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Minnesota Company v. Chamberlain, 70 U.S. 3 Wall. 704 704 (1865)

Minnesota Company v. Chamberlain

70 U.S. (3 Wall.) 704


The language of a decree in chancery must be construed in reference to the issue which is put forward by the prayer for relief and other pleadings, and which these show it was meant to decide. Hence, though the language of the decree be very broad and emphatic -- enough so, perhaps, when taken in the abstract merely, to include the decision of questions between codefendants -- yet where the pleadings, including the prayer for relief, are not framed in the way usual in equity when it is meant to bring the respective claims and rights of codefendants before the court, but are framed as in a controversy between the complainant and defendant chiefly or only -- such general language will be held down to these two principal parties alone.

These were appeals from decrees of the Circuit Court for Wisconsin, sustaining demurrers to two bills of complaint. Both bills and the essential question in each were the same, certain small differences between the bills being noted further on. The case was this:

In September, 1857, the La Crosse & Milwaukee Railroad Company, a company organized to build a railroad from Milwaukee to La Crosse across the State of Wisconsin, but whose road was not then completed, entered into articles of agreement with Chamberlain for the double purpose of insuring the completion of the road and securing to him a large debt alleged to be due from the company. By this contract the road was leased to Chamberlain in consideration that he would apply the income to the working and extension of the road, to the payment of interest on debts of the company, and to the payment of Chamberlain's own debt, on satisfaction of which, either by application of the income or otherwise, the road was to be restored to the company. After the execution of this contract and in the following month, the company confessed a judgment in his favor for $629,089.72. Afterwards, and in the same month,

Page 70 U. S. 705

Cleveland obtained a judgment against the company for $111,700.71.

To enforce the satisfaction of this judgment by sale of the road and other property of the La Crosse Company, as for brevity the corporation was usually styled, Cleveland filed his bill in the District Court of the United States for the District of Wisconsin against that company and Chamberlain, with whom were joined some other defendants.

In this bill, according to the account given of it by the complainants in the present cases, Cleveland insisted that the lease to Chamberlain and the judgment confessed in his favor were without consideration and in fraud of creditors, and that they hindered the collection of his judgment, and he prayed that they might be declared void. The La Crosse Company and Chamberlain answered denying all fraud, and Cleveland took issue by replication.

The court found against the respondents, and at January Term, 1859, decreed that the articles of agreement between the La Crosse Company and Chamberlain "be and hereby are vacated, annulled, and made void, so that the same shall not be of any force and effect whatever," and that

"the judgment and all executions and proceedings thereon be and hereby are vacated, annulled, made void, and set aside so that the same shall have no effect whatever."

The decree also "perpetually enjoined and restrained" Chamberlain from "controlling or meddling with the railroad or anything belonging to it under the articles of agreement."

In 1860, a company -- called for brevity the Minnesota Company -- succeeded, through a purchase and through a subsequent organization, such as is allowed by the statutes of Wisconsin, as a railroad company, in order to take and manage the property acquired by the purchase, to all the property, franchises, and rights of the La Crosse Company, subject, however, to prior encumbrances.

This Minnesota Company, being thus interested in the matter, alleged by their bill below (the first of the two cases now under review) that by this decree the agreement and the

Page 70 U. S. 706

confessed judgment were made absolutely void not only against Cleveland, the judgment creditor, but also as between Chamberlain and the La Crosse Company, and that Chamberlain, notwithstanding this decree, having purchased the Cleveland judgment, remained in possession of the road, receiving large sums of money, amounting altogether to more than $200,000, for which he was bound to account. They prayed, therefore, that Chamberlain might be ordered to apply to the payment of the Cleveland judgment, from the money so received, a sum sufficient for that purpose; that he might be ordered to account; that he might be credited with the sum applied to the Cleveland judgment; that the balance be ascertained; that the Cleveland judgment be ordered to be cancelled; and that the ascertained balance, if against Chamberlain, be paid to the Minnesota Company, or, if in his favor, by the Minnesota Company to him. They also prayed further relief.

The bill of Scott & Graham -- the second of the two bills below and now here for review -- was, as already signified, essentially like the first, that of the Minnesota Company. Like it, it did not seek specifically to set aside Chamberlain's lease, but while prominently making its alleged fraudulent nature inducement in this case, went on the assumption that the lease and judgment were already vacated as to everybody and for all purposes by the decree of January, 1859. The bill, however, in this second case, did allege also that the lease was ultra vires and void, therefore, on its face, as also void because, by its terms, hindering creditors; but its general tenor was, as already mentioned, and as in the first bill the Minnesota Company asked that the fund arising from the working of the road should be applied in satisfaction of the Cleveland judgment, for an account &c., so the only prayer of Graham & Scott was that the same money might be applied in payment of their debt.

The essential question in both cases, therefore, considered by the court was this: whether the lease made to Chamberlain, and the judgment confessed in his favor by the La Crosse Company, in 1857, was annulled as between the

Page 70 U. S. 707

parties to the lease and judgment by the decree of the District Court of the United States for the District of Wisconsin at the January Term 1859, or only as against Cleveland, the judgment creditor, in whose suit against the company and Chamberlain the decree was rendered?

The court, it may here be said, had been informed by the counsel for the Minnesota Company and for Graham & Scott, as well as by the counsel for Chamberlain, that there was now pending in the Circuit Court of the United States for the District of Wisconsin a suit brought by the company against Chamberlain for the specific purpose of setting aside the contract between Chamberlain and the La Crosse Company.

Page 70 U. S. 709

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