30 Nev. 43 | Nev. | 1908
Lead Opinion
By tbe Court,
This is an appeal from tbe judgment and an order denying defendants’ motion for a new trial. Tbe action was brought by respondents, alleging a copartnership for mining purposes between themselves and defendant Murry Scott. They prayed for a decree dissolving tbe alleged copartnership, for tbe appointment of a receiver, for an accounting, and for other appropriate relief incidental to the dissolution of tbe copartnership. Tbe nature and character of'the copartnership between respondents and defendant and appellant Scott is alleged in the complaint as follows: "That on or about the 8th day of December, 1905, the plaintiffs and defendant made and entered into a contract and agreement in and by which it was then and there mutually stipulated, contracted, and agreed by and between said plaintiffs and defendant that they would engage together as copartners in the 'business of prospecting for, discovering, locating,(leasing, acquiring and
The answer of defendant Scott denies that he ever entered into any contract of copartnership with the plaintiffs Costello and Newhall, and denies that he had ever entered into any agreement or', business relations whatever with the plaintiff Newhall. He further alleges that he and the plaintiff Costello did enter into <! a (so-called) grub-stake agreement” which was confined exclusively to the Goldyke District, in Nye County. The nature of this agreement is set forth in defendant Scott’s answer to be as follows: "By the terms of said agreement, the plaintiff Costello was to furnish money to this defendant, and with said moneys defendant was to purchase necessaries to support him, and materials for- working
It is alleged in the pleadings and shown by the proofs that on or about the 23d day of May, 1906, the defendant Scott, who was then at the Town of Fairview, in Churchill County, joined defendants Mays and Savage in a prospecting expedition. These three parties, two days later, discovered the mines of Wonder, about twenty miles from Fairview, which proved to be of great value.
The main contention, upon the merits in this ease, is plaintiffs’ claim to an equal interest with Scott in the fruits of his discovery at Wonder, by reason of the alleged partnership. The case came on for trial in Churchill County before the court, with the aid of a jury. Special issues were submitted to the jury, which, in the main, were answered in favor of the contention of defendant Scott. To the question, "Was the partnership or grub-stake agreement confined, or intended to be confined, to the G-oldyke District, in Nye County?” the jury answered "Yes.” Upon the question as to whether there was a partnership agreement, as contended
After the jury had returned its verdict upon the special issues submitted, respective counsel entered into a stipulation "that any and all further hearings, arguments, and proceedings to be had before the court in said cause may be had, heard, and taken before the court at Reno, in Washoe County, Nevada; * * * that an order may be made by the court for a change of venue in said cause for any and all purposes of said cause;’ The stipulation also contained another provision 'governing "any further accounting in said cause.” Upon this stipulation the court entered an order transferring the cause to Washoe County, where the case was finally argued and submitted. Upon the 3d day of January, 1907, the' court rendered its decision, in which it rejected the conclusions reached by the jury upon the special issues, and found in favor of plaintiffs’ contentions, and entered a decree accordingly. Defendants’ counsel filed exceptions to the findings of the court, and in due time moved for a new trial upon the grounds of errors of law occurring during the trial, insufficiency of the evidence to justify the decision of the court, and. that the decision, findings, and judgment of the court are not supported by the evidence, but are contrary thereto. The motion for a new trial was heard by the successor in office of the judge who tried the case, and the motion denied. The case comes to this court in a transcript of nearly 1,400 pages, and the questions presented are ably and elaborately discussed by counsel in 350, pages of brief.
1. The first question, in logical order, is whether the court had power to set aside the verdict of the jury upon the questions of fact submitted to it, and substitute contrary findings of its own.
In a purely equity ease, it is well settled in this state that a party cannot demand a jury as a matter of right. The calling of a jury in such a case is a matter of discretion with
It is contended, however, in this case that the answer of defendant Scott raised a legal issue upon the question of the existence of the partnership, and that the finding of the jury upon this issue was controlling upon the court. Conceding that the answer did raise certain legal issues, it may be admitted that, if a jury had been called to try these.issues, the court would not have power to disregard the verdict of the jury upon such issues, and make findings contrary thereto. But this is not the situation presented in this case. The jury was not called to determine the legal issues. The case was treated by all parties as an equitable proceeding throughout, and the right of the court to pass upon the legal, as well as the equitable, issues does not appear to have been questioned until after the jury brought in its verdict, and, so far as the record shows, not until after the trial judge had rendered his decision. The minutes of the court, included in the transcript, show that, after the argument upon and the disposal of the motion to discharge the receiver, the court set the case down for trial upon a day certain, "by the court with the aid of a jury”
Counsel for both sides were present when this order was made, and they are deemed to have consented to it. (Haley v. Bank, 21 Nev. 127.) The stipulation, which respective counsel entered into immediately following the verdict of the jury upon the special issues, shows, we think, that the trial was regarded as being by the court, with the jury simply in an advisory capacity. In the opinion rendered by the trial judge the following statement is made: "A trial was had before the court, a jury being called to assist the court in determining the questions of fact involved.” It is manifest from this that the court understood the case to have
Counsel cites Van Vleet v. Olin, 4 Nev. 97, 97 Am. Dec. 513, and quotes, in support of his contention, the following: " The court below treated the case all through as an ordinary action at law. When an action is so tried and treated by court and counsel, the law must be correctly submitted to the jury.” The case cited was an equity case, which the court and counsel treated, so far as the trial was concerned, as an action at law. Applying the reasoning in that case to the present case, and it can with equal force be said that where an action presents both legal and equitable issues, but is treated by court and counsel as a purely equitable case, and a jury is impaneled simply in an advisory capacity, the court has the same right to disregard the findings of the jury upon the legal issues as it has to disregard those bearing upon the equitable issues.
