Thе respondents initiated these actions to recover for alleged hidden profits on the sale of real estate to their partnership. The sole issue on appeal is whether or not thеir first cause of action for an accounting under Section 33-41-540, South Carolina Code of Laws (1976) and thеir second cause of action for fraud as a result of an affirmative misrepresentation аre distinct causes of action. The lower court held that they were. We disagree and reverse.
Each respondent’s complaint alleges that they, along with others, are limited partners in an аssociation. The appellant is the general partner. In accordance with the terms of the partnership agreement, the appellant was to provide certain parcels of land. After the appellant transferred the land to the partnership and received in return notes for payment, it was learned by the respondents that the appellant did not transfer the property at his cost, but rather at a profit and without the consent of respondents, the limited partners. Following these generalized allegations, the complaint delineates two causes of аction.
For a first cause of action, the respondents allege that they are entitled to аn accounting under the provisions of Section 33-41-540 which provides:
Every partner must account tO' the partnership for any benefit and hold as trustee for it any profits derived by him without the consent of the othеr partners from any transaction *24 connected with the formation conduct or liquidation of the рartnership or -from any use by him of its property.
The respondents’ second cause of action is one in fraud seeking money damages. Essentially they allege that the appellant affirmatively represented to the respondents that he was transferring the land at cost and without any profit.They also allege they were entitled to rely on these representations because of the fiduсiary relationship existing between the parties.
At the appropriate time the appellant made a motion for the respondents to elect between the two causes of aсtion. He argued that the respondents had alleged only one cause of action for which thе law affords two possible remedies for redress, only one of which may be ultimately pursued. The lower court denied the motion by reasoning that although the two actions arise out of the same transaction, they are based upon an entirely different set of facts. We disagree that any essentiаl factual differences are alleged.
We have defined a cause of action as: A рrimary right possessed by plaintiff, and a corresponding primary duty devolving upon the defendant; a delict or wrong done by the defendant which consists in a breach of such primary right and duty . . .
Harth v. United Insurance Company of America,
266 S. C. 1,
We have previously сonsidered the nature of the primary right of the plaintiff and the primary duty of the defendant in a very similar сontext to that presented here.
Jacobson v. Yaschik,
249 S. C. 577,
We find the holding of Jacobson controlling. The respondents have allegеd only one primary right, the right to not be subjected to a hidden profit from one owing them fiduciary duties, and only one primary duty of the appellant, the duty of a fiduciary to disclose and to deal in good faith. Because only one cause of action is alleged- by which the respondents may seek either an equitable or a legal remedy, the respondents must make an election. See Jacobson, supra.
It is true, as pointed out by respondents, that this case varies from Jacobson since it involves an express misrepresentation whereas Jacobson involved a constructive misrepresentаtion because of a failure to disclose. We find this distinction of no significance. The substance of the action is the respondents have been victims of a misrepresentation by the appеllant. As far as the ability to pursue separate causes of action, it matters not whether the misrepresentation was constructive or express. Suppression of a material fact which оne is duty bound to disclose is equivalent to a false misrepresentation. See 37 C. J. S. Fraud, Section 16, p. 244.
Reversed.