Petition for writ of prohibition by Mark Walser and another against Thomas F. Moran, as District Judge of the Second Judicial District of the State of Nevada. Writ granted.
Cheney, Downer, Price & Hawkins, for Petitioners.
Norcross & Thatcher, for Respondent.
By the Court, Sanders, J.:
The petitioners ask for writ of prohibition to restrain the Second judicial court of the State of Nevada, in and for the county of Washoe, from proceeding to try a civil action pending therein against the petitioners, upon the ground that the said court, unless restrained, will transcend the limits of its jurisdiction. Upon the filing of the petition an order to show cause was issued, and the return thereon consists of a general demurrer and answer; both raising the question whether the facts alleged show any excess of jurisdiction for which the petitioners have no other adequate remedy. Rev. Laws, 5708, 5709. It appears that the petitioners interposed a joint and separate demurrer to the complaint, which was overruled, and, instead of answering, as required by the court's order, they have applied for this writ.
Though other questions are ably discussed, the only one to be considered in this proceeding is the propriety of our granting the writ, in view of the long line of decisions holding that the writ ought not to issue where there is another and adequate remedy. Unless the case as made by the petition is to be distinguished from those cases, we should hesitate to entertain this application. That portion of the demurrer material here, and to which this inquiry is directed, is that there is a misjoinder of causes of action in the complaint, in that it attempts to set forth:
(a) A cause of action on an express contract; (b) a claim against specific personal property; (c) a claim against a trust by virtue of a contract, or by operation of lawwhich said causes of action, so stated, belong to more than one of the classes which may be joined in the same action and do not affect all the parties to the action.
1, 2. The demurrer involves a discussion of section 97 of our practice act (Rev. Laws, 5039) which permits causes of action to be united when they all belong to one only of the seven subdivisions enumerated in the section
and affect all the parties to the action. The only source of authority for any pleading, and the rules for the construction thereof, are drawn from our practice act. It provides that all the forms of pleading in civil actions and the rules by which the pleadings shall be determined shall be those prescribed by the act. Rev. Laws, 5036. It also provides that in the construction of a pleading, for the purpose of determining its effect, its allegations shall be construed with a view to substantial justice between the parties. Rev. Laws, 5065. We are mindful that our constitution and statute have broken down the barrier of the common law, in so far as the form of a civil action is concerned. Rev. Laws, 329, 4943. Nevertheless, parties must find their authority for the form of their pleading in the practice act. Rev. Laws, 5036. It is the general rule that a complaint shall contain but a single cause of action (14 Standard Ency. Proc. 668), and two or more causes of action cannot be united in the same complaint, unless the joinder is authorized by the practice act (State v. Yellow Jacket S. M. Co., 14 Nev. 220; Dyer v. Barstow, 50 Cal. 652).
3. Section 97 of the practice act provides:
The plaintiff may unite several causes of action in the same complaint, when they all arise out of:
1. Contract, express or implied; or * * *
3. Claims to recover specific personal property, with or without damages for the withholding thereof; or
4. Claims against a trustee, by virtue of a contract, or by operation of law; * * *
But the causes of action so united shall all belong to only one of these classes and shall affect all the parties to the action, and not require different places of trial, and shall be separately stated. * * *
The object of this section is said to be to avoid a multiplicity of actions, and is entitled to a liberal construction, with a view to effect its object. State Bank v. Lanam, 34 Okl. 485, 126 Pac. 220; Cincinnati, etc., R. Co. v. Cooke, 37 Ohio St. 265. But a legitimate construction will not permit of causes of action being united
contrary to the limitations or restrictions contained in the act. The general purposes of its limitations is to secure and maintain a regular and orderly administration of justice. Their particular purpose is to avoid a multiplicity of distinct grievances, diverse and incongruous matters, whereby a defendant would be subjected to the embarrassment and difficulty of meeting on the trial widely different issues. Horton v. Equitable Life A. Society, 35 Misc. Rep. 495, 71 N. Y. Supp. 1060. But a party who seeks to take advantage of its limitations is not entitled to such technical construction of the pleading as would defeat the general object of the privilege afforded the complainant.
