Union Oil Co. v. Smith
249 U.S. 337 (1919)

  • Under the General Mining Law of 1872 (30 U.S.C. 22), people were allowed to make claims to "valuable mineral deposits" they found on Federal lands.
    • Basically, if you discovered a valuable mineral (like gold, copper, or even oil) you could "stake a claim" and get a permit to mine the mineral and keep the profits.
  • Union Oil and Smith were both independently searching for oil in a specific area of Federal property. Union Oil filed a claim first, and based their claim on the fact that they had discovered oil on a different, nearby claim about 1000 feet away.
    • Once Union Oil suspected there was oil in the general area they made lots of claims all over the place. The idea was to make the claims first, then explore the land to see if there was really oil in any of the claims.
  • Smith entered an area claimed by Union Oil and actually discovered oil. He sued Union Oil in order to have Union Oil's claim declared void.
    • Union Oil hadn't actually gotten around to doing any exploration on that specific claim.
  • The US Supreme Court found for Smith and gave them right of possession of the claim.
    • The US Supreme Court looked to the Mining Law and found that in order to stake a claim, you have to have actually discovered the valuable mineral (in this case oil).
      • It very clearly states that discovery must precede claim locations.
    • However, the Court found that obviously you have to explore a plot of land before you can discover valuable minerals on it. Therefore, a miner may hold the place in which he may be working against all others while he is working towards discovery.
      • That's known as pedis possessio (aka "walking on property to establish possession.")
    • The Court noted that this possessory right is limited in extent, and possession may be maintained only by continued actual occupancy by people persistently and diligently engaged in work discovering the mineral.
      • In this case Union Oil wasn't actually looking for oil on the plot in question, they were too busy drilling for it on other plots they owned in the area, so they lose their claim.
  • Basically, this case says that explorers do have some, limited possessory rights in a claim, even if they haven't actually made a discovery just yet.
  • Btw, soon after this case was decided, Congress amended the Mining Law and fossil fuels like oil are no longer covered.