CHAPTER XI. VOID TRANSACTIONS. THERE remains a phase of deception in which the fraud is such as to prevent the existence of any new relation based upon it, a phase of fraud alluded to in earlier pages of this volume, but not developed there. Cases of the kind may arise by misrepresentation, or by act not misrepresentation. § 1. MISREPRESENTATION. While in ordinary cases misrepresentation has the effect of rendering a contract voidable only, and not void, this assumes that the case was such that the misrepresentation still permitted the creation of a contract. The contrary may in fact be true. But to prevent by misrepresentation the existence of a new and binding relation into which the wrongdoer has sought to put his victim, there must have been a radical misrepresentation, a misrepresentation i. e. of the very nature itself of the relation in question, as distinguished from such matters as its usefulness, properties, purpose,3 1 Ante, pp. 73, 74; and see especially chapter on Silence, pp. 594, 595. 2 The result of this, as we have elsewhere seen (ante, pp. 73, 74), is that the contract is binding until properly rescinded. Whether this has been sufficiently observed in all cases may be doubted. In a New York case a mortgage by A to B had been assigned to C under fraudulent representations, and C now brought suit to foreclose. A answered payment to B, and this was held a defence; the ground being that B still had the equitable title to the property, and C was only a trustee for him. Hall v. Erwin, 66 N. Y. 649. The case is not fully reported. 3 In a recent case certain persons who had pledged goods with the plaintiff's obtained the same from the pledgees by misrepresentation of the purpose for which they wanted them, and then pledged them for value to the defendants, who had no notice of the fraud. extent, or its bearing upon other things. When however it is of that radical nature, the result will be that for the greater part2 no rights can grow out of the transaction. Thus if a person seek to bring about a contract of any sort, his purpose will utterly fail if he misrepresent the very kind of contract which the other party is to enter into, assuming that the latter has acted in the matter with due care. No contract at all would result in such a case, for want of union of minds; not only could the wrong-doer acquire no rights by the transaction, - others could acquire none out of it which they could enforce against the party upon whom the fraud was perpetrated.3 Illustrations of this proposition may be drawn from cases already presented in these pages. Thus if the payee of a negotiable bill of exchange represent the instrument to be a contract of guaranty, and induce another to indorse it in blank, without fault, upon that footing, no liability can arise against the supposed indorser even in favor of a purchaser for value without notice. Again if a negotiable instrument, executed but not put into circulation, were obtained from the owner of the paper by a false representation that the wrongdoer was taking something else, the instrument would have no validity against the party deceived (if without fault), in favor of any one whomsoever into whose hands it might happen to pass. The same would be true, a fortiori, of obtain It was held that the plaintiffs could not recover the goods; they had only a special property in them, and they had given that up, under a fraud indeed, which would have entitled them to restoration against the wrong-doers, but not against the defendants. Babcock v. Lawson, 5 Q. B. D. 284, af'g 4 Q. B. D. 394. 1 In Hewitt v. Clark, 91 Ill. 605, a note supposed and intended by the maker to be for $10.00 was made out for $300.00, and signed by him without fault. It was held invalid in the hands of a bona fide purchaser for value; this under statute. 2 See ante, p. 74, note. 3 Foster v. Mackinnon, L. R. 4 C. P. 704, ante, p. 258; Gross v. Drager, 66 Wis. 150. 4 Foster v. Mackinnon, supra. 5 See Burson v. Huntington, 21 Mich. 415; Gibbs v. Linabury, 22 Mich. 479; Whitney v. Snyder, 2 Lans. 477; Chapman v. Rose, 56 N. Y. 137; Kellogg v. Steiner, 29 Wis. 626; Corby v. Weddle, ing possession of a deed in that way; no right whatever would pass, and the property could be recovered even from a bona fide purchaser for value.1 Indeed this would be true of a deed, or a note, deposited in escrow, and so obtained before the terms of the deposit had been complied with.2 Not a few cases have arisen in recent times of misrepresentation, of the same radical character, by personation; A representing himself to be B, and in the supposed character of B obtaining a contract with C. This sort of fraud has generally been practised in sales of goods, the wrongdoer being the purchaser, and directly selling for value and without notice, or disappearing after receiving the goods from a carrier. The question in the first form is, whether the second buyer acquires a good title against the deceived vendor; and this turns upon the further question whether a de facto contract was effected in the first transaction.3 57 Mo. 452; Briggs v. Ewart, 51 Mo. 245; Martin v. Smylee, 55 Mo. 577 (but quære if the Missouri cases have not gone too far); ante, p. 73, note. Comp. Midland R. Co. v. Hitchcock, 37 N. J. Eq. 549; Ballard v. Burgett, 40 N. Y. 314; also such cases as Holmes v. Trumper, 22 Mich. 427; Greenfield Bank v. Stowell, 123 Mass. 196; and Angle v. Northwestern Ins. Co., 92 U. S. 330. 1 Abingdon v. Butler, 1 Ves. Jr. 206; Taylor v. Davis, 72 Mo. 291; Henry v. Carson, 96 Ind. 412; Fisher v. Beckwith, 30 Wis. 55; Everts v. Agnes, 4 Wis. 343; s. c. 6 Wis. 453. See Windett v. Hurlburt, 115 Ill. 403; Weaver v. Carpenter, 42 Iowa, 343, long delay. 