Court Opinion

ID: 9791032
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:03:53.675422+00
Date Added: 2024-06-11T07:37:33.508847
License: Public Domain

SHENK, J., Concurring.
I concur. The general rule that fraud in the inducement of a contract may be shown is recognized in Gridley v. Tilson, 202 Cal. 748 [262 Pac. 322]. An exception to the general rule is also noted therein and is still effective, subject to the limitation stated in section 260 of the restatement of the law of agency, now approved. As I understand this rule, it is that an innocent principal so contracting with another may relieve himself from liability for the fraud of his agent, but he is nevertheless subject to rescission on the part of the defrauded party. The rule proceeds upon the theory that an innocent principal so contracting may not be permitted to enrich himself by reason of his agent’s fraud, and that any property received by such principal is held by him as a constructive trustee for the person defrauded. I am satisfied that the restatement of the law of agency as contained in sections 256 to 264, inclusive, of the final draft, should be followed.