Court Opinion

ID: 9632060
Source: CourtListenerOpinion
Date Created: 2023-08-22 11:00:37.231499+00
Date Added: 2024-06-11T18:08:07.230553
License: Public Domain

CARTER, J.
I dissent. I cannot agree with the result reached in this case. Moore entered into an agreement with the Woods in which he agreed to develop a gold mine within twelve months. The Woods were lessees of the mine. Moore was also to pay $5,000. The agreement estimated the necessary development expenditures to be $25,000. At any time at Moore’s request a corporation was to be formed to take over the mine in which he was to have a 51 per cent interest and the Woods, the balance. Moore entered into possession of the property, paid the $5,000, and diligently prosecuted development work, expending $22,300. Although the mine had not reached a “production basis” further operations by *632Moore were prevented by conditions beyond the control of either him or the Woods. The sole issue presented is whether the expenses of safeguarding the property during the period that development was prevented should be borne by Moore, the Woods or by both in proportion to their interests. The solution of that question depends upon the interpretation of the contract and the application of equitable principles.
First, the contract properly interpreted is wholly silent on the foregoing issue. It provides that Moore shall “continuously operate said property and develop the same, expending thereon such moneys as may be necessary properly to develop said mine, . . . and will place said mine on production within a period of twelve (12) months from the date hereof. . . .” The foregoing clause is qualified by the immediately following proviso “that delays are not incurred by reason of . . ., governmental regulations or any other causes beyond the control of the party of the second part, and in the event that the said party of the second part should be delayed in placing the said mine on production within said period of twelve months by reason of any such cause or causes, then said twelve months’ period shall he extended to cover such period of time as said party of the second part shall he unahle to work said mine.” Hence, Moore’s time was extended by the terms of the agreement. The only other clause in the agreement dealing with Moore’s obligation to make payments or assume duties with respect to the mine is the paragraph immediately following the above-quoted excerpts. It provides that Moore “will carry on said work in a miner-like fashion and pay for all labor, insurance premiums, power and utility bills, all materials purchased, supplies used, and all other expenses of such work so as to develop the greatest possible tonnage of ore consistent with good work and proper development, working not less than ninety (90) man shifts per month.” The words “said work” and “such work” can refer only to development and operational work. That is the only type of work referred to in the foregoing part of the agreement and must be that to which reference is made in the last-quoted paragraph. Certainly work of that character aimed toward putting the mine on production does not include expenses for preservation of the property when because of unforeseen events the development and operation of the mine is prevented. The very work which Moore assumed the obligation to perform was prevented. How then may it be said that he was doing such work in *633merely preserving the property. Therefore, we have a situation in which neither Moore nor the Woods have assumed by the contract the obligation for the maintenance expenses while the mine cannot be operated.
Second, principles of equity, restitution and unjust enrichment require that the expenses be borne by the Woods and Moore in proportion to the interests they are to have in the partnership or corporation which is to operate the property. The following factors are of importance. The possessory right to the mine and the minerals and some of the equipment used in its development belong to the Woods. It is their property which must be preserved during the interval that work is prevented. Moore has paid $5,000 and expended $22,300 in the development of the mine. He has performed all of the terms of the agreement to be by him performed. Through no fault of his he is faced with the problem of being unable to proceed with the development work, and the necessity of preserving the mine and equipment in order that he will not lose the efforts and outlays already expended. Both he and the Woods have an interest in having that property preserved in order that it may be placed finally on a production basis to their mutual benefit. By analogy the following rule should apply. “Where two persons are tenants in common or joint tenants and one of them has taken reasonably necessary action for the preservation of the subject matter or of their common interests, he is entitled to indemnity or contribution, enforced by means of a lien upon the interest of the other (a) if he made a request to the other to join in such preservation, or (b) without such request, if action was immediately necessary and the other was not available.” (Rest., Restitution, § 105.) (See, also, Rest., Restitution, § 117.) Also Moore and the Woods may be considered as joint adventurers. The Woods furnished the mining property. Moore was to develop it paying the expenses thereof. A corporation or partnership was to be formed to operate the mine. The interests in the produce from the mine were expressly apportioned, and when it became a producing mine the profits and losses were to be divided. A joint adventure has been defined as “a joint association of persons in a common enterprise for profit, but falling short of a partnership. . . .
“To illustrate: a joint adventure exists where a furrier agrees with a merchant to devote his labor and skill in manufacturing fur garments, the other to furnish the capital, sell *634the goods and pay the furrier a proportion of the net profits and a salary for his services; in such ease the furrier has not the usual power of a partner to hind the firm. So also it has been held that there is a joint adventure where one agrees to devote his services to securing fruit to be marketed by the other on an equal division of the profits and losses; where two persons agree to make a purchase of grain and to share the profits and losses; where several persons associate themselves together to promote a race for profit; where two persons agree to operate an apartment house on shares for a limited time ; and where several persons purchase an interest in a mine and operate it, not for ultimate profit, but as a means of paying the balance of the purchase price.” (14 Cal.Jur. 760.)
The trial court determined that the expense of safeguarding the property during the period of enforced suspension of operations should be borne by Moore and Woods in proportion to their respective interests in the property. In my opinion this is an equitable division, and the judgment should be affirmed.
Schauer, J., concurred.