Case ID: sd_49/html/0018-01.html
Source: Caselaw Access Project
Author: {"author": "\n      BiURCH, C.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

BILLS, Respondent, v. HYDE, Appellant.
    (205 N. W. 708.)
    (File No. 5571.
    Opinion filed November 9, 1925.)
    1. Principal and .Agent — Accounting—Agent Must Account For Money Received From Principal.
    It is duty of agent to account for money of bis principal received by bim.
    2. Principal and Agent — Trusts—Accounting—Principal May Secure Accounting of Fundis Left Wi<(h Agent for Investment, Although Not Expressly Provdided for in Contract.
    Measures taken in good faith by principal to secure proper accounting, and to assure himself of its propriety, will not be violation of contract for investment of funds, though they may not be in its express terms.
    3. Principal and, Agent — Trusts—Agent Has No Right to Retain Security Purchased for Principal, in Absence of Express Agreement.
    Agent agreeing to invest money for principal in 8 per cent securities, which he guaranteed, has no right to retain securities unless empowered to do so by express terms of contract.
    4. Principal and Agent — Complaint—Pleadings—Complaint for Accounting of Funds Left With Agent for Investment Held to State Cause of Action.
    Complaint, alleging that defendant had induced plaintiff to turn over sums of money to him for which he was. to purchase 8 per cent securities and guarantee investment, and that demand had been made for delivery of securities and accounting, which defendant had refused, held to state cause of action for accounting.
    5. Pleading — Complaint—Demurrer—Complaint in Action for Accounting Held not to State Double Cause of Action.
    Complaint in action for accounting of funds deposited with defendant, with agreement that he should invest them, and asking for accounting, held not to state double cause of action, notwithstanding that it alleged that defendant converted funds to own use.
    6. Pleading — Demurrer—Recourse Must Be Had to Entire Pleading to Determine Its Character.
    Recourse must be had to entire pleading to determine its character, including the prayer.
    7. Pleading — Demurrer'—Use of Technical Words Not Sufficient to Change Character of Action.
    Mere use of certain technical words, describing facts relied upon, is not sufficient to change character of action.
    Appeal from Circuit Court, Hughes County; Hon. John F. Hughes, Judge.
    Action by Emma J. Bills against Charles L. Hyde. From an order overruling a demurrer to the complaint, defendant appeals.
    Affirmed.
    
      Puller & Robinson, of Pierre, for Appellant.
    
      Stephens, McNamee, O’Keeffe & Stephens, of Pierre, for Respondent.
    (5) To point five of the opinion, Appellant cited: Jones v. Winsor, 22 S. D. 480.
   BiURCH, C.

It is argued by appellant that there is no intimation in the pleading that the defendant was obliged, as a matter of contract or law, to deliver over any such securities, and, if he guaranteed the interest and the safety of the investment, that he has the right to retain the securities. The relation between the plaintiff and defendant is one of agency creating a trust relation. The plaintiff cannot allege more than the truth, or state the time when the securities were to be delivered, if in fact no time was mentioned as a part of the contract. We assume that the complaint states the truth, and that all the facts relative to the contract have been pleaded. Are such facts sufficient to create a contract upon which an action may be based and maintained? It is a well recognized duty of an agent to account for money of his principal-received by him. The principal has the right to assure himself that the accounts are proper and correct. Measures taken in good faith by the principal to secure a proper accounting and to assure himself of its propriety are therefore not in violation of the contract, although they may not be in its expressed terms. As a rule, the funds are to be applied to the purposes of the agency, and the least turning aside of funds held in trust by the agent is legally a wrongful act. 21 R. C. U. 832, § 15. Upon the contention that the agent is entitled to retain the securities because of his guaranty, he has no such right unless by express terms of the contract he is empowered to d'o so. A guarantor’s contract is independent of the contract between the holder of securities and the obligors thereon. We are satisfied that the complaint states a 'cause of action- for an accounting.

Defendant contends that the pleading is framed with a double aspect and is demurrable for that reason, citing Jones v. Windsor, 22 S. D. 480, 118 N. W. 716, in support of this contention. In that case this court apparently found that, while the complaint therein wias framed with a double aspect, no cause of action was stated under either aspect, and sustained a general demurrer for that reason. Because the pleader in the case at bar uses the expression that the defendant has converted the funds to his own use, we do not think it sufficient to state a cause of action in conversion. Recourse must -be had to the entire pleading to determine its -character, including the prayer. The only relief asked is the usual relief in an action in equity for an accounting. The mere use of certain technical words describing the facts relied upon are not sufficient to change the character of the action. The pleader must specify the relief he desires.

Note. — Reported in 205 N. W. 708. See, Headnote (1), American Key-Numbered Digest, Principal and Agent, Key-No. 66, 2 C. J. Sec. 356; (2) Principal and Agent, Key-No. 66, 2 C. J. Sec. 401; (3) Principal and Agent, Key-No. 62(2), 2 C. J. Sec. 402; (4) Agency, Key-No. 78(3), 2 C. J. Sec. 617; (5) Pleading, Key-No. 64(2), 31 Cyc. 120; (6) Pleading, Key-No. 49, 31 Cyc. 83; (7) pleading* Key-No. 49, 31 Cyc. 116.

The order of the circuit court overruling the d’emurrer is affirmed.