Court Opinion

ID: 3863586
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:57:07.762039+00
Date Added: 2024-06-11T13:49:39.949405
License: Public Domain

The facts before us are these. The Quidnick Co. was declared to be entitled to a lien on the estate, held by the respondent Chafee in trust, for such amount as an account to be taken shall disclose to be due; the estate could not be held to await the account except at "great and ruinous expense," and the trustee was therefore directed to proceed to sell the property and deposit the proceeds, subject to the order of the court, as security for the lien. No mode of sale was specified; that being left to the discretion and responsibility of the trustee, but, in order to guard against any improper terms of sale, the order provided that either party to the suit might apply to the court for "directions to said trustee in relation to such sales." The trustee advertised the property for sale in parcels at public auction, without any objections or requests for directions, but just before the time of sale, on the petition of certain depositors in the Franklin Institution for Savings, the sale was enjoined by one of the justices of the court. Pending a motion to dissolve this injunction, negotiations were had and offers made to the trustee for a sale of the entire estate in bulk for a fixed sum, and under the terms of the decree before referred to, the trustee applied to the court for "directions" in respect to these offers, presenting petitions for an acceptance from a majority of the creditors. At the hearing another offer to the trustee, of a larger sum, was produced, and the court was asked by the complainant and numerous other creditors, embracing some who had signed the former petition and nearly all who had not, to direct the trustee to accept this latter offer of $2,880,000 for the entire estate.
Although such directions as these were of quite a different *Page 424 
character from those contemplated by the court when the original decree was entered, still as such a sale would necessitate some change in our former order as to the depositing of proceeds, we were compelled to consider the matter. The smaller sum, having been proposed by the creditors' committee and assented to by so large a number, we assumed it to be their estimate of the value of the property, and if the trustee could secure no larger price than Mr. Lapham's, that being assented to by most, if not all, of the remaining creditors, it would be clear that this sum must be taken as the fair, if not full, value of the estate. We, therefore, intimated to the trustee that if he should receive no "further and better offer" within three weeks, we should advise him to accept that one. At the expiration of the time the trustee presented to the court, without reading the signature, the letter of the firm of these respondents. Objection was made by the complainant's counsel to the consideration of an anonymous offer, whereupon the signature was read by the trustee's counsel and the name of the respondents' firm disclosed. Whether the trustee was authorized to disclose the name is disputed, though from the statement of the respondents, we think with little reason, but the name was read and this fact was known to them. It is evident that the contents of this letter at least were to be communicated to the court, for otherwise it could not be known that there was a "further and better offer." As this offer was to bid the same amount previously named, at an auction sale, made by a well known banking firm in Providence, believed to be amply responsible, not perhaps for the full amount of the offer, but, at least, for its complete performance under the terms named, it was thought by the court to be a better offer than the preceding one, for the reason that it indicated a competition for the estate in a manner that would not bring less and might bring more than any other proposal.
The committee of creditors in a letter to the trustee urged him, with much force, in view of the apparent competition, "to apply at once to the court for authority to offer the entire property in one parcel at auction to the highest bidder, not to be sold, however, for a sum less than $2,880,000," under "such terms of sale as shall fully protect the rights and interests of creditors;" and as the respondents' offer was coupled with this suggestion, in its *Page 425 
exact terms, it was impossible, within reason, for the court to ignore it or to do otherwise than to advise the following of such a course.
Under the proposed terms of sale the trustee could not deposit the funds at once, as directed by the original decree, as a portion was to lie back to be paid in instalments, and consequently it was necessary to enter another order, directing the sale in the manner indicated, under such terms and conditions as would best secure the lien which we had before decreed to the complainant. Before this was entered it was submitted to the respondents by one of the committee of creditors, and assented to by them.
