Smith v. Daly

• Decision Date: 20 May 1960
• Citation: 5 Cal.Rptr. 176,181 Cal.App.2d 154
• Court: California Court of Appeals Court of Appeals
• Parties: V. R. SMITH, Helen Smith, H. E. Barnett and Leona Barnett, Pete Cassou, Freda Cassou, Alfred Siemon and Bennett Siemon, Plaintiffs, Cross-Defendants and Respondents, v. A. D. DALY, Nellie E. Daly, substituted as Executrix of the Estate of A. D. Daly, deceased, and Nellie E. Daly, Defendants, Cross-Complainants and Appellants. Civ. 6081.

Page 176

5 Cal.Rptr. 176

181 Cal.App.2d 154

V. R. SMITH, Helen Smith, H. E. Barnett and Leona Barnett, Pete Cassou, Freda Cassou, Alfred Siemon and Bennett Siemon, Plaintiffs, Cross-Defendants and Respondents, v. A. D. DALY, Nellie E. Daly, substituted as Executrix of the Estate of A. D. Daly, deceased, and Nellie E. Daly, Defendants, Cross-Complainants and Appellants.

Civ. 6081.

District Court of Appeal, Fourth District, California.

May 20, 1960.

Hearing Denied July 12, 1960.

Di Giorgio & Davis, Bakersfield, for appellants.

Baker, Palmer, Wall & Raymond, Bakersfield, for respondents.

GRIFFIN, Presiding Justice.

Two actions in the Superior Court, number 70549 involving a quiet title action to five gypsite placer mining claims, and number 70138 for damages for breach of a contract, were consolidated for trial. During the course of the trial, action number 70138 was dismissed and the court proceeded with the trial of the quiet title action.

The principal question involved is whether defendants performed the necessary assessment work on said claim during the year July 1, 1956 to July 1, 1957 and before plaintiffs filed a claim thereto August 1, 1957; whether these claims were open for relocation by plaintiffs when they filed their notice of location. Defendants' answer and cross-complaint seeks to quiet their title thereto, to recover damages for trespass, claims full compliance with all annual assessment work required by law to July 1, 1957 and alleges plaintiffs to be claim-jumpers without right.

It is conceded that defendants did, on July 8, 1957, record a notice of proof of annual labor or improvements performed for the year indicated by A. D. Daly. It is further conceded that Daly owned and actively worked these claims since 1936 and that he had done the necessary assessment work up to July 1, 1956. The pre-trial order recites:

'If such assessment work was performed by him (Daly) or by someone on his behalf, the claims of the plaintiff in the second action are without validity.'

A brief description of these claims and the surrounding circumstances is necessary to a proper understanding of the factual background and conclusions to be reached. The deposit of gypsite, which is the subject of the action, lay beneath a thin overburden of dirt in the open desert, in the Red Rock Mining District, at Cantil in Kern County. In order to 'mine' this material, it was first necessary to scrape off the overburden with a bulldozer or similar piece of equipment. The gypsite was then bladed into long 'windrows' so that it could dry out. When it was sufficiently dry, the material in the 'windrows' was bulldozed into a pile convenient to the 'loader.' There is some evidence indicating this so-called stockpile was only a few feet in height and at least some portion of it was stockpiled in the pit itself after this operation. The 'loader' was more than the name implies. It consisted of a series of about 15 returning elevator buckets rotating on a belt leading up from the level of the stockpile to a bin or large container of a stationary type, at the top of which was located a so-called mechanical oscillating screen which pulverized the material, removed lumps and impurities from the ore before depositing the cleaned gypsite into a funnel-shaped bin which was opened and thereafter the gypsite fell in this powdered form into big trucks passing under it and was carried away in this pulverized condition to customers. There is some conflict in the evidence as to whether further scraping off of overburden or further cuts were made in the original deposit and further stockpiling of it was made after July 1, 1956 and prior to July 1, 1957. Apparently defendants, or their former lessees, had, prior to July 1, 1956, thus worked the claims and stockpiled the gypsite. Defendant Daly and his wife, during the time in question, lived in a house either on or near these claims. He suffered a prolonged illness and died on November 26, 1957.

