When it is not shown when, or at whose instance, or upon what
ground a removal of a cause from a state court was effected, and no
copy of the petition or of the substance of it is in the bill or
annexed to it, everything must be presumed against the party
objecting to it.
As, under the Act of March 3, 1875, c. 137, it was in the power
of the court to rearrange the parties and to place them on
different sides according to the actual facts, it is to be assumed
that that power was exercised by the court below, and its action in
that respect is not reviewable here.
After a final decree in a case, an apparent want of jurisdiction
on the face of the record cannot be availed of in a collateral
proceeding.
The charges of fraud in this case are too vague to be made the
basis of a bill to set aside a judicial sale.
The delay of the plaintiffs for four years to assert their claim
is, under the circumstances, fatal to it.
This was a bill in equity to set aside a decree rendered in a
former case of
Watson v. Evers et al. for want of
jurisdiction, or that the sale of certain land by a special
commissioner, under such decree, be set aside as to all the lands
still in the possession of the defendants.
Plaintiffs, who were aliens -- British subjects, and residents
of London -- set forth that in 1881 or 1882, they, together with
Watson and one Baldwin, citizens of Illinois, were associated
together in the purchase of a large quantity of land in
Mississippi, known as the "Delta," amounting to 500,000 or 600,000
acres, together with certain pine lands, amounting to about 150,000
acres. That, certain differences having arisen as to their
respective interests, Watson filed a bill in the Chancery Court of
Le Flore County (a mistake for De Soto County) against Evers,
William Marshall, George F. Philips, M. S. Baldwin,
et
al., which was removed into the circuit court of the United
States, wherein a decree was rendered on October 3, 1885, in
Page 156 U. S. 528
favor of Watson for the sum of $145,000, which was charged as a
lien upon said lands, and, in the event of the failure of the
defendants to pay such sum within six months from the date of the
decree, the lands were to be sold by one McKee, as special
commissioner, for the satisfaction of the decree. The land was
accordingly sold, and most of it bought in by Watson, such sale
being afterwards confirmed by the court.
"That said decree was a consent decree, agreed to in a spirit of
compromise, and accompanied with and based upon certain agreements,
to be hereinafter explained."
The bill further alleged that the circuit court of the United
States was without jurisdiction to entertain such suit or render
such decree by reason of the fact that Watson, the plaintiff in
such bill, was a citizen of Illinois, and Baldwin, one of the
defendants, and a material defendant, was likewise a citizen of
Illinois.
It is further charged that before the sale of the land was had,
Watson and his agents and representatives conspired with one
Burroughs to prevent them (the plaintiffs) from being present at
said sale and to deter them from bidding for the lands, the result
of which fraudulent collusion was that Watson bought the lands at a
mere trifle per acre, except about 162,000 acres, which it was
fraudulently agreed that Burroughs and his friends should buy at
their own figures. That but for such fraudulent collusion the Delta
lands would have sold for more than enough to satisfy the decree,
and would have left at least the pine lands to plaintiffs in this
bill and the other defendants in said suit, after fully paying
their debt. Instead of this, they succeeded in securing all the
land, and still claim a large balance against the defendants in
that suit as due by the decree -- more in fact than Watson
originally advanced for the purchase of the land. The plaintiffs
were not aware of, and had no knowledge of, the fraud practiced
upon them by Watson until recently, and long after the sale had
been ratified and confirmed, and that this is the first opportunity
to bring the matter before the court and ask a restitution of their
rights and an equitable redress for the fraud.
