Galloway v. Mitchell County Electric Membership Corp. , 190 Ga. 428 ( 1940 )

1. Where a superior-court judge is disqualified, and the disqualification is made plainly to appear, the superior-court judge of another circuit may pass on a petition for a temporary restraining order and interlocutory injunction, without any previous designation by the disqualified judge.

2. Such a judge of another circuit may at the interlocutory hearing pass a chambers order on a demurrer to the petition, but he is not obliged to do so. Where demurrers to the petition are there presented and considered as to the grant of an injunction, but not then passed upon, the judge does not lose jurisdiction to decide them by entering a later interlocutory order, unless or until another judge, properly designated by the disqualified judge, shall in the meantime assume jurisdiction of the cause, sitting as a court during term time in lieu of the disqualified judge.

3. After a judge having jurisdiction has passed upon a petition for injunction, if no writ of error is taken from his judgment, the presiding judge of the county, or, if disqualified, any qualified judge properly called in by him to preside in his stead, sitting as a court during the appearance term, has jurisdiction to alter or revoke all interlocutory orders not under review, including a judgment on demurrer. The fact that such previous orders may have been passed by the superior-court judge of another circuit would not operate to deprive such subsequent judge, sitting as a court, of jurisdiction to enter such a judgment as fully and completely as if he himself had passed such previous orders.

(a) The city court of Camilla being a constitutional city court, its judge is empowered under the constitution (Code, § 2-3301) to preside in the place of the superior-court judge of the county in a cause where that judge is disqualified. Under the facts, the city-court judge was not without jurisdiction to act in this case.

4. Under the preceding rulings, the correctness of the judgment by the city-court judge, vacating the previous orders by the superior-court judge of another circuit, must be determined.

5. Under the act of Congress known as the "rural electrification act of 1936," the Georgia enabling act of 1937, and the charter of the defendant Electric Membership Corporation, the alleged threatened acts of that defendant, in borrowing money from the Federal Rural Electrification Administration for the purpose of lending it to one of its corporate members or stockholders, in order that the latter might erect and maintain a cold-storage plant, were, upon complaint of the petitioning member and stockholder of the Electric Membership Corporation, ultra vires and illegal. On this ground alone the petition stated a cause of action, good against general demurrer.

6. The petition likewise stated a cause of action against the Cold Storage Association, in so far as it was sought to enjoin that corporation from participation in such alleged illegal acts of the Electric Membership Corporation; although it failed to show any ground for relief as to the alleged threatened acts of the Cold Storage Association in borrowing money from the Federal Electrification Administration on its own initiative and credit, independently of the Electric Membership Corporation, since the petitioner was not a stockholder or member of the Cold Storage Association. The fact, however, that one paragraph of the petition was subject to such a ground of special demurrer did not authorize the dismissal of the entire petition, without opportunity to amend.

7. For the reasons stated in the opinion, the motion to dismiss the writ of error as raising moot questions is denied.

8. The court erred in dismissing the action, and in dissolving the previous interlocutory injunction.

No. 13154. JUNE 11, 1940. The plaintiff, a minority stockholder or member of the Mitchell County Electric Membership Corporation, filed in Mitchell superior court a petition for injunction against that corporation, its directors, and the Community Cold Storage Association Inc., to enjoin them from alleged ultra vires and otherwise illegal acts. The suit was returnable to the October term, commencing on October 9, 1939. The superior-court judge having duly certified his disqualification, the petition was presented to the superior-court judge of an adjoining circuit, who granted a temporary restraining order and a rule nisi returnable before him. Before the hearing, this judge declined to act further, and requested counsel to secure some other judge. Thereupon they presented the petition to the superior-court judge of the Southern Circuit, who passed an order reciting that the judge of Mitchell superior court had disqualified himself, that the other judge had withdrawn, and that he as the judge making this order assumed jurisdiction. By this order the defendants were required to show cause before him, at Valdosta, why the prayers of the petition should not be granted. At the interlocutory hearing before the judge of the Southern Circuit on October 14, 1939, after the introduction of evidence on both sides, he passed an order granting a temporary injunction, and stating: "The court on this hearing having considered all the evidence and pleadings, including the defendant's general demurrers which were urged after plaintiff's amendment was allowed, and which was presented as reason why the injunction should not be granted, though the court does not at this time pass on, by way of sustaining or overruling said demurrers." On October 19, 1939, after completion of the jury business, the defendants appeared before the regular judge presiding in Mitchell superior court, who had previously disqualified himself, and asked that their demurrers to the petition be disposed of. The judge then called the case and entered on the docket opposite the case this statement: "This case having been called to the attention of the court at this the appearance term, and a request for a ruling upon the demurrers at this the appearance term, and the undersigned judge being disqualified on account of the fact that . . his wife is a member of [a] defendant corporation — the . . judge of the city court of Camilla is requested to assume jurisdiction thereof, and to direct such action as the law provides." The judge of the city court agreed to act, took the bench of the superior court, and entered on the docket an order stating that he assumed jurisdiction, and continued the "hearing in said matters until. . October 28, 1939, this the October term . . of said court being kept open for the purpose of disposing of said matters, and this order continuing said case being under authority given [the] judge [of the] city court while presiding as judge of the superior court in disqualified cases." The plaintiff's counsel then stated that "he was not agreeable to any of the proceedings, and was not waiving any right, and would not agree or consent to the demurrers being passed upon by" the judge of the city court.

