Metcalfe v. Merchants' & Planters' Bank

Decision Date02 July 1906
Citation89 Miss. 649,41 So. 377
PartiesGEORGE METCALFE, ET AL., v. MERCHANTS & PLANTERS' BANK, ET AL
CourtMississippi Supreme Court

FROM the chancery court of Washington county, HON. PERCY BELL Chancellor.

Metcalfe and others, appellants, were complainants in the court below and the Merchants and Planters' bank of Greenville and others, appellees, were defendants there. From an interlocutory decree requiring complainants to determine by election the character of their pleading, whether an original bill or a cross-petition under Code 1892, ch. 8, and from a further decree sustaining defendants' demurrer to their petition, the complainants appealed to the supreme court.

The Merchants and Planters' bank, being financially involved made a general assignment for the benefit of its creditors making one Atterbury assignee. Atterbury accepted the trust and filed the petition and bond in the chancery court required by the code chapter on assignments for the benefit of creditors (Code 1892, ch. 8), but soon thereafter resigned. The court thereupon, on the request of the bank and certain of its creditors, appointed as his successor one Walker, the former president of the bank, by whom, as its representative officer, the bank executed the assignment for the benefit of its creditors. At this stage of the proceedings the appellants, former depositors, holders of bank exchange, and one stockholder of the bank, filed in the cause what purported to be a bill of complaint, or petition against not only the assignee, Walker, but also against the bank, its officers, directors, sureties, and certain public officials, among them the sheriff of the county, who had deposited official funds in the bank. This pleading was voluminous, seeking relief against the defendants thereto, some of whom were not defendants to the assignee's petition. It charged that the bank had, with the knowledge of its directors and officers, been insolvent for more than five years prior to the date of the assignment; that during this period the directors and officers had remained practically the same; that forced and unearned dividends had been declared and received by the defendant stockholders with knowledge of the bank's insolvency; that false financial statements had been published; that loans had been made to directors and other officers named in excess of the amount allowed by law; that the funds of the bank had been to a great extent used to assist the private ventures of different individuals; that the sheriff of the county was claiming a lien on the assets of the bank for $ 6,000 of public money deposited, which complainants contended should be postponed to previous depositors, and that the chancellor was disqualified to pass upon the assignment and make orders thereon because interested. It did not, however, claim that the assignment was fraudulent, but merely alleged that it was not "lawfully executed."

As regards the contention of complainants touching the disqualification of the chancellor, the records already on file in the cause, and referred to in appellant's pleading, showed that in the list of creditors filed with the petition of Atterbury, assignee, the name of the chancellor appeared; but subsequently, and before the filing of appellants' petition, the assignee filed a revised list of creditors, which showed that the name of the chancellor had been erroneously listed as a creditor, and eliminating it from the list. Subsequent orders taken in the cause show that he was a debtor of the bank, and the status of such indebtedness was ascertained by a special chancellor. All other matters in the cause were passed upon by the chancellor.

On motion of defendants the complainants were compelled to elect whether their petition should be treated as an original bill in equity, or as a cross-petition under Code 1892, ch. 8, providing that any creditor may file a cross-petition against the assignee and other persons defendant to show that the assignment should not be enforced. Exception was taken by complainants to this action of the court, and complainants then elected to stand in the cause as upon a cross-petition. Thereupon the various defendants severally demurred to the petition, and the demurrers were sustained and the petition dismissed. The opinion further states the facts.

Affirmed.

Jayne & Watson, for appellants.

The chancellor erred in not rescuing himself from trying this cause. Section 165 of the state constitution states that no judge of any court shall preside on the trial of any cause wherein he may be interested. This section has been passed on by this court in Ferguson v. Brown, 75 Miss. 214 (s.c., 21 So. 603), and subsequently in Kirby v. State, 78 Miss. 175 (s.c., 28 So. 846). And see, also, Lemon v. Peyton, 64 Miss. 161 (S.C., 8 So. 235). At the time of the rendition of the different decrees and orders in the case the chancellor was a beneficiary in the assignment as a creditor of the bank; was also indebted to the bank under several obligations, and was made a party to the cause by the petition of Atterbury for approval of his bond and administration of the trust under the assignment.