Page 156 U. S. 529
That the decree was a compromise decree, accompanied by
stipulations, one of which was that the defendants were to have six
months in which to pay the decree, and that when they acquiesced
and consented to such decree, it was their intention and
expectation, and it was so understood by all parties, to organize a
land company in London, and to sell the lands referred to in the
decree for money enough to pay off said indebtedness, and the
balance in stock and debentures and working capital within the six
months allowed to them by the decree. To accomplish this, and in
carrying out the understanding, a company was organized at great
expense to plaintiffs, and a satisfactory sale of the lands
arranged to be made to such company, which would have been
perfected, and Watson's debt paid, but for the interference of
Watson and his agents, who, by circulating false reports affecting
the title to the land, prevented such company from being floated,
and defeated the efforts of the defendants in such suit in raising
money to comply with their agreement to pay off such decree. That
afterwards a son of Watson, representing his father and the Delta
& Pine Land Company, visited London and, recognizing the fact
that plaintiffs still had an interest in the lands, agreed to
organize another English company, certain shares of stock in which
company they agreed to receive. That plaintiffs, being ignorant of
the fraud that had been practiced upon them at the time of the sale
and relying upon the statements of Watson's son, at his request
executed quitclaim deeds of their interests in such lands, Watson
stating that he wanted such deeds in trust solely for the purpose
of facilitating the sale of the lands to such company, and
promising that such deeds, when executed, should be deposited by
him with Walter Webb & Co., of Queen Victoria Street, London,
the solicitors of such company. That Watson, instead of depositing
the deeds with the solicitors, fraudulently, and in violation of
his promise and agreement, sent the deeds to Mississippi, and
caused them to be registered in the several counties in which the
lands were located. That this was done without the knowledge or
consent of plaintiffs. That the organization of the company was
never
Page 156 U. S. 530
perfected, and negotiations for the sale of the lands had been
abandoned. No stock was ever issued; plaintiffs never received any
consideration for the deeds, or their interest in the lands. Such
deeds were obtained by fraud and false pretenses and promises made
by Watson, were without consideration, and are void. That
plaintiffs are informed that Watson and the persons associated with
him in the Delta & Pine Land Company have sold a large quantity
of the lands at a good price, as well as a large amount of timber
from the lands remaining in their possession, and have realized
from such sales more than enough to pay the decree and the interest
thereon.
The prayer of the bill was that the court set aside the decree
rendered in the case of
Watson v. Evers for lack of
jurisdiction, or, if mistaken as to this, that the sale by the
commissioner be set aside as to all the lands still in possession
of defendants; that the quitclaim deeds be held to be inoperative
and void, and defendants be required to render an account of the
lands and timber sold by them, and the amount of taxes paid on the
land since such sale; that the sums received, after paying the
taxes, be credited upon the decree, and, in case Watson proves to
have been overpaid, that a decree be awarded in favor of plaintiffs
for the excess, and that the land now in possession of defendants
be decreed to be the property of the plaintiffs, as their interest
may appear.
A demurrer was filed to this bill by Watson and the Delta &
Pine Land Company, which was sustained by the court, and the bill
dismissed.
MR. JUSTICE BROWN, after stating the facts in the foregoing
language, delivered the opinion of the Court.
To maintain this bill, plaintiffs take the position either that
the Circuit Court for the Northern District of Mississippi, to
Page 156 U. S. 531
which the case was removed, was wholly wanting in jurisdiction
to render the decree complained of in the case of
Watson v.
Evers et al., or that the sale made in pursuance of such
decree was not only voidable for fraud, but absolutely void, and
subject to collateral attack in this proceeding.
1. The allegations of the bill with regard to the want of
jurisdiction of the federal court are very meager, and are simply
that Watson filed a bill in the state court against Evers,
Marshall, Philips, and Baldwin, which suit was removed to the
federal court, and a decree rendered therein; that such court was
wholly without jurisdiction, since Watson, as shown in the bill,
was a citizen of Illinois, and Baldwin, one of the defendants, was
also a citizen of the same state. It is not shown when or at whose
instance or upon what grounds the removal was effected, nor is
there a copy of the petition, or the substance of it, either
incorporated in the bill or annexed thereto as an exhibit. We are
left wholly in the dark as to these important particulars, and,
under these circumstances, everything must be presumed against the
pleader. We are bound only to inquire whether a suit to which two
citizens of the same state were originally plaintiff and defendant
could possibly have been removed to the federal court. The
presumption is that the court did have jurisdiction, and that its
decree is valid, and, assuming for the present that the court may
attack it collaterally, the burden is clearly upon the plaintiffs
in this case to show that the decree was void.
We are not even informed by the amended bill of the year in
which the bill was filed in the state court or the removal had,
but, as it is averred that the parties to such suit were associated
together in 1881 or 1882, and the decree was rendered in 1885, we
are left to infer that the removal must have taken place under the
Act of March 3, 1875, c. 137, 18 Stat. 470, which at that time
determined the jurisdiction of the federal courts. By section 2 of
that act,
"Any suit of a civil nature at law or in equity, now pending, or
hereafter brought, in any state court where the matter in dispute
exceeds, exclusive of costs, the sum or value of five hundred
dollars, . . .
