Elliott v. Leopard Mining Co.
Before: Crockett
Synopsis
Executory Contract Construed—Its Effect upon the Parties thereto; AND THEIR SUCCESSORS IN INTEREST HAYING NOTICE OF ITS CONTENTS — Pleading.—The complaint sets out a contract of record, whereby B, A & E, a law firm, undertook to render certain professional services to maintain and quiet the title of four mining partners, viz., L F, S H, GH, and P O’M, to certain mining claims, of which the Leopard Mining Company was an adverse claimant; and whereby said mining partners on their part agreed to convey to said firm an undivided one-fourth of said claims, or in case of a compromise with said adverse claimant, said firm should be entitled to a share equal to one-fourth of the proceeds of said compromise. The complaint further alleges the commencement of an action in pursuance of said contract; a dissolution of said law firm, each of its members retaining his individual share in the interest contingent on the conveyance or compromise aforesaid; a release by A and B of their interests to S H, one of said mining partners, to George Hearst, and by him to said Leopard Mining Company, whereby said action to quiet title and all controversy concerning said mining claims were settled and compromised, and said company became the sole successor in interest of all the parties thereto, agreeing to pay to said Hearst a large sum of money in installments, a part of which was due and unpaid, when, after demand by E, said Hearst and said company refused to recognize his interest therein, and he commenced his action therefor upon separate demurrers by defendants to such complaint. 1. That it does not state facts sufficient to constitute a cause of action. 2. That there is a misjoinder of alleged causes of action. 3. That there is a misjoinder and a nonjoinder of i>arties plaintiff and defendant, i. That the complaint is ambiguous, unintelligible, and uncertain: held, that appellant’s remedy is not alone upon the personal covenant of the parties contracting with his firm; but that the legal effect of the contract is to place the interest of said firm in the compromise and the proceeds thereof precisely on the same footing as their interest in the mining claims would have occupied had the title been established in the Courts :• held, that as soon as the compromise was effected, said law firm was entitled to a direct, immediate, and specific interest of one-fourth of the proceeds in specie, and were entitled to demand the same directly from the Leopard Mining Company; and that said Hearst was liable to account for so much thereof as had been paid to him: held further, that the points made by demurrer to the complaint are not well taken.
Hearst and the Leopard Mining Company had notice of the existence, and terms of the contract mentioned in the complaint. The allegation of its record is equivalent to an allegation of notice to respondents. (Civil Code, secs. 1158, 1215.)
The contract being a conveyance within the meaning of the latter sections, its record is constructive notice of its contents to subsequent purchasers.
It makes no difference so far as the demurrers are concerned that the contract was made and recorded in Nevada, for it is a familiar rule that in the absence of any averment or proof as to [359]the law of the State, where a contract may be made or recorded, the law of such State it will be presumed is the same as that of the State whose Courts may be called on to interpret it, or to give the contract effect. (Norris v. Harris, 15 Cal. 226; Hill v. Grigsby, 32 Cal. 55.)
Hearst, who purchased with notice of the contract, stood in the same relation to appellant that his grantor stood at the time of the conveyance to him, and became the trustee of appellant to the extent of his interest under the contract. So the Leopard Mining Company, dealing with Hearst, with notice of the contract, occupied the same -relation. He who purchases property having notice of an equity affecting it, takes it subject to that equity. (.Reeves v. Wilson, 38 Cal. 457.)
It will be said that there is no privity between appellant and respondents. The law creates the privity; it makes every person who dealt with the property after the record of the contract as much a party to its terms as the first contracting parties. At the time this suit was commenced both respondents had money belonging to appellant, and which they held as his trustee, which each refused to pay him, and denied his right to recover.
The demurrer of Hearst, in addition to the general ground taken that the facts stated in the complaint do not constitute a cause of action, takes other grounds of demurrers which we will notice in their order.
1. There is a defect of parties plaintiff and defendant in this, that Bryan and Aude, the two partners of appellant, were not made parties plaintiff, or if their consent could not have been obtained for that purpose, that they were not made parties defendant.
2. That Fisk and the other parties who entered into the contract with said firm are necessary parties defendant.
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