On October 20, 1939, the superior-court judge of the Southern Circuit, "being apprised by plaintiff's counsel of the defendants' said expression of a desire to have a ruling made upon [their] said demurrers in said case, amended his said order of October 14, 1939, in an order reciting that said case having come on to be heard before him . . at Valdosta, Georgia, on the 14th of October, 1939, and after considering the petition, amendments, answers, and demurrers, an order was passed continuing in force the temporary restraining order, . . now, after due deliberation, the order as referred to . . is hereby amended as follows: . . that the demurrers filed by the defendants to the petition of the plaintiff be and the same are hereby overruled." This order was filed and recorded. On October 28, 1939, the judge of the city court took the bench of Mitchell superior court and announced that he was ready to hear the demurrers. Counsel for the plaintiff thereupon objected to such a hearing and assumption of jurisdiction, in view of their previous objections, the amendatory order of the superior-court judge made on October 20, and a new order by the superior-court judge of the Southern Circuit, read at the hearing, restraining the defendants, their attorneys, and the city-court judge from proceeding with the case, and issuing against the defendants a rule nisi for contempt of court. Over the objection of plaintiff's counsel, the city-court judge heard a motion to set aside the amendatory order of the superior-court judge, on the grounds stated that the order was "entered in vacation time when said judge . . was absent from Mitchell County, . . and without any notice being given to the defendants, and by reason thereof said judge was without jurisdiction to enter said order, and said order was wholly void;" that at the interlocutory hearing before the superior-court judge "the defendants asked to have the said demurrers passed on by the said judge, . . which was denied;" that thereafter the judge of Mitchell superior court had designated the city-court judge "to hear and pass on defendants' demurrers;" and that the amendatory order of the superior-court judge had been passed after the city-court judge had set the hearing. The city-court judge then entered an order adjudging that the motion be sustained, and that "the order . . of October 20, 1939, by the judge of the Southern Circuit be and the same is hereby set aside as being null and void and having been entered without jurisdiction." He then entered another order that the demurrers of the defendants, both general and special, "be sustained and said cause dismissed, and all restraining orders heretofore granted are hereby dissolved." These orders were entered in open court, during the appearance term of the case, which adjourned on the same day. The plaintiff excepted to the adverse rulings and orders, as indicated. Other pertinent facts are stated in the opinion. 1. Notwithstanding other constitutional and statutory methods for obtaining another judge when a superior-court judge is disqualified, a superior-court judge of another circuit has jurisdiction to pass upon a petition for a temporary restraining order and interlocutory injunction, without being designated by the disqualified judge, and may thus act merely on the initiative of the plaintiff, where the disqualification exists and is made plainly to appear. Glover v. Morris, 122 Ga. 768, 771 (50 S.E. 956); Rutledge v.Bullock, 44 Ga. 23, 25, 26; Code, §§ 24-2616, 24-2617.

2. At such an interlocutory hearing, such judge of another circuit is empowered, but not obliged, to pass upon demurrers to the petition. Kent v. Citizens Mutual Investment Asso.,186 Ga. 91, 93 (196 S.E. 770); Byrd v. Piha, 165 Ga. 397,399 (141 S.E. 48); Ga. L. 1925, p. 97 (Code, § 81-1002). Where at the interlocutory hearing demurrers are argued and considered as a reason why the injunction should not be granted, but under the terms of the order granting the injunction are not then passed upon, the judge does not thereby lose his jurisdiction to pass upon the demurrers, but may thereafter enter an amendatory interlocutory order dealing with the demurrers (see Code, § 24-2620; Glover v. Morris, supra), unless or until another judge, properly designated by the disqualified judge, shall in the meantime assume jurisdiction of the case, sitting as a court during term time in lieu of the disqualified judge.

