Public Service Co. of Oklahoma v. Bleak

• Decision Date: 30 December 1982
• Docket Number: No. 15662,15662
• Parties: PUBLIC SERVICE COMPANY OF OKLAHOMA, a corporation; Getty Oil Company, a corporation; Beall J. Masterson and Anita Masterson, husband and wife, Plaintiffs-Appellees, v. Floyd R. BLEAK and Clyda Bleak, husband and wife; Leo Crowley and Mary Ellen Crowley, husband and wife; and Leo F. Childs, Defendants-Appellants, and Berthal W. Trent and Joyce Trent, husband and wife, Defendants.
• Court: Arizona Supreme Court

Page 600

656 P.2d 600

134 Ariz. 311

PUBLIC SERVICE COMPANY OF OKLAHOMA, a corporation; Getty Oil Company, a corporation; Beall J. Masterson and Anita Masterson, husband and wife, Plaintiffs-Appellees, v. Floyd R. BLEAK and Clyda Bleak, husband and wife; Leo Crowley and Mary Ellen Crowley, husband and wife; and Leo F. Childs, Defendants-Appellants, and Berthal W. Trent and Joyce Trent, husband and wife, Defendants.

No. 15662.

Supreme Court of Arizona,

In Division.

Dec. 30, 1982.

Law Offices of Kenneth L. Allen by Kenneth L. Allen, Ilene G. Sipe, Tucson, and DeConcini, McDonald, Brammer, Yetwin & Lacy by John C. Lacy, Tucson, for plaintiffs-appellees

Crowley, Fresquez & Fresquez by Leo Crowley, Flagstaff, for defendants-appellants.

FELDMAN, Justice.

Plaintiffs, Getty Oil Company (Getty). Public Service Company of Oklahoma (Public Service) and Beall J. Masterson, brought this action to establish their possessory rights to a number of unpatented mining claims. Following a jury trial, a verdict was returned in favor of plaintiffs and

judgment was entered that plaintiffs were entitled to exclusive possession of the claims as against the defendants, Floyd and Clyda Bleak (Bleak), Berthel and Joyce Trent, Leo and Mary Ellen Crowley, and Leo F. Childs. Defendants appeal from the judgment and the denial of their motion for a new trial. We have jurisdiction pursuant to Ariz. Const. art. 6, § 5(3), and Ariz.R.Civ.App.P. 19(e), 17A A.R.S. We affirm.

FACTS

The unpatented mining claims in question are located in Mohave County near Artillery Peak. The area was first recognized as having potential for uranium mineralization in 1955. Beall J. Masterson and his family located ten claims in July, 1955. Later that same year, James Saunders and his wife entered the area and began staking unpatented mining claims to the south and east of the Masterson claim group. In February, 1956, Tejano Mines, a limited partnership, through Beura Childs, one of the partners, began locating claims to the south of the Masterson claims. In March, 1956, Saunders and Tejano Mines entered into a written agreement by which they agreed to work together on their group of claims, all of which were located south and east of the Masterson claims. The parties stipulated that these original claims were made on unappropriated ground.

Eventually there was a falling out between the Saunders and Tejano groups, and there is conflicting evidence on the question of whether any work was done on the joint Saunders-Tejano claims for a period of approximately thirteen years from 1958 through 1971. In the midst of this period, in May, 1968, Hecla Mining Company entered the area, inspected the ground and the records, and eventually located 59 claims, known as the J.L. claims. These claims overlaid a substantial portion of the claims filed by the Saunders and Tejano groups in 1955 and 1956. At trial, the parties stipulated that Hecla's locations were made in good faith. There was testimony that Hecla's employees never observed any indication of active conflicting claims. Hecla did not perform the annual assessment work for the assessment year ending September 1, 1972.

In 1971, Floyd Bleak appeared on the scene and purportedly entered into an agreement with Saunders whereby Bleak was to relocate part of the Saunders-Tejano claims and take over the assessment work on all the claims. Bleak was to pay Saunders a percentage of the net proceeds from the sale or operation of the claims. On May 1, 1971, Bleak attempted to locate (in the name of Berthel Trent) the Big Sandys # 1 through # 15 and # 18 through # 51. The physical location of these claims was in dispute.

Between July of 1973 and September of 1974, Getty and Public Service entered the area. Getty leased the Masterson claims. It also staked lode-mining claims called Hots # 1 through # 46. Public Service located claims known as A.P.s # 1 through # 44. This work was done as part of a joint venture between Getty and Public Service. The Getty-Public Service claims completely overlay the area and are in direct conflict with the Saunders-Tejano claims. They also overlay, in part at least, Bleak's Big Sandy claims.

