Dunn v. Hite

Citations

• 27 N.M. 53
• 195 P. 1078

Syllabus

<p>SYLLABUS BY THE COURT</p> <p>1. Where A. signs a note as surety for B., payable' to C., and gives a chattel mortgage on property owned by him to secure the payment of the note on which he is surety, and B. also gives a chattel mortgage on property owned by him to secure the payment of the note, and later the maturity of the note is approaching, and A. and B. enter into a written contract with C., by the terms of which it is agreed that B. is to sell all his cattle to D. at a given price per head, and payment for the same is to be applied on the note, and A. agrees that, if the money received is not sufficient to pay the note, he will give his individual note, due in six months thereafter, and secure the same by chattel mortgage, and B.’s cattle are sold under the agreement and the money is applied, and there remains a deficiency, and A. refuses to carry out the terms of the subsequent contract, held, that the subsequent contract did not supersede and cancel the original note and mortgage, and that C.' had a right to proceed by foreclosure thereon. P. 57</p> <p>2. Contracts, illegal because opposed to statute, or to public policy, or to good morals, cannot be ratified but contracts obtained by actual fraud, by undue influence, by breach of fiduciary duty, and the like may be confirmed or ratified. If a party possessing the remedial right to have a contract avoided on the ground of fraud has obtained full knowledge of all the material facts involved in the transaction, has become fully aware of its imperfection and of his own rights to impeach it, or ought and might, with reasonable diligence become so aware, and all undue influence is wholly removed, so that he can give a perfectly free consent, and he acts deliberately, and with the intention of ratifying the voidable transaction, then his confirmation is binding, and his remedial right, defensive or affirmative, is destroyed. ■ P. 57</p>