Opinion
Rehearing Granted July 11, 1931. In Bank.
Action by the California Trust Company against J. J. Cohn and another, in which defendants filed a cross-complaint. From a judgment dismissing the cross-complaint, defendants appeal.
Reversed, with directions
Appeal from Superior Court, Los Angeles County; Leon R. Yankwich, judge.
COUNSEL
D. Chase Rich, of Los Angeles, for appellants.
Swanwick & Donnelly and R. W. Proudfit, all of Los Angeles, for respondent.
OPINION
WASTE, C. J.
This is an appeal by the defendants from a judgment of dismissal entered upon the sustaining of a demurrer to their second amended cross-complaint. The action was brought by plaintiff to quiet title to a described parcel of real property. Defendants filed an answer denying plaintiff’s ownership of the lot in dispute and a cross-complaint containing certain allegations of fraud and concluding with a prayer for judgment decreeing that plaintiff holds the legal title in trust for defendants, reforming a certain written contract so as to make it comply with an asserted prior oral declaration of trust, and for damages in the sum of $18,500 alleged to have resulted to the defendants by reason of plaintiff’s fraud. To this threefold cross-complaint the plaintiff demurred on the grounds that it failed to state facts sufficient to constitute a cause of action, that it improperly seeks to join with an action to quiet title an action for damages, and that several causes of action have been improperly united and not separately stated, in that an action at law for damages is united with a bill in equity for reformation of a contract. The trial court sustained the demurrer with leave to the defendants to amend within ten days. Standing upon their cross-complaint, the defendants declined to amend, whereupon the judgment of dismissal from which this appeal is taken was entered.
A plaintiff, or cross-complaint, who declines to avail himself of leave to amend his pleading after a demurrer thereto is sustained, which demurrer is both general and special must stand upon his pleading as against both grounds of demurrer. Aalwyn v. Cobe, 168 Cal. 165, 173, 142 P. 79; Robinson v. Godfrey, 78 Cal.App. 284, 288, 248 P. 268. This being so, the judgment must be affirmed if any one of plaintiff’s several grounds of demurrer is well taken. It is well, therefore, that we have before us the substance of the allegations of the cross-complaint. The pleading alleges that on May 15, 1926, the cross-defendant (who, for purposes of clarity, will hereafter be referred to as the plaintiff) was the owner of the lot in dispute, said lot forming a part of a tract containing some 150 lots; that on said date plaintiff stated and represented to the defendants (cross-complainants) that if they would pay plaintiff $7,500 it would hold title to said lot in trust for them, and would resell the same on or before May 15, 1927, for $40,000, which was represented to be its reasonable value, and pay to the defendants $17,500 thereof; that plaintiff also represented that it would immediately organize a large sales force to sell the entire tract, that it would improve the tract by grading and paving streets and sidewalks and by installing electric, telephone, water, and gas service to each lot, that it would form a corporation consisting of all the lot owners in the tract, that it would deed an ocean frontage to the corporation for the benefit of the members, and that it would thereafter reduce the foregoing oral statements and representations to writing; that in reliance on these several representations, defendants, on May 15, 1926, paid $7,500 to the plaintiff; that on August 13, 1926, plaintiff presented to them a written agreement purporting to contain the oral representations above referred to; that in reliance on plaintiff’s statements they signed this written agreement without reading it; that said written agreement did not conform to plaintiff’s prior oral representations in that it failed to provide for plaintiff’s improvement of the tract, failed to state that plaintiff was holding lot 2 in trust for the defendants, and failed to provide for a resale of the lot by plaintiff; that all of the plaintiff’s statements and representations were false and untrue and made with the intent to defraud; that on October 17, 1927, defendants received a communication from plaintiff demanding a $7,500 additional payment as required by the provisions of the asserted fraudulent written agreement theretofore signed by them; that then for the first time they read the same, and discovered plaintiff’s fraud; that they therefore renounce the written agreement and rely on the asserted oral agreement, and declare plaintiff to be the holder of the legal title to lot 2 in trust for them; and that by reason of plaintiff’s fraud they have been damaged in the sum of $1,000 for attorney’s fees and $17,500 by reason of plaintiff’s failure to resell the property as agreed. The cross-complaint then prays (1) that plaintiff be decreed to be holding the legal title to lot 2 in trust for the defendants; (2) that the written agreement be reformed so as to comply with the asserted prior oral agreement; and (3) that defendants be awarded judgment in the sum of $1,000 as and for attorney’s fees expended in protecting the property and $17,500 damages, together with interest and costs.
The written agreement, which is attached to the cross-complaint as an exhibit, differs materially from the alleged oral understanding, in that it constitutes a contract of sale under and by the terms and provisions of which the plaintiff agrees to sell and the defendants to but lot 2 for $30,000 payable $7,500 on the signing thereof and $7,500 each year thereafter until paid.