Counsel cites many cases in his brief supporting the contention that, where legal issues are involved in an action, the party raising the legal issue has the right to have such issue tried by jury. In his reply brief counsel directs our attention to two decisions of the Supreme Court of California, cited in his opening brief, which he argues are entitled to the greatest respect, presumably because of the similarity of our code and practice with that of California. The cases are Newman v. Duane, 89 Cal. 597, 27 Pac. 66, and Donahue v. Muster, 88 Cal. 121, 25 Pac. 1096, 22 Am. St. Rep. 283, and in both these cases a jury was demanded to try the legal issues, which demand was denied by the court, and exception t.aken. In this case a jury was never demanded to try the legal issues, and, therefore, the cases cited are not in point. Whatever right .defendants may have had in this case to a trial by jury of any issues raised by answer, such right was waived by failure to demand a jury trial thereof, and by consenting that the case be tried by the court with the aid of a jury, as in a purely equitable ease. The court had the right to disregard the conclusions of the jury upon the facts. Upon appeal the main questions presented are whether the findings of the court are supported by the evidence. (Harris
2. The principal questions upon the merits involve a determination of the contractual relations, if any, existing between the plaintiffs and defendant Scott at the time of the discovery of the Wonder mines. This relationship must be determined, in the main, by correspondence had between the parties during the month of December, 1905, and following. On December 8, 1905, defendant Scott wrote to plaintiff Costello as follows: "No doubt you will be somewhat surprised when you open this letter to see it is from me. * * * Well, Tom, if you feel like staking me here, I think I can get some very valuable ground here. * * * If you desire to stake me, you will have half interest in all the claims I locate. If you can spare the money, I think it will be a great investment for both of us. * * * If you desire to stake me, do not say anything to any one about it, and we will come out all O. K. in the spring. The camp will be a hummer before many months. If I could have , only seen you when you was here, I know everything would have been all O. K. * * *”
To this letter the plaintiffs, on December 14th, replied as follows: "Your letter received, and will say in answer that we have practically exhausted our own means, but we are in correspondence with- several parties from whom we expect some help. If they come through, we will at once come to your assistance. We could have done business in the summer and fall easily, but at that time you were tied up with other parties, and I am glad to see you have gotten some very nice properties for them, and we have no doubt but what you will be able to find other good properties in the future. Now, when you answer this, let us know what you need. Then, if things come right with us, we will be able to advise you at once.”
On December 24th defendant replied as follows: "Everything is looking fine here. They have made a new strike at the Goldyke that is very good, they say. I have been prospecting the hills since you was here, and have made some very important finds. I have my eyes .on some claims that
To this letter plaintiffs replied, December 30th, as follows: "Your very welcome letter received several days ago, and we assure you we appreciate your position, but you can rest assured we are doing all in our power to help you, but will tell you right now money is a darn scarce article here in Tono-pah. But we have written to several different parties, and we have every reason to believe that at least two of them will come through. * * * Money will be rather close with us for perhaps the next sixty days, or until such time as we get returns from our correspondents., Now, here is what we would like to have you do. Of course, you understand, we are willing to go in partnership with you, and you also understand, old man,.we will have to depend on the outside for money to carry on operations until such time as we get a company floated. So we would like for you to send us a diagram of the best thing you have; tell us about the veins— their width and values and formation; also whether it is a sinking or tunneling proposition. Now, it is our candid opinion that although it will take a little while to get things started right, of this you may feel sure, if you go into this
On January 5, 1906, defendant replied as follows: "Your welcome letter was received this morning. * * * I have four claims joining the Idahoes, and I have been doing the assessment work. * * * I will send, you the papers in my next letter, and you can put them on record. I only have my name on the location papers, but you can put your name on when you record them. As soon as the snow goes away, so I can see the ground, I will begin to russel the hills. * * * I am satisfied we will make some money here this year. As soon as the snow goes, I will locate all the leges on these claims, and write you all the particulars. I received your check and it will come in handy at present. Well Tom, I will do my best out here, and I think we will not be very long doing some business.”
On January 21st the plaintiffs wrote defendant as follows: "What is the matter, old man; we have not heard from you for quite a while. We have several people on string, and would like to know what you have that we can offer them; so we think it is advisable for you to let us know at your earliest convenience, as we are extremely anxious to keep in touch with these clients. Send diagrams, extent of veins, formation, and how far from Goldyke, and direction, and a general opinion as to their value, and whether they are sinking or tunneling propositions, water, etc. Mining conditions are looking up quite favorably, and it is quite certain we will do a considerable business during the coming summer. By the way, we wrote you on the 30th of December, inclosing a check for $40. Please let us know if you have received same, as we have not heard from you since that time. * * * ”
On February 2d defendant replied as follows: "I cannot
On the same date, February 2d, plaintiff wrote defendant as follows: "We only received your letter of January 5th yesterday. * * * Please address in future Costello & New-hall, Box 866, Tonopah. * * * We are glad to hear the good reports from that section, and agree with you that there are good chances for us to make some money out there during the coming season.”
