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ship business: Townsend v. Goewey 19 Wend. 424. Judge Gardner, in Gridley v. Dole, supra, says: "If one partner gives the other his promissory note or separate acceptance for value received, on the partnership account, an action will lie on such note or bill." Citing Collyer on Partnership, § 269,

and 1 Anst. 50.

If the evidence is referred to, it will be seen that the plaintiff refused to advance the money except upon a note made by the defendant and indorsed by Sanger; and as he was under no legal obligatien to advance the money, he had a right to impose the conditions and prescribe the security, and the contract then made can not be varied by any cotemporaneous or prior verbal agreement, or affected by the business relations of the parties: Lindley on Part. 735; Fox v. Frith, 10 M. & W. 131; Bedford v. Brutton, 1 Bing. (N. C.) 399; Sedgwick v. Daniell, 2 H. & N. 319. There is no rule forbidding one partner to sue another at law in respect of a debt arising out of a partnership transaction. If the obligation or contract, though relating to the partnership business, is separate and distinct from all other matters in question between the partners, and can be determined without going into the partnership accounts, an action will lie by one partner against his copartner: Worrall v. Grayson, 1 M. & W. 166. advance of the money upon the security of the note in suit for a special purpose connected with the partnership business was separate and distinct from the general partnership dea'ings, and an action upon it does not involve an examination of the partnership accounts. It was an independent transaction between two of several partners, and the contract is valid and may be enforced at law. The judgment should be affirmed. All concurring except RAPALLO, J., not voting.

Judgment affirmed.

The

DECKER ET AL. V. HOWELL ET AL.

(42 California, 636. Supreme Court, 1872.)

Partnership note-Strict partnership by agreement between mining partners. Howell and Haynes entered into an agreement to engage together in a mining adventure, under the firm name of "Howell & Haynes," the profits and losses to be shared equally, etc., etc. Howell borrowed of the plaintiff in the name of the firm and for its use the money for which the note in suit was given: Held, that while in case of an ordinary mining partnership one partner has no authority to bind the other by a firm note, yet there is nothing in the nature of the business of mining which forbids a contract of strict partnership subject to the incidents of a trading partnership, and that the contract in this case constituted a partnership in the ordinary sense, so that both Howell and Haynes were bound by the note.

Appeal from the District Court of the Tenth Judicial District, Yuba County.

This was an action upon a promissory note for three thousand dollars, made in the name of "Howell & Haynes," to R. M. Turner, and by Turner indorsed to plaintiffs. Howell and Turner made default. Haynes answered separately, setting up, among other things, that " Howell & Haynes " was a partnership formed for the sole and exclusive purpose of mining, and that Howell had given the note without Haynes' knowledge or authority, and in fraud of his rights. On the trial the court below found the facts substantially as stated in the opinion; but in addition thereto found that after the making of the note Howell conveyed all his interest in the partnership to Haynes, in consideration that he would pay certain claims, including the note in question. As conclusions of law the court found:

First. That the defendants, Howell and Haynes, were copartners in the working and management of their mines and mill.

Second. That a copartner in a mining partnership has not in any case implied authority to borrow money on the credit of the partnership, nor to execute or deliver a promissory note in the partnership name for any purpose, and, consequently, that the defendant Howell had no implied authority Sauntry v. Dunlap, 12 Wis. 407.

to execute or deliver a note in the partnership name to the plaintiffs for the money borrowed from them, and that the fact that the money borrowed was used to pay the wages of the laborers on the mine and for supplies therefor can make no difference.

Third. That the defendant Haynes, by his ratification of the acts of the defendant Howell in the making and delivery of the note in suit, became, and now is, liable to pay to plaintiffs the amount due on said note.

As a further conclusion of law the court found that the plaintiffs were entitled to judgment in the sum of four thousand nine hundred and sixty-four dollars and twenty-five cents, for principal and interest on the note, and rendered judgment accordingly. Defendant Haynes moved for a new trial, which being denied, he took this appeal from the judgment and order.

JAMES C. CARY and CHARLES E. FILKINS, for appellants.

W. C. BELCHER and G. N. SwEZY, for respondents.

By the Court, NILES, J.

