Court Opinion

ID: 6974028
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:07:42.986149+00
Date Added: 2024-06-11T16:08:54.437172
License: Public Domain

Dunn, J., and Cartwright, C. J., dissenting: In our opinion this judgment should be reversed and the cause remanded for a new trial. The appellee learned of the fraudulent character of the scheme by virtue of which the notes he received were given, soon after his purchase. Later he traded these notes, together with other property, to one Baldwin for an equity in a hotel in Iowa. He testified that he'got nothing of value for the notes but he did use them in the trade, by which he got the equity in the hotel. It is well established that one who has been induced to enter into a contract by fraud may maintain a suit to recover the damages occasioned by the fraud without returning or offering to return what he has received. He is entitled to the benefit of his contract, and may retain the money or property received thereon and recover the damages sustained by the fraud. But in this case the plaintiff, knowing of the fraud practiced upon him', by his voluntary action placed the defendant where he was liable to a third person for the same damages the plaintiff was entitled to recover. While the appellant was not liable on the notes, the appellee, by trading them to Baldwin, conferred upon the latter a right of action against appellant for deceit to the same extent as appellee had such right of action. As held in Leonard v. Springer, 197 Ill. 532, the deeds, notes and trust deed, with the recitals therein and thereon, constituted a representation to any one who might buy any of the series of notes relying on the statements of those instruments. It was not necessary that any representation should have been made by the appellant or any agent of his. A purchaser would have the right to rely upon the recitals of the instruments themselves. No reason appears why Baldwin, or any person to whom he may have transferred the notes, may not maintain an action against appellant for the fraud. The appellant ought not to be subjected to two actions. It is the act of appellee in disposing of the notes after notice of the fraud on himself which exposes appellant to the additional liability, and appellee, in order to recover, should show that appellant is not liable to another suit for this transaction. The time when the notes were transferred to Baldwin does not appear. His cause of action is perhaps barred by the Statute of Limitations, but he may have transferred the notes to another whose cause of action is not barred. On another trial appellee may be able to produce the notes or show that no cause of action exists, at the time of such trial, against appellant in favor of the holder of them. In such case their transfer by the appellee would not interfere with his recovery.