State ex rel. Fourth Nat. Bank of Phila. v. Johnson

• Citation: 83 N.W. 320,105 Wis. 164
• Parties: STATE EX REL. FOURTH NAT. BANK OF PHILADELPHIA ET AL. v. JOHNSON, JUDGE.
• Decision Date: 18 December 1899
• Court: United States State Supreme Court of Wisconsin

105 Wis. 164

83 N.W. 320

STATE EX REL. FOURTH NAT. BANK OF PHILADELPHIA ET AL.

v.JOHNSON, JUDGE.¹

Supreme Court of Wisconsin.

Dec. 18, 1899.

Mandamus by the state, on relation of the Fourth National Bank of Philadelphia and others, against Daniel H. Johnson, circuit judge, to compel him to appoint Henry Herman as assignee of the Plankinton Bank of Milwaukee. Writ awarded.

Mandamus to the Honorable D. H. Johnson, judge of the circuit court for Milwaukee county.

June 1, 1893, the Plankinton Bank, a banking corporation organized under the laws of this state and located at the city of Milwaukee, made a voluntary assignment for the benefit of creditors to its vice president William Plankinton, who, in due time, qualified and entered upon the duties of the trust created by such assignment. He failed to file a report of his doings as assignee till July 1, 1898, at which time he made a report in response to an order of the court requiring it, which, on due notice to creditors, was brought to the attention of the court August 10, 1898, when such objections as the nature of the account would permit were filed by creditors, and a motion was made that the assignee be required to file a more definite and certain account. May 9, 1899, without disposing of such motion and without any opportunity for the creditors to be heard on the merits of the account, the court made an order approving it, except as to the claim of the assignee for compensation, as full and complete and in accordance with the statute governing the subject, up to the date thereof, and extending the time for the final settlement of the estate till January 1, 1900. On the next day the assignee resigned and his resignation was accepted by the court to take effect upon the final confirmation of his account, and the matter was referred to a circuit court commissioner to state the account subsequent to the date of the one filed as aforesaid and to report such statement to the court. After the making of such order the court refused to allow the creditors to examine the officers of the assignor and the assignee before the court or a commissioner thereof, and thereafter, on the 17th day of June, entered an order denying the motion of the July previous, that the assignee make his account more definite and certain. Some days later the last-mentioned order was amended by making all the papers in the assignment proceedings a part of the record in the proceedings which resulted in its entry.

At that stage of the administration of the assignment last above indicated, this court, on a petition setting forth all the facts above detailed and facts showing that the rights of the creditors would be lost beyond remedy unless immediate relief were granted against the various judicial acts referred to, duly issued an alternative writ of mandamus requiring the circuit judge to allow the creditors to examine the assignee and officers of the assignor and to file objections to the assignee's account that had been confirmed, and to vacate the orders referred to standing in the way of such examination and the filing and hearing of such objections, or to show cause why to the contrary on the return day named in the writ. Such proceedings were had on such return day and thereafter, that this court decided that the assignee's account of July 1, 1898, was not a compliance with the statute in regardto a final account; that the creditors had an absolute right under section 1693b, Rev. St. to an inspection of the assignor's books and to examine the officers of the assignor under oath; that, independent of the statute, the creditors were entitled to examine the assignee and the officers of the assignor within reasonable limits, and that the denial of that privilege was beyond the discretionary power of the circuit court; that under the constitutional superintending power of this court it may compel lower courts to do acts not discretionary, and, as to discretionary acts, may compel them to perform their duty by exercising judicial discretion in the premises and to undo acts done in such manifest disregard of judicial duty as to leave no room to say there was a reasonable excuse therefor; it appearing that, without such exercise of such superintending power the denial of rights secured by law would go without any adequate remedy and cause great and irreparable mischief and hardship; and that the disclosures made in the proceedings for the writ of mandamus warranted the exercise of such superintending power within the principles stated.

