Steinfeld v. Copper State Mining Co., Civil 2852

• Decision Date: 19 July 1930
• Docket Number: Civil 2852
• Citation: 37 Ariz. 151,290 P. 155
• Parties: ALBERT STEINFELD, Appellant, v. COPPER STATE MINING COMPANY, a Corporation, CALUMET AND COPPER CREEK MINING COMPANY, a Corporation, MINNESOTA-ARIZONA COPPER COMPANY, a Corporation, MARTIN E. TEW, JOHN F. SHAW and GALESBURG COPPER COMPANY, a Corporation, Appellees
• Court: Arizona Supreme Court

290 P. 155

37 Ariz. 151

ALBERT STEINFELD, Appellant, v. COPPER STATE MINING COMPANY, a Corporation, CALUMET AND COPPER CREEK MINING COMPANY, a Corporation, MINNESOTA-ARIZONA COPPER COMPANY, a Corporation, MARTIN E. TEW, JOHN F. SHAW and GALESBURG COPPER COMPANY, a Corporation, Appellees

Civil No. 2852

Supreme Court of Arizona

July 19, 1930

APPEAL from a judgment of the Superior Court of the County of Pinal. E. L. Green, Judge. Judgment affirmed.

Mr Francis M. Hartman, for Appellant.

Mr John B. Wright, for Appellees.

OPINION

LAMSON, Superior Judge.

This is a suit in equity instituted by Albert Steinfeld, as plaintiff, against the Copper State Mining Company, a corporation; Calumet and Copper Creek Mining Company, a corporation; Minnesota-Arizona Copper Company, a corporation Martin F. Tew; John F. Shaw; and Galesburg Copper Company, a corporation, defendants, to quiet title to, or for an interest in, or for a lien upon, all or portions of certain unpatented mining claims, situated in Pinal county, Arizona, known as Kimbro Eastern, Valesquez, Valesquez Wedge and Granite Hill mining claims, together with all buildings, mills, power plant and improvements of every kind situated thereon. Subsequently the Minnesota-Arizona Copper Company brought an action against John F. Shaw and Galesburg Copper Company to quiet title in the same mining claims and improvements, in which case Albert Steinfeld intervened. By stipulation the two cases were consolidated for trial. The cases were tried to a jury, and at the close of all the evidence the court directed a verdict in favor of Minnesota-Arizona Copper Copany and against Shaw and Galesburg Copper Company without prejudice to the rights of Albert Steinfeld, and judgment was entered in accordance with the directed verdict. At the same time the issues between Albert Steinfeld on the one side and Copper State Mining Company, Calumet & Copper Creek Mining Company and Minnesota-Arizona Copper Company were withdrawn from the jury and submitted to the court for decision. Thereupon both sides submitted proposed findings of fact which were modified, amended, corrected and agreed upon by counsel for the respective parties, and then signed by the court. Thereafter the court announced its decision in favor of the Minnesota-Arizona Copper Company and against the plaintiff, Steinfeld, and a formal judgment followed. It appears from the judgment that the action was dismissed as against the Copper State Mining Company, Calumet & Copper Creek Mining Company and Tew, without costs, for the reason that the evidence failed to show that such defendants or any of them ever did have any right, title or interest in the Kimbro group of mining claims. The plaintiff filed a motion for new trial, also amended motion for new trial, and various exceptions and objections to the proposed findings of fact. Thereafter the amended motion for new trial was denied and appeal duly taken to this court from the judgment and order denying motion for new trial.

It appears to be necessary to state rather fully the facts as they appear from the findings of the court below, and the evidence introduced. There are four Arizona corporations involved: Copper Creek Mining Company, incorporated June 18, 1903; Minnesota-Arizona Copper Company, incorporated April 17, 1908; Calumet & Copper Creek Mining Company, incorporated March 23, 1910; and Copper State Mining Company, incorporated August 5, 1915.

The Copper Creek Mining Company had many stockholders and owned numerous mining claims. The Minnesota-Arizona Copper Company had many stockholders and owned the Kimbro group and other claims. The Calumet & Copper Creek Mining Company owned two groups of mining claims, and also obtained by exchange of stock the controlling interest in the Copper Creek Mining Company and the Minnesota-Arizona Copper Company, holding 1,650,000 shares of stock in the Copper Creek Mining Company, and 1,700,000 shares of stock in the Minnesota-Arizona Copper Company. In 1909 the Minnesota-Arizona Copper Company leased to the Copper Creek Mining Company a portion of the surface of the Kimbro and Kimbro Eastern mining claims for a period of twenty-five years, for the purpose of the erection and maintenance of a concentrating mill and other machinery thereon, and thereafter the Copper Creek Mining Company erected a mill on the leased ground.

