Court Opinion

ID: 7970478
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:54:41.479393+00
Date Added: 2024-06-11T16:34:45.629835
License: Public Domain

COLLINS, J.
The cause of action set forth in the complaint herein against defendant Clugston was for the foreclosure of a mortgage upon real property executed and delivered by him, with plaintiff as mortgagee, to secure the payment of his promissory note payable to plaintiff for the sum of $2,500, on which default had been made and on which a stated sum was due. The cause of action set up against defendant Brown was that, having in his possession the sum of $2,500 of plaintiff’s money to loan, he entered into a conspiracy with Clugston, a clerk in his office, in pursuance of which he caused the real property in question to be deeded to the latter, and then wrongfully and fraudulently caused Clugston to execute and deliver the note and mortgage in question, although he had not and never had any interest in the mortgaged premises, and did not receive any part of the money to obtain which the conspiracy was entered into; that Brown fraudulently stated and represented to plaintiff that the money was to be loaned to Clugston, when in fact the scheme was to enable Brown to keep the money himself; and that he did retain and did fraudulently appropriate it to his own uses and purposes.
There were further allegations in reference to the details of the transaction and its alleged fraudulent character, together with averments as to the real value of the mortgaged property and plaintiff’s ignorance of the fraud until just before she brought this action; and also an allegation that both defendants were insolvent. The relief demanded was the appointment of a receiver to take charge of the property alleged to be in Brown’s possession, to collect rents, to apply the money so collected on delinquent taxes and needed repairs, and to apply the balance, if any, on the debt; and for the usual decree ordering a sale of the mortgaged property, an application of the proceeds on the debt and expenses, and, further, for a several judgment against both defendants for any deficiency which might remain after making such application.
Defendant Brown demurred to the complaint, upon the grounds— *11First, because several causes of action were improperly united; and, second, that as against him the complaint did not state facts sufficient to constitute a cause of action. The appeal is by Brown alone, and is from an order overruling the demurrer.
We are of the opinion that but one cause of action is set forth in the complaint, and that is for the recovery of the money which, through the conspiracy entered into between defendants, was appropriated by Brown to his own purposes; and also that, on the facts alleged, plaintiff was entitled to recover all that she demanded as against both defendants. The mortgage was executed and delivered for Brown’s accommodation, that he, not Clugston, might have and use the plaintiff’s money then in his hands. Clugston was not interested, according to the complaint, in either property or money. He did not own the former, nor did he receive any .part of the latter. The action, so far as disclosed by the pleading, was not to recover damages because of the fraud, but to recover from defendants the amount of money which had been appropriated and used by Brown by reason of the conspiracy and fraudulent practices of both defendants.
It is manifest that plaintiff would have the right to ignore the security, and to recover on like allegations as against both of these conspirators, in the same action, the amount of money which was in Brown’s hands, and which under the guise or pretense of making a loan to Clugston he unlawfully retained for his own use; And on the alleged facts, and after exhausting the security, nothing would prevent plaintiff from maintaining an action against both or either of these defendants to recover any balance which might remain unpaid and unsatisfied on the debt. And, if this be so, why cannot she, both defendants being insolvent, hold the mortgaged property as security, have it sold for what it will bring, have the net proceeds applied in payment of the indebtedness as far as such proceeds will go, and then obtain, in the same action, a personal judgment against both wrongdoers for the deficiency, if there be any. The defendant Brown has no cause for complaint if plaintiff professes a willingness to avail herself of the proceeds which may come from a sale of the property, and none but the most technical of reasons can be urged why, under our system of pleading and practice, all of the *12matters between plaintiff and both defendants, all arising out of the same transaction and inseparably connected, should not be disposed of in a single action. From the allegation that both defendants are insolvent, it clearly appears that plaintiff should be permitted to retain her security, to enforce and exhaust it, and also obtain a personal judgment.
Order affirmed.