On February 7th plaintiff Newhall wrote defendant as follows: "Your favor of February 2d, with location notices received last night, and I filed the notices for record this morning. Mr. Costello is at Crow Springs, and will not be in until the night of the 13th. We expect to collect some money between this and the 15th, and will send you some just as soon as we can receive it.”
On February 26th plaintiffs again wrote to defendants as follows: "We have been trying for the past three weeks to get rid of some stock in order to raise some money. * * * By the way, when you answer, please let us know what kind of showing there is on the four claims we have had recorded, and what you think they are worth, as it is possible we might get some one interested. We understand from the papers that there are quite a number of good strikes being made around Goldyke, and hope the reports are true.- You will find inclosed money order for $25. We promised to help you out by the 15th, but it was impossible to do so.”
Answering the foregoing letter on March 14th, defendant after acknowledging its receipt, and writing at some length describing properties located and the general outlook of the camp, continued as follows: "Burns north of us has some very fine rock and he is going to lease his ground and I am going to take a leice and I think we will shurely make some money out of the leice he has rock that you can see all kinds
On April 5th defendant wrote plaintiffs as follows: " Your letter received and will say in reply that I was very glad to heare from you. I am glad also to know that I have the claims. I would like to see you come out here. I think these claims would be a good stock propersition one of the best in this district, something that will stand a show to make a mine. We have that Gold Dyke ledge shnre. Know is the time to do something for this camp is coming to the front shure this summer. I think it would a good idie to stok this property if you are in a position to do so. We are still having snow here but I think that we will have some nice weather soon. Evry thing is looking good out this way. I have your'check Well Tom I would like to see .you out this way as soon as you can do so. * * *”
A few days after writing the letter last above mentioned, the defendant Scott went to Tonopah to see plaintiffs personally. The evidence is conflicting as to the conversation had between them. The court accepted as true the version given by plaintiffs, and as the trial court is the exclusive judge of the credibility of the witnesses, its action in this respect is binding on this. court. The plaintiffs testified to the effect that, at this conversation in Tonopah, the Burns lease was discussed, and that it was agreed between them that the . lease 'should be taken, but that it was not contemplated that the parties should work the same to any considerable extent.
Scott returned to Go!dyke, and on April 18th wrote to plaintiff Costello as follows: "I arrived home. I am not going to take the Leise. Burns would not do as he agreed to and I think we had better not have anything to do with him. I know he has a great mine but he will not do the wright thing by a Leice and I will not take one. He promised me before I went to Tonopah that he would give me 9 months and transfurable but he has changed his mind and onley wants to give me 6 months and not transfurble and I do not want the Leice on those terms because that would not give us a chance. I am going out prospecting and will be away about three weeks out about 15 or 20 miles from here. I saw some rock from this place yesterday and it was great rock. I will do some work on some of our claims here when I come back if I do not find anything on this trip. The camp is looking good. We will make some money this year I am sure. They are making some good striks on th¿ Gold Dyke extension.”
Defendant next writes, on April 30th, from a place called Snow Point, to Costello as follows: "I am out prospecting between Atwood & Fairview. This is a verry good country to prospect in. I, am about eighteen miles from Fairview. I have been here two days. Two fellows here has some very fine rock and I have some claims joining them and I think I will stay here for some time. I will be in Atwood in about two weeks. This is a fine looking camp and I think it will be a good one. * * * ” On May 4th the defendant wrote to
The foregoing is all the correspondence which is admitted by both parties to have been written and received before the Wonder discovery. Plaintiffs testified that on May 19th they wrote to defendant, inclosing $50 in currency, asked for, a copy of which letter was admitted in evidence. Defendant Scott denied he had ever received the letter or the $50. The court found that the letter and money had been received by Scott, and that Scott was subsisting thereon at the time of the Wonder discovery. On May 23d Scott, together with defendants Mays and Savage, left Fairview on a prospecting expedition, and two days later discovered and located the Wonder mines, twenty miles north of Fairview.' After the discovery of the Wonder mines there was no further correspondence upon the part of Scott with the plaintiffs. Plaintiffs wrote three letters to Scott after the Wonder discovery was known, which were admitted in evidence over defendant’s objection, and will hereafter be considered. It is the contention of the defendant Scott that the correspondence had between himself and plaintiffs during the month of December, 1905, shows but a grub-stake agreement, appli
" 'Grub-stake' contracts have sometimes been called prospecting partnerships, and are said to partake of the character of 'qualified partnerships.' Yet, unless the agreement goes beyond the mere furnishing of supplies in consideration of a participation in the discoveries, the word 'partnership' is improperly used and is misleading. It is simply a common venture, wherein one, called the 'outfitter,' supplies the 'grub,' and the other, called the 'prospector,' performs the labor, and all discoveries inure to the benefit of the parties in the proportion fixed by the agreement. The prospector has the right to insist on the outfitter performing his part of the agreement as a condition precedent to participation in such discoveries. Should he fail to do so, the prospector may discover and locate for his own advantage, free from any obligation to the outfitter. * * * Is it essential to a right in property under a grub-stake contract that such property be acquired by means of the grub-stake furnished, and pursuant to such contract? * * * The 'grub-stake’ contract, properly speaking, applies to the search for and location of mines on the public domain. * * * We frequently encounter cases where the object of the venture is not only to search for and discover mines, but also to work and develop them, and conduct a general mining business. This is something more than a 'grub-stake’ contract. Such an agreement constitutes a partnership.” (Lindley on Mines, 2d ed. vol. 2, sec. 858, p. 1565, et seq.)
