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by Gleeson gave him the right to purchase, 'Yes, all right; that will be all right. That is from Patrick Power, within 18 months from about all the conversation I remember in respect May, 1901, for $20,000, three of the above to the Power and Mono claims." mentioned claims. to wit, the San Francisco,

Frank Goodbody, an attorney working in Fennard, and Batavia. This option, however,

the office of Judge Reilly at the time, does was permitted to lapse on July 1, 1902, but not state whether Reilly used the word "we" a new one, giving the right to purchase the or “you” when referring to the owner of the same three claims for $20,000, was procured Mono claim, but testified: on June 6, 1903, in the name of Martin Cos- heim. in Bisbee, and there was a tax title from

"The Mono claim had been owned by Joe Mutello, which option was exercised November Mr. Neale, and Mr. Leavenworth and myself 6, 1904, when a deed conveying these three assisted Judge Reilly in straightening out that claims to Martin Costello was executed by title and giving it to Costello. That was done Patrick Power. It is admitted by both par

in Costello's name." ties that the purchase price of $20,000 for

Costello purchased the Mono in 1901, a the three claims under the second Power op- short time before the alleged agreement, at a tion was paid by Costello, though there is a tax sale, paying for it only a nominal condisagreement as to whether he was credited sideration, and at the trial of this case beon this option with the installments paid by fore Judge Campbell, in 1910, he testified: Gleeson on the first one. Whether one-half

"Judge Reilly had no interest in the Mono

whatever, and was never interested in any minof this amount, however, was for the bene ing claim with me.” fit of Reilly, does not appear. The record

Judge Reilly's letter of April 25, 1901, to J. title to the Mono claim, as shown by stipula- Henry Work, an attorney, of New York, intion of the parties, was in the name of Martin quiring about the purchase of the Mono by Costello in December, 1901, and if Reilly was Costello, shows very clearly that the latter's the owner and contributor of a one-half inter- statement regarding the Mono claim was true est in this claim, such facts can only be de at that time. duced from the conversation had between Lee 0. Woolery, an attorney employed in Gleeson, Costello, and Reilly at the latter's Judge Reilly's office at various times between office in Tombstone, in December, 1901, when, 1899 and 1908, and who returned from Indiand as a result of which, it is alleged and ana in June of the latter year at the request found, the partnership agreement was enter- of Judge Reilly, testified as follows: ed into.

"A few weeks before Judge Reilly left TombGleeson's version of the conversation is as stone the last time [late in 1908), going to Califollows:

fornia, he told me in his office on Fourth street "There was a conversation between Reilly, Costello owned a number of mining claims in

that he brought me out here for the reason that Costello, and myself in regard to the mining the Turquoise mining district, and he was acting claims. Goodbody, O'Brien, Reilly, Costello, as attorney for Costello, and that John Gleeand myself were present. Judge Reilly says to son had a mortgage on the Copper Belle mines, Costello, 'Well, John has got this option on the and expected to get the mines through a forecloPower claim for $20,000, and we got the Mono, sure proceeding, but they did not get it, and it and I told him that we would pay the option, was their intention if they got those claims to and we would put the Mono and Power claims organize a company and deed those claims, or into the partnership,' something to that effect; the claims owned by Costello and Gleeson, to Judge Reilly made that suggestion. He made it the Costello Copper Company, or a corporation long before this, that I would put the Power owned by them, and they wanted me to act as option and they would put in the Mono claim. secretary of the company; that is the reason He said him and Martin Costello owned the he wanted me back out here." Mono claim. Martin Costello said, 'Yes, all right; that will be all right.' I can't tell

„you

Any knowledge of his decedent's interest all of the conversation; it was so long ago.' in the alleged partnership is disclaimed in the

In the former trial of this case Gleeson answer of the executor of Reilly's estate, a testified:

party defendant, nothwithstanding there is "Judge Reilly never contributed a cent that nothing in the record of the former trial, nor I know of."

