Md. Cas. Co v. Clintwood Bank Inc

• Decision Date: 12 September 1930
• Citation: 154 S.E. 492
• Court: Virginia Supreme Court
• Parties: MARYLAND CASUALTY CO. v. CLINTWOOD BANK, Inc.

154 S.E. 492

MARYLAND CASUALTY CO.

v.CLINTWOOD BANK, Inc.

Supreme Court of Appeals of Virginia.

Sept. 12, 1930.

Under Judicial Code § 29 (28 USCA § 72), removal petition must be filed in state court at least by time defendant is required to answer or plead to declaration or complaint of plaintiff.

The plea of the surety was due March 23, 1929. The petition for removal was not filed on that day. but, on the contrary, the case was continued on motion of the bank for the accommodation of the surety to April 2d, and the petition for removal was filed April 1st.

The return date for the surety was March 23, 1929, but the cause was continued on motion of bank for the accommodation of surety until April 2d. On April 1st, the surety made motion for continuance until June 25th, which court denied but the case was passed until April 11th in order to give surety time and opportunity to prepare for trial. The surety had been notified of default of cashier in September, 1928, and there was no suggestion that, had more time been given, any additional facts could have been adduced.

The bond provided that the bank and the surety should share any recovery made by either on account of losses caused by cashier's defalcations in the proportion of the amount of the loss borne by each bears to the total amount of loss, but it appeared that the property of the defaulting cashier referred to was conveyed to pay debt due from him to bank and had no relation to cashier's defalcations which were subject-matter of action.

Reports and letters were desired for purpose of showing that bank had not complied with provision of bond requiring it to give surety notice of cashier's defalcations within 10 days after discovery thereof, but the State Corporation Commission contended that, under Acts 1928, c. 507, § 56, prohibiting state officer from divulging information regarding bank, commission was not bound to produce papers and letters.

Code 1919, §§ 6001, 6002, deal with time in which objections to jurors should be made and allowed.

Error to Circuit Court, Dickenson County.

Action by notice of motion by the Clint-wood Bank, Inc., against the Maryland Casualty Company. Judgment for plaintiff, and defendant brings error.

Affirmed.

Chalkley & Camblos, of Big Stone Gap, for plaintiff in error.

W. B. Phipps. of Clintwood, Jno. W. Flan-nagan, Jr., of Bristol, and C. R. McCoy, of Clintwood, for defendant in error.

PRENTIS, C. J.

This is a motion brought under Code 1924, § 6046, by the Clintwood Bank against the Maryland Casualty Company, surety on the bond of William P. Raines, cashier of the bank. There has been a jury trial, a verdict and judgment in favor of the bank for $10,000, the penalty of the bond, and the surety company is here assigning several errors.

The first of these assignments is the refusal of the court to order the removal of the case from the circuit court of Dickenson county to the District Court of the United States for the Western District of Virginia because of diverse citizenship.

The notice of motion was served March 8, 1929, and was returnable before the circuit court of Dickenson county March?3, 1929. The general counsel in Virginia of the surety company wrote to the clerk of the court March 19, 1929, asking him to enter their name as counsel for the defendant and to advise them when the case should be set for trial. On the same date they wrote to the attorney for the plaintiff, advising him that they had written to the clerk to note them as counsel for the surety company, and inquiring of the attorney for the plaintiff when ho wished to have the case set for trial, stating that they (defendant's counsel) could hardly be ready during that term, and Suggesting a continuance to the next term. Attorneys for the plaintiff replied that they would be willing to have the case passed until April 2, 1929, a later day in the term, and inclosed a copy of an order which they stated would be entered, and requested defendant's counsel to wire whether or not the order would be satisfactory. There was no response to this letter, and on the 23d day of March, the return day of the notice, defendant not having either demurred, pleaded, or answered an order was entered docketing the case and continuing it until April 2, 1929. This order was entered upon motion of the attorneys for the plaintiff. In the meantime, however, general counsel for the surety company In Virginiawired to the plaintiff's attorney advising him that Hon. John W. Chalkley would represent the Maryland Casualty Company and to telephone him. The attorney for the plaintiff was unable to communicate with Mr. Chalkley, and on March 23, after the order of continuance had been entered and court had adjourned, a petition was filed with the clerk, praying for the removal. This petition, however, was invalid because there had been no notice to plaintiff or its attorneys, and was abandoned. Thereafter, April 1, 1929, the surety company, by its counsel, appeared in court and filed another petition for removal, which was denied, the court holding that it was filed too late. The correctness of this ruling is the question raised by the assignment.

