Silver Surprize, Inc. v. Sunshine Mining Co.
| Decision Date | 04 March 1976 |
| Docket Number | No. 1318--43052--III,1318--43052--III |
| Citation | 15 Wn.App. 1,547 P.2d 1240 |
| Parties | SILVER SURPRIZE, INC., a corporation, Appellant, v. SUNSHINE MINING COMPANY, a corporation, Respondent. |
| Court | Washington Court of Appeals |
John L. Neff, Witherspoon, Kelley, Davenport & Toole, Spokane, for appellant.
Leo J. Driscoll, Winston, Cashatt, Repsold, McNichols, Connelly & Driscoll, Spokane, for respondent.
This is a contract action 1 brought by the The factual background is as follows: Silver Surprize owns a mining claim in the Coeur d'Alene Mining District near Kellogg, Idaho. This claim is located near claims owned by Sunshine and borders other mining claims in which Sunshine has contractual interests: 2
plaintiff, Silver Surprize, Inc., against [547 P.2d 1243] the defendant, Sunshine Mining Co., to require defendant to account for ore removed from the 'Yankee Girl Vein' (YGV) within plaintiff's mining claim or, alternatively, for cancellation of the contract. In defense, Sunshine asserts that, because it owns the extralateral rights to the YGV, that vein is not covered by the contract and, therefore, an accounting is not required. Alternatively, Sunshine contends the action is barred by statutes of limitation and laches. While the trial court refused to find that Sunshine owned extralateral rights in the YGV, it did find that the YGV was not subject to the contract and, even if it were, Sunshine acquired title to the ore removed by ouster of its cotenant, Silver Surprize, through adverse possession. Further, the court held the action was barred by statutes of limitation and laches and denied Silver Surprize's request to cancel the contract. Both parties appeal from a judgment of dismissal.
In 1946, Silver Surprize and Sunshine entered into an exploration agreement. Under that agreement, Sunshine conveyed to Silver Surprize its interest in three small claims located in the upper section of the Silver Surprize group, reserving
. . . any Extralateral rights within the exterior boundaries of said claims which Sunshine may have owned, in whole or in part, prior to the location of said claims.
(Italics ours.) In return, Silver Surprize conveyed an undivided one-half interest in the Surprize group to Sunshine, together with an unlimited right of surface and underground ingress and egress. Under this agreement Sunshine was to explore and develop the Surprize group as 'in Sunshine's judgment is warranted as a sound mining venture.' Gross receipts were to be shared equally between them after deductions for Sunshine's expenses. Sunshine was required to:
. . . furnish Surprize, either monthly or quarterly, statements of production and costs, together with general information as to the amount, location and character of the work performed.
Silver Surprize was given the right to inspect the underground work being performed.
Sunshine has never rendered an accounting to Silver Surprize, although it removed in excess of $2 million worth of ore from that part of the YGV located within the Surprize group of claims. When an accounting was demanded just prior to commencement of this action in 1965, Sunshine refused.
The assigned errors present four major issues:
(1) Does Sunshine own extralateral rights in the YGV, thereby rendering the 1946 agreement inapplicable to that vein?
(2) If Sunshine does not own extralateral rights in the YGV, was that vein nevertheless excluded from the agreement?
(3) If the YGV is covered by the agreement, did Sunshine acquire title to the ore removed through the ouster of its cotenant, Silver Surprize, by adverse possession?
(4) Is the claim of Silver Surprize barred by statutes of limitation or laches?
The rights of possession and enjoyment running to the locator of a mining claim are governed by the Act of May 10, 1872. 3 This act provides:
The locators of all mining locations made on any mineral vein, lode, or ledge . . . shall have the exclusive right of possession and enjoyment of all the surface included within the lines of their locations, and of all veins, lodes, and ledges throughout their entire depth, the top or apex of which lies inside of such surface lines extended downward vertically, although such veins, lodes, or ledges may so far depart from a perpendicular in their course downward as to extend outside the vertical side lines of such surface locations. But their right of possession to such outside parts of such veins or ledges shall be confined to such portions thereof as lie between vertical planes drawn downward as above described, through the end lines of their locations, so continued in their own direction that such panes will intersect such exterior parts of such veins or ledges.
