Rutan v. Huck

• Decision Date: 22 January 1906
• Docket Number: 1600
• Citation: 30 Utah 217,83 P. 833
• Court: Utah Supreme Court
• Parties: RUTAN et al. v. HUCK

83 P. 833

30 Utah 217

RUTAN et al. v. HUCK

No. 1600

Supreme Court of Utah

January 22, 1906

APPEAL from District Court, Piute County; John F. Chidester, Judge.

Action by Frank C. Rutan and another against Louis C. Huck. Judgment for plaintiffs. Defendant appeals.

MODIFIED.

Henderson Pierce, Critchlow & Barrette, Dickson Ellis, Ellis & Shulder for appellant.

APPELLANT'S POINTS.

"One who attempts to act as the agent of both parties to a transaction without disclosing that fact to his principals is precluded from recovering compensation for his services." (Boyd v. Dullaghan, 33 Ill.App. 267; Rice v. Davis, 136 Penn. St. 439, 20 Am. St. Rep 933, 1 Am. & Eng. Ency. of Law [2 Ed.], p. 1113; Kronenberger v. Fricke, 22 Ill.App. 533; Farnsworth v. Hemmer, 1 Allen 494; Panama Tel. Co. v. India Rubber Co., L. R., 10 Ch. 515, 526; McKinley v. Williams, 74 F. 94, 95; Meeker v. York, 13 La. Ann. 1820; Holcomb v. Weaver, 136 Mass. 265, 266; Morrison v. Ogdensburg, etc., R. R. Co., 52 Barbour 133, 179; Cleveland etc., R. R. Co. v. Pattison, 15 Ind. 70, 72; Everhart v. Searle, 71 Pa. 256, 259, 260; Hamilton v. Dooley, 15 Utah 281.)

John M. Zane, Wm. A. Vincent, W. I. synder and Bismark synder for respondents.

RESPONDENT'S POINTS.

The findings of the court which are made upon conflicting evidence are entitled to control the facts, unless they are manifestly against the clear weight of the evidence. If there be a substantial conflict upon the evidence, the findings will not be disturbed. (Dwyer v. Mfg. Co., 14 Utah 339; Walley v. Nat'l Bank, 14 Utah 305; Henderson v. Adams, 15 Utah 30; McCormick v. Mangum, 20 Utah 17, 20; Ranch Co. v. Argile, 79 P. 47.)

It was a contract of partnership for the acquisition and disposal of interests in lands and a division of the profits thereof and it has long been settled in this state that such a contract is not within the statute of frauds. (Knauss v. Cahoon, 7 Utah 182; Coffin v. McIntosh, 9 Utah 315.)

Authorities in other jurisdictions upon this point are numerous. (Van Housen v. Copeland, 180 Ill. 74; Coward v. Clanton, 79 Cal. 23; Fountain v. Menard, 53 Minn. 443; Newell v. Cochran, 41 Minn. 374; Howell v. Kelly, 149 Pa. 437; Bates v. Babcock, 95 Cal. 479; McElroy v. Swope, 47 F. 380; Kilbourn v. Lalta, 5 Mackey 304; Davis v. Gerber, 69 Mich. 246; Babcock v. Reed, 99 N.Y. 609; Falkner v. Hunt, 73 N.C. 571; Flower v. Bamekeff, 20 Ore. 132; Case v. Seger, 4 Wash. 492; Davenport v. Buchanan, 6 S.D. 376; Bruce v. Hastings, 41 Vt. 380; Connell v. Mullegan, 13 Smedes & M. 388; Evans v. Green, 23 Miss. 294; Gibbons v. Bell, 45 Tex. 417; Smith v. Crosby, 47 Tex. 121.)

It was a mining partnership, and it is well settledthatsuch a partnership is not within the statute of frauds. (Shea v. Nilima, 133 F. 209, 213.)

It is settled by the authorities that wherever two or more persons enter into an agreement, verbal or written, for the purpose of purchasing or otherwise acquiring or operating a mine or mining property and they actually carry out the agreement by spending their time and money upon it, the one furnishing the money or the other his time, or where they acquire property in the name of both or either, with an agreement to own or operate it together, the property obtained is partnership property. (Bank v. Bissell, 2 McCrary 73; Kahn v. Smelting Co., 102 U.S. 641; Childers v. Neeley, 47 W.Va. 70, 34 S.E. 828; Skillman v. Lachmann, 23 Cal. 199; Duryea v. Burt, 28 Cal. 569; Perkins v. Peterson, 29 P. 1135; Moritz v. LaVelle, 77 Cal. 10; Settembre v. Putnam, 30 Cal. 490; Welland v. Huber, 8 Nev. 203; Meagher v. Reed, 14 Colo. 235, 24 P. 681.)

(c) The contract has been fully executed on the side of Rutan, and it would be a fraud upon Rutan after he has made full performance of the contract and rendered services which the record shows it is impossible to adequately compensate in damages, to permit the statute of frauds to be used as a means of fraud. (Brinton v. Van Cott, 8 Utah 480; Lynch v. Coviglio, 17 Utah 106; Bates v. Babcock, 95 Cal. 479; Coward v. Clanton, 79 Cal. 23; Howell v. Kelly, 149 Pa. 473.)

