Court Opinion

ID: 6604458
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:10:52.669236+00
Date Added: 2024-06-11T15:58:08.283367
License: Public Domain

LyoN, J.
By the complaint under consideration the plaintiff invokes the equitable jurisdiction of the court, and the chief question presented b}' the appeal is, Does it state an equitable as distinguished from a legal cause of action?
We think this question must be answered in the affirmative. The complaint shows that the defendants stood in a fiduciary relation to the plaintiff in respect to the money which they received from him to be loaned. The averment is that the plaintiff intrusted them with his money on the faith of their representations that they were familiar with the value of the lands, on the security of which it was proposed to loan the money, and that they had large experience in the business of negotiating loans upon réal estate security; and upon the faith of their promise that they would only loan plaintiff’s money on first mortgage, securities, and then only to the amount of one third the cash value of the land mortgaged. It was not only the duty of the defendants to fulfil these promises, but also to keep true, full, and accurate accounts of their dealings with the plaintiff’s money so intrusted to them, and to render such account to the plaintiff on reasonable request. The complaint alleges an utter disregard of their duty in both respects. It charges that they loaned the plaintiff’s money on worthless or grossly insufficient securities, and that they refuse to render him an account of their doings in the premises. It also charges upon, the defendants other violations of duty growing out of their management of the securities after they had made the loans.
That such a case is a proper one for the equitable interposition of the court is so well settled, both in English and American jurisprudence, that it is quite unnecessary to cite *43authorities to support the proposition. It is so laid down by all the standard text writers on the subject, and is affirmed and applied in numerous adjudged cases in this court and elsewhere. Some of the authorities are cited in the brief of counsel for the plaintiff. To these may be added the case of Power v. Power, L. R. 13 L. Ch. Div. 281, which is a very instructive case on this subject. See, also, Sehwiel&erath v. Lohen, 48 Wis. 599; Merrill v. Merrill, 53 Wis. 522.
The authorities cited by counsel for the defendants do not deny equitable jurisdiction in a case like this, where a fiduciary or quasi trust relation exists between the parties in respect to the cause of action, and the plaintiff is entitled to an accounting. In such a case it is quite immaterial that there are no mutual accounts between the parties.
Moreover, the complaint shows substantially that the defendants have invested the plaintiff’s money intrusted to them, and that he does not know, and they refuse to inform him, what they have done with it. On this showing, the account which it is their duty to render will operate as a discovery, and this is a distinct ground for the interposition of a court of equity.
It is further claimed that in the complaint there is an improper joinder of causes of action. This is founded upon the allegation therein to the effect that the defendants have converted to their own use $398 intrusted to them by the plaintiff for the purpose of paying certain costs. Standing alone, this is merely a statement of a legal cause of action. It cannot properly be joined with an equitable cause of action unless it arises out of “ the same transaction, or transactions connected -with the same subject of action.” E. S. sec. 2647. The subject of the equitable action is not only the money intrusted by the plaintiff to the defendants for investment, but their subsequent dealings with the securities taken therefor. Hence, if the costs, to the payment of which the $398 was to be applied, were incurred in actions *44brought to enforce payment of such loans, the legal cause of action arose out of the same subject as did the equitable cause of action stated in the complaint, and is properly joined therewith.
Although it is not directly averred in the complaint that the costs were incurred in actions to collect such loans, the averment is evidently inserted as part of the history of the defendants’ conduct in respect to the loans and securities, and was not intended as a statement of an independent cause of action. Under the liberal rule which now prevails for the construction of pleadings, wre think it may fairly be inferred from the ivhole complaint that the costs which the $398 was advanced to pay, were incurred in actions brought to enforce payment of such loans. Thus construed, there is no improper joinder of causes of action in the complaint.
By the Court— The order overruling the demurrer to the complaint is affirmed.