30 U.S.C. § 26 (1971). The right to follow a vein outside the boundaries of one's own claim has come to be called 'eatralateral rights.' See 2 C. Lindley, Mines, American Law Relating to Mines and Mineral Lands § 566 at 1252 (3d ed. 1914). Extralateral rights attach only to those veins which have their apex within the boundaries of a claim. The concept
of extralateral rights is illustrated as follows:
NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE
In other words, once a claimant establishes the apex of a vein within the boundaries of his claim, he may follow that vein on its downward course (dip) outside the claim so long as he remains within the extension of the end lines of his claim.
A locator of a mining claim is presumed to own all ore within the boundaries of his claim extended downward vertically. St. Louis Mining & Milling Co. v. Montana Mining Co., 194 U.S. 235, 239, 24 S.Ct. 654, 48 L.Ed. 953 (1904); Calhoun Gold Mining Co. v. Ajax Gold Mining Co., 182 U.S. 499, 508, 21 S.Ct. 885, 45 L.Ed. 1200 (1901). Thus, one who asserts extralateral rights to a vein penetrating another's claim has the burden of proving that the vein has its apex within the boundaries of his claim. Heinze v. Boston & M. Consol. Copper & Silver Mining Co., 30 Mont. 484, 77 P. 421 (1904); Barker v. Condon, 53 Mont. 585, 165 P. 909, 912 (1917); Collins v. Bailey, 22 Colo.App. 149, 125 P. 543, 548 (1912). This rule is firmly stated in Consolidated Wyoming Gold Mining Co. v. Champion Mining Co., 63 F. 540, 550--51 (N.D.Cal.1894):
The respondent (surface owner) has the undoubted right to say to complainant (extralateral claimant), 'Hands off of any and everything within my surface lines extending vertically downward, until you prove that you are working upon and following a vein which has its apex within your surface claim, of which you are the owner!'
Here, the trial court held that Sunshine failed to meet the substantial burden of proof required of an extralateral rights claimant. 4
First, Sunshine contends that its extralateral right to the YGV was established by evidence sufficient to prove a surface apex in the Thin Claim and that entry of findings and conclusions to the contrary was error. We disagree.
The trial court found that Sunshine demonstrated the apex
of some vein which courses throughout the length of the Thin Claim.
. . . but Sunshine has failed to prove continuity of the vein mineralization or gangue between that apex on the Thin Claim and the Yankee Girl Vein seen between the 2700 and 3700-foot levels. (Challenged finding of fact No. 33)
Sunshine attempted to prove continuity and identity between the claimed surface apex on its Thin Claim and the YGV between the 2700- and 3700-foot level by mineral samples taken from drill holes along the projected downward course of the YGV between the surface and the 2700-foot level. The trial court characterized this evidence as 'not too revealing,' specifically finding that:
From reading the drill logs covering drilling above 2700 it is impossible to determine the configuration of the Yankee Girl Vein between the Yankee Girl adit and the 2700-foot level. Commencing with Hole 27--011 at the 2400-foot level to the surface, it is apparent that the vein There is no established degree of continuity or identity which an extralateral rights claimant must show between an apex within the boundaries of his claim and the vein he is pursuing into an adjoining claim. The required showing of continuity and identity is dependent upon the facts of each case. Gold, Silver & Tungsten, Inc. v. Wallace, 104 Colo. 273, 91 P.2d 975, 979 (1939). Here, the trial court was presented with mineral samples recovered from narrow drill holes often hundreds of feet apart between the surface and the 2700-foot level. The recovered samples contain material common, not only to the YGV between the 2700- and 3700-foot levels, but throughout the Coeur d'Alene Mining District. The trial court summed up the difficulty of establishing an apex without further demonstrative evidence Nor has Sunshine mined down dip from the surface on the Yankee Girl Vein to reveal for certain its angle of dip and configuration. It is that fact which makes the case somewhat unusual as compared to the reported cases. In all of the latter cases there has been extensive work at or near the surface of the claim demonstrating the strike and dip of the vein. In addition, what geological projections were made weren't over such extensive distances as involved in this case. This case is very unusual in that Sunshine has mined the ore at the lower levels and projected up-dip for nearly half a mile in an attempt to tie their mining in with a surface apex in claims under its control. (Unchallenged finding of fact No. 35)
is irregular and very narrow. It likewise does not possess those characteristics which distinguish it and give it its identity between the 3700 and 2700-foot levels. There is no concentration of mineralized stringers that interlace, converge, or weave in and out. There are many isolated stringers in the area, so it is...
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