Wernimont v. State ex rel. Little Rock Bar Association

• Citation: 142 S.W. 194,101 Ark. 210
• Parties: WERNIMONT v. STATE ex rel. LITTLE ROCK BAR ASSOCIATION
• Decision Date: 11 December 1911
• Court: Supreme Court of Arkansas

142 S.W. 194

101 Ark. 210

WERNIMONT v. STATE ex rel. LITTLE ROCK BAR ASSOCIATION

Supreme Court of Arkansas

December 11, 1911

Appeal from Pulaski Circuit Court, Second Division; F. Guy Fulk Judge; affirmed.

STATEMENT BY THE COURT.

This is an appeal prosecuted by Henry G. Wernimont from a judgment of the Pulaski Circuit Court revoking his license to practice law in that court, and striking his name from the roll of its attorneys. The proceeding was begun by a written motion filed by a number of attorneys practicing in that court representing the Grievance Committee of the Little Rock Bar Association, and also by the Prosecuting Attorney of the Sixth Judicial Circuit on behalf of the State, in which it was charged that said Wernimont had been "guilty of misdemeanor in his professional capacity, and of unprofessional conduct as an attorney, so as to render him unworthy and unfit to be a member of the profession." Notice of the filing of the motion was duly served upon the defendant, and he thereupon appeared and interposed a demurrer thereto, which was overruled. He then made answer duly sworn to, in which he set forth in detail his actions in the matter of the charges made against him. His deposition was also taken in his behalf, in which he reiterated the truthfulness of the statements made in said answer. The defendant did not appear in person at the trial of the case but was represented by an attorney whom he employed to defend against the charges. At the request of the attorney for the defendant, a jury was impaneled, but subsequently the court discharged the jury, over the objection of defendant's attorney, and proceeded to pass upon and try the case "upon the petition, answer and deposition, with the exhibits thereto, and upon the matters known to the court as appearing upon the records of the court." The court found that the defendant was guilty of misdemeanor in his professional capacity, and of malpractice as an attorney in perverting and abusing the process of the court; and it thereupon ordered his name stricken from its roll of attorneys, and entered judgment disbarring him from practicing in that court.

It appears from the statements set out in the sworn answer of the defendant that he was the president of a corporation known as the "German Investment Company," engaged "in buying and selling promissory notes and choses in action as agent and broker, and the buying and acquisition of such for investment, profit and gain." The other corporators were members of defendant's family, and he entered into a contract with the company whereby "all law and collection business transacted by him was the business, property and acts" of the company.

It appears that two mutual fire insurance companies operating in the State had, by insolvency proceedings, been placed in the hands of receivers. Amongst the assets of these insurance companies were a large number of notes, aggregating in face value about $ 15,000. These notes were in small amounts of from five to twenty dollars, and were executed by persons who resided in various counties throughout the State. One of these insolvent companies, known as the Home Insurance Company, possessed about five hundred of these notes, of the face value of from five to six thousand dollars, which were advertised for sale by its receiver. At that sale the defendant, as president of the German Investment Company, bid therefor the sum of $ 50, which was accepted by the receiver. Defendant stated that at that time he had no person in view for whose account to purchase said notes until a few days later, when he mentioned the matter to one D. R. Miller, who importuned him to make the purchase for his account, to which he assented.

At defendant's request, the receiver made a bill of sale for the notes to said Miller, who gave his check for $ 50 therefor. Thereupon said Miller took all these notes to the office of the German Investment Company and proposed to sell the same to it in bulk. The defendant, representing the Investment Company, then entered into a written contract with said Miller, whereby it was agreed that Miller should indorse and guaranty the payment of all these notes, and that he would acquire other notes offered for sale by the receiver of the other insolvent insurance company above mentioned, known as the American Insurance Company, and likewise indorse them to the German Investment Company and guaranty their payment. Later, these notes were secured by Miller for a small sum and indorsed to the German Investment Company. The notes of this latter insurance company were also small in amounts, but large in number, and were of the face value of from seven to eight thousand dollars, and the persons executing the same resided in various counties throughout the State.

