Bufalini v. DeMichelis

McMURRAY, J. pro tem.

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Defendant appeals from a judgment impressing a trust on certain nnpatented mining claims and ordering him to convey the claims to a copartnership composed of plaintiffs and defendant.

Under a written agreement dated August 29, 1951, the defendant and plaintiffs became copartners in the Midland Mining Company. Five of the plaintiffs contributed cash and the other plaintiff contributed nothing tangible. Defendant contributed a lease he held on unpatented mining claims known as Blue Star Tungsten No. 1, No. 2 and No. 3, and was designated as the active managing partner. During the existence of the partnership defendant entered into a contract for purchase of other unpatented mining claims known as the Garnet Queen No. 1, No. 2 and No. 3; this contract was dated November 20, 1952, and ran to defendant in his own name; he had previously been instructed to acquire the Garnet Queen group for the partnership and had carried on partnership negotiations wherein the Garnet Queen group was mentioned as about to be acquired by the partnership. These Garnet Queen claims are the subject of this appeal, defendant admitting that the Blue Star group was a partnership asset.

The sole issue before the trial court, admitted to be such by defendant’s counsel during the trial, was whether or not defendant violated fiduciary duties owed to his copartners by acquiring the Garnet Queen group in his own name rather than for the partnership. In order to determine this issue the trial court was required to and did interpret the partnership agreement. The interpretation adopted by that court offends appellant who itemizes many contentions in this appeal. In essence, however, all of these contentions may be summarized as follows: First, that the partnership agreement must be so construed as to limit its operation and effect to the Blue Star group of claims and no others; second, that since this was a mining partnership it could not operate as to the Garnet Queen group since it had no interest or right of possession in such claims; and, third, that, defendant’s promise to acquire the Garnet Queen group for the partner

[455]

ship was without legal effect since it was an attempt to alter, by parol, a written partnership agreement (if appellant’s interpretation thereof be adopted) without consideration and in violation of the statute of frauds.