in this one, to show that if Reilly ever owned Frank O'Brien, a former probate judge of and contributed, either directly or indirectly, Cochise county, who had come to Tombstone a one-half interest in the Mono and one-half from the mine with Gleeson, and who was at of the purchase price of the Power claims, as the time manager of the Copper Belle store testified to by appellee, such interest, valued and working under Gleeson, the then super- then for partnership purposes at $20,000, is intendent of the Copper Belle Mining Com- not now a part of the assets of his estate, for pany, testified that in the conversation Reilly no transfer thereof to Costello was shown, or said to Costello:

attempted to be shown, in substantiation of "John has got this bond on the Power prop- appellee's allegation that such had been done. erty, and you have got the Mono claim; he The record contains no evidence, other wants to throw it in together. He wants you to than Gleeson's statement, which even tends to throw in the Mono with the Power group and make one claim of the whole property ; bond prove that Costello paid one-half of the $20,and all

. He will throw in his share, his bond. 000 for the San Francisco, Fennard, and And Reilly said to Gleeson. 'How about that, Batavia claims, for the benefit of Reilly, or John; is that all right? Gleeson said, 'Yes,' and then he turned to Martin and says, How that Reilly was the equitable owner of a about it, Jew; how about it?' and Martin says. I one-half interest in the Mono claim, or that

he contributed such interest to the partner-, 4 N. W. 434. 2049 Revised Statutes of Arizship. And we think that such facts are not ona 1913." established by appellee's testimony that Reil- [2, 3] A consummated partnership which ly, in a conversation held ten years before, would have the effect of establishing in Cosused the first personal pronoun “we,” meaning tello the trust relation regarding these Costello and Reilly, instead of the second per- claims ought to be proven by evidence as sonal pronoun "you,” meaning Costello alone, clear and satisfactory as would be required in the expression "we got the Mono” and “we to show the trust relation direct, without the would pay the options,” and “we would put intervention of a partnership. If, therefore, the Mono and Power claims into the partner. the evidence be considered sufficient to subship,” to which Costello replied, “Yes, all stantiate the finding that the partnership right; that.will be all right.” Especially is agreement was entered into in December, this true in view of appellee's former state- 1901, as alleged, before a consummation ment that “Judge Reilly never contributed a thereof can be made to appear, it must be cent that I know of,” and Costello's testimo- shown that each of the partners contributed ny that “Judge Reilly had no interest in the his proportion of the agreed assets. The fact Mono whatever, and was never interested in that Gleeson and Costello may have paid any mining claims with me.” Costello's re- their proportions would not establish a partply, “Yes, all right; that will be all right,” dership composed of Gleeson, Reilly, and Coseven though it be held to be an admission tello, with each contributing property valued against interest, and given the fullest weight Reilly, either directly or through Costello,

at $20,000, when there is no showing that possible, would not be sufficient in an action prosecuted by Reilly's executor to deprive partnership does not, in itself, create a part

paid his. "The mere agreement to form a Costello's estate of its legal title to any partnership; nor does the advancement by any of the mining claims which Costello purchas- one party of his agreed share of the capied with his own funds. In the light of the tal. The entire agreement and all of the atcase of Costello v. Cunningham, 16 Ariz. 447, tending circumstances are to be taken into 147 Pac. 701, such a declaration, standing consideration in determining whether a partalone or taken in connection with the other nership was actually launched.” 30 Cyc. evidence in this record, would not warrant 357. the court in finding that Costello held one- [4] The court has found, as alleged by aphalf of the Mono mining claim in trust for pellee, that a supplemental partnership, exReilly in December, 1901, nor that he held it, tending the scope of the original one so as together with the San Francisco, Fennard, to embrace a large number of other claims in and Batavia mining claims, in trust for the the Turquoise district, was entered into by partnership, after that date. As said by this the three partners in February, 1902. This court in the Costello-Cunningham Case: is an important finding, which has been as

“These statements by Costello became admis- signed as error and fully argued by both apsible as evidence only because they were made pellant and appellee in their very exhaustive by him against his interest. Clearly such state- briefs, but we deem a discussion of it unments, when given the most favorable effect to necessary, in view of the transaction of the plaintiffs, are simply statements to the effect that Cunningham owned a half interest with September, 1908, as it is termed in the recCostello in mines in the Warren mining district, ord, and the construction which must be and that Cunningham was a partner with Cos- placed thereon. Appellant contends that tello in mines situate in that mining district.