4-6. If the pleading in this case were attacked on one of the general grounds of demurrer, such as that it fails to state facts sufficient to constitute a cause of action, there would be much force to this contention. State v. District Court, 38 Nev. 323, 149 Pac. 178. Properly speaking, the office of the writ of prohibition is not to correct errors, but to prevent courts from transcending the limitation of their jurisdiction in the exercise of judicial power. Low v. Crown Point M. Co., 2 Nev. 75. The limitations are negative in character, and expressive of the legislative intent that a party who seeks to avail himself of the privilege to unite his causes of action must square his pleading with the rules prescribed by the practice act. State v. Yellow jacket S. M. Co., supra. Where an existing right or privilege is subject to regulation by a statute in negative words, the mode so prescribed is imperative (2 Lewis's Sutherland, Stats. Constr. 633); and where a statute has imposed restrictions under which a court, or judge thereof, may act in matters otherwise within its jurisdiction, and those restrictions are disregarded, the party aggrieved may have a remedy by prohibition (People ex rel. v. Nichols, 79 N. Y. 591; Quimbo Appo v. People, 20 N. Y. 531).
7. We do not apprehend that the rule stated extends to the correction of errors for a mere irregularity in the exercise of an authority inherent in a court; but, where
an authority otherwise inherent is limited by statute, the court which acts differently from the prescription of the act exceeds its jurisdiction, and is therefore liable to prohibition. McDonald v. Elfe, 1 Nott & McC. (S. C.) 504. Unquestionably a court that proceeds in the trial of a cause against the express prohibition of a statute exceeds its jurisdiction. Hayne v. Justice Court, 82 Cal. 284, 23 Pac. 125, 16 Am. St. Rep. 114.
8. Entertaining the views the question remains: Has the respondent exceeded the limits of its jurisdiction in proceeding with the trial of this cause contrary to the prohibitions contained in section 97 of our practice act? A demurrer to a complaint for misjoinder of causes of action involves the concession that it states two or more good causes of action. Pomeroy's Code Rem., sec. 342. We shall therefore consider the grounds of the demurrer upon this assumption, without expressing any opinion as to the legal sufficiency of either of the causes of action or upon the merits of this lawsuit.
9. The complaint is too lengthy to allow of a minute synopsis of its allegations. It contains five causes of action, separately stated, against both of the defendants, and we are of the opinion that it states a cause of action aimed against one of the defendants, though not separately stated. We have examined with care the able analysis of the facts stated in the complaint made by counsel for the petitioners, without being able to reach the conclusion contended for by them that the causes of action separately stated against both of the defendants belong to more than one only of the classes enumerated in section 97. Therefore we conclude that the demurrer to the petition on this particular ground should be sustained. In view of that lack of certainty and definiteness which should characterize a pleading that seeks redress for numerous wrongs of a different nature and various remedies adopted to meet the circumstances of the case, we have reached this conclusion with some misgivings as to its correctness; and as the point discussed is likely to have some material bearing on further
proceedings in the cause, we shall state briefly our views of the pleading.
The first cause of action is confessedly to recover from the defendants $30,000 as damages for the breach of a contract of employment. The second and third causes of action are to establish the plaintiffs' alleged right to a specific portion of a number of shares of valuable mining stock in different companies, alleged to have been acquired and held by the defendants in virtue of their contractual relationship with the plaintiffs, and in the event that the stock cannot be delivered that plaintiffs be given judgment for its value, aggregating the sum of $209,233. The fourth cause of action is not discussed. The fifth cause of action seeks a discovery and an accounting from the defendants of all their dealings with certain property of the plaintiffs entrusted to them under an executory contract. Fraud is charged in the creation of the contractual relation between the plaintiffs and the defendant Margrave. This feature of the pleading will be dealt with in the discussion of that portion of the demurrer which states that the causes of action did not affect all the parties. Fraud and deceit are also charged in the management and disposition of the property embraced in the contract.
