Lamott v. Butler

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 [36]temporarily 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.