The draft of a decree presented by the trustee's counsel had in it a provision requiring the receiver of the Franklin Institution for Savings to join in a deed to the purchaser; but as no one had asked for this, and as it was not suggested or required either by the respondents' letter or that of the committee to which they referred, it was stricken out by the court, because we had no authority to order it, and because such an order would not be conformable to the terms of the respondents' offer. It was understood at the hearing that possibly Mr. De Wolf, the receiver, would come in under the offer and join in the deed; and that if he did not, claiming that he is not a mortgage creditor but a judgment creditor only, holding title under his levy, no dividend was to be made on the mortgage notes supposed to be held by him; nor was the amount of such dividend in such case to be distributed among the balance of the creditors. In other words, the basis of computation was thirty-three per cent. on the mortgage notes, and no one was to receive more than that. If Mr. De Wolf did not hold the notes, so much less would have to be paid, and the dividend upon them would stand, pro tanto, as an offset to his judgment claim; but whether he did or not it would make no difference to other holders. This provision was not incorporated in the respondents' letter, or in that of the committee which they made a part of theirs; but, as it had been understood to be a condition of all the offers, we allowed the draft to be changed to conform to this understanding, which change was wholly in the respondents' favor. No other change was made. The affidavit of Mr. Gardner stated that the draft was shown to *Page 426 
the respondents after the clause relating to De Wolf's joining in the deed was stricken out. The respondents claim that it was not; but it seems to us to be quite immaterial either way. If after, then they knew just what the decree was as settled by the court; if before, no one knew better than they that it was no part of their offer, that it did not belong there, and that its erasure would in no way alter the terms of their own proposal. Besides this, the entire decree, reciting the full terms of sale, was advertised within less than a week of its entry and up to the day of sale; the respondents knew this, and, as they say, went to see De Wolf about it, and were all along endeavoring to find persons to aid them in carrying out their offer. May 3, 1882, the day before that named for the sale, the respondents sent a letter to the trustee, stating that since the terms of sale as advertised were different from those contemplated in the letter of March 3, 1882, and in consequence of recent threatened complications of the estate, neither they nor their associates would appear as bidders at the advertised sale. On the next day, May 4, 1882, the trustee offered the estate for sale as advertised, but no bid was made by the respondents or any other person. He then reported the state of things to the court, whereupon a citation was issued to the respondents to appear and show cause why a writ of attachment should not issue against them for contempt.
They have appeared, and in writing and under oath have declared that their offer was made in good faith; have disclaimed any intention to impede, hinder, or obstruct the court, its officers, decrees, or proceedings, and have specifically set up:
1. That they have in nowise committed any contempt, in that they were not parties or witnesses or otherwise interested in the suit;
2. That the offer would have been carried out had not other persons interested in the purchase withdrawn their support;
3. That there was a change in the decree, in the matter of De Wolf;
4. That their names were disclosed without authority;
5. That they had a right to withdraw from their offer.
Only the first and last of these grounds need any further consideration. The statement by the respondents, in one breath, that *Page 427 
the offer would have been carried out had not other parties withdrawn their support, and in the next that it could not be on account of the change in the decree, are quite inconsistent, and indicate that the former and not the latter was the real reason of the non-fulfilment of their promise. In view of the facts we have stated, this last excuse seems to us to be a pretext as puerile and frivolous as the offer itself was baseless and unsubstantial. The matter of the presentation of the letter has already been sufficiently referred to. The questions remaining then are these: has there been a contempt of court, and in what did it consist?
Blackstone, 4 Comment. 283, recognizes two classes of contempt: direct, or those "which openly insult or resist the powers of the courts;" and consequential, or those "which, without such gross insolence or direct opposition, plainly tend to create a universal disregard of their authority."
It has been held that anything done for the purpose of obstructing justice, or which will have that effect, is a contempt. Rex v. Clement, 4 B.  A. 218, 233.
In Executors of Brasher v. Cortlandt, 2 Johns. Ch. 505, where a purchaser at committee's sale bid from friendship to another, who, having taken an appeal in the proceedings, advised respondent that he need not complete the purchase, he was ordered to pay the purchase money or an attachment would issue. Chancellor Kent remarked: "If no order of this kind could be made in this case, it would follow that not only the purchaser but the committee of the lunatic would be permitted to baffle the court and sport with its decree."
In Gilmore v. Gilmore, 40 Me. 50, the defendant professed his readiness to pay certain notes, when he could do so with safety, claiming no abatement of the sum apparently due, and a receiver was appointed to collect them. The defendant then refused to pay unless an allowance was made for an amount which he claimed had been previously paid, whereupon the court ordered an attachment, saying: "This refusal to pay his note to the receiver has the appearance of a disposition to palter with the authority of the court, if not to practise a fraud upon those who are interested in the proceeds of the property in his hands. Such a course can neither be approbated nor permitted." *Page 428 
In Fischer v. Raab, 56 How. Pr. 218, where a party in open court agreed to pay the expense of a reference in a certain event and the event occurred; on refusal to pay he was held to be in contempt.