In accordance with the conclusions reached, as indicated, a peremptory writ of mandamus was issued, in effect making mandatory the alternative commands of the first writ. The case will be found reported in 103 Wis. 591, 79 N. W. 1081.

June 13, 1899, a petition was filed in the circuit court, purporting to be signed by a majority of the creditors of the assignor representing a majority in value of the debts against the assigned estate, setting forth such to be the facts; that the assignee, with other officers of the assignor, were liable to creditors for abuse of their trust as such officers; that the personal interests of the assignee were adverse to the interests of the creditors which he was bound to protect; that he had neglected and was neglecting his duties as assignee in order to conserve his personal interests, to the great damage of the creditors, and that the creditors would be irreparably damaged unless an assignee wholly devoted to their interests were appointed. Henry W. Herman was named by the petitioners as a suitable person to be appointed in place of Mr. Plankinton and his appointment was requested. The petition, on due notice to the creditors and all parties interested, was brought to the attention of the court, whereupon the assignee filed an answer thereto, among other things taking issue with its allegations as to the parties thereto being sufficient to require his dismissal under the statute (section 1702b, Rev. St.). Thereupon the petition was amended by correcting and verifying names of creditors that were misspelled so as not to be easily identified as identical with names of creditors having claims on file, also by correcting mistakes that resulted in the same name appearing twice in the petition, and by adding to the petition the names of a considerable number of creditors who came in and participated in the proceedings subsequent to the making up of the petition in the first instance. The original and amended petition showed on their face that they contained the number of creditors representing the amount of debts against the assignor, requiring, as matter of right, a change in the assignee under section 1702b. Opportunity was given the assignee to take issue with the allegations of the amended petition, but he neglected to do so till long after he ceased to be assignee, as hereinafter stated.

While the proceedings for the removal of Mr. Plankinton were at the stage above set forth, an order was entered pursuant to the writ of mandamus issued as before indicated, vacating an order previously made accepting the resignation of Mr. Plankinton conditionally, and at the same time the judge, of his own motion, accepted such resignation as follows: “It is ordered that the resignation of William Plankinton, assignee of the Plankinton Bank, the assignor above named, be and the same is hereby accepted to take effect upon the appointment and qualification of his successor.”

On the 14th day of July, 1899, the matter of the appointment of a successor to Mr. Plankinton as assignee was taken up by the circuit court and heard. There were no objections or exceptions on file, or made on the hearing, to the appointment of Henry Herman in accordance with the nomination made by the creditors in their petition, and no question was made by any creditor or any person on behalf of creditors, or the former assignee, Mr. Plankinton, or by any person interested in the assignment, but that the petition was sufficiently representative of the creditors of the assigned estate to satisfy all the requisites of section 1702b. The court took the matter of the appointment under advisement and on the following day officially stated that for the purposes of the proceedings it would be taken for granted that the petition satisfied the requisites of section 1702b, but that such section did not require, in any event, the appointment as assignee of the person nominated by the creditors; that the statute left it entirely to the discretion of the circuit court or judge to name such person as assignee as in his judgment was best suited for the trust. Thereupon, without informing the creditors of any other reason for ignoring their wishes in regard to the appointment of Mr. Herman, except that power was vested in the circuit judge to name a person entirely independent of the wishes of the creditors, he announced that Irving M. Bean, a person reputed to be a close personal friend and business associate of Mr. Plankinton, would be appointed as his successor, and without giving the creditors any opportunity to be heard in opposition to such appointment, though a request for such a hearing was made on their behalf, the appointment was made. Thereafter a request for the entry of a formal order, making the attitude of the court in the matter appear of record, was denied. The order appointing Mr. Bean was prepared by the attorneys for the old administration and signed July 15, 1899, but was not placed on file, nor were the attorneys for the creditors able to get access to it till July 21, 1899, when they discovered for the first time that the court finally determined that the question as to whether the petition of the creditors was signed by a majority of all the creditors of the assignor representing a majority in value of the debts against the assigned estate, was deemed not adjudicated, though it had been understood before, and suggested by the judge that it...