3. Whether or not, under such circumstances and before losing jurisdiction, the judge of the other circuit could on the plaintiff's motion, but without giving additional notice to the defendants of his intention to do so, thereafter pass on the demurrers, which had been presented and argued at the interlocutory hearing, is a question which it is unnecessary to determine, since it is here made to appear that during the appearance term of the court, and before the time when the amendatory order passing on the demurrers was entered by the judge of the other circuit, the defendants moved in open court to obtain an adjudication of their demurrers; that in response to such motion the disqualified judge thereupon called on the judge of a city court of that county to preside for him and assume jurisdiction of the cause; and that during the same term, in open court, and while acting as the court, the judge of the city court proceeded to assume jurisdiction of the cause, and thereafter, in open court and while sitting as a court, passed an order sustaining the demurrers and dismissing the action. This he did after vacating the previous order overruling the demurrers, which had been passed on by the judge of the other circuit, who, however, passed such amendatory order after the city-court judge sitting as a court had assumed jurisdiction. Since it was as a court, and not as an individual judge, that the city-court judge, designated to preside in lieu of the disqualified judge, acted (Allen v. State, 102 Ga. 619, 625-627, 29 S.E. 470;Butler v. State, 112 Ga. 76, 37 S.E. 119), he was within his jurisdiction, during the same term, to vacate the original orders, just as if he had granted them himself; and this is true irrespective of whether, if jurisdiction was still retained, the amendatory order could have been entered without notice to counsel for the defendants. See Kerr v. Kerr, 183 Ga. 573 (189 S.E. 20), and cit.; Code, § 110-702.

(a) "The phrase ``a city court,' as used in paragraph 1, section 5, article 6 of the constitution [Code, § 2-3301], which declares that, ``In any county within which there is, or hereafter may be, a city court, the judge of said court, and of the superior court, may preside in the courts of each other in cases where the judge of either court is disqualified to preside,' refers exclusively to the city courts designated in paragraph 5, section 2, of the same article [Code, § 2-3005]; viz. city courts from which writs of error lie to the Supreme Court." Wells v. Newton,101 Ga. 141 (28 S.E. 640). As to what city courts are of that character, from which a writ of error will lie to the Court of Appeals since the constitutional amendment relating to that appellate court (Code, § 2-3009), see Cone v. American SuretyCo., 154 Ga. 841 (115 S.E. 481); Ash v. Peoples Bank ofOliver, 149 Ga. 713, 715 (101 S.E. 912), and cit.; Welborne v. State, 114 Ga. 793 (9), 801 (40 S.E. 857). Section 30 of the act establishing the city court of Camilla expressly providing for a direct writ of error (Ga. L. 1905, pp. 184, 190), and such court otherwise conforming to the requirements of a constitutional city court, its judge was authorized to preside in Mitchell superior court in a cause where the judge thereof was disqualified.

4. Under the preceding rulings, it becomes necessary to pass on the correctness of the judgment by the city-court judge, who presided in the case at the appearance term by request and in lieu of the disqualified judge, in vacating the previous orders of the judge who had first acted, and in sustaining the demurrers to the petition, and, as a necessary consequence, in dissolving the interlocutory injunction. This is true for the reason that, if the ruling on the demurrers was correct, the injunction would necessarily fall as being incidentally involved. If, however, the ruling on the demurrers was erroneous, such injunction would remain of force, since no writ of error has been taken therefrom, and no motion to dissolve the injunction, with notice thereon, was made. Newton Mfg. Co. v. White, 47 Ga. 400 (2), 404; Code, § 55-203.

5. Under the act of Congress known as the "rural electrification act of 1936" (49 Stat. 1363-1365; U.S. Code Ann., title 7, §§ 901, 904, 905), the Georgia enabling act of 1937 (Ga. L. 1937, p. 644), and the pleaded charter of the Mitchell County Electric Membership Corporation, organized under such acts, it was empowered to furnish and sell in rural areas to its stockholder members electric energy, assist them in wiring their premises, and in acquiring, supplying, and installing electrical or plumbing equipment therein, as well as to furnish them such equipment. Such Membership Corporation was further empowered to make contracts necessary for such purposes, and obtain loans from the Federal Rural Electrification Administration as provided by the Federal act, §§ 904, 905. But the Electric Membership Corporation was not authorized, as alleged in the instant petition of a complaining member and stockholder of that corporation, to borrow $25,000 from the Federal Electrification Administration for the sole purpose of lending it to the other defendant, the Community Cold Storage Association, which like the plaintiff was a member of the Mitchell County Electric Membership Corporation, in order that the Cold Storage Association, might use the money "to erect and maintain a refrigerating food storage and processing plant." These alleged purposes of the loan were ultra vires and therefore illegal, since they exceeded the powers granted to the Electric Membership Corporation by the rural electrification acts and its charter. While it was permitted to provide electrical or plumbing equipment to its members, it was not authorized, over the protest of one member, to lend money to another member in order that such other member might construct its plant and thereafter maintain its own separate enterprise. To thus divert money and credits of the Electric Membership Corporation, engaged in the business of rural electrification, might well be taken as inimical to the salutary purposes for which it was chartered. See, in this connection, Cherokee Iron Co. v. Jones, 52 Ga. 276, 280;Military Interstate Asso. v. Savannah, Thunderbolt c. Ry.,105 Ga. 420 (31 S.E. 200); First National Bank of Tallapoosa v. Monroe, 135 Ga. 614 (69 S.E. 1123, 32 L.R.A. (N.S.) 550); Brinson Ry. Co. v. Exchange Bank of Springfield,16 Ga. App. 425 (85 S.E. 634); Savannah Ice Co. v. CanalLouisiana Bank Trust Co., 12 Ga. App. 818 (79 S.E. 45).

