Connelly v. Peck , 6 Cal. 348 ( 1856 )

The opinion of the Court was delivered by Mr. Justice Heydenfeldt.

Mr. Chief Justice Murray concurred.

When this case was here before, we held that the complainant was entitled to relief upon the proofs, if the allegations and prayer of the bill of complaint had corresponded with the facts proved, and the case was sent back to give the complainant an opportunity to amend. The case now comes up, upon the bill and answer, and amended bill and answer, with the proofs as taken in the former case. The amended bill now contains allegations and a prayer for relief, upon which a Court of chancery can act, and I see no reason to change the opinion formed when the case was first here.

The transfer of Weber’s bond for title by S. F. Peck to McNish, upon the trust to pay the debt of complainant, and the promise of McNish to perform the trust, was binding on the latter, and could not be affected by any misrepresentation made by Peck, because the rights of Connolly under the transfer had already vested. Before the transfer, the property was in the name and power of Peck. He might have directly transferred to Connelly, or any one else, and it would have been just as effectual; and thus having the power to make a valid transfer, he equally had the power to create the trust, or impose any terms he saw fit.

This position is not at all affected by the consideration that the property in question was partnership property. There is nothing to show positively that it ever was so held out to the world, or so regarded by the complainant, and so far as concerns S. F. Peck’s dealings with it, and with the plaintiff, his partnership was unknown, and his partners dormant; in which case equity gives no priority to partnership debts. See Lord v. Baldwin, 6 Pick., 350; Cammack v. Johnson, 1 Green Ch. R., 169.

McDowell, Mills & Co. cannot "be regarded as purchasers without notice. McNish the trustee, was the agent of McDowell & Peck, who are thereby chargeable with notice, and McDowell, Mills & Co. are the successors of McDowell & Peck, one if not both of the latter firm belonging to the former.

The decree of the chancellor is reversed, and a decree here ordered directing the Court below to appoint a master to sell the" property, and make a report of the sale, and out of the proceeds to pay the judgment, interest, and costs of the complainant against S. F. Peck, and then to pay the surplus to McDowell, Mills & Co.