Gates v. Raymond

MáRshall, J. The judgment appealed from must be reversed because the court excluded the evidence offered to prove that plaintiff by fraud induced defendant to agree to trade horses and was guilty of such action in carrying out his fraud ulent scheme that defendant was rendered incapable of restoring him to his former position as a condition of rescinding such agreement. The trial court was guided by the general rule that a transaction consummated by fraud of one of.the parties •thereto, to the injury of the other, is not absolutely void, but is voidable upon condition of a restoration of the wrongdoer to his former position. Such condition is equitable in its nature; therefore, necessarily, it goes no further than good conscience requires. That limitation admits of several important exceptions, [660] many of which will be found distinctly pointed out in Friend Bros. C. Co. v. Hulbert, 98 Wis. 183; Gay v. D. M. Osborne & Co. 102 Wis. 641, one of which exactly fits the facts pleaded in the answer in this case. It is this: When a wrongdoer has, by his own act, put it out of the power of his victim to restore him to his former position, he cannot profit thereby. In such circumstances the injured party may, upon doing all that he reasonably can under the circumstances to restore the wrongdoer to his former position, reclaim of him all the benefits which he obtained from the wronged party as the result of the trade. Guckenheimer v. Angevine, 81 N. Y. 394; Merchants’ Nat. Bank v. Tracy, 77 Hun, 443; Hammond v. Pennock, 61 N. Y. 145; Masson v. Bovet, 1 Denio, 69; Kerr, Fraud & M. (2d ed.), 371. Reference is usually had in the books to Masson v. Bovet as containing an accurate statement of the exception particularly mentioned. Such statement is as follows: “ The restoration is not exacted on account of any feeling of partiality or regard for the fraudulent party. The law cares very little what his loss may be, and exacts nothing for his sake. If, therefore, he has so entangled himself in the meshes of his own knavish plot that the party defrauded cannot unloose him, the fault is his own; and the law only requires the injured party to restore what he has received, and, so far as he can, undo what had been done in the execution of the contract. That is all that the defrauded party can do, and all that honesty and fair dealing require of him. If these fail to extricate the wrongdoer from the position he has assumed in the execution of the contract, it is in no sense the fault of his intended victim, and, upon the principles of eternal justice, whatever consequences may follow, they should rest on the head of the offender alone.” The idea is that the wrongdoer cannot insist, as a condition of rescission, on a return of that which, by his fraud, the wronged party does not control. [661] This is sound doctrine. If the plaintiff here, as alleged, as a part of a fraudulent scheme to rob the defendant of his property, induced him to drink intoxicating liquor until he was incapable of taking care of himself in a business transaction, and then, with knowledge of such situation and intentionally taking advantage thereof, plaintiff induced defendant to agree to trade horses and participate with him and his •confederates in gambling at cards to the end that, by reason of defendant’s condition of intoxication he would lose to his associates, or some of them, the property plaintiff gave or agreed to give him for his horse, and such end was accomplished as so designed, the defendant being thereby rendered incapable of restoring plaintiff to his former position as a •condition of rescinding the horse trade, such restoration was not necessary to such rescission. There is no circumstance in such a situation to sustain a claim that defendant ratified the trade, and the law will not aid plaintiff in protecting himself by his own wrong from the consequences of his plot, whatever the loss to him may otherwise be. The trial court properly ruled that the facts alleged to the effect that the horse trade was made in order to enable the defendant to participate in gambling, did not constitute a defense. The horse in controversy was not won from defendant in the gaming transaction, so sec. 4532, Stats. 1898, under which a person may recover money or property lost by playing or waging on any game, does not apply. Neither was the horse transferred or agreed to be transferred to the plaintiff as security or as a part of any contract involving security for money advanced for the purpose of gambling, so as to render the transaction void under sec. 4538. By the Gowrt.— The judgment of the circuit court is reversed, and the cause remanded for a new trial.