In an exchange of letters beginning November 12, 1955, plaintiff Smith first wrote Daly in part:

'Since Mr. Barnett and I visited your mine, we have organized the Mojave Desert Gypsite Company for the purpose of selling your material * * *

'It is my understanding that the price to me for my own ranches is $1.50 per ton F.O.B. mine, and to the outside farmers $2.00 per ton * * *

'If this meets with your approval, please sign one copy and return it to us.

'As soon as possible I want to start hauling gypsite for some of my properties which have not already been treated.'

'Signed: V. R. Smith

'Approved: A. D. Daly'

About February 1956 all parties proceeded under this general agreement, as well as some oral agreement or arrangements whereby Daly was to furnish the bulldozer, machinery, loader and a man to operate them, and place the gypsum in condition and in a position to be loaded on Smith's trucks. Daly was to pay this expense, or Smith was to pay it and deduct the amount from proceeds due to Daly. Apparently 4,700 tons were thus delivered; 2,395 tons were taken out during the assessment year involved. About April 3, 1956, Daly wrote Smith, reciting that:

'About six months ago, it was orally understood between yourself and the Mojave Desert Gypsite Co., * * * that if you used my product * * * I would not sell my product * * * to any other persons who would undertake marketing gypsite or gypsum in those areas for a reasonable time * * *

'I am now approached by third parties who are offering to purchase said gypsite deposit * * * I will protect you and your rights in the event that I sell said deposit * * * I consider our previous oral understanding as binding and intend to confirm it by this letter so that you will obtain all of the gypsite that you may need from my deposit * * * until the 31st day of December, 1965, with an option on your part to extend it for an additional period of 10 years. * * * The prices quoted are to be for bulk shipments f. o. b. the A. D. Daly Mine. * * *

'In addition to the foregoing and in further consideration of your personal use of my product and the sale promotion that you have done to date, I also confirm our oral understanding that I will sell said gypsite deposit at Cantil to you for $100,000.00 on the following terms:

'$14,000.00 payable in cash on or before the 15th day of June, 1956, which said payment will give you title to all of the personal property on said premises and act as a down payment on the mining property. * * * This offer of sale will be accepted if said initial payment of $14,000.00 is made on or before the said 15th day of June, 1956.'

'Signed: A. D. Daly

'Approved: V. R. Smith'

The court found generally that neither defendants nor any person on their behalf performed any labor or made any improvements on any of the claims for the annual period ending July 1, 1957 except a small amount of work of indefinite value in connection with loading and shipping gypsum from gypsum which had been previously mined an stockpiled by lessees of defendants and that the 'loading and shipping did not in any manner constitute improvement or development of said mining claims.' It denied defendants' recovery on their cross-complaint and quieted plaintiffs' title to said mine as against these defendants. Judgment was entered accordingly.

Appellants first argue that plaintiffs were barred and estopped, as a matter of law, from relocating on defendants' claims because of their prior contractual relationship. The court made no specific finding on this question although it was conceded by plaintiffs, in the pre-trial order, that one of the issues presented for consideration was whether plaintiffs were estopped to claim a valid, good faith location by reason of their contractual relationship. The pre-trial order recites that plaintiffs dispute the claim of estoppel because they never were in possession of the claims and never exercised the option tendered to them by Daly. A specific finding on this question should have been made because of the various oral and written agreements of the parties and their conduct and actions in reference thereto.

Plaintiffs claim the agreement, including the option to purchase, was breached by defendants and defendants make the same claim in reference to plaintiffs. Whether that option was still enforceable against defendants at the time plaintiffs filed their location notices is not indicated by the findings.

It is a...