Mountain Iron & Supply Co. v. Branson

• Decision Date: 05 March 1932
• Docket Number: 30341.
• Citation: 8 P.2d 407,134 Kan. 818
• Parties: MOUNTAIN IRON & SUPPLY CO. v. BRANSON et al.
• Court: Kansas Supreme Court

8 P.2d 407

134 Kan. 818

MOUNTAIN IRON & SUPPLY CO. v. BRANSON et al.

No. 30341.

Supreme Court of Kansas

March 5, 1932

Syllabus by the Court.

Under allegation of duly authorized agency and verified denial of authority, express appointment and acceptance, or direct evidence thereof, is not essential.

Mining partnership may exist between co-owners of oil well only while they are actually engaged in operations.

Mining partnership can be created by intention of parties as gathered from surrounding circumstances, and without any express declaration of partnership.

Findings held to establish mining partnership between co-owners of oil well during operations, rendering members of such partnership liable for materials and supplies furnished.

1.Upon an issue formed by an allegation of duly authorized agency and a verified denial of authority, an express appointment and acceptance or direct evidence thereof is not essential but such authority may be implied from, and established by the relevant facts and circumstances as to the acts and conduct of the parties in connection with the matter or business in hand.

2.A mining partnership may exist between co-owners of a mine or well only where and while they are actually engaged in the operation of the producing property.Huston v. Cox,103 Kan. 73, 172 P. 992.

3.A mining partnership can be created and established by the intention of the parties as gathered from the surrounding circumstances, and without any express declaration of partnership.

4.The findings of the trial court as outlined in this opinion considered and held as a matter of law to clearly establish and create a mining partnership between the five co-owners of the operating well during the six and one-half years it was operated by them.

Appeal from District Court, Butler County; George J. Benson, Judge.

Action by the Mountain Iron & Supply Co. against B. F. Branson and others.Judgment in favor of the plaintiff, and certain defendants appeal.

J. M Pleasant, of El Dorado, for appellants.

J. B McKay, of El Dorado, for appellee.

HUTCHISON J.

The appeal in this case is taken by four of the five defendants against whom a judgment had been rendered in favor of the plaintiff upon an account for certain sucker rods, valve rods, pony rods, tubes, boxes, and pins, in the sum of $328.15, for use in pumping oil from a well on a certain 80-acre tract on which the defendants were cotenants and operating a producing well.

The appellants together owned a one-eighth interest in the well, its equipment and product, and allege errors as to the introduction of evidence, the insufficiency thereof to support the findings, error in the conclusions of law and the overruling of the motion for a new trial, but they argue and present in this appeal only the insufficiency of the evidence, and the findings to establish a mining partnership.The appellee directs our attention to the fact that the petition not only alleges the existence of a mining partnership, but also that the defendant Branson was the duly authorized agent of the four appealing defendants.The answer was verified, which placed the burden on the plaintiff of establishing either or both of these allegations.

The trial court made extended findings of fact to the effect that defendant Branson acquired an oil and gas lease on this eighty-acre tract, and assigned to each of these four appellants fractional interests therein, retaining substantially the remaining part thereof himself.By oral agreement with these four appellantshe drilled a well for a definite compensation, of which each of them promptly paid his part; the agreement to drill included the furnishing the well with pump and other equipment ready for operation; initial production from thirty-five to fifty barrels of oil per day was obtained in July, 1924, and it diminished in quantity during its operation until it was shut down in January, 1931, when it wan only producing three barrels per day.There was in the oral agreement for drilling and equipping the well no provision about its operation.Immediately after production was obtained all those interested in the leave signed division orders for the marketing of the oil, and these four appellants regularly received their proper shares of the sale price of all the oil produced therefrom.Defendant Branson has been in the active charge and management of the well and the leasehold at all times since the commencement of the well.He hired the pumper, and for two years paid him, but later the pumper collected his wages from the defendants on a pro rata basis.When the pumping engine wore out, all the defendants knew of that condition, and Branson arranged for a new one, and each paid his share of the expense of installing it.The four appellants knew at all times that Branson was managing and operating the well, and made no protest--however, the only expense they have thus far paid has been the wages of the pumper, the expenses of installing the new engine and one barrel of gasoline ordered by one of them in an emergency.They did not have actual knowledge that the material furnished by plaintiff was needed or had been procured until it had been furnished and was in use.It was purchased in March, 1929, on the order of Branson, and was used from that time until the well was shut down in January, 1931.

From these findings, the trial court concluded as a matter of law that the plaintiff was entitled to...