Court Opinion

ID: 5434671
Source: CourtListenerOpinion
Date Created: 2022-01-08 17:51:43.47548+00
Date Added: 2024-06-11T08:31:46.479474
License: Public Domain

Baldwin, J. delivered the opinion of the Court.
Cope, J. concurring.
It seems to us that the matters involved in this controversy have heretofore been determined. It is scarcely necessary to repeat here all the facts which appear in the cases of Butler v. Collins (12 Cal.) and Collins v. Butler (14 Id.)
It suffices to state that this suit is founded upon the notes tendered by Butler to Collins upon the occasion of the demand made by Butler of Collins, for the repossession of the store and goods *36temporarily surrendered into the custody of Collins by Butler upon the agreement and understanding fully recited in the cases referred to. We understand that the effect of the judgment in the first case cited was to declare this whole arrangement a fraud on the part of Collins, the result of which was that no title passed to the goods. It is now insisted that the effect of the tender of these notes, whether accepted by Collins or not, was to vest in Collins the property in them, and that he may enforce them as he could any other valid securities. But the fraud imputed and found was not in Collins’ refusing to accept these notes. It was in inveigling Butler into this arrangement, substituting the contract evidenced by these notes for the old notes, and under pretense of giving him the benefit of this last contract, getting possession of the goods. It is true that the refusal to take the notes and carry out the contract was proof of this fraud, but only proof going to show the original and antecedent fraudulent intent. The effect of the fraud was to make void the whole arrangement, leaving, of course, the first contract in full force. This fraud, therefore, avoided as well all right to recover on the notes tendered, as Collins’ title to the goods. The only consideration for the notes to Butler was the redelivery of the goods and the surrender of the old note; but this delivery and surrender Collins refused to make. Collins never had any right to these notes; the tender was made to enable Butler to get his goods restored and to take up the old note, and Collins could not refuse his part of the contract, and insist on Butler’s compliance with Ms part. Upon the refusal of compliance by Collins, the notes became, even if they were not before, without consideration: they were never received or delivered in fact. As soon as Butler discovered, either from the conduct of Collins or otherwise, the fraud practiced upon him, he had a right to insist on the fraud in avoidance of the whole arrangement—the delivery of the goods or the bill of sale, and the new notes—and this fraud avoided the entire transaction in all its parts, leaving the relations and rights of the parties where they were before. This left the old contract in force, and it may still, for anything we can see, be enforced.
The authorities cited by the counsel for respondent have no application to such a case. Conceding the effect of a tender to be as *37stated, the principle can never be extended to a case where the tenderer has no knowledge at the time of a fraud practiced upon him by the other party. If a man tenders another his notes, according to contract previously made, in payment for a horse, and the tenderee refuses to take the notes, but afterwards demands them, would the tenderer be bound to give or pay them, if he, in the meantime, discovered that the horse was stolen ? If this pretension could be maintained, it would follow that the perpetrator of the fraud could successfully set it up by the mere fact of the faithful performance of the contract by the other party, made, too, in entire ignorance of this fraud committed by the first. The whole case then comes to this: it is found that Collins resorted to a subterfuge to get possession of goods owned by Butler; this was to get from Butler the goods under the assurance that the latter should get them back on giving certain notes; relying on this, Butler gets the notes and tenders them. But Collins never intended to let him have them; he accordingly refuses to take the notes; Butler sues for the goods and recovers the value in a suit in which this fraud is found; Collins after this sues on these notes, and insists that the mere tender of the notes by Butler, under the circumstances, vests the title in him, Collins. The answer is, that the tender being induced, by the fraud of Collins, cannot be set up by Collins for any purpose; that the notes never having been delivered, Butler, at any time on discovering the fraud, might retract the agreement to deliver them; and that as Butler got nothing for the notes, they are wholly without consideration.
It is not necessary to notice minor points. We think this defense sufficiently presented in the answer and established by the record evidence.
We have assumed the finding of fraud as true. If it be not, the fault is in the verdict in the first case.
Order granting a new trial reversed and cause remanded.