## Facts

- Smith claimed possessory rights to a 106-acre federal public-domain tract in California as a placer oil mining claim (the Schley claim).
- Union Oil claimed the same tract under an earlier placer location (the Rawley claim) and asserted rights as part of a group of contiguous oil claims, including a separate 160-acre tract (the Sampson claim).
- Neither party, nor anyone else, had discovered oil or other minerals within the boundaries of the disputed tract.
- Smith and associates posted and recorded a location notice and maintained actual presence while diligently prosecuting work aimed at discovering oil on the Schley claim.
- When Smith entered, Union Oil was not actually occupying the disputed tract, but it was drilling on the Sampson claim about 1,000 feet from the disputed tract’s boundary.
- Union Oil argued that drilling on the Sampson claim qualified as statutory annual labor for a group of up to five contiguous oil placer claims in common ownership under the Act of Feb. 12, 1903, because the work tended to determine the oil-bearing character of the contiguous claims.

## Issues

1. Whether a valid mining right or possessory title under federal mining law can be initiated and held against the United States and other claimants without a mineral discovery within the claim.
2. Whether the Act of Feb. 12, 1903 permits work on one undiscovered oil claim to hold other contiguous undiscovered claims against a later peaceable entrant who diligently prosecutes discovery work.

## Decision

- The U.S. Supreme Court affirmed the judgment for Smith.
- The Court held that discovery of mineral within the claim is essential to create valid rights or initiate title under the mining laws as against the United States.
- The Court held that the 1903 Act’s “annual assessment labor” provision does not apply to holding claims before discovery and does not relax the discovery requirement.
- Drilling on one undiscovered contiguous claim, even if informative about neighboring ground, does not preserve possessory rights in another undiscovered tract against an intervening qualified locator who peaceably enters and diligently prosecutes discovery work on that tract.

## Legal Principles

- A mineral discovery within the claim’s boundaries is required to create valid rights or initiate title under federal mining laws.
- Before discovery, a qualified prospector who peaceably enters vacant public land has only a limited possessory right dependent on continued actual occupancy and persistent, diligent work directed to discovery.
- A later discovery can perfect a prior marked-and-recorded location only if no third-party rights have intervened.
- “Assessment work” and “annual assessment labor” refer to the post-discovery annual labor requirement to maintain a perfected location; they do not govern the initiation or retention of claims before discovery.
- The Act of Feb. 12, 1903 permits annual labor for up to five contiguous oil placer claims in common ownership to be performed on one claim only for maintaining perfected claims, not for excluding intervening locators from undiscovered ground.

## Conclusion

Because Union Oil had no discovery on the disputed tract and lacked actual protective occupancy there, its earlier location and its drilling on a separate contiguous claim could not defeat Smith’s peaceable entry and diligent exploration on the tract; the 1903 grouped-assessment-work statute did not extend pre-discovery possessory rights or substitute for discovery.


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