Court Opinion

ID: 3541974
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:53:32.823341+00
Date Added: 2024-06-11T13:55:17.575425
License: Public Domain

I dissent. Mining partnerships in Montana are controlled by Chapter 162 of the Civil Code, comprising sections 8050 to 8059. This chapter was taken practically in its entirety from the California Civil Code (secs. 2511 to 2520, inclusive), and construing anything in relation to mining partnership, under the California and Montana statutes, the courts of both jurisdictions have followed very closely these statutes. Having a chapter of statutes devoted to mines and mining which contains the only statutory provisions relating to mining partnerships, that chapter must be looked to in determining what constitutes a mining partnership rather than applying statutes of a general nature.
In view of the decisions of this court relative to mining partnerships, it is my opinion that it is erroneous to classify the operations of defendant in the case at bar as a joint adventure instead of construing the contract and determining the nature of their operations relative to questions involved as a mining partnership under Chapter 162.
I see nothing in the contract between Cameron and Nimmons and O'Grady that brings their relation within the terms of a joint adventure.
33 Corpus Juris, 841 says: "A joint adventure as a legal concept is of comparative recent origin. It is purely a creature of our American courts. At common law an enterprise of a limited character, such as is now called a joint adventure, was regarded in law as merely an informal kind of partnership, and the courts made no attempt to distinguish the one from the *Page 178 
other. Such is still the law in England and in Canada, but in the United States the courts, about the middle of the last century, began to find it convenient to draw a distinction between them, and hence there is gradually building up a body of American law applicable to the relation of joint adventures which may or may not apply to the relation of partners. So far the divergence between the two relations is very slight; so slight in fact that it is generally asserted that they are governed by the same rules of law."
This same authority was quoted in Snider v. Carmichael,102 Mont. 387, 407, 58 P.2d 1004, where this court had under consideration an agreement between the parties relative to the handling of an extensive sheep outfit. In working out that case, the court followed statutory authorities relating to ordinary partnerships, varying such regulations to harmonize with the trend of American decisions which is referred to in the quotation from Corpus Juris; but in view of the special statutes we have relating to mining partnerships, it seems to me that the logical course to pursue is to follow the chapter cited on mining partnerships in dealing with any controversy relative to mining operations so far as that special chapter applies.
I am unable to harmonize the majority opinion with a number of Montana cases bearing upon the questions involved in the controversy in the instant case. In Anaconda Copper Min. Co. v.Butte  Boston Min. Co., 17 Mont. 519, 43 P. 924, this court laid down the rule that the foundation of the mining partnership depends upon the ownership of a share or interest in the mine. InEisenberg v. Goldsmith, 42 Mont. 563, 113 P. 1127, it was in effect held that it was necessary that a person should have a personal interest in the mining claim or mine in order to be legally classified as a partner in any operations relating to the mine. In State ex rel. Cole v. District Court, 79 Mont. 1,254 P. 863, this court held that lessees as well as owners may be made partners, but stressed the essential qualification of a partner in such an enterprise owning a possessory right in the property involved. *Page 179 
In Meister v. Farrow, 109 Mont. 1, 92 P.2d 753, 758, in considering whether certain operations by parties created a mining partnership, it was said: "The first requirement, then, is that the participants own shares or interests in a mining claim. This court has held that it is not necessary that the ownership be of a mine, but that ownership of a lease and bond, such as is here involved, is a sufficient ownership of the mining lode or claim. (State ex rel. Cole v. District Court, 79 Mont. 1,254 P. 863; Lindley on Mines, 3d ed., sec. 798; Bentley v.Brossard, 33 Utah, 396, 94 P. 736.) The interest in the mine must be owned in praesenti. This is one of the reasons why the so-called `grubstake' contract does not create a mining partnership. In the grubstake contract the result sought is the discovery of a mining claim, which, when located, becomes the joint property of the prospector and the one furnishing the grubstake, and the contract usually creates a cotenancy in the property when it is discovered. It is true that after discovery a mining partnership is often formed for the purpose of working the property, but the grubstake contract does not create the relationship. (O'Hanlon v. Ruby Gulch Min. Co., 64 Mont. 318,209 P. 1062; Prince v. Lamb, 128 Cal. 120, 60 P. 689.)"
In the case of Shell Petroleum Corp. v. Caudle, (5 Cir.)63 F.2d 296, 297, the question was as to whether a mining partnership existed or not, and a labor claim against the Shell Corporation was based upon whether a partnership existed between the defendant and the Shell concern. The contract was alleged to have been entered into by one McClanahan and Shell. The court there held that "Co-operation in prospecting is not working a mine. Where property to be prospected is not jointly owned, the actual agreement controls. [Citing cases.] A proposal to share by royalty or otherwise in the results of a well-drilling venture on the property of one coadventurer does not make a partnership, where the intention is otherwise. [Citing cases.] And where an agreement is made for a future partnership, but the partnership is to go into effect only after stipulated *Page 180 
things are done, no partnership exists until the conditions are fulfilled."
