Clarke v. Chicago, B. & QR Co.

• Decision Date: 14 September 1937
• Docket Number: No. 1503.,1503.
• Citation: 91 F.2d 561
• Parties: CLARKE v. CHICAGO, B. & Q. R. CO.
• Court: U.S. Court of Appeals — Tenth Circuit

91 F.2d 561 (1937)

CLARKE v. CHICAGO, B. & Q. R. CO.

No. 1503.

Circuit Court of Appeals, Tenth Circuit.

July 21, 1937.

Rehearing Denied September 14, 1937.

M. A. Kline, of Cheyenne, Wyo., for appellant.

J. L. Rice, of Denver, Colo. (J. C. James, Wilfred O'Leary, of Cheyenne, Wyo., and J. Q. Dier, of Denver, Colo., on the brief), for appellee.

Before PHILLIPS, BRATTON, and WILLIAMS, Circuit Judges.

BRATTON, Circuit Judge.

The appeal in this case presents contentions respecting money in the registry of the trial court. The action, No. 1811 in the court below, was instituted to foreclose a mortgage on the property of Hot Springs Electric Light & Power Company situated at Thermopolis, Wyo. Finding that a tax sale of the property was void, that foreclosure of the mortgage would not afford adequate relief, and that the value of the property with interest from the date of the tax sale was $92,160, the court required certain defendants to deposit that sum in the registry of the court and directed that holders of bonds secured by the mortgage file claims for payment out of such fund. With a slight modification, the decree was affirmed. Clarke v. Hot Springs Electric Light & Power Co. (C.C.A.) 55 F.(2d) 612, certiorari denied 287 U.S. 619, 53 S.Ct. 19, 77 L.Ed. 537. The deposit was made; some of it has been distributed; and some remains in the custody of the clerk. John T. Clarke and wife, Ella R. Clarke, as owners of fifty bonds each of the par value of $1,000 filed their claim. John T. Clarke subsequently transferred his interest in such bonds to Ella R. Clarke, and she acquired thirty-six other bonds of the like par value for which Herman Reher had filed claim. The court thereafter made an award to the attorneys for plaintiffs and an allowance to John T. Clarke for his assistance in the preparation of the case for trial; and that action was affirmed. Clarke v. Hot Springs Electric Light & Power Co. (C.C.A.) 76 F.(2d) 918, certiorari denied 296 U.S. 624, 56 S.Ct. 147, 80 L.Ed. 443.

In the course of separate and distinct litigation pending in the court below, being Nos. 288, 980, and 1320, it was determined that a superstructure on the Boysen dam constituted a nuisance and damaged property of the Chicago, Burlington & Quincy Railroad Company, hereinafter called the company. The court ordered the Clarkes and others to remove such superstructure and to enlarge the spillway. On appeal, modified decrees were awarded containing changes not material here. Clarke v. Boysen (C.C.A.) 39 F.(2d) 800, certiorari denied 282 U.S. 869, 51 S.Ct. 75, 75 L.Ed. 768. Such modified decrees were entered, but the Clarkes and other defendants refused to remove the superstructure. Acting under an order of the court, the marshal removed it. The cost incurred was $16,968.01. The company advanced the money required, and the court awarded it judgment against the Clarkes for that amount, separate judgments being rendered against John T. Clarke in Nos. 288 and 980, and against Ella R. Clarke in number 1320, with provision in each that payment of any one would operate to discharge all of them; and they were affirmed. Clarke v. Chicago, B. & Q. R. Co. (C.C.A.) 62 F.(2d) 440, certiorari denied 290 U.S. 629, 54 S.Ct. 49, 78 L.Ed. 548.

On November 19, 1932, the company filed separate petitions in Nos. 288, 980 and 1320, identical in substance, setting forth the rendition and nonpayment of the respective judgments; that the judgment debtor was in contempt of court, was a nonresident of Wyoming, and owned no property in the state except an interest in the real estate on which the Boysen dam was located and an interest in the money previously paid or about to be paid into the registry of the court in this cause; that the interest in the real estate was encumbered and for that reason was unsalable; that, unless such money be impounded, the clerk would make distribution of it; and that the company would be unable to collect the judgments. It was prayed that the clerk be directed to retain all money in the registry of the court in which the judgment debtor had a share or interest; and that upon final hearing so much of such money as might be necessary be ordered paid and applied to the extinguishment of such judgment. Notice that the petitions would be heard on December 1 was served upon the attorneys who had represented the Clarkes in the litigation. On the date named, the court entered a temporary restraining order and directed the judgment debtor to show cause on December 10 why an injunction should not issue restraining the withdrawal, assignment or disposition of the money; and the injunction was granted on the 10th.

On November 29, 1932, ten days after the petitions had been filed seeking to impound the money in the registry of the court, and two days before the date set for hearing upon them, Ella R. Clarke executed a written assignment and transfer of her interest in the bonds and the proceeds of them, to Henry T. Clarke, a brother of her husband, and Charles Caldwell, an attorney who had represented her and her husband in the litigation, as trustees. The assignment recited a cash consideration of $100, plus other good and valuable consideration. It failed to disclose the beneficiary or beneficiaries. Caldwell later resigned as trustee, and on January 4, 1936, Henry T. Clarke filed a claim founded upon the assignment. It was not verified; instead, its execution individually and as trustee was acknowledged. The company filed objections to its allowance.

The court heard the claim and the objections, and found that the assignment was given with actual intent and purpose on the part of Ella R. Clarke and of the assignees to hinder, delay, and defraud her creditors, particularly the company in the collection of its judgment; that there was due and owing to Ella R. Clarke out of the fund in the registry of the court $24,253.02; and that there was due John T. Clarke from such fund the sum of $544.17. A decree was entered (a) adjudging the assignment to be void, determining that the $24,253.02 was the property of Ella R. Clarke, disallowing the claim of Henry T. Clarke, trustee, and directing that such money be retained in the registry of the court until the rights of the company thereto be determined in cause 1320; and (b) directing that the $544.17 owing John T. Clarke from the money in the registry of the court be retained until the rights of the company thereto be determined in causes 288 and 980. Henry T. Clarke, trustee, appealed from that decree.

It is urged at the outset that the court lacked jurisdiction to...