Silver King Coalition Mines Co. v. Conkling Mining Co.

• Decision Date: 19 December 1919
• Docket Number: 5188,5190.
• Citation: 255 F. 740
• Parties: SILVER KING COALITION MINES CO. v. CONKLING MINING CO. [1] CONKLING MINING CO. v. SILVER KING COALITION MINES CO.
• Court: U.S. Court of Appeals — Eighth Circuit

255 F. 740

SILVER KING COALITION MINES CO. v. CONKLING MINING CO. ^[1]

CONKLING MINING CO. v. SILVER KING COALITION MINES CO.

Nos. 5188, 5190.

United States Court of Appeals, Eighth Circuit.

December 19, 1919

T Marioneaux and W. H. Dickson, both of Salt Lake City, Utah (A. C. Ellis, Jr., and R. G. Lucas, both of Salt Lake City Utah, on the brief), for Silver King Coalition Mines Co.

Edward B. Critchlow, of Salt Lake City, Utah (William W. Ray, of Salt Lake City, Utah, William D. McHugh, of Omaha, Neb., and William J. Barrette and William H. King, both of Salt Lake City, Utah, on the brief), for Conkling Mining Co.

Before SANBORN and STONE, Circuit Judges, and ELLIOTT, District Judge.

SANBORN Circuit Judge.

The decree assailed by these appeals is that the plaintiff below the Conkling Company, a corporation, recover of the defendant below, the Silver King Coalition Mines Company, a corporation, $542,222.58, on account of the latter's extraction and appropriation to its own use, of the plaintiff's share of the ore in the Conkling lode mining claim, which the two corporations owned as tenants in common. Prior to the year 1907 Nicholas Treweek and J. Leonard Burch were the owners of an undivided three-fourths, and the Kearns-Keith Company, a corporation, was the owner of the undivided one-fourth, of this lode mining claim. In that year Treweek and Burch conveyed their three-fourths and their causes of action against the Kearns-Keith Company and the King Company to the Conkling Company, and the King Company succeeded to the ownership of the Kearns-Keith Company's one-fourth and assumed its liabilities, so that the Conkling Company and the King Company stand in the same relation to each other as if each had owned the interest, and had committed the acts of omission and commission of their predecessors or predecessor in interest. For the sake of brevity, therefore, the acts of omission and commission of their respective predecessors will in this discussion be called their acts respectively.

The King Company first discovered ore in this claim in October or November, 1906. It had then long been in exclusive possession of that claim. It had run the Alliance Tunnel and numerous drifts and crosscuts therefrom through its own land through the Conkling and other claims to enable it to reach and work ores wherever it might find them. As it was driving one of these crosscuts through the ground of the Conkling claim it discovered in that ground the ore in controversy. It did not notify its cotenant of its discovery, but during the year 1907 it took out from Conkling ground and stored in drifts underground many thousand tons of ore. In the latter part of 1907 the Conkling Company learned something of this operation and in December of that year and January, 1908, it demanded access to and an opportunity to examine the defendant's workings in Conkling ground, that the ore taken therefrom should be kept separate from ores from other sources, and that the King Company should account to it for three-fourths of that ore. The King Company did not grant these requests. This suit was commenced on January 8, 1908, and after an application was made herein therefor, an order was made by the court on June 30, 1908, with the consent of the King Company, that the Conkling Company should have access to the workings of the latter in Conkling ground and an opportunity to examine and survey them. The King Company, however, continued to extract the ore from this mine, a part of which proved to be within, and a part of which proved to be without the Conkling ground. From May, 1907, to August, 1910, and during the years 1913, 1914, 1915, and 1916 it did not keep the ore from Conkling ground separate from that outside that ground, but mingled the ores together. After April, 1909, the ore from the Conkling ground and from adjacent ground was hoisted by the King Company from the 500-foot level through the Silver Hill shaft, and the shift bosses kept a record of the number of cars of first class ore and of the number of cars of second class ore that were hoisted through that shaft. But no account of the amount of the ore taken from the Conkling ground, or of its value or of its proceeds, was kept by the King Company. The result was that when, under the interlocutory decree, it became necessary to determine the the amount and value of this ore in 1917, the Conkling Company was dependent for its information on the testimony of officers and employes and the scant records of a corporation which had not informed it of the discovery of the ore, had not permitted it to examine its workings in Conkling ground until induced to do so by a suit and an application for an order, had refused to keep an account of the volume of ore it took from Conkling ground, or of its value or proceeds, and had never rendered any account thereof until it presented one showing the amount due the Conkling Company to be $78,638.61 in obedience to the interlocutory decree in the spring of 1917 preparatory to the final hearing. The claim of the Conkling Company was for about $900,000. The decree of the court was for $542,222.58, and the question raised by the assignments of error of the respective parties is the correctness of this amount which the King Company contends is too large and the Conkling Company insists is too small. The title and the respective rights of the parties to the Conkling lode mining claim, especially to the 135-foot strip across its westerly end were adjudged by this court in 1916 in this suit (Conkling Mining Co. v. Silver King Mines Co., 230 F. 553, 144 C.C.A. 607), a motion for rehearing was considered and denied, an application to the Supreme Court for a writ of certiorari failed (242 U.S. 629, 37 Sup.Ct. 14, 61 L.Ed. 536), and this court is unwilling now, if it might lawfully do so, to disturb that adjudication.