even though the supplemental agreement was Such statements and declarations, standing alone, are not sufficient evidence to determine, entered into and the claims described in the or sufficient evidence of its nature to warrant third amended complaint purchased by the the court in finding that Costello and Cunning; partnership in pursuance thereof, a proper ham acquired mines by each paying an equal construction of the transaction or settlement share of the expenditures laid out in their acquisition, and that Costello took the record ti of September, 1908, will establish the fact tle thereto

in his name in trust for that appellee by that act withdrew any conthe use and benefit of himself and his co-owner, tribution he may have made to the partnerPatrick Cunningham. Such statements and declarations made by Costella are insufficient, ship in its extended scope, and that the efstanding alone, to establish the trust contended fect of such withdrawal was to dissolve any for. Leatherwood v. Richardson, 11 Ariz. 278, partnership theretofore existing, thus ending 94 Pac. 1110.

The rule requiring the Gleeson's connection with the partnership evidence to be clear and satisfactory is especially applicable where the trust is attempted to and leaving Costello the owner of the equibe proved by parol evidence, as well as when it table as well as the legal title of all claims is sought to convert into a trustee a person hold- alleged to have been purchased by the parting the title to property ostensibly as absolute nership. The basis for this position is found whether as alleged therein or otherwise, which was the real party in Interest, or that Gleethis defendant does not admit, but, on informa- son ever Indorsed or delivered said notes to tion and belief, denies such partnership, or Costello, and alleged a lack of consideration trust, was fully dissolved and terminated during or about the month of September, 1908, at which for the notes. Gleeson, who was made a time a full and complete accounting and settle party defendant on motion of the Copper ment of the affairs of said alleged partnership Belle Mining Company, admitted in his anwas bad and completed between plaintiff herein and Martin Costello; that at said time plaintiff swer the making of a certain agreement herein voluntarily withdrew all and any contri- which the said company had pleaded also butions theretofore made by him to or for the as a defense, and which would probably have benefit of said alleged partnership and received been good against him as plaintiff in the full payment thereof from Martin Costello; that in and by said accounting, settlement, and pay- case, but denied that Costello had any ment, plaintiff herein renounced and relinquish- knowledge of said agreement when the sale ed all and every alleged interest or claim of in, was made and the notes delivered. So, terest in or to any of the properties mentioned whether the sale of these notes by Gleeson in the third amended complaint, and that his alleged interests therein, or in said alleged part to Costello was bona fide or merely simnership thereupon ceased and determined; that ulated—done for the purpose of enabling plaintiff thereupon voluntarily relinquished all Costello, as a bona fide purchaser for value of said properties to the said Costello, who at all times thereafter, at his own expense and without notice, to do for Gleeson what he risk and without any cost or hazard to plaintiff probably could not do for himself-was the herein, continued to control and care for said pivotal point in the case. Gleeson testified properties in the purchase of which he had ex; that Costello paid him $25,000 in cash, and pended approximately $100,000 of his personal funds; that having thus freed himself of all risk conveyed to him certain mining claims near or hazard of said alleged partnership enter: Tombstone as consideration for the notes. prise, and having withdrawn all of his alleged Costello's testimony was to the same effect. contributions thereto, and having so continued without risk or hazard of loss, plaintiff now and the trial court finally decided that Cosseeks to participate in the fruits of Costello's tello was a bona fide purchaser of the notes, successful handling of said properties, all of and on July 29, 1908, gave him judgment for which was attained at the sole risk and by the the amount due on them, to wit, $63,659.32, sole efforts of Costello, and at his sole expense; that when plaintiff so withdrew his alleged con- and ordered foreclosure of the mortgage. tributions to said alleged partnership, said al- | This judgment was satisfied of record by leged partnership, if any there was, was largely Costello on August 28, 1908. indebted to Costello for moneys expended by him in the purchase of said properties and in

39 Cyc. 84, 85. The statements and declarations of a holder of the record title of in paragraph 16 of appellee's second amendmines, made' against such title, can affect the ed answer, which reads as follows: holder's title only by way of working an estop- “Further answering said third amended com. pel. Oral statements or silence could never have plaint, this defendant is informed and believeg the effect to pass title which the statute ex and therefore alleges that if any partnership or pressly declares shall be transferred by deed trust relation ever existed between plaintiff and only. Hayes v. Livingston, 34 Mich. 384, 22 Martin Costello, deceased, in relation to any of

owner.

