Knight v. Linzey

8 L.R.A. 476, 45 N.W. 337, 80 Mich. 396, 1890 Mich. LEXIS 653
CourtMichigan Supreme Court
DecidedMay 2, 1890
StatusPublished
Cited by10 cases

This text of 8 L.R.A. 476 (Knight v. Linzey) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Knight v. Linzey, 8 L.R.A. 476, 45 N.W. 337, 80 Mich. 396, 1890 Mich. LEXIS 653 (Mich. 1890).

Opinion

Morse, J.

This is another Bohemian oat case, and comes here from the Shiawassee circuit court, where the plaintiff recovered judgment. The declaration is framed upon the same theory as those in Hess v. Culver, 77 Mich. [397]*397598, and Pearl v. Walter, 80 Id. 317. The plea was the general issue. The same objection was made to the introduction of proof under the declaration as we have recently noticed in Pearl v. Walter, supra, and will need no further attention.

The principal points raised in the case relate to the charge of the court. It was alleged in the declaration that the plaintiff was induced to make two notes, one for §100 and one for $200, and that these notes were sold before due, by the defendant Linzey, to an innocent purchaser for value. It appeared upon the trial that the $200 note was sold before due to one Edward Eose, and the §100 note to one Silas Frye, and that the plaintiff had paid them to these parties before bringing suit. Linzey sold the note to Eose; and Davison, the note to Frye. Linzey testified that he told both Eose and Frye, before they purchased the notes, that they were given for Bohemian oats, and that he informed plaintiff of this fact before he paid the notes. Plaintiff, however, denies that Linzey told him anything of the kind; and Eose and Frye swear that they did not know the notes were given for Bohemian oats until after they purchased them. Eeuben Johnson testified that he heard Linzey tell Eose that the note was given for Bohemian oats before Eose bought it; and two other witnesses swore that they heard Linzey tell plaintiff that, if he was in Knight’s place, he would not be in a hurry about paying the notes, as Eose knew what they were given for before he purchased.

The counsel for the defendants insisted upon submitting to the jury the question whether or not Eose and Frye, or either of them, were innocent purchasers of the notes, and requested the court to instruct the jury that, if they found both of them not to be innocent purchasers, and plaintiff knew it, his payment of the notes to them was voluntary, and he could not recover, or, if either [398]*398one of them was not an innocent purchaser, and plaintiff knew it, he could not recover for the note held by guch one, and also submitted the following request, in addition:

“9. The notes in question in this suit were void, and the purchasers thereof are supposed to know for what they are given, and could not recover upon the notes of plaintiff until they first proved, by a preponderance of evidence, that they were innocent purchasers of the same; and it became the plaintiff’s duty to make a fair and diligent inquiry into the facts, and ascertain whether they were innocent purchasers, before he paid the notes, and, if he paid them, without making such inquiry, then he made the payment voluntarily, and cannot recover in this case; and, before he can recover, he must prove, by a preponderance of evidence, that said Eose and Frye were innocent purchasers of the notes.”

The court gave these requests, but qualified the last or ninth by adding:

“Unless you find that he was fraudulently influenced to make and deliver the notes by Linzey, the defendant, or by Davison in the presence of Linzey.”

Counsel also requested a charge as to each note, that, • if they found the purchaser (Eose or Frye) not an innocent purchaser, and that he knew for what the note was given, then the plaintiff, if before payment he had been reliably informed of facts which showed that such purchaser was not a Iona fide one for value, was not obliged to pay the same, and it became a voluntary payment, and he could not recover of Linzey the amount of such payment. This was given, with the following qualification:

“ Unless the jury should find that there was fraud practiced on the plaintiff in obtaining the notes from him by defendant and Davison, and of which fraud plaintiff had no knowledge or information when he gave said notes.”

These directions were, if anything, more favorable to the defendants than the law is. If the plaintiff, an inno[399]*399cent party, was defrauded into giving these notes, he was not obliged, upon information obtained from the party who had defrauded him, or any other information short of a certainty, to contest these notes in the hands of a stranger to the transaction of their inception, and who would be presumably an innocent holder of them. He was not compelled to take the chances of two lawsuits to obtain relief from, or redress for, the fraud committed upon him.

The court charged the jury, substantially as requested by the defendants, that if the plaintiff entered into the transaction, knowing that in the end some person or persons must be defrauded, and knew how the oats were bought and sold, then plaintiff and defendants were engaged in a transaction against public policy, and therefore void; and the law would leave each of them where they had left themselves, without redress, and the plaintiff could not recover if he knew of the common fraud. This charge was correct, but it is claimed that the circuit-judge entirely neutralized the effect of it by stating subsequently in his charge as follows, it being the plaintiff’s third request:

“Knight had a perfect right to rely upon the statements of Linzey, and was not bound to seek information elsewhere, and Linzey was bound to make true statements to Knight; and, if he made false statements to Knight which were material, and Knight relied upon such statements, and believed them, and parted with his two promissory notes, and afterwards paid said notes, and Knight was not equally in fault with Linzey, then Knight would be entitled to recover.”

The court further said in his general charge, in reference to this subject:

“I charge you that if two men, of equal knowledge, enter into a contract, deliberately, for the purpose of doing an act which is fraudulent, and the tendency of which is to contravene the principles of the common law, [400]*400or in violation'of the statute, then each would he equally in fault; and, so long 'as the contract remains unperformed, neither party would be aided at law or in equity to its enforcement. The law would leave them where they had placed themselves. But if they were not equally in fault, — and this doctrine applies where the action is brought upon the contract, — if one of them was influenced by the judgment of the other, did not act upon his own knowledge of the facts, and was ignorant of the facts until he was informed by the other party of their existence, and relied upon the judgment of the other party, and upon his statements of the facts communicated to him by the other party, and believed them to be true, and then relied upon the judgment of that other person, he at the time believing and relying upon that other person as to the existence of the facts communicated to him, as to-the honesty of the subject-matter of the contract entered into, — of its being lawful, — he would not in such case be a knowing and guilty participant in the violation of law, or in contravention of public policy.

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Bluebook (online)
8 L.R.A. 476, 45 N.W. 337, 80 Mich. 396, 1890 Mich. LEXIS 653, Counsel Stack Legal Research, https://law.counselstack.com/opinion/knight-v-linzey-mich-1890.