Feusner v. Farley

• Citation: 80 Wyo. 124,338 P.2d 835
• Decision Date: 12 May 1959
• Docket Number: 2862,Nos. 2861,s. 2861
• Parties: Wayne L. FEUSNER, also known as Wayne Feusner, Roy H. Feusner, also known as Roy Feusner, Roy D. Feusner, Roy H. Feusner and Sons, a Partnership, Appellants (Defendants below), v. C. R. FARLEY, Appellee (Plaintiff below). Wayne L. FEUSNER, also known as Wayne Feusner, Roy H. Feusner, also known as Roy Feusner, Roy D. Feusner, Roy H. Feusner and Sons, a Partnership, Appellants (Defendants below), v. Shelby GIBLER, Appellee (Plaintiff below).
• Court: United States State Supreme Court of Wyoming

Page 835

338 P.2d 835

80 Wyo. 124

Wayne L. FEUSNER, also known as Wayne Feusner, Roy H. Feusner, also known as Roy Feusner, Roy D. Feusner, Roy H. Feusner and Sons, a Partnership, Appellants (Defendants below), v. C. R. FARLEY, Appellee (Plaintiff below).

Wayne L. FEUSNER, also known as Wayne Feusner, Roy H. Feusner, also known as Roy Feusner, Roy D. Feusner, Roy H. Feusner and Sons, a Partnership, Appellants (Defendants below), v. Shelby GIBLER, Appellee (Plaintiff below).

Nos. 2861, 2862.

Supreme Court of Wyoming.

May 12, 1959.

Thomas M. McKinney, Basin, Robert B. Bowman (of Bowman & Bowman), Lovell, for appellants.

J. D. Fitzstephens and E. J. Goppert (of Goppert & Fitzstephens), Cody, for appellees.

Before BLUME, C. J., and PARKER and HARNSBERGER, JJ.

Mr. Justice HARNSBERGER delivered the opinion of the court.

C. R. Farley and Shelby Gibler each brought their separate actions against defendants. As their claims were identical against the same defendants and would be determined upon the same evidence, the cases were consolidated for trial and will similarly be disposed of in this court.

Plaintiffs claimed defendants Roy H. Feusner and Wayne L. Feusner, his son, orally agreed with Farley and Gibler to engage with them in a joint prospecting and mining venture. The Feusners were to pay Gibler $350 per month and Farley $10 per day and all expenses. Farley was to furnish his jeep and certain instruments; Farley, Gibler and Wayne were to prospect for and locate uranium claims; and Roy, Wayne, Farley and Gibler would own equal shares in any mining claims located.

Defendants claimed that both plaintiffs were merely employees of a dairy business owned wholly, or at least principally, by the Feusner family.

Upon trial to the court, judgment was rendered adjudging each plaintiff to be the owner of a one-fourth interest in the disputed claims subject, however, to a lease of the property held by Lisbon-Uranium Corporation and to a royalty interest held by one Morris Avery. From that judgment the defendants and each of them appeal.

Defendants contend that the alleged oral agreement was voided because of our Statute of Frauds, the applicable portion of which reads:

'In the following cases every agreement shall be void unless such agreement, or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith:

* * *

* * *

'Fifth--Every agreement or contract for the sale of real estate, or the lease thereof, for more than one year;' § 5-101, W.C.S.1945.

However, in their brief appellants say, 'Appellees rely upon the rule that where two or more parties agree to locate mines upon the public domain through their joint efforts or expense and each is to acquire, by the act of location, an agreed interest in the mine, that the agreement is not within the Statute of Frauds' and that they 'have no dispute with this rule of law'. Appellants also acknowledge that by its judgment the trial court found the parties had entered into a joint adventure. These concessions sum up to mean that if the court's finding that there was a joint adventure was correct, the Statute of Frauds would not apply.

Notwithstanding, we think it proper to explain how Mecum v. Metz, 30 Wyo. 495, 222 P. 574, rehearing denied 32 Wyo. 79, 229 P. 1105, cited by appellants as supporting their contention, is distinguished from this case and, consequently, is not in point. In the Mecum case the alleged agreement concerned real estate, the title to which was in Metz at the time the purported contract was made and, therefore, the agreement was clearly within the purview of the statute. In this case, at the time the agreement was made, there was no title to the disputed claims in either of the contracting parties. The same situation obtained in Crosby v. Strahan's Estate, Wyo., 324 P.2d 492, as that in the Mecum case, so it also fails to sustain appellants' claim.

