Graham v. Meyer

• Decision Date: 14 April 1885
• Citation: 1 N.E. 143,99 N.Y. 611
• Parties: GRAHAM, Executrix, etc., v. MEYER.
• Court: New York Court of Appeals Court of Appeals

99 N.Y. 611

1 N.E. 143

GRAHAM, Executrix, etc.,

v.MEYER.

Court of Appeals of New York.

Filed April 14, 1885.

S. P. Nash and W. J. Gibson, for appellant.

Joseph H. Choate and B. Roelker, for respondent.

EARL, J.

On the twentieth day of May, 1859, plaintiff's testator, John Graham, recovered in the United States circuit court, against the defendant, a judgment for $243,204.42. On the next day the defendant made a generalassignment for the benefit of his creditors, preferring all of them to Graham. The claims of the preferred creditors amounted to $250,000, and the property assigned amounted in value to about $400,000. The defendant at once also took measures looking to a review of the judgment against him in the supreme court of the United States. In November, of the same year, Graham commenced, against the defendant and his assignees, a creditors' suit to set aside the assignment as fraudulent, and to reach the assigned property for the satisfaction of his judgment. While these conditions existed, Graham and the defendant, in the winter and spring of 1860, through their respective agents, entered into negotiations for a compromise and settlement of the judgment, which resulted in the payment by the defendant of the sum of $109,850, in full satisfaction and discharge of the judgment.

In the summer of 1866 this action was commenced by Graham, who died after the trial of the action, to set aside the compromise, and satisfaction of the judgment, and to recover the balance due upon the judgment, on the ground that the compromise was effected and satisfaction procured by the fraudulent representations of the defendant and his attorney as to the amount and condition of his property. The judge sitting at the special term found against the plaintiff upon his allegations of fraud, and he ordered judgment dismissing the complaint. The judgment was, upon appeal, affirmed at the general term, and then this appeal was taken to this court. We have carefully real and considered all of the evidence, and are of opinion that the findings of fact by the trial judge were abundantly justified by the evidence. The opinions given at the special and general terms contain all that needs to be said about the facts and the general features of the case.

It appears that after paying the preferred creditors, and the sum agreed upon for the compromise of the judgment, there remained of the assigned estate, which came to the defendant, between $30,000 and $40,000. The claim now made on behalf of the plaintiff is that, notwithstanding there was a failure to satisfy the court that any fraudulent representations were made on the part of the defendant to induce the compromise, yet it should be set aside on account of the undue concealment by him and his attorney of the true condition of the assigned estate. There are several answers to this claim of the plaintiff, which will be separately set forth:

1. It does not appear that either the defendant or his attorney knew with any certainty how much property would remain to the defendant after paying the preferred creditors and the amount of the compromise. They knew that there would be a large surplus after paying the preferred creditors; but there was no proof or finding that they knew that there would be any considerable surplus after also paying the sums agreed to be paid to Graham, and hence there is no sufficient basis for imputing to them any undue concealment.

2. There is no allegation in the complaint, and no finding and no just inference from the evidence, that Graham was in any way influenced by the concealment, if any. Upon the whole evidence there is no reason to doubt that he would have made the same compromise if he had had all the information about the estate of the defendant which either he or his attorney could at the time have given. The estate was in the hands of the assignee. The defendant regarded the judgment against him as unjust, and it was certainly a very hard one for him to pay. He claimed it was affected with error, and he was taking proceedings to procure its reversal. Graham appears to have been insolvent, and in great need of money to compromise with his creditors. Under such circumstances, if Graham had known the precise condition and value of the assigned estate, it could not be said that the compromise was an unreasonable or an unwise one for him to accede to.

3. But the defendant was not bound to make any disclosure of his financial condition. He made no misrepresentations, and did...