Jackson v. Hodges

Bartol, J., delivered the opinion of this Court. In the year 1855, the appellant, George Jackson,' being indebted to the appellees and others, in large sums, represented to his creditors that he was unable to pay more than fifty cents in the dollar of his debts, and proposed to them to accept that proposition in full satisfaction of their ⁴⁸⁷ claims ; they confiding in his honesty, and relying upon his representations with regard to the value of his assets, accepted his proposition and received from him promissory notes endorsed by his brother, James .Jackson, payable on an average of twelve months, without interest, to the amount of fifty per centum of the sums respectively due them, and released and surrendered their claims. Afterwards, a short time before the filing of the bill of complaint in this case, the appellees being informed that George Jackson, the appellant, had not truly represented his pecuniary condition, but had concealed and secreted a large amount of property for his own benefit, instituted this suit for the purpose of annulling and setting aside the settlement made in 1855, and subjecting the property of George Jackson to the payment of the balance of their claims. The main allegation of the bill, upon which the appellees’ claim for relief depends, is that the settlement of 1855 was procured by fraud on the part of George Jackson.

The fraud is alleged to consist in his falsely representing himself as unable to pay more than fifty per centum of his debts, when in fact he had property enough to pay them in full; and in his concealing from his creditors the real amount and value of his property, and thereby inducing them to accept the composition proposed. As fraud is never presumed, but must be established by proof, it is our duty to examine the evidence contained in the record, and to determine whether in our opinion, it is sufficient to prove the fraud and deception charged in the bill of complaint. It appears from the evidence, that in order to induce his creditors to accept the terms offered, George Jackson exhibited to them a statement of the amount of his debts, and the estimated amount or value of his property, consist ⁴⁸⁸ ing of his stock of goods on hand, and the debts due him considered as good. These statements are not produced, nor is there any very distinct evidence of the several amounts or estimates .contained in the statement.

It plainly appears from the testimony of Allen T. Lewis, one of the creditors, who was examined as a witness both for the complainants and the defendants, that the statement exhibited by George Jackson did not contain an invoice of his stock of goods, or specify in detail either the items of his property or a list of the sperate debts due him, but merely the aggregate amount of his liabilities, and two items showing the aggregate amount of his property and sperate debts. There is no dispute about the amount of his liabilities ; by an agreement signed by the solicitors, they are admitted to have been in the aggregate $18,546 -16. The witness, Allen T. Lewis, states that he made the calculation from the statement shown, and the result was that after paying fifty per cent, there, would be left to George Jackson a surplus or margin of $1,800 or $2,000, which he thought was “no more than lie was entitled to have for selling the goods, making the collections, and for the risk he would run, and including also a little margin to enable him to go on and continue business.” He also states that George Jackson represented that the statement “ embraced all his property except his household furniture, which he (witness) thought the creditors ought not to require of him.” This evidence is conclusive to show that the whole amount of his property as represented to his creditors, was from $11,000 to $11,278. This is ascertained by adding $1,800 to .$2,000 to the sum of $9,273, the sum proposed to be paid to the creditors.

What was the whole value or amount of his assets at ⁴⁸⁹ that time is not proved by direct evidence. But he concedes in bis answer that the estimate be then put upon his stock of goods was $13,000, (and that they were actually sold for more.) James Jackson, his brother, owed him $500 to $1,000. What other debts were due him is not shown. He owned two improved lots, one on Burén street, and one on Aisquith street, both of which, however, were encumbered with mortgages, and their value, if any, beyond the amount of the incumbrances, does not clearly appear.

But estimating only the stock of goods on hand, and the debt then due him from James Jackson, it is clear that these items together exceed by the sum of $2,500 or $3,000, the