We observe that under the Virginia motion statute, Code 1924, § 6046, the plaintiff may take judgment on the return day if the defendant fails to appear, and that no plea in abatement can be received after the defendant has demurred, pleaded in bar, or filed a statement of its grounds of defense.

We find in 3 Cyc. 504, this statement: "Service of a notice of general retainer or appearance, or filing such notice with the clerk after a complaint has been filed, constitutes a general appearance in actions at law." And this also:

"Acts Recognizing Case as in Court—In General. —Any action on the part of defendant, except to object to the jurisdiction, which recognizes the case as in court, will amount to a general appearance."

These statements of the general rule are well supported by the cases.

The precise question raised is controlled by the federal statute, section 29 of the Judicial Code (28 USCA § 72). By the provisions of that section, the removal petition must be filed "in such State court at the time, or any time before the defendant is required by the laws of the State or the rule of the State court in which such suit is brought to answer or plead to the declaration or complaint of the plaintiff."

We find this in Dobie on Federal Procedure, § 109, p. 429, referring to the practice in states which prescribe a different time for filing pleas in abatement and pleas to the merits:

"An interesting question then arises, in these States, when the removal petition is filed in the State court after the lapse of the time for filing pleas in abatement, but before the expiration of the period within which pleas to the merits may be filed.

"This point was discussed in the leading case of Martin v. Baltimore & Ohio Railroad Co., 151 U. S. 673, 14 S. Ct. 533, 538, 38 L. Ed. 311. The decision there reached was that the removal petition was filed too late. The court held that, inasmuch as the language of the Federal statute made no distinction between different kinds of answers or pleas, 'Congress contemplated that the petition for removal should be filed in the state court as soon as the defendant was required to make any defense whatever in that court, so that, if the case should be removed, the validity of any and all of his defenses should be tried and determined in the circuit court of the United States.'" The language last quoted is from the opinion.

This decision was followed in Fidelity & Casualty Co. v. Hubbard (C. C. Va. 1902) 117 F. 949. There is a note on this case in 8 Va. Law Reg. 414.

In Kansas City, Fort Scott & Memphis R, Co. v. Daughtry, 138 U. S. 298, 11 S. Ct. 306, 34 L. Ed. 963, the previous statute is also construed, and it is held that "application to remove a cause from a state to a federal court must be made at or before the time when the plea therein is due, and the time for removal cannot be extended because a plaintiff in error does not take advantage of his right to take judgment by default."

In Simkins, Federal Practice, p. 1066, this is accepted as the settled practice, and he cites, in addition to the case just cited, Austin v. Gagan (C. C.) 39 F. 626, 5 L. R. A. 476; Fox v. Southern R. Co. (C. C.) 80 F. 945; Heller v. Ilwaco Mill & Lumber Co. (C. C.) 178 F. 111, 112.

That the state court should not surrender its jurisdiction on a petition for removal unless a case is made which on the face of the record shows that the petitioner has a right to such removal is also well recognized. Stone v. South Carolina, 117 U. S. 430, 6 S. Ct. 799, 29 L. Ed. 962; Home Ins. Co. v. Morse, 20 Wall. 459, 22 L. Ed. 370; Crehore v. Ohio & M. R. Co., 131 U. S. 241, 9 S. Ct. 692, 33 L. Ed. 144; Simkins Federal Prac. p. 1071.

Under the Virginia statute, the plea of the defendant was due March 23, the return day. The petition for removal was not filed on that day; on the contrary, the case was continued on motion of the plaintiff, for the accommodation of the defendant, and so the petition filed thereafter April 1 was filed too late.

The court did not err in refusing to remove the case.

Another assignment of error is based upon the refusal of the court to grant another continuance until the next term, June 25; the motion being made April 1. Instead of trying the case on April 2, the date to which it had been continued, the case was passed until April 11, in order to give counsel for the defendant additional time and opportunity to prepare for the trial.

The defendant had been notified of the default of the cashier in September, 1928, had been in possession of the proofs of loss filed by the plaintiff for some time, and had made investigations in order to determine its liability under the bond. There is no suggestion that, had more time been given for the preparation of the case, any additional fact could or would have been adduced. We are...