United Western Minerals Co. v. Hannsen

• Decision Date: 17 July 1961
• Docket Number: No. 19539,19539
• Citation: 147 Colo. 272,363 P.2d 677
• Parties: UNITED WESTERN MINERALS COMPANY, a Delaware Corporation, Plaintiff in Error, v. John F. HANNSEN, Pete Cowan, Archle Hopper, Rockwell Canda and James Edwards, Defendants in Error.
• Court: Colorado Supreme Court

Page 677

363 P.2d 677

147 Colo. 272

UNITED WESTERN MINERALS COMPANY, a Delaware Corporation, Plaintiff in Error, v. John F. HANNSEN, Pete Cowan, Archle Hopper, Rockwell Canda and James Edwards, Defendants in Error.

No. 19539.

Supreme Court of Colorado, In Department.

July 17, 1961.

Rehearing Denied Aug. 14, 1961.

J. Harrison Hawthorne, Canon City, for plaintiff in error.

Stinemeyer & Stinemeyer, Cannon City, for defendants in error.

MOORE, Justice.

We will refer to plaintiff in error as United and to defendants in error as plaintiffs, as they appeared in the trial court. Since there is but one controlling question involved in this review we limit consideration to those portions of the record which bear directly upon that issue.

Plaintiffs, as lessors, entered into a written contract with United, as lessee, under which sixteen unpatented lode mining claims were leased for a period of two years ending December 21, 1958. The annual rental which United agreed to pay was $3,200. In the complaint it is alleged that on the date the action was commenced there was due the annual rental for the second year of the lease plus interest thereon. United filed an answer in which the execution of the lease was admitted, and further alleged that

'There has been a failure of consideration for the Mining Lease marked Exhibit A-1 for the reason that the Plaintiffs failed to make a discovery on any of the mining claims described in such lease; that, having failed to make a discovery, the Plaintiffs did not acquire title to the said mining claims and held no property rights therein which could be made the subject of a lease.'

By counterclaim United sought to recover all sums theretofore paid under the terms of the lease.

Plaintiffs moved for judgment on the pleadings, which motion was granted. In dismissing the counterclaim and entering judgment as prayed in the complaint, the trial court found, inter alia:

'That the demand for relief set forth in the Anended Complaint herein is a claim for rental due under the terms of Mining Leases Plaintiffs Exhibits 'A-1' and 'A-2' attached to the Amended Complaint herein in the sum of $3290.66 plus interest at the legal rate from June 11, 1959 and costs; that the Defendant by way of Answer admits all the material allegations of the Amended Complaint including the execution of the Mining Leases and the refusal of defendant to pay the rental as provided by said leases; the sole defense attempted to be set up by the Answer and incorporated by reference in the counterclaim is the affirmative defense of failure of consideration, alleged at paragraphs 5 and 6 of the Answer, in which defendant alleges that the Plaintiffs failed to make a discovery on any of the mining claims in the lease described, and therefore the Plaintiffs held no property rights which could be made the subject matter of a lease; that Plaintiffs represented to Defendant that said mining claims were valid and in reliance thereon Defendants entered into said Leases; the Court finds as a matter of law that such allegations do not constitute, in law, the affirmative defense of failure of consideration, for nowhere in the pleadings appears an allegation that the Defendant was even disturbed in its possession of the leased premises or that Defendants have suffered any damages monetary or otherwise by reason of any representations made by the Plaintiffs; that the counterclaim of the Defendant is likewise essentially based on the allegation contained in Paragraphs 5 and 6 of the Answer, and therefore, states neither an affirmative defense or a claim upon which relief can be granted against the Plaintiffs.'

United seeks review of the judgment by writ of error.

The lease between the parties was made a part of plaintiffs' complaint. It contained the following provision:

'The Lessor hereby warrants and agrees to defend the title to the demised premises, against all persons lawfully claiming by, through or under the Lessor, but not otherwise, * * *.'

In essence, this provision of the lease forecloses consideration of any argument based upon an implied warranty of title, or a general warranty thereof. It defines the limits within which plaintiffs obligated themselves to defend the title to the claims, all of which were adequately described by location certificates appearing of record in the office of the clerk and recorder of the proper county.

On the face of the record it is undisputed that plaintiffs were asserting rights in, and were 'in possession' of, the mining claims as evidenced by the location certificates above mentioned. United paid cash, and agreed to pay the rental involved in this action. In consideration thereof plaintiffs granted United the right to go upon the premises for exploration purposes, and '* * * for the purpose of mining and removing therefrom the minerals and mineral ores of every kind and character which may be contained therein, * * *.'

Accomplishment of a valid location of a mining claim involves a number of essential acts on the part of the claimant, including the requirement that he shall go into possession; that he perform certain assessment work; and that there be discovery of a mineral deposit. As between United and plaintiffs, no rights of third parties having intervened, there is no requirement that any one of these essential acts should be performed in advance of any other. The applicable general rule is stated in 58...