The defendants, in so far as they are jointly liable, are proceeded against as agents, and not as trustees. The second and following causes of action disclose such wilful violation of the fiduciary relationship between the parties imposed by the contract that it would be unconscionable for the defendants to withhold from plaintiffs their alleged portion of all of the property in any manner acquired in virtue of their contractual relations. Contract, then, being the foundation of the duties imposed upon the defendants, it is clear that the breach of those duties must be regarded as arising out of contract and therefore as within subdivision 1 of section 97, which embraces all causes of action arising out of contract, either express or implied. But it does not follow that the complaint contains but one cause of action. We
are impressed that it clearly discloses, and that it was the intention of the pleader to state, independent and distinct causes of action. Should the defendants be brought to trial on the pleading as it now stands they would be entitled to all the advantages incident to a pleading that contains two or more causes of action properly joined.
Another more difficult question remains to be considered. An objection is stated in the demurrer that the causes of action do not affect both of the defendants. This branch of the demurrer is both difficult and perplexing, because of the appetite of the pleader. A technical construction of the pleading involves a multitude of subjects, parties, contract, tort, fraud, deceit, damages, agencies, nondisclosure, trust in invitum, voluntary trust, discovery, accounting, receivers, and injunction. When, however, the pleading is denuded of its narrative averments, it affirmatively appears that on December 21, 1912, the defendant Walser was employed by plaintiffs in his professional capacity as an attorney at law, and in the contract of employment he was constituted the plaintiffs' attorney in fact to reduce to possession, by litigation or otherwise, all of plaintiffs' rights and interests, vested or contingent, in certain mining companies and properties named in the contract, without cost or expense to plaintiffs. As compensation for his services, the plaintiffs by the contract of employment sold and conveyed to the said defendant, his heirs or assigns, an undivided two-thirds interest in all of the property embraced in the contract and it was expressly stipulated therein that the plaintiffs were to receive one-third of everything recovered under the contract.
At or about the time the contract was executed, it is charged that the defendant Walser falsely and fraudulently represented to plaintiffs that it would require large sums of money to accomplish the purposes of the agreement, and falsely and fraudulently represented that it would be necessary to have associated with him
one of sufficient means to do the things required of him to be done under the contract, and that he falsely and fraudulently represented that his co-defendant Margrave was such person. It is charged that the defendant Margrave knew of the false and fraudulent representations made by his co-defendant as to his financial ability, and acquiesced therein. It appears that the defendant Walser represented at this time that it was necessary that plaintiffs sell, assign, and transfer to Walser a two-thirds interest in the property, because of and in consideration of the money to be advanced by Margrave, for which consideration he (Walser) would have to convey to Margrave a one-third interest in the contract; that thereafter the defendant Walser, by a purported assignment in writing, attempted to convey to Margrave an undivided one-third interest of all the rights of the plaintiffs in all the property named in the contract with Walser.
It is charged, as a conclusion, that by reason of the false and fraudulent representations of the defendants, and that by reason of the fact that the defendant Margrave at the time of the representations was without any money whatever, the sale to Walser of more than a one-third interest in plaintiffs' property named in the contract was without any consideration whatever. It appears that the defendant Margrave acted with his co-defendant Walser under the contract as owner of a one-third interest in the property of plaintiffs, and in the course of their joint dealings under the contract there came under the control of the defendants 291,000 shares of stock in one of the companies named in the contract. It is the prayer of the complainants that they be given judgment for the sum of $30,000, as damages against the defendants for their failure and neglect of duty in not protecting from loss property entrusted to them in virtue of the contract of December 21, 1912. We do not apprehend that it is the contention of plaintiffs that a joint and several judgment could be had against the defendants under the pleading in its present form. The defendants are jointly liable, or not
at all, for the breach of duty complained of. If, then, on the face of the complaint, it should appear that the defendants are not jointly liable for the loss of the stock as alleged, and no several judgment could be had against them, no legal reason is suggested why they, or either of them, should be subjected to the cost and inconvenience of a trial on the first cause of action. If the facts as above outlined be true, they clearly negative any duty or promise on the part of the defendant Margrave to protect the plaintiffs' property from loss.
