Dettra v. Kestner , 147 Pa. 566 ( 1892 )

Per Curiam,

By agreement of parties, trial bj^ jury was waived and the decision of this case was submitted to the court pursuant to provisions of the act of Afu-il .22, 1874.

It was claimed by defendant that he was induced to apply for and accept membership in the Standard Mutual Live Stock Company (of which plaintiff is receiver) by reason of false and fraudulent representations made to him by the officers of the company, as to its financial standing, amount of insurance, etc., and that he had no knowledge of the fraud thus practiced upon him until demand was made by the receiver for payment of the assessment in suit.

The facts constituting the alleged fraud were substantially found by the court; but it'was also found that the rights of innocent third parties afterwards intervened, and for that reason the learned judge, in his second conclusion of law, held that the fraud practiced on the defendant could not avail him in this suit.

Where the rights of innocent third parties have not intervened the principle contended for by defendant is applicable. In such ease, fraud justifies rescission of the vitiated contract, and as far as possible remits the .parties to their former condition; but when, as in this case, the rights of innocent third parties have intervened, and it is essential to their protection; that a contract, otherwise vitiated by fraud, and therefore voidable, should be sustained, equity requires that it be upheld. The application of that principle to the facts found by the court practically disposed of the case.

There was no error in the ruling complained of in the first specification, nor was there any error in either of the three conclusions of law recited in the remaining specification of error. Their correctness is fully vindicated in the opinion of the learned judge who presided at the trial. For reasons more fully given by him the judgment should be affirmed.

Judgment affirmed.