A cross-complaint can be maintained when the defendant seeks affirmative relief ‘relating to or depending upon the contract * * * upon which the action is brought, or affecting the property to which the action relates. * * *’ Code Civ. Proc. § 442. That the principal affirmative relief which defendants are seeking in this action affects the property to which plaintiff seeks to quiet title, goes without saying. Taking up first the general demurrer, we find, upon an examination of the authorities, that the cross-complaint alleges facts sufficient to establish a trust in favor of the cross-complainants. A resulting trust arises by implication of law when the purchase money is paid by one person and the land is conveyed to another, while a constructive trust arises by operation of law when title is acquired through fraud and misrepresentation. Webb v. Vercoe, 201 Cal. 754, 760, 258 P. 1099, 54 A. L. R. 1200; Kimball v. Tripp, 136 Cal. 631, 634, 635, 69 P. 428; 1 Perry on Trusts (7th Ed.) 212, 267. The allegations of the cross-complaint herein, which for purposes of demurrer are admitted to be true, show that the defendants purchased lot 2 outright, paying the agreed price therefor and permitting title to remain in the seller solely for resale purposes. Aside from any abortive attempt of the parties to create an express voluntary trust, this was sufficient, in our opinion, to give rise to a resulting trust in favor of the purchasers. That the defendants bought the property directly from the plaintiff rather than from a third person is not material, the important fact being that they parted with their money in the belief that title to the property was to be held by plaintiff in trust for them. The added element of fraud present in the case is sufficient to charge plaintiff, as a constructive trustee of the property, if that be necessary. Therefore, whether we consider or disregard the allegations of fraud, there is sufficient in the cross-complaint to fortify it against a general demurrer, for a cause of action for the declaration of a trust arising by operation of law is alleged.
It is unnecessary, therefore, that we determine whether the cross-complaint alleges facts sufficient for a reformation of contract or the imposition of damages. A general demurrer challenges the sufficiency of the pleading to state any cause of action, and must not be sustained if the pleading states facts from which any liability results, although not for some or all of the relief sought to be obtained. Hall v. Bell, 143 Wis. 296, 299, 127 N.W. 967. If the pleading states grounds for relief, either legal or equitable, it will stand the test of a general demurrer. Swan v. Talbot, 152 Cal. 142, 144, 94 P. 238, 17 L. R. A. (N. S.) 1066. As against a general demurrer, it is sufficient if the pleading contains the allegations essential to the statement of any one cause of action, even though an abortive attempt be made to state facts calling for other and different relief.
Nor is it any answer to state that the trust alleged in the cross-complaint is void by reason of its parol character. No writing is necessary to create either a resulting or constructive trust. They are trusts which the law implies from the facts of the case and may be created without a writing. Webb v. Vercoe, supra, 201 Cal. page 762, 258 P. 1099, 54 A. L. R. 1200; 1 Perry on Trusts, 217. The statute of frauds is therefore without application to them.
In support of its general demurrer, plaintiff relies on Archer v. Miller, 73 Cal.App. 678, 684, 239 P. 92, and similar cases holding that a contract of purchase and sale must be specifically enforcible and must therefore be alleged and shown to be just and reasonable in order to constitute a defense to a quiet title action. This line of authorities is without application to this cause for, as appears from the allegations of the cross-complaint, which, as already intimated, are admitted by the demurrer, we are not here concerned with an executory contract of sale which it is sought to have specifically enforced, but rather with an executed transaction, the circumstances of which are legally sufficient to charge plaintiff as trustee for the defendants. The general demurrer is therefore without merit.
This brings us to a consideration of the second and third grounds of demurrer, which may be treated together. The cross-complaint does not improperly join an action for damages with one to quiet title, nor does it improperly unite several causes of action without separately stating them. The relief sought by way of damages and reformation is but incidental and ancillary to the prayer for a decree declaring plaintiff to hold lot 2 in trust for the defendants. In an action of equitable cognizance it is the policy of our law to allow a party to obtain in one action all the relief to which he may be entitled on account of a single transaction, although such relief may be of a character that would require several suits under the strict rules relating to the forms of common-law actions prior to the adoption of the Codes. Murphy v. Crowley, 140 Cal. 141, 145, 73 P. 820. Equity does not deal with cases piecemeal, and in a proper cases it may give other and different relief justified by the circumstances.
The seeking of different kinds of relief does not establish different causes of action. San Diego Water Co. v. San Diego Flume Co., 108 Cal. 549, 556, 41 P. 495, 29 L. R. A. 839; Hutchinson v. Ainsworth, 73 Cal. 452, 455, 15 P. 82, 2 Am. St. Rep. 823. In discussing misjoinder of causes of action, it is therefore necessary to first determine in which cases there is but a single cause of action. The ‘cause of action’ is to be distinguished from the ‘remedy’ and the ‘relief’ sought, for a plaintiff, or a cross-complainant, may frequently be entitled to several species of remedy for the enforcement of a single right. Beronio v. Ventura Lumber Co., 129 Cal. 232, 235, 61 P. 958, 79 Am. St. Rep. 118. By way of example, it has been held that a suit to abate a nuisance and to recover damages does not involve a joinder of causes (Grandona v. Lovdal, 70 Cal. 161, 163, 11 P. 623); that incidental to the quieting of title the complaint may ask that the instrument under which defendant claims title be declared void (Parsons v. Weis, 144 Cal. 410, 414, 77 P. 1007); that in an action for trespass the prayer may ask for mesne profits, injury to personal property, expenses of removal and the like (Gomez v. Reed, 178 Cal. 759, 763, 174 P. 658); and that a complaint in an action for reformation of contract does not set out two causes of action merely because it also requests that the contract, as reformed, be specifically enforced or damages be awarded in lieu thereof. Messer v. Hibernia Sav., etc., Soc., 149 Cal. 122, 126, 127, 84 P. 835.
In our opinion, the case at bar presents a situation where, under one cause of action, the cross-complainant is entitled to several species of remedy. But one transaction is relied on as a basis for the threefold prayer for relief. In such a case the question of joinder of causes of action does not arise. There is but one cause of action— one right to be enforced, although several remedies may be sought. It follows that the two grounds of special demurrer are also without merit.
The judgment is therefore reversed, with directions to the court below to overrule plaintiff’s demurrer to the defendants’ second amended cross-complaint.
We concur: LANGDON, J.; SHENK, J.; SEAWELL, J.; RICHARDS, J.; PRESTON, J.