Court Opinion

ID: 9653666
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:51:20.043302+00
Date Added: 2024-06-11T18:13:00.639698
License: Public Domain

On Rehearing
LINDLEY, District Judge.
We have granted a rehearing and the cause has been reargued.
In our earlier opinion we disposed of the issues raised by the various defenses of*390fered by defendants at the trial. We see no occasion to recede from anything said with respect to any other than the third defense which has to do with the question of whether the fraud of plaintiff in procuring judgment may be invoked by the owner when the judgment creditor attempts to enforce its lien against the owner’s property. We must keep in mind that the defendants, owners of the property involved, have never had a day in court. The Supreme Court of Illinois in Gibbons v. Cannaven, 393 Ill. 376, 66 N.E.2d 370, 169 A.L.R. 1190, held that they were not entitled to be heard in the original action or upon appeal. Consequently the first time that defendants had opportunity to question the validity of this judgment was when plaintiff sought, in the present action, to enforce the judgment against their property in pursuance of the pertinent Illinois statutes cited in our original opinion. Then and then only were defendants’ rights before any court for determination.
We said and we repeat that, under the Illinois authorities, in an action of this character, it is a defense that the judgment was procured by fraud; that it is not necessary that the alleged fraud relied upon should take the form of collusion or that it be directed primarily against the owners of the property. We held that this right of one not a parly to a suit to attack the judgment entered therein for fraud extends not only to matters affecting the jurisdiction of the trial court, but also to matters submitted to the jurisdiction of the court. The Illinois cases cited are clear and unequivocal in their pronouncement of these ruling principles. Thus, in Wing v. Little, 267 Ill. 20, 107 N.E. 875, involving the right-s of the owner to set up the fraud utilized in the procurement of the judgment, the court expressly said that whenever a judgment or decree is procured through fraud of either of the parties for the purpose of defrauding some third party, such third party may attack the judgment or decree in a collateral proceeding and show the fraud or collusion by which the judgment or decree was obtained. We find no exception to this ruling principle in Illinois.
The trial court expressly found that plaintiff testified falsely as to the extent to which she was prevented from working and earning money; that she caused her counsel substantially to misrepresent and overstate the extent to which she had been prevented by injuries from working and earning money and that, by means of such false testimony and argument, plaintiff misrepresented to the court and the jury that her injury was substantially greater than it really was. Thus the fact of the fraud has been expressly judicially found and determined and the evidence clearly substantiates the finding. Plaintiff’s sworn testimony that her injury was such that she was unable to work for two years after it occurred, whereas it is undisputed that she resumed her employment within less than two months, was gross misrepresentation which could have resulted only in deception of the jury in its determination of plaintiff’s damages. The Illinois courts have said emphatically that when sitting in equity they will not put their stamp of approval upon such conduct or deny to a third party injured thereby, the right to present to the court the true facts.
But the trial court concluded that defendants could not avail themselves of the defense. The district judge seemed to believe that it was necessary to prove that Cannaven colluded with Gibbons. However, we have seen from the authorities originally cited, it is not necessary that the fraud relied upon should take the form of collusion; it may emanate from the misrepresentation of either party. On the record, therefore, it appears that, though the district court found that the judgment had been procured by material and substantial misrepresentation of fact, it held the defense not open to defendants. This seems to us in direct conflict with the governing Illinois authorities, by which we are bound, all of which agree that if a third party is injured by procurement of a fraudulent judgment, he has a right to set up that defense when he is brought into a forum which has jurisdiction to determine the rights and liabilities of the parties. Indeed, were this opportunity not presented, defendants’ property will have *391been taken in pursuance of the lien of a fraudulent judgment without defendants ever having had the right to be heard in the original trial or on appeal therefrom or in the action in which it is sought to impress the judgment lien upon their property. This is abhorrent to a court of equity and violates elemental principles. It is clear, therefore, that the trial court erred in refusing to permit defendants to avail themselves of the third defense, that of fraud in procurement of the verdict. For this reason the judgment must be reversed with directions that the trial court give effect to the undeniable fraud of plaintiff.
Nor do we believe that defendants were bound to show that plaintiff was guilty of the crime of perjury. The Supreme Court of Illinois has said that a fraudulent representation “is anything short of a warranty, ‘proceeding from the action or conduct of the party charged, which is sufficient to create upon the mind a distinct impression of fact, conducive of action. The most usual and obvious example is an oral, written, or printed statement. * * * Any conduct capable of being turned into a statement of fact is a representation. * * * It is sufficient that there were acts such as to mislead a reasonably cautious or prudent man in regard to the existence of a fact forming a basis of or contributing an inducement to some change of position by him.”’ Leonard v. Springer, 197 Ill. 532, 64 N.E. 299, 301. “Fraud includes anything calculated to deceive, whether it be a single act or combination of circumstances, whether the suppression of truth or the suggestion of what is false, whether it be by direct falsehood or by innuendo, by speech or by silence, by word of mouth, or by look or gesture.” The People v. Gilmore, 345 Ill. 28, at page 46, 177 N.E. 710, at page 717. “Fraud in its generic sense, especially as the word is used in courts of equity, comprises all acts, omissions, and concealments involving a breach of legal or equitable duty and resulting in damage to another. * * * It may consist in * * * the positive assertion of a falsehood, or in the creation of a false impression by words or acts, or by any trick or device, or in a concealment or suppression of the truth, or in both a suggestion of falsehood and a suppression of truth together.” Bundesen v. Lewis, 291 Ill.App. 83, 9 N.E.2d 327, 333. We find no authority requiring that the representation must have been of such character as to amount to perjury. A single word, even a nod or a wink or a shake of the head or a smile or gesture intended to induce another to believe in the existence of a nonexisting fact may be fraud. Walters v. Morgan, 3 De G. F. & J. 718, 64 Eng.Ch. 718, 45 Eng. Reprint 1056; Turner v. Harvey, 1 Jac. 169; 4 Eng.Ch. 169, 37 Eng. Reprint 814; Wicker v. Worthy, 51 N.C. 500; 26 C.J. 1071; 37 C.J.S., Fraud, § 15. Since there is no difference in the natural effect on the mind of one deceived, whether the deceiver uses words, writings, or symbols, it follows that there is no difference in the legal consequence and the deceiver is liable no matter what means he employs. Morley v. Harrah, 167 Mo. 74, 66 S.W. 942. In other words, if deception is accomplished, the form of the deceit is immaterial. The impelling question is “did it produce upon the mind a false impression conducive to action?”
The judgment is reversed with directions to proceed in accord with the views here expressed.
SPARKS, Circuit Judge, dissents.