Court Opinion

ID: 8195458
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:18:43.890556+00
Date Added: 2024-06-11T16:40:45.376119
License: Public Domain

Owen, J.
(dissenting). It seems plain to me that the plaintiff is estopped, so far as the Southern Wisconsin Acceptance Company is concerned, to allege the non-delivery of the Arctic refrigerator machine. After his order for this machine had been given, and after certain parts thereof had been installed, Lounsbury asked Malas for a conditional sale contract for the express purpose of enabling him to borrow money thereon. At this time the machine had not been installed. Lounsbury, however, represented to Malas that it was at the depot. Knowing that it had not been installed, Malas executed the conditional sale contract, *537in which he acknowledged delivery and acceptance of the machine. At this time he knew it had not been delivered, and he executed this contract containing this declaration for the express purpose of enabling Lounsbury to borrow money thereon. Lotmsbury took this contract to. the Southern Wisconsin Acceptance Company, and that company, relying upon the representation that the machine had been delivered and accepted, bought the contract. Malas now brings this action to have the contract set aside upon the ground that Lounsbury failed to install the machine.
There is no doubt that as between plaintiff and Louns-bury plaintiff has a good cause of action for the cancellation of the contract. Neither is there any doubt that he would have the same cause of action, or the same defenses to a cause of action brought to recover thereon, as against an assignee of Lounsbury, unless, as to' such assignee, he has estopped himself.
There is nothing sacred in the rule of law which permits all of the defenses to a non-negotiable instrument while in the hands of an assignee that are available against the original party. It has been held by this court that a widow may be estopped from claiming her right of dower (H. W. Wright L. Co. v. McCord, 145 Wis. 93, 128 N. W. 873), and that a wife may be estopped from claiming her homestead (Krueger v. Groth; 190 Wis. 387, 209 N. W. 772). I know of no reason why a party situated as Malas may not estop himself from claiming non-delivery of the machine as against the assignee of Lounsbury. It seems to me that this was effectually done when by his own declarations he led the Southern Wisconsin Acceptance Company to believe that the machine had been delivered, installed, and accepted. This is particularly true when he did it for the special purpose of enabling Lounsbury to raise money upon the contract. I am unable to appreciate the morality of the doctrine which enables Malas under such circumstances, after he has induced the Southern Wisconsin Ac*538ceptance Company to make an investment in this contract, to come into court and say that the declaration upon which the Southern Wisconsin Acceptance Company relied, upon which it had a right to rely, and by reason of which it invested its money, was a falsehood.
It is said that he was induced to make this declaration by reason of the false representations of Lounsbury that the machine was at the depot. Even though the machine was at the depot Malas knew that it was not installed, and such representations afford him no excuse for making the declaration he did. Even though the misrepresentation had been merely that the machine was at the depot, if material and relied upon it would have been none the less fraudulent, even though Malas actually believed it was at the depot. It is well established that one who makes a representation must know that it is true. A misrepresentation made innocently is none the less fraud because he who makes it believes it to be true. The decision in this case establishes the doctrine that one who is the victim of fraud may by further fraud pass his loss on to another, as the cost of production is passed on to the consumer. I regard this as grossly immoral, unjust, and contrary to well established legal principles. I must therefore dissent.
A motion for a rehearing was denied, with $25 costs, on October 11, 1927.