Benedict v. Seiberling

Decision Date23 December 1926
Docket NumberNo. 702.,702.
PartiesBENEDICT v. SEIBERLING et al.
CourtU.S. District Court — Northern District of Ohio

Tracy, Chapman & Welles, of Toledo, Ohio (Thomas H. Tracy, George D. Welles, and Newton D. Tracy, all of Toledo, Ohio, of counsel), for plaintiff.

Squire, Sanders & Dempsey, Thompson, Hine & Flory, and Griswold, Green, Palmer & Hadden, all of Cleveland, Ohio, Mather, Nesbitt & Willkie, of Akron, Ohio, and Fraser, Hiett, Wall & Effler, of Toledo, Ohio, for defendant Robinson.

Affidavit of Disqualification.

KILLITS, District Judge.

The complaint in this case was filed December 10, 1926. It was twice verified, on information and belief by the plaintiff, and positively by another individual, who alleged his full knowledge of all of the facts and circumstances set out. With it was also filed an affidavit supporting the complaint in setting forth grounds for a temporary restraining order which was granted without notice.

December 20, at 10 a. m., was designated for the hearing of a motion for a temporary injunction. Timely notice came to every defendant. On the morning of December 18, a motion to quash service was filed by defendants F. A. Seiberling, Francis Seiberling, Manton, and Robinson; and later, at 10:47 a. m. of that day, an affidavit and application in attempted disqualification of the sitting judge was filed. This was but a little over an hour before, according to Saturday custom, the clerk's office and judge's chambers closed.

Some time during the morning, but before the filing of the affidavit, a complete copy thereof was furnished by one of the counsel of record to a local newspaper, and the substance whereof, in an extended article, was in such paper published a short time after the filing hour.

Upon authority later cited herein, it became our immediate duty to pass upon the sufficiency of the attack upon our competency to sit in the case — a duty so pressing that we were precluded, for the time being, to take up any other matter in the case, however pressing, if diligence had been followed in the filing of the affidavit.

In Shea v. United States (C. C. A.) 251 F. 433, a decision of our own Circuit Court of Appeals, certiorari denied, 248 U. S. 581, 39 S. Ct. 132, 63 L. Ed. 431, the facts showed that the case was set for trial on Monday, January 8, 1917; and that on Saturday, January 6, an affidavit attacking the sitting judge's qualifications had been filed, upon an allegation of facts which had been known to affiant for a substantial time before the filing. It was held that, while the circumstances exonerated affiant from complying with the statutory provision that the affidavit should be filed not less than 10 days before the beginning of the term, nevertheless its filing was too long delayed; and that the court was justified in striking it from the files. We do not think that this authority is pertinent to much of this case. We must regard the filing as timely as to every action by the attacked judge herein, except as to one matter which we have the assurance, in statements made to us privately by counsel for recusing affiant, is unimportant, and as to which limited action by the court will work no hardship to affiant, and concerning which a brief statement is necessary.

By the terms of the Clayton Act (38 Stat. 730), a temporary restraining order is effective for but ten days; a discretion to extend, however, lies with the court. With the afternoon of Monday, December 20, the order would expire in effectiveness, unless renewed for satisfactory reasons. The recusing affidavit is not only very long, but, to properly consider it, required an intensive study of a long bill and its exhibits. The court found itself unable to give sufficient consideration to it prior to 10 a. m. of Monday, December 20. To have allowed its filing to halt all activities by the attacked judge in the case would have resulted in an injustice to the complainant, in that the restraints of the temporary order upon the defendants would be removed before the merits of the motion for temporary injunction could be heard. It was not reasonably practicable to obtain another judge between 11 a. m. of Saturday and 10 a. m. of Monday to consider extending the life of the restraining order. Therefore, assuming, as already decided, that the complainant was entitled to the benefits of a temporary order until such hearing, the affidavit would, in some measure accomplish its purpose, even if it should ultimately be determined to have been insufficient in law, unless the judge sought to be recused acted in this particular instance.

Paragraph 12 of the affidavit sets up in some detail a purely business transaction, had a substantial time before the commencement of this action, between the sitting judge and an individual who is not a party to the case, but who is named in the affidavit as one who assisted in procuring what the affiant insists in the affidavit was an attempt to produce an alleged collusive jurisdiction in this court. Other allegations in the affidavit attempt to set up a nexus between this business transaction and the commencement of this suit, and it is urged as one of the facts justifying belief in the judge's personal bias.