Page 156 U. S. 532
in which there shall be . . . a controversy between citizens of
a state and foreign states, citizens or subjects, either party may
remove said suit into the Circuit Court of the United States for
the proper district, and when in any suit mentioned in this section
there shall be a controversy which is wholly between citizens of
different states, and which can be fully determined as between
them, then either one or more of the plaintiffs or defendants
actually interested in such controversy may remove said suit into
the circuit court of the United States for the proper
district."
The position of Baldwin as defendant in the case was not
conclusive as to his actual interest in the litigation. For aught
that appears, his interests may have been identical with those of
Watson, and adverse only to his alien codefendants. In such case it
would have been perfectly competent for the court to ascertain the
real matter in controversy and to have rearranged the parties to
the suit upon the opposite sides of such controversy, and thus
sustain the jurisdiction of the court. The power of the court under
the act of 1875 thus to rearrange the parties, and to place them on
different sides of the matter in dispute according to the actual
facts, has been recognized by this Court in several cases.
The
Removal Cases, 100 U. S. 457;
Pacific Railroad v. Ketchum, 101 U.
S. 289;
Harter v. Kernochan, 103 U.
S. 562. If such were the case here, the suit would then
stand as one wherein two citizens of the same state were plaintiffs
and aliens were defendants, which would be removable irrespective
of the question whether, under the second clause of the section, a
separate controversy between citizens and aliens could be removed.
It would appear from the opinion of the district judge that this
was the view taken by him. Even if he had been mistaken as to the
actual community of interest between Watson and Baldwin, as matter
of fact, his decision in respect thereto would not be reviewable
collaterally.
Grignon's Lessee v.
Astor, 2 How. 319;
Michaels
v. Post, 21 Wall. 398;
Chapman v. Brewer,
114 U. S. 169;
Noble v. Union River Logging Railroad, 147 U.
S. 165. Even upon the theory of the plaintiffs, to
authorize the court to hold the decree in that case void
Page 156 U. S. 533
in a collateral proceeding, it was necessary to show beyond any
controversy that, upon the record, the court could not have had
jurisdiction. This the pleader has failed to do.
But we do not wish to be understood as holding that even if
jurisdiction had not been apparent upon the record, advantage could
be taken of it after a final decree, and in a collateral
proceeding. Thus, in
Skillern v.
May, 6 Cranch 267, a case which had been reversed
by this Court and sent back to the circuit court was discovered to
be one not within the jurisdiction of that court. But as it
appeared that the merits had been finally decided in this Court,
and its mandate required only the execution of the decree, it was
held that the circuit court was bound to carry the decree into
execution, although the jurisdiction of that court was not alleged
in the pleadings. So in
McCormick v.
Sullivant, 10 Wheat. 192, a prior judgment between
privies in estate was pleaded in bar of the remedy sought to be
enforced in the suit then under consideration, and objection was
made that the proceedings did not show that the parties to it were
citizens of different states, and consequently that the court was
without jurisdiction, and the decree void. It was held, however,
that the courts of the United States, though of limited, were not
of inferior, jurisdiction, and that if jurisdiction were not
alleged in the pleadings, their judgments and decrees were
erroneous, and might be reversed for that cause, but that they were
not absolute nullities, and that the decree in the former case,
while it remained unreversed, was a valid bar to the suit under
consideration. To the same effect are
Ex Parte
Watkins, 3 Pet. 193;
Kennedy v.
Georgia State Bank, 8 How. 586;
Des Moines
Navigation Co. v. Iowa Homestead Co., 123 U.
S. 552, and the recent case of
Dowell v.
Applegate, 152 U. S. 327.
These authorities are especially pertinent to this case in view
of the fact that after the removal of the case to the federal
court, the parties thereto, including the plaintiffs herein,
acquiesced in its jurisdiction and entered into a consent decree
which was designed to settle the entire controversy.
2. It is also evident that the charges of fraud are altogether
too vague to be made the basis of a bill to set aside the sale.
Page 156 U. S. 534
The Delta & Pine Land Company is made a defendant to the
bill, but for what reason does not clearly appear. It is only
averred that Watson's son, representing his father and the Delta
& Pine Land Company, visited London and agreed to organize
another English company, and that plaintiffs should have certain
shares of stock in that company, and that said Watson and the other
persons associated with him in the Delta & Pine Land Company
have sold a large quantity of such lands at a good price, and that
they have also sold a good deal of timber off the lands remaining
in their possession, and have realized more than enough to pay the
sum due upon the decree. But there is no averment to whom the
quitclaim deeds in London were executed, or what the interest of
the Delta & Pine Land Company was in the lands, or how it
became possessed of such interest, though, from the fact that
plaintiffs call upon the company to account for the money received
from the sale of such lands, it would appear that in some way it
became the purchaser of a portion of such lands. There is no
averment, however, of such purchase, or, if it were made, that the
company purchased with the knowledge of the fraud alleged.