Although the above cases show the trend of opinion in this state, our court has never passed upon the exact question as to eligibility of the chancellor as here presented, nor has it indicated conclusively what pecuniary interest is sufficient to disqualify a judge. Hence we must look to the decisions of other tribunals. At common law the principle was well established that no man may act as judge in his own cause. 17 Am. & Eng. Ency. Law, 732; Hughes on Procedure, vol. 1, sec. 159 et seq. As to the exact nature of the diqualifying interest, the decisions in various states differ somewhat. We refer to some of these decisions:

Indiana: Where a justice of the peace rendered a judgment in favor of a party whom he had represented as attorney in the cause the judgment was void. Chicago, etc., R. R. Co. v. Summers, 113 Ind. 10.

Michigan: Where the trial judge was a nephew by marriage of one of the complainants and a cousin of two others, held that he was disqualified to sit in a cause wherein they were interested. Horton v. Horton, 79 Mich. 642.

New Hampshire: In a case where the probation of a will was written by the probate judge, held that he was disqualified as to issues involved. Moses v. Julian, 45 N.H. 52.

Massachusetts: Where the probate judge appointed his wife's brother administrator of an estate of which her father was the principal creditor, held that the judge was disqualified by reason of personal interest, and the appointment was void. Hall v. Thayer, 105 Mass. 219.

Texas: Where a wife sued her husband for divorce on ground of abandonment, and the judge who presided at the second trial of the cause was attorney for the husband on the first trial, held he was disqualified to act as judge. Newcomb v. Light, 56 Tex. 141.

Nevada: Where a judge who had been previously of counsel in one phase of a cause subsequently as judge entered an order extending the time in which to file a statement in the case on its coming before him for trial on the merits, held that the act of the judge was void. Frevert v. Swift, II P. (Nev.), 273.

New York: In a case where a person had been convicted before the county court, consisting of a county judge and a justice of the peace, the justice of the peace was related to the defendant within the sixth degree of kin, consequently disqualified. Subsequently the same person, defendant above, pleaded the former conviction. Held, that the plea was bad, as the former conviction was void. People v. Connor, 142 N.Y. 130.

California: Where the question in the case involved the issue of city bonds running forty years, and the trial judge held land in the city, he was disqualified to act as judge in the case. Meyer v. San Diego, 53 P. 434.

Louisiana: Where the judge was remotely connected with a claim, held that he was disqualified to pass upon the homologation of the same. Succession of Jan, 10 So. 6.

West Virginia: Several judgment creditors sought to satisfy their judgments through an equitable proceeding against the common debtor. Among the judgments represented was one recovered in favor of the presiding judge, but which he had assigned without recourse to one of the creditors mentioned. Held that the judge was disqualified, inasmuch as there was an implied warranty on his part that the judgment was what it purported to be. Findley v. Smith, 26 S.E. 370.

Florida: In a case involving probate of a will where the interests of a church were concerned, held that the judge, who was one of the vestry of the church, was disqualified. State v. Young, 12 So. 673.

Oklahoma: Where the judge who appointed a receiver was himself a debtor of the bank of which the receiver was appointed, held that the judge was a party interested. Bank v. Nat. Bank of Guthrie, 51 P. 119.

It is contended, however, by opposing counsel, that the allegation of interest on the part of the chancellor was not sufficient to make it necessary for him to rescue himself. The allegation is as follows: "That the chancellor passing upon such matters, making the orders therein, was disqualified to act in the matter, adjudicate thereon, or to make the orders, decrees and appointments therein made, because he was a party to said suit and interested in the cause, and is still a party thereto and interested therein." We think this is a clear statement of facts, and not to be construed merely as a legal conclusion on the part of complainants. The term "party to a suit" needs no definition.

In the English case of Dimes v. Grand Junction Canal, Leading Cases, 176, cited in Hughes on Procedure, vol. 1, sec 159, the question of interest of a presiding judge was...

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