State ex rel. Zimmerman v. Gibbes

• Decision Date: 11 May 1933
• Docket Number: 13638.
• Parties: STATE ex rel. ZIMMERMAN et al. v. GIBBES et al.
• Court: South Carolina Supreme Court

172 S.E. 130

171 S.C. 209

STATE ex rel. ZIMMERMAN et al. v. GIBBES et al.

No. 13638.

Supreme Court of South Carolina

May 11, 1933

Original prohibition proceeding by the State, on the relation of Simpson J. Zimmerman, individually and as conservator of the Central Union Bank of South Carolina, and others against Hunter A. Gibbes, representing himself and all other depositors similarly situated, the Court of Common Pleas for Richmond, and the Hon. W. H. Townsend, Judge of the Fifth Judicial Circuit.

Writ granted.

John M Daniel, Atty. Gen., J. Ivey Humphrey, Asst. Atty. Gen., and Irvine F. Belser, of Columbia, for petitioners.

D. W Robinson, of Columbia, for respondents.

STABLER Justice.

At its 1933 session, the General Assembly passed an act, approved March 9th of that year (38 St. at Large, p. 1174), vesting the Governor of the state "with plenary powers to assume supervision and control of the Banking Department and the banks of the State of South Carolina, depositories, Building and Loan Associations, and all other institutions that accept and pay deposits, subject to the provisions of this Act." Section 1. Section 4 (page 1177), in part provides: "*** And all persons, firms or corporations are hereby prohibited, while the Governor is in control of the banks, banking institutions, building and loan associations or cash depositories under the provisions of this Act, from instituting any legal proceedings of any nature whatever against any bank, banking institution, building and loan association or cash depository, *** without first obtaining the written approval of the Governor. ***"

Pursuant to the powers granted, the Governor appointed a board of bank control to advise and consult with him; and later, under authority of the act, Simpson J. Zimmerman was named as conservator of the Central Union Bank of South Carolina, which has its principal place of business at Columbia.

On April 11, 1933, an action was begun in the court of common pleas for Richland county by Hunter A. Gibbes, "representing himself and all other depositors similarly situated," against Zimmerman, individually and as conservator of the Central Union Bank, the Governor of the state, and others. The plaintiff alleged, inter alia, on information and belief, that there was practically no chance of the reopening or the reorganization of the Central Union Bank, that its funds were being depleted by its present management, and that its assets should be liquidated by the orders of the court and applied to the debts of its depositors and other creditors. The prayer, inter alia, was for the appointment of a receiver, for the enforcement of the stockholders' liability, and that the Act of March 9, 1933, "be declared invalid, null and void, in so far as the same undertakes to prevent plaintiff and other depositors of the Central Union Bank from bringing and prosecuting this action."

Judge W. H. Townsend, to whom the matter was presented, issued a rule requiring the defendants to show cause before him on May 4, 1933, why the prayer of the complaint should not be granted, and by his order restrained the defendants in the meantime, "from proceeding in any Court, in any way, in connection with the affairs and assets of the Central Union Bank except in this proceeding."

On April 12, 1933, the present proceeding was instituted in the original jurisdiction of this court, by the state of South Carolina, in relation to Zimmerman and other defendants named in the original suit, against Hunter A. Gibbes, plaintiff in that suit, the court of common pleas for Richland county, and Hon. W. H. Townsend, judge of the Fifth judicial circuit, seeking a writ of prohibition " restraining and enjoining them from further proceeding in the said case, and dissolving and dismissing the rule to show cause and temporary restraining order therein issued, and dismissing said suit." On the verified petition this court granted an alternative writ of prohibition, requiring the respondents to show cause before it, on April 14, 1933, why the relief prayed for should not be granted, and why a final writ of prohibition should not issue. Judge Townsend made formal return, setting out that the courts of common pleas, under the provisions of the state Constitution, have jurisdiction in all civil cases, and original jurisdiction to issue writs of injunction, subject to appeal to the Supreme Court; and that the order to show cause made by him was based upon the complaint, and that the restraining order issued was intended to preserve and maintain the jurisdiction of the state court in the administration of the affairs of the bank, in the event that the plaintiff established a good cause of action; and further stated that "the Supreme Court now has before it the same information and knowledge that the Court of Common Pleas and the Circuit Judge had at the time of the issuance of said order; and neither the Court of Common Pleas nor said Judge have any knowledge or information as to the merits of said cause, except as set out in the verified complaint, and no interest whatever therein, and will be pleased, because of the interest of a great number of citizens involved, to have this Court assume jurisdiction in the emergency existing, in order that a speedy and final decision may be had thereon."

