Opinion ID: 1759432
Heading Depth: 1
Heading Rank: 8

Heading: Mining Partnership

Text: We have carefully examined the evidence bearing upon the question of whether or not the Defendants were engaged in a mining partnership as alleged by the State. We have concluded that a mining partnership as to all Defendants was shown as a matter of law. All of the elements of a mining partnershipjoint ownership, joint operations, sharing of profits, community of interest and mutual agency representing the mining partnership in management and operationwere proved without dispute. The record shows that the Defendants acquired their respective property interests from the Texas & Pacific Coal & Oil Company in the fall of 1951. These interests were acquired through a farm-out agreement with Texas & Pacific. The rights were originally acquired by a series of transactions conducted by Harrington for himself and in behalf of the other Defendants. The rights and interests acquired were later confirmed by legal conveyances. The record shows that each defendant made admissions conclusively establishing that an oral agreement was entered into before the well was drilled whereby they would own the lease proportionately and would share in the expenses and profits. It is immaterial that conveyances of interests to some of the partners were executed after the well was drilled. There was no written or oral agreement to limit the rights or duties of any one of the defendants so as to preclude liability, responsibility, control, operation or management of the lease. A mining partnership arises by operation of law where co-owners work a mine. See Wagner Supply Co. v. Bateman, 118 Tex. 498, 18 S.W.2d 1052. The record shows that the defendants operated under the name of HAL CO. and worked together from a time before the well was drilled until the dissolution of the partnership long after the well was completed. It is not necessary that a mining partnership be created by mutual agreement or intention, or by mutual selection of the persons comprising the partnership. See 12 Tex.Law Review, 410, 412, 413, 414. The cases relied upon by the defendants involve a general partnership and not a mining partnership. The requisite element for a mining partnership which seems to create the greatest difficulty is joint operation. From our examination of cases in this and other jurisdictions it seems that this element is absolutely required before a mining partnership arises. This element has been conclusively shown. Each defendant worked and cooperated in every act that was done. Harrington secured the lease, handled the pooling of money, paid the pooled money out by paying the expenses of operation, including paying the pumper and the driller. Harrington secured the forms and furnished necessary information for Baton to make reports to the Railroad Commission. Baton represented to the Railroad Commission that he was the owner and operator of HAL CO.. Baton furnished the surface pipe when they started the well. Baton admitted, when testifying after being called under the adverse party rule, that all of the defendants were members of the HAL CO. at the time the well was drilled; that we drilled the well, Yes, sir; and that all of the defendants had an interest in the Company. Baton, Allgood and Lutes, in addition to owning an interest in the farm-out or lease from the beginning, looked to Harrington for progress reports. Lutes admitted Harrington acted for all of the defendants in acquiring the lease and that he looked primarily to Harrington. Baton was active in the mining operation from the start. Baton frequently appeared at Harrington's office and signed all reports which had been prepared by Harrington. The defendants paid their proportionate share of the expenses and received their proportionate share of the income in accordance with division orders. There is no denial by any of the defendants of these admitted facts. In this case there was no contract between the defendants except their joint oral agreement to drill and operate. Unquestionably, a mining partnership existed at all pertinent times. See Munsey v. Mills & Garrity, 115 Tex. 469, 283 S.W. 754 (1926); Wagner Supply Co. v. Bateman, supra; Clayton v. Bridgeport Machine Co., 33 S.W.2d 787 (Tex.Civ.App. 1930, error ref.), and 12 Texas Law Rev., 410, for additional authorities.