Hirbour v. Reeding

Blare, J. The action of the court below in sustaining the demurrer of the respondents to the complaint of the appellant is before us for review. The following facts appear in the complaint and must be taken as true upon this hearing. Hirbour, the appellant, and Needing and Gassert, the respondents, entered into a verbal contract of copartnership in April, 1873, at Eocker City in this Territory, “ for the purpose of prospecting for, locating, recording, pre-empting, developing and mining quartz lodes and other mining property in Montana Territory.55 Each party was to have an undivided third interest in said lodes and property, and pay for one-third of the labor and other expenses incurred in carrying on the business of the copartnership. Under this contract, the Silver Girdle lode was discovered by the — 18 — parties, but it was recorded in tlie names of the respondents by them April 23, 1873, when it should have been recorded in the mames of the copartners. All the parties “worked upon and mined ” this lode in July, 1875, and developed and “ displayed great value” in the property. “ Said work and labor were done and performed ” by the parties “ as copartners in obedience to, and under and by virtue of, said contract of copartnership.” After the lode had been recorded, certain persons, Young and Rondei - bush, located and pre-empted under the name of the Burlington lode a part of the Silver Girdle lode. The conflict respecting the titles to the property was compromised, and Young and Rou-derbush conveyed by a deed to the respondents July 29, 1875, thirteen hundred and fifty feet of the Burlington lode, which was included within the boundaries of the Silver Girdle lode. The respondents refuse to give the appellant an interest in the property, and have extracted therefrom a large quantity of valuable ore. The copartnership has not been dissolved, and there has been no accounting between the parties. The respondents demurred to the complaint upon the following grounds: That the contract of copartnership was within the Statute of Frauds of this Territory and void; and that the complaint was ambiguous in failing to state the amount of the work which was done by the appellant upon the lode, or its value, or the time when it was done. The court below sustained the demurrer, and judgment was afterward entered for the respondents. The respondents claim that the allegation of the complaint respecting the amount of the work performed by the appellant on the property is ambiguous, but we think that it should be deemed an averment that the appellant performed his part of the conditions of the contract of copartnership. When this allegation is controverted by the respondents, the appellant must establish on the trial “ the facts showing such performance.” Civ. Pr. Act, § 68. Therefore the examination of one question will enable us to determine this appeal. If the contract of copartnership is valid we are of the opinion that the complaint contains the allegations that are necessary to empower the court to enter a decree — 19 — requiring the respondents to convey to the appellant his interest in the property in controversy. Is this contract within the Statute of Frauds of this Territory ? The following sections of the act relating to conveyances and contracts are pertinent to this inquiry: “ No estate or interest in lands other than for leases for a term not exceeding one year, or any trust or power over or concerning lands, or in any manner relating thereto, shall hereafter be created, granted, assigned, surrendered or declared, unless by act or operation of law, or° by deed or conveyance in writing, subscribed by the party creating, granting, assigning, surrendering or declaring the same, or by his lawful agent thereunto authorized by writing.” Cod. Sts. 393, § 6. “The term ‘lands,’ as used in this act, shall be construed as co-extensive in meaning with land, tenements, hereditaments and possessory land claims to public lands; and the terms Estate’ and ‘interest’ in lands shall be construed to embrace every estate and interest, present and future, vested and contingent, in lands as above defined.” Cod. Sts. 391, § 22; 389, § 1. It does not appear that the respondents have acquired the title of the United States to the property. Their interest in the lode may be lost or forfeited by abandonment, or a failure to comply with the laws of the mining district, the Territory or the United States. Counsel for both parties concede, what we consider a sound proposition, that the lode in dispute is real estate. Melton v. Lambard, 51 Cal. 258. We must apply to the contract set forth in the complaint the legal principles that govern copart-nerships for the purchase and improvement of real property. A partnership may be formed without any written articles between the parties. “ After some question it seems to be settled that there may be a partnership for the buying and selling of land.” Pars, on Part. 37, n. f. According to the weight of the authorities which