Tri-Bullion Corporation v. American Smelting & Refining Co., TRI-BULLION

• Decision Date: 29 November 1954
• Docket Number: TRI-BULLION,No. 5795,5795
• Parties: CORPORATION, a corporation, Plaintiff-Appellant, v. AMERICAN SEMLTING & REFINING COMPANY, a corporation, Defendant-Appellee.
• Court: New Mexico Supreme Court

Page 293

277 P.2d 293

58 N.M. 787

TRI-BULLION CORPORATION, a corporation, Plaintiff-Appellant, v. AMERICAN SEMLTING & REFINING COMPANY, a corporation,

Defendant-Appellee.

No. 5795.

Supreme Court of New Mexico.

Nov. 29, 1954.

Hannett & Hannett and W. S. Lindamood, Albuquerque, for appellant.

Shantz & Woodbury, Silver City, Ben C. Hill, Tucson, Ariz., for appellee.

LUJAN, Justice.

This is an appeal from a judgment entered in favor of the American Smelting and Refining Company, a corporation, defendant (appellee), dismissing the complaint of the Tri-Bullion Corporation, a corporation, plaintiff (appellant), with prejudice, and the plaintiff appeals.

The facts out of which the controversy arose are somewhat complicated, and will be stated in extenso.

On December 4, 1890, a patent was issued by the United States Government to the North Graphic Mining Company covering Lot 523-A, the property involved herein, and Lot No. 523-B, not a subject of this suit, and recorded January 3, 1891. On December 12, 1903, the patentee, North Graphic Mining Company, leased the following described property under a 99 year lease to one Cony T. Brown, which lease was recorded October 7, 1904. It reads, in part as follows:

'All that certain tract, piece and parcel of mining ground situate in the Magdalena Mining District, County of Socorro, Territory of New Mexico, known and described as follows, towit:

'The surface within the following described area that is to say: four hundred (400) feet off of the south end of the North Graphic Lode Mining Claim as the same is surveyed by the Government and described in the patent therefor, the said patent being Government Patent 523-A, that is to say, beginning at the southwest corner of the said mining claim as described in said patent, and running thence six hundred (600) feet to the southeast corner of the same, as therein described and thence along the east side line of said mining claim four hundred (400) feet, and thence from said last mentioned point in a line parallel with said south end line of said claim six hundred (600) feet to the west side line of said claim, and thence for a distance of four hundred (400) feet to the place of beginning.'

The lease further provides:

'It is further covenants by and between the parties hereto that the said party of the second part shall have the right to use the surface ground within the said above described area as dumping ground and for the erection thereon of buildings and improvements . . . the said party of the second part by virtue of this lease acquires no right to any of the mineral in said ground; * * *'.

On March 29, 1904, Cony T. Brown assigned this lease of Fitch & Brown, a copartnership. On March 30, 1904, said copartnership assigned their lease to W. H. Cottingham, as Trustee. On November 8, 1904, the said Cottingham, as trustee, assigned said lease to Graphic Lead and Zinc Mining Company, a corporation, which was recorded on November 12, 1904. On December 9, 1905, said last corporation conveyed its interest in said lease to the Ozark Smelting and Mining Company, a corporation, said assignment was recorded January 25, 1906. On June 16, 1913, the Tri-Bullion Smelting and Development Company, a corporation, the predecessor in title to plaintiff herein, and Ozark Smelting and Mining Company, a corporation, a predecessor in title to the defendant herein, entered into an agreement for the purchase of stock fo the North Graphic Mining Company, a corporation, and its assets, same was recorded December 10, 1913. At the time of this agreement the North Graphic Mining Corporation, the original patentee, was still the owner of the mining claim subject to the Cony T. Brown lease.

At the time of said agreement, no mention whatever was made therein concerning the south 400 feet of Extension No. 1, North Graphic Lode Mining Claim, designated as Lot 523-A, which property was leased to Cony T. Brown on December 12, 1903, and which lease was at the time of the agreement owned by Ozark Smelting and Mining Company, one of the parties to said agreement. On November 3, 1914, the North Graphic Mining Company, a corporation, conveyed said mining claim by warranty deed to Julian Dickinson, Receiver of North Graphic Mining Company, same was recorded November 6, 1914. No mention was made of a lease of the south 400 feet of said claim. On December 2, 1914, Julian Dickinson, Receiver of North Graphic Mining Company, conveyed said property to Howard Paschal, Trustee, reciting in said instrument that the same was made by virtue of a decree of the Circuit Court of Wayne County, Michigan, and in pursuance of the grant conferred by the deed to Dickinson, Receiver. This deed was recorded December 28, 1914.

