Frost v. Lowry. 1846. The defendants in error having discovered Stout's fraud, IN BANK. sent to Maumee, found him there, tendered to him the draft, Dec. Term, with Eustaphieve's acceptance erased, but saying to him, they wished to keep it till the trial, if he was willing; that he could take it, however, if he desired. Stout replied, it was just as well, and that the draft might remain in the hands of the attorney for the defendants in error, subject to his order. They, the defendants in error, then explained their claim to the plaintiff in error, Frost, and demanded the goods, which were refused. A writ of replevin was then sued out, the goods replevied, and the right of property and possession is the controversy which followed in respect thereof. On the trial, the defendants in error surrendered the draft, with the acceptance canceled, to the Court, to be disposed of as the Court should direct. It was proved on the trial by David B. Stout, brother of Nathan L., that Eustaphieve had, probably, no funds in his hands to meet his acceptance, and that Nathan L. Stout was present at the time of the replevin and made no objection. Other facts appear in the bill of exceptions, but they are not material. The Court were asked to charge the jury, amongst other things, that if the goods were obtained from the defendants in error, by Nathan L. Stout, by fraud, they could not rescind the contract without tendering back to Stout the acceptance of Eustaphieve. This instruction was refused, and exception taken. Other instructions were asked and refused, and exception, likewise, taken, as well as to the entire charge of the Court, as given to the jury. The Supreme Court on the circuit, on a writ of error, affirmed the judgment of the Common Pleas, and the plaintiff now seeks, by the prosecution of this writ, to reverse the judgment of the Supreme Court. IN BANK. Dec. Term, 1846. Frost v. Lowry. T. Ewing, for the Plaintiff in Error. The bill of exceptions in this case shows, that on the 6th day of July, 1843, Nathan L. Stout purchased of J. & A. Lowry, in New York, a quantity of goods, amounting in value to $1,565.38; that at the time of the purchase, he falsely represented himself as a merchant in business, free from debt; that he gave for the goods, at the time, his own draft for the amount, payable in six months and accepted by Alexander A. Eustaphieve. The goods were delivered to him and the boxes. containing them marked with his name, and directed to Logansport, Indiana. On their way to that place, and while in a warehouse at Maumee City, on the 1st of August, 1843, the goods were seized by Elisha S. Frost, sheriff of Lucas county, on an attachment in favor of Thomas C. Rockhill, of Philadelphia, against said Nathan L. Stout. On the 9th of August, J. & A. Lowry having ascertained that the representations of said Stout, as to his situation and property, were false, and that he was in fact insolvent, came to Maumee City, tendered back to said Stout the draft given by him for the goods-having first erased the acceptance of Eustaphieve-and demanded the goods. Stout being unable to redeliver them, J. & A. Lowry sued out their writ of replevin and took them from the custody of the sheriff. On the trial of the cause, the draft aforesaid was brought into court, with the acceptance of Eustaphieve erased, and held to be disposed of as the Court might direct. The Court instructed the jury, that the plaintiffs were entitled to recover, and sealed a bill of exceptions, setting forth the above facts, among others which are unimportant as regards the question which we propose to raise on this motion. The fraud practiced by Stout upon J. & A. Lowry, in the purchase of the goods, made the contract voidable at their option, but not void per se. The draft which had been given them in exchange for the goods, was not what Stout had represented it. The acceptance was all right, but the drawer was not a solvent Frost v. Lowry. person, as had been falsely represented. They, therefore, had IN BANK. a right to avoid the contract. But to do this, according to a very plain principle of law, they must have restored the draft with the acceptance upon it, in the same condition in which it was when they received it. The draft with the acceptance of Eustaphieve upon it, was precisely the same in law as a note of Eustaphieve for a like sum with the indorsement of Stout. The case then is, perhaps, a little simplified, and brought more directly within the authorities, by considering this draft as the note of Eustaphieve, indorsed by Stout, which has been given to Lowry in payment for the goods. Then, when the vendors seek to avoid the contract and reclaim the goods, because of the insolvency of the indorser, they strike out the name of the maker of the note, and offer to return it so canceled. It is exceedingly difficult to conceive for what fair or honest reason this erasure was made, and it is left in the case wholly without explanation. We have the simple fact, and must endeavor to find the law that arises from it. This case is much like that of Coolridge v. Bingham, 1 Metcalf, 547. Bingham bought goods of Coolridge, and gave him in payment a note drawn by G. C. Whitney in favor of G. Whitney for $306 at four months, and purporting to be indorsed