We think a fair interpretation of the letters which passed between plaintiffs and defendant Scott warrants the construction placed upon them by the trial court, that they show that the parties in question engaged in a partnership in prcesenti for mining purposes. If the letter of December 8th contained the only proposition upon the part of the defendant, arid the proposition therein contained had been accepted without modification, it would have constituted simply a grub
The gist of the proposition made by defendant is embodied in the two sentences contained in this letter.: "I think we can make some money here if we form a partnership. I will get the properties if you can dispose of them, and some very , good ones at that” He states in this letter that about all he will need will be grub, as he has plenty of tools. He requests a reply to this letter, so he "will know what to do.” In the letter of December 30th plaintiffs accept the proposition, which both parties style a "partnership” and which constitutes a partnership in law. Plaintiffs, however, explain in,their letter that they have to " depend on the outside for money to carry on operations until such time as we get a company floated.” They say to defendant in this letter: "You go ahead, and get hold of the best propositions you can. * * * W e will float them"You can keep us posted from time to.time, and we will do our share by keeping you supplied with money to the best of our ability.” The contract is clear from these two letters. Defendant, who is a practical miner and prospector, is to get hold of good properties, some of which he already has and others he has in view. These properties the plaintiffs, who are stockbrokers, and in the business of selling and promoting mining properties, are to dispose of. The parties are to have an equal interest in all mining property acquired by defendant and the proceeds of any sales effected
It is very earnestly contended by counsel for appellant that the contract entered into between Scott and the plaintiffs had reference only to the Fairplay District, in which Goldyke and Atwood are situated. Although the earlier correspondence between the parties refers only to this district, there is no specific declaration that their operations are to be confined to that district. It is common knowledge that where parties .enter into grub-stake agreements, or general partnerships for mining purposes, they care very little about the place where the mines are found. The main thing which the parties to this partnership wanted was mining properties of sufficient promise and value to enable them to be handled so that money could be made out of them. That the parties did not intend to confine their operations exclusively to the Fairplay District is shown by their conversation in Tonopah, when plaintiff Costello pointed out the advisability of prospecting the south end of the Fairview Range; by the letter of defendant of April 18th, when he notified plaintiffs that he was going on a prospecting trip fifteen or twenty miles from Atwood, and would be gone about three weeks; by the fact that defendant testified that the grub purchased for this prospecting trip should have been paid for by plaintiffs; by defendant’s letter, written April 30th from Snow Point, in which he says: "I am out prospecting between Atwood and Fairview. * * * I will be in Atwood in about three weeks”; by defendant’s letter from Fairview of May 4th, relative to the lease at that place, and plaintiffs’ reply thereto of May 10th.
3. It is contended by counsel that defendant’s letter of May 4th, informing plaintiffs that he could receive a two-
Defendant Scott denies that this letter of May 19th was ever sent or received. His counsel in his brief on appeal says: "Assuming that the letter of May 19th was written and sent, what is the result? Plaintiffs are bound by the last meeting of the minds of the parties. A specific, defined, and unambiguous agreement was entered into between the three, not intended or contemplated by the original contract, and it is the only one existing after May 19th, and must control this case. Offer and acceptance made by letter create a mutual obligation, and form a valid contract:’ If this letter was neither written nor received, then the contract in regard to the lease could never have been effected, for the necessary money was not forthcoming. If the letter was written, whether received or not, it shows that plaintiffs had no idea of terminating the relations previously existing between plaintiffs and Scott, for in that letter they ask for a description of the claims located by defendant between Goldyke and
The evidence in this case shows that, up to the time of the Wonder discovery, the parties had reposed mutual confidence in each other. Scott knew that money was not easy with the plaintiffs. They frankly explained to him their financial situation in the very beginning of the transactions, and Scott was satisfied. Scott knew, as did every one, that the San Francisco disaster made money tight in this state for some time thereafter, and this situation is referred to in plaintiffs’ letter of May 10th. In all the- correspondence between the parties from December, 1905, to May, 1906, inclusive, there is not a line or a word indicating a severance of the contractual relations which they had entered into. After Scott made the Wonder discovery, he ceased all communications with plaintiffs. When one party to a partnership for mining purposes makes a discovery which would be of great value to the partnership, courts will not look with favor upon any contention upon the part of such discoverer that the partnership relations had previously been severed, unless such severance is clearly established. In this case the contentions of defendant Scott, based upon the correspondence alone, and independent of the other corroborative testimony in the case, fails to have any convincing force.
