Court Opinion

ID: 3626945
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:07:17.371057+00
Date Added: 2024-06-11T13:44:43.493817
License: Public Domain

An interlocutory order made in the action directs that "the defendant, Flamount Realty Corporation, and/or the officersthereof," forthwith deliver and turn over to the receiver any and all sums deposited by tenants as security under the leases. Failure to make such delivery has resulted in an order holding not only the corporation but its president and treasurer in contempt.
I agree that the regularity of the original order may not be reviewed upon this appeal from the contempt order. Presumptively it was regular and binding, at least, upon any person named therein who was a party to the action. The corporation was a party to the action and named in the order. The officers of the corporation were not parties to the action or to the proceedings which resulted in the order to deliver and turn over to the receiver security deposited under leases. They are not even named in the order as individuals, though included in the general class described as officers of the corporation. No specific officer is directed to act. All that the order, fairly construed, requires is that the corporation shall act and, since the corporation can act only through its agents and officers, that its appropriate officers shall act in its behalf. Upon a motion to punish an individual for contempt of an order made in a proceeding to which the individual was not a party, two questions are presented: Was the order binding upon the individual? Did he disobey the order?
"No court can make a decree which will bind anyone but a party; a court of equity is as much so limited as a court of law; it cannot lawfully enjoin the world at large, no matter how broadly it words its decree. If it assumes to do so, the decree is protanto brutum fulmen, and the *Page 353 
persons enjoined are free to ignore it. It is not vested with sovereign powers to declare conduct unlawful; its jurisdiction is limited to those over whom it gets personal service, and who therefore can have their day in court. Thus, the only occasion when a person not a party may be punished, is when he has helped to bring about, not merely what the decree has forbidden, because it may have gone too far, but what it has power to forbid, an act of a party. This means that the respondent must either abet the defendant, or must be legally identified with him." (AlemiteMfg. Corp. v. Staff, 42 Fed. Rep. [2d] 832, opinion by LEARNED HAND, J.)
In that case the injunction order was entered against a defendant, "his agents, employees, associates and confederates," yet the court reversed an order adjudging in contempt one who had been in the employ of the defendant and who, with notice of the injunction, violated its prohibitions, but acting independently and not as an agent of the defendant. "Strictly * * *, the addition of such words as the plaintiff here relies on, adds nothing to the decree. Without them any one is liable who knowingly does what the court has properly enjoined; with them nobody is liable who does not."
The same limitation upon the power of the court to enjoin persons not parties to an action has been generally recognized. Disobedience by a person not a party to the action of an order enjoining a party, its "agents" or "officers" or "servants," may be punished as a criminal contempt, but only where the offender acted as "agent or servant of the defendants or in combination or collusion with them or in assertion of their rights or claims." (Rigas v. Livingston, 178 N.Y. 20, 24; People ex rel.Stearns v. Marr, 181 N.Y. 463.) (See, also, Seaward v.Paterson, [1897] 1 Ch. 545.)
Here such distinctions have been entirely disregarded and the result seems to me quite anomalous. The *Page 354 
corporation and its officers have been charged with a civil contempt and have been fined $250 each, though there has been only one act of disobedience by the corporation and its officers, and we are agreed that but one fine should have been imposed on them jointly and severally. The defendant corporation as a party to the action is bound to obey the mandate of the court issued in the action. Its failure to act through its officers and agents is a disobedience of the mandate of the court and a contempt. So, too, would be refusal to act by an officer or agent authorized, and under a duty, to act for its principal. (Matter of Lennon,166 U.S. 548.) Mere failure to act by an officer not a party to the action would not. The power derived from the principal and the duty must coincide. Here there may be proof that the corporation received deposits from tenants; in the proceeding in which the appellants are parties there is no proof of what became of these deposits or that they are now subject to the control of either or both of the officers who have been adjudged in contempt. Yet the order directs the commitment of both the officers until the order is obeyed by somebody.
It is sought to justify all this upon the ground that the order, directed to the corporation and/or its officers, is not subject to collateral attack, by any person charged with disobedience. So far as the order adjudicates that the conduct of the corporation which was a party to the action is unlawful and enjoins continuance of such conduct, the order is conclusive when the corporation is charged with its violation or its officers are charged with knowingly assisting the corporation in violating the injunction. So this court has held in cases cited in the opinion of HUBBS, J. The reason underlying these decisions is that the court had jurisdiction over the person of the defendant and its mandate to a defendant is presumptively valid and no person may knowingly assist another to violate a mandate of the court. The *Page 355 
problem is different where a person not a party to the action is charged with violation of an injunction order directed to such person. If by such order "the unlawfulness of his conduct has been determined, and, if he has not been a party and has had no day in court, he is condemned without hearing." (Alemite Mfg.Corp. v. Staff, supra, at p. 833.) As was said in that case, "This is far from being a formal distinction; it goes deep into the powers of a court of equity. * * * It is by ignoring such procedural limitations that the injunction of a court of equity may by slow steps be made to realize the worst fears of those who are jealous of its prerogative."
Thus, if we construe the injunction order as a direction to the corporation acting through its officers, it is not subject to collateral attack, but the order punishing the corporate officers for contempt should be reversed because there is no proof that either of these officers was in possession of the deposits and had both the power and the duty to pay it over. If we treat the injunction order as a direction to the officers, eo nomine,
though not parties to the action, then it is void as to them, for they have not had their day in court to contest a claim that they were under any duty towards the receiver to make such payment. In either event, they cannot be held in contempt without a hearing upon the basic question of whether their conduct is unlawful.
The order should be reversed upon the appeal of the officers, and the appeal of the corporation dismissed.
POUND, Ch. J., CRANE, O'BRIEN and CROUCH, JJ., concur with HUBBS, J.; LEHMAN, J., dissents in opinion in which KELLOGG, J., concurs.
Ordered accordingly. *Page 356