152 Wis. 352 | Wis. | 1913
Lead Opinion
Examination of the evidence convinces us that the findings of fact made by the trial judge are amply supported. We do not find it necessary to rehearse or discuss the evidence in detail. It is considered that the facts in the case are, as found by the trial court, that the Union Investment Company was but a stalking horse for McLaughlin Brothers in the transaction with the defendants; that the representations as to the begetting power of the horse were made as alleged in the complaint and that they were essentially false; that it was understood and agreed that the notes should not be binding until twenty shares in the horse had been subscribed for by responsible parties, and that such shares were never subscribed; that the plaintiff is not a holder in due course, but really purchased the notes in bad-faith.
The only question in the case which we deem doubtful is the question whether upon these facts the judgment of dismissal upon the merits was right.
The plaintiff urges with much force that by failing to return the horse after knowledge of all the facts and by paying the first of the series of notes two years after its date, at which time the demerits of the horse were fully known, the defendants have not only lost any right which they may have had to disaffirm the purchase, but have affirmatively ratified it.
The principle is very familiar that one who has entered into an executory contract under circumstances which entitle him to disaffirm or rescind must exercise his right of rescission with reasonable promptness after he has acquired or should by proper diligence have acquired knowledge of the facts upon which his right of rescission or disaffirmance is based. Bostwick v. Mut. L. Ins. Co. 116 Wis. 392, 89 N. W. 538, 92 N. W. 246. In the present ease it cannot be doubted but that the defendants knew every fact concerning the character of the horse, and knew also that the notes had been delivered contrary to the agreement, at the time they paid the first note of $1,000, and long before this action was commenced.
Respondents rely on Hodge v. Smith, 130 Wis. 326, 110 N. W. 192, as an authority supporting the proposition that the contract can be wholly avoided in such a case on the ground of the fraud, even where there has been no return or offer to return the property received. The difficulty is that in the Hodge Case it appears by the printed record that the horse died, without fault of the defendants, a few months after the sale and long before the notes came due, hence there
While the answer was probably framed on the theory that if fraud were proven the defense was complete, it also contains substantially the allegations necessary to sustain a claim for recoupment of damages. It alleges that the horse could not make enough as a stallion to pay for his keep and was practically worthless for breeding purposes. It does not specifically allege what the actual value of the horse was, but it demands judgment of dismissal of the complaint, thus quite plainly alleging, by inference at least, that they had already fully paid for the horse when they paid the first $1,000 note.
It may well be that there is another ground upon which the same result might be reached. The plaintiff is appealing to a court of equity to reform the note and enforce it. It appears that his assignors, in whose shoes he stands, obtained the note by fraudulent devices and gave property for it which was worth little in comparison to the value as represented. If the court lends its aid to reform the note and enforce it as reformed, it will actively assist in the consummation of the original fraudulent scheme to unload a poor stallion on a company of farmers at a fabulous price.
Courts of equity do not allow their process to be so used. The rule which requires clean hands of him who would appeal to the conscience of the chancellor would seem to be applicable to such a case.
We prefer, however, to rest the decision on the merits.
By the Gowrt. — Judgment affirmed.
Concurrence Opinion
(concurring). I concur in affirmance on the second ground stated in the opinion. I am unwilling to take judicial notice of the value of a horse from any of the data furnished by the evidence and mentioned in the opinion of the court, and I dislike to acquiesce in such a precedent.