In addition to the foregoing facts concernperfecting and maintaining the titles thereto, no ing the Copper Belle suit, it was further espart of which was then or at any time paid by tablished in this case that on August 8, 1908, plaintiff.”

following the rendition of the Copper Belle In order that the transaction or settlement judgment, Reilly, who was then and had of 1908 and its relation to this suit may ap- been for many years the legal adviser of pear, a brief statement of the facts of the both Costello and Gleeson in their individcase of Martin Costello v. Copper Belle Min- ual capacities, wrote the latter informing ing Company, a corporation, is necessary. him of the result of the case, and inclosed a In February, 1904, Martin Costello filed suit statement of his account with Costello and in the territorial district court at Tomb- Gleeson for legal services in reference to stone against the Copper Belle Mining Com. mortgages and suits concerning the Copper pany, a corporation, on four certain promis- Belle mining claims. On September 13th, sory notes aggregating $53,000 and executed thereafter, Gleeson called upon Costello and under date of February 4, 1902, by the said Reilly at the latter's office in Tombstone for Copper Belle Mining Company in favor of the purpose of settling up the Copper Belle John Gleeson, each in the principal sum of transaction, and in consequence of the set$13,250, and bearing interest at the rate of tlement reached at this time Costello ac3 per cent. per annum, interest payable an- counted to Gleeson for the full amount of the nually. These notes matựred one each year Copper Belle judgment, to wit, $63,659.32, for the years 1906, 1907, 1908, and 1909, re- by giving Gleeson a check for $33,659.32, and spectively, and their payment was secured paying, at the request of the latter, $11,257.by a mortgage on ten mining claims of the 70 to Judge James Reilly, $11,549.19 to Mrs. said Copper Belle Mining Company located James Reilly, and retaining for himself $7,in the Turquoise mining district. It was 423.16 in repayment of a loan he had prefurther alleged that in July, 1902, and be viously made Gleeson. In the ståtement infore any of said notes became due, John closed in Reilly's letter to Gleeson there is Gleeson, for a valuable consideration, as- an item of $10,000 for legal services in the signed and delivered them to Martin Cos Copper Belle and other litigation, which tello, who then became and thereafter re- amount was included in the $11,257.70 paid mained the owner and holder of said notes, Judge Reilly by Costello at Gleeson's retogether with the mortgage securing their quest. It was further shown that within payment. The Copper Belle Mining Com- 14 days from the time Costello paid Gleepany answered by denying, among other son by checks the $25,000 cash consideration things, that Costello was the owner and hold for the notes, which was on January 12, er of said notes and mortgage, or that he 1903, this entire amount was returned to

him by Gleeson through Reilly acting as the money advanced on behalf of Gleeson's inagent of both parties. And the trial court, terest in the partnership," the amount due notwithstanding the contrary result reached Costello because of such advances was one years before in the Costello-Copper Belle third of approximately $100,000, or more Mining Company case, acting principally up-than $30,000. And notwithstanding it was on the foregoing facts, came to the conclu. Gleeson's intention at that time to repay sion, and we think very properly so, that Costello out of the proceeds of these notes, the sale of the notes to Costello by Gleeson and although there was no other source was not bona fide, but only simulated-done from which he could procure funds for this for the specific purpose of enabling Costello purpose, the fact remains that he accepted to do for Gleeson what he probably could the full amount of the judgment, and used not do for himself, viz. collect the notes. no part of it to reimburse Costello, and, be And Costello's act in returning to Gleeson cause of such acceptance and failure to rethe proceeds of the notes is found by the pay, the latter was left without even security court to have been in accordance with the for the very advances he had agreed to make understanding had between them at the time only upon a promise of security, and which the simulated sale was agreed upon that in fact were only made after such security immediately after the collection of the notes had been "left in the possession of Reilly, by Costello he would turn over to Gleeson, representing the partnership." their rightful owner, the entire proceeds Such action on the part of Gleeson, appel. thereof.

