Court Opinion

ID: 6229042
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:17:42.522117+00
Date Added: 2024-06-11T08:57:47.118231
License: Public Domain

The opinion of the court was delivered by
Black, C. J.
The fund to be distributed was made by the sale of goods which belonged to, and formed the stock in trade of John Keech and Mercer E. Gibson. The business had been carried on by Keech, and the partnership of Gibson was kept an entire secret. The appellees, in total ignorance of Gibson’s connection with Keech, trusted the latter alone, and obtained their judgments against him alone. Brown & Co. having been informed of the partnership, obtained judgment against both.
The appellees claim to be first paid, because their executions were earliest in the hands of the sheriff, and the appellants assert their right to priority on the ground that being creditors of the partnership, the partnership funds must be applied to the satisfaction of their debt before any part of them can go to the separate creditors of John Keech.
If this were the ease of an open, known, and public partnership, the right of the appellants to stand foremost in the distribution, *485could not be resisted. But tbe rule of equity on which that right rests is not applicable to secret partnerships.
Though this question had never before arisen here, it has been decided in Massachusetts, New Jersey, and New Hampshire. In Baldwin v. Lord, 6 Pick. 348, which is the leading case, the reasoning of Chief Justice Parker is so sound and satisfactory, that we adopt it without the smallest doubt of its correctness.
The appellants assert that they knowing of the partnership, trusted Keech and Gibson on the faith that the property of the firm would be applied to the payment of their debt. It is upon this fact that their claim to priority of payment is founded. The appellees might answer that not knowing of the partnership and having no means of knowing it, they gave credit to Keech alone, in the natural belief that he was the sole owner of all the property he possessed. In one case the credit was given to a single person ; in the other to two; but in both it was grounded on the same property. Equity, looking with equal eye on both parties, hands •them over to the law; and the law decides, as it does always, in favor of the most vigilant. Prior in tempore potior est in jitre.
Decree affirmed.