Murray County v. Pickering , 195 Ga. 182 ( 1942 )

It appearing that the trial judge while a practicing attorney represented the defendant in settling a matter between him and the plaintiff county that was in controversy, and the instant suit by the county having challenged the validity and correctness of such settlement, the judge was disqualified to preside over such contest. He therefore erred in not holding himself disqualified, as urged in the plaintiff's motion.

No. 14318. DECEMBER 2, 1942. REHEARING DENIED DECEMBER 14, 1942. On July 17, 1942, Murray County filed a suit against V. C. Pickering, praying for accounting, money judgment, injunction, and general relief. The defendant filed a general demurrer to the petition. Before any ruling was made on the demurrer, the plaintiff moved that the presiding judge, Honorable John C. Mitchell, hold himself disqualified on the alleged grounds that he had represented the defendant in previous litigation referred to in the petition, and had acted as counsel for him in a former accounting and settlement with the county, which are now attacked by the county. Judge Mitchell overruled this motion, and heard and sustained the general demurrer. The plaintiff excepted, assigning error on both rulings.

From 1929 to 1933 the affairs of Murray County were in charge of a sole commissioner. In 1933 a board of three commissioners was created. A sole commissioner was again provided in 1939. Ga. L. 1933, pp. 625, 626; Ga. L. 1939, p. 691.

The petition refers to certain contracts between Murray and Gilmer Counties, the State Highway Board, and the defendant Pickering; but it is sufficient here to speak of these contracts as if Gilmer County had not been a party. Thus as to Murray County the petition alleged:

In 1931 this county entered into a contract with the State Highway Board for the construction of a described highway, the work to be performed by the county with convict labor, and to be paid for as it progressed on estimates made by the engineering department of the State Highway Board. The commissioner of Murray County entered into a verbal agreement with the defendant Pickering, under the terms of which the defendant was to carry out the construction operations and was placed in full and complete charge of them. It was also agreed that all funds received from the State Highway Board would be deposited in bank to the credit of a named highway account, and these funds were to be disbursed by the defendant to pay for any and all expenses of the project. The verbal agreement also provided that the defendant was to have reasonable compensation, and that he was to make an accounting for all funds. Said contract remained in parol, and was not reduced to writing until some two years after the agreement was made, when, at the instance of the State Auditor, a memorandum agreement was made and signed. Under this arrangement, various sums of money were deposited in bank, and the funds thus deposited were checked out by the defendant and used by him as he saw fit, no accounting being made by him to the commissioner of Murray County. The project operations continued as above stated until August 12, 1933, when the Highway Board terminated the operations by Murray County, and itself had the project work completed.

Afterwards the State Highway Board paid to the county $216,556.72 as money earned by it on this project before its operations ceased. All of this sum except $105,450.92 was deposited in bank to the credit of the highway account above mentioned. In March 1934, J. Roy McGinty, as a citizen and taxpayer, brought an equitable petition against the bank, and the (named) county authority. Substantially the petition alleged that the whole setup by and between the fiscal authorities of Murray County and the defendant should be enjoined, and that an audit and accounting should be had. McGinty v. Pickering, 180 Ga. 447 (179 S.E. 358). The defendant Pickering filed an answer in which he alleged that he had never filed with Murray County any "statement or account for services rendered in connection with said project, nor had he been called upon for a statement of the same, for the reason that it has been and is now impossible to determine whether there would or will be anything out of which he could be paid any sum whatever."

In the same case the county commissioners filed an answer in which they averred: "On information and belief there are yet many outstanding bills to be paid by the said Pickering on the . . Murray highway, and until he has completed and performed all duties the commissioners have no right to call upon him for an accounting on said project." The "quoted averments show collusion on the part of said commissioners, because they were thus willing to abandon the duty of their office in order for the defendant to obtain the $105,450.92, the subject-matter of that injunctive suit."

The petition next alleged that in March, 1934, at an interlocutory hearing in the McGinty case, the judge ordered that the sum of $105,450, which was then in bank, be placed in the said highway account, "to be disbursed by V. C. Pickering in the payment of charges against the construction of said road as provided by the contract, the said Pickering after paying said bills to render an accounting of his acts to commissioners of roads and revenues of said county."

