Bradley v. Tattnall Bank

• Decision Date: 09 April 1984
• Docket Number: Nos. 67592,67593,s. 67592
• Citation: 170 Ga.App. 821,318 S.E.2d 657
• Court: Georgia Court of Appeals
• Parties: BRADLEY v. TATTNALL BANK. SPIVEY v. TATTNALL BANK.

Page 657

318 S.E.2d 657

170 Ga.App. 821

BRADLEY v. TATTNALL BANK.

SPIVEY v. TATTNALL BANK.

Nos. 67592, 67593.

Court of Appeals of Georgia.

April 9, 1984.

Rehearing Denied May 7, 1984.

Certiorari Denied June 20, 1984.

Richard E. Braun, Midway, for appellant (case no. 67592).

M. Francis Stubbs, Reidsville, Joel E. Williams, Jr., for appellant (case no. 67593).

Bobby T. Jones, Metter, for appellee.

QUILLIAN, Presiding Judge.

Levy J. Spivey agreed to purchase a 95% interest in the San-Reid Apartments from Theron L. Rogers. He also agreed to assume the outstanding mortgage on the apartments to the Farmers Home Administration (FHA). Following the signing of their sales agreement on December 31, 1979, they entered into a partnership to manage and operate the apartments. They also entered into an employment contract with Jesse Bradley to perform "other acts in connection with the partnership agreement." Spivey borrowed $135,000 from the Tattnall Bank to finance the purchase and that sum was deposited in the partnership account in the Tattnall Bank. The promissory note of Spivey was guaranteed by Rogers and Bradley. In addition the note was secured by "DSD covering San-Reid Apartments dated 12/31/79" and "BSSA covering accounts receivable, furniture and fixtures of San-Reid Apartments dated 12/31/79." Rental receipts from the San-Reid Apartments were deposited in the partnership account.

The sales contract between Spivey and Rogers also provided that it was subject to approval by the FHA and was to expire 60 days from the date of execution "12/31/79." In June 1980, the FHA notified the parties that the application had been denied. They prepared a second application and submitted it to the FHA on June 24, 1980. On September 29, 1980, Rogers informed Spivey that the agreement was terminated. Spivey filed an action for specific performance (80-285) and the trial court granted summary judgment to Rogers. The Supreme Court affirmed. Spivey v. Rogers, 249 Ga. 179, 288 S.E.2d 555.

Although the rental receipts from the San-Reid Apartments were deposited in the partnership account, Rogers asked Spivey not to use those funds to pay the monthly payments due on the Tattnall note. Accordingly, no monthly payment was ever made on the note. On or about September 29, 1980, the bank asked Spivey to execute another note. The first note had been executed on December 31, 1979 and was payable in 144 monthly installments. The second note was back-dated to December 31, 1979 and was made due and payable on December 30, 1980. The second note was also guaranteed by Rogers and Bradley. No payments were made on either note. Following default and demand for payment, the bank brought this action against Spivey, Bradley, and Rogers. Rogers answered and admitted execution of the note and that he had guaranteed the same. Bradley's answer admitted endorsement of the note but set forth defenses of laches, fraud in the inducement, and lack of consideration. Spivey's answer denied all allegations of the complaint and pled defenses of failure to state a claim, failure of consideration, and several types of discharge. In addition, Spivey set forth a counterclaim against the bank and named a vice-president and director of the bank as a third-party defendant. The trial court ordered the proceeds of the note placed in the registry of the court.

The bank filed a motion to strike or dismiss the third, fourth, fifth and sixth defenses, the counterclaim, and third-party complaint of Spivey. The bank also moved for summary judgment. After hearing, on August 23, 1982, Judge Harvey denied the bank's motion for summary judgment, the motion to strike the third-party complaint, and reserved ruling on the dismissal of the defenses of Spivey. The bank's motion to strike Spivey's counterclaim was granted. On June 23, 1983, a different judge, Judge Findley, ruled that "anything in any previous order of this court pertaining to any motion or pleading filed by either party in this case (81-224) is hereby set aside or denied, as the holding here demands." He gave judgment for the bank against all defendants, jointly and severally, on the note, plus accrued interest and attorney fees. An auditor was appointed to apportion and dispense the sums from the registry of the court to each defendant. Defendants Spivey and Bradley appeal. Held:

