Cochran v. Montgomery

This action was brought January 21, 1902, in the city court of Montgomery, Alabama, by the county of Montgomery, one of the counties of the state of Alabama, against John J. Cochran, a citizen of that county and state, and Fidelity & Deposit Company of Maryland, a corporation of the state of Maryland, Cochran being the treasurer of the plaintiff county, and the Fidelity & Trust Company of Maryland being the sole surety on the official bond of said Cochran as such county treasurer, to recover damages for certain alleged breaches of said official bond. Cochran was charged with the conversion of amounts belonging to the general fund of the county, and of amounts belonging to the road and bridge fund. Demurrers to the complaint were severall filed by defendants in the state court.

February 15, 1902, the Fidelity & Deposit Company presented to the district judge of the United States for the middle district of Alabama, holding the circuit court, its petition for the removal of the cause into the circuit court of the United States for that district, alleging, among other things, that the matter in dispute exceeded the sum of $2,000 exclusive of interest and costs, and that the said controversy is between citizens of different states, in that the plaintiff was, at the time of the commencement of said suit, and still is, a citizen of the state of Alabama, and your petitioner, The Fidelity & Deposit Company of Mryland, was, at the time of the commencement of said suit, and still is, a citizen of the state of Maryland, and of no other state, having its principal office in the city of Baltimore, in the state of Maryland, and that your petitioner desires to remove this suit, which is now pending and undetermined in said state court, before the trial thereof, into the circuit court of the United States to be held in the middle district of Alabama.

The petition then averred that from prejudice or local influence in favor of the plaintiff, and adverse to this defendant, it will not be able to obtain justice in said court or in any other state court to which the defendant may, under the laws of this state, have the right to remove said cause, on account of said prejudice or local influence; that the suit was against John J. Cochran, the treasurer of said county, and petitioner, a surety company and a surety on the official bond of said Cochran as such treasurer, to recover the sum of $120,000, the full penalty of the bond; and that by reason of the nature of said suit, all the residents and citizens of said Montgomery county have a direct interest in the recovery by the said plaintiff of the amount claimed.

It was further alleged that Cochran was 'practically financially irresponsible' and therefore 'practically only a nominal party to the suit,' because the surety company 'would be obliged to meet practically the whole claim should judgment be rendered against defendants;' and then set forth certain circumstances tending to show that there was local prejudice against the surety company 'in any county in the state of Alabama in which said case should be tried.' On the filing of the petition the judge entered an order finding that it appeared to the court 'that from local prejudice or local influence' the surety company would not be able to obtain justice in the city court of Montgomery, or in any other state court to which the company might have the right to remove the cause, and that the court was of opinion that it should be removed to the circuit court on the giving of bond in the penalty of $1,000, and ordered the removal of the cause accordingly. The case came on to be heard in the circuit court at the May term, 1902, when the plaintiff moved to remand upon the ground that the Federal court was without jurisdiction, one of the defendants being a citizen of the same state as the plaintiff. This motion was overruled. 116 Fed. 985. On the trial the plaintiff amended the complaint by adding four additional counts, to which demurrers were sustained; and the case was tried on the original complaint and the general issue and certain special pleas interposed by defendants. The result was a judgment in favor of plaintiff for the amount of the general fund converted, but, under the rulings of the court, there was no recovery on account of the road and bridge fund. On writ of error sued out by plaintiff this judgment was reversed and a new trial ordered by the court of appeals. 57 C. C. A. 261, 121 Fed. 17. On a second trial, May 28, 1903, the complaint was amended in certain particulars and three new counts added. The second trial resulted in a judgment in favor of plaintiff for an amount less than the amount claimed. On this judgment cross writs of error were sued out from the circuit court of appeals, and the judgment reversed on the writ brought by plaintiff, and a new trial ordered. 62 C. C. A. 70, 126 Fed. 456. The third trial, February 3, 1904, resulted in a judgment in favor of plaintiff for the full amount of the road and bridge fund converted by Cochran, with interest, less certain admitted payments made by him, and not including the amount of the general fund, which had been, in the meantime, voluntarily paid by the company. On this last judgment, defendants sued out a writ of error to the court of appeals, and the judgment was affirmed. 62 C. C. A. 680, 128 Fed. 1019. And thereupon the present writ of error was allowed. The case is numbered 37. Application for certiorari was made, and is numbered 112.

Messrs. Edgar H. Gans and Thomas A. Whelan for plaintiffs in error and petitioners.

[Argument of Counsel from pages 263-265 intentionally omitted]

Messrs. William L. Martin, John G. Finley, and Jesse F. Stallings for defendant in error and respondent.

Statement by Mr. Chief Justice Fuller:

[Argument of Counsel from pages 265-267 intentionally omitted]

Mr. Chief Justice Fuller, after making the foregoing statement, delivered the opinion of the court: