Cleveland v. Chamberlain - 66 U.S. 419 (1861)
U.S. Supreme Court
Cleveland v. Chamberlain, 66 U.S. 1 Black 419 419 (1861)
Cleveland v. Chamberlain
66 U.S. (1 Black) 419
1. If it be made to appear in the case of an appeal pending in this Court that the appellant has purchased and taken an assignment of all the appellee's interest in the decree appealed from, the appeal will be dismissed.
2. The rule laid down in Lord v. Veazie, 8 How. 254, where both parties colluded to get up a case for the opinion of the Court, is applicable to a case where the appellant becomes sole party in interest and dominos litis on both sides.
3. An appellant who becomes the equitable owner of the whole opposing interest, who procures a discontinuance as to his co-defendants, against whom no final decree is made, employs counsel on both sides, and makes up a record to suit himself in order that he may obtain an opinion of this Court affecting the rights and interests of persons not parties to the pretended controversy is justly chargeable with conduct highly reprehensible and a punishable contempt of court.
4. The third parties, whose rights and interests may be affected by the decision of the court in a dispute alleged to be merely colorable, will be heard on affidavits or other proofs to show that it is not carried on in good faith between the parties who are nominally the appellant and appellee.
Newcombe Cleveland, of Illinois, brought his bill in equity in the district court against the La Crosse & Milwaukee Railroad Company, Byron Kilbourn, Moses Kneeland, James Luddington, D.C. Freeman, Charles D. Nash, of Wisconsin, and Selah Chamberlain, of Ohio, complaining that he had recovered a judgment against the railroad company for $112,271 76, besides costs, which remains unsatisfied, and on which the complainant issued his execution and levied upon
the road of the company and all its property, real and personal, and upon its franchises, rights and privileges, as by the laws of Wisconsin he had a right to do; that the railroad company fraudulently, and with intent to cheat its creditors, made to Selah Chamberlain a pretended lease of its railroad, except the Watertown division, for an indefinite time, and a sale of all its personal property except what was used on the Watertown Division, together with all its rights, privileges and franchises connected with or incident thereto; that Chamberlain entered into possession of the road and took into his custody the property of the company conveyed to him by this fraudulent contract; that with a like fraudulent intent, the company made a similar lease and contract of sale for the Watertown Division of their road, but this lease was for a certain limited time, and the personal property used thereon, with D. C. Freeman, who, under the contract, went into possession thereof; that while the complainant's action, in which he recovered the judgment already mentioned, was on trial, the railroad company fraudulently confessed judgment to Chamberlain for $629,105.22, though the company did not at that time owe him a sum exceeding fifty thousand dollars, and all of the judgment beyond that sum was without any consideration whatever. The bill charges Kilbourn, Kneeland, and Luddington, who were directors of the company, with fraudulently acquiring title to certain lands of the company worth $100,000 by means of a pretended sale made by themselves to another person, who was their agent for $20,000 in stock of the company. The bill prays that the contracts with Freeman and Chamberlain, and the conveyances to the other defendants of the lands, as well as the judgment confessed by the company to Chamberlain, may be declared fraudulent and void.
The material charges of the bill were denied in the several answers of the defendants. Much evidence was taken on both sides, and the case was most fully heard and examined by the judge of the district court, who decreed that the contract and judgment of Chamberlain were fraudulent, and as such should be set aside. The contract with Freeman having expired by its own limitation, no decree with respect to him was
made except that he pay a certain part of the costs. Against the other defendants the court made no final decree, but as to the conveyance of the lands to Kneeland and Luddington, referred it to a master to ascertain the annual income of the lands they purchased, the value of the improvements made since their purchase, and the interest upon the purchase money paid. The suit against them was afterwards discontinued. The La Crosse & Milwaukee Railroad Company, pending the suit, had been dissolved, and their charter and property were transferred to another corporation, organized under the name of the Milwaukee & Minnesota Railroad Company. The only party, therefore, against whom a final decree was made was Chamberlain, whose judgment and contract were set aside as fraudulent. Chamberlain took an appeal to this Court.