Turning, then, to the finding of the court below relative to the amount of the recovery, the indisputable fact is that many of the issues that conditioned the bases of the accounting were determinable only from conflicting testimony, or from indirect evidence and the rational deductions therefrom, or from scant and unsatisfactory proof, so that after a study of the record the truth of the statement of the court below in opening its opinion on the accounting that 'the record in this matter is voluminous, but in many respects unsatisfactory, and the best that can be hoped for is an approximation of a true account between the parties,' is conclusively demonstrated.

In this state of the case the rules and legal presumptions, by which this court should be guided in its consideration of the evidence and its review of the findings below, are of more than ordinary importance. Counsel have recognized this fact, and their forcible and exhaustive arguments upon this subject have been thoughtfully considered with this result. As this court stated in Silver King Coalition Mines Co. of Nevada v. Silver King Consolidated Mining Co. of Utah, 204 F. 166, 180, 122 C.C.A. 402, 416, the King Company-- 'was a trustee for the complainant of its share of the ore it took, and of the proceeds thereof. As such trustee it violated its duty to notify its cotenant of its entry and taking of the ore, its duty to keep the ore separate, its duty to keep an account of it and of its proceeds, and its duty promptly to account for and pay to its cotenant its just share of the proceeds of the ore.'

If the King Company had discharged these duties, the amount that should be recovered could have been readily ascertained and clearly proved. So uncertain did its failure so to do render the amount it ought to pay in its own estimation that it filed four accounts in this suit, in which the amounts it stated its indebtedness to the Conkling Company varied from $72,750.76 to $262,161.22. In a suit of this nature the burden is upon the plaintiff to prove that the defendant took the plaintiff's ore, or the proceeds of it, and mingled it with the ore in which the plaintiff had no interest, and those facts were admitted or conclusively proved in this case. Then the burden of proof and the duty rested upon the defendant to prove the amount of the ore it took from Conkling ground and its proceeds or value, and to account and pay therefor, and if by reason of the failure of the defendant to keep the Conkling ore separate from other ore, and to keep an account of the ore taken and of its proceeds or value, the proof of the amount, the proceeds or value, or of any other facts requisite to make such proof, remained at the close of the hearing evenly balanced, uncertain, or doubtful, the doubt should have been and should now be so resolved, in accordance with the basic principle of the accounting of a negligent or reckless trustee or agent, that the latter shall receive no profits from his wrongful treatment of the property of his cestui que trust, and the latter shall receive the just value of his property and its income. The King Company should not profit in this case by its own wrong, and issues rendered uncertain or doubtful by reason of its failure to discharge its recited duties, or by its confusion of the ores from Conkling ground with those from other sources, must be resolved against it. By that rule, therefore, and by the familiar rule that, where a court has considered conflicting evidence and made a finding or decree, the presumption is that it is correct, and unless some obvious error of law has intervened, or some serious mistake of fact has been made, the finding or decree must be permitted to stand (Coder v. Arts, 152 F. 943, 946, 82 C.C.A. 91, 94, 15 L.R.A. (N.S.) 372), this court must be guided in its review of the findings and decree below in this case.

As when this case came to a...