Hefter v. Cahn

• Decision Date: 30 September 1874
• Parties: LOUIS HEFTER et al.v.AARON CAHN et al.
• Court: Illinois Supreme Court

73 Ill. 296

1874 WL 8981 (Ill.)

LOUIS HEFTER et al.

v.AARON CAHN et al.

Supreme Court of Illinois.

September Term, 1874.

OPINION TEXT STARTS HERE

APPEAL from the Circuit Court of Cook county; the Hon. JOHN G. ROGERS, Judge, presiding.

Messrs. MCCLELLAN & HODGES, for the appellants.

Messrs. ROSENTHAL & PENCE, for the appellees.

Mr. JUSTICE CRAIG delivered the opinion of the Court:

This was an action of assumpsit, brought by appellees, in the circuit court of Cook county, against appellants, to recover a balance claimed to be due for goods sold and delivered.

A trial was had before a jury, which resulted in a verdict for appellees for $873.12. A motion for a new trial was overruled, and the court rendered judgment upon the verdict.

The facts contained in this record, upon which the judgment is based, so far as is material to be stated, in order to get a correct understanding of the case, are these:

At the time of the fire in Chicago of October 9th, 1871, appellants were indebted to appellees in the sum of $1746.25. After the fire, one of appellants informed appellees that they could pay all their debts in full if their creditors would give them time. A short time after this, as the evidence tends to show, Mr. Livingston, who was a brother-in-law of appellants, acting as their agent, called upon appellees and informed them that appellants had been looking over their affairs, and had found that they could not pay over 35 cents on the dollar of their indebtedness. Appellees then informed Livingston they would not accept the amount offered, but they thought the creditors would be willing to take 50 cents on the dollar, and that they would sign an agreement to compromise on that sum, if the other creditors would. A few days after this, Livingston called on appellants again, and stated that all the creditors would settle at 50 cents on the dollar. Appellees then consummated the agreement, and a contract was prepared and executed by the creditors, as follows:

“We, the undersigned, creditors of Hefter Brothers, of Chicago, do hereby agree to accept fifty cents (50) per dollar in full satisfaction and settlement of our respective claims against them, such settlement to be made in two notes of twenty-five (25) per cent each, dated December 1, 1871, and due respectively three and six months from date, and to be signed by Hefter Bro. and indorsed by Engle & Livingston.

Chicago, Nov. 30th, 1871.

+-----------------------------------------------------------+
                ¦(Signed)¦Cahn, Wampold & Co.,                     ¦$1746.25¦
                +--------+-----------------------------------------+--------¦
                ¦        ¦Henry Greenebaum, Pres. German Nat. Bank,¦700.00  ¦
                +--------+-----------------------------------------+--------¦
                ¦        ¦Riley & Brandemoure,                     ¦50.00   ¦
                +--------+-----------------------------------------+--------¦
                ¦        ¦Fichtenberg Bros.                        ¦235.30  ¦
                +--------+-----------------------------------------+--------¦
                ¦        ¦Leopold, Kuh & Co.,                      ¦677.04  ¦
                +--------+-----------------------------------------+--------¦
                ¦        ¦H. A. Kohn Bro.,                         ¦634.91  ¦
                +--------+-----------------------------------------+--------¦
                ¦        ¦Hart Brothers                            ¦62.00   ¦
                +-----------------------------------------------------------+
                

Notes were given in pursuance of this agreement, which were paid at maturity.

Subsequently it turned out that Leopold, Kuh & Co. had received their debt in full, and before they executed the agreement the full amount of their debt had been secured.

Upon learning this fact, appellees instituted this suit to recover the balance of their debt.

Appellees base their right of recovery in this case upon two propositions:

First--They claim appellants knowingly made a false impression on their minds as to the extent of appellants' property, and on this ground they are not estopped by the composition agreement.

Second--That the secret agreement entered into with Leopold, Kuh & Co., without the knowledge of appellees, rendered the composition agreement void as to all the creditors.

While it is true the evidence is not entirely harmonious as to what occurred between Livingston and appellees, which induced the latter to agree to the compromise, yet it is apparent, from the evidence, that they were led to believe the assets were not sufficient to pay more than 50 cents on the dollar. They were told that appellees had looked over their affairs, and found they could not pay more than 35 cents on the dollar. No statement of the property and its value was submitted. If it had been, it would have clearly appeared that there was property more than enough to discharge in full all liabilities, for it is shown that, about one year after the settlement, the property of appellants, owned at the time of the compromise, was of the value of near $18.110, while the entire amount of their indebtedness was but little in excess of $4000.

It is not reasonable to suppose that appellees would have settled at 50 cents on the dollar, had a true and correct representation been given them, as to the property then owned by appellants. The jury, no doubt, from the evidence, found that appellees agreed to the settlement upon the representations made by Livingston, the agent, as to the value of appellants' property, and that those representations were not true, and we can not say they were not justified in arriving at that conclusion, from the evidence.

Under this state of facts, would the compromise be binding upon appellees?

It is a familiar rule, that fraud will vitiate any contract, and render it nugatory.

In the case of Vine v. Mitchell, 1 Moody & Robinson, 337, which is a case, in its facts, very similar to the one under consideration, TINDAL, C. J., told the jury the question for them to decide was, whether the defendant had fraudulently suppressed the fact of his having the beneficial interest in the leasehold property, and that depended upon the question whether, at the time when the composition was entered into, the parties were dealing upon the understanding that the defendant had no other available property than his book debts. If the question had been asked, and the...