Daily v. Fitzgerald, No. 1441

No. 1441 | N.M. | May 5, 1912

OPINION OP THE COURT.

ROBERTS, C. J.

1 The appellant contends that the findings of the trial court are not sufficient to support the judgment. The findings are set out in the statement of facts and it is not necessary to repeat them here. The appellant evidently proceeds upon the theory that if any doubt exists as to the meaning of the findings that doubt is to be resolved in his favor. He endeavors to create such doubt by combining and confusing the language of the sixth finding of fact that Fitzgerald had authority to make the contract with the first conclusion of law that this authority was not given in express terms. The rule as to the construction of findings is exactly the opposite from that contended for by appellant. The general rule is “that every reasonable intendment and presumption will be resolved against the appellant and in favor of the correctness of the proceedings below.” 3 Cyc. 275. Applying this rule to the construction of findings, every inference not contrary to the evidence or otherwise appearing to be unreasonable will be drawn from the facts'found and in case of doubt that presumption will be presumed correct which supports the judgment. 3 Cyc. 310. In Kuschel v. Hunter (Cal.) 50 P. 397" date_filed="1897-09-14" court="Cal." case_name="Kuschel v. Hunter">50 Pac. 397, the court says: “The presumptions wo are permitted to indulge must be in support of the judgment. If there are doubts as to the meaning of any finding-they must be resolved in support of the judgment.” Tested by this rule we think the findings are sufficient to support the judgment.

2 Appellant argues that the findings are not supported by the evidence. This court has held, by an unbroken line of' decisions, that it will not disturb findings of fact, where there is any substantial dispute upon the evidence. A great many of the disputed facts in the-case were established by circumstantial evidence and we-cannot say that the lower court was not justified in arriving at the conclusion it did.

The principal contention urged by appellant is,, that the defendants were mining partners, and therefore that Fitzgerald did not have the power to bind Foster by his engagements with the plaintiffs. That a mining partnership-has special features, differing from other partnerships, among which are a want of the delectus personarum and a consequent want of that authority in the individual members to pledge the personal credit of their associates except for the employment of labor and similar essential purposes. There is, of course no dispute as to the existence-of these special associates, known as raining partners, and as to the lack of ¡rower of any member thereof to bind his associates to the extent of the implied powers of a commercial partner. But under the findings of the court it is apparent that the principle does not apply to the case at bar.

Under the 6th finding the court found that Fitzgerald, on the evidence, had authority from the defendants Foster and Iielmer to market all ores extracted from the mine and to procure advances from the plaintiffs on account of ores thereafter mined, and that the defendant Foster knew that such advances were being made, and by its fourth finding1 the court found that the parties were “partners doing business under the firm name and style of the Torpedo Copper Companj', and as such partners were engaged in the development and operation of the mining property.” It is evident that the court found that the parties did not sustain the relation to each other of mining partners, but that they were partners, subject to the rules relating to an ordinary partnership in trade. This conclusion is strengthened by the fact that the appellant, at the conclusion of the testimony, requested the court to find facts showing the existence of a mining partnership, and to state the conclusion of law therefrom that the relationship existing between the said parties, constituted a mining partnership. This the court infused to do, but made the findings set out in the statement of facts.

3 The appellant contends that the agreement of August 3, 1906, set out in the statement of facts was the measure of the power of the partners, and limited their rights, and that the liability of the defendant Foster must be determined under the provisions of said contract. If this proposition is correct there could be no doubt as to the non-liability of the defendant Foster. The lower court however evidently did not determine his liability upon such contract. A reading of the contract will evidence the fact that it did not provide for the working of the mine. It was simply a preliminary arrangement between the three parties, providing for the purchase b3r Fitzgerald of the property, the furnishing of the indemnity bond by Foster, the organization of a corporation and the distribution of the shares of stock. It was evidently never the intention of the parties to carry on, under this written agreement, the extensive mining operations which they did. Immediately after the purchase by Fitzgerald of the property, or the signing of the contract for the purchase, steps were taken to complete the formation and organization of a corporation to take over the property. This was delayed from time to time, and Fitzgerald continued working the mine and Foster to advance money far beyond the amount specified in the preliminary written agreement. Other undertakings were begun by the parties, and from all the circumstances shown on the trial we believe the court was justified in concluding that a partnership existed between the parties and that it was subject to the rules relating to an ordinary partnership in trade. We have set forth in the statement of facts many of these facts and circumstances. The appellant contends that every agreement for the working of a mine is a mining partnership, except where there has been an express agreement to constitute a full trading partnership, but we do not understand that appellant contends that by “express agreement” he means one proven by some express words of the parties describing in exact language the relation intended to be assumed or negativing in express words their intent to become mining partners. In the leading case in this country on mining partnerships, Skillman v. Lachman, 23 Cal. 204, the court says: “Still there may be a partnership in the working of a mine subject to the rules relating to an ordinary partnership in trade. Story Part. sec. 82. And this relation of partnership may be constituted either by express stipulation or by implication deduced from the acts of the parties.” The court evidently found that the relation of the defendant Foster to the enterprise was not that of a mining partner.