4. The contention of appellant that the evidence does not support the finding of the court that plaintiffs’ letter of May 19th, together with the $50 alleged to be inclosed therein, was received, in the view we take of this case, is immaterial. The trial court in its decision analyzes the evidence upon this question of fact, and we could not, under well-
5. The court admitted in evidence, over defendant’s objection, three letters written by the plaintiffs to Scott, of dates June 23, July 15, and July 16, 1906. It is claimed the evidence shows these letters were never received; that they contained self-serving declarations supporting plaintiffs’ contention of the existence of the partnership. The court found as a fact that these letters were received. Conceding, without deciding, that the court erred in their admission, the error, if any, was harmless, for the letters only tended to support plaintiffs’ contention of partnership. The question of partnership was a matter of legal construction to be placed upon prior correspondence. We have already construed this correspondence to establish a partnership. The letters in question could add nothing to the proof of the existing contract.
6. Plaintiffs allege in their complaint: "That subsequent to the 25th day of April, 1906, as plaintiffs are informed and believe, and so aver the fact to be, the said defendant, together with the said L. A. Savage and William Mays, became the owners of the possessory title of the Wonder town site in the said mining district, County of Churchill, and State of Nevada, by virtue of a discovery of mineral and the location thereof as. quartz claims, the number and a more particular description of which plaintiffs are unable to give; that as plaintiffs are informed and believe, and so aver the fact to be, for the purpose of cheating and defrauding plaintiffs of their share and interest of, in, and to defendant’s one-third interest in the said town-site location and claims, the defendant transferred and released, without a valuable or any consideration, his said undivided one-third interest therein to said codefendant, N. R. Fitzpatrick, who then and
Plaintiffs pray for a judgment and decree "vacating, annulling, and setting aside the release or conveyance made by defendant to said codefendant N. R. Fitzpatrick as to the plaintiffs’ undivided one-half of the premises affected thereby!’
Defendant Scott’s separate answer contains the following allegation and denial: " Defendant admits that the said firm of Mays, Savage & Scott became the owners of possessory title of the Wonder town site. He avers that the mining claims on which said town site exists were located by the firm; that no mineral has been discovered thereon up to present date. The surface of said located claims was segregated from the mineral, and it was agreed by said firm that the surface should be “occupied for town-site purposes. An agreement was entered into by which certain parties should promote the sale of town lots on said town site, but the said agreement reserved all of said claims except the surface to the locators. The defendant Murry Scott transferred to said Fitzpatrick his interest in said surface in consideration that said Fitzpatrick would, among other things, promote the building of a town site, and thereby enhance the value of defendant’s mining property, and in further consideration of indebtedness existing on the part of defendant to said Fitzpatrick, for as much as the said Fitzpatrick had given defendant shoes, food, and other necessaries, by which he was enabled to sustain life, during a portion of the said time that the said Costello had agreed to furnish him with food and necessaries, and which he had neglected to .do. Defendant denies that the said transfer was fraudulent or without any consideration, and avers that at the time the same was made the property had nothing but a prospective and speculative value, and it was not known that any town would ever exist thereon.”
The separate answer of Fitzpatrick, Mays, and Savage contains the following allegations and denial: "Defendants deny that said .Murry Scott transferred to defendant Fitzpatrick his interest in the said surface claims comprising the town-
The-court found that the transfer by defendant Scott to his codefendant Fitzpatrick of all the rights of Scott to the surface of claims of which he was a locator was fraudulent, and such transfer, in so far as it affected a sixth interest in the town site,'was set aside, and plaintiffs decreed to be the owners thereof, and judgment given against Fitzpatrick for one-half of the proceeds derived by him from a sale of lots in said town site of Wonder.
Appellants contend the evidence is insufficient to support the finding that the transfer was fraudulent. Discussing the question of the evidence requisite to establish fraud, this court, in the case of Gruber v. Baker, 20 Nev. 476, 9 L. R. A. 302, said: "A party alleging fraud must clearly and distinctly prove the fraud as alleged. If the fraud is not proved as alleged, relief cannot be had, although the party against whom relief is sought may not have been perfectly clear in his dealings, for fraud will not be carried by way of relief one tittle beyond the manner in which it is proven. The rules of evidence are the same in equity as at law, and when certain facts as proved amount to a fraud is a question for the court. But the court is not justified in finding such facts upon any less or different kind of .proof than would be required to satisfy a jury, for the law in no case will presume
The trial court based its finding that Fitzpatrick had notice of the partnership relations existing between plaintiffs and the defendant Scott upon the following, as shown by the opinion of the court: "It.further appears from the evidence in this case that Fitzpatrick lived with Scott in Goldyke District, Nye County, Nevada, at the time that Costello & Newhall were furnishing Scott with money, and at the time they were engaged with him in the mining business at Goldyke. It further appears from the evidence that Fitzpatrick was living with Scott at Goldyke from the 16th or 17th of March, 1906, up to the time that the defendant Scott left Goldyke for the Fairview country. It also appears from his evidence that he learned of the relations existing between defendant Scott and Costello at the time he first went to Goldyke, about the 16th or 17th of March; .that during the time he was at Goldyke, claims were located in the name of Scott, Fitzpatrick, and Costello.”
