| Graver v. Faurot | |
|---|---|
 | |
| Decided April 13, 1896 | |
| Full case name | Graver v. Faurot |
| Citations | 162 U.S. 435 (more) 16 S.Ct. 799, 40 L.Ed. 1030 |
| Case history | |
| Prior | 64 F. 241 (N.D.Ill., 1891) |
| Subsequent | 76 F. 257 (7th Cir., 1896) |
| Holding | |
| Since statute bars the Court from considering entire cases on appeal where no federal question is presented for certification, the Court cannot accept a question seeking to resolve a conflict between earlier decisions where the entire record is included as that entails deciding the case without being asked to do so. Certiorari denied. | |
| Court membership | |
| |
| Case opinion | |
| Majority | Fuller, joined by unanimous |
| Laws applied | |
| Judiciary Act of 1891 | |
Graver v. Faurot, (162 U.S. 435), is a case decided in 1896 by the United States Court of Appeals for the Seventh Circuit on the issues of res judicata and fraud on the court. The Seventh Circuit had heard the case the preceding year but, like the district court that had previously heard it, was unable to decide which of two recent U.S. Supreme Court cases was controlling. After the Supreme Court denied certiorari to resolve the issue, on procedural grounds, the Seventh Circuit resolved the case itself.
The case had arisen from an 1889 investment made by Graver in a company recommended by Faurot, a banker he was acquainted with. Represented to Graver as promising, the company was actually worthless. After learning this, he suspected Faurot and the company's owner, Bailey, of having concealed the company's true condition from him and sued the two in federal court for securities fraud. Both defendants denied any scheme when questioned under oath, and Graver and the two agreed to dismiss the case. Three years later, when Faurot's bank failed, documents introduced in the bankruptcy proceedings and on file with the federal government revealed not only that both he and Bailey knew the stock's true value but that Faurot had had an interest in the company and had concluded an agreement with Bailey to divide the proceeds of Graver's purchase between them. Graver filed a new action in federal court seeking, as equitable relief, to have the previous dismissal set aside since it had been obtained through perjured testimony.
Two recent decisions of the Supreme Court, United States v. Throckmorton and Marshall v. Holmes, addressed the relevant question of whether Graver could reopen the suit, but with contrary interpretations. The district judge said that while the facts of the case showed that Graver had been defrauded he could not distinguish the two cases, and certified the case to the Seventh Circuit, which in turn sought guidance from the Supreme Court. In a unanimous opinion written by Chief Justice Melville Fuller, the Court denied certiorari, on the grounds that the appellate court had effectively certified the entire case to it, which the Judiciary Act of 1891 forbade them from accepting without a federal question to decide. Even though there was such a question, the Court preferred not to answer it without deciding a case whose facts might dictate a contrary conclusion. So later that year the Seventh Circuit held for Graver that the perjury constituted extrinsic fraud which had prevented him from having his case fairly heard and decided.
Since Graver the Supreme Court has considered some other cases where the factual question of whether a litigant's deception and misbehavior has constituted intrinsic fraud which under Throckmorton cannot be used as a basis for relief, cases in which observers hoped it would resolve the conflict they saw with Marshall, which suggested a court could grant relief from a prior judgement allegedly obtained by fraud if it was unconscionable not to. It has never reconsidered the question offered in Graver of which case controls. Lower federal, and state, courts that have done so have pointed to Graver as the reason they felt compelled to.