We are urged to reconsider the question whether the limitation of liability is not made independent of the "privity or knowledge" of the owner by the omission of those words from the Act of June 26, 1884, c. 121, § 18, 23 Stat. 53, 57, coupled with the repeal, in § 30, of all laws and parts of laws in conflict with the provisions of that act. It is argued that the effect of the omission and the repealing section is to do away with the former qualification in Rev. Stats., § 4283, and the argument is fortified by a reference to the history of the act, which shows that some of the Senators thought it important to make the limitation absolute. On the other hand in Butler v. Boston & Savannah S. S. Co., 130 U. S. 527, 553, 554, it was said by Mr. Justice Bradley that possibly the later act was intended to remove all doubt as to the application of the law to all cases of loss "caused without the privity or knowledge of the owner." We find no different expression in O'Brien v. Miller, 168 U. S. 287, 303. Mr. Justice Bradley's opinion was adopted after considerable discussion in Richardson v. Harmon, 222 U. S. 96, 106, and Richardson v. Harmon was accepted as establishing that the statute does not limit liability for the personal acts of the owners done with knowledge, in the late case of Pendleton v. Benner Line, 246 U. S. 353, 356. In that case the argument that the limitation of the exoneration to acts &c. done or incurred without the privity or knowledge of the owner was repealed by the Act of 1884, was presented in the fullest way.

We very much appreciate the danger that the act should be cut down from its intended effect by too easy a finding of privity or knowledge on the part of owners, as also by too liberal an attribution to them of contracts as personally theirs. We are not disposed to press the law in those directions further than the cases go. But in this case in addition to the finding of the owner's privity to the unseaworthiness was the further finding that the

contract was the personal contract of the petitioner--a finding that seems warranted if any contract by a corporation can fall within the class. That such contracts may impose a liability that cannot be transferred to what is left of the ship is decided. Luckenbach v. McCahan Sugar Refining Co., 248 U. S. 139, 149. Upon the whole case we cannot escape from the conclusion that the decree must be affirmed.

Decree affirmed.

UNION OIL COMPANY OF CALIFORNIA v. SMITH.

ERROR TO THE SUPREME COURT OF THE STATE OF

CALIFORNIA.

No. 8. Submitted November 13, 1918.-Decided March 31, 1919.

In order to create valid rights or initiate a title as against the United States under the mining laws, a discovery of mineral within the location is essential. P. 346.

For the purpose of exploring for mineral, a qualified person who has entered peaceably upon vacant public land is treated as a licensee or tenant at will of the United States and allowed, as of necessity, a right of possession, the extent of which, i. e., whether confined to pedis possessio or coterminous with the boundaries of his inchoate location,-is not here decided. Id.

The right of possession before discovery may be maintained only by continued actual occupancy by a qualified locator or his representatives engaged in persistent and diligent prosecution of work looking to the discovery of mineral. P. 348.

Discovery may follow the marking and recording of a mining claim, and perfect the location as of the time of discovery, provided no rights of third parties have intervened. P. 347.

The terms "assessments," "annual assessment labor," and " assessment work," in acts of Congress as in the practice of miners, have nothing to do with the locating or holding of a claim before discovery, but refer to the annual labor required by Rev. Stats., § 2324,

compensation has been fixed at certain rates, in one case "unless otherwise ordered" and in both "subject to future orders" excludes the possibility of holding that a change of rate could not be made so far as the written words were concerned. So it was decided in Eastern R. R. Co. v. United States, 129 U. S. 391, which answers the argument that the future orders referred to did not extend to a change of rates. In that case, to be sure, the railroad made no protest, but the decision was not placed upon that ground alone but also upon the effect of the words "unless otherwise ordered." It is said that the Postmaster General had no power to change the rates in 1905 when the papers were signed. But that would not obliterate the reservation and bind the United States to a different contract from that which the documents expressed if they expressed anything more than the rate at which the service was rendered while it was rendered. The United States was free to adopt the reservation in its favor and it did adopt it by the Act of 1907. As the case stands, the Railroad was free, as in the Eastern Railroad Case, to decline to carry at the new rates, but could not insist upon the old ones after notice that they had been revised.

It is argued that the Act of 1907 could not be put into effect without a reweighing. The act directs the Postmaster General to readjust the compensation to be paid from and after the first day of July, 1907, for the transportation of mail on certain routes "by making the following changes in the present rates per mile per annum for the transportation of mail on such routes, and hereafter the rates on such routes shall be as follows: On routes carrying their whole length an average weight of mail per day of more than five thousand pounds and less than forty-eight thousand pounds the rate shall be five per centum less than the present rates on all weight carried in excess of five thousand pounds"; with further reductions arrived at in like manner. The references to

337.

Argument for Plaintiff in Error.

ownership of the five and that they are so situated that the sinking of the well upon one will tend to develop, or to prove the oil-bearing character of the remaining claims of his group. There was no need of remedial legislation in cases where discovery had been made on the claims, because such a discovery itself establishes their oil-bearing character. The mining law requires assessment work as an evidence of good faith. Chambers v. Harrington, 111 U. S. 350, 353; McCullock v. Murphy, 125 Fed. Rep. 147, 149. Work done for discovering minerals or in prospecting or developing the claim may be included in the expenditure required as a condition to acquiring patent. It is doubtful if there was any authority in the statute for extending the requirement of annual work to placer claims. Morrison's Mining Rights, 14th ed., 134. For placer locations, such work need not be done within the boundaries of the claim. Lindley on Mines, 2nd ed., p. 1174; Gordon Gulch Bar Placer, 38 L. D. 28, 32.

Oil, except in rare cases, lies in stratified formations, often at great depth, requiring vast effort and expenditure and much hazard to reach the deposit and determine its nature and permanency. McLemore v. Express Oil Co., 158 California, 561. In this respect it is like blind lodes, which gave occasion to the tunnel site laws, and oil locations should be treated as leniently as tunnel locations-hence this act. The term "mining claim" is used here in the abstract, synonymously with location. "Annual assessment labor" done upon one of five or fewer contiguous locations, where it would tend to the development or to determine the oil-bearing character of such contiguous locations, applies to work upon unperfected as well as perfected oil locations.

The great purpose was to eliminate the expense of separate discovery work simultaneously upon five or less contiguous locations, by centralizing the work upon one,

Argument for Plaintiff in Error.

249 U. S.

when by that the oil-bearing character of the other claims could be effectively determined. The unit of the group contemplated is "oil land located as placer

mining claims." Such a unit would not necessarily be a perfected claim and, in view of the subsequent language of the act, to imply that it must be such, with discovery thereon, before the act could be applicable, would be to import something into the act which is not contained in its terms.

We submit that the full import of this language is, that the lands shall be oil lands only in the sense in which they are pleaded in the respondent's complaint and in the appellant's amended answer in this action, to be oil lands; that is, lands adjacent to lands which are demonstrated to be oil lands; recognized to be oil lands; in the vicinity of which are outcroppings and evidence of those geological formations which are oil-bearing in their character, and so situated that those who are familiar with that department of geology are able to say, as business men, that probably, if wells shall be sunk in such lands, oil may, as a good business venture, be produced therefrom.

The word "located" means simply delimited by having the boundaries ascertained and monumented on the ground, identified by having a notice of the location posted upon the land, and further proclaimed to the public by having such notice of location recorded in the manner customary under the rules for recording mining claims.

It has been long recognized, particularly under the decisions in California, commencing with Miller v. Chrisman, that a claim so located, whether discovery shall have been made thereon or not, is property and the subject of conveyance and the passing of rights therein from one owner to another.

Two or more claims may be actually developed by one