The fact that Fitzpatrick was living with Scott at Goldyke, and the fact that a number of mining claims were located in the names of Costello, Scott, and Fitzpatrick, of which he had knowledge, would not of themselves be sufficient to establish notice to him of the existence of partnership relations. It is a common occurrence for prospectors in locating claims to include the names of other parties, with whom they may have no contractual relations. Tim mere fact that Fitzpatrick was living with Scott certainly would not afford him any notice of his relations with Costello. There is no intimation in the evidence that Fitzpatrick ever saw any of the correspondence between plaintiffs and Scott, or that he was informed of their contents or effect prior to the Wonder
But the court says: "It appears from his (Fitzpatrick’s) evidence that he learned of the relations existing between Scott and Costello at the time he first went to Goldyke.” The record shows that Fitzpatrick was asked the question: " When did you first learn that Costello was interested with Scott?” The answer was, "When I first went to Goldyke.” This question and answer appear to be all there is in the record , upon which the court attributed to Fitzpatrick knowledge of the relations existing between plaintiffs and Scott; at least it is all that counsel has directed our attention to in their brief. The witness may have had one idea in mind and counsel another when the question was asked. Costello was "interested ” with Scott in the locations at Goldyke. This Fitzpatrick knew, and this he may have had in mind when he answered the question, as the question and answer are entirely consistent with this view. Fitzpatrick may have known that Costello was "interested” with Scott in the locations, but may never have suspected the existence of partnership relations.
No attempt was made by further questions to ascertain to what extent the witness had knowledge of the relations existing between plaintiffs and Scott. He denied in his answer the existence of such partnership. The burden of proof was on plaintiffs to establish notice, or such a state of facts as would put a person upon inquiry. Both Scott and Fitzpatrick testified that the consideration for the transfer of the town-site interests was partially money owed by Scott to Fitzpatrick, supplies, etc., furnished, and partially an agreement upon the part of Fitzpatrick to do the location work for Scott on the Wonder claims. The court reviews the evidence upon the question of the alleged indebtedness existing between Scott and Fitzpatrick, and the matter of supplies alleged to have been furnished, and concludes that no such indebtedness existed, nor were any such supplies furnished. There is evidence to support this finding, and it is conclusive upon this court. Both Scott and Fitzpatrick testified that
The testimony shows that after Scott transferred his interest in the town site to Fitzpatrick, that Mays, Savage, and Fitzpatrick entered into an agreement with Kleeman & Co. for the latter to promote the town site upon a percentage, the latter company, in further consideration therefor, to do all the location work, to hold the claims, survey and plat the same. This the company did. Counsel for respondents contend that this shows that Fitzpatrick did none of this 'work. But if he agreed to do the work as part consideration for the transfer, and subsequently he made such arrangements that the work was done by some one else, neither Scott nor plaintiffs would be in position to complain, if the transaction was otherwise regular. Scott and the plaintiffs were relieved of paying their proportion of the expense of this work, which was' estimated to be over $700. The agreement between Scott and Fitzpatrick was made in the latter part of May, and the contract with Kleeman & Co. entered into on June 1st following. At this time the value of the town site was more or less problematical.
We are unable to see wherein the evidence in the case discloses any bad motive upon the part of either Scott or Fitzpatrick in the transfer of the former’s interest in the surface rights of the claims in question for town-site purposes. If Scott was defrauding plaintiffs, he was working the same injury upon himself. There is nothing in the evidence indicating that Scott was to derive any advantage from the town site, secret or otherwise, other than being relieved from the expense of doing his part of the location work upon the claims, surveying, etc. It may be that Scott at the time did not appreciate the value of the town site, and transferred it for less than it subsequently proved to be worth. However, it is not reasonable that he would seek to injure plaintiffs, when to do so he would inflict equal injury upon himself. If there was anything to indicate he retained any secret interest in the town site, and only plain
Scott had but little means at this time, and he knew money was hard for plaintiffs to get hold of, and if he arranged to secure work to be done, necessary to acquire title to the mining claims, upon a basis that was as fair to plaintiffs as it was to himself, plaintiffs are hardly in position to complain, unless it violated the conditions of the partnership. In the agreement between Scott and Fitzpatrick nothing but the interest in the surface was transferred; all mining rights were reserved. The partnership for general mining purposes entered into between plaintiffs and defendant Scott did not contemplate the promotion and sale of town sites, and this may be taken as some evidence 'that Scott did not contemplate defrauding his partners when he made the transfer. While the transfer by Scott to Fitzpatrick of his interest in the surface rights of the Wonder claims for town-site purposes is not clear in all particulars, yet, taking into consideration all of the facts and circumstances as disclosed by the record, we think the showing is insufficient to establish actual fraud in the transaction. The fact that the' transfer was verbal does not, of itself, give plaintiffs a right to have it set aside; it being in reference to a matter concerning which Scott had power to bind the partnership.
