Lost Key Mines, Inc. v. Hamilton

VAN DYKE, J.

In this action plaintiff, The Lost Key Mines, Inc., a corporation, brought suit against certain defendants, seeking to quiet title against the claims of said defendants in respect to certain real property in Tuolumne

[570]

County. It based its claims upon a mining lease. Josie Goodwin, respondent herein and admitted owner of the real property, filed a complaint in intervention against The Lost Key Mines, Inc., which we shall hereafter refer to as “Lost Key,” against Gold Pan Consolidated, a corporation, hereafter referred to as “Gold Pan,” and against other defendants, in which she sought to quiet her title as against the claims of Lost Key, Gold Pan and others. The trial court gave its judgment quieting title in respondent Josie Goodwin and from that judgment Gold Pan has appealed.

We shall state the facts in accordance with the rule that all intendments are in favor of the judgment given and that all conflicts in testimony are resolved in respondent’s favor. On July 30, 1946, respondent leased the subject property to Lost Key under a contract giving it the right to mine the property for an undetermined length of time in return for royalty payments. The lease was in the usual form of mining leases. Lost Key went into possession, installed mining machinery upon the property and commenced mining. Its operations continued for a period and then halted. In August, 1947, those interested in the lessee’s affairs fell into dispute concerning its operations and two factions developed. Leading one faction were a Mr. Hamilton and a Mr. Potter. They negotiated with respondent concerning the resumption of mining operations on the property. Lost Key was a Nevada corporation. Hamilton and Potter, who were president and vice-president respectively thereof, had been informed by the California Commissioner of Corporations that if it was desired to sell stock in the venture' in California it would be required that a California corporation be formed and a lease given to it. Such a corporation was formed under the name of Gold Pan Consolidated. Just prior to its formation Lost Key executed a quitclaim deed of the property under lease to it, in favor of respondent Goodwin, and thereafter, and upon incorporation of Gold Pan, respondent Goodwin executed a lease to the new corporation, giving it mining rights equivalent to those that had been given by the first lease to Lost Key. By her complaint in intervention respondent claimed this lease also had terminated. Apparently challenging the validity of the corporate action of Lost Key in executing the quitclaim deed, certain parties remained in physical possession of the property and when appellant Gold Pan attempted to take possession under its lease, they were successful in forcibly