Shortly afterward the defendant filed a statement with the county, showing that he had received $391,132.06, and had "paid out for expenses" $374,567.39; leaving a balance of $16,564.67. On May 5, 1934, the county commissioners passed a resolution accepting this statement, and, in reference to the said balance of $16,564.67, ordering "that sufficient of this fund be used to finish paying the balance Murray County is due the said V. C. Pickering and that the remaining amount, together with the machinery which was bought under a reversionary contract, and all other equipment and supplies in connection with the construction of said highway be turned over to the said V. C. Pickering on his compensation for the construction of said highway."

On March 2, 1935, the Supreme Court of Georgia reversed the judgment of the trial court in the McGinty case, and held the funds to be county funds; that the funds were not being treated as county funds; that the defendant was an agent without right; that it was the duty of the county commissioners to audit and pass upon the claims arising against the county in connection with the construction project, which duty could not be delegated; which ruling included the defendant's reasonable or unliquidated claim for compensation.

After that decision, the commissioners, on June 4, 1935, purportedly passed a resolution in which it is set forth "that the accounts were audited and passed upon; that the defendant did not disburse any of the project funds for other than lawful charges; that all of them were paid on lawful charges in connection with project operations. The then two acting commissioners attempted to make a re-settlement of the project operations between Murray County and the defendant, but no accounting was in fact made by the defendant. Copy of said re-settlement resolution is hereto attached, marked Exhibit `E,' and made a part of this petition, reference being prayed thereto." (This resolution was in the nature of a contract of settlement, and in the motion to disqualify the judge, it is referred to as the "contracts.")

The petition also exhibited copies of certain contracts between Murray County and Pickering, alleged to have been executed in pursuance of the oral agreement as first made between them.

It was averred that the McGinty case was later tried before a jury, and that a judgment for the defendants on that trial was affirmed by the Supreme Court. McGinty v. Keith, 182 Ga. 869 (187 S.E. 79).

The petition attacked the defendant's statement of account, and the final resolution concerning it, as collusive and fraudulent, and alleged fraudulent concealment on the defendant's part. The petition also alleged recent discoveries indicating, as petitioner contends, large indebtedness to it by the defendant.

The petitioner prayed for injunction to restrain the defendant from disposing of moneys received by him under the alleged agreements for construction of the highway, and from transferring any property in which said funds had been invested by him, for a specific judgment for $230,000, and for general relief.

The contentions presented by the demurrer need not be stated.

The motion as to disqualification of the judge was based on two alleged grounds as follows:

(1) That the judge of this court, John C. Mitchell, was of counsel, being a member of the firm of Mitchell Mitchell, which firm were counsel for V. C. Pickering throughout the litigation in the case of Roy McGinty Jr. v. A. L. Keith et al., and members of board of roads and revenues of Murray County, Georgia, Cohutta Banking Company, treasurer of Murray County, and V. C. Pickering, in Murray superior court, which suit is set forth and referred to in the original petition in this case, and in which case John C. Mitchell appeared as counsel, both in the lower court and on the two appeals to the Supreme Court.

(2) That the firm of Mitchell Mitchell, of which John C. Mitchell, judge of this court, was at said time a member, was of counsel for Pickering in connection with all negotiations between Murray County and Pickering, touching the preparation of the contracts set forth as exhibit E to the original petition, represented and advised the said V. C. Pickering throughout in the settlement and accounting alleged to have been made between V. C. Pickering and Murray County under said contracts, and represented V. C. Pickering as attorney throughout in all transactions between himself and Murray County touching the matters and things set forth in the petition in this case.

The motion to disqualify was overruled by order as follows: "The within motion coming on for hearing on this day, and after consideration of the statement of His Honor John C. Mitchell, it is ordered, considered, and adjudged that the same be and is hereby denied."

The bill of exceptions recites that on presentation of the foregoing motion the judge made the following statement which was assented to as the facts applicable to said motion: "I can state that the motion states the true facts. Because I did represent Mr. Pickering through that litigation, or the firm of which I was a member, at that time. I also represented him and was present at the time the final settlement was made with the county; but in view of those facts, I do not think that it is such — not being the same case — would be such as to disqualify me, as I no longer have any connection, have had no connection with Mr. Pickering's litigation since the conclusion of that case."