7. It appears from the evidence that on August 2, 1906, the receiver came into possession of the sum of $1,816, moneys in bank belonging to the partnership of Costello, Newhall & Scott, and involved in the suit. The final decree of the court, among other things, adjudges and decrees to plaintiffs judgment against Scott for the sum of $2,180.60, which latter sum is in fact inclusive of the said sum of $1,816 in bank. The effect of this was to give plaintiffs a double judgment for one-half of $1,816. It is manifest that this double judgment was an oversight upon the part of the trial judge. Upon the hearing of the motion for a new trial
8. The record shows that just prior to the beginning of the trial of this cause the Hidden Treasure Mining Company, a corporation, petitioned to intervene, setting up in its petition that it was the owner of certain mining claims in the Wonder Mining District, named the "Hidden Treasure” "Hidden Treasure No. 1” "Hidden Treasure No. 2” and "Skiddo Fraction”; said claims having been located by defendants Scott, Mays, and Savage on or about May 26,1906; that on or about the.day of July, 1906, said defendants by deed conveyed said claims to said corporation, which ever since had been the owner thereof; that the plaintiffs claimed an interest in said claims by reason of the alleged partnership with defendant Scott. Because of the lateness of the application, the necessity of a continuance, and the fact that the decree in this ease could not be binding on the corporation unless it was a party, the permission to intervene was denied. Although there has been some argument in the briefs thereon, the order of the court denying the prayer for intervention is not before us. Upon the trial the court, over defendant’s objection, admitted in evidence the deed in question to the Hidden Treasure Mining Corporation. This deed is dated the 28th day of July, 1906, acknowledged on the 5th day of October, and recorded on the 22d day of October following,
The decree also contains the following general provision: "It is further ordered and said plaintiffs are hereby adjudged and decreed to be entitled to take and receive and have delivered to them an undivided one-half part, share and interest of, in, and to any and all other or further moneys or other consideration received or to be received by said defendant Scott, or contracted to be paid to him, or accruing to or in any wise arising out of any interest, property, right, title, estate, claim, or demand of said defendant Scott in any qnd. all mining claims, premises, and property acquired by him between December 30, 1905, and August 2, 1906, and plaintiffs are entitled to and are hereby given judgment against the said defendant Scott for the same.”
It is claimed that this, in effect, is a double judgment in favor of plaintiffs, as it decrees $o them not only one-half of Scott's third interest in the claims deeded to the Hidden Treasure Mining Corporation, but also gives them one-half of all the stock issued by said corporation to Scott in consideration of the transfer of the claims. Plaintiffs, of course, are not entitled to ah interest both in the stock and in the claims, and we think the trial court never intended to award them both such interests. No specific reference is made in the decree to stock in this corporation or any other. We do not understand from the decree that the court attempted to adjudicate the rights of the Hidden Treasure Mining Corporation, as contended by counsel for appellant, and it is manifest it could not do so. Besides, the court in its decision upon the motion to intervene distinctly stated that if the corporation was not allowed to intervene, no decree it would make would be binding upon the petitioner. Respondents in this case, with full knowledge of the transfer to the Hidden Treasure Corporation,, have proceeded upon the theory that that transfer is void in so far as it affects their right to a half of the interest which Scott had to the locations. They have, in effect, elected to claim an interest in the ground itself, and not in the proceeds which Scott obtained therefor, and we think the decree should be so con
The record contains numerous other assignments of error, but the view we have taken upon the main questions makes it unnecessary, we think, to determine them.
As against all the appellants, excepting N. R. Fitzpatrick, 1 the decree and judgment is affirmed, subject to the modification in accordance, with the remission filed by respondents in the lower court, and also subject to the construction of the decree placed thereon by this eonrt, and as to them the order denying the motion for a new trial is affirmed.
In so far as the judgment and decree is. against the appellant N. R. Fitzpatrick, it is reversed, and a new trial is granted upon the issues between respondents and said appellant Fitzpatrick, excepting as to the issue involving partnership relations between respondent and defendant Scott.
It is further ordered that the cause be remanded for further proceedings, in accordance with the judgment and decree of the trial court and of this court. Appellant N. R. Fitzpatrick is entitled to his costs upon appeal.
Rehearing
•ON Petition eor Rehearing.
By the Court,
Counsel for appellants have filed a petition for rehearing in this cause upon several grounds. The opinion heretofore rendered covers satisfactorily, we think, all points raised in the petition, with one exception. Counsel in his petition says: "The judgment in the case at bar is not a final settlement of the partnership affairs. Paragraph 16 gives plaintiffs judgment against defendant Scott for $2,182.60, upon which execution may issue. This is also a separate judgment for costs of $936. Also a separate judgment for one-half of the
Even if there was room for argument as to whether the judgment rendered in this cause was a final judgment, appellants by treating it as such, and appealing therefrom, are estopped to deny the finality of the decree. (State v. Commissioners, 22 Nev. 78, Clark v. Dunnam, 46 Cal. 204; Bigelow on Estoppel, p. 601.)