The case of Treat v. Murdock, 8 Cal. 2d 316,  65 P.2d 881, 883, seems to be directly in point and is largely depended upon by the defendant in the case at bar. I cannot discover in the wording of the contract in the instant case, and which is set out in the majority opinion, any intention between Cameron and Nimmons and James O'Grady representing the syndicate, to enter into any such contract as they are held for in the majority opinion. As stated before, we took our mining partnership statutes from California and the case at bar should be construed in harmony with the construction that California has followed in construing their statutes for more than fifty years, and for that reason the California case of Treat v. Murdock, supra, is quoted from at length:
"Nor does the contract of October 27th, which fixed the agreement of the parties, establish any partnership relation of Murdock with the appellants. It gave appellants no interest in the mine, but only the right to require payment of the amount owing to them from a percentage of the net proceeds of the mine. It provides that they should receive stock in a corporation to be formed by Murdock when and if he secured some outstanding interests in the mine. But the entire tenor of the instrument shows that its purpose was to evidence an agreement that certain funds should be applied to payment of appellants' note, with interest, and that in addition they should receive either 14 per cent. of the net proceeds of the mine or 10 per cent. of the stock of the corporation to be formed as compensation for the use of the money. These provisions clearly show the transaction to have been a loan, and that the appellants never acquired or contracted to secure title to the mining property or any interest in it.
"The code provisions concerning mining partnerships have been considered in numerous cases. It has uniformly been held that ownership of the mine, or an interest in it or an option to purchase it or the right to possession of it is a prerequisite *Page 181 
for the existence of such a partnership. (Michalek v. NewAlmaden Co., Inc., 42 Cal. App. 736, 184 P. 56; Stuart v.Adams, 89 Cal. 367, 26 P. 970; Prince v. Lamb, 128 Cal. 120,60 P. 689.) There is also the further requirement that the partners actually engage in working the mine. This does not mean that each of the partners must perform physical labor in the mine but it does require that each of the partners have some part in carrying on the mining operations. `The partnership arises only when the co-owners unite and co-operate in working the mine.' (Peterson v. Beggs, 26 Cal. App. 760, 148 P. 541, 542.) Each of these elements of a mining partnership is entirely lacking in the record in the instant case. The appellants never acquired any interest whatever in the mining property and the uncontradicted evidence is that they never did any work on the property, they never directed any of the mining operations or had anything to do with the management of the mine.
"On the contrary, the conduct and writings of the parties point unmistakably to the relationship of debtor and creditor. The fact that Murdock agreed to give appellants certain stock in a corporation if and when it was formed does not supply any of the requirements of a mining partnership. Nor does the agreement of Murdock to pay appellants' note out of a percentage of the net proceeds of the mine and to continue to pay them a share of those proceeds after the note was satisfied fix the relationship of partners. In the case of Spier v. Lang, 4 Cal. 2d 711, 713,716, 53 P.2d 138, 141, the court said that `this feature of the agreement has long been held not to require a conclusion that a partnership relation existed where also there was no joint participation in the management and control of the business, and the proposed profit-sharing was contemplated only as compensation or interest for the use of the money advanced.'"
I can find no precedent in California, or in Montana, or any other state, where parties have been held to have been partners in a mining enterprise or as joint adventurers where the facts *Page 182 
are similar to those involved here and under statutes similar to ours. Neither have I been able to find any case held to be a joint adventure in which the interested parties did not have a property interest in the property involved.
On the question of the right of Rae, the plaintiff in the action at bar, to maintain the action on behalf of all the interested parties, attention is called to sections 8943, 8944, 8980, 9067 and 9629, Revised Codes, and the comments made relative thereto in the case of State ex rel. Freebourn v.Merchants' Credit Service, 104 Mont. 76, 66 P.2d 337, and the case of Streetbeck v. Benson, 107 Mont. 110,80 P.2d 861, both cases being overruled in certain particulars by the majority in the instant case. The purpose of the construction given to the statutes mentioned in above cases was two-fold; first, to prohibit collection agencies from practicing law and exercising the reprehensible methods many of them frequently followed in extorting money from unfortunate debtors, and, second, to prevent those authorized to practice law in Montana from violating the clear provisions of section 8980, supra.
It was not the intention, as I understand it, that either of the decisions mentioned should be construed to mean that creditors, such as those beneficially interested in the case at bar, in order to save costs of litigation, might not in good faith assign their claims to one of their number for collection in one action. No one may practice law in this state until licensed by authority of this court and when licensed they become officers of the court, and a solemn obligation rests upon this court to see that its officers demean themselves in a manner becoming officers of the highest tribunal of this state. It was unnecessary, in my opinion, for either of those opinions to be modified in arriving at the conclusions the majority reached, and I am further of the opinion that such modification will tend to relax the wholesome restraint imposed upon lawyers who are inclined to indulge in practices inimical to the approved ethics of the profession.
Rehearing denied July 1, 1941. *Page 183