The defendants, Howell and Haynes, entered into an agreement to engage together in a mining adventure, under the firm name of "Howell & Haynes," for the purpose of purchasing, holding, and working certain mines. The profits and losses were to be shared equally. Howell, a practical miner, was to contribute his skill and personal services in the conduct of the business; Haynes was to contribute money. The mine was purchased by and conveyed to the partners. A note of the firm was given for a portion of the purchase money, and afterward paid without objection by either. The mine was worked for a year under the management of Howell, who then conveyed his interest to Haynes. Prior to this conveyance Howell borrowed of the plaintiff, in the name of the firm and for its use, the money for which the note in suit was given.

The main question in this case is whether Howell had authority, either express or implied, to make the note in suit.

It is well settled that in the case of an ordinary trading partnership either partner may bind the firm by note.

It is equally well settled by the decisions of this court that no such authority exists in the case of an ordinary mining partnership. The decision in Skillman v. Lachman, 23 Cal. 206, and the subsequent cases, place this exception to the recognized rule as applicable to trading partnerships, upon the ground that in mining partnerships the delectus personæ does not exist, and the membership is continually subject to changes beyond the control of the partners. But it is no disparagement to the salutary doctrine of these cases to hold that a strict partnership may exist in the working of a mine which shall be subject to the incidents of a trading partnership. There is nothing in the nature of the business of mining which forbids such a contract. If, by the terms of a contract of mining partnership, it appears that the confidential relations of an ordinary partnership are established, and that the firm is not subject to the intrusion of other partners at will, the reason of the rule that restricts the powers of a single partner fails. The parties are strictly partners, not by reason of their common ownership of the mine, but as the result of their own agreement. The cases of Bradley v. Harkness, 26 Cal. 76, and Duryea v. Burt, 28 Cal. 587, recognize this principle.

In Bainbridge on Mines, 433, the author says: "But there are mining concerns which are carried on by partners, few in number, subject to mutual se'ection, and therefore more closely connected by mutual confidence. * * There may be no

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difference between firms of this kind and those engaged in any other distinct business as general partners, and those who are not working partners may not be the less liable to the general consequences of such a partnership."

I am of opinion that the agreement between Howell and Haynes was a contract of partnership in the ordinary sense. Each exercised his choice in the selection of the other as his copartner. If either had conveyed his interest in the mine to a stranger, the purchaser would not, by virtue of the sale, be subrogated to his rights under the agreement. The purchaser and remaining partner would then become tenants in common of the mine and in its working, subject to the rules applicable to an ordinary mining partnership.

Judgment affirmed.

Mr. Justice SPRAGUE did not participate in this decision.

BUTTERFIELD V. BEARDSLEY ET AL.

(28 Michigan, 412. Supreme Court, 1874.)

'Joint stock association. The members of an unincorporated joint stock association engaged in boring for oil, sustained by money advanced by each, may, in a proceeding for the distribution of a common fund, be treated as partners.

Necessity of exceptions to report of master. As a general rule the report of a master, or a commissioner acting as master, is received as true when no exception is taken, and parties who are dissatisfied with such a report should except to it or take some other action appropriate to the objection.

2 Subject-matter of jurisdiction in equity. The controversy in this case, which was one relating to the distribution, among members of an unincorporated joint stock association, of the common fund arising from the final disposition of the entire assets of the company, is held to be one for equitable cognizance. Legal title to common fund in third parties. Where property belongs in equity to an association of members, each having an undivided interest in whatever belongs to the company, it is of no consequence in a controversy over the distribution of the proceeds of the sale of the property authorized by the general consent, that the legal title stood in a third person.

Distr.bution of proceeds of sale of entire stock-Equity jurisdiction. Where the property of a joint stock association, unincorporated, has been disposed of on the basis of the payment by the holder of a portion of the shares of such company, of a certain sun on account of the ent ́re interest of all the other shareholders in such a manner as to extinguish all claim on his part upon the sum so paid, in a suit between the residue of the shareholders for an equal distribution of the proceeds of sale, his former interest in the company will have no bearing on the result. The sale will not be regarded as merely a transfer of individual certificates of stock, but as a final disposition of the entire assets of the company, and the case will be held to be one for equitable cognizance. Articles of association not signed by shareholder. Under articles of association providing that the ownership of a certificate should carry with it an undivided interest in all company property, the fact that a subsequent purchaser of a certificate had never subscribed the articles is of no consequence as affecting his right to a ratable share of the proceeds of a sale of the company's property.

Appeal in chancery from Oakland Circuit.

CROFOOT & BREWER and A. C. BALDWIN, for complainant.

1 Bullard v. Kinney, 11 M. R. 348; Hedge's App., Id. 463.

2 Von Schmidt v. Huntington, 6 M. R. 284.

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