Grant v. Hart

• Decision Date: 15 May 1941
• Docket Number: 13643.
• Citation: 14 S.E.2d 860,192 Ga. 153
• Parties: GRANT v. HART et al.
• Court: Georgia Supreme Court

14 S.E.2d 860

192 Ga. 153

GRANT v. HART et al.

No. 13643.

Supreme Court of Georgia

May 15, 1941

[Copyrighted Material Omitted] [Copyrighted Material Omitted]

Syllabus by the Court.

1. Under the uniform procedure act of 1887, Code, § 37-901 permitting both legal and equitable rights and remedies to be adjusted in a single superior-court suit, a petition seeking both legal relief and ordinary relief in equity is not subject to general demurrer on the ground only that the plaintiff has a complete and adequate remedy at law. Sullivan v. Ginsberg, 180 Ga. 840, 847, 181 S.E. 163, DeLacy v. Hurst, 83 Ga. 223(4-6), 9 S.E. 1052. If a petition sounding in equity sets forth a cause of action at law, it will not be dismissed for a lack of equity. If the suit is good at law, it is immaterial how it is labeled. Where a plaintiff alleges and proves such facts as entitle him to equitable relief, the court will enforce his equitable rights; but where, although he asks equitable relief, he alleges and proves only such facts as entitle him to strict legal rights, the court will enforce his legal rights, but only according to the strict rules of law. Such a case will be dealt with and controlled by the same legal principles which would have been applied had it been instituted as a suit at law. Grimmett v. Barnwell, 184 Ga. 461, 463, 192 S.E. 191, 116 A.L.R. 257, and cit. Under this rule, the ground of general demurrer to the instant petition, that it 'fails to state a cause of action,' would not authorize a dismissal of the entire suit, even if such a ground were sufficient to raise the question that there is an adequate remedy at law. Since the petition seeks relief good at law, it would stand as a suit at law, even if the prayers for equitable relief were to be held bad as such.

2. While a mere prayer for an accounting in an action seeking damages for a tort, and based upon no trust or fiduciary relation, will not make a petition one in equity (Burress v. Montgomery, 148 Ga. 548, 97 S.E. 538, and cit.; Gormley v. Slicer, 178 Ga. 85, 172 S.E. 21, and cit.; Universal Garage Co. v. Fowler, 184 Ga. 604, 192 S.E. 299; Clarke v. Upchurch, 31 Ga.App. 601, 121 S.E. 525; Code, § 10-102), it is nevertheless true that where the petition seeks to establish and enforce a trust, or 'where a fiduciary relation exists, an accounting in equity is proper.' Atlanta Trust Co. v. National Bondholders Corp., 188 Ga. 761, 767, 4 S.E.2d 644, Ausley v. Cummings, 145 Ga. 750(7), 758, 89 S.E. 1071.

(a) 'Trusts are implied * * * Where, from any fraud, one person obtains the title to property which rightly belongs to another.' Code, § 108-106(2). 'Constructive trusts are such as are raised by equity in respect of property which has been acquired by fraud, or where, though acquired originally without fraud, it is against equity that it should be retained by him who holds it.' O'Neal v. O'Neal, 176 Ga. 418(2), 168 S.E. 262; quoting 26 R.C.L. 1232, § 78; Jenkins v. Lane, 154 Ga. 454(4), 477, 478, 115 S.E. 126, and cit.; Frick Co. v. Taylor, 94 Ga. 683, 21 S.E. 713. 'Trusts are children of equity. * * * A court of law may entertain them; but when the case is complicated, especially when it has a flavor of fraud, equity will not banish them, and remit the parties to another forum.' Kupferman v. McGehee, 63 Ga. 250(4), 256; 63 C.J. 1015, § 943. As against a trustee ex maleficio, the person injured is entitled to recover or subject in equity the property and its income or product to such a trust; and if the trust property cannot be traced, the fact that an action might have been brought at law for damages, or that the plaintiff may in his suit to establish the trust also seek a money judgment for the proceeds of the trust property, if the property cannot be traced, will not divest equity of jurisdiction. Salzburger Bank v. Standard Oil Co., 173 Ga. 722, 161 S.E. 584, 84 A.L.R. 403; Castleberry v. Wells, 183 Ga. 328(3), 335, 188 S.E. 349, and cit.; Stonecypher v. Coleman, 161 Ga. 403(1, a), 408, 410, 131 S.E. 75; O'Neal v. O'Neal, supra; Robison v. Carey, 8 Ga. 527, 530; Brown v. Father Divine, 173 Misc. 1029, 18 N.Y.S. 544, 546(3-5).

