Davis v. Peabody
| Decision Date | 28 February 1898 |
| Citation | 49 N.E. 750,170 Mass. 397 |
| Parties | DAVIS v. PEABODY et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Shepard, Stebbins & Storer and Harrison A Plympton, for plaintiff.
William F. Wharton, for defendants.
The demurrers are upon the grounds that the plaintiff has not stated a case which entitles him to relief in equity, that he has a plain and adequate remedy at law, that his bill is multifarious, and that proper parties are not before the court. The first two grounds of demurrer were rightly overruled. If the plaintiff was induced by fraud to enter into contracts which, upon discovery of the fraud, he had rescinded, he has an equitable right to recover the money which he paid, and to have the contracts into which he entered declared void. If, as he also alleges, his trustees have mismanaged for their own gain a fund in which he was interested as a cestui que trust, he also has for that a right to relief in equity. We think, however, that the bill is multifarious, because founded upon distinct rights, not so related to each other that a court of equity should deal with both in the same bill. The plaintiff was a shareholder and creditor. He alleges that he was induced by false representations to enter into both of these relations; that upon the discovery of the fraud, he rescinded the contracts by which he became a shareholder and a creditor; that he offered to return the shares and securities, and demanded the repayment of the sums which he had paid; wherefore he asks that the contracts whereby he took shares and those whereby he lent the association money be decreed to be rescinded, and to be null and void, and that the association may be ordered to pay him back his money, with interest. This is one branch of the bill. He further alleges that the trustees have managed and are managing the affairs of the association recklessly, extravagantly, and in their own private interests and profit; and particularly that they have fraudulently diverted a certain sum of $25,000 from the purpose for which it was borrowed to another purpose, for their personal gain and to the great damage of the association. These two sets of allegations are not connected by any averment that the association has not sufficient means to answer a decree ordering it to repay to the plaintiff his money with interest. The prayer that a receiver may be appointed to take possession of everything belonging to the association, and that all may be converted into money and distributed, is not for something necessary or incidental to the repayment to the plaintiff of his money. The two prayers are for distinct kinds of relief, and, if the first is granted, the plaintiff will have no further interest in the association or its property, and no further right to complain of misconduct on the part of the trustees. If he was induced by fraud to become a shareholder and a creditor, to his damage, he may maintain his bill to obtain repayment of his money. If he is a cestui que trust, and the trustees have managed the trust property improperly and for their personal gain, he may maintain a bill for that. But he cannot require the court to investigate the two grounds for equitable relief in one bill, which contains no averments connecting the two sets of equities, or which show that the alleged malfeasance of the trustees prejudices his relief on his demand for the repayment of the money paid for shares and upon loans. In Price v. Minot, 107 Mass. 49, and in Dunphy v. Association, 146 Mass. 495, 16 N.E. 426 both branches of the relief sought--one the charging of the existence and the violation of a trust, the other the preservation and recovery of...
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