2 See Henry v. Carson, supra; Burson v. Huntington, 21 Mich. 415; Powell v. Conant, 33 Mich. 396; Andrews v. Thayer, 30 Wis. 228; Hutchinson v. Crane, 100 Ill. 269, purchaser with notice; Cotton v. Gregory, 10 Neb. 125. Comp. Biederman v. O'Connor, 117 Ill. 493. 8 Cundy v. Lindsay, 3 App. Cas. 464; In re Cooper, 20 Ch. D. 611, C. A.; Hardman v. Booth, 1 Hurl. & C. 803; Rodliff v. Dallinger, 141 Mass. 1; Edmunds v. Merchants' Transp. Co., 135 Mass. 283; Moody v. Blake, 117 Mass. 23; Alexander v. Swack hamer, 105 Ind. 81; ante, p. 403, note. See also Smith v. Wheatcroft, 9 Ch. D. 223, that where personal considerations do not enter into the case, mistake will not avoid a contract; but quære if that would be so when the mistake was caused by fraud. 'If A, personating B, executes a deed in the name of B, purporting to convey B's property, no right or interest can possibly pass by such an instrument. It is not a deed. It makes no difference in law that A had the same name as B, if the false personation is established; still the instrument is not a deed, and that plea would be a complete answer by B or any one claiming through him.' The case first cited is the most valuable and authoritative decision upon the subject. L was a manufacturer in Ireland. Alfred Blenkarn, who occupied a room in a house looking into Wood Street, Cheapside, London, wrote to L, proposing a considerable purchase of L's goods, and in his letter used this address, 37 Wood St., Cheapside,' and signed the letters (without any initial for a Christian name) with a name so written that it appeared to be 'Blenkiron & Co.' There was a respectable firm of that name, W. Blenkiron & Co.,' carrying on business at 123 Wood Street. L sent letters and afterwards supplied goods, the letters, the goods, and the invoices being all addressed to 'Messrs. Blenkiron & Co., 37 Wood St.' The goods were received by Blenkarn at that place, and disposed of for value to the defendants, who were entirely ignorant of the fraud. Upon these facts the House of Lords, in an action against such purchasers to recover the value of the goods, held that no contract had been made with Alfred Blenkarn, that no property whatever passed to him, not even a possessory title, and hence that nothing had passed to the defendants, who were accordingly liable.1 Lord Cairns said that Blenkarn had caused the plaintiffs to believe that they were dealing, not with him, but with Blenkiron & Co., and that Blenkarn had acted as if he had forged that firm's signature and intercepted goods intended for them. How is it possible,' said his lordship, to imagine that in that state of things any contract could have arisen between the respondents and Blenkarn...? Of him they knew nothing, and of him they never thought. Their minds never even for an instant of time rested on him, and as between him and them there was no consensus of mind which could lead to any agreement Kay, J., sustained on appeal, in In re Cooper, supra. The other cases supra are to the same effect. 1 Perkins v. Anderson, 65 Iowa, 398, contra, on the ground that the carrier, in delivering the goods, was the plaintiff's agent, is wrong. or any contract whatever.' The court therefore, it was added, were not dealing with a de facto contract; such a contract would have made a different case. A contrasting case1 may now be presented, in which a somewhat similar question arose, more recently, in this country. Three actions of tort were brought against a common carrier for a wrongful delivery of goods; in two of them a person falsely representing himself to be Edward Pape, of Dayton, Ohio, a reputable merchant there, appeared in person in Boston and bought of the plaintiffs the goods which were the subject of the suits. The court held that, upon these facts, and upon the test of the English case just stated, there was a sale, and that the title to the goods passed to the purchaser. The minds of the parties, the court said, had met upon all the terms of the sale, and upon the seller and the buyer. The seller could not have supposed that he was selling to any other person; his intention was to sell to the person present and identified by sight and hearing;' and it did not defeat the sale that the buyer assumed a false name. There was a de facto contract within the rule of the English authority; the contract was only voidable, not void; and the defendant, the carrier by whom the goods were forwarded, had no duty to inquire into the validity of it.2 1 Edmunds v. Merchants' Transp. court in Samuel v. Cheney, supra, ‘is Co., 135 Mass. 283. not that he will ascertain who is the 2 It delivered them to the person owner of the goods and deliver them to who bought and owned them, who went him, but that he will deliver the goods by the name of Edward Pape, and thus according to the directions. If a man answered the direction upon the pack- sells goods to A, and by mistake directs ages, and who was the person to whom them to B, the carrier's duty is perthe plaintiff sent them. Dunbar v. Bos- formed if he delivers them to B, alton R. Co., 110 Mass. 26.' Ib., Morton, though the unexpressed intention of the C. J.; Samuel v. Cheney, 135 Mass. forwarder was that they should be de278; Robertson v. Coleman, 141 Mass. livered to A.' The case of an action 231; Dodge v. Bank, 30 Ohio St. 111; against a carrier was distinguished from Empire National Bank v. Shotwell, 35 Cundy v. Lindsay, supra. See Perkins Kans. 360. v. Anderson, 65 Iowa, 378; Dunbar v. 'The contract of the carrier,' said the Boston R. Co., 110 Mass. 26; McKean |