The defendant stated that the German Investment Company paid to Miller $ 401.31 for the notes of the Home Insurance Company and $ 382.43 for those of the American Insurance Company, and further agreed to pay Miller 20 per cent of all these notes when collected, with the understanding, however, that if any were not collected, and the face of such uncollected notes thus guaranteed by Miller exceeded the twenty per cent of the notes collected, then Miller should receive nothing further from the German Investment Company, but on the other hand should pay to it the amount of such excess. It was also agreed that Miller should undertake the collection of all said notes for a commission of 25 per cent. of the collections made.

It was further stated by the defendant in his answer that the purpose of making this contract with Miller, under the terms of which he indorsed and guarantied the payment of these notes, was to secure a guarantor who resided in Pulaski County, so that jurisdiction could be acquired, in suits instituted in that county, over his person, and thereby, under the statutes of the State, to acquire jurisdiction over the persons of the makers of the various notes, who were nonresidents of Pulaski County, and who resided in various counties throughout the State.

Thereupon, separate suits were instituted on several hundred of these notes by the defendant in the name of the German Investment Company as plaintiff, and against said Miller and each of the makers thereof, before a justice of the peace of Pulaski County. Miller acknowledged service of summons in each of the suits, and process was issued in each of the suits against the makers of the notes, who were nonresidents of said Pulaski County, but who resided in counties throughout the State, some of them distant from Pulaski County. A large number of these suits proceeded to judgment before said justice of the peace. In some of the cases, the makers of the notes appeared and charged that the alleged transfer and guaranty of the notes by Miller to the German Investment Company was only a sham and a fraud, in order to secure jurisdiction over them, although they resided in counties distant from Pulaski County, and asked that the service of summons upon them for that reason should be quashed. But this was never done in the justice of the peace court.

A great number of appeals were taken from these judgments rendered by this justice of the peace on these notes to the circuit court of Pulaski County. In that court the motion to quash the service of summons on the defendants who were nonresidents of Pulaski was renewed; but in most cases, before the same could be heard by the court, the defendant, representing the German Investment Company as plaintiff in those cases, dismissed them, and before the trial of any of the cases took nonsuits.

The defendant says that he instituted at least 242 suits on these notes, about 180 of which were reduced to judgments. A great many of these suits were appealed to the Pulaski Circuit Court, where in some cases the service of summons was quashed, and in a great number of other cases the defendant, representing the German Investment Company, took these nonsuits.

We do not deem it necessary to set out further the statements which were made by the defendant in his sworn answer relative to his actions in securing these notes and instituting these suits thereon. From a careful examination thereof, we think the lower court was well warranted in finding that Wernimont conceived the plan of having these notes transferred by the receivers to Miller, a resident of Pulsaki County, in order that he might indorse them to the German Investment Company for the sole purpose of giving it, under the forms of law, an apparent right to institute suits in Pulaski County against said Miller and the numerous persons who were nonresidents of said county, and thus to use the process of the court in obtaining jurisdiction of such persons, in apparent conformity with law, when as a matter of fact the guarantying indorser on these notes, instead of being an adversary in such suits, was interested in their prosecution, and that he was thus made a defendant in the suits only in order to reach with process these other persons, nonresidents of the county wherein the suits were instituted, and not in good faith; and further, that the result and purpose of these operations was to force from these defendants, who resided at a distance from the forum where the suits were instituted, a compromise or payment of these claims in order to escape the great expense of making defense of these suits at such a great distance from their residence.

Judgment affirmed.

W. T. Tucker, for appellant.

1. The charge against appellant not being an indictable offense, he was entitled to a jury. Kirby's Digest, § 460.

2. There is nothing in the record to show that it was not a bona fide transaction by which Miller purchased the notes. It will be presumed that the transaction...