It is charged that that particular portion of the contract whereby Margrave acquired an interest in its subject-matter was fraudulent in its inception, and that by reason of the fraud perpetrated by his co-defendant Walser, and acquiesced in by him, he became the owner of a one-third interest in the contract, that all of his acts in conjunction with his co-defendant's were tortious, and that the alleged attempted assignment to him of a one-third interest in the property embraced in the contract was without consideration; and the plaintiffs demand judgment that they be decreed owners of one-half of the two-thirds interest originally sold and conveyed to Walser under the contract. The effect of the relief demanded is to repudiate and disavow Margrave's interest in any of the property alleged to have been acquired by the defendants under the contract. The effect of these allegations is equivalent to an admission that Margrave owed no duty to plaintiffs to protect their property from loss. The relation between the plaintiffs and the defendant Walser was of a fiduciary character; that of the defendant Margrave was tortious; yet it is sought to mulct him in damages for the breach of a fiduciary duty, when it clearly appears that none is shown, but, on the contrary, is expressly disaffirmed.
10. It is just such a situation as this that section 97 of the practice act is designed to meet. Why should the defendant Margrave be subject to the cost, inconvenience and necessity of resisting an action against him which could result only in a voidable judgment? Under
the liberal rule of construction enjoined for the purpose of determining the effect of a pleading (Rev. Laws, 5065), we uphold the causes of action separately stated in the complaint upon the ground that they were founded upon a contract equally binding under the circumstances upon both of the parties defendant. But this conclusion does not deprive the defendant Margrave of the benefit of his demurrer upon the ground that the causes of action do not affect both of the defendants.
11. It is obvious that by the fifth cause of action the plaintiffs seek an accounting from the defendants upon the ground of their fiduciary relation arising from their original contractual relation. That an agent, or one standing in such relation, can be brought to account with his principal for moneys and property received cannot be doubted; but in order to uphold said action it must appear that the transaction arose out of such relation. If, therefore, no such contractual relation existed between the plaintiffs and the defendant Margrave as created a confidential or trust relation, but, on the contrary, one tortious in its nature, there should be judgment for the defendants on the demurrer.
But it is strenuously urged that as one of the causes of action is at law and the others are equitable in their nature, and a court of equity having acquired jurisdiction over the parties and the subject-matter, and as the relief obviously extends to property in the hands of both defendants, equity will settle and adjust in a single action all the rights and interests incapable of being tried and disposed of by a single judgment at law. We are not called upon to determine whether the causes of action separately stated and the one intermingled therewith are properly joinable under the old equity practice. The petitioners are here litigating a rule of pleadingone that negatives and limits the general power or authority of the respondent court in a proceeding under it. In the case of State v. Yellow Jacket S. M. Co., supra, the question was asked:
Is our code the only source of authority from which rules of pleading may be drawn, and have its methods so completely supplanted those which preceded it that the latter can no longer be appealed to as possessing of themselves any force and authority?'
The court answered this question by holding that a complaint, answer, or demurrer is sufficient when it squares with the rules prescribed by the practice act, and not otherwise. But regardless of the statute, we have been referred to no rule of practice, at law or in equity, which justifies the course of the plaintiffs in this action. It is true that section 97 does not provide that causes of action, to be united, must be consistent; but it is obvious that the complainants state a cause of action for the breach of a contract and a distinct and independent cause of action for fraud in its procurement. This fraud is blended and intermingled with the whole structure of the complaint, and each of its causes of action, so much so that by reason thereof the plaintiffs were induced to demand its rescission in part as to both of the defendants and in its entirety as to one of the defendants, and that two-thirds of the property acquired under it be decreed to be that of the plaintiffs, and in case the contract be not rescinded, that the defendants be held jointly liable, both at law and in equity, for its breach.
12. We are aware that a court of equity is ever the master of frauds and that its doors stand open to relief against it; but it would be unjust for the plaintiffs to try the experiment in this action of rescinding the contract for fraud in its procurement, and, failing in this, to recover damages at law for its breach and relief in equity for the violation of a fiduciary obligation implied from the contractual relationship of the parties created by the contract. One of these positions negatives the other. Though the plaintiff is not confined to one kind of relief, yet each prayed for, though differing in character, should be consistent. The principle that forbids the
union of inconsistent causes of action should prevent a demand for inconsistent relief in any one cause. Bliss on Code Pleadings, sec. 164.
We are of the opinion that the rule of pleading prescribed by section 97, designed as it is for the regular and orderly administration of justice, is not to be departed from; and as the writ of prohibition is designed to prevent the violation of some fundamental principle of justice or the transgression of the bounds prescribed by law, should the respondent undertake to try this cause on the pleading in its present form, it would proceed against the spirit and the letter of the statute, and the writ as applied for should be granted.
