State ex rel. Milchem Inc. v. Third Judicial Dist. Court In and For Lander County, s. 5467

• Decision Date: 20 September 1968
• Docket Number: 5483,Nos. 5467,s. 5467
• Citation: 84 Nev. 541,445 P.2d 148
• Parties: STATE of Nevada ex rel. MILCHEM INCORPORATED, a corporation, and Tony Miller, Petitioners, v. The THIRD JUDICIAL DISTRICT COURT of the State of Nevada, IN AND FOR the COUNTY OF LANDER; Honorable John F. Sexton, Judge thereof, and William Roberts, William Lauritzen, and Lyman Thomas, Respondents.
• Court: Nevada Supreme Court

Page 148

445 P.2d 148

84 Nev. 541

STATE of Nevada ex rel. MILCHEM INCORPORATED, a corporation and Tony Miller, Petitioners, v. The THIRD JUDICIAL DISTRICT COURT of the State of Nevada, IN AND FOR the COUNTY OF LANDER; Honorable John F. Sexton Judge thereof, and William Roberts, William Lauritzen, and Lyman Thomas, Respondents.

Nos. 5467, 5483.

Supreme Court of Nevada.

Sept. 20, 1968.

Rehearing Denied Nov. 12, 1968.

Cooke & Roberts and George G. Holden, Reno, for petitioner, Milchem, inc Harry B. Swanson and Richard E. Fray, Reno, for petitioner, Tony miller.

Gordon W. Rice and Leo P. Bergin, Reno, for respondents.

OPINION

MOWBRAY, Justice:

Respondents Roberts, Lauritzen, and Thomas commenced an eminent domain action under NRS 516.010--516.060 against the petitioners. Petitioner Milchem Incorporated is the present owner of the property. Petitioner Miller is one of Milchem's predecessors of title.

These respondents filed a notice of location in 1963 for certain minerals on Miller's land. Later that year a certificate of location was recorded for another claim on the land. One year later the respondents filed their only proof of annual labor. In late 1966, after Milchem acquired title, another certificate of location was recorded.

Respondents have actually occupied and mined a certain lode in an open pit on a portion of the property since 1963. On November 16, 1966, they were advised by petitioner Milchem to cease such work and remove their property from the land. Respondents refused and instead went to court, filed the condemnation action, and obtained a temporary restraining order preventing petitioner Milchem from interfering with or obstructing respondents' possession, mining, or use of the property.

On January 6, 1967, Milchem filed a motion to dismiss respondents' action. In March 1967 Milchem filed a motion for a preliminary injunction to require the respondents to cease mining operations and yield possession to petitioner Milchem. Petitioner Miller also filed a motion to dismiss respondents' action. Miller also counterclaimed for damages against the respondents. Petitioners' motions were denied. Respondents have continued to remove the ore from the land. Petitioners claim that they have no plain, speedy, or adequate remedy in the ordinary course of law, and therefore filed in this court the present petition for an alternative writ of prohibition. Petitioners are asking this court to command the lower court to desist and refrain from any further proceedings in the eminent domain action below.

1. Respondents' claim that prohibition is not an appropriate remedy is without merit. In Bell v. First Judicial Dist. Court, 28 Nev. 280, 294, 81 P. 875, 876 (1905), this court said:

'It appears from the petition herein that petitioners applied to the lower court for relief, and that the questions herein presented were urged upon that court upon motions to quash and to dismiss the proceedings. If the proceedings in the lower court would be void because of the unconstitutionality of the sections of the act under which it is instituted, I think it is a case for the proper interference of this court by prohibition, unless it appear that there is another plain, speedy, and adequate remedy.' See also Mitchell v. Second Judicial Dist. Court, 82 Nev. 377, 418 P.2d 994 (1966).

When the motions to dismiss and the motion for a preliminary injunction were denied by the lower court after a presentation of the arguments herein urged, the petitioners were left with no other plain, speedy, and adequate remedy. Their claim is that the statute upon which respondents seek to act is unconstitutional. The respondents are in possession of the property and are able to mine the limited supply of minerals. They are thus able virtually to destroy the mining value of the land. Petitioners have no assurance that they will ever be adequately compensated for any damage done to their land. The slow process of appeal would not provide an adequate remedy under such circumstances. Prohibition is a proper remedy.

2. Respondents have moved to dismiss this proceeding upon the ground that Milchem has pursued another and inconsistent remedy by commencing an action to quiet title to the property. Respondents claim that petitioners, Milchem and Miller, have thereby waived their right to prosecute this proceeding.

Much of the authority cited by the respondents is not in point in that it contemplates an appeal from a judgment of the lower court and a subsequent attempt by an appellant to pursue an inconsistent remedy. In the present case there has been no judgment below; indeed, that is what the petitioners are trying to prevent. This is an original proceeding to obtain a permanent alternative writ of prohibition.

