Kahn v. Smelting Company

• Decision Date: 01 October 1880
• Citation: 102 U.S. 641,26 L.Ed. 266
• Parties: KAHN v. SMELTING COMPANY
• Court: U.S. Supreme Court

102 U.S. 641

102 U.S. 641

26 L.Ed. 266

KAHN v. SMELTING COMPANY.

October Term, 1880

APPEAL from the Supreme Court of the Territory of Utah.

The facts are stated in the opinion of the court.

Mr. John R. McBride and Mr. George H. Williams for the appellant.

Mr.Samuel Shellaburger and Mr. Jeremiah M. Wilson, contra.

MR. JUSTICE FIELD delivered the opinion of the court.

This is a suit to compel the defendants to account for the proceeds of a mining claim in Utah, known as the Montreal claim, and to pay over to the plaintiff the amount to which he may be entitled upon such accounting. The complaint alleges that on the 14th of December, 1874, the plaintiff and two other persons, by the name of Deronso and Berassa, were the owners and tenants in common of the claim, each having an undivided third; that they then entered into an arrangement to work the claim for the ores and metals it contained, and from that time until February, 1876, they were a mining partnership engaged in working the mine, bearing the expenses and sharing the profits equally, Deronso and Berassa having the immediate direction, control, and management of its working; that on the 1st of February, 1876, his associates sold and transferred their interest in the mine, and in the tools, implements, and appurtenances connected therewith, to the defendant, Isador Morris, through whom the other defendants immediately acquired all the rights they possess; that from that time until the 10th of April, 1876, the defendants were in full charge and possession of the property, and extracted from the mine and sold about sixteen hundred tons of ores, worth about $45,000, the expense of extracting and marketing of which did not exceed $10,000; that since the 1st of February the plaintiff has been a partner with the defendants in the mining claim and is entitled to his share of the profits made,—being one-third of the whole,—and has demanded of the defendants a statement of their work and an accounting, but they have refused to comply with his demand, or to give him any information on the subject or any share of the profits, and have denied him access to the books of account of the concern, and that the profits amount, according to his information and belief, to about $35,000. He therefore prays for a decree establishing the partnership between him and the defendants, and directing an accounting from them and the payment of the amount found due to him upon such accounting; and for such other and further relief as to the court may seem meet and equitable.

The answer of the defendants traverses the allegations of the complaint, and avers that on the 31st of January, 1876, the defendant, Isador Morris, found Deronso and Berassa in the actual possession of a portion of the Montreal mine, of which they claimed to own two-thirds; that, believing they owned such interest, Morris paid to them $25,000 for it and received a quitclaim deed from them; that on the following day, for the like sum, he conveyed, by a similar deed, that interest to one Wadsworth in trust for such persons as a majority of the members of the Sandy Smelting Company of Salt Lake City might direct, and that afterwards such majority conveyed the same to the defendant, the Central Smelting Company, remaining, however, in the possession of and working the mine until about March 1, 1876, when the smelting company took possession of it and afterwards held it exclusively until the 1st of April following. The answer further avers that a short time prior to this last date the mine was claimed by another company, called thd Old Telegraph Company, under an older location; that thereupon the Central Smelting Company and its vendors caused the prior location and the mining claim to be carefully examined by experienced miners, and upon that examination they became satisfied that the older location and the Montreal mine were one and the same vein or lode, and that the Montreal mine was owned by the holders of the earlier location; that having become thus satisfied of this fact, the Central Smelting Company abandoned the Montreal mine, and has not since held, used, or occupied the same, or exercised any acts of ownership over it.

The answer further avers that the defendants never worked the Montreal mine or extracted ore from it, under any agreement with the plaintiff, or by his advice or consent, or in conjunction with him or as his mining partners; that they have always refused to recognize him as a party in any work, labor, or management, or business of the mine; that the proceeds of the mine received by the Central Smelting Company and its immediate vendors, after deducting the expenditures, show a net profit of about $12,000, which the defendants hold until the determination of suits now pending between the plaintiff and the owners of the alleged earlier location; that those suits are brought to determine whether the Montreal mine and the earlier location are one and the same lode, and which of the parties is entitled to its possession, and the proceeds; and the defendants pray for their protection that the prosecution of this suit may be restrained until those suits are determined.

On the trial, evidence was produced by both parties, and from it the court found as facts,——

First, That there was no partnership between the plaintiff and the defendants, as charged in the complaint.

Second, That there was no such co-tenancy between them in the mine in controversy as entitled the plaintiff to an accounting; and held, as a conclusion...