It makes no difference whether the conclusions of law of the Court below are correct or not, if the facts of the case and the conclusions which the law itself makes, and which the Court ought to have made as applicable thereto, warrant and sustain the judgment.
That the first conclusion is correct, so far as it goes, is beyond controversy. When two or more parties are engaged together in working mines for their joint account, it is no longer an open question whether or not the associates are copartners, and constitute a copartnership. They may own the mine as tenants in common, and in unequal interests, and divide the profits and share the losses of working in proportion to their several interests, but the moment they begin the working for their joint account they become copartners. This copartnership may be general or special, and whether general or special, will depend upon the circumstances of each case. (See Story on Part. Sec. 82; Bainbridge on Mines, 332; Arundel on Mines, 27; Rockwell on Mines, 576; Collier on Mines, 88; Collyer on Part. Sec. 3.)
The above authorities would seem to leave no doubt that two or more persons may form a partnership for the business of mining, in which they might have all the benefits, enjoy all the rights and privileges, and subject themselves to all the liabilities of commercial partnerships--in which thereshould be found all the characteristics, and to which should be attached all the incidents of commercial partnerships. Such a partnership may be created by deed, by parol agreement, or " by just presumption from the acts of the parties." And if it be possible that a partnership possessing all the characteristics, and subject to all the liabilities of commercial partnerships, can be created for a mining adventure, then we think that the partnership between the defendants, Howell and Haynes, was one of that class. If there is any one element wanting, we do not know what it is.
The delectus personoe, so frequently mentioned as an essential element in commercial partnerships, and as distinguishing them from certain kinds of joint stock and mining associations, is not wanting here. Indeed, it was the chiefest inducement with Haynes, to engage in this business with which he was personally unacquainted, that he could be associated in the business with Howell, and have the benefit of his skill and experience.
The cases of Skillman v. Lachman, 23 Cal. 198; Duryea v. Burt, 28 Cal. 569; Dougherty v. Crary, 30 Cal. 290; Settembre v. Putnam, 30 Cal. 491, and McConnell v. Denver, 35 Cal. 365, do not determine that a mining partnership cannot be a commercial partnership, or that mining partners do not and cannot have implied authority to borrow money or give notes in the name of the partnership. All these cases carefully preserve the distinction that the partnership of which they treat are the ordinary mining partnerships in which the controlling element--the delectus personoe --is wanting, in which the shareholders are generally numerous, and may, at their pleasure, transfer their interests and introduce new members. Not one of them holds or intimates that a mining partnership may not be formed which would in all respects be governed by the rules of commercial partnerships, and in which the members should possess all the rights, and be subject to all the liabilities of such partnerships.
The Court below was wrong in its second conclusion of law, and should have found that Howell had implied authority to borrow the money and make the note in the name of the partnership. The finding was, doubtless, based upon the authority of Skillman v. Lachman, and kindred cases; but, as we have shown, the doctrines there laid down are applicable toa different class of partnerships, and not to what the facts here presented and found by the Court show this of Howell & Haynes to have been.
JUDGES: Niles, J. Mr. Justice Sprague did not participate in this decision.
OPINION
NILES, Judge
The defendants, Howell and Haynes, entered into an agreement to engage together in a mining adventure, under the firm name of " Howell & Haynes," for the purpose of purchasing, holding, and working certain mines. The profits and losses were to be shared equally. Howell, a practical miner, was to contribute his skill and personal services in the conduct of the business; Haynes was to contribute money. The mine was purchased by and conveyed to the partners. A note of the firm was given for a portion of the purchase money, and afterwards paid without objection by either. The mine was worked for a year under the management of Howell, who then conveyed his interest to Haynes. Prior to this conveyance, Howell borrowed of the plaintiff, in the name of the firm and for its use, the money for which the note in suit was given.
The main question in this case is whether Howell had authority, either express or implied, to make the note in suit.
It is well settled that in the case of an ordinary trading partnership either party may bind the firm by note.
It is equally well settled by the decisions of this Court that no such authority exists in the case of an ordinary mining partnership. The decision in Skillman v. Lachman, 23 Cal. 206, and the subsequent cases, place this exception to the recognized rule as applicable to trading partnerships, upon the ground that in mining partnerships the delectus personoe does not exist, and the membership is continually subject to changes beyond the control of the partners. But it is no disparagement to the salutary doctrine of these cases to hold that a strict partnership may exist in the working of a mine which shall be subject to the incidents of a trading partnership. There is nothing in the nature of the business of mining which forbids such a contract. If by the terms of a contract of mining partnership it appears that the confidential relations of an ordinary partnership are established, and that the firm is not subject to the intrusion of other partners at will, the reason of the rule that restricts the powers of a single partner fails. The parties are strictly partners, not by reason of their common ownership of the mine, but as the result of their own agreement. The cases of Bradley v. Harkness, 26 Cal. 76, and Duryea v. Burt, 28 Cal. 587, recognize this principle.
In Bainbridge on Mines, 439, the author says: " But there are mining concerns which are carried on by partners, few in number, subject to mutual selection, and therefore more closely connected by mutual confidence. * * * There may be no difference between firms of this kind and those engaged in any other distinct business as general partners, and those who are not working partners may not be the less liable to the general consequences of such a partnership."
I am of opinion that the agreement between Howell & Haynes was a contract of partnership in the ordinary sense. Each exercised his choice in the selection of the other as his copartner. If either had conveyed his interest in the mine to a stranger, the purchaser would not, by virtue of the sale, be subrogated to his rights under the agreement. The purchaser and remaining partner would then become tenants in common of the mine and in its working, subject to the rules applicable to an ordinary mining partnership.
Judgment affirmed.