lant contends, in reality constituted a with. Although the notes were actually trans- drawal from the alleged partnership of any ferred to Costello on July 2, 1902, “for the contributions he had made thereto, and purpose of making more sure their collec- should be construed as having effected a ter tion," and though the proceeds thereof after mination of any partnership agreement there collection were turned over to Gleeson in tofore existing, as well as a relinquishment September, 1908, yet, during al this time to Costello of any interest or claim Gleeson and for six months prior thereto, as appears may have had in the properties belonging to from the findings, they were performing an the partnership before its dissolution. The important, though separate and distinct, terms of the agreement extending the scope function, in connection with the partnership of the partnership made it the duty of Glee This is shown by the fact that in February, son to transfer the notes to Costello as se 1902, when the three partners decided to ex. curity, but instead of transferring them to tend the scope of the partnership, Gleeson him individually, as the agreement required, was without means to embark upon such an he “left them in the possession of Reilly, enterprise, and Costello, upon the suggestion representing the partnership, as security of Reilly, agreed to advance for him his for his obligation to contribute bis share of one-third of the cost thereof, but upon two the expenses of the partnership.” And this conditions, viz.: First, that Gleeson would deposit with the partnership, Reilly being transfer to him, as security for such ad- | merely its representative for this purpose, vances, the Copper Belle notes which had appears to have been accepted by Costello that day come into Gleeson's possession as

as a sufficient compliance with the agree owner;. and, second, that title to all claims ment to transfer to him. It is true, however, acquired should be taken in his name and so that for the purpose of making a pretended held until Gleeson and Reilly should re-sale appear as an actual one, and thus renpay him their share of the purchase price der more probable the collection of the notes, of said claims. In accordance with this Gleeson transferred them to Costello in July, agreement, as found by the court, Gleeson at 1902, but such transfer was in no way conthat time "left the Copper Belle notes in nected with, nor in furtherance of, the sersthe possession of Reilly, representing he ice the notes were then performing of separtnership, as security for his obligation to curing Costello, and since the sale of the contribute his share of the expenses of the notes was a mere pretense and a sham, the partnership,” and in pursuance of this ar- transfer of them in aid of such an act rangement, during the succeeding six years, should be regarded likewise. If, therefore, the partnership purchased a large number of the finding that the notes in the possession mining claims, and took title to them in the of the partnership were serving as a guar name of Costello, who advanced from his antee be accepted as true, it follows necespersonal funds in purchase price, assess- sarily that while thus engaged they were be ment work, taxes, and the procuring of pat-yond Gleeson's control and so closely conents to a number of the claims, nearly $100,- nected with the contribution they were then, 000, which was in addition to the $20,000 he and for years had been, responsible for that had paid for the Power claims. When, an acceptance at that time of their proceeds therefore, Gleeson called on Costello and by him was in reality a withdrawal from the Reilly in September, 1908, for the purpose partnership, which resulted in its termina. of settling up the Copper Belle transaction, tion and in the relinquishment of his inter and, as found by the court, "for repaying est in the property which it had owned to

agreement, as Gleeson testified there was, by, paid, however, and the option lapsed on Sepwhich he was permitted to “take down" the tember 30, 1908. money and retain his interest as well by pay- Gleeson's other reason for taking down the ing for it in another way.

money is found in the remark he attributes The agreement referred to by Gleeson ap- to Costello, “I never considered you an owner pears in the following examination of him in the two claims and a half of the Casey," by the court:

which, according to Gleeson, caused him to "Q. How was Mr. Costello to be repaid for fear that, unless he did take the money, he the money he had advanced? A. He had those might lose both his interest in the claims Copper Belle notes of mine. Q. Then how were you to pay him for what he had put up on this and the proceeds of the notes, inasmuch as property, if you got all your money back for he had nothing to show that he owned either. the Copper Belle notes? A. I had to take it Testifying further on this point, Gleeson back. He could have said he didn't owe me stated that when they were trying to settle anything; that there was nothing coming. Q. How was that? A. I had to take that. He the Copper Belle matter in September, 1908, could have said there was no money.