by G. Whitney and D. M. Whitney, but the indorsements were forged. The plaintiff never returned or offered to return the note, but brought assumpsit for goods sold, and it was held that he could not recover. That in order to rescind the contract, he must first place the other party in statu quohe must restore what he had received. The rule of law is precisely the same where the party defrauded in part, but who received any thing of value, chooses to hold void the contract and retake the goods, he must restore whatever he has received, in whole or in part, as payment or to secure payment. It is contended, however, inasmuch as the goods in the case at bar had passed out of the custody and control of the fraudulent purchaser, and were replevied from the sheriff who had Dec. Term, 1846. Frost v. Lowry. Dec. Term, 1846. IN BANK. taken them in attachment, that an offer to restore the acceptance was unnecessary prior to the replevin, or even subsequently; and Stevens v. Austin, 1 Pick. Rep. 557, is cited in support of the position. That was the purchase of a wagon; the contract was fraudulent on the part of the purchaser, and he obtained a bill of sale of the wagon by fraud; possession was not delivered to him, and he took away the wagon without the consent of the owner, and sold and delivered it to the defendant, who had notice of the fraud and trespass. The money and note which he gave for the wagon were not tendered back before suit, but brought into court on the trial to be disposed of as the court might direct. It was held, that the plaintiff could recover without making the offer of restoration. The decision was right, but placed by the learned Judge upon the wrong ground. The wagon never having been delivered, or gone out of the possession of the owner with his consent, he had a right to his action of trespass against the fraudulent vendee for taking it; and he need not have tendered back any thing, for he never parted for a moment with the possession of the property, and its taking was an actual rather than a constructive trespass. The Court, however, seem, by the reported case, to have excused the tender, simply on the ground that the property had passed out of the hands of the fraudulent vendee; that the defendant, who knew of the fraud, had no right to claim a tender as to himself, for he was entitled to nothing, and could not set up a want of tender or restoration to the fraudulent vendeé, because it was res inter alios, with which he had no concern. Now, this position, with all due deference, is wholly untenable, if it be applied to an actual though fraudulent purchase, accompanied with delivery of possession. The purchase, because of the fraud of the vendee, is not void, but voidable at the option of the vendor. The purchaser sells the goods and delivers possession to a third person, who has notice to charge him; his title, like that of the first purchaser, is good, until the vendor take measures to avoid it. It is defeasible just as the title of the first purchaser was de Frost v. Lowry. Dec. Term, 1846. feasible, and not otherwise; and until the vendor take the IN BANK. necessary steps to avoid it, it is good; and it will not do to say that the steps necessary to avoid the title of the first purchaser, or an act done by the original vendor, confirming his title, are res inter alios. They are not so; for there is that privity in estate, or more strictly, dependency of title, which makes those acts, according to the very strictness of the law, operative on the title of the last vendee. Suppose the original vendor receive full payment of his fraudulent purchaser, or give him a release for the price of the goods, or do any act which may release him, can it be for a moment doubted that the vendee, with notice of the fraudulent purchase, is released also, although these things are res inter alios acta? And is it not equally clear, that neglect of the vendor to do an act necessary, as between him and his fraudulent purchaser, to avoid the contract, is equally necessary as against the vendee of that purchaser. Can it be for a moment held, that he can enable himself to bring and sustain suit against the vendee of his purchaser, without placing himself in a situation to make void the sale to his purchaser? But it is very true, after a transfer by the fraudulent purchaser, he can neither say nor do any thing which will impair the title of his vendee. He must be merely passive, and cannot aid the vendor by his admission or acquiescence to sustain his action, for it is not by assent or acquiescence, or agreement with the fraudulent purchaser, after he has parted with the property, that the original contract of purchase is to be avoided, but by the exercise of a legal right existing in the vendor, at and from the time of the sale, by reason of the fraud to avoid it. Now, all acts done by the fraudulent purchaser, previous to the last transfer, affect his title to the property, and through that title affect the vendee who has notice-and all acts done by the first vendor to affirm the sale, to waive objection to the fraud, to qualify or disqualify himself to take advantage of it and regain his property, bear also on the last vendee and confirm or destroy his defeasible title. Under these circumstances, then, |