
    239 F. 638
    ALASKA JUNEAU GOLD MINING CO. v. EBNER GOLD MINING CO. et al.
    No. 2795.
    Circuit Court of Appeals, Ninth Circuit.
    Feb. 5, 1917.
    Rehearing Denied May 14, 1917.
    
      J. A. Hellenthal, of Juneau, Alaska, and Curtis H. Lindley, of San Francisco, Cal., for appellant.
    
      John R. Winn, of Juneau, Alaska, and Alfred Sutro, of San Francisco, Cal. (Winn & Burton, of Juneau, Alaska, and Pillsbury, Madison & Sutro and A. D. Plaw, all of San Francisco, Cal., of counsel), for appellee Ebner Gold Mining Co.
    Before GILBERT,' MORROW, and HUNT, Circuit Judges.
   GILBERT, Circuit Judge

(after' stating the facts as above).

The appellant, adverting to the fact that Tripp was employed by one Underwood and by the California-Nevada Copper Company, and not by the appellee, contends that the evidence shows that Underwood employed Tripp to investigate the property, so that, if Underwood should after-wards acquire rights thereunder, he might, if he saw fit, adopt the plans; that, whatever Tripp’s intentions were, they were entirely personal and speculative, and never were adopted by the appellee, or by any one by any overt act until after August 1, 1910, the date when the appellant began its operations; that on leaving the employment of Underwood Tripp never advised the parties who succeeded Underwood of what he had done, but he retained in his possession the only copy of the notice he had posted, and that Tripp never had any intention of taking the water out on the north side of the creek, but that his intention was to preserve the old flume and utilize it in the later operations.

The evidence is that, at the time when Tripp posted the notice, he was, and for some time had been, in the employment of Underwood, who at that time was, by purchase from Ebner, the owner of nearly all of the capital stock of the appellee. On October 19, 1909, Underwood wrote to Tripp, telling him to find the best mill site for the Ebner property “as things now stand,” and, referring to the 200-stamp mill which was to be built the next year, when the spot for the mill should be settled, and telling him that, when that spot was settled, he could plan his tunnel, etc. Tripp testified that he had dealings with the directors of .the Copper Company, with which Underwood was connected, and which company succeeded to all of Underwood's interests, and the evidence shows that Tripp, on his arrival on the ground, asked Ebner for the keys to the boarding house and the property, told him he was ready to commence operations, and it shows that Tripp put up an assay office and started the boarding house, and that he was in full control and possession of all the property of the appellee, so long as he remained on the premises. On September 25, 1909, he wrote to Ebner, referring to the fact that in company with Ebner he had selected a location “which we have jointly agreed upon as being the proper location for a tunnel to the Ebner mines.” Tripp’s plan at that time contemplated that a 200-stamp mill should be built on the Cape Horn No. 2 lode claim, that a tunnel should be commenced at that point and carried to the upper end of the group of claims, and that water should be carried from the old dam to the new mill site, following the south bank of the creek for a distance, then to cross to the north bank thereof, and thence to the new mill site. In July, 1910, Tripp turned over his work to Bent, his successor.

There can be no question that Tripp, in posting the notice, was acting for and on behalf of the appellee’s group of mines, and in pursuance of a definite plan, and we think the court below properly held that the notice was sufficient to indicate an intention to appropriate the water for the purposes thereafter claimed by the appellee. The notice specified that the flume might be carried on the southerly side, “or to cross the creek with pipe or flume, or both, to any place on the property known as the Ebner mine.” There was sufficient in this to show that it was not the intention to use the water at the site of the old stamp mill. If such had been the intention, there was no occasion to post a notice. The water was already being conducted to, and in use at, that mill.

To the contention that the notice did not indicate an intention to take the water out at any point above the appellant’s dam, it is a sufficient answer to point to the admission, in the appellant’s reply, that “it has been and is the universal and general rule, practice, and custom for those desiring to appropriate water to post a notice in writing in a conspicuous place at the point of intended diversion.”

Acts done by Tripp at the instance of Underwood, or at the instance of the Copper Company, must be deemed to be done for the benefit of the appellee’s group of mines, and to inure to the advantage thereof. Underwood, and later the Copper Company, by virtue of owning all, or nearly all, of the stock of the appellee, represented the appellee in these transactions, and sustained a fiduciary relation to it. In Wheeler v. Abilene Nat. Bank Bldg. Co., 159 F. 391, 393, 89 C.C.A. 477, 479 (16 L.R.A.[N.S.] 892, 14 Ann.Cas. 917), it was said: “The holder of the majority of the stock of a corporation has the power, by the election of biddable directors and by the vote of his stock, to do everything that the corporation can do. His pow'er to control and direct the action of the corporation places him in its shoes, and constitutes him the actual, if not the technical, trustee for the holders of the minority of the stock. He draws to himself and uses all the powers of the corporation.”

See, also, Jones v. Missouri-Edison Electric Co., 144 F. 765, 75 C.C.A. 631; Union Pacific R. Co. v. Frank, 226 F. 906, 920, 141 C.C.A. 510.

