Utah Consolidated vs. Utah Apex

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This page was last updated on September 1, 2016.

Overview

In early July 1918, Utah Consolidated Mining Company filed the first of four suits against Utah Apex Mining Company, seeking to take ownership of an ore body that was on the Utah Apex company's side of the surface property line. Utah Apex filed two counter-suits, alleging that the ore body in question, known as the Yampa limestone, was altered or mineralized to the point that the "vein" was not continuous and extralateral rights did not apply.

In simpler terms, Utah Consolidated sued Utah Apex because Utah Consolidated wanted to own and follow the ore vein on its side of the property line, into Utah Apex property. Utah Apex argued that the "vein" that Utah Consolidated wanted to follow into Utah Apex ground was in fact not a vein, but was fractured and not continous, and that Utah Apex owned the vein and all rights to mine it. And that Utah Consolidated owed Utah Apex for the value of the ore Utah Consolidated had already removed.

In U.S. mining law, what was called extralateral rights, or apex rights, the individual or company whose claim contains the apex of a vein (the top of an ore vein that slopes downward in both directions) may follow and exploit the vein indefinitely along its dip (downward slope), even if it passes under surface property lines of adjoining mining claims. An apex could show at the surface as an outcrop, and apex law allowed that the ore could be mined as the vein continued downward in any direction.

The Utah Apex vs. Utah Consolidated suit was a landmark legal decision because it reversed apex law as it applied to altered or mineralized (fractured) "veins" and as it applied to surface property lines, hundreds of feet below the surface.

In addition to giving Utah Apex permanent title to the ore veins, the verdict included damages against Utah Consolidated in the amount of $2.5 million. Because International Smelting had posted an "appeal bond" in that same amount, and Utah Consolidated lost its suit on appeal, International Smelting became sole owner of Utah Consolidated, which they already controlled, except for hundreds of smaller stockholders. Utah Consolidated then became a direct subsidiary of International Smelting, which in turn was a direct subsidiary of Anaconda.

Utah Apex and Utah Consolidated both shut down those areas of their mines that were subject to the suits and counter-suits. The shut downs continued until the U. S. Supreme Court found in favor of Utah Apex in March 1922.

The district court found in favor of Utah Apex. On appeal, the appeals court found in favor of Utah Apex. The U. S. Supreme Court refused to hear the case. The result was an agreement in 1922 that Utah Consolidated would pay Utah Apex for the value of the ore already extracted.

Timeline

July 15, 1918
"Utah Consolidated early in the month filed an action in the United States District Court at Salt Lake against the Utah Apex Mining Company charging trespass and the wrongful extraction of ores and asking for an accounting. It charges that ore to the amount of about $500,000 has been taken from the ground in dispute by the defendant company, asks an injunction restraining further trespass and demands a clear title to the ground." "In its bill of particulars the Utah Consolidated Mining Company sets forth that in June 1903 the company purchased from Frank O. Lindforth the Yampa Extension Northeast Lode mining claim. The Utah Apex Mining Company has property adjoining and it is claimed in the operation of this working the Apex has interfered and conflicted with the vein or lode of the Yampa Extension. The plaintiff alleges that the defendant company has penetrated the Yampa Extension vein, cut and intersected a lode containing a large amount of valuable silver, lead, copper, and other metal and mineral ores, and has extracted from the vein a large amount of these ores, an accounting of which the plaintiff company demands." (Salt Lake Mining Review, July 15, 1918, page 37, "Utah Cons. Dividend")

October 30, 1918
"The Utah Apex Mining Company, V. S. Rood, superintendent, has brought suit against the Utah Consolidated Mining Company, claiming trespass the wrongful extraction of ore and damages to the extent of $1,750,000. The companies operate two of the heaviest producers of the great Bingham section." (Salt Lake Mining Review, October 30, 1918, page 35, "Around The State")