Although the averments of fact were insufficient to show fraud, or that the Cold Storage Association was only a dummy of the Electric Membership Corporation, under the averments as to ultra vires the petition stated a cause of action against the Membership Corporation, good against the general demurrers.

6. Under the Code, § 22-711, a minority stockholder "may proceed in equity" for "acts ultra vires," not only against the corporation and its officers, but "those participating therein." Although the petitioner, not being a stockholder or member of the Cold Storage Association, showed no cause of action in seeking to enjoin that corporation from borrowing money on its own initiative and credit from the Federal Rural Electrification Administration, with which acts he has no concern, his averments and prayers nevertheless, as against general demurrer, stated a cause of action in so far as they related to the participation of the Cold Storage Association in the alleged ultra vires acts of the Electric Membership Corporation, and sought to enjoin participation in those acts. Under the preceding rulings, there is no merit in the special ground of demurrer that there was a misjoinder of parties defendant as to the Cold Storage Association, and that certain allegations failed to show that the petitioner was entitled to any relief against that association. While the special ground of demurrer to paragraph 24, relating to acts by the Cold Storage Association independently of the Electric Membership Corporation, was good, it did not authorize the dismissal of the entire petition without opportunity to amend. Sutton v. Adams, 180 Ga. 48 (4), 71 (178 S.E. 365), and cit.

7. The defendants moved to dismiss the writ of error of the plaintiff from the judgment rendered by the city-court judge, sustaining the demurrers to the petition, on the ground that the case is moot, because the defendants did not intend to do the acts sought to be enjoined, that is, that the Mitchell County Electric Membership Corporation did not intend to borrow money from the Federal Rural Electrification Administration and lend it to the codefendant, the Cold Storage Association, but that the Cold Storage Association intends to borrow such funds directly from the Federal Administration on its own initiative and credit; and that "such renunciation of intention to do the acts complained of in plaintiff's petition were set up in a sworn amendment to defendants' answer, and presented at the interlocutory hearing" on the injunction, held before the judge of the superior court who first acted in the place of the disqualified judge, and who granted the injunction. In a response to the motion, the plaintiff denies the statements that the defendants do not intend to do the acts charged; and sets up, with copies of the defendants' answer, referred to in the motion to dismiss, that the defendants urged the same grounds before the superior-court judge at the interlocutory hearing as reasons for the refusal of the injunction, that the judge found against such contentions, and that no writ of error has been taken from his judgment granting the interlocutory injunction. In the present writ of error from the last judgment sustaining the demurrers and dismissing the action, the plaintiff only attacks the jurisdiction of the judge who rendered that judgment and its correctness. The motion to dismiss is without merit, since the response to the motion denies essential averments of fact.Jones v. Head, 185 Ga. 857 (196 S.E. 725); Jones v.Johnson Ledbetter Co., 185 Ga. 323, 324 (194 S.E. 902). Furthermore, the motion seeks to raise questions of fact, which were presented at the interlocutory hearing, and which are set forth in the defendant's amended answer. These matters of fact are not determinable on this writ of error, involving only the petition and the demurrers thereto, but would arise on a trial of the issues, in which their previous consideration at the interlocutory hearing would not be res adjudicata. See Reynolds v. Calvert Mortgage Co., 146 Ga. 534 (91 S.E. 555);Crovatt v. Baker, 130 Ga. 507, 511 (2) (61 S.E. 127);Milltown Mfg. Co. v. Bray, 149 Ga. 151 (99 S.E. 468). As to the rule where the question decided at the interlocutory hearing was entirely one of law, see Elyea Inc. v. Cenker,184 Ga. 179 (190 S.E. 585), and cit.

8. Under the preceding rulings, it was error to dismiss the action on the demurrers, and to dissolve the interlocutory injunction.

Judgment reversed. Allthe Justices concur.