The chief factual issue in the case revolves around the question of whether Bleak had actually done the work necessary to perfect valid locations of the Big Sandy claims, and, if he had, whether he had done the annual assessment work required to retain his possessory rights to all of the claims, including the Saunders-Tejano group. Bleak testified to having done the necessary work, while representatives of both Getty and Public Service testified that they had searched the area prior to location and found no evidence of conflicting claims or recent assessment work. They testified that the Getty and Public Service claims were located in good faith without knowledge of any conflicting claims. To bolster this position, they testified that Getty and Public Service employees had checked with people in the area and found that none of the local residents had knowledge of any conflicting claims and that none had seen In May, 1977, Getty and Public Service first became aware of Bleak's claim of a possessory right to both the Saunders-Tejano claims and the Big Sandy claims. As a result of Bleak's claims, plaintiffs brought this possessory action to establish their exclusive right of possession to the Masterson claims, the Hots # 1 through # 46 and the A.P.s # 1 through # 44. The defendants ¹ sought judgment that the Saunders-Tejano and Big Sandy claims entitled them to a prior right of possession wherever there were conflicts with the plaintiffs' group of claims.

any recent work in the area. A search of the public records had also failed to show any evidence of active conflicting claims.

At trial, the parties stipulated that a valid discovery of minerals was made on all claims and that all acts necessary for valid locations were performed on all claims except the 1971 Big Sandys.

Defendants raise several assignments of error dealing with instructions and evidentiary rulings and also allege that the verdict was contrary to the weight of the evidence. Further facts will be given where appropriate in discussion of the legal issues raised by this appeal.

INSTRUCTIONS

Effect of Forfeiture

The primary legal issue raised by this appeal is whether the Saunders-Tejano possessory right was revived when, and if, Bleak resumed assessment work on those claims following the forfeiture resulting from the failure of Saunders and Childs to do the assessment work and the subsequent location and abandonment of the claims by Hecla. Plaintiffs claimed that when Childs and Saunders failed to perform their assessment work, their claims became subject to location by a new locator. This is a correct statement of the law. 30 U.S.C. § 28 (1976). Plaintiffs next claim that Hecla's location therefore terminated the Saunders-Childs possessory rights. This, too, is a correct statement of the law. Id. Plaintiffs then argue that when Hecla abandoned the claims which it had located over the Saunders-Tejano claims, the mineral deposits became subject to new location, even though Bleak may have reentered on behalf of Saunders and Childs and resumed the assessment work. Under plaintiffs' theory, Bleak could reacquire exclusive possession only by making a new location. Defendants claim, however, that when Hecla abandoned the claims Bleak's resumption of assessment work reinstated his exclusive possessory rights and prevented valid locations by any of the plaintiffs.

This legal dispute was resolved in plaintiffs' favor by the trial court, which put the principle to the jury in the following instruction:

Where the senior locator of a mining claim has failed to do the required assessment work and the claim is relocated by a second locator who later abandons the claim or fails to do the assessment work, the senior locator may not resume assessment work and prevent the relocation of the claim by a third locator.

Defendants argue on appeal that this instruction is an incorrect statement of the law. There are conflicting views on this issue.

The right created by the valid location of an unpatented mining claim is a right of exclusive possession. Malone v. Jackson, 137 F. 878 (9th Cir.1905). The right is merely a possessory right because title to the property remains in the United States until the claim is patented. Bagg v. New Jersey Loan Co., 88 Ariz. 182, 188-89, 354 P.2d 40, 44 (1960). To maintain the right of exclusive possession, the locator of a claim must perform annual labor or "assessment work" on the claim. 30 U.S.C. § 28 (1976). [U]pon a failure to comply with these conditions, the claim or mine upon which such failure occurred shall be open to relocation in the same manner as if no location of the same had ever been made, provided that the original locators, their heirs, assigns, or legal representatives, have not resumed work upon the claim after failure and before such location.

The failure to perform annual assessment work does not in itself work a forfeiture of a locator's possessory right, but the statute provides that:

Id.

Thus the statute allows an original locator who has "defaulted" in his annual labor to retain his possessory right by resuming that labor before a subsequent location is made. If a subsequent relocation is made before the assessment work is resumed, the land is open and unappropriated and is subject to relocation "in the same manner as if no location of the same had ever been made."

The statute is silent with regard to what occurs when a valid subsequent relocation is made, but abandoned, and the original locator then resumes assessment work. Three cases hold that in such a situation the original relocator revives his right to exclusive possession by resuming assessment work. Justice Mining Co. v. Barclay, 82 F. 554 (D.Nev.1897); Richen v. Davis, 76 Or. 311, 148 P. 1130 (1915); Klopenstine v. Hays, 20...