Schiselman v. Trust Co. Bank, 36146

• Decision Date: 08 September 1980
• Docket Number: No. 36146,36146
• Citation: 246 Ga. 274,271 S.E.2d 183
• Parties: SCHISELMAN v. TRUST COMPANY BANK et al.
• Court: Georgia Supreme Court

Page 183

271 S.E.2d 183

246 Ga. 274

SCHISELMAN v. TRUST COMPANY BANK et al.

No. 36146.

Supreme Court of Georgia.

Submitted April 18, 1980.

Decided Sept. 8, 1980.

Paul L. Hanes, Atlanta, for appellant.

A. Felton Jenkins, Jr., Thomas E. Raines, Stacey W. Cotton, Atlanta, M. Randall Peek, Dist. Atty., for appellees.

HILL, Justice.

Trust Company Bank brought a civil action against Schiselman and Schiselman's company, M & R Supplies, Inc., d/b/a Micro-Chem, to recover approximately $190,000, to enjoin the defendants from diverting, using or ridding themselves of assets and property, and to appoint a receiver. Trust Company alleged that Schiselman had altered a United States Treasury check in the amount of $1,463.87 by adding a 19 to make the check read $191,463.87. Schiselman subsequently withdrew the funds. On November 14, 1979, the trial court entered an order providing that the defendants be "temporarily restrained and enjoined until further order of this Court from diverting, dissipating, using, transferring or otherwise getting rid of any and all property and money of every kind owned or in the possession of either of said defendants, excepting only the use of property or money for normal everyday living expenses." Also on November 14, a receiver was appointed; his powers were spelled out at length in an order dated November 19, 1979. Schiselman was permitted to remain with Micro-Chem as an employee and was paid a salary. An interim consent judgment was entered in favor of Trust Company and against the defendants on December 11, 1979, in the amount of $177,271.73 plus interest.

On January 10, 1980, the receiver filed with the court a report and application for sanctions and direction. In his report, the receiver stated that he had discovered on December 17 that Schiselman had on November 20 factored $17,151 worth of Micro-Chem invoices with Cahill Associates, Inc., for $13,615, but that restitution had been made upon demand and Schiselman had assured the receiver that he had made no other unauthorized transactions. However, the receiver's report further stated that on January 3 it was discovered that Schiselman had on December 17 opened a bank account in the name of Micro-Chem at the Citizens & Southern National Bank and that he also was maintaining a bank account in the name of Micro-Chem with National Bank of Georgia opened prior to the receivership but concealed from the receiver.

The receiver further stated that beginning on or about November 20, Schiselman had surreptitiously begun factoring accounts receivable of Micro-Chem with Action Capital Corporation and had continued this practice at least until December 17, receiving advances totaling approximately $48,000. Schiselman used $6,497 from an Action Corporation check for $17,105 to open the Citizens & Southern Bank account on December 17. The report stated that the C & S account as of January 2 was overdrawn by approximately $20,000.

The receiver requested that the court issue an order requiring Schiselman to appear and show cause why restitution should not be ordered and why "the court should not hold him in contempt of court and/or to impose such other sanctions as is appropriate to ensure the enforcement and the observance of this court's orders."

A hearing was held January 10, 1980, and concluded January 21, 1980. ¹ The defendant admitted almost all of the acts complained of by the receiver. The trial court sentenced defendant to 20 days in jail and a $200 fine for each of 10 acts of contempt of the November 14 order. Defendant appeals, enumerating three errors.

1. Defendant first asserts that the order of November 14 was not clear and concise and that no acts of contempt were proved. He argues that the order excepted everyday living expenses and that the everyday living expenses of the corporation include payments to creditors to continue operations. He states that the order itself did not specify what normal living expenses might be.

A person has living expenses; a business has operating expenses, not living expenses. The receiver, not Schiselman, was charged by the court with full authority to operate the business and to manage its property and assets. Moreover, Schiselman testified that a portion of the funds acquired from Action Corporation had been used for gambling. Here Schiselman asserted that his errors, which he admitted had not been wilful in that he did not intend to disobey the court's order. The evidence was ample, by whatever standard, for the trial judge to find that the acts were wilful, and to impose whatever sanctions he deemed proper within his authority. Code Ann. §§ 24-105, 24-2615(5). Contemnor's testimony that he had no intent to violate the order is not binding on the court. Carson v. Ennis, 146 Ga. 726, 92 S.E. 221 (1917). It was not error to hold the defendant in contempt.

2. Schiselman next asserts that the contempt was civil and not criminal, and was brought by the receiver to recover funds and not to punish the defendant. Schiselman argues that he did not know the contempt was criminal until the sentence (200 days and $2000) was imposed, ² that the receiver was seeking an order of civil contempt, that the nature of the proceeding cannot be determined solely by the final order but must be determined from its purpose, that it is improper for the trial court to convert a civil contempt proceeding into a criminal one, that a defendant cannot properly defend himself without notice that the proceedings are criminal in nature, and that this defendant was not afforded the rights he was entitled to receive in a criminal case (Miranda warning and fifth amendment privilege against self-incrimination).

The receiver sought to require Schiselman not only to show cause why he should not be required to make restitution but also "to show cause why the Court should not hold him in contempt of court and/or to impose such other sanctions as is appropriate to ensure the...