Merchants' Bank v. Dwight

*660In the opinion delivered, after stating the facts at length, Bosworth, J., who delivered the opinion of the court says:—These facts present this question: Is a defendant, who was guilty of a fraud in incurring an obligation, which has been surrendered by another party to the contract, after he had discovered the fraud, and who thereupon took a new obligation, in incurring which the defendant was guilty of no fraud, liable to be arrested on the latter obligation, by reason of his fraud in incurring the first ?

When a defendant is sued in an action arising on contract, to recover a debt, or a sum which he has obligated himself to pay, the Code does not authorize an arrest, because the defendant was guilty of a fraud in incurring a prior and different obligation to pay the same money. To authorize an order for his arrest, he must have been guilty of a fraud in incurring the obligation for which the action is brought, in which the order of arrest is made or applied for. Code, § 197, sub. 4.

......The contract, or obligation, on which this action is brought, was made or incurred without any fraud being practised to procure it. It was accepted as a settlement of the transaction, in respect to which the alleged fraud was practised, and with full knowledge of it. I think this ground sufficient to require a reversal of the order appealed from.