Stowe v. Merrilees

This appeal is taken upon the judgment roll alone. Briefly summarizing the findings, it appears that the defendant Merrilees, for some time prior to the fall of 1932, was mining upon certain property in Calaveras County under a lease from the owners thereof.

It is conceded by appellant that the judgment must be affirmed if a valid limited partnership existed at the time the debts were contracted. He contends, however, that when persons who OAvn or have an interest in a mining claim commence work thereon a mining partnership is formed by operation of law and that a limited partnership cannot be created for such purpose. He asserts further that there was not a substantial compliance with the provisions of the code as to the filing and recording of the certificates. The points raised on the appeal appear never to have been decided in this state and the cases cited from other jurisdictions throw little light upon the problem.

Section 2511 of the Civil Code provides that: “A mining partnership exists when two or more persons who own or acquire a mining claim for the purpose of working it and extracting the mineral therefrom actually engage in working the same.”

These sections have existed in their present form since 1872. Section 2479 of the Civil Code was adopted in 1929 as part of the Uniform Limited Partnership Act and states that: “A limited partnership may carry on any business which a partnership without limited partners may carry on except banking and insurance.”

Appellant argues that there is an irreconcilable conflict between section 2479, supra, and the two sections dealing with mining partnerships and that under the familiar rule that the language of general provisions must yield to that of special provisions touching the same subject, sections 2511 and 2512 must govern. But it is also true that if code provisions can be reasonably so construed as to avoid conflict, that construction must be adopted. It is the duty of courts, when reasonably possible, to harmonize the several sections involved so as to give effect to the apparent intention of the legislature. It was undoubtedly the intention of the legislature in adopting the provisions of the Uniform Limited Partnership Act not only to secure uniformity between our partnership laws and those of other states but also to extend to all lines of business, except banking and insurance, the privileges of the act. There is no sound reason in public policy why the owners of mining properties should not be permitted to induce capital to participate in their ventures, with a limited liability as to partnership debts, if the rights of third parties are adequately safeguarded. The same status can be obtained by a corporate form of organization. As mining is not included within the exceptions mentioned in said section 2479, it follows that a limited partnership may be formed for such purpose unless the provisions of the code relating to mining partnerships prevent it. We find no provision therein that forbids it. The owners of mining properties may still form mining partnerships by express agreement or, in the absence of such an agreement, such relationship

It appears from the facts stated above that defendants executed their certificates of limited partnership and commenced work on the property on November 15, 1932, but that the certificates were not filed and recorded until' forty-nine days later. Appellant argues that this was not a substantial compliance with the code. He has cited a number of authorities from other jurisdictions on the question of substantial compliance and others which hold that any failure to comply strictly with the provisions of the statute will defeat the attempt to form a limited partnership. None of these cases was decided under a statute exactly like ours and undoubtedly most of them were influenced by the rule prevailing in such jurisdictions that statutes in derogation of the common law should be strictly construed. This rule is not in effect in this state and the act itself contains a provision that it is to be liberally construed. (Sec. 2504, Civ. Code.) The prevailing opinion as to the construction of statutes of this character is that they are- remedial in nature and are to be construed with a view to effecting the purpose of the statute and at the' same time protect the public. (47 C. J. 1278, sec. 1017.) No time is fixed by the act within which such filing and recording must be done and it must therefore be held that a reasonable time is allowed. What is a reasonable time must be determined by the circumstances of the particular case.

Although the certificates were not filed promptly, such failure could not have worked to the detriment of appellant. His business with respondents did not start until the certificates had been on file and of record for sixty-four days. The purpose of requiring such filing and recording is to acquaint third parties with the essential features of the partnership arrangement and it appears that ample notice was given in this ease. In the case of Levy v. Lock, 5 Daly (N. Y.), 46, 47 How. Pr. 394 , decided under the statutes of New York before the adoption of the Uni

The judgment is affirmed.

Thompson, J., and Pullen, P. J., concurred.

A petition for a rehearing of this cause was denied by the District Court of Appeal on May 16, 1935, and an application by appellant to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on June 13, 1935.