There is a general allegation that Watson and his agents
conspired fraudulently with one Burroughs and others to prevent
plaintiffs from being present at the sale, and to deter them from
bidding, but it is not averred by what representations or other
fraudulent means contemplated bidders were prevented from attending
an official sale, which the law required to be advertised for a
certain number of weeks, and it is highly improbable that if
plaintiffs had designed to buy in this land, they would have
omitted to attend the sale and permit Watson to buy it at a mere
trifle per acre. A fraudulent agreement is also averred that
Burroughs and his friends should buy about 162,000 acres, but the
particulars of the alleged arrangement are entirely wanting. There
is also an averment of fraudulent collusion of Watson and his
representatives preventing all competition, and that, had it not
been for such collusion, the Delta lands alone would have sold for
more than enough to pay off the decree, and would
Page 156 U. S. 535
have left the pine lands to the plaintiffs and the other
defendants in such suit after fully paying their debt. There is no
averment, however, of the means used to prevent competition, and
the whole allegation is vague and unsatisfactory. There is also an
averment that the complainants were not aware of, and had no
knowledge of, the fraud practiced upon them by Watson until
recently, and long after such sale had been ratified and confirmed.
But it appears that such sale occurred in 1886, was a matter of
public record, and yet was allowed to rest until 1890 without
action or challenge, when this bill was filed.
It further appears that one of the stipulations under which the
consent decree was entered was that defendants were to have six
months in which to pay and satisfy the decree, and that it was
their intention to organize a land company in the City of London,
and to sell the lands referred to, and pay off the indebtedness;
but that this scheme was also thwarted by the interference of
Watson and his agents, who, by circulating false reports affecting
the title of the lands, prevented the company from being floated.
But the bill does not allege what these false reports were, or to
whom they were made, or any facts from which the court can
determine whether they were likely to affect the organization of
the company or not. It does not appear when Watson's son visited
London, or what means were used to induce plaintiffs to execute
quitclaim deeds of their interests, or when such deeds were
executed, or to whom they were executed. There is no reason given
why plaintiffs did not, in view of all these alleged frauds, apply
to the court which ordered the sale for an order vacating the same.
If the transactions took place as stated by them, they could hardly
have been ignorant of the fraud practiced upon them. As the sale
and the prices paid were matters of record, plaintiffs were bound
to inform themselves of the facts, and to take steps to protect
their interests.
Foster v. Mansfield, Coldwater &c.
Railroad, 146 U. S. 88. It
does not even appear whether the transaction in London occurred
before or after the sale, though the inference is that it was some
time after, when the plaintiffs must have been
Page 156 U. S. 536
aware of the suspicious circumstances attending the sale, or at
least should have made inquiries. In short, the bill is much more
remarkable for what it omits than for what it alleges.
It does appear, however, that Watson had a claim against these
parties, which was settled by the consent decree at $145,000; that
162,000 acres of these lands were purchased by Burroughs, who is
not made a party to this suit, although he is alleged to have
fraudulently conspired with Watson, and a large portion of these
lands have been sold, presumptively to
bona fide
purchasers, and that in the lapse of time that has intervened it
would be impossible to restore the parties to their original
positions.
It is apparent that the whole case depends upon the validity of
the sale made by the special commissioner. If this sale were valid,
plaintiffs lost all their interests in the lands. They had nothing
left to convey by their subsequent quitclaim deeds, and the
cancellation of such deeds would not revest them with any interest.
If the sale were voidable either by reason of a fraudulent
combination to deter the plaintiffs from being present or to
prevent competition or by reason of the false reports circulated in
London to prevent the plaintiffs from carrying out their agreement
to satisfy the decree within six months, it was the duty of the
plaintiffs, instead of executing quitclaim deeds, and thus putting
themselves again into the hands of parties whom they allege to have
twice played them false, to promptly disaffirm their acts and seek
to repossess themselves of the property. Their delay of four years,
during which much of the property has been sold, presumptively to
parties who have purchased without notice, is fatal to their
claim.
The decree of the court below sustaining the demurrer and
dismissing the bill was correct, and it is therefore
Affirmed.