So in Lansdown v. Elderton, 14 Ves. Jun. 512, a purchaser at a master's sale failed to pay in his money and was ordered to be committed to the Fleet, on the ground that a purchaser "could not be permitted to baffle the court and disobey an order, more than any other person."
These precedents, from many, are sufficient to bring out the principle, that an act which tends directly to hinder and obstruct proceedings under the order and authority of the court, or which indicates trivial and paltering dealing with the court in affairs which are before it, is an act in contempt.
Courts of equity in all cases have to deal with the rights of parties, securing to one that which is his due and protecting another from that which would tend to injury. They must deal with interests in the light of the facts that are before them, following such things as seem to be to the advantage of those concerned, and avoiding such as seem to be to their disadvantage. Now if persons could make, with impunity, insincere or irresponsible representations, upon faith in which the court is called upon to act and does act, we should soon find that legal proceedings would be a snare instead of a safeguard, and endeavors to secure the rights of parties would prove a mockery instead of a reality.
In the present case a large estate was to be sold for the benefit of creditors, under the order of the court. If sold otherwise than for cash, the permission of the court had to be obtained and its former order modified. The creditors' committee urged the trustee to ask for an order to sell at auction at an upset price, and with this request came the respondents' letter, in the manner stated. Upon such a showing there seemed to be no choice as to the course which must be taken. There was no suggestion from any quarter that this was an irresponsible offer, or one not likely to be carried out. In fact the only objection made to it was in the opinion of Judge Potter, upon the ground that, as it offered no more than the preceding one, it was not a better offer, saying: *Page 429 
"If the firm of Wilbour, Jackson  Co. had, within the time fixed, pledged themselves to bid at auction $100,000, or even $50,000, over and above the Lapham offer, I should have thought it the duty of the court to try the experiment for the benefit of creditors. But they have not done it." Nevertheless it seemed to the court that the proposal was a better one, in that it promised that the estate should not bring less than had been offered for it, while it might bring more; to say nothing of differences in regard to guaranties of title.
We relied on the representations of the respondents; and they must have known this fact, as well from the course of the proceedings as from the published opinions of the court.
They now say that the parties whom they expected would assist them declined to come in, and that they were unable to fulfil their offer. It therefore appears that, unable of themselves to carry out their own proposal, they had no binding assurances of agency or assistance from other parties, but were simply expecting aid and thus adventuring with the estate. We can see no excuse for this; certainly, if there be any, it has not been shown. True the respondents say they made their offer in good faith, supposing they would be able to carry it out, and with no intention to hinder the proceedings of the court. This we readily believe, but this is not enough. What reasonable grounds they had for their expectations they have not seen fit to state, and it is evident that their failure could not reasonably have come from any of the grounds they have stated.
Contempt of court lies in the quality of the act done, and not in the intention of the person doing it.
Chief Justice Taney stated this in Wartman v. Wartman,
Taney, 362, 370. "As regards the question whether a contempt has or has not been committed, it does not depend on the intention of the party, but upon the act he has done."
We may therefore assume that the respondents made their offer in entire good faith, and with confident expectation of their ability to raise the necessary funds to carry it out. We do not say that the mere failure to perform an offer so made is, in itself, a contempt, for there may be many cases in which circumstances would abundantly excuse it; but if the respondents knew, at the outset, *Page 430 
that they were not able of themselves to carry out their undertaking and had no sufficient authority from others, but were groping in vague hope, this certainly was a trifling with the court amounting to contempt.
And it makes no difference, as the respondents urge, that they were not parties to the suit before us. They voluntarily placed themselves before the court. Their letter was to be used to influence its action. Whether it was read with or without authority they did not repudiate the disclosure, but left the court and parties to suppose that it was authorized, not only for the space of nearly three weeks prior to the entry of the decree, but even down to the hearing on this citation. We therefore regard them as voluntarily before the court for the purpose of inducing specific action in discretionary proceedings.
That persons not parties to a suit may be held for contempt is well established.
An editor of a newspaper has been fined for contempt in publishing proceedings contrary to an order of the court. Rex
v. Clement, 4 B.  A. 218.
A member of the House of Commons who had carried off his infant daughter, a ward of the court, from the house of the ladies under whose care she had been placed by the guardians appointed by the court, and who, on being examined by the court, admitted the fact and refused to state where his daughter was, was ordered to be committed to the Fleet, although not a party to the suit. Wellesley's case, 2 Russ.  M. 639.