Howard Paschal was President of the Tri-Bullion Smelting and Development Company, and he it was who made arrangement with the holders of a majority of the capital stock of North Graphic Mining Company for a purchase of their stock prior to making of the above mentioned agreement, and who executed that agreement in behalf of his company.

On December 7, 1914, Howard Paschal, Trustee, by a deed conveyed the said mining claim, without mention of any lease of any nature, to the Tri-Bullion Smelting and Development Company and the Ozark Smelting and Mining Company, same was recorded December 28, 1914.

On December 30, 1927, the Tri-Bullion Smelting and Development Company conveyed all its interest in said mining claim to Tri-Bullion Corporation, a corporation, plaintiff herein. On January 1, 1916 the Ozark Smelting and Mining Company, a corporation, conveyed its interest to the Sherwin-Williams Company, said deed was recorded December 13, 1916. On December 30, 1927, the Tri-Bullion Smelting and Development Company conveyed by deed all its interest in the North Graphic Group of Mines to the Tri-Bullion Corporation. On April 9, 1943, the Sherwin-Williams Company, by a mining deed, conveyed all its interest in the property to the American Smelting and Refining Company, defendant herein, which deed was recorded April 14, 1943. On April 25, 1944, Sherwin-Williams Company, executed a correction deed to American Smelting and Refining Company, conveying any interest in the surface ground in the property in question.

This action was filed on January 29, 1951, by the plaintiff where it alleged:

'1. That the plaintiff and defendant were at all times material to this cause the owners of a certain mining claim as tenants in common, to-wit: (description of property omitted) on which there was situated a large dump of tailings which were owned by the plaintiff and defendants as tenants in common.

'2. That between the 24th day of April, 1944, and the 1st day of June, 1950, the defendant converted to its own use upwards of fifteen thousand tons of said dump and tailing which contained valuable minerals, and smelted and marketed said minerals, which said minerals, as plaintiff is informed and verily believes, were of the value of upwards of $50,000, one-half of which was the property of plaintiff.

'Wherefore, plaintiff demands judgment against the defendant in the sum of $25,000 * * *.'

The defendant answered as follows:

'Defendant admits that it was and is the owner of an undivided one-half interest in and to that certain mining claim or premises known as Extension No. 1, North Graphic lode mining claim, designated by the Surveyor General as Lot No. 523A, except as to the surface of the following described area of said claim, to-wit:

400 feet off of the South end of said claim, beginning at the Southwest corner of said claim and running thence 600 feet to the Southeast corner of the same, and thence along the East side line of said claim 400 feet and thence from said last mentioned point, on a line parallel with the South end line of said claim 600 feet to the West side line of said claim, and thence 400 feet to the place of beginning;

which said surface and all rights therein were and are the sole property of defendant.

'2. Defendant denies that plaintiff was or is the owner of any interest in and to said Extension No. 1, North Graphic lode mining claim.

'3. Defendant admits that upon said area of said claim above described there was situated a large dump, but denies that the same was owned by plaintiff and defendant as tenants in common, and alleges that it was the sole property of defendant.'

At the conclusion of the trial the court made many findings of fact and conclusions of law, among which are the following:

'1. Plaintiff and defendant are the owners as tenants in common of the Extension No. 1 North Graphic Lode Mining Claim, subject to the rights of defendant as lessee under the terms of lease of December 12, 1903, a copy of which is attached to defendant's second amended answer and is shown in the abstract in evidence. Plaintiff's Exhibit 1.'

'31. At all times since the making of the lease of December 12, 1903, the area leased thereby has been held and possessed and controlled by a lessee, that is the original lessee or his successive assignees; and the dump on such area has been continuously in the possession of such lessee and under his or its control and has not been abandoned by the lessee.'

'32. There was no conveyance or assignment of said leasehold interest to the plaintiff.'

The court concluded as a matter of Law:

'2. The lease of December 12, 1903, to Cony T. Brown was not extinguished by a merger of said lease into the agreement of June 19, 1913, between Tri-Bullion Smelting and Mining Company and the deed dated December 7, 1914, from Howard Paschal, Trustee, to Tri-Bullion Smelting and Development Company and Ozark Smelting and Mining Company, and the rights of said County T. Brown thereunder are owned by the defendant herein and the same and said lease are in full force and effect.

'5. Plaintiff and defendant were tenants in common of that mining property designated as Lot 523-A, as to the mining claim itself, but subject to said lease of ...