December 30, 1918
"The Utah Consolidated recently instituted a $500,000 apex suit against its neighbor the Utah Apex. It has been hinted in certain quarters that this case would be settled out of court, but events the present month would seem to set this rumor at rest for Utah Consolidated has just filed two new suits against Utah Apex. The suit relative to the Yampa lode claim declares that the property and also cause for action were purchased by the plaintiff from a third party on August 2nd of this year and that since then and prior to that time the Utah Apex company has been working certain veins in the property. The complaint asks for a temporary restraining order against the Utah Apex company, a decree setting forth the title of the Utah Consolidated company to the property and an accounting and judgment for ores taken from the property. The other suit relates to the Mercer claim and Mercer No. 2. The same claims are made and the same petition is made as in the case of the Yampa claim." (Salt Lake Mining Review, December 30, 1918, page 22, "Utah Mining Dividends")

October 15, 1919
Utah Consolidated Mining Company filed court actions against Utah Apex Mining Company for encroaching its ore body. Utah Apex filed a counter-suits, alleging the same action, claiming that the so-called Yampa limestone was altered mineralized to the point that the "vein" was not continuous and extralateral rights did not apply. The case was to be heard in United States District Court on November 3rd. (Ogden Standard, October 15, 1919)

Utah Apex company had come upon an ore fissure that was very high grade, at 20 percent lead, with high values of zinc and silver. (Wall Street Journal, October 23, 1920)

November 3, 1919
The Utah Consolidated suit against Utah Apex came before the U. S. District Court in Salt Lake City. (Salt Lake Mining Review, October 30, 1919)

January 29, 1920
Arguments in the U. S. District Court began in the Utah Consolidated vs. Utah Apex case. (Deseret News, January 28, 1920)

October 20, 1920
The federal judge in the district court hearing the five Utah Apex-Utah Consolidated cases decided four in favor of Utah Apex, and one in favor of Utah Consolidated. (Ogden Standard, October 21, 1920)

December 13, 1920
Utah Apex shut down its mine, due to the low price of lead, high freight rates, and uncertain smelter contracts. Over 200 miners were out of work. (Ogden Standard, December 19, 1920)

April 3, 1921
Utah Apex and Utah Consolidated stopped shipping ore. Of 1,200 miners employed by both companies, only 75 remained on the payroll. (Des Moines Register, April 4, 1921; Los Angeles Times, April 4, 1921, with identical wording)

September 6-7, 1921
The Utah Consolidated appeal of the Utah Apex extralateral rights case was heard in U. S. Eighth Circuit Court of Appeals in Denver on September 6 and 7, 1921. (Ogden Standard, September 8, 1921; Engineering and Mining Journal, September 17, 1921, page 467)

November 14, 1921
The Eighth Circuit Court of Appeals in Denver, affirmed the lower court decision that the ore bodies being worked by Utah Consolidated Mining Company, and which passed vertically below and past the surface boundary lines of Utah Apex Mining Company, were not continuous ore veins and therefore did nor constitute extralateral rights. (277 F. 41; 1921 U.S. App.)

December 16, 1921
The U. S. District Court in Salt Lake City, in the accounting phase of the trial, handed down its decision that Utah Consolidated was to pay Utah Apex $1,154,928.98, including $206,587.99 interest, for the value of ore extracted from the claim that the court had previously awarded to Utah Apex. (Ogden Standard Examiner, December 17, 1921, "yesterday")

January 15, 1922
The mines of both Utah Apex and Utah Consolidated remained closed due to low metal prices. (Salt Lake Mining Review, January 15, 1922)

February 1, 1922
"Utah Consolidated Co. Appeals Utah Apex Decision To Higher Court -- What virtually amounts to the last step in the litigation between the Utah Apex Mining Co. and the Utah Consolidated Mining Co. has been taken. Utah Consolidated has been granted a motion for a rehearing of the case before the Court of Appeals by Judge Grant of the U. S. District Court who has fixed a bond of $1,300,000. On February 1 Utah Consolidated filed this bond and preparations are being made for argument before the Court. After the hearing of suits by Utah Consolidated and counter suits by Utah Apex, a verdict was awarded the latter company and Utah Consolidated was ordered finally to pay the Utah Apex Mining Co. approximately $1,200,000 for illegal extraction of ore. It is this award that is being contested." (Mining & Scientific Press, February 18, 1922, page 235)