McCarran, C. J., concurring in the order:
I concur in the order, and in so much of the opinion of Mr. Justice Sanders as supports the issuance of the writ by reason of the failure of the causes of action to affect both of the defendants. I am not in accord with the views of Mr. Justice Sanders as expressed in his opinion relative to the question of misjoinder of causes of action. Having originally prepared a tentative opinion for the court, in which I dealt exclusively with two questions involved in this proceeding, I deem the matter of sufficient importance to annex my opinion, together with a statement of facts essential to a clear understanding of the pleadings and principles involved.
The complaint sets up five causes of action. By the first cause of action it is related that during the year 1912, and prior to the 2d day of July of that year, the plaintiffs, R. S. Page and Marie Olive Page, had invested in and had loaned or advanced for the benefit of the Indian Consolidated Mines Company the sum of $10,000, on account of which investment and advances the Pages became the owners of, or asserted ownership to, a large amount of the capital stock of the Indian Consolidated Mines Company and other mining property and interests at the town of Rochester, county of Humboldt, State
of Nevada. On or about the 2d day of July, 1912, the Pages consulted with Mark Walser, an attorney at law, and one of the defendants here, relative to their rights in the Indian Consolidated and other property interests in and about Rochester. Walser advised suit and accepted a retainer of $150 for the institution of the same.
During the month of September, 1912, it is alleged: That Walser, as attorney for the plaintiffs, advised that proceedings be instituted in the United States District Court, at Carson City, for the purpose of having the Indian Consolidated Company declared insolvent and bankrupt. This advice appears also to have applied to the Limerick Consolidated Mines Company and the Little Indian Mining Company, in all of which the Pages were more or less interested. That on such advice Walser received from the Pages the sum of $180 for the purpose of accomplishing the results advised. On the 21st day of December, 1912, it is alleged that Walser advised that he could settle all disputes between the Pages and the Indian Consolidated Company, and upon such advice the Pages entered into a written agreement with Walser, as their attorney, by the terms of which the Pages assigned, sold, and conveyed to him an undivided two-thirds of their interest in and to all stocks, claims, debts, or demands, whether vested or prospective, in the Indian Consolidated Mines Company of South Dakota, the Indian Consolidated Mines Company of Nevada, the Limerick Mines Company, and the Limerick town site, and appointed and instituted Walser their attorney in fact, for the purpose of representing them in any action at law or otherwise, or in any proceeding necessary to reduce their interests to possession.
By the terms of this agreement Walser was to commence and maintain such actions at law as might be necessary to clear the title to the interests owned by plaintiffs, or which they claimed to be entitled to, in the several companies mentioned in the contract, such actions to be carried on at the expense of Walser; he further agreeing to defend all actions that might be
instituted against the plaintiffs by reason of their interests in the said companies or their connection therewith, and at his own expense to protect the property, free it from liens, and protect it from other claimants, the contract further providing that the Pages were to have an undivided one-third interest in and to everything recovered from or on account of the rights or interests which they had in any or all of the several companies named in the contract.
It is alleged that at the time of the execution of this contract the defendant Walser made false and fraudulent representations to the Pages to the effect that in order to conduct the litigation, or other proceedings or negotiations, necessary to establish the rights of plaintiffs and reduce the same to possession, large expense would necessarily be incurred, and that it would be necessary for him to have associated with him a man of considerable means, who would advance the money necessary to carry on such litigation, negotiations, or dealings necessary to establish the interests of plaintiffs and reduce the same to possession. It is alleged that Walser then and there introduced his co-defendant in this action, Frank Margrave, to the Pages, representing that Margrave was a man of means and possessed the necessary finances to carry on such litigation and other negotiations or dealings to accomplish the purpose of the agreement.