In this paragraph 12 it is stated that the attacked judge, on the afternoon of December 15, narrated to counsel for affiant the facts of this business transaction. However, the fact is known to counsel and the attacked judge alike that the existence of substantially all of the substantial facts concerning this transaction were known to counsel for the affiant prior to the interview with the judge on the afternoon of December 15; and no other allegation of alleged fact in the affidavit carries an inference that any of the basic reasons for assuming prejudice or bias on the part of the attacked judge were not known to affiant until so soon before the date of the filing of the affidavit as to reasonably preclude a much earlier preparation and presentation thereof. The reasonable inferences, as well as admissions to the court by affiant's counsel, are quite to the contrary. We therefore applied to the one question of the right of the attacked judge to preserve the status of the parties as it existed when the affidavit was filed, through an extension of the operation of the temporary restraining order for ten days more, a conclusion, under the authority of Shea v. United States, supra, that, as to this limited extent only, the affidavit was inoperative for want of a timely filing. It is not asserted in the affidavit that a lawful discretion was not exercised by us in allowing the temporary restraining order.

To appraise the qualifications of the affidavit, it is necessary as well as proper to briefly refer to the character of the bill. The plaintiff, a resident and citizen of the state of New York, asserts her ownership of stock in the defendant the Goodyear Tire & Rubber Company, hereafter called the Goodyear Company. This stock has been deposited by her and is now controlled by a voting trust in accordance with a voting trust agreement entered into in 1921; that at about that time a reorganization of the affairs of the Goodyear Company was entered into to effectuate a plan of financing, under which reorganization plan to this time the company has been operating. Generally speaking, for the purposes of this memorandum, it is not necessary to elaborately set forth the scope either of the reorganization or plan. These set up three classes of stock: Prior preference, preferred, and common. For financing purposes, under the plan, a majority of the holders of each of these classifications deposited their respective holdings with a selected depositary, by it to be voted according to the voting power of the various classes of stock through and by the direction of appropriate voting trustees. In addition, a fourth issue of stock was put out in limited amount, called management stock, of nominal par value, the holders of which were to have the authority to elect a majority of the board of directors of the Goodyear Company while the plan continued in operation.

The defendants, in addition to the Goodyear Company, and the Union Trust Company of Cleveland, which was selected as the depositary, to which, so far as the bill makes any revelation whatever, no interest in any of these controversies attaches, are F. A. Seiberling, Russell L. Robinson, E. E. Mack, C. R. Erwin (George M. Jones, proxy), and Henry B. Manton, who are trustees under the common stock voting trust, E. G. Wilmer, A. H. Scoville, W. A. Phillips, trustees under the prior preference voting trust, J. W. McMahon, Arthur A. Fowler, George P. Miller, and Robert C. Schaffer, trustees under the preferred stock voting trust, and Francis Seiberling, a director of the Goodyear Company, charged with the combining with F. A. Seiberling, Robinson, and Manton, two of whom are also directors of the company, in alleged efforts to wreck a proposed reorganization and new refinancing plan, and to otherwise prefer their own interests at the expense of their several trusts. It should be noted that the holders of the management stock are not made parties to the case.

Residences of defendants are alleged as follows: Jones, proxy for Erwin, common stock voting trustee, and McMahon, preferred stock voting trustee, are residents of the Western division, wherein also the Goodyear Company does business, of our district; two other defendants reside in Illinois, two in New Jersey, and one each in Michigan and Wisconsin. The Union Trust Company, the principal place of business of the Goodyear Company, and the several residences of the defendants F. A. Seiberling, Francis Seiberling, Robinson, Mack, Scoville, and Manton, are in the Eastern division of this district.

It is set out that in October of this year the directors of the company, by a vote of 8 to 5, recommended a reorganization of the company and a readjustment of its financing problems to...

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  • United States v. Gilboy, Crim. No. 12880.
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    ...34 F.Supp. 269; Fieldcrest Dairies, Inc., v. City of Chicago, D.C.E.D.Ill.1939, 27 F.Supp. 258, at page 260; Benedict v. Seiberling, D.C.N.D.Ohio 1926, 17 F.2d 831, 841; Tucker v. Kerner, 7 Cir., 1950, 186 F.2d 79, at page 85, 23 A.L.R.2d 1027; Eisler v. United States, 1948, 83 U.S.App.D.C.......
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  • Sanders v. Allen
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    ...to pass on its sufficiency and, if found insufficient, to strike it from the files. His action is reviewable on appeal. Benedict v. Seiberling, D.C., 17 F.2d 831. The legal sufficiency of the affidavit is the only question before the court and the court cannot pass upon the truth or falsity......
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