The respondent Hunter A. Gibbes demurred upon the ground that the petition "does not state facts sufficient to constitute a cause of action of any kind and does not entitle the petitioners to any relief at the hands of this Court." He also made return and answer, setting forth at length his reasons why the writ should not issue, and praying for dismissal of the petition.

We think the matter may properly and correctly be disposed of by a decision of the questions: (1) Whether the writ of prohibition is here the appropriate remedy; and (2) whether the banking act of 1933 is constitutional with especial reference to that portion of section 4 forbidding the bringing of suits against the banks by any one without the written permission of the Governor. In our discussion of these questions, we shall necessarily refer to, and dispose of, the several contentions of the respondents.

I. We desire, in the outset, to call attention to the very recent case of Ex parte Jones, 160 S.C. 63, 158 S.E. 134, 77 A. L. R. 235, where Hon. Mendel L. Smith, Acting Associate Justice, in an able and elaborate opinion, discusses the history and law of prohibition, citing most of the cases in this state dealing with the question. See, also, Ex parte Wingate, 166 S.C. 440, 165 S.E. 176, the latest utterance of this court on the subject.

As the contention that prohibition is an extraordinary prerogative writ and should be resorted to only in cases of necessity, and when there is no other adequate ordinary remedy is conceded, a discussion of that point is unnecessary. See Ex parte Jones, supra; Ex parte Wingate, supra; Spelling on Extraordinary Remedies, vol. 2, § 1727; High on Extraordinary Remedies, § 765. The rule is that, where the court in which the original action is brought has jurisdiction and the usual remedies provided by law are adequate and complete, the writ should not issue. The respondent Gibbes contends that this proceeding falls within that class; the petitioners, defendants in common pleas, having a full and adequate remedy by appeal. The question, however, whether the remedy is inadequate, is one within the sound discretion of the court to which application is made for the issuance of the writ, and is to be determined on the facts of each particular case. And in this connection the court may properly consider the delay and inconvenience incident to appeal, although the inadequacy of such remedy will not be tested solely by these considerations. It is to be kept in mind that the right of prohibition is defeated, not by the exercise, but by the adequacy, of the remedy by appeal. 50 C.J. 686.

In the case at bar we conclude, upon consideration of the facts before us, that the remedy accorded the petitioners by appeal is not, in the existing circumstances requiring a speedy disposition of the questions presented--to which we shall more particularly hereafter refer--such a completely adequate remedy as would justify the court in refusing the writ on that ground.

With regard to the contention that a prohibition proceeding is not the proper way of testing the constitutionality of the act "it seems to be the rule that the Court will not determine constitutional questions in a prohibition proceeding if the same questions may be raised in another proceeding which will furnish the applicant an adequate remedy." 22 R. C. L. 25. But the appellate court will not refuse to grant relief by prohibition simply because to do so would necessitate the passing upon a constitutional question. Bell v. First Judicial District Court, 28 Nev. 280, 81 P. 875, 1 L. R. A. (N. S.) 843, 113 Am. St. Rep. 854, 6 Ann. Cas. 982; 22 R. C. L. 25. As we have held in this case that a completely adequate remedy by appeal is not afforded the petitioners in the circumstances, the necessity for passing upon the constitutional questions raised would not bar relief by...