The bill of exceptions recites that this statement by the judge was "accepted as evidence by both parties." No other evidence being submitted by either party, the judge overruled said motion. The parties will be referred to as plaintiff and defendant, as they appeared in the trial court.

We are of the opinion that the judge erred in declining to hold himself disqualified; and as this error rendered the further proceedings nugatory, no other question will be decided.

The motion to disqualify was based on two grounds: (1) that the judge while practicing as an attorney had represented the defendant in previous litigation regarding the subject-matter; (2) that the firm of which he was then a member had represented and advised the defendant in the settlement and accounting between defendant and Murray County, and represented him as attorney in all transactions between them touching the matters and things set forth in the petition.

In a supplemental brief for the plaintiff it is stated: "We do not believe that ground one of the written motion to disqualify is sufficiently supported by the evidence." Whether this statement should be taken as an abandonment of this ground, it can not be treated as an abandonment of the second ground, in view of the continued insistence thereon; and this is true notwithstanding "the likeness and similarity" of the two grounds, as pointed out by counsel for defendant. In the circumstances, however, we shall deal only with the second ground.

Whether the judge's own statement might properly, have been considered as evidence, if objection had been made, or if there had been no consent, yet the order states that it was considered, and the bill of exceptions as duly verified recites that it "was assented to as being the true facts applicable to said motion," and was "accepted as evidence by both parties."

The statement will therefore be "accepted" by this court as evidence on the motion; and so treating it, we are of the opinion that, whether it might have sustained ground 1, it did sustain ground 2. We quote the statement again, as follows: The court: "I can state that the motion states the true facts. Because I did represent Mr. Pickering through that litigation, or the firm of which I was a member, at that time. I also represented him and was present at the time the final settlement was made with the county; but in view of those facts, I do not think that it is such — not being the same case — would be such as to disqualify me, as I no longer have any connection, have had no connection with Mr. Pickering's litigation since the conclusion of that case."

The judge doubtless would have greatly preferred to hold himself disqualified, but at the same time felt it his duty to preside unless he were in fact disqualified; and it may be that under some authorities he would not have been disqualified. 30 Am. Jur. 789, § 81; 33 C. J. 1003, § 160.

Under the Code, § 24-102, a judge is disqualified to "sit in any cause or proceeding . . in which he has been of counsel;" and according to our view, the motion and the evidence established disqualification under this rule. The matter in controversy was whether the defendant was indebted to the county as result of transactions in which he handled the county's money in the construction of a designated highway. This very matter had been drawn in question either directly or indirectly in former litigation; and regardless of the judge's connection with that litigation, an accounting and settlement necessarily had to be made at some time. The judge stated that he represented the defendant and was present at the time the final settlement was made. In Smith v. Queen Insurance Co., 41 Ga. App. 587 (2) (153 S.E. 785), it was held that the language above quoted from the Code, § 24-102, being remedial in nature, should be liberally construed, and that the word "cause" should not be limited to a suit or proceeding in court. A part of that decision was quoted with approval by this court in Burgess v. Simmons, 191 Ga. 322 (12 S.E.2d 323), in which the opinion was prepared by Presiding Justice Atkinson, and was concurred in by all the Justices.

This is not a case where an attorney, who afterwards became judge, merely drew a contract on which a suit or defense was founded, but the subject-matter was involved in controversy before the suit was instituted, and the judge represented the defendant in bringing it to a settlement. The validity and correctness of this settlement were challenged in the present suit; and in view of his previous connection therewith as an attorney, the judge was disqualified to preside over such contest.

While the former controversy may have arisen only upon complaint of a taxpayer, this fact would not alter the conclusion here, as a taxpayer may intercede regarding county affairs when he is in danger of financial loss.

The judge erred in not holding himself disqualified, as urged in the second ground of the motion; and for this reason the case must be remanded, without reference to the merits.

Judgment reversed. All the Justices concur, except Hewlett,J., disqualified.