are conflicting upon the question, the contract of such a partnership need not be reduced to writing to make it valid. Pars, on Part. 7, n. d. We do not intend to review the cases in which this subject has been examined, but will refer to a number of the most recent decisions which we have read. — 20 — The supreme court of 'Indiana bolds in Holmes v. McCray, 51 Ind. 358, tbat a parol agreement for a partnership for the purpose of dealing in lands is not within the Statute of Frauds. Chief Justice Biddle, in the opinion, says: “ As between the partnership and its vendors or vendees in the sale or purchase of lands, the statute in all cases would operate; but as between the partners themselves, when they are neither vendors nor vendees of one another, we cannot see how the statute can affect their agreements.” In New York, the same views are announced in Chester v. Dickerson, 54 N. Y. 1, and Fairchild v. Fairchild, 64 id. 471. Chief Justice "Wade in his concurring opinion quotes from the opinion of the court in Chester v. Dickerson, supra, and this reference is therefore sufficient.1 The same matter is considered in Traphagen v. Burt, 67 N. Y. 30, and the court comments on the case of Levy v. Brush, 45 id. 589, which is relied on by the respondents, and says: “ In the case cited (Levy v. Brush, supra), the plaintiff had done no act of performance, advanced no money, nor parted with anything under the contract, nor had the land been accepted, possessed and treated as joint property, nor improvements made upon the same accordingly, and the contract regarded as carried into effect. * * * Where a party has partly performed or parted with valuable property upon the faith of the contract, equity will not allow another party to retain property obtained upon the faith of a verbal contract to consummate a fraud by retaining the property and refusing to perform the contract.” These rules have been applied to the settlement of questions arising concerning quartz lodes. The case of Murley v. Ennis, 2 Col. 300, is directly in point. Mr. Justice Wells says in the opinion: “ If two or more go into the public domain together to search and explore for mines, with the agreement to occupy and develop such discoveries as may be made for the joint benefit, and such discovery, development and joint occupation follow, it is clear that, while each explorer becomes invested with his due — 21 — share and estate in the premises, no provision of the Statute of Frauds is violated. * * * Such contract of association is merely the creation of an agency in each of those contracting, and is no more a violation of law than a contract of partnership or association in any lawful calling.” In Welland v. Huber, 8 Nev. 203, three persons and Huber, in December, 1871, entered into a verbal agreement to prospect for and locate mines. All the parties were to be equal owners. In 1872, Huber located the Huber lode, 1,000 feet in length, and recorded in the name of each partner 200 feet and in his own name 400 feet. In the decision Mr. Justiee Belenap says: “ If Huber located the 400 feet in his own name in pursuance of the alleged partnership, he did so under an implied promise to convey to the complainants their interest in it upon request. The complainants at once acquired a right to a specific performance, and that right could he enforced in equity without a previous request.” In Gore v. McBrayer, 18 Cal. 582, Gore, McBrayer and others verbally agreed to prospect for quartz.- The court held that the Statute of Frauds which requires an instrument in writing to create an interest in land, does not apply to the taking up of mining claims, and that a writing is not necessary to vest or divest title on locating mines. In Settembre v. Putnam, 30 Cal. 490, it is decided that, if mining partners, under a verbal agreement, claim and develop a lode upon the land of another, and authorize one of their number to buy the same for the benefit of all, and he procures a deed in his own name, he holds the legal title of the interests of his partners in trust for them. After examining these cases we conclude that the contract of copartnership made by the appellant and respondents is valid and can be enforced. The name of the property in controversy, which may be called the Silver Girdle lode, or the Burlington lode, is immaterial. It was acquired and developed by the labor of the appellant and respondents under the contract, and is the property of the parties to this action. The transaction between the respondents and Young and Bouderbush, by which the same estate under another name was conveyed to the respondents, does not affect the rights of the appellant to his interest. The legal — 22 — title is vested in the respondents, but equity will treat them as trustees for all the partners. Fairchild v. Fairchild, supra; Pars. on Part. 363; Story on Part., § 92 ; Bainbridge on Mines (3d ed.), 395; Dupuy v. Leavenworth, 17 Cal. 262; Miller v. Ball, 64 N. Y. 286. The demurrer to the Complaint should have been overruled.