Montgomery County v. Cochran

• Decision Date: 01 July 1902
• Citation: 116 F. 985
• Parties: MONTGOMERY COUNTY v. COCHRAN et al.
• Court: U.S. District Court — Middle District of Alabama

116 F. 985

MONTGOMERY COUNTY v. COCHRAN et al.

United States Circuit Court, M.D. Alabama.

July 1, 1902

On the 21st day of January, 1902, the county of Montgomery brought suit in the city court of Montgomery against 'John J Cochran as principal, and the Fidelity & Deposit Company of Maryland, a corporation existing under the laws of the state of Maryland, as surety,' for breaches of Cochran's official bond as county treasurer. The complaint contains seven counts, alleging, in substance, that the treasurer lost the moneys of the county by placing them on general deposit with the banking house of Josiah Morris & Co., which failed. Among the moneys thus lost is the sum of $111,109.58, the proceeds of the sale of $100,000 of county bonds issued by the board of revenue, which it is alleged came into Cochran's hands as treasurer. The bonds were issued under the authority of an act approved December 13, 1901, for 'building and improving the public roads of the county upon a permanent and well-considered system, and for erecting bridges in said county. ' Acts 1900-1901, p. 703. The fourth section of that act reads as follows 'Sec. 4. Be it further enacted, that the board of revenue of said county are hereby authorized to negotiate and sell such bonds as are issued by them by virtue of this act, but said bonds shall not be sold for less than par (100 cents on the dollar) and the proceeds of said bonds shall be paid over to and kept by the treasurer of said county and applied to pay for the building of and improving the public roads of the county upon a permanent and well considered system, and for erecting bridges in said county; such use, payment and application of said proceeds to be under the direction and by authority of said board of revenue of said county of Montgomery, and the said county treasurer to be responsible for the safe keeping of all the proceeds accruing from the sale of said bonds which may come into his hands in his official capacity, the same as for other county funds or money in his hands as such treasurer; and there shall be no commissions paid said county treasurer for disbursing the funds accruing from the sale of the bonds named in this act. ' Id. p. 705.

On the 15th day of February, 1902, at the last term of the circuit court of the United States for the Middle district of Alabama, the Fidelity & Deposit Company presented to the court the following petition for the removal of said cause into the circuit court of the United States for the Middle district of Alabama, to wit:

'The County of Montgomery, Plaintiff, versus John J. Cochran as Principal, and the Fidelity & Deposit Company of Maryland a Corporation under the Laws of the State of Maryland, as Surety, Defendants. In the Circuit Court of the United States for the Middle District of Alabama. Petition for the Removal of Said Cause from the City Court of Montgomery Alabama.

'To the Honorable the Judges of the Circuit Court of the United States for the Middle District of Alabama: Your petitioner, the above-named Fidelity & Deposit Company of Maryland, a corporation existing under the laws of the state of Maryland, respectfully shows to this honorable court that the county of Montgomery, as plaintiff, brought suit of a civil nature, in the city court of Montgomery county, Alabama, on the 21st day of January, 1902, against your petitioner, the Fidelity & Deposit Company of Maryland, and one John J. Cochran, and that the matter or amount in dispute exceeds the sum or value of two thousand ($2,000.00) dollars, exclusive of interest and costs; that service of process in said case was made on your petitioner on the 24th day of January, 1902, and that the time for pleading or demurring to said complaint is within thirty days after the said service, and that your petitioner has heretofore, viz., on the fifteenth day of February, 1902, appeared in said city court of Montgomery and demurred to said complaint and a copy of said complaint and the demurrer thereto is hereto attached and made a part hereof, and the first trial term for said case is in the month of April, 1902; 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 that your petitioner, the Fidelity & Deposit Company of Maryland, was at the time of the commencement of this suit, and still is, a citizen of the state of Maryland, and of no other state, having its principal offices in the city of Baltimore in the said state of Maryland; and that the other defendant in said suit is a citizen of the said state of Alabama; 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. Your petitioner further shows unto this honorable court that from prejudice and 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 a right to remove said cause, on account of such prejudice or local influence. And, in this connection, your petitioner further shows unto your honors that said above-mentioned suit is a suit instituted by a political subdivision of the state of Alabama, to wit, Montgomery county, against the said John J. Cochran, the treasurer of said Montgomery county, and your petitioner, a surety company, as surety on the official bond ofsaid John J. Cochran, as treasurer of said Montgomery county, and that said suit is instituted by said county of Montgomery to recover the sum of $120,000.00 (one hundred and twenty thousand dollars), which last-mentioned sum is the penalty of said bond, alleged to have been deposited by the said John J. Cochran, as such county treasurer, in the banking house of Josiah Morris & Co., of Montgomery, Alabama, whereby the said sum is alleged to have been lost to the said county of Montgomery by reason of the failure and insolvency of the said Josiah Morris & Co., 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. And in this connection your petitioner further shows unto your honors that the other defendant in this suit, John J. Cochran, is practically financially irresponsible, in that his assets, your petitioner is informed and believes and so states, are less than five thousand dollars, and that the said Cochran is therefore practically only a nominal party to the said suit, and that your petitioner, the said Fidelity & Deposit Company of Maryland, would be obliged practically to meet the whole claim should judgment be recovered against the defendants; and your petitioner further shows that from time to time heretofore there have been statements made in the public press to the effect that your petitioner is and will be held liable for the amount claimed in said suit, and will have to pay the same, and that said publications as made in papers published in the city of Montgomery, and in other cities in the state of Alabama, have been circulated throughout all the counties in the said state of Alabama, whereby a local prejudice against your petitioner, and influence in favor of the plaintiff in said suit, has been created throughout the whole state of Alabama. Petitioner further avers that the amount sought to be recovered in said suit was, at the time of the failure of said Josiah Morris & Co., substantially all the funds of the plaintiff, and the inconvenience to said plaintiff from its inability to use said money for public purposes has caused a feeling of prejudice against your petitioner, not only in the county of Montgomery, but in other parts of the state of Alabama. Petitioner further avers that the matter of a change of venue in said case is one of discretion on the part of the judge of said city court, and not one of right belonging to said petitioner, and, even if said discretion should be exercised in favor of the removal of said cause to some other county, yet petitioner is informed and believes, and upon said information and belief states, that the wide publicity and notoriety given to this cause and the issues involved therein would operate in any county or court of the state of Alabama to prejudice the rights of this petitioner. And petitioner further avers that the said petitioner is now the surety on bonds of many state and county officers throughout the whole state of Alabama, and that the decision in the present case will be regarded as probably constituting a precedent in any future case or cases which may be brought against your petitioner on said bonds, by reason of which there will necessarily exist a local prejudice against your petitioner in this case in any county of the state of Alabama in which said case should be tried. Petitioner further avers that the said banking house of Josiah Morris & Co. at the time of its failure was largely indebted, viz., about nine hundred thousand dollars, and that this indebtedness was due, and much the larger part of it is still due, to various persons residing in different parts of the state of Alabama, including the city council of Montgomery; that the said Josiah Morris & Co. secured an agreement with its respective creditors for an extension of time within which to pay the amount due to them, respectively, and the said Josiah Morris & Co. has failed to make the second of the payments thus agreed on, and there seems to be no present prospect of any further payments by the said Josiah Morris & Co. to its creditors, by

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