ing the former's approval. This letter was replied to on February 22d by C. C. Slaughter confirming his previous telegram and saying that the original intention was that the money borrowed should go to the credit of the Mercantile Bank for the use of W. B. Slaughter.

Thus things stood until the twenty-third of March, when the Harriman received a telegram from W. B. Slaughter, president of the Mercantile Bank, telling them to cancel all authority of C. C. Slaughter to act as an officer of the Mercantile because he had resigned. The Harriman thereupon telegraphed and wrote W. B. Slaughter, informing him of what had transpired on the subject of the credit for the loan under the note and its transfer, and saying that as he had given no personal instructions on the subject, they had made bookkeeping entries taking the $30,000 out of the account of the Mercantile so as to hold it for a full understanding of the situation; and when, a few days later, the Harriman learned of the failure of the Mercantile, such entries were made as to cancel the loan without diminishing or changing the credits which otherwise existed in favor of the Mercantile.

Subsequently W. B. Slaughter notified the Harriman that he had never applied for the loan in question, or signed the note which evidenced it, and denied all liability. The appointment of the Receiver and the bringing of the suit which we have stated at the outset followed in due

season.

Passing the fact that both parties to the loan agreement, the Harriman Bank on the one side and W. B. Slaughter on the other, insist, although for different reasons, that the loan agreement has no existence, there nevertheless can be no room for dispute that such contract, by the failure to comply with its conditions and by the fraud and forgery committed concerning the collaterals as between the parties to it and those in privity, was rightly canceled and can be the source of no obligation against

the Harriman Bank. The right of the Mercantile Bank as here asserted, if it has any existence, must rest, therefore, not in the loan agreement, but on some condition or consideration extraneous to that contract creating as against the Harriman and in favor of the Mercantile the duty to pay the amount which both the courts below awarded.

No semblance of ground, however, supporting that view results from the undisputed facts which we have stated unless it can be sustained from two considerations: (1) the payment which was made by the Mercantile on February 8th of the check purporting to be drawn by W. B. Slaughter in favor of Thatcher and the making by C. C. Slaughter on the eighth of the fraudulent and false deposit slip purporting to show the deposit on that day by W. B. Slaughter of a check drawn by him on the Harriman for $30,000; and (2) the bookkeeping entries which were made by the Harriman on the eighteenth transferring the credit for the amount of the agreed loan from the account of W. B. Slaughter to that of the Mercantile Bank. But a moment's thought demonstrates that the circumstances referred to cannot possibly sustain the conclusions stated. This is true as to the first because both the payment of the check by the Mercantile and the making of the false deposit slip took place before the Harriman had even received the collateral note or made any entry on its books concerning the same; and the second because the mere bookkeeping entry made by the Harriman of credit to the Mercantile, in the very nature of things, was incapable alone of conferring rights on the Mercantile to which it was not otherwise entitled, especially in the absence of all consideration moving from the Mercantile to the Harriman and the non-existence of any condition upon which to base even the pretext of estoppel in favor of the Mercantile as against the Harriman resulting from action taken by the former upon the faith of the book

keeping credit. Indeed, when the reasoning upon which the relief below was awarded is considered, and the arguments pressed at bar sustaining that result are weighed, they all at last come to the assumption that by some undisclosed process the Mercantile Bank was entitled to enforce as against the Harriman the contract for the loan agreement made with W. B. Slaughter, without the duty to comply with the obligations of that contract, and therefore became possessed of the power to enforce the contract against the Harriman despite the fraud and forgery practiced upon the Harriman in the attempt which was made to procure the benefits of the loan agreement.

It follows that the judgment of the Circuit Court of Appeals and that of the District Court must be and they are reversed, and the case be remanded to the District Court with instructions, that after setting aside its judgment, it take such further proceedings as may be in conformity with this opinion.

And it is so ordered.

BUTTE & SUPERIOR COPPER COMPANY, LIMITED, v. CLARK-MONTANA REALTY COMPANY ET AL.

APPEAL FROM THE CIRCUIT COURT OF APPEALS FOR THE NINTH CIRCUIT.

No. 598. Argued January 10, 13, 1919.-Decided March 3, 1919.

