Decker v. Howell

By the Court, Niles, J.: The defendants, Howell and Haynes, entered into an agreement to engage together in a mining adventure, uuder the firm name of “Howell & Haynes,” for the purpose of purchasing, holding, and working certain mines. The profits and losses were to be shared equally. Howell, a practical miner, was to contribute his skill and personal services in the conduct of the business; Haynes was to contribute naoney. The mine was purchased by and conveyed to the partners. A note of the firm was given for a portion of the purchase money, and afterwards paid without objection by either. The mine was worked for a year under the management of Howell, who then conveyed his interest to Haynes. Prior to this conveyance, Howell borrowed of the plaintiff, in the name of the firm and for its use, the money for which the note in suit was given. The main question in this case is whether Howell had authority, either express or implied, to make the note in suit. It is well settled that in the case of an ordinary trading partnership either partner may bind the firm by note. 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 decision in Skillman v. Lachman, 23 [642] 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 continually 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 an 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. The cases of Bradley v. Harkness, 26 Cal. 76, and Duryea v. Burt, 28 Cal. 587, recognize this principle. 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 closely 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.” I am of opinion that the agreement between Howell & Haynes was a contract of partnership in the ordinary sense. Each exercised his choice in the selection of the other as his copartner. If either had conveyed his interest in the mine to a stranger, the purchaser would not; by virtue of the sale, be subrogated to his rights under the agreement. The purchaser and remaining partner would then become tenants in [643] common of the mine and in its working, subject to the rules applicable to an ordinary mining partnership. Judgment affirmed. Mr. Justice Sprague did not participate in this decision.