Graver v. Faurot

76 F. 257, 22 C.C.A. 156, 1896 U.S. App. LEXIS 2121
CourtCourt of Appeals for the Seventh Circuit
DecidedOctober 5, 1896
DocketNo. 217
StatusPublished
Cited by22 cases

This text of 76 F. 257 (Graver v. Faurot) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Graver v. Faurot, 76 F. 257, 22 C.C.A. 156, 1896 U.S. App. LEXIS 2121 (7th Cir. 1896).

Opinion

WOODS, Circuit Judge,

after making tke foregoing statement, delivered the opinion of the court.

We are of opinion that upon the facts stated in his bill the appellant was entitled to relief. In Insurance Co. v. Hodgeson, 7 Cranch, 332, where the suit was to enjoin so much of a judgment at law as exceeded the value of the vessel insured, on the ground that overinsurance had been obtained by misrepresentation of the age and tonnage of the vessel, Chief Justice Marshall, defining the scope of equitable relief in such cases, said:

“Without attempting to draw any preciso line to which courts of equity will advance, and which they cannot pass, in restraining parties from availing themselves of judgments obtained at law, it may safely be said that any fact which clearly proves it to be against conscience to execute a judgment, [260]*260and of "which the injured party could not have availed himself In a court of law, or of which he might have availed himself at law, hut was prevented by fraud or accident, unmixed with any fault or negligence in himself or his agents, will justify an application to a court of chancery. On the other-hand, it may with equal safety bo laid down as a general rule, that a defense' cannot be set up in equity, which has been fully and fairly tried at law, although it may be the opinion of that court, that the defense ought to have been sustained at law. In the case under consideration the plaintiffs ash the aid of this court to relieve them from a judgment on account of a defense which, if good anywhere, was good at law, and which they were not prevented by the act of the defendants, or by any pure and unmixed accident, from making at law. It will not be said that a court of chancery cannot interpose in any such ease. Being .capable of imposing its own .terms on the party to whom it grants relief, there may be cases in which its relief ought to be extended to a person who might have defended, but has omitted to defend himself at law. Such cases, however, do not frequently occur. The equity of the applicant must be free from doubt. The judgment must be one of which it would be against conscience for the person who has obtained it to avail himself. The court is of opinion that this is not such a ease.”

The general proposition there stated, that “any fact which clearly proves it to be. against conscience to execute a judgment * * * will justify an application to a court of chancery,” is quoted and reaffirmed in Marshall v. Holmer., 141 U. S. 589, 596, 12 Sup. Ct. 62. In Ward v. Town of Southfield, 102 N. Y. 287, 293, 6 N. E. 660, where it was alleged as the ground for setting aside a judgment at law that the judgment plaintiff was aware of and fraudulently concealed a fact which, if known, would have been a defense to the action, the court, after recognizing the rule declared in U. S. v. Throckmorton, 98 U. S. 61, that the fraud, to be available, must be.extrinsic, “not in the subject of the litigation, not in anything which was involved in the issues tried, but fraud practiced upon a party or upon the court during the trial or in prosecuting the action, or in obtaining, the judgment,” said:

“It is not practicable nor possible to formulate a rule on tbis subject wbicb will be sufficient to solve all ease!-:, but, where fraudulent concealment of a fact is relied upon for tbe purpose of impeaching and setting aside a judgment regularly obtained, it must bn an intentional concealment of a material and controlling fact, for the purpose of misleading and taking an undue advantage of the opposite party. It would not be wise or politic to carry the rule so far as to make it incumbent upon every plaintiff to reveal to the defendant any infirmity in his case, and to require every defendant to reveal to the plaintiff every infirmity in ais defense. Where there is no relation of confidence between the plaintiff and the defendant, the parties stand at arm’s length. They come into court as adversaries, and neither party is bound to make any revelation of his ease to the other. The plaintiff must be prepared to prove all the facts; constituting his cause of action, and to meet any defense which the defendant may interpose, and the defendant must be prepared to establish any defense which he may have. Neither party can mislead the other fey any positive or actual fraud. Nor can he, for the purpose of perpetrating a fraud upon the other party, conceal such facts as good faith and common honesty require him to reveal. These principles are illustrated in many cases to be found in the books. Patch v. Ward, 3 Ch. App. 203; U. S. v. Throckmorton, 98 U. S. 61; Smith v. Nelson, 62 N. Y. 286, 288; Ross v. Wood, 70 N. Y. 8, 10; Hunt v. Hunt, 72 N. Y. 217, 227; Verplanck v. Van Buren, 76 N. Y. 247, 257.”

Tbe attack kere is not upon a judgment at law, but upon a decree in equity; and manifestly it is not true of a complainant in equity that when he brings his bill he must come prepared with proof to [261]*261maintain it, and to meet any defense which, may be interposed. It is his p.ri vilege to search the conscience of his adversary by requiring, him to answer under oath, and if possessed of no other evidence, or means of obtaining it, he must accept or at least yield to the answer as true. The appellant alleges that when he brought his first suit, though he was certain of the fact, he was without competent evidence that Faurot had been a party to the fraud practiced upon him. There was therefore no alternative but to require the respondents to answer under oath, and, that having been done, the proposition that “neither party is bound to make any revelation of his case to the other’-' was not applicable. On the contrary, it became imperative upon the respondents to make a frank and full disclosure, and not, by concealing anything of which good faith and common honesty required confession, to mislead the complainant into the abandonment of this suit The false answer was, under the circumstances, a “positive and actual fraud,” both upon the complainant and upon the court. It was an additional or new fraud, distinct from that against which relief was sought; and by means of it, as the demurrer admits, the decree for the dismissal of the bill was obtained. It is certainly against: conscience and reason that a decree so obtained should he available, for any use, to one implicated in the fraud by which it was procured.

It is urged, however, that after the dissolution of the temporary injunction the appellant, finding himself without evidence to maintain his suit, should have dismissed his bill, instead of allowing the case to be disposed of as it was by a decree, which, it is insisted, is res judicata between the parties, making inadmissible the evidence relied upon for relief. It is evident now that a dismissal of the suit would have been, and perhaps at the time ought to have been perceived to be, the better course; but if is not for the appellee to insist thai by such an error of judgment, attributable to his own confessed perjury, which made the complainant hopeless of success in the suit, all right to relief was lost. That was not the result, unless the doctrine of res judicata, as applied in U. S. v.

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Bluebook (online)
76 F. 257, 22 C.C.A. 156, 1896 U.S. App. LEXIS 2121, Counsel Stack Legal Research, https://law.counselstack.com/opinion/graver-v-faurot-ca7-1896.