Maxfield v. Schwartz

• Decision Date: 30 December 1890
• Parties: MAXFIELD ET AL. v SCHWARTZ ET AL.
• Court: Minnesota Supreme Court

45 Minn. 150

47 N.W. 448

MAXFIELD ET AL.vSCHWARTZ ET AL.

Supreme Court of Minnesota.

Dec. 30, 1890.

(Syllabus by the Court.)

1. When one of two contracting parties is fraudulently induced to execute a written instrument upon the false representation that it expresses the agreement which they had made, the party defrauded may defend against the enforcement of the fraudulent instrument by the other party, even though he may be chargeable with want of prudence in relying upon the false representations.

2. This defense may also be made when a third party, for whose benefit the contract was made, seeks to enforce it.

Appeal from district court, Scott county; EDSON, Judge.

For report on former appeal, see 45 N. W. Rep. 429.

Southworth & Coller, for appellants.

J. L. Macdonald, for appellees.

DICKINSON, J.

This is an appeal by the plaintiffs from an order overruling their demurrer to one of the defenses, as set forth in the answer. The plaintiffs, creditors of the partnership of Berens & Nachtsheim, prosecute this action to recover from the defendants the amount of their debt against that firm, basing their right of recovery on a written instrument executed between Berens & Nachtsheim and the defendants, by the terms of which the latter, in consideration of the sale and delivery to them by that firm of all their property, agreed to pay all their debts. The right of the plaintiffs to recover in this action was affirmed by our decision upon a former appeal. Maxfield v. Schwartz, 45 N. W. Rep. 429. While the answer is so drawn as to be subject to criticism, and while the defense to which we are about to refer is obscured by allegations of immaterial matter, we think that the pleading must be regarded as alleging that the real agreement of the contracting parties was that, in consideration of the transfer by Berens & Nachtsheim of all their property to the defendants, the latter should pay the debts of Berens & Nachtsheim to the extent of the proceeds of such property, but that Berens & Nachtsheim procured the defendants to execute the written instrument, upon which this action is brought, by falsely and fraudulently representing to them that it expressed the agreement which they had made, they believing such representations to be true. It is further alleged that the defendants are Germans by birth, and understood the English language so imperfectly that they were unable to read the written contract intelligently, or to understand its purport if it were read to them. If the facts were as stated, the execution of the written instrument by the defendants was procured by the fraud of the other contracting parties, and for that reason the defendants may resist a recovery upon it. They may deny that it is their contract, although, of course, it being, as they admit, impossible to now rescind, they would be bound to perform the agreement actually made by them. This they allege they have done. If Berens & Nachtsheim were seeking to enforce the written contract, a plea of fraud,...