In a suit brought in the District Court to determine extralateral rights between patented mining claims, the complaint averred that the construction and application of §§ 2322-2332 of the Revised Statutes were involved, set up the discovery, location and patent of plaintiffs' claim, and, to meet a defect of the location notice under the state law, averred actual, open, exclusive and uninterrupted possession and working of the plaintiffs' claim for more than five

years from the date of discovery, the limitation period provided by § 2332. Held, that the latter allegations were part of plaintiffs' case, and involved a construction and application of § 2332, and hence the judgment of the Circuit Court of Appeals was reviewable in this court by appeal. Pp. 20-23.

In determining extralateral rights between adjoining patented mining claims, a failure of the earlier location notice to comply with the state law is immaterial if the junior locator, at the time of locating, knew that the earlier locator was in possession of and working his claim. The purpose of a location notice is but to give warning of the prior appropriation. P. 26.

The unequivocal possession of a mining claim gives constructive notice of the possessor's rights thereunder. Id.

As between two patented mining claims, priority of right to the vein of the one where it dips beneath, and unites with the vein of, the other is not determined by the dates of entries and patents but by priority of discovery and location. P. 27.

In the absence from the record of an adverse suit, there is no presumption that anything was considered and determined by the Land Department, in patenting a mining claim, except the question of the right to the surface. Id.

An application to patent a lode mining claim invites only such contests as affect the surface; and where no surface conflict involves the apex, a prior locator of an adjacent unpatented claim is not obliged to adverse in order to protect his right to follow his vein extralaterally on the dip. P. 28.

Findings of fact made by the District Court concerning the apexes,

courses and dips of mineral veins in dispute, and affirmed by the Circuit Court of Appeals, must be accepted by this court unless clearly wrong. P. 30.

A release and quitclaim of an undivided interest in a designated mining claim, though with expressed intent to convey all the grantor's right, title and interest in the property, together with all earth, rock, ores, etc., found therein, held, to pass only rights and interests appertaining to that claim under its location and patent and not to affect the extralateral rights appertaining to an adjoining claim owned by the grantor. P. 30. Montana Mining Co. v. St. Louis Mining Co., 204 U. S. 204, distinguished. In a suit to establish extralateral rights and for an accounting for ores, where the plaintiffs were awarded relief as to their principal vein, the court also found that a branch or strand of it apexed in plaintiffs' claim and dipped beyond the side line into defendant's

Argument for Appellant.

249 U. S.

territory, uniting there with the main vein again, but the place where the apex crossed the line could not be fixed. Held proper, while decreeing plaintiffs the owners of the strand vein and entitled to its possession throughout its depth as far as its apex extended within their claim, to reserve the question of such extent and the measurement of plaintiffs' rights thereunder for determination in future supplemental proceedings in the light of further mining development. P. 32.

248 Fed. Rep. 609, affirmed.

THE case is stated in the opinion.

Mr. William Wallace, Jr., with whom Mr. T. L. Chadbourne and Mr. K. R. Babbitt were on the briefs, for appellant:

As between those asserting prior rights to vein areas and ore bodies situated such as are those here in controversy, the question of priority of location is one of naked fact-just as it would have been before the patent entry. Creede & Cripple Creek Mining Co. v. Uinta Tunnel Mining Co., 196 U. S. 337; Last Chance Mining Co. v. Tyler Mining Co., 61 Fed. Rep. 557; Hickey v. Anaconda Mining Co., 33 Montana, 46. But a patent may not be used to create a false priority wherewith to destroy preëxisting rights of others. He who first completes a valid location gains the first segregation and first mining right. Creede Case, supra; St. Louis Smelting Co. v. Kemp, 104 U. S. 649. A locator may not relate to his discovery, as against intervening rights to the same surface or rights appurtenant to adjoining free surface, location of which was first completed, unless he completed his own location within the time provided by law. Creede Case, supra; Cedar Canyon Mining Co. v. Yarwood, 27 Washington, 271.

As to the time when the marking of the Elm Orlu was completed, there can be no aider by presumption. There is no absolute finding of the trial court back of 1876. There is no affirmative evidence upon which this court could find an earlier date. A dominant presumption al