McLean v. State of Mississippi

• Decision Date: 12 May 1938
• Docket Number: No. 8739.,8739.
• Citation: 96 F.2d 741,119 ALR 670
• Parties: McLEAN v. STATE OF MISSISSIPPI ex rel. ROY. STATE OF MISSISSIPPI ex rel. ROY v. McLEAN.
• Court: U.S. Court of Appeals — Fifth Circuit

119 ALR 670, 96 F.2d 741 (1938)

McLEAN v. STATE OF MISSISSIPPI ex rel. ROY.

STATE OF MISSISSIPPI ex rel. ROY v. McLEAN.

No. 8739.

Circuit Court of Appeals, Fifth Circuit.

May 12, 1938.

Fred H. Montgomery and Ed. C. Brewer, both of Clarksdale, Miss., for appellant and cross-appellee.

Gerald Fitzgerald of Clarksdale, Miss., for appellee and cross-appellant.

Before FOSTER, SIBLEY, and HUTCHESON, Circuit Judges.

SIBLEY, Circuit Judge.

Ephriam R. McLean was during 1934 sheriff of Bolivar county, Miss., and had given an official bond payable to the State of Mississippi with United States Fidelity & Guaranty Company as surety. During that year an atrocious murder was committed in the county, without eyewitnesses. The county supervisors employed police officers in Memphis, Tenn., to help discover the murderer. R. L. Roy was suspected, and the prosecuting attorney of Bolivar county had a warrant issued for his arrest which was delivered to McLean as sheriff, but on its face it ran only within the county and was never executed or returned. Five days later the Memphis officers telegraphed the sheriff that Roy was in custody in Shreveport, La., and requested that Roy be brought to Memphis before being questioned. The same day the sheriff at Shreveport telegraphed McLean that Roy would return without extradition papers. McLean, who was making application for formal extradition papers, replied, requesting that Roy be held and promising to be in Shreveport the next day. The sheriff at Shreveport again wired that Roy waived extradition and was ready for him. McLean and two deputies and the prosecuting attorney then went by automobile to Shreveport, took Roy, who in fact did not demand extradition, to Memphis, Tenn., and held him there ten days, McLean testifying that it was unsafe to take him to Mississippi because of threatened mob violence. Roy testifies to brutal "third degree" practices being inflicted on him while in Memphis by the police officers and prosecuting attorney, McLean at times being present and not interfering. Roy was finally taken by McLean into Bolivar county, Miss., and put in jail there, but was soon released because the true murderer was discovered. Roy, a citizen of Louisiana, brought suit in the District Court of the United States for the Northern District of Mississippi upon the official bond of McLean, a citizen and resident of the Northern District of Mississippi, joining his surety, United States Fidelity & Guaranty Company, a corporation of Maryland but doing business in Mississippi and having a statutory agent for service resident in said Northern District upon whom service was made. By a special appearance United States Fidelity & Guaranty Company asserted that it was not suable in the Northern District of Mississippi and was discharged. Verdict and judgment went against McLean solely on account of the occurrences in Tennessee. This appeal and cross-appeal present two questions: Was the surety suable in this venue? Was the sheriff's bond liable for what happened in Tennessee?

United States Fidelity & Guaranty Company was allowed to sign the bond by reason of having qualified under the laws of Mississippi as a foreign guaranty company. These laws, Code of Mississippi of 1930, §§ 5133, 5165, require as a condition of doing business in the State that, among other things, the company shall appoint the commissioner of insurance and his successors "its true and lawful attorney, upon whom all process in any action or legal proceeding against it may be served, and that process so served shall be of the same force and validity as if served on the company, and the authority thereof shall continue in force irrevocable so long as any liability of the company remains outstanding in this state." The company by formal directors' resolution expressly agreed to the things required in the statute, and made a formal appointment of the insurance commissioner and his successors to receive service of all legal proceedings against it, which stated: "And said Company does hereby expressly agree that any and all lawful processes against it which may be served upon him shall be deemed valid personal service upon said Company and shall be of the same force and validity as if served upon said Company." These statutes and agreements are said to involve a consent to be sued in Mississippi in the district where the agent for service resides.

Federal jurisdiction appears. The State of Mississippi, as obligee in the bond, sues for the use of Roy as the Mississippi statutes provide. But Roy is the real plaintiff and his citizenship is what counts, and is diverse from the citizenship of McLean and his surety. But the venue statute, 28 U.S.C.A. § 112, provides, with immaterial exceptions: "No civil suit shall be brought in any district court against any person by any original process or proceeding in any other district than that whereof he is an inhabitant; but where the jurisdiction is founded only on the fact that the action is between citizens of different States, suit shall be brought only in the district of the residence of either the plaintiff or the defendant." Notwithstanding this positive language, it is well settled that these provisions are not a deprivation of jurisdiction, but merely establish a privilege as to the place in which one may be sued and that the privilege may be waived. In re Moore, 209 U.S. 490, 28 S.Ct. 585, 706, 52 L.Ed. 904, 14 Ann.Cas. 1164. The waiver may occur before or after the suit, and may result from mere failure to object. Ingersoll v. Coram, 211 U.S. 335, 29 S.Ct. 92, 53 L.Ed. 208; Commercial Cas. Ins. Co. v. Consolidated Stone Co., 278 U.S. 177, 49 S. Ct. 98, 73 L.Ed. 252. The breaches of a sheriff's bond will necessarily be local, governed by the local law and proved by local witnesses. The manifest convenience of a local trial strongly argues that the consent to local service was intended to operate as a consent to local suit. Neither the statute nor the consent attempts to limit their effect to suits in the State courts, but apply broadly to all legal proceedings. But as to suits in the federal courts we feel constrained to hold that the provision for local service is not a waiver of venue. A corporation is an "inhabitant" of and "resides" in the State and district of its incorporation, and the fact that it does business elsewhere and there has agents who may be served with process does not affect its venue rights under the federal statute. Seaboard Rice Milling Co. v. Chicago, R. I. & P. R. Co., 270 U.S. 363, 46 S.Ct. 247, 70 L.Ed. 633. Something more is needed to constitute a waiver of them. Prior to 1887 when the statute, Act March 3, 1875, 18 Stat. 470, allowed suit in the district of which the defendant "is an inhabitant or in which he shall be found," it was held that a corporation which in order to do business in a State appointed an agent for service thereby "consented to be found" there, and could be sued in a federal court in that State. In re Schollenberger, 96 U. S. 369, 24 L.Ed. 853.

When the words above italicized were omitted by the Act of March 3, 1887, 28 U.S.C.A. 112, it was held otherwise in Southern Pac. Co. v. Denton, 146 U.S. 202, 13 S.Ct. 44, 36 L.Ed. 942, the court saying on the point of a waiver by complying with the statute of Texas which required both an agent for service in the State and an agreement not to remove suits to the courts of the United States (page 46): "But that statute requiring the corporation, as a condition precedent to obtaining a permit to do business within the State, to surrender a right and privilege secured to it by the constitution and laws of the United States, was unconstitutional and void, and could give no validity or effect to any agreement or action of the corporation in obedience to its provisions. Home Insurance Co. v. Morse, 20 Wall. 445 22 L.Ed. 365; Barron v. Burnside, 121 U.S. 186, 7 S.Ct. 931 30 L.Ed. 915; Texas Land Co....