Santaquin Mining Co. v. High Roller Mining Co.

MARIONEAUX, District Judge. In this case both parties have appealed from the decree of the district court, and the case, briefly stated, is as follows: The complaint alleges plaintiff’s corporate existence, and that on January 1, 1895, T. J. Kirkman, George E. Kirkman and T. W. Kirkman, duly entered upon certain vacant mineral land of the United States, and located the Silver King mining claim, and that during each year since the location the locators and their successor in interest (plaintiff) duly performed the work required by the laws relating to annual work on mining claims; that the locators duly conveyed, by proper deed, their rights to plaintiff, and that plaintiff is the owner and in possession of said mining claim; that after the location of the Silver King the defendant, claiming to be the owner of an alleged mining claim called the “High Roller,” wrongfully caused the latter to be so surveyed as to overlap the Silver King, and include a portion thereof (describing it), amounting to 8.397 acres; that on July 15, 1899, the defendant made application to the proper authorities of the United States for patent for the said High Roller claim, including the said 8.397 acres claimed to be a portion of the Silver King claim; that within sixty days after said application plaintiff filed in the land office a protest and adverse claim in due form, and that thereupon proceedings were stayed to await the determination by a court of competent jurisdiction of the right of possession of said disputed area of ground. The complaint contains other formal allegations that it is not necessary to recite. The defendant’s answer admits the corporate — 285 — existence of plaintiff, but denies tbe other allegations of the complaint, and further alleges that it (defendant) was incorporated March 18, 1899; that on November 5, 1898, the said High Holler claim, was mineral land of the United States, subject to location, and on said day was entered upon and located as a mining claim by A. 0. Jacobson, H. Man-gum, Jr., and I. H. Spriggs, and that ever since the date of location the said High Holler claim has been actually and exclusively occupied and possessed by said locators and by defendant as their successor in interest by virtue of a deed of conveyance from them to it. The answer further avers that defendant is now the owner and entitled to the possession of said High Holler claim. Each party prays that its title be quieted. Plaintiff therefore claims the area in dispute by virtue of a valid location of the Silver King claim, and legal succession to the rights of the locators; defendant claims title to the same area by virtue of a valid location of the High Holler claim, and legal succession to the rights of the locators. Upon the trial the plaintiff offered W. H. West, Wm. Yan Ausdale, J. C. Holman, and others to prove a valid location of, and continuous assessment work upon, the said Silver King claim, in order, of course, to show that the area in dispute was part of a valid mining claim, and not public land subject to location, at the time of the location of the High Holler claim. Plaintiff, having concluded that branch of the case, next offered in evidence its articles of incorporation, which were received over the objection of the defendant. The evidence of plaintiff’s succession to the rights of the original locators of the Silver King was as follows: W. H. West testified that one day in the year 1897 he saw the original owners of the Silver King claim at Santaquin, and “there was talk of incorporation,” and the following paper was signed by T. W. Kirkman, Geo. E. Kirkman, and T. J. Kirkman, all the original locators of said claim: “This certifies that we, the undersigned, for and in consideration of — 286 — one dollar, in band paid, tbe receipt of which is hereby acknowledged, and 4,000 shares of stock in the Santaqnin Mining Company, which shall be assessable, hereby agree to sign and deliver to the Santaqnin Mining Company a good and sufficient deed conveying all onr interest in the Silver King claim, situate in the Santaqnin mining district, Utah county, Utah.” The paper was admitted in evidence over the objection of the defendant. Witness continuing: “After I made this arrangement with owners, went to- Salt Lake, and prepared to incorporate, and the articles were prepared. Q. What, if any, arrangements were made as to the deed of this Silver King claim? A. I made arrangements with these parties that owned the property that they were to sign the deed conveying the property to the proposed corporation, the Santaquin Mining Company, and that I was. to hold the deed until the company was organized and incorporated into a company. There were other papers in connection with-the deed. The deed was handed to me by T. I. Kirkman, one of the grantors, with instructions to- deliver it to the company when incorporated. I took the deed, and after incorporation I delivered it to J. A. West, the secretary. It was recorded.” Cross-examination: “Think Kirkman recorded deed before it was handed to me. Deed is dated August 11, and recorded August 21. Think I had it in my hands after August 21. Kirkman mailed it to me after it was recorded. It was mailed to me before organization of the company. The letter said, ‘Deliver this to the company when it is organized.’ I was told to hold the deed until the company was formed, and then deliver it. Before the deed was mailed to me, I had a talk with the Kirkmans about organization, and about taking the deed to hold until the company was formed.” George E. Kirkman testified as follows: “Deeded my interest to plaintiff in 1&9i7. Q. State what, if any, arrangements and negotiations were between you and the owners and Mr. West, or any other person, about this? A. Arrangements were that we — 287 — deed our claims to tbe Santaquin Mining Company until it was incorporated. We gave West tbe deed, and told bim to bold it until tbe company was organized and fixed so- that they could take tbe deed. We were to get stock in tbe company after tbe company was organized. Tbe stock was put in my father’s name. I signed tbe deed. I think it was banded by my father to Mr. West.” Oross-examination: “I do not know whether that was before it was recorded. It may have been sent by letter. Was not there when my father handed it or mailed it to West. Am not certain which way it went. Do not know bow it was delivered.” W. H. West, recalled, testified: “Tbe deed shown me in Mining Record No. 35, page 538, is a copy of tbe one banded me. Q. Mr. West, I will ask you whether or not, when you were first at Santaquin in July or August, in company with Mr. Kirkman, there was any talk about formation of a corporation? A. Yes, sir; there was. They were to be stockholders. Mr. T. J. Kirkman was an incorporator. Tbe basis of tbe incorporation was to acquire this property. In pursuance of this talk, tbe articles were prepared about August 18 or 19 — a few days before they were signed, I think. After they were prepared, I visited tbe owners of tbe Silver King at Santaquin to make final arrangements about the deed. Told the grantors that tbe articles were prepared, and it was arranged so that they were to have so much stock. Tbe conveyance was made to company some time before when I was first down and made arrangements for the property. After we made final arrangements about the articles,'it was agreed that they should be prepared, and the company formed. Articles must have been drawn up August 18, and it is apparently true that they were exe-, cuted August 19. They were dated Salt Lake City, August 18, 1897, and signed and sealed tbe next day. A draft of tbe articles was made early in August, but was amended and altered, and finally drawn again, and later signed. .The first drawing of tbe paper was after my arrangements — 288 — with the owners of the property. Do not know why we did not put into the articles a statement that the property was to be the capital stock. It was according to the direction of some attorney.” Plaintiff then offered, and the court received in evidence, plaintiff’s certificate of incorporation. Next plaintiff offered the deed from the original locators to the Santaquin Mining Company. The deed bears date August 17, 1897, and purports.to have been acknowledged the same day; whereas the articles of agreement of incorporation of plaintiff company bear date and acknowledgment two days later, and were filed with the recorder of Salt Lake county and the Secretary of State August 30, 1897. Defendant objected to the deed upon the ground that it was void, “because [as its counsel stated in his motion] there must be a grantor and a grantee in existence at the time the deed is executed and delivered.” The objection was sustained by the trial judge, and the deed excluded from the proofs in the case. To this ruling plaintiff excepted, and rested its case. Defendant moved the court for a nonsuit upon the ground that plaintiff had not connected itself with the title of the original locators, since it was not in existence at the time of the execution of the deed. Other grounds for a nonsuit were also insisted upon, but the court sustained the motion on the ground “that there was no corpo 'ation existing at the time of the deed; that the corporation did not succeed to the title.” Defendant then proceeded upon its part to introduce testimony tending to show a valid location of the High Roller claim by the persons named in the defendant’s answer, the maintenance of the possessory title by proper and timely assessment work, and its own legal succession to the title of the original locators by a proper deed of conveyance. Defendant introduced no evidence whatever to rebut the testimony given on behalf of plaintiff tending to show a valid location of the ground in controversy as the Silver King claim. The case was taken under advisement, and thereafter the court found and decided that the location — 289 — of the Silver King claim was good and valid, and vested in the locators the title to said claim and to the area in conflict with the High Roller; and that the deed which had been rejected when offered in evidence vested an equitable title in plaintiff company to the Silver King claim and the ground in dispute; and that plaintiff company was “in possession and working said mining claim when” defendant’s grantors located the High Roller claim; and that said area in conflict at that time “was not vacant or unoccupied mineral land of the Hnited States,” and that the High Roller location is invalid. The findings conclude as follows: “That because said deed executed by T. W. Kirkman, T. J. Kirkman, and George Kirkman did not pass the legal title to said Silver King Mining Claim, owing to the non-existence of said corporation at the time of its execution, the plaintiff is not entitled to prosecute this adverse proceeding, nor to the relief prayed for in its complaint; that the defendant is not entitled to the relief prayed for in its cross-complaint; and that both the complaint and cross-complaint should be dismissed, and that each party should pay their own costs, and the costs of court should be equally divided.” A decree was entered accordingly, from which both parties have appealed to this court- Plaintiff assigns as error the rejection of the deed to the Santaquin Mining Company and the court’s ruling sustaining defendant’s motion for a nonsuit. Defendant’s principal assignment is that the court erred in holding finally that the deed in question was valid, and vested the title to the Silver King claim in