Court Opinion

ID: 8189965
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:12:50.98799+00
Date Added: 2024-06-11T16:40:34.423070
License: Public Domain

MaRShall, J.
This case is governed by a few well established principles. Tbe first of such principles is this: In testing a complaint on a demurrer for insufficiency, tbe pleading does not necessarily fail because tbe-pleader did not state-facts sufficient for tbe precise cause of action intended, or because be misconceived tbe precise nature of bis cause of action and wrongly denominated it, or because of misapprehension of tbe nature of tbe relief warranted by tbe facts. If tbe pleading, giving it tbe benefit of every reasonable inference, expressly or by such inference., or both, states facts-showing tbe plaintiff to be entitled to some relief within tbe competency of the court to grant, it states a good cause of action for such relief. Such is tbe liberal rule of tbe Code as. early announced (Morse v. Gilman, 16 Wis. 504), and many times emphasized and given proper significance in recent years. Emerson v. Nash, 124 Wis. 369, 102 N. W. 921; Bieri v. Fonger, 139 Wis. 150, 120 N. W. 862; Loehr v. Dickson, 141 Wis. 332, 124 N. W. 293. In tbe most recent ease tbe rule was tersely applied thus:
“A demurrer challenges tbe sufficiency of the complaint to state any cause of action, and must not be sustained in face of one which does by liberal construction state facts from which any liability results, although not for some or all tbe damages-sought to be recovered.”
So it is not necessarily fatal to tbe complaint in this case because it does not state a good cause of action in equity for *300rescission of contract, if such be the fact. It should nevertheless have been held good if facts be stated sufficient to warrant some other relief.
The next principle involved is this: A court of equity should not entertain an action for rescission of a contract on the ground of fraud, merely because of the fraud, since,the party Pronged has, ordinarily, a perfect remedy at law by •exercising his legal right to rescind by his own acts, and then suing to recover back what he parted with to his adversary by Teason of the latter’s fraud. Johnson v. Swanke, 128 Wis. 68, 107 N. W. 481.
It requires special circumstances in connection with the ■fraud, rendering the legal remedies not adaptable at all to ■cure the mischief, or not to adequately do so, to warrant a •court of equity in affording its jurisdiction to correct the wrong. -Whether such circumstances in any given case are •or are not sufficient to satisfy the rule, is a matter for determination by the trial court as one of fact. Hence there is .such room for the exercise of judgment that the trial court’s ■decision cannot be successfully challenged unless it is clearly wrong.
The only sjjecial circumstance appearing here of any significance is that the defendant loan and trust company has, with a view to winding up its affairs, transferred its assets to the defendant investment company, it assuming and agreeing to pay all the trust company’s liabilities. It is not alleged that the investment company is insolvent or that it is using, •or proposes to use, the assets assigned to it other than to discharge the liabilities of the trust company, or that such assets are insufficient for that purpose. So far as the complaint .goes, it may well be that the taking over of the trust company’s liabilities by the investment company, and the latter’s assumption of and agreement to pay the liabilities of the former, were circumstances beneficial to appellant. Therefore, we are unable to conclude that the trial court was clearly *301wrong in bolding tbat tbe complaint does not disclose special circumstances sufficient in connection witb tbe fraud alleged to constitute an equitable cause of action for rescission.
If we could stop bere tbe result would be an affirmance of tbe order appealed from. But there is another principle to-be considered. Doubtless tbe learned trial court either overlooked such principle or did not give due significance to a feature of tbe pleading which stands out very plain, challenging our attention to one of tbe most familiar fields of equity jurisprudence.
According to tbe complaint appellant did not take tbe land contract and notes as ownei’. He took them only as security for delivery to him of tbe first-class $5,000 note and mortgage-as soon as tbe same should come to tbe possession of tbe trust company, which occurrence was promised would soon take place. When tbe agreement in tbat respect was breached by respondent selling tbe promised securities to another party,, appellant did not change bis position. ' He demanded such securities in place of tbe land contract and notes, according-to tbe agreement, insisting, as be has at all times, tbat be would not take tbe unsatisfactory papers for bis money, but would bold them till such money.should be returned, since be could not get tbe note and mortgage promised. So be only insisted upon retaining tbe papers in tbe same character they were received, — a mere pledge for tbe perfoi'mance of tbe agreement to deliver to him tbe notes and mortgage for tbe money deposited to be loaned.
If a person bolds property as security, either upon a chattel mortgage or as a pledge or other lien, a remedy in equity to foreclose is open to him, and tbe fact tbat be has one at law to recover tbe debt or enforce tbe liability for which beholds tbe security, or has a summary i*emedy to tbat end, does not militate against bis right to such equitable remedy. Boorman v. Wis. R. E. Co. 36 Wis. 207; Forepaugh v. Pryor, 30 Minn. 35, 14 N. W. 61; Packard v. Kingman, 11 Iowa, *302219; Green v. Gaston, 56 Miss. 748; McDonald v. Vinson, 56 Miss. 497; Briggs v. Oliver, 68 N. Y. 336; Long D. Co. v. Mallery, 12 N. J. Eq. 93; Jones, Cbat. Mortg. § 777; Pom. Eq. Jur. (3d ed.) § 1231; 13 Am. & Eng. Ency. of Law (2d ed.) 830.
In the case cited from our reports, speaking of the tenure by which one holds personalty as security in the nature of a pledge, the court said:
“The right of a person in whose favor a lien exists, whether on real or personal property, to maintain an action in equity to have the amount of the lien determined, and to enforce payment thereof by a sale of the property, or otherwise, is too well settled to be questioned.”
The Minnesota court said on the same subject: “The fact that there is a power of sale in a chattel mortgage does not affect the right to foreclose it by action.” The doctrine is thus broadly stated in the elementary works: “Almost universally the remedy by foreclosure is proper regardless of legal or summary remedies.”
So it seems there can be no doubt of appellant’s right, on the facts stated, to relief by foreclosure, both as against the trust company and the investment company, which took a .transfer of all the former’s assets and assumed all its liabilities. So far, only, need we go to show that the complaint states a cause of action, and that the demurrer for insufficiency should have been overruled. The order went only on the ground of insufficiency.
By the Court. — The order appealed from is reversed, and the cause remanded for further proceedings according to law.
Timxiw, J., dissents.