Meagher v. Reed

• Decision Date: 28 March 1890
• Citation: 14 Colo. 335,24 P. 681
• Parties: MEAGHER et al. v. REED.
• Court: Colorado Supreme Court

24 P. 681

14 Colo. 335

MEAGHER et al. v. REED.

Supreme Court of Colorado

March 28, 1890

Commissioners' decision. Appeal from district court, Lake county.

Teller & Orahood and Jas. W Taylor, for appellants.

J B. Bissell, for appellee.

PATTISON C.

This is an appeal from a judgment and decree rendered the 24th day of December, 1884, in a suit in equity brought by Clinton Reed the appellee, to recover an undivided one-fourth interest in a leasehold estate in a certain lode mining claim, known as the 'Felicia Grace,' situate in the consolidated ten-mile mining district, Summit county, Colo., and for an accounting of the proceeds realized by the appellants in working that property. The suit was predicated upon an alleged partnership agreement between appellants and three other persons, who will be named hereafter, and the issues presented to this court are-- First, whether the partnership was established by the evidence; and second, whether such evidence was legal and competent.

The first question necessarily involves a review of the evidence taken upon the trial. In the consideration of the case, only so much of the bill of complaint need be recited as defines the contract between the parties and their several interests in the property, and the proceeds of the property in controversy. It is alleged that in the month of April, 1884, the defendant J. C. Meagher, the appellee, Clinton Reed, A. A. Smith, and John Van Avery, by parolentered into an agreement of copartnership, wherein and whereby it was agreed by and between the said several parties that they would together obtain a lease upon the property known as the 'Felicia Grace' Iode mining claim, and, after obtaining the lease of said property from the owners thereof, would together, as an association or copartnership, enter upon and into said mining property, and prosecute the work of developing and extracting the ore therefrom under and by virtue of the terms of said lease, for the joint benefit, profit, and advantage of said several partners. That by the terms of said agreement the interests of said several parties were to be as follows: The said Reed was to be and become the owner of one-fourth thereof, paying his proportion of the expense of working and developing said claim, and working it, and receiving such proportion of the profits thereof. That the said Smith was to own and enjoy in like manner one-fourth, and the said Meagher one-fourth. That by the terms of said agreement so entered into between the parties said Meagher was to procure from the owners of the property the lease thereof in his own name, and after its procurement, to execute to the said parties proper and sufficient transfer and assignment of their interests therein. That thereafter, and in the said month of April, A. D. 1884, in accordance with the said terms of said partnership agreement so entered into between the parties, the said Meagher procured from the owners of the said property, in his own name, a lease thereof, for the period of 18 months from the day of its execution. That said lease was executed by the owners of said property on or about the ___ day of April, A. D. 1884, and was thereafter duly recorded in the office of the recorder of deeds in Summit county, Colo. It is then alleged that after the execution and delivery of the lease Meagher, on behalf of the copartnership, took possession, and began developing the property; that complainant, as he was bound to do, contributed materials and funds to aid in the prosecution of the common enterprise. It is unnecessary to state the other allegations of the complaint, such allegations being such as are usually found in a suit brought between partners for an accounting and distribution of partnership property. The answer put in issue the allegations of the complaint, and interposed, as a separate defense, the statute of frauds. The case was tried to the court. It is unnecessary to recite the findings of fact, except such as define the relation of the parties to each other, and constitute the basis of the decree. Such findings are as follows: '(1) In are fore part of April, 1884, the defendant John C. Meagher, the plaintiff, Clinton Reed, A. A. Smith, and John Van Avery formed a copartnership for the purpose of procuring and working a lease on the Felicia Grace mine, situate in Summit county, Colo.; that each of said persons was to own an undivided one-fourth interest in said lease when the same was procured, and upon the suggestion of the defendant Meagher that he, being an owner of the property, could probably procure a lease on better terms than others, it was agreed that he should procure the lease in his own name, and after the procurement thereof should transfer to the other parties their respective interests, and until such transfer was made that he should hold their interests in his own name for their benefit. (2) That some time about the 24th day of April the lease was made, and on the 24th day of April Meagher and Patrick Barker, who succeeded to the interest of Van Avery in the premises, went to work. (3) Intervening the time when the agreement was made and the work commenced, Van Avery notified Meagher that he would not be able to take his interest in the lease. Thereupon, by agreement between Meagher and Barker and the other parties, Barker took that interest, an undivided one-fourth. (4) That such agreement and transfer was made prior to the time of the actual execution of the lease itself. (5) That on the 26th day of April work was commenced under the lease in accordance with the terms of the agreement antecedently made. That thereafter, on the 27th of April, as had been agreed, the defendant Meagher applied to A. A. Smith to furnish supplies under the copartnership arrangement. That on that day the plaintiff, Reed, sent Meagher the supplies asked for, amounting to the extent and value of $13.05, which was received by Meagher, and by him used in the prosecution of the enterprise. (6) That afterwards, and about the 1st day of May, Meagher wrote to A. A. Smith for $25, to be used in the payment of the current expenses of the prosecution of the work. That the said sum so applied for was sent to him by the check of plaintiff, Reed. (7) That Meagher thereafter, and until the commencement of this suit, made no other request or application to Reed for other supplies or money to be used in and about the work. (8) That it was agreed at the time of the formation of the original copartnership arrangement with Meagher that the several parties were to contribute whatever supplies and money might be needed in the prosecution of the common enterprise only, and whenever they should be called for by Meagher for their proportion of the expenses.' The other facts found by the court do not appear to be material to the discussion of the case. By the twenty-third finding it is declared that the said lease will by its terms continue until October 24, 1885; that there has been opened in the said premises a large and valuable body of ore; that the developments show that during the continuance of the lease there will probably be taken, mined, and removed from the said premises upwards of 3,000 tons, at the rate at which said mine is now being worked; and that the ore so mined will be of the probable value of $50 per ton, and of the net value of upwards of $100,000, of which the said Reed's share will be about $25,000. By the twenty-fourth finding it is declared that the said Clinton Reed is now the owner of an undivided 7-32 in the said lease, and entitled to that extent to share in the benefits and advantages accruing thereunder, and to that proportion of the profits of all the ores mined; and that he is entitled to occupy, possess, and enjoy the said premises under the said lease with the said Meagher and the other defendants interested in said lease. If these findings are sustained by legal and competent evidence it is clear that the judgment and decree based upon them must be affirmed.