(b) The petition alleged that the defendant by fraudulent representations of himself and his agent, obtained the plaintiff's valuable stocks and United States bonds worth $11,898, by exchanging therefor certain worthless stock and certain bonds worth $6,270; and that two other persons, conspiring with the defendant, by fraudulent representations later obtained from the plaintiffs, the bonds which the plaintiffs had received from the defendant, through a swap of entirely worthless stock for such bonds, and sold the bonds which the alleged conspirators thus obtained to the defendant or other purchasers procured by him. Under the foregoing rules, the averments of the petition sufficiently alleged an equitable cause of action for establishment and enforcement of a constructive trust, and for an accounting as to the trust property and its proceeds and 'the income therefrom if said stocks and bonds could be traced,' with an alternative prayer for recovery of the proceeds of sale, equal at least to their market value at the time of sale, if the property could not be traced.

3. As to a tender, it was alleged that before suit the plaintiffs had formally tendered to defendant all money and the worthless stock received in exchange for their own stocks and bonds; that defendant refused the tender and denied any liability; and that plaintiffs 'continually tender to the defendant said stock certificates * * * and said [money], and state they are agreeable that any decree or judgment * * * against the defendant be conditional upon said payment and transfer by petitioners of offset in an amount equal to said [money] and the transfer of said stock certificates or any other sums or property which the court may find due by petitioners to defendant.' These averments of tender and an offer to do equity, under the Code, §§ 37-104, 20-906, were sufficient, without continued legal tender or a delivery into court of any money and stocks received from the defendant in the alleged fraudulent exchange, such as might have been necessary from a defendant sued for recovery of money or stock. Especially is this true where it was further alleged that defendant had possession of plaintiffs' property as to which it was sought to impose the trust; that the money received by plaintiffs, with the worthless stock, was less than ten per cent. of the value of their own stocks and bonds; and where plaintiffs prayed an accounting as to the alleged unknown income and proceeds received by the defendant from their property. See Zugar v. Scarborough, 186 Ga. 310, 321, 197 S.E. 854; County of Bibb v. Winslett, 191 Ga. 860, 14 S.E.2d 108; Wynne v. Fisher, 156 Ga. 656(2), 119 S.E. 605; Mayer v. Waterman, 150 Ga. 613(3), 617, 104 S.E. 497; Franklin v. Cruce, 187 Ga. 58, 59(2), 200 S.E. 135, and cit.; Fricker v. Americus Improvement Co., 124 Ga. 165(5), 172, 52 S.E. 65; Pope v. Thompson, 157 Ga. 891(2), 895, 122 S.E. 604; Kerr v. Hammond, 97 Ga. 567, 570, 25 S.E. 337; Irwin v. Askew, 74 Ga. 581(4), 586; Johnson v. Giles, 69 Ga. 652, 653, 655. After setting forth a first alleged fraudulent exchange of worthless stock and bonds of a stated value, by which the defendant obtained from the plaintiffs their valuable stocks and United States bonds of much greater value than the bonds of the defendant, as indicated in the preceding parts of this syllabus, the petition alleged that, about eight months later, the defendant and two other persons conspired to repossess, and the alleged conspirators by fraudulent misrepresentations repossessed, the bonds which the plaintiffs had previously received from the defendant, and sold such bonds to the defendant or other persons procured by him. Under these averments, the contention that the plaintiffs should have tendered to the defendant the bonds which had already been repossessed and disposed of as alleged, or their value, is manifestly without merit.

4. A general demurrer does not raise questions as to multifariousness, duplicity, or misjoinder of causes of action, or as to nonjoinder or misjoinder of parties. As to such matters, a special demurrer is necessary. Tingle v. Maddox, 186 Ga. 757, 198 S.E. 722; Shingler v. Shingler, 184 Ga. 671, 672, 192 S.E. 824; Wilkinson v. Smith, 179 Ga. 507, 176 S.E. 373; Burkhalter v. People's Bank, 175 Ga. 744(3), 165 S.E. 749. Since the only special demurrer raising any of these questions attacks merely the alleged misjoinder of causes of action as to paragraph 78 of the petition, referred to in the preceding division, only the question of misjoinder thus raised can be considered.

Where several matters are stated in a petition, not as distinct and unconnected, but as arising 'out of the same transaction or series of transactions, forming one course of dealing, all tending to a single end,' a demurrer for misjoinder of causes of action will not lie. Griggs v. Griggs, 218 N.C. 574, 11 S.E.2d 878, 879. Under this rule, paragraph 78 was not subject to the special demurrer on this ground, since under all of the averments the last transaction set forth in that paragraph was such a part of the alleged original scheme, fraud, and constructive trust and its development, and such a violation of the alleged previous promises and assurances of the defendant, as to bring the last transaction within the legal rule stated.

5. Where several persons conspire to defraud another, one or all of the wrongdoers may be sued, 'proof of the conspiracy renders the act of one in deceiving and defrauding the injured party the act of all,' and an implied or constructive trust may be set up as to the subject matter of the fraud and conspiracy. Wall v. Wall...