Court Opinion

ID: 3985599
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:41:50.394273+00
Date Added: 2024-06-11T13:51:30.002786
License: Public Domain

It appears from the record (minute order, June 8, 1935) that the action was dismissed on motion of counsel for respondent casualty company. But this motion as recited by the minute order perhaps should be taken as no broader than the prayer contained in the demurrers of the casualty company to the complaint and amended complaint, which read that "each of the alleged causes of action therein contained, be dismissed as to this defendant." This being so up to June 8, 1935, the record does not speak that the cause against Rankin was dismissed on motion of respondent. On December 8, 1935, written orders "sustaining motion to strike amended complaint" and "sustaining demurrer" with "leave to amend the complaint" (which latter must be considered as pertaining to the first complaint, for it would be inconsistent to strike the amended complaint and at the same time sustain a demurrer to it and give ten days to amend it) were signed and filed by the judge. On the same date a judgment of dismissal of the entire action was signed and filed. This judgment recites that it was on motion of the attorneys for the casualty company. Passing the fact that there appears to be an inconsistency in an order permitting ten days to amend and a judgment of dismissal of the action signed and all filed the same day, the judgment of dismissal recites that it was made on motion of counsel for respondents. Consequently, it cannot be said that the appellant appealed from a judgment of the court which he himself asked for. And I am not prepared at this time to say that if it were *Page 209 
shown that had he requested such judgment in pursuance of a ruling sustaining a demurrer to his complaint, that we would dismiss the appeal. We might construe such request as consistent with the desire to obtain the final judgment necessary to appeal from in order to have tested out the question of whether the order sustaining the demurrer was properly made. Otherwise, a defendant might rest content with an order sustaining a demurrer and refuse to ask for judgment of dismissal, and the plaintiff could never have the ruling sustaining the demurrer tested unless the court of its own motion entered the judgment of dismissal. For the reason that the record shows the entire action dismissed on motion of respondent, I concur in the opinion that the appeal should not be dismissed.
Another situation should be noted in passing. It is contended that since Rankin did not appear pro se or by attorney, the motion dismissing as to him was a nullity. If this is so, the judgment of dismissal as to the bonding company may not be final, according to the rule laid down in Shurtz v. Thorley, 90 Utah 381,61 P.2d 1262, and the appeal should be dismissed for that reason. The answer is that erroneous as may be the judgment of dismissal as to Rankin it stands as a dismissal, the court having jurisdiction to dismiss. Non constat that the judgment was not final.
Now as to the substantive matters: Many troublesome questions strew the course of this litigation. I agree that the complaint sufficiently alleges that Rankin was a dealer in securities as defined by chapter 87, Laws of Utah 1925, as amended by chapter 79, Laws of Utah 1929 (now title 82, R.S. Utah 1933); also that the bond required him to comply with the provisions of this act and that compliance with the act required him to register the securities sold and not to commit any fraudulent practices as defined by what are now sections 82-1-24 and 82-1-36, R.S. 1933; that the complaint alleges he did not register the securities and that he did indulge in one of the fraudulent practices denounced by the act; that it is not necessary to negative the fact that the *Page 210 
securities sold belong to a class exempt by the act; that the bond was for the benefit not only of the state, but of persons defrauded or obtaining unregistered stock by a sale made or consummated in Utah.
On the question of assignability, the distinctions made by the cases appear to me to be very volatile and at times quite illogical. There was no difficulty under the common law, which held all actions for tort nonassignable, but when this mass doctrine was eaten into, it became honey-combed with illogical and somewhat contradictory distinctions. At first, it was said that actions ex delicto which constituted invasions of the person were not assignable; thus, slander, libel, assault, battery, false imprisonment, false arrest, personal injury were not assignable. The restriction on assignment of the right to collect a penalty may be grounded on public policy, but why an action for damages for fraud should not be assignable is not clear in view of the general breaking down of the old time distinction made between nonassignability of tort actions and assignability of contract actions. It is said that the fraud is an offense against the person, but this cannot be true. A fraud is not actionable at law unless it results in damages in the way of pecuniary loss. A breach of contract causing loss of profits or property might as equally affect the person in the sense that all loss of property personally affects the owner of it; but it is not an invasion of the person or of the attributes of person or personality. Yet it appears to be the law that actions for fraud are not assignable.
It also seems to be held that an action in equity to effect a rescission is not assignable, although if it accompanies an assignment of the property in reference to which the action lies, some courts hold it to be assignable. It is difficult to imagine a situation where a person would assign a mere disembodied right to rescind, keeping for himself the right to obtain the property, which rescission was sufficient to restore. But if the contract may be rescinded without the aid of equity so as to transmute it into a situation where the *Page 211 
defrauder holds the money paid by the purchaser as money had and received for the benefit of the said purchaser, his action so transmuted may be assigned. Apparently the distinction seems to come down to the matter of whether the purchaser may completely make delivery back to the seller of the thing he bought as part of the rescission. If, as a buyer, he requires the aid of a court of equity to obtain delivery or to complete the rescission, he cannot assign. This seems to run counter to the doctrine of mutuality. Thus, in the instant case, where the plaintiff could deliver an indorsed certificate of the stock which he was fraudulently induced to buy and thus put the seller in status quo, he could rescind without aid of equity, but in such a situation as we apparently had in White v. Texas Company, infra, where the seller rescinded, it would require equitable interposition to compel the fraudulent purchaser to deliver over an endorsed certificate. One would expect on some of the distinctions that such action was not assignable. And here again fictions are resorted to in order to get around the rule. Thus, where a seller claims fraud on the part of the buyer and rescinds, it is said the rights of ownership were reinvested in the seller and he could assign his rights in the stock. But it would require an equity action to consummate the reinvestment of such rights. White v. Texas Company, 59 Utah 180, 202 P. 826. In this case it was even held that if the sale was not bona fide, "no title to the stock passed to the defendants." The quoted part does not seem to me to properly state the law, for it must have been, at the most, only voidable.
I confess the subject is to me quite in a fog. I am unable to see why any action to regain property or obtain damages based on fraud, now that the original distinctions have been broken down, should not be assignable. I am unable to see on principle why one who assigns his claim against another should not convey with it every right on the part of that person to use all the mechanisms of law and equity to assert the rights which his assignor could have asserted. But, at *Page 212 
all events, it seems to be the law as stated in the opinion of the court that if the purchaser may tender back his stock, asserting rescission, and demand his money so as to restore the defendant to his former status without interposition of equity and he so does, that he transmutes the cause of action into one for money had and received for his benefit and can then assign this claim together with the cause of action. The amended complaint alleges these steps. It alleges that the claim and cause of action were assigned. The complaint lacked a material allegation in that it did not specify that the contract of sale was made or consummated in Utah. This was not urged in the court below. The plaintiff had no chance to amend and thus avoid the effect of a reversal on that ground by this court. While it is true that a defendant may show before this court any deficiency whenever the complaint fails to state a cause of action, even though not urged or pointed out in the lower court, this being one of the few exceptions to the general rule that grounds not presented in the lower court cannot here be presented, it is also true that when such defendant does reveal a deficiency not pointed out below, thus depriving plaintiff of a chance to rectify it then, he cannot complain if he is allowed no costs if he wins only upon such newly revealed grounds. For that reason, I concur in the order which gives the prevailing party in this appeal no costs.