There Costello denied several times that either Gleewas enough money coming from the C. & A. to son or the partnership owned any interest in pay my interest outside of that. . He agreed the Casey claims, giving as his reason the to get this money from the C. & A.? A. Yes, sir; that is the reason I took it down. Q. Now, fact that he had a mortgage on them before in regard to your interest in the corporation he and Gleeson went in together. After the that you were to have, were you to pay for last denial and some argument following that interest in the corporation? A. Sure, the money was up all the time. Q. That is to say, it, they both became angry, whereupon Gleethat Costello agreed that you could take down son said, "Give me that money," to which your money, and he would take a chance on the Costello replied, "Don't get mad about it; C. & A. making this payment? A. I don't see that he took any chances. Q. 'Well, he certain you are all right; you can have your interest ly did, since it was never paid. A. I said that in the other claims." Gleeson, replied, “By I took it down, Q. You what?. A. I said I God, I will have it all or nothing; give me took it down. Judge Reilly said, 'Call this Copper Belle transaction off. There is money

that money." Then it was that Gleeson enough coming from the C. & A. to pay it all. accepted the money, to wit, $33,659.32, the We will all get money.' I said, 'I don't want balance coming to him after others had been to call it off; and Costello said, 'I never con: paid at his request the amounts due them. sidered you an owner in the two claims and a half of the Casey,' that is why I took it down. The court finds that Gleeson, in taking the I had nothing to show I had claims, I had mon- money, acted upon Reilly's suggestion-really ey, or anything else.”

accepted his proposition that since there was It does not appear just how Reilly's sug- enough money due in a few days under the gestion that the Copper Belle transaction be C. & A. option to more than pay all moneys called off could have furnished a reason for advanced by Costello, “it was not necessary Gleeson's "taking down the money,” since it that the said John Gleeson repay Costello has been established that there was no sale for bis advances out of the proceeds of the of the Copper Belle notes to “be called off," Copper Belle notes, and that it was best for and that Gleeson returned to Costello within Gleeson to take all of the proceeds of such 14 days after its receipt the $25,000 “pretend- notes, and have no further dispute over the ed" consideration for the notes. Such trans- matter, and that everything would be all action could have been “called off" only if the right.” According to Gleeson's reply, “Yes, testimony given by Gleeson at the first trial sir; that is the reason I took it down,” to of this case had been true, namely, “I put the court's question, “He agreed to get his up $25,000 to pay for my part of the mines, money from the C. & A.?" this arrangement but when they called the transfer of the was satisfactory to Costello, but evidently Copper Belle notes off, why, of course, I got the court was not convinced on this point, that money back.” While the second part for there is no finding that Costello did agree of Reilly's suggestion, “there is enough money to it. And in view of the other reason given coming from the C. & A. to pay it all,” seems to have been offered as an excuse for calling by Gleeson, that he “took down the money" off the Copper Belle transaction-an impossi- because Costello denied his interest in the ble thing under the ciroumstances-yet Glee Casey claims on which the “money coming son gives it, supplemented by the statement from the C. & A.” would be due in a few that Costello agreed to it, as one of his rea- days, it is not apparent how such a finding sons for “taking down the money." When could have been made. Gleeson did not tes. Reilly and Gleeson referred to the “money tify that Costello indicated his consent by coming from the C. & A.,” they meant the any spoken word, but declared that he "was $35,000 due September 30, 1908, and the $100,- right there' when Reilly made his sugges000 due March 30, 1909, on the option held by tion. Costello's continued denial, however, of the Calumet & Arizona Mining Company on Gleeson's interest in the Casey claims in the the Casey claims, to wit, the Tin Horn, Hard presence of both Gleeson and Reilly rendered Up, and Head Center-three of the most valu. it unnecessary for him to object in specific able claims owned by the partnership-and terms to Reilly's suggestion in order that his two others known as the Black Hawk and silence might not imply an agreement by the Smile of Fortune. The $35,000 was not him to take the risk of getting his money

172 P.-47

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