It is uniformly held that the rule as to parol evidence to vary a written instrument is not operative to exclude evidence that such written instrument has been discharged or waived or that the performance of part of it has been dispensed with, or that a particular provision in the contract has been waived. (Viele v. Insurance Co., 26 Iowa 9; Vroman v. Darrow, 40 Ill. 171; Leathe v. Bullard, 8 Gray 545; Fuller v. McDonald, 8 Me. 213, 23 Am. Dec. 499; Bank v. Kettering, 106 Pa. 531.)

The statute of frauds does not apply to executed contracts so that when the original written agreement has been modified by parol so as to convert the whole agreement into a parol agreement, and when the resulting oral agreement is performed, its performance has the effect which the parties agreed it should have. (Moore v. Campbell, 10 Ex. 323; Leather Cloth Co. v. Hieronymus, L. R. 10 Q. B. 140; Swain v. Seamens, 9 Wall. 254; Long v. Hartwell, 34 N.J.L. 116, 127; Jackson v. Litch, 62 Pa. 451; Ladd v. King, 1 R. I. 224, 231; Cuff v. Penn, 1 M. & S. 21; Cummings v. Arnold, 3 Met. 486.)

There is no doubt on the authorities that the written agreement between Huck and Rutan would create a trust in onethird of the property purchased in favor of Rutan, with Huck holding the legal title. (Seymour v. Freer, 8 Wall. 202; Townsend v. Vandemerker, 160 U.S. 171; Barling v. Peters, 131 Ill. 78; Shaeffer v. Blair, 149 U.S. 248; Petrie v. Torrent, 88 Mich. 58; Green v. Brooks, 81 Cal. 333.)

It was a sale to Huck's wife, and a trustee cannot sell the trust property to his wife. It is a sale to himself, and in selling he could only have sold his own stock. (Bassett v. Shoemaker, 20 A. 52; Frazier v. Jenkins, 64 Kan. 615; Dundas's Appeal, 64 Pa. 325.)

In special or limited partnerships, there is no implied agency to sell and such a partner in selling sells only his own interest, unless he sells with the consent of his partner. (Settembre v. Putnam, 30 Cal. 491, 496; Charles v. Eshelman, 5 Colo. 107; Judge v. Braswell, 13 Bush. 67, 11 M. R. 580; Harris v. Mayor, 73 Md. 22, 8 L.R.A. 677; Dickinson v. Valky, 10 B. & C. 128, 34 Rev. 348; 1 Lindley, Partn., sec. 130 bottom p. 302.)

STRAUP, J. BARTCH, C. J., concurs. McCARTY, J., dissenting.

OPINION

STRAUP, J.

1. This was an action brought by plaintiffs and respondents against the defendant and appellant to obtain a decree adjudging that the defendant held in trust for them one-third of the capital stock possessed by him of the Annie Laurie Mining Company and to compel him to account for his receipts and expenditures in connection therewith. The substance of the complaint, so far as material, is: That on or about August 11, 1898, Rutan, an experienced mining engineer, and Huck, a capitalist, entered into an agreement wherein it was agreed that they would jointly engage in the business of looking for, examining, and purchasing mining properties, bonds on said properties, and options to purchase the same, and other interests therein; that Huck was to advance the necessary purchase moneys, and Rutan to devote his time, labor, skill, and experience in examining, passing, and reporting upon the values of prospective or contemplated purchases, and when such properties or interests were purchased the title thereof was to be taken in the name of Huck, the properties worked, managed, or disposed of, and, out of the proceeds arising therefrom, Huck was to be reimbursed for the moneys advanced by him and the remainder thereof divided between them, two-thirds to Huck and one-third to Rutan; that in pursuance of said contract Rutan devoted time, labor, skill, and experience in looking for and examining properties, and among them examined and reported on the Annie Laurie group of mines situate in Piute county, Utah and reported to Huck and recommended the acquisition of them or an interest therein, in accordance with said agreement; that such negotiations were had that Huck acquired for himself and Rutan an option upon a quarter interest in said mining properties, advanced moneys in developing them, took up said option, and acquired title to a one-fourth interest in said claims, paying $ 52,000 therefor, and thereafter conveyed it to the Annie Laurie company and received therefor 5,000 shares of its capital stock of the par value of $ 100 per share, all of which was done in pursuance of said agreement between Huck and Rutan, and that the stock was held by Huck, two-thirds for himself and one-third for Rutan, subject to Huck's being reimbursed for the moneys advanced by him; that Huck, by way of dividends on said stock, and from sales of a portion thereof, received more than sufficient moneys to cover his advancements and disbursements; an assignment, by Rutan of one-half his interest in his contract with Huck, to Snyder; a demand on Huck, and a refusal by him, for an accounting, and a repudiation by Huck of the contract. The answer admitted Rutan was an experienced mining engineer, Huck a capitalist, and that they were interested together in matters connected with mining properties; but denied that their said interest related to or had any connection with the Annie Laurie properties. It admitted that Rutan examined and reported on said properties; but denied such examination or report had any reference to the alleged contract, or any contract which Rutan had with the defendant. It admitted the defendant acquired a one-fourth interest in said properties for the sum of $ 52,000, and that he conveyed it to the Annie Laurie company for one-fourth of its capital stock; that he received dividends on said stock, sold some stock, and still held a large part thereof. It admitted Rutan...