Where a railroad was in the hands of a receiver, the employees of another road, who had "struck," prevented employees of the receiver from working, and were adjudged to be in contempt. Secor v. Toledo, P.  W.R.R. Co. 7 Biss. 513;King v. Ohio  M.R.R. Co. 7 Biss. 529.
It would indeed be strange if any one could impede judicial proceedings, without being called to account, simply because he was not a party to a suit, or was not in the immediate presence of the court.
The respondents further claim that at most their letter was but an offer which they had the right to withdraw at any time before the sale. *Page 431 
That is a matter that cannot be decided in this proceeding, which involves, not their civil liability as for a contract, but only the question whether they have trifled with the court by making an offer which they did not know they could perform.
If the sending of a letter to the trustee, to be used in court to secure an offer of the trust estate at auction, promising in that event to bid a certain sum, the writers not being able at the time and not knowing that they would be able to fulfil their promise; if, on the faith of such letter, a sale at auction is ordered on the terms named, involving a delay of several weeks to the parties, and large expense in advertising and care of the estate in the mean time, while down to the day before the sale they are silent, seeking persons to join them in a speculation, and then without adequate excuse they abandon their undertaking; if this is not to "baffle the court and sport with its decree," it is difficult to conceive what would amount to that.
We are of the opinion that the conduct of the respondents was unwarrantable, and we therefore adjudge them to be in contempt. Believing, nevertheless, that they had no intention to hinder the proceedings of the court, but were under an honest though mistaken and unfounded belief that they could fulfil their promise, we think that this should be considered.
At our request the trustee has submitted a sworn statement of the expenses of advertising, and care of property awaiting sale,c., directly incurred by reason of the delay which the respondents have caused, amounting to $7,877.03.
Omitting the item of office labor, there remains, in round numbers, $7,500, as the immediate outlay.
While we make no ruling and express no opinion as to the civil liability of the respondents to make good this or any other damage as upon a contract, still it is quite reasonable and proper that they should at least reimburse the trustee for these expenditures; for there can be no question that they were occasioned by what the respondents did, and the loss in these respects is none the less real because it was unintentional. Fair dealing frequently moves men to make some recompense for injurious acts which they may not consider themselves responsible for in law.
If, therefore, the respondents see fit before Saturday next to *Page 432 
pay to the trustee the last named sum by way of immediate reimbursement; such payment not to be taken as any admission of liability for any other or further sum on the one hand, nor as a bar to, or satisfaction for, any suit or claim for other or further damages on the other; and to pay to the clerk of this court the taxed costs on this citation, we shall regard that as a sufficient purging of contempt, and they will be dismissed from further attendance. Otherwise, on Saturday next, the clerk will issue a writ of attachment.
After the foregoing opinion the firm of Wilbour, Jackson 
Co. filed with the court a brief to the effect:
1. That they acted as bankers and brokers and not for themselves, and their agency was understood by all parties interested.
2. That the effect of their action was favorable and not detrimental to the sale of the Sprague estates.
3. That the court should delay action until final sales of the Sprague estates.
4. That, acting in good faith, they have already been sufficiently punished by the censure of the court.
They also claimed that proceedings for contempt were confined to the two cases:
1. Of acts of violence or insolence, when the court would proceed of its own motion.
2. Of disobedience on the part of parties, or their attorneys and agents, when the court would proceed only on complaint of the party injured.
They also July 11, 1882, filed the following:
     QUIDNICK COMPANY,  |  vs.                               SUPREME COURT, Z. CHAFEE, Trustee. |                March Term, A.D. 1882.
In the matter of the proceeding against Wilbour, Jackson  Co. for contempt.
The respondents now, as heretofore, disavowing any conscious act of disregard for, or want of respect to the court, its orders, or proceedings, respectfully decline to make the payment to Z. Chafee, trustee, as suggested by the court in their decision and order made *Page 433 
on June 17, 1882. In so doing they trust the court will consider their refusal justified for the following reasons:
First, that this court is the only tribunal to pass upon Mr. Chafee's claim against them for damages, if such claim be made.
Second, that in their own judgment, and that of very many advisors, such payment, however intended by the court, would be an admission of liability for damages which they cannot justly make.
For these and other reasons they feel that they must decline to exercise the option given them, regretting that any further burden should be put upon the court in this matter.
Respectfully submitted, WILBOUR, JACKSON  CO.
By their attorney, EDWIN METCALF.