First Nat. Bank v. Merchants' Bank

Decision Date16 June 1888
PartiesFIRST NAT. BANK v. MERCHANTS' BANK et al.
CourtU.S. District Court — Northern District of Georgia

Hoke &amp Burton Smith, for the motion.

Hopkins & Glen, and Julius L. Brown, contra.

NEWMAN J.

This is a motion to remand, and, in order that the question presented may be understood, a brief statement of the case is regarded as necessary. On the 13th day of July, 1887, the First National Bank of Sheffield filed its bill in equity in the superior court of Fulton county, Ga., against the Merchants' Bank of Atlanta, on the following statement of facts: On the 14th and 15th days of June, 1887, complainant had on deposit $8,000 with the defendant. Prior to that time complainant had been dealing with the Fidelity National Bank of Cincinnati, Ohio, forwarding checks to said bank, and said bank depositing in place of said checks currency to the credit of complainant in New York. Prior to said time the Fidelity National Bank had been perfectly solvent, and was a bank which did an immense business, and complainant had dealt with it quite a length of time. Just before or about the 14th day of June, 1887, said bank, through its officers, had squandered its money in sudden wild speculations in wheat and 'futures' of different characters, and it had become totally insolvent; yet it continued to deal with complainant without giving complainant any notice of its changed condition, and fraudulently concealed such changed condition from complainant with full knowledge of the fact that complainant was not informed of said changed condition. By reason of said fraud the said Fidelity National Bank induced complainant on the 14th and 15th days of June, 1887, to send it two checks for $4,000 each on the Merchants' Bank of Atlanta. The Fidelity National Bank received the said checks two or three days later, and fraudulently sent the same to the Merchants' Bank of Atlanta, without forwarding the currency to New York, to be deposited to the credit of complainant, and said checks reached Atlanta on or about 20th day of June, but the Merchants' Bank has never paid out said $8,000 to the said Fidelity National Bank, and still has the same.

The prayers in the bill are for a decree requiring the Merchants' Bank to pay complainant $8,000, and enjoining them from paying it to the Fidelity National Bank. Temporary injunction was granted. On October 8, 1887, an order was passed making David Armstrong, receiver of said Fidelity Bank, party to the cause, and thereupon, on the same day upon petition of said Armstrong, an order was passed by said superior court removing the cause to the circuit court of the United States. It is said in favor of this motion, in the first place, that the petition for removal, together with the bond and affidavit, was filed in the state court on the 7th day of October, 1887, and that David Armstrong, as receiver was not made a party defendant until the next day, the 8th day of October. An examination of the record shows this to be true. It further shows that on the 7th day of October, the attorneys for complainant consented in writing that Armstrong, as receiver, be made a party defendant to said cause, and on the 8th day of October the court passed an order in which it is recited that Armstrong, as receiver, having been made a party in the cause, and having caused his appearance to be entered by his solicitor, and having made and filed a bond and affidavit as required by law, said cause is removed to the circuit court of the United States. I think that by this order the discrepancy in dates and the irregularities alluded to were cured. It seems that on the 7th, when the receiver filed his petition for removal, he had not by formal order been made a party; but I do not think that filing would have the effect to take from the court all jurisdiction to proceed further in the same, for it would seem that this proceeding by Armstrong to remove, when he was really not a party to the cause, would have no effect, and it required the order of the court, passed on the next day, making him a party, to give the proceedings any force and effect whatever. I do not think, therefore, the position of counsel for complainant that the matter alluded to requires the cause to be remanded can be sustained.

It is said in the next place that the location of the Merchants' Bank, it being a Georgia corporation, defeats the right of removal in the case. This would be true if the Merchants' Bank was a party to the controversy in the case, having an interest therein to be determined, but the record shows that it is only a nominal party. In the language of the petition, it is 'but a stakeholder' of the fund in controversy, and it is apparent that the entire litigation and contention will be between the other two parties. The Merchants' Bank...

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