Nelson v. Matsch

• Decision Date: 31 August 1910
• Docket Number: 2129
• Citation: 38 Utah 122,110 P. 865
• Court: Utah Supreme Court
• Parties: NELSON v. MATSCH

110 P. 865

38 Utah 122

NELSON v. MATSCH

No. 2129

Supreme Court of Utah

August 31, 1910

APPEAL from District Court, Fifth District; Hon. Joshua Greenwood Judge.

Action by Rasmus Nelson against Henry Matsch.

Judgment dismissing the action. Plaintiff appeals.

REVERSED, with directions.

B. N C. Stott and Pennel for appellant.

Richards Richards & Ferry for respondent.

McCARTY, J. STRAUP, C. J., and FRICK, J., concur.

OPINION

McCARTY, J.

STATEMENT OF FACTS.

This is an action for an accounting of partnership funds. The facts and circumstances leading up to and out of which this controversy arose are as follows: Rasmus Nelson, plaintiff, and Henry Matsch, defendant, in July, 1905, at Eureka, Utah, "entered into and formed a copartnership for the purpose of taking and working and operating leases on divers and various blocks of ground on the various levels in the Bullion-Beck mine in Tintic Mining District, Juab County, Utah, owned and operated by the Bullion-Beck & Champion Mining Company, a corporation. The partnership took, worked, and operated various leases and blocks of ground" in said mine. The rules and regulations of the mining company from which the leases were obtained required all business relating to the leasing of ground to be transacted in the name of one person only. In pursuance of these rules, the leases, each of which was for a period of three months, were taken in the name of Matsch. When a lease expired, the partnership acting through and in the name of Matsch would obtain another from the company. No new agreement of partnership was entered into by the parties on the taking of a new lease, but they continued to work and do business under the partnership agreement entered into by them in July, 1905. All ores mined under the lease were shipped in the name of Matsch, who received the proceeds thereof, and regularly made monthly settlements with Nelson until September, 1907. On July 23, 1907, Nelson left the property leased by the partnership, and took charge of a mine in another part of the district. Before leaving, he had a talk with Matsch in regard to the matter, and it was agreed that Matsch should manage the partnership business during Nelson's absence at the stipulated price of four dollars per day. At that time the partnership was operating on what was known as "Blocks 6 and 7 North 500 Level" in the Bullion-Beck mine, and kept employed thereon an average of four men. The partnership had tools and supplies consisting of drills, picks, hammers, shovels, wheelbarrows, powder, fuse, caps, and candles. Nelson was never at the property worked by the partnership after July 23, 1907, and knew nothing of the partnership business except what was told him by Matsch, the manager. The proceeds of the ore shipped under the lease were received by Matsch about the middle of each month. He would first pay all debts of the partnership incurred in mining and marketing the ores, then deduct the four dollars per day due him as manager of the partnership business, and then divide the balance of the proceeds between himself and Nelson. In August, 1907, he had a settlement with Nelson for the July shipment and in September for the August shipment. After making the August shipment, the partnership during the month of September and the first four days of October, 1907, "broke down" practically all the ore in blocks six and seven.

In the latter part of September, 1907, some disagreement arose between Nelson and Matsch, the facts and circumstances of which do not appear in the record, and their relations became somewhat strained. On October 5, 1907, Matsch offered to purchase Nelson's interest in the ores mined by the partnership since the August shipment. At the time the offer was made the partnership had fifty tons of ore in transit to the smelters and about the same amount broken down in the mine ready for shipment. The ore in transit netted the partnership three hundred and sixty-eight dollars, and the ore in the mine ready for shipment, which was a higher grade and much more valuable than any theretofore shipped by the partnership from blocks six and seven netted three thousand two hundred and thirteen dollars and twenty cents; the sum total of the profits to the partnership being three thousand, five hundred and eighty-one dollars and twenty cents. Nelson who knew nothing of the value of the ore except what Matsch told him finally agreed to take five hundred dollars for his interest. Thereupon Matsch prepared and Nelson signed a writing denominated by the parties a "release," of which the following is a copy: "Eureka, Utah, October 5, 1907. I hereby release all my interest in blocks six and seven North five hundred level Bullion-Beck mine, and all ores broke up to October the 5th, 1907; also all interest in lot three hundred and fifteen sold in month of September to Henry Matsch for the sum of five hundred dollars. Rasmus Nelson." At the time this document was signed and delivered Matsch paid Nelson the five hundred dollars mentioned therein, and remarked, as he handed him a check for the amount: "I don't know whether I will get five hundred dollars out of it." Nelson testified that Matsch told him at the time of the transaction that the ore in question was of about the same grade and value as that contained in the former shipments made by the partnership from blocks six and seven, and that the profit on the ore in transit would be about one hundred and eighty dollars to each of them, and that the ore broken down in the mine when marketed would net each about three hundred and twenty dollars; that he relied on the statements of Matsch regarding the value of the ore and believed he was telling the truth; that he, Nelson, had never seen the ore, and knew nothing about its value except what Matsch told him; that at the time he accepted the check he stated to Matsch: "Well, if you don't get your money back, I have the money ready for you. I don't want any more than I am entitled to." Nelson further testified that at the time Matsch offered to purchase his interest in the ore Matsch said that Doty, the superintendent of the mine, told him that some of the ore in question had been taken from block five (which block was not included in the lease), and that he would not permit them to ship the ore broken down by the partnership, and that they could not get a lease on block five, the ground adjoining blocks six and seven, and through which the ore body on which the partnership had been working extended, unless there was some settlement between them, the partners, for the ores already mined; that it was necessary for him to relinquish his interest in blocks six and seven to Matsch; that, if the relinquishment were not made, "he (Matsch) would have to go down next day and stop work." None of this evidence was denied except that Matsch testified that he did not understand Nelson to say that he would make good the loss in case the profits on the ore should be...