1. Error is enumerated in the ruling of the second trial judge granting summary judgment for plaintiff, where the record had not been expanded following the first trial judge's denial of the motion. Defendants argue that the ruling of the first trial judge on the bank's motions must be taken as "the law of the case." The "law of the case" has been defined as a controlling legal rule established by a previous decision between the same parties in the same case. See generally 21 C.J.S. 330, Courts, § 195(a). However, it is a rule of practice, and is distinguishable from res judicata and stare decisis. Id. Legal proceedings are "in fieri"--"in process of formation or development; hence, incomplete or inchoate" until judgment is entered. Black's Law Dictionary. The general rule is that courts, while a cause is pending before them, have control over the record and proceedings, their orders and judgments, during the term; and after the term if the cause is still pending before them, and may amend or set them aside. Black, Law on Judgments (2d ed.) 221, § 154; 1 Freeman on Judgments (5th ed.) 267, § 140. While the cause is pending the ruling is said to be in the "breast of the judge," but after the cause is no longer pending and the term has expired, the judgment "is upon the roll." McCandless v. Conley, 115 Ga. 48, 51, 41 S.E. 256. The "law of the case" rule is subject to the power of the court, and the court may, in a proper case disregard or correct its former decision where the cause remains pending before it. 21 C.J.S. 332, Courts, § 195(b). "The superior court has plenary power over its orders and judgments during the term at which they are entered, and may amend, correct, or revoke them, for the purpose of promoting justice." Deen v. Baxley State Bank, 192 Ga. 300, 303, 15 S.E.2d 194. However, an interlocutory ruling does not pass from the control of the court at the end of the term if the cause remains pending. Union Circulation Co. v. Trust Co. Bank, 143 Ga.App. 715, 717(1), 240 S.E.2d 100, Div. 2, revd. 241 Ga. 343. Justice Holmes, speaking for the Supreme Court, in Messenger v. Anderson, 225 U.S. 436, 444, 32 S.Ct. 739, 740, 56 L.Ed. 1152, stated that "[i]n the absence of statute the phrase, 'law of the case,' as applied to the effect of previous orders on the later action of the court rendering them in the same case, merely expresses the practice of courts generally to refuse to reopen what has been decided, not a limit to their power."

Inasmuch as our Civil Practice Act was patterned after the Federal Rules of Civil Procedure we can look to federal court decisions for guidance. A collection of cases expressing different views on this issue was analyzed in Miss. Power Co. v. Peabody Coal Co., 69 F.R.D. 558, 562 (1976), and they concluded that while a judge should be cautious about overruling prior orders of another judge in the same case "nevertheless, he may do so in the exercise of sound discretion and particularly if he is convinced that such action is dictated by the interests of justice." Accord: United States v. Koenig, 290 F.2d 166, 172 (5th Cir.1961), affd, sub. nom. DiBella v. United States, 369 U.S. 121, 82 S.Ct. 654, 7 L.Ed.2d 614. Professor Moore agrees that under Rule 56(a) and (d), and Rule 42(b), the trial court exercises a broad authority to dispose of cases in stages and these decisions are interlocutory in character, and until entry of judgment they remain subject to change at any time. "The doctrine of the law of the case does not limit the power of the court in this respect." 1B Moore's Federal Practice 124 § 0.404[4-1]. He recommends the practice of treating each successive decision as establishing the law of the case and departing from it only for convincing reasons. 1B Moore's Federal Practice 125, § 0.404[4-1]. He also found that "[t]here is no jurisdictional inhibition to reconsideration [of a prior ruling by a different judge], however, and a trial judge should not court reversal because of the erroneous ruling of another judge any more than because of an erroneous ruling of his own." 1B Moore's Federal Practice 127, § 0.404[4-2]. This latter reasoning was affirmed in Castner v. First Nat. Bank, 278 F.2d 376 (9th Cir.1960) where the court found no abuse of discretion by a second judge in reversing a decision of a prior judge in the same case. They reasoned that the second judge must conscientiously carry out his judicial function in any case in which he is presiding and he would not fulfill his sworn duty if he found a prior ruling to be erroneous and permitted it to control the case. It is clear from an analysis of these cases that any restriction upon a judge's reconsideration of a ruling upon a motion made by a prior judge in the same case "is a principle of comity and not a limitation upon jurisdiction." United States v. Teresi, 484 F.2d 894, 899 (7th Cir.1973). The question on appeal is whether the second judge abused his discretion. United States v. Desert Gold Mining Co., 433 F.2d 713, 715 (9th Cir.1970); Greyhound Computer v. Int. Business Machines, 559 F.2d 488 (9th Cir.1977), cert. den. 434 U.S. 1040, 98 S.Ct. 782, 54 L.Ed.2d 790.

We have found two federal cases directly on point as to this issue. In Dictograph Prods. Co. v. Sonotone Corp., 230 F.2d 131 (2d Cir.1956), the court held that "[a] district judge's denial of a defendant's motion for summary judgment did not become 'law of the case' so as to preclude another judge thereafter from entering summary judgment ... notwithstanding general practice of one judge to defer to rule of the first judge as a matter of mutual respect,...