to said Pollman, who was later brought into the suit as a party defendant on motion of the plaintiffs, and this court adjudicates the rights of plaintiffs and the said last-named defendant.

"Counsel for plaintiffs contend that by reason of the fact that said reservoir has not been operated during the five years next preceding their location, if it may be called that, of the reservoir in question, the rights of the former owners have been extinguished under the act of 1898, to wit, section 5136, L. O.L. Plaintiffs also contend that the defendants have abandoned the works, and it is upon these two issues that this cause is to be determined.

"Originally the reservoir in question formed a part of the water supply of the Nelson Mining Company, and was used to impound the excess waters of Pine creek when the same were not required by the ranchers below, whose rights as appropriators and riparian proprietors were respected by that company. For some reason that company sold this reservoir, with the right to impound those waters, to the United Elkhorn Mines Company, through mesne conveyances, and the defendant Pollman succeeds to those rights. The waters of this reservoir had formerly been conducted through the Newton-Sturgill ditch to the Nelson placer mine; but after the sale the reservoir was cut off from that ditch and became the property of Pollman, as above stated.

"It is shown by the evidence that the waters from this reservoir were not used during the five years next prior to the commencement of plaintiffs' suit; nor were waters stored therein, owing to the defective condition of the trunk gate and the impossibility of using it, raising and lowering it. The dam and spillway remained practically intact, and the reservoir was in fairly good condition and usable otherwise. The owners paid taxes on this reservoir up to and including the year 1906, and J.T. Donnelly afterwards, while trustee, paid the taxes for the years 1907 and 1908; but it was not assessed for the years 1909 and 1910, owing to inaction by the county assessor.

"On the 12th day of April, 1910, the bondholders entered into an agreement for the sale of the property of the United Elkhorn Mines Company by F.P. Hays under certain conditions, and, if those conditions failed, then the sale was to be made by said trustee, Donnelly, for and on behalf of said bondholders, whose mortgage had been foreclosed upon the said property, as hereinbefore stated.

"It will be noted that this reservoir was cut off, as is above stated, from the original Nelson placer mine plant and the purpose for which it was constructed, to wit, to store water for use in that mine, by the sale thereof to Hays as agent for the Beaver, afterwards the United Elkhorn Mines, Company, to whose interests defendant Pollman succeeds.

"There are two questions to be determined: (1) Has the defendant lost 'all title, claim and interest' in the reservoir by reason of its nonoperation for a period of five years? and (2) was the reservoir abandoned property at the time plaintiffs took it up? If either of these questions must be answered in the affirmative, plaintiffs must prevail; but if either must be answered in the negative they cannot prevail. We will consider them in their order.

"First. Has the defendant lost 'all title, claim and interest' by reason of its nonoperation of the reservoir for a period of five years? This question must be determined by construction of section 5136 of our present Code, and a consideration of the history of that section will aid us. Originally that section read thus: 'That ditches used for mining purposes and mining flumes permanently affixed to the soil be and the same are hereby declared real estate during the time the same shall be used for that purpose; provided, that whenever any person, company, or corporation, being the owner or proprietor of any ditch, flume, or water right, have or shall abandon the same, and who shall for one year thereafter cease to exercise ownership over said water right, ditch, or flume *** shall be deemed to have lost all title, claim, and interest therein.' We note that there is no provision in the old section relating to nonoperation of the ditch, etc. The construction put upon the old law by our courts confines the loss of ownership to willful abandonment and excludes all other contingencies, and such is the patent intent of that act. See the Dodge-Marden Case . Water rights for mining and other purposes could not, under that old section, be lost by nonuser alone, short of the period prescribed in section 4 of Hill's B. & C. and Lord's Code; the number remaining unchanged. The old section was based upon abandonment only. There was no provision, as is above remarked, or reference, to failure to operate; but the reference is to abandon only. 'Whenever a person shall abandon the same' is the text of the old statute. Hence, under the old statute,...