Sutro Tunnel Company Lawsuit Against a Virginia City Mine, 1885

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Sutro Tunnel Company Lawsuit Against a Virginia City Mine, 1885
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This is a historic find. Handwritten 1880s court document from M.N. Stone, attorney for the Sutro Tunnel Company. The Sutro Tunnel Co. is suing the Segregated Belcher Mining Co. The Segregated Belcher Mine was located in Gold Hill between the Overman and Belcher Mines. The company was formed by Robert Apple in 1865. It was a small producer during the 1860s and 1870s with work focused on the upper levels of the mine. They tried to explore the deeper parts of the mine from 1872-1880 with little success, and shutdown until the late 1880s. Enter the Sutro Tunnel. Envisioned by Adolph Sutro in 1860, chartered in 1865, the tunnel finally connected with the Savage Mine on Sept. 1st, 1878. This was too late to be of much use since production on the Comstock had declined. Given that many of the mines had signed contracts with Sutro in the 1860s and 70s, it should be no surprise that legal fights resulted from the long delayed construction. Part of the Sutro's deal in constructing the tunnel was a royalty agreement on ore brought out.

Here are the details for this case. Essentially, the Sutro claims that they fully complied with their 1879 Belcher contract. The original contract between the Sutro and the Comstock mines (mainly Gould & Curry) dates to 1866. In 1879, the Segregated Belcher signed their own contract. 1) The South Lateral Tunnel was constructed 171 ft into the Belcher claim in January 1882 with the required size, grade, and course, and sufficient railway and drainage. That the drainage ability is 4 times what is was required to be. 2) That a single track railway was all that was needed, citing the fact that the connection with the Savage Mine was only one track. That the 1866 contract required a double track but that the defendant waived this requirement in their 1879 contract. 3) Then describes in detail the agreed upon drainage system. 4) That the doctrine of "ultra vires" is invoked, meaning the Belcher committed acts "attempted by a corporation that are beyond the scope of powers granted by the corporation's objects clause, articles of incorporation or in a clause in its Bylaws, in the laws authorizing a corporation's formation, or similar founding documents. Acts attempted by a corporation that are beyond the scope of its charter are void or voidable." 5) Then discusses the agreed upon price per foot ($70) for the construction of the South Lateral Tunnel and associated royalties ("$2 per ton for all ores which might be extracted..."). 6) The Belcher claims Statute of Limitations but this is not valid. Signed by Stone as attorney for plaintiff.

So the Belcher appears to have not paid the cost of construction for the South Lateral Tunnel and is most likely not paying the ore royalties either. It appears that the Sutro Tunnel Co. won their lawsuit. Includes a detailed description of the lawsuit and appeal.

13.5" x 8.5" Toning and soiling. 28 handwritten pages. Date: Location: Virginia City, Nevada HWAC# 50955