Town of Wilson v. Fidelity & Deposit Co. of Maryland, 205 N.C. 262 (1933)

Oct. 11, 1933 · Supreme Court of North Carolina

205 N.C. 262

TOWN OF WILSON v. FIDELITY AND DEPOSIT COMPANY OF MARYLAND and FIDELITY AND CASUALTY COMPANY OF NEW YORK.

(Filed 11 October, 1933.)

Removal Of Causes C I) — Allegation of conspiracy between individual defendants held not to affect corporate defendants’ right to removal.

This action was brought against the clerk and assistant city clerk and cashier of a city to recover for misappropriation of city funds and conspiracy to defraud the city out of moneys collected under color of their offices and misappropriated or embezzled, and against the nonresident corporate sureties on their official bonds. The corporate defendants .moved for a removal of the causes to the Federal Court, their petitions for removal showing the requisite jurisdictional amounts and asserting rights of removal on the ground of diverse citizenship and separable controversies: Held, the petitions for removal should have been granted, the allegations of the complaint as to conspiracy between the individual defendants not affecting the liability of the corporate defendants on the bonds, or the question of separability.

Appeal by defendants from Daniels, J., at June Term, 1933, of WlLSON.

Civil action to recover of T. A. Ilinnant, city clerk, and surety on bis official bond, Fidelity and Deposit Company of -Maryland, and Glaucus Gr. Hinnant, assistant city clerk, and surety on bis official bond, Fidelity and Casualty Company of New York, and Mary Beatrice Boger, casbier of tbe town of Wilson, and surety on ber official bond, Fidelity and Casualty Company of New York, for alleged misappropriations of public funds, and conspiracy to defraud tbe plaintiff out of moneys collected by tbe defendants under color of tbeir offices and fraudulently misapplied or embezzled. Tbe individual defendants are residents of tbe State of North Carolina. The corporate defendants are corporations chartered under the laws of Maryland and New York.

Motions by nonresident corporate defendants to remove cause to the District Court of the United States for the Eastern District of North Carolina for trial. Motions denied by the clerk and affirmed on appeal by the judge of the Superior Court, from which ruling movants appeal.

Connor & Hill and Manning & Manning for plaintiff.

Finch, Band & Finch and S. Broten Shepherd for defendant, Fidelity and Deposit Company of Maryland.

Ruark & Ruark for defendant, Fidelity and Casualty Company of Hew York.

Stacy, C. J.

The petitions for removal, besides showing requisite jurisdictional amounts, assert rights of removal on grounds of diverse citizenship and separable controversies. Brown v. R. R., 204 N. C., 25.

The liabilities of the corporate defendants are predicated upon three separate bonds, one executed by the Fidelity and Deposit Company of Maryland to protect the plaintiff against larceny or embezzlement of the town clerk, and the others executed by Fidelity and Casualty Company of New York to insure the faithful performance of duties and accounting on the part of the assistant clerk and cashier.

It is practically conceded that under the decision in Timber Co. v. Ins. Co., 190 N. C., 801, 130 S. E., 864, the motions should have been allowed, unless the allegation of a conspiracy among the individual defendants defeats the rights of removal on grounds of separable controversies. We fail to see wherein this allegation changes the liability of the corporate defendants on their respective bonds, or affects the question of separability, upon which the rights of removal depend.

Eeversed.