There are a number of allegations in the first cause of action as to the false and fraudulent representations alleged to have been made by Walser relative to the financial standing of Margrave. By the representations it is alleged that the Pages were led into the sale, assignment, and transfer of two-thirds of their interest and property rights in the various companies mentioned in the agreement. There is also an allegation as to the act of the defendant Walser in attempting to assign to Margrave one-third of the interests acquired by him. It is alleged that on the 21st day of December, and at
or about the time of the execution of this agreement, Walser demanded of plaintiffs, and as their attorney informed plaintiffs, that it would be necessary for him to have in his possession all of the stocks and securities of the plaintiffs in and to all of the mining properties mentioned in the agreement, and, by reason of the demand and representation thus made by Walser, the Pages delivered to him stocks in the mining companies mentioned, to the amount of 689,000 shares, besides other securities, inclusive of 6,000 shares of the capital stock of the Limerick Consolidated Mines Company.
It is alleged that by virtue of the agreement the defendants Walser and Margrave came into control of all the stock, property rights, and interest of all of the North Rochester Mines Company, the same being the property of the Pages. It is alleged that in February, 1913, in settlement of a dispute theretofore existing between the Limerick Consolidated Mines Company and the North Rochester Mines Company, the latter conveyed to the former all its right, title, and interest in and to the Limerick, Condee, and Plainview group of mining claims at Rochester, in consideration for which conveyance the Limerick Consolidated Mines Company agreed to issue and did issue to the North Rochester Mines Company 300,000 shares of the capital stock of the Limerick Consolidated, together with a cash payment of $2,500, which said cash payment was upon the demand of Walser and Margrave paid directly to them; that the receipt of this $2,500 was by Walser and Margrave kept from the knowledge of the Pages, and the latter did not become apprised of the same until the month of February, 1917; that during the month of March, 1913, Walser, acting for the North Rochester Mines Company, entered into an agreement to pool 291,000 shares of the Limerick Consolidated Company's stock until September 15, 1913. It is alleged that at or about the time of the making of the agreement between the Pages and Walser, the North Rochester Mines
Company had an outstanding indebtedness amounting approximately to $500; that at the time of the making of the settlement between the North Rochester Mines Company and the Limerick consolidated Mines Company it was agreed as part of the consideration that, out of the $2,500 received by Walser and Margrave as representatives of the North Rochester Mines Company, they would pay all of said outstanding indebtedness.
The first cause of action then proceeds to set forth the institution of attachment proceedings by an outstanding creditor of the North Rochester Mines Company, the levy of a writ of execution on the 291,000 shares of the Limerick Consolidated, and the sale of the same to satisfy the execution. it is alleged that Walser and Margrave at all times had full knowledge of these proceedings, including the attachment, execution, and sale under execution of the 291,000 shares of stock, but failed and neglected and refused to pay the amount of the claim, or to pay the judgment, or to defend the action, and failed to notify the Pages, or either of them, of the existence of such proceedings; and in this respect it is alleged that the defendant Walser notified the Pages that the 291,000 shares of stock of the North Rochester Consolidated was still in the hands of the pooling trustee under the pool agreement. It is by reason of the loss accruing to the Pages, growing out of the attachment, execution, and sale under execution of the 291,000 shares of stock of the North Rochester Mines Company, that damages are claimed in the first cause of action for the sum of $30,000.
The second cause of action rests on the acquisition of certain shares of stock in the Nevada Packard Mines Company by Walser and Margrave, which acquisition it is declared was accomplished by the purchase of interests in other mining properties represented by stock of the Nevada Packard Mines Company, which said purchase and interest was paid for out of the $2,500 received by Walser and Margrave as a part consideration of the settlement between the North Rochester Mines Company and the Limerick Consolidated.
The third cause of action rests on the acquisition by Walser and Margrave of certain shares of stock in the Rochester Mammoth Mines Company, which acquisition, it is alleged, was paid for by moneys received by Walser and Margrave in the settlement between the North Rochester Mines Company and the Limerick Consolidated.
The fourth cause of action is or the recovery of 6,000 shares of the capital stock of the Limerick Consolidated Mines Company, delivered by the Pages to Walser at his instance, request, and demand, on the 21st day of December, 1912.
In the fifth cause of action it is alleged by virtue of the contract of December 21, 1912, and by reason of the stocks and securities delivered to Walser by the Pages on that day, and by reason of the matters and things directly growing out of the contract of that date, Walser and Margrave have acquired large property interests in various unnamed mining companies, operating in Rochester mining district, and have received on account thereof large sums of money, none of which property interests or money so obtained have ever been accounted for by defendants or either of them to plaintiffs, but, on the ...