Settembre v. Putnam

California Supreme Court Oct 15, 1866Published

Before: Sawyer

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Holding. The court held that the defendants held a portion of their interest in the mining property in trust for the plaintiff due to their bad-faith acquisition of the land in their own names, and that the plaintiff is entitled to an accounting and conveyance of his share. However, a complete determination of the partnership's affairs requires the joinder of all interested parties, including Brodie and Crandall.

Issues

Whether the plaintiff is entitled to an interest in the mining property and profits based on a verbal contract with the defendants.
Whether the defendants hold the acquired land in trust for the plaintiff.
Whether the absence of other interested parties (Brodie and Crandall) precludes a final accounting and settlement of the mining partnership.

Disposition. reversed and remanded

Quotations verified verbatim against the opinion

“The defendants could dispose of their own interest, but they were not authorized to sell that of plaintiff”

“it turns out upon the trial that a complete determination of the controversy cannot be had without the presence of other parties, and the Court is authorized, of its own motion, to order them to be brought in”

Synopsis

Appeal from the District Court, Third Judicial District, Santa Clara County.

The plaintiff filed a complaint setting up the facts found by the Court, and also some other facts not material to be reported. He prayed in his complaint for an account to be taken by the Court of the value of all the ores removed from the mine by the defendants and of all sums of money which they had received and which' had in any manner come to their use from the mine, and also of all charges and expenditures on account thereof by any and all of the partners, as well the plaintiff as the defendants, and each of them, and that the Court adjudge, order and decree that the partnership be dissolved, and that the defendants be required to pay to the plaintiff the amount which should be found to be due the plaintiff on the account, and the defendants be directed and required to grant and convey to the plaintiff one equal undivided third of the mine of North Almadén, and of all the interest owned or held by the defendants in the said mine of North Almadén, whether derived through or under the contracts with Thomas H. Farnsworth and Oliver W. Farnsworth, or otherwise, together with the rights thereunto belonging or in anywise appertaining, free from any and all incumbrances or charges, liens, or alienations of any kind made, done or suffered by the defendants or either of them, and for such other and further relief as to the Court might seem in accordance with equity and good conscience, and for all costs of suit.

The District Judge rendered judgment for defendants, and gave the following opinion, assigning his reasons therefor :

“ My conclusion is that the foregoing facts do not show a partnership between the plaintiff and the defendants; that the verbal agreement made by the defendants to the plaintiff to share with him their interest in the mine if it should prove to be valuable, and their subsequent fraudulent conduct in refusing to do so after he had developed it, are matters for which the plaintiff has his remedy at law or in equity, upon a proper case to compel a specific execution of their agreement out of any interest which they, the said defendants, may have in the mine or the land in which it is. Therefore the defendants are entitled to judgment in this case for costs.

“ Judgment is so ordered.”

The plaintiff appealed.

The other facts are stated in the opinion of the Court.

By the Court, Sawyer, J.: We think, upon the facts found, that there existed between the plaintiff and defendants one of those associations, so common in this State, formed for the purpose of carrying on mining operations, and combining some of the incidents of ordinary trading partnerships, and some of the incidents of tenancies in common—a species of qualified partnerships, often called mining partnerships. The two defendants, together with one Brodie, were in possession of a portion of the “ Rancho Yerba Buena y Socayre,” in the County of Santa Clara, upon which they supposed they had discovered a quicksilver mine, which mine they claimed in equal shares. They had also agreed between themselves to explore and develop it. The title to the land upon which the mine was supposed to exist, was in Thomas H. and Oliver, W. Farnsworth.

The Court found that both the plaintiff and defendants were without means; “ but the plaintiff was a miner of some skill and experience, and the defendants, anxious to secure his services in prospecting the mine, verbally proposed to him, that, if he would accompany them and devote his time, labor and skill in exploring and developing the mine, they would supply the necessary mining tools and provisions, and give him an equal share of their interest in the mine (their interest being two thirds, and Brodie’s one third) if it should prove valuable."

“ The plaintiff accepted this proposition, and at the same time gave to them twenty dollars with which to pay certain [494]expenses incurred by the defendants in starting their enterprise.”

“ Under this verbal contract the defendants furnished the tools and provisions. Brodie was no party to the contract between the plaintiff and the defendants, but he furnished the defendants with two laborers. And the plaintiff, with the men furnished by Brodie, went to work and opened a tunnel, in which they worked for twenty-five or twenty-six days, and at the end of that time struck a ledge of quicksilver ore. The ledge promising to be valuable, the defendants and the plaintiff, upon a consultation together, concluded it best to buy from the said Farnsworths the title to the land on which the mine was located. And for that purpose they authorized one of their number, to wit, the defendant Putnam, to try and procure the land for them (the said plaintiff and defendants.) The defendant Putnam accordingly arranged with the said Farnsworths to lease one hundred acres of the land as described on page six of the plaintiff’s complaint, with the privilege of buying it within six months thereafter; and on the 6th day of June, 1865, the said defendants, in their own names, and the said Farnsworths, made and executed and delivered the written lease and contract of sale of said tract of land. * * * *

Settembre v. Putnam

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