March 6, 1922
The U. S. Supreme Court refused to hear the four Utah Consolidated vs. Utah Apex extra lateral (apex) rights cases. (258 U.S. 619; 42 S. Ct. 272; 66 L. Ed. 794)

March 1922
"Utah Apex Wins In Supreme Court -- The decision of the lower Federal courts in favor of the Utah Apex Mining Co. in its litigation with the Utah Consolidated company over ore bodies situated in the Bingham district, in Utah, must stand. The Supreme Court, on March 6, refused to consider it. The Utah Consolidated company lost in the lower courts and brought four cases to the Supreme Court for review. The decision closes one of the hardest-fought apex suits in the history of the mining industry. Conflict of the two companies began on November 2, 1919, before Judge Tillman D. Johnson of the United States District Court. Both sides prepared long and carefully for the legal battle. Eminent mining lawyers and geologists were retained in the case. Thousands of feet of workings were run to demonstrate that certain geological conditions prevailed. Expensive glass and wire models of the two companies' mines, showing the vein systems, slopes, and workings, were constructed and brought into court. Among the well-known authorities who testified in the case were Waldemar Lindgren, Andrew C. Lawson, Albert Burch, George D. Blood, and Orrin P. Peterson. Accounting in the litigation set the value of the ore which had been involved in the contest at approximately $1,200,000." (Mining & Scientific Press, March 18, 1922, page 377)

December 4, 1922
The Eighth Circuit Court of Appeals in Denver affirmed the lower court decision for the accounting award given by the district court to Utah Apex Mining Company. (285 F. 249)

February 26, 1923
The U. S. Supreme refused to hear the case for the accounting award given by the district court to Utah Apex Mining Company. (261 U.S. 617; 43 S. Ct. 362; 67 L. Ed. 829)

February 26, 1923
"Utah Cons. Denied Petition for Rehearing -- BOSTON -- The United States Supreme Court has denied petition of the Utah Consolidated Mining Co. for a rehearing of the case which it lost to Utah Apex Mining Co. involving trespass, Apex rights and illegal extraction of ore." "This is the last step in this long drawn-out litigation. It means that the verdict granted in the lower courts to Utah Apex awarding it damages from Utah Consolidated amounting to nearly $1,300,000 has been upheld in the highest court. The damages are covered by an American Surety bond for $1,300,000 which Utah Consolidated was ordered to file with the court over a year ago." (Wall Street Journal, March 1, 1923)

February 18, 1924
International Smelting foreclosed on Utah Consolidated Mining Co. for the $1.3 million mortgage it held, from a note that was issued on January 27, 1922 (to satisfy the award bond required by the district court). The foreclosure was filed in the U. S. District court. The mortgage was written to include all parcels and property as collateral, including the concentrating mill adjacent to the International smelter. All property was to be sold as a single unit, to satisfy the mortgage in the amount of $1.3 million. (Ogden Standard Examiner, February 19, 1924; Salt Lake Mining Review, February 29, 1924)

March 31, 1924
The property and assets of Utah Consolidated Mining Company were sold at a Sheriff's sale (public auction) on the steps of the Salt Lake city and county building. The successful bid was for $1 million, and came from International Smelting Company, a subsidiary of Anaconda Copper Company. (Salt Lake Telegram, March 31, 1924)

March 1924
Utah Consolidated Mining Company was reorganized as the Utah Delaware Mining Company, a full subsidiary of International Smelting Company, the Utah operating company of Anaconda Company.

More Information

Utah Apex -- Information about the Utah Apex Mining Company (1903-1937)

Utah Consolidated -- Information about the Utah Consolidated Mining Company (1903-1932?)

Anaconda In Utah -- Information about Anaconda and how in later years, after 1941, it operated the mines shown above, until operations were shut down in 1981.

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