The oral agreement relied upon by plaintiffs in the cases now before us was nothing more nor less than what is generally referred to as a 'grubstake' contract. Such contracts have repeatedly been held not to be within Statutes of Fraud.

In Cascaden v. Dunbar, 2 Alaska 408, 412; Id., 9 Cir., 157 F. 62, 84 C.C.A. 566 (certiorari denied 212 U.S. 572, 29 S.Ct. 682, 53 L.Ed. 656); 3 Alaska 671; 9 Cir., 191 F. 471, 112 C.C.A. 115, the court stated:

'A grubstake contract is an agreement between two or more persons to thereafter locate mines upon the public domain by their joint aid, effort, labor, or expense, whereby each is to acquire, by virtue of the act of location, such an interest in the mine as is agreed on in the contract. * * * The title accrues to each as an original locator, though the location be made in the name of one or more of the parties only. Lindley on Mines (2d Ed.) § 331; Book v. Justice Min. Co. (C.C.) 57 F. 106. Each party to the grubstake contract not named in the location notice becomes, nevertheless, an equitable owner and tenant in common with those named. Murley v. Ennis, 2 Colo. 300. A grubstake contract, though oral, is not within the statute of frauds. * * *' Cascaden v. Dunbar, 2 Alaska 408, 412.

In Book v. Justice Mining Co., C.C., 58 F. 106, 119, 827, it was said:

'* * * An oral agreement to locate a mining claim for the benefit of another need not be in writing. If a party, in pursuance of such an understanding, at the expense of another, locates the claim in his own name, he holds the legal title to the ground in trust for the benefit of the party for whom the location was made; and such party could, upon making the necessary proofs, compel the locator of the mining claim to convey the title thereof to him, although the agreement so to do was not in writing. This familiar principle has been often applied in cases where a party has entered into an oral agreement to locate mining ground for the joint benefit of himself and others, and makes a location in his own name. It has always been held that such oral agreements are not within the statute of frauds. Gore v. McBrayer, 18 Cal. 582; Moritz v. Lavelle, 77 Cal. 10, 18 Pac.Rep. 803; Hirbour v. Reeding, 3 Mont. 15; Welland v. Huber, 8 Nev. 203.' Book v. Justice Mining Co., C.C., 58 F. 106, 119.

In Dayvault v. Baruch Oil Corp., 10 Cir., 211 F.2d 335, 340, this language was used:

'The pleadings and the evidence in this posture of the case establish a rather typical joint adventure to acquire, explore and develop oil and gas leases. It is a familiar arrangement in the oil country for those having knowledge and access to oil and gas leases to match their know-how with those who have access to risk capital for the development of oil properties. While not good business practice, it is not uncommon for the joint adventurers to orally agree that one of them shall hold title to the leases in order to expedite the promotion of the joint enterprise. See Blackner v. McDermott, supra [10 Cir., 176 F.2d 498]; Mulroy v. Sessions, supra [Sup., 38 N.Y.S.2d 853]; Hifler v. Calmac Oil & Gas Corp., supra [Sup., 258 App.Div. 78, 10 N.Y.S.2d 531, 16 N.Y.S.2d 104]. * * *'

The court also stated at 211 F.2d 339:

'If title to partnership property is placed in the name of one of the partners, a fiducial relation is thereby created, as to which he owes the highest degree of honor and good faith. Mattikow v. Sudarsky, supra [248 N.Y. 404, 162 N.E. 296]; Meinhard v. Salmon, 249 N.Y. 458, 164 N.E. 545, 62 A.L.R. 1; Wyoming-Indiana Oil & Gas Co. v. Weston, 43 Wyo. 526, 7 P.2d 206, 80 A.L.R. 1037; Blackner v. McDermott, 10 Cir., 176 F.2d 498. The partnership property is regarded as personal property for the purpose of adjusting the equities of the parties * * *; or equity may impress a trust upon the property for the benefit of the joint adventurer. Meinhard v. Salmon, supra. Or, equity may impress a constructive trust upon the real property for the benefit of the joint adventurers to prevent unjust enrichment and to enforce...