4 The chief fact which distinguishes mining from general partnerships is the absence of the delectus personae in the former and the resultant rules, that the shares of mining partners may be transferred to others, who become partners in turn by acquiring such interests; and as the partners therefore have not the right to choose their associates, it necessarily follows that such associates have no power to personally bind their fellow members. Skillman v. Lachman, 23 Cal. 198" date_filed="1863-07-01" court="Cal." case_name="Skillman v. Lachman">23 Cal. 198; Duryea v. Burt, 28 Cal. 569" date_filed="1865-10-15" court="Cal." case_name="Duryea v. Burt">28 Cal. 569; Meagher v. Reed (Col.) 24 Pac. 681.

5 Where there is an express agreement between the parties, and it appears therefrom that they contracted with the object a,nd purpose of retying on the delectus personae in their relations, the fact that their business was the working of a mine does not affect their relation or liability as general partners. This proposition was decided by the Supreme Court of California in the case of Decker v. Howell, 42 Cal. 637. The court says:

“The main question in this case is whether Howell had authority, either express ox implied, to make the note in suit. It is equally well settled by the decisions of this court that no such authority exists in the case of an ordinary mining partnership. The decisions in Skillman v. Lachman, 23 Cal. 206, and the subsequent cases, place this exception to the recognized rule as applicable to trading partnerships, upon the ground that in mining partnerships the delectus personae does not exist, and the membership is continuously subject to changes beyond the control of the partners. But it is no disparagement to the salutary doctrine of these cases to hold that a strict partnership may exist in the working of a mine which shall be subject to. the incidents of a trading partnership. There is nothing-in the nature of the business of mining which forbids such a contract. If by the terms of a contract of mining partnership it appears that the confidential relations of a.n ordinary partnership are established, and that the firm is not subject to the intrusion of other partners at will, the reason of the rule that restricts the powers of a single partner fails. The parties are. strictly partners, not by reason of their common ownership of the mine, but as the result of their own agreement. * * * In Bainbridge on mines, 439, the author says: But there are mining concerns which are carried on by partners, few in number, subject to mutual selection, and therefore more close-. ty connected by mutual confidence.’ * * * There may be no difference between firms of this kind and those engaged in any other distinct business as general partners, and those who are not working partners may not be the less liable to the general consequences of such a partnership.”

Certainly it must be the intention of the parties, operating a mine, which must control. If they intend that their relations to each other shall be that of partners, with the confidential relations of an ordinary partnership existing, and the firm not subject to the intrusion of other members at will, no reason exists for the application of such business relations of the rules of an ordinary mining partnership.

The facts and circumstances established and proven on the trial of this case in the lower court justified the court, in concluding that the parties themselves intended to establish the confidential relations of an ordinary partnership. Foster, the appellant, in several of his letters, speaks of his liability for the obligations of the partnership. If a mining partnership existed, and if the partners regarded each other merely as mining partners, no liability on his part would have existed, save as he had authorized. Fitzgerald, the managing partner at the mine, contracted debts and incurred obligations, procured advances from the El Paso Smelter, all of which were taken care of bjr Foster, and that without objection or complaint. The. correspondence shows that the parties did not intend that other partners should intrude into the partnership. Helmer says to Fitzgerald, in speaking of a proposition which had been made to Fitzgerald to buy his interest, “If you go out we go out”; again he tells Fitzgerald, “we three are one.” If either of the three partners had conveyed his interest in the mine to a stranger, the purchaser and the remaining partners would have become tenants in common of the mine and in its workings subject to the rules applicable to an ordinary mining partnership; Decker v. Howell supra., but such sale would have worked a dissolution of the general partnership theretofore existing between the three partners. The court found that the partners had in contemplation other enterprises, viz: the erection of a smelter, the exploiting of a town site and tlie building of a railroad. These enterprises were not mentioned in the written contract of Aug. 3rd, but were taken up by the parties later.

