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Saul vs. Buck, Hefflebower & Neer

Supreme Court of Georgia1884-04-25
72 Ga. 254

Summary

Holding. A creditor settlement procured through a debtor's false and fraudulent statements regarding assets and liabilities is void and unenforceable. The judgment for the defendants in error is affirmed.

A debtor obtained a settlement from creditors at fifty cents on the dollar by representing his financial condition while concealing that he had paid some creditors in full and promised others seventy-five cents on the dollar. The trial court rendered a verdict for the creditors, and the debtor sought a new trial on multiple grounds. The court rejected the debtor's argument that his impeached testimony should have been believed without corroboration, noting that his trial testimony contradicted his prior sworn answers in a separate Virginia equity case. The court also rejected his claim that the settlement should be valid based on information from the creditors' agent, finding instead that the creditors relied on the debtor's own misrepresentations about his financial condition.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Validity of a debtor settlement obtained through fraudulent misrepresentation of financial condition
  • Whether impeached testimony requires corroboration when contradicted by prior sworn statements
  • Effect of selective payment to certain creditors while concealing disparate treatment from other settling creditors

Procedural posture

The trial court rendered a verdict for the defendants in error, denied the plaintiff in error's motion for a new trial, and the plaintiff appealed.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Blandeord, Justice.

A verdict was rendered in favor of defendants in error against the plaintiff in error, and he moved the court for a new trial, on various grounds, which was overruled, and this is excepted to. and error is assigned here on this exception.

1. One of the grounds of error in the motion is, that the court charged the jury that, if the plaintiff was impeached^ he was not to be believed, unless corroborated by other witnesses or circumstances in proof. Under the facts in this case, we think that the court would have been justified in going much further than this. The evidence showed that plaintiff in error was sworn, and he testified in his own favor, and the main facts testified to by him were contradicted by his sworn answer to a bill in equity filed and pending in one of the courts of Virginia; and he was re-introduced, when he testified that he never read the answer; did not know that it was important. The defendants in error read his depositions taken in the Virginia case, in which he testified that the answer was drawn by his counsel, from a memorandum furnished by himself, and that the answer was true and correct. The jury might well have been instructed to give no credit to a witness thus impeached.

2. The next ground of the motion insisted on here is, that the court erred in not instructing the jury that, if the defendants in error made the settlement with the plaintiff in error from information received by them from their own agent, then the settlement was good.

The evidence showed that plaintiff in error made a composition with his creditors; that he represented the state of his affairs to defendants in error in the city of Baltimore, and obtained a settlement of fifty cents upon the dollar, he stating that this was all he could pay, and that he would have to borrow money to pay this, and that all of his creditors were to be paid in like proportion, and yet at the same time, he had paid some of them in full, and others he agreed to pay seventy-five cents on the dollar, which was concealed from defendants in error. Defendants in error made this settlement with plaintiff in error not on account of any information which they received from their agent, but on the statements made by the plaintiff in error as to his assets and liabilities. A short time after this settlement, the plaintiff in error swore, in answer to the bill filed in Virginia against him, that he was worth eleven thousand dollars, and that when he made the compromise with his creditors, he was worth nine thousand dollars. We think the court did right to refuse to charge the jury as insisted on by the plaintiff in error. There was no evidence to require this charge.

3. The other grounds in the motion for new trial are fully covered and controlled by the decision of this court in the case of Woodruff vs. Saul, this same plaintiff in. error.

4. The verdict of the jury in this case was demanded, by the evidence; a composition brought about by false and fraudulent statements of the debtor is void, and cannot stand.

5. The proposition of a debtor to pay fifty cents on the-dollar of his indebtedness, when, at the same time, he has ■ d some of his creditors in full, and promises to pay others seventy-five cents in the dollar, which is kept con-

cealed from his other creditors, who accept a settlement . at fifty cents on the dollar, is fraudulent, and such settlement is void, and will not bind the creditor.

The judgment of the court below is affirmed.

70 Ga., 271.