The judgment in this case determined all the material issues raised by the pleadings. It determined the existence of the partnership, and ordered dissolution thereof. It gave to plaintiffs an undivided half interest in certain described
The decree also contains the following provisions: "It is further ordered, and said plaintiffs are hereby adjudged and decreed to be entitled to take, receive, and have delivered to them an undivided one-half of any and all moneys or other consideration now in the keeping, custody, or control of R. L. ‘ Douglass, receiver herein, and which moneys or consideration has accrued or is accruing to the interest heretofore held, owned, or claimed by the defendant Scott in the mining claims, and premises herein mentioned, and plaintiffs are hereby adjudged to be entitled to a delivery of the same, and are hereby given judgment therefor. It is further ordered, adjudged, and decreed that the said R. L. Douglass, receiver herein, be, and he is hereby, directed to forthwith make a full account of all his acts and proceedings herein, and render the same to the court, and to forthwith transfer, pay, and deliver to the plaintiffs herein, or their attorneys of record, an undivided one-half of any and all moneys or other consideration, received and now held, by him as such receiver, and accruing to the interest heretofore standing in the name of and claimed by the said codefendant Fitzpatrick in said town-site premises, and also to forthwith transfer, pay, and deliver to plaintiffs, or their attorneys of record, an undivided one-half of any and all moneys or' other consideration received and now held by him as such receiver, and accruing to the interest, part, and share in ■ said contracts for the sale of certain of the aforesaid mining claims and heretofore standing in the name of and claimed by the said defendant Scott.”
The decree concludes as follows: "The court hereby reserves the right to make a supplemental decree herein on proper showing made for that purpose, as to any other or further property, if any, belonging to said copartnership, and not adjudicated upon or included herein!’ The objections
In Bates on Partnership, 970, the author says: "A decree finding the existence of a partnership and ordering a dissolution, or finding the fact and time of dissolution, and settling the proportions of interest of partners, and referring the cause to ascertain the specific amounts and to take the account, is a final decree for the purposes of appeal!’ (Clark v. Dunnam, 46 Cal. 205; Sharon v. Sharon, 79 Cal. 703; Arnold v. Sinclair, 11 Mont. 556, 29 Pac. 340, 28 Am. St. Rep. 489; Black on Judgments, 41. See, also, note to Williams v. Field, 60 Am. Dec. 429.)
The record in this case contains a report of the receiver filed January 28, 1907, in pursuance of the decree, which decree was filed January 4, 1907. This report shows that the receiver had in his hands upon the date he filed his report moneys belonging to the partnership in the sum of $27,'316.59. The receiver asked to be allowed a commission in the sum of $1,200, and for a reasonable allowance for his attorney’s fees in the sum of $250. The report of the receiver does not show that there are any claims of third parties against the partnership; nor is it claimed that the record so shows. Counsel in his petition for rehearing asserts that, since the appeal, certain claims have been made by third parties of indebtedness due them from the partnership. Even if we could consider such claims as having been adjudicated, nevertheless it appears that the receiver has ample funds in his hands to pay them all, and have a large balance besides.
While the matter is not strictly before us, we deem it appropriate to say that claims of third parties, if any, should be adjudicated and settled before the final discharge of the receiver. Plaintiffs, of course, are liable for the partnership debts equally with the defendant Scott. Counsel for petitioner says that counsel for plaintiffs claim that under the decree awarding plaintiffs one-half of all moneys in the hands of the receiver they are entitled to such half immedi
A literal construction of the decree would undoubtedly impose all the fees and expenses of the receiver upon the defendant Scott. Where such is not manifestly the intention of the trial court, we are not disposed so to regard it. The order appointing the receiver recites the reasons therefor as follows: "Upon reading the said verified complaint, and it appearing to the court therefrom that it is a proper case for the appointment of a receiver, and it further appearing to the court that it is for the best interest of the said copartnership that a receiver, with all the usual powers, be appointed to take charge of all and singular the said copartnership business, properties, and effects, as set forth and described in the said complaint, and hold and preserve the same pending the further order of the court.” It appears from this order that the court deemed the appointment of the receiver for the
In Johnson v. Garrett, 23 Minn. 565, the court said: "The court charged in the account against plaintiff the whole compensation allowed to the receiver. There are no facts stated in the finding to sustain this. The receiver was appointed for the benefit of both parties, and, we must presume, upon a showing that justified it; and the court, we must presume, allowed him only what his services were worth. These services were of equal benefit to both parties. . His appointment relieved each of them from transacting the business he was paid to do. Where the appointment of a receiver benefits equally all the parties, they should, as a general rule, share the expense equally. One-half of the sum so charged to plaintiff, to wit, $250, must be deducted from the judgment.”
As the record appears in this court, there is ample money in the hands of the receiver to pay such fees and expenses as the court may award the receiver, to pay all- just claims, if any, against the partnership, and out of the half remaining and belonging to defendant Scott, to pay plaintiffs their judgment for costs taxed at $936.15 and the amount of $1,272.60, determined to be due plaintiffs from defendant Scott on account of their one-half interest in the money received by Scott on account of the partnership prior to the institution of suit. If there is money in the hands of the receiver after paying the fees and expenses of the receiver and the debts of the partnership to make these payments to plaintiffs, they should be so made, instead of being enforced by execution prior to the settlement of the receiver’s accounts.
It is ordered that the decree in this cause be further modified by providing that the fees and expenses of the receiver be paid one-half by the plaintiffs, and one-half by the defend
With these additional modifications, the judgment and order of this court as heretofore made on the 2d day of January, 1908, will stand as the judgment and order of this court.
A rehearing is denied.