It is first necessary, therefore, to determine by a review of the entire case whether the findings of the court are warranted by the facts disclosed and established by the evidence. The evidence tends to prove that for some time prior to April 1 1884, the appellant J. C. Meagher was one of the owners of the property in question. The property was undeveloped and its value unknown. A shaft had been sunk upon the premises to a considerable depth, but no valuable deposit of mineral had been found. In an adjoining property, known as the 'Robinson Lode Mining Claim,' a deposit of mineral had been discovered some time before, the dip or direction of which was towards the 'Felicia Grace.' Meagher having learned of this discovery, and believing that the same deposit or a continuation of it might be found within the territory of the property named, became desirous of securing a lease from his co-owners for the purpose of developing the property, and ascertaining whether this deposit of mineral could be found. Being without means it was essential for him to associate others with him to aid in the enterprise. Some time in the month of March, 1884, Meagher met at Leadville one Dr. A. A. Smith, and had some conversation with him in relation to the matter. He succeeded in interesting Smith, and obtained from him a promise that he would undertake to pay one-fourth of the expense of developing the property, if a lease was obtained, in consideration of the transfer to him of an undivided one-fourth interest in the lease when it was made. In this conversation it appears that Smith suggested that Clinton Reed would also take a quarter interest, and pay one-fourth of the expenses. Before the lease was actually obtained a definite understanding was arrived at between Meagher,...