But it is argued that there was nothing in Tripp’s notice to show that the water was intended to be used at any point outside of the Ebner group of mines, and it is said that that group ended on the south with the Lotta claim, and that between the Lotta claim and the new mill site intervened a tract of land now known as Parish lode No. 2, but which at the time of the posting of the notice was public land of the United States. But the evidence shows that the ground covered by the Parish lode No. 2, although in subsequent litigation between the parties to this cause it was held to be public land, was at the time of the Tripp notice in the actual possession of the appellee, which had theretofore taken steps to locate the same. At that time, and for more than a year prior thereto, the appellee’s mining property consisted of the Golden Fleece, Crown Point, Keystone, Taku, Lotta, Parish No. 1, the Cape Horn, and the Eureka mill site south of the Cape Horn, which subsequently, on account of quartz discovery therein, was located as the Cape Horn No. 2 lode claim. Although Ebner held the title to Cape Horn and Cape Horn No. 2, he held it in trust for the appellee, or the owners of its capital stock. This is shown by his letter to Tripp of September 25, 1909, in which he suggests that the assessment work for those claims be performed by work in starting the tunnel.

The appellant points to the fact that on April 4, 1912, Tripp sold his water rights under his location notice to Hoops, who on March 10, 1913, sold the same to Jennings, and that it was not until May 21, 1914, that Jennings conveyed to the appellee. But this evidence, we think, is not inconsistent with the other testimony showing Tripp’s relation to the appellee through Underwood and the Copper Company. Hoops was not a stranger to the appellee. He was a stockholder and bondholder of the Copper Company, and he had advanced money for the Ebner mines to keep the work going on; the appellee being at that time hindered by litigation with the appellant, and on that account unable to raise all the necessary money.

The finding of the court below that the rules and regulations which were pleaded in the appellant’s reply were not in force at the time when the rights of either of the parties to the present suit were initiated was made upon conflicting evidence, and we would not be at liberty to disregard it, if we were of the opinion that it was contrary to the weight of the evidence. A consideration of the evidence, however, convinces us that the finding is well sustained.

We discover no ground to disturb the finding of the trial court'that not until after the appellee had followed up the posting of the Tripp notice by actual physical work at the point where the notice was posted, and after actual diversion of water at that point, did the appellant do anything that would give notice to the appellee that the appellant intended to make any claim to the water of the creek, or to appropriate the same. The appellant having brought the suit, and having therein attacked the right of the appellee, the burden was upon it to show that it had acquired a prior right to divert water from the creek at the point where it had constructed the Alaska Juneau dam. The appellant had initiated its claim by posting a notice on August 1, 1910, in which claim was made to 20,000 miner’s inches of the water of Gold creek, to be used for milling, mining, and other purposes, “said water to be diverted from said creek at a point indicated by this notice posted on a tree, and about one mile from the mouth of the said Gold creek. Said water is to be diverted by ditch, pipe, and flume.” The evidence is without dispute that the notice was posted on the Lotta claim, a claim which had been patented to the appellee. The evidence further shows that it was not posted there by reason of any mistake as to the boundaries of the Lotta claim, -but that it was deliberately and intentionally placed there under a claim of right and title to the land, by virtue of a mining claim located on July 20, 1910, designated the Oregon lode mining claim, which overlapped the Lotta claim.

The appellant’s projected ditch or flume was to extend over a portion of the Lotta claim, and over the Parish No. 2 claim, lying south thereof. In an action of ejectment, brought by the appellee against the appellant, it was finally adjudged that the appellant’s attempted location of the Oregon claim was void, and that the appellee was the owner of the whole of the Lotta claim. Ebner Gold Mining Co. v. Alaska-Juneau Gold Mining Co., 210 F. 599, 127 C.C.A. 235. On October 3, 1910, and before that action was commenced, the appellant began to build a dam on the Lotta claim at the point where its notice was posted. The dam site was subsequently abandoned, and the appellant built its dam at the line between the Lotta claim and the Parish No. 2. The acts so done upon the appellee's property were acts of trespass, never assented to by the appellee, but actively opposed by it, and they, could not become the basis of a right to appropriate the water of Gold creek. “The right of appropriation extends only to waters upon the public domain of the United States, or upon the public lands of a state, for one cannot acquire a water right on land held in private ownership by another without acquiring an easement in such land.” 40 Cyc. 704; Prentice v. McKay, 38 Mont. 114, 98 P. 1081; Smith v. Denniff, 24 Mont. 20, 60 P. 398, 81 Am.St.Rep. 408; Marshall v. Niagara Springs Orchard Co., 22 Idaho, 144, 125 P. 208; Tobey v. Bridgewood, 22 Idaho, 566, 127 P. 178.

Nor do we find ground for disturbing the finding of the court below that the appellee’s project was prosecuted with due diligence from and after the date of the posting of the Tripp notice. It is true that there is evidence of a temporary suspension of activity, but the testimony leaves no doubt that this was the direct result of a series of hostile acts on the part of the appellant.

The point is made that the decree is erroneous, in that it awards the appellee the first use of 10,000 inches of water, whereas the court found as a fact that the capacity of the appellee’s flume is but 3,200 inches. The attention of the court below was not directed to this error by a motion to correct the same, or by the assignments of error.

The cause will be remanded to the court below, with instructions so to correct the decree as to accord with the finding of fact as above indicated. In other respects the decree is affirmed, and the appellee is awarded costs on the appeal.  