In 1914, one Leo Goldschmidt obtained a judgment against the Calumet & Copper Creek Mining Company for approximately $9,000, which judgment was docketed in Pinal county November 16th, 1914. On June 2, 1915, the Calumet & Copper Creek Mining Company was adjudicated a bankrupt. This adjudication did not affect the lien of the Goldschmidt judgment.

Defendant Tew was a stockholder in the Minnesota-Arizona Copper Company and became vice-president some time after its incorporation. He was also a stockholder in the Calumet & Copper Creek Mining Company and became president a few months before the adjudication in bankruptcy. He was also a stockholder in the Copper State Mining Company and president in charge of the affairs of that company. At the time of the docketing of the Goldschmidt judgment, and at the time of the adjudication in bankruptcy, the Calumet & Copper Creek Mining Company owned a number of mining claims, 1,650,000 shares of stock in the Copper Creek Mining Company, valued in the schedules at $240,000, and 1,700,000 shares of stock in the Minnesota-Arizona Copper Company, valued in the schedules at $170,000. The bankrupt also listed the permanent improvements on the leased portion of the Kimbro group as personal property. These improvements were held by the court to be real estate, and admitted by all of the parties to this litigation as such. At the time of the docketing of the Goldschmidt judgment the improvements consisted chiefly of the old mill erected by the Copper Creek Mining Company. It does not appear just what improvements were made by the Calumet & Copper Creek Company.

Some of the stockholders of the bankrupt company raised the sum of $10,000, and placed the same in the hands of one Hudson, who purchased all the assets of the bankrupt at the trustee's sale. In the deed from the trustee to Hudson, the mining claims owned by the bankrupt company were specifically named, and the shares of stock in the Copper Creek Mining Company and Minnesota-Arizona Copper Company were included. The deed also conveyed all right, title and interest which the bankrupt had by virtue of its ownership of the 1,700,000 shares of stock in and to the Kimbro group belonging to the Minnesota-Arizona Copper Company. Thereafter the Copper State Mining Company was organized and Hudson conveyed to the new company, using the same language as contained in the trustee's deed to him. These conveyances were made subject to the lien of the Goldschmidt judgment. The stockholders of the bankrupt company who had contributed to the fund were given stock in the Copper State Mining Company in proportion to their contributions. The lower court expressly found that there was no fraud in connection with any of these transactions.

In the year 1916 the Copper State Mining Company erected on the Kimbro and Kimbro Eastern a flotation mill and other improvements of the value of approximately $150,000. These improvements were assessed to the Copper State Mining Company as personal property, and that company paid the taxes thereon each year thereafter. Neither the Minnesota-Arizona Copper Company nor Goldschmidt, nor any of his successors, ever paid or tendered any taxes on these improvements. In October, 1919, Goldschmidt took out an execution, and the sheriff sold not only the claims belonging to the judgment debtor, Calumet & Copper Creek Mining Company, but also the Kimbro group. Goldschmidt himself became the purchaser at the sale and received the sheriff's certificate of sale. In November, 1919, Goldschmidt sold and assigned this certificate of sale to the Consolidated National Bank of Tucson. In February, 1922, said bank obtained from the sheriff of Pinal county a sheriff's deed, conveying all the right, title and interest of the Calumet & Copper Creek Mining Company, as the same existed in November, 1914, or thereafter, in the Kimbro group and the improvements thereon. In 1926 the bank conveyed the same property to the plaintiff herein.

It appears that the Minnesota-Arizona Copper Company held no formal meetings of stockholders or directors after 1910, but did hold informal meetings on several occasions; that the Minnesota-Arizona Copper Company performed, or caused to be performed, the assessment work on the Kimbro group each year from 1908 to the date of the trial. It further appears that in 1918 and 1919 claims for exemption from assessment work were filed on behalf of the Copper State Mining Company, in which claims the Kimbro group were stated to belong to said company. It further appears that defendant Tew in 1917 caused a prospectus to be printed in which he stated that the Copper State owned the Kimbro group, together with the improvements. No evidence was introduced to show whether or not said prospectus was ever distributed to anyone, or that Tew had any authority from the Minnesota-Arizona Copper Company to make such statement.

In June, 1923, the Copper State Company, by its president, Tew, made a written contract with the Consolidated National Bank, whereby the bank agreed to accept $12,000 in full payment of its judgments, amounting to about $44,000 under which certain claims of the Copper Creek Mining Company and Calumet & Copper Creek Mining Company had been sold to it, and to convey its interest in said claims to the Copper State Mining Company, provided Tew would pay certain notes owing by him individually to the Steinfeld...