The statute of limitations on a potential claim of adverse possession by the respondents ran its 5 years on March 21, 1968. Petitioners claim that the quiet-title action was filed on February 15, 1968, as a cautionary measure to prevent the respondents from claiming 5 years of continuous adverse possession. This is a reasonable explanation which has its basis in law. Knoke v. Swan, 2 Cal.2d 630, 42 P.2d 1019, 97 A.L.R. 841 (1935).

The petitioners should not be forced to give up either their right to protect themselves against the allegedly unconstitutional actions of the lower court or the potential claim of adverse possession by the respondents. The petitioners' right to protect themselves in such a fashion is an exception to the general rule of waiver by pursuit of an inconsistent remedy. Smith v. Patton, 241 S.W. 109 (Com.App.Tex.1922).

Under these facts, petitioner Milchem's quiet-title action cannot be considered so inconsistent as to constitute a clear and unmistakable voluntary waiver of petitioners' right to proceed. Basic Refractories, Inc. v. Bright, 71 Nev. 248, 286 P.2d 747 (1955).

3. We now reach the merits. The statute ¹ under which respondents' original action was brought is apparently unique to Nevada. In essence, it seeks to encourage the development of the mineral resources of the State by extending to certain lands held in private ownership the same rights to discover and exploit minerals which prevail upon the public domain under the federal mining laws. It also purports to protect the rights of the private owner by providing for an eminent domain proceeding to ascertain and compensate him for the value of any land taken. Petitioners' primary claim is that this eminent domain proceeding is unconstitutional in that it does not provide a just compensation (Nev.Const. art. 1 § 8) for the taking of private property. The exclusion of the value of the minerals contained in the land, pursuant to NRS 516.060, is the alleged unconstitutional defect.

When this statute was enacted, it was a common belief that the United States had retained mineral rights in large quantities of land to which it had issued patents. Most congressional acts which allowed for selection and patent of public lands contained restrictions which prevented the selection of lands which were known to be valuable for minerals. This applied to lands selected under the railroad grants and under the homestead laws. The enabling act which admitted Nevada as a State required it to consent to a reservation of minerals in favor of the United States as to all lands selected by the State. Since it was physically impossible to catalog and inventory all public lands selected for grant or entry to determine if they were valuable for minerals, the Secretary of the Interior normally included in early patents a reservation or exception of mineral rights or lands valuable for minerals. Similarly, patents issued by the State of Nevada normally contained a reservation of mineral rights or mines valuable for specified minerals in favor of the United States. Thus, when the Nevada statute was enacted, it was common belief the patentee of most lands (excluding mineral patents) owned only the surface rights and that the mineral rights were retained by the United States.

Respondents contend that the language 'mineral land excluded' in the patent deed from the United States to the Central Pacific Railway Co., a predecessor in interest of the petitioners, precludes them from having any interest in the minerals in the land. It is clear, however, that this language means only that mineral lands known to be such at the time of the patent were not conveyed by the instrument. In Burke v. Southern Pac. R.R., 234 U.S. 669, 690, 34 S.Ct. 907, 915, 58 L.Ed. 1527 (1914), it was held that the Secretary of the Interior must determine at the time of issuing such a railroad grant patent which lands are to be excluded as mineral, and that such 'determination of the fact * * * will be considered as conclusive.' See also Dredge Corp. v. Husite Co., 78 Nev. 69, 369 P.2d 676 (1962); Francoeur v. Newhouse, 40 F. 618 (C.C.N.D.Cal.1889). Petitioner Milchem is the owner of the present mineral rights which were subsequently discovered to be in the land.

Ownership of minerals is a property right protected by the State and Federal Constitutions. United States v. 4.553 Acres of Land, etc., 208 F.Supp. 127 (N.D.Cal.1962); Idaho Maryland Mines Corp. v. United States, 104 F.Supp. 576, 122 Ct.Cl. 670 (1952). The rights acquired by eminent domain are only those which are fully paid for. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322, 28 A.L.R. 1321 (1922).

Where the mineral right is itself the interest sought to be condemned, it must be valued and paid for separately. State ex rel. State Highway Comm'n v. Foeller, 396 S.W.2d 714 (Mo.1965); 4 Nichols, Eminent Domain § 13.22(2) at 422 (3d ed. 1962).

Condemned property can be taken 'only after an ample and certain provision has been made for a just, full and adequate compensation * * *.' Dayton Gold & Silver Mining Co. v. Seawell, 11 Nev. 394, 411 (1876).

As was stated in Board of Directors, St. Francis Levee...