Where in a partnership, the delectus personae exists, and the parties intend that the confidential relations of partners shall exist, and so treat the business relation, the mere fact that the business engaged in is the operation of a mine, should not alter the liability of the individual partners. To so hold would be to lose sight of the principle which distinguishes a mining partnership from an ordinary commercial partnership. The mere fact that parties make a contract, associating themselves together for the purpose of mining, falls far short of fixing their relations as mining partners.

Kimberly v. Arms, 129 U.S. 512" date_filed="1889-03-05" court="SCOTUS" case_name="Kimberly v. Arms">129 U. S. 512.

The real relations of the partners must be determined, not on the agreement of Aug. 3, as appellant assumes, but on their acts, intentions and- agreements thereafter, as disclosed by the evidence; the contract being merely a piece of evidence serving to throw light on these intentions.

The lower court found that an ordinary commercial partnership existed between the parties; while such finding was not made in express terms, yet it was plainly made by implication, and finding no error in this holding, upon the evidence, numerous points argued by appellant are disposed of.

Appellant contends that Daily had notice of the limited liability of Foster, basing such contention upon a remark made by Galles, the receiver, to Daily that "Foster had associated with him as mining partners, Foster and Iielmer,” but there were other facts and circumstances appearing in evidence, of which Daily had notice, which justified the court in holding otherwise.

Appellant, in this court, for the first time challenges the sufficiency of the complaint to state a cause of action. No demurrer to the complaint was filed in the lower court, and no objection was interposed to the admission of evidence. This contention can be disposed of by a quotation from the case of Cushing v. Pires, 124 Cal. 663" date_filed="1899-06-05" court="Cal." case_name="Cushing v. Pires">124 Cal. 663:

6 “While the complaint is not to be recommended as a precedent to be hereafter followed, yet in view of the fact that no objection, either as to its form or substance was made in the court below, we think it sufficient to support the judgment based upon it. It is true that the objection that the complaint does not state a cause of action may be successfully made for the first time on' appeal, but the appellate court will not be over zealous to find a defect in the complaint that the appellant himself failed to discover until the case had been decided against him on its merits. We think the defects in the complaint, as well as the variance complained of, are of a nature to be waived by failure to call them to the attention of the trial court by proper objections, and that the defendant should not be heard to urge those objections for the first time after judgment.”

See also Western Union Telegraph Co. v. Longwell, 5 N. M. 308; Chaves v. Meyers, 11 N. M. 333.

Appellant claims that the judgment was excessive, in that the court included in the judgment the sum of $3000 and interest thereon. In a statement rendered by Daily to Foster on M-aj' 6, 1908, this $3000 was shown to have been advanced on Oct. 23, 1907, which it develops was after the date of the organization of the corporation. But Daily, in his testimony, says that the sum was advanced on the date of the organization of the corporation, so we cannot say that the court was in error i,n including the item.

The plaintiffs have brought a cross appeal assigning as error the action of the court in finding that the plaintiffs waived their right to recover freight and treatment charges,- claiming that such finding is without any evidence to support it. We have examined the transcript and find that there is evidence upon which the court might have based such a finding.

7 Appellees, in their cross appeal, also assign as error the action of the court in sustaining the demurrer, to the amended complaint and thereby striking out the additional defendants. It is a sufficient answer to this alleged error to say that the plaintiffs did not stand on their demurrer, but filed an amended complaint, and that the parties defendant who were stricken out, by the action of the court in sustaining the demurrer are not .parties to this appeal.

Finding no error in the record the cause is affirmed.