plaintiff, and in holding that the location of the High Roller claim was invalid. We think it is clear that the learned judge below erred in rejecting the deed offered by the plaintiff to prove itself the successor to the title of the original locators. A paper purporting to 1 be a deed was made, signed, acknowledged, and placed on the public records before the grantee therein named (the plaintiff) had become a corporate entity. The paper — 290 — was delivered to one W. H. West, with directions to deliver it to the Santaquin Mining Company when it should be incorporated. After the incorporation, W. H. West, delivered it, pursuant to directions, to J. A. West, the secretary of the company. It then took effect. It became eo insianii a deed, and it then had every requisite required by law. Prior to the instant of delivery it may be conceded that it was a nullity so far as vesting the title to the premises was concerned. But no effect is claimed for it prior to> the time of its delivery to the corporation. It will surely be conceded that if, after the incorporation of the plaintiff company, W. H. West, who had possession of the deed, had required the Kirkmans to write another one, sign and acknowledge it, and give it to him, and he had then delivered this new instrument to J. A. West for the company, that it would have been a valid deed. And will it not be as readily conceded that, if one who has agreed to convey certain land to> a corporation to be formed should, before its actual existence, write, sign, and acknowledge a paper' in form a deed, designating as grantee the name under which the corporation after-wards receives its charter or certificate, that when the company should finally become a corporate entity, he might deliver this paper to it, and thereby vest in it a good title from the moment of delivery ? Is not the delivery the very essence of the transaction ? Would it not be demanding a perfectly useless ceremony to require the owner of the premises to write, sign, and acknowledge- another instrument to the same purport? Clearly, such a proceeding would savor strongly of the nonsensical. No authority is produced, for doubtless none •exists, which regards the time of writing or signing a deed .as the test of its validity, to the utter disregard of the time ■of delivery. The cases cited by counsel objecting to the deed .are cases of instruments bearing the names of persons deceased at the time of the preparation of the instruments. ;Sueh instruments are not deeds, for the simple reason that they have never been, and, in the nature of things, never — 291 — could have beeu, delivered. The point is too plain to require elaboration. The claim that the instrument was delivered when put into the hands of W. H. West with instructions to deliver it to the company when formed, is wholly untenable. 2 This was but a part of the act of delivery, which was not completed, manifestly, until J. A. West, the company’s secretary, accepted the instrument from W. H. West in behalf of the corporation. There can be no delivery of a deed without acceptance, and no acceptance without the existence of some person or entity with capacity to accept, and when W. H. West received the deed the corporation was not in existence. Under such circumstances the fact that the persons named as grantors here placed the instrument on the public records cannot be considered a delivery. 3 Washb. Real Prop., 310-312. See the following authorities in support of our conclusions: Spring Garden Bank v. Hurlings Lumber Co., 32 W. Va. 357, 9 S. E. 243, 3 L. R. A. 583; 3 Washb. Real Prop., 300; Wharf Co. v. Judd, 108 Mass. 227. Both upon reason and authority we think it is established that the deed offered by plaintiff was prima facie a valid instrument that vested the title of the ^original locators of the Silver King claim in the plaintiff' company, and it should have been admitted in evidence. Plaintiff contends that we should direct a decree in its favor; defendant, that we should grant a new trial of the cause. To direct a decree in favor of plaintiff would 3 be equivalent to an ex parte decision of the case upon the merits; for while the lower court has found the location of the Silver King to have been valid, and the High Roller to have been an invalid location, and that the area in controversy is the property of the plaintiff, still the finding that plaintiff has title to the' ground is based upon evidence which was offered only, but which was not received. It is fair to presume that defendant at least desired to controvert the plaintiff’s evidence of its succession to the title of the — 292 — locators of the Silver King, but by the ruling of the court refusing to admit the deed in evidence defendant was clearly excused from showing anything against the validity of the deed. It was not, of course, concluded by the prima facie evidence which entitled the deed to be read in evidence. It is very clear that, where a party properly omits to introduce testimony because the court has ruled that the plaintiff has not proved a case, a new trial should be granted, if, upon subsequent reflection, the court enters findings which are inconsistent with the rulings at the trial, and are based upon points upon which the adverse party has not been heard. 14 Enc. Pl. and Prac., p. 745; Parks v. Nichols, 20 Ill. App. 143. Here the court held at the trial that upon its own showing plaintiff had no title, and then, when defendant, manifestly relying upon the ruling, omitted to controvert plaintiff’s showing, the court found the deed to have some effect, although, technically speaking, it had never been read by the court. The decree entered below is set aside, and a new trial granted. Costs of this appeal are awarded to the plaintiff. BASKIN, C. J., and BARTCII, J., concur.