Albany City Bank v. Schermerhorn , 9 Paige Ch. 372 ( 1842 )

The Chancellor.

The necessary papers are not before me, on this appeal, to enable me to decide the case upon the merits ; nor were all the papers which the law requires before the vice chancellor, upon making the order appealed from, according to the certificate of the clerk. The statute relative to proceedings as for contempts to enforce civil remedies and to protect the rights of parties in civil actions, has prescribed two modes of proceeding, where the misconduct complained of is not committed in the immediate view and presence of the court; except in the two cases, of disobedience to a rule or order for the payment of money, and disobedience to a subpoena. One of the prescribed modes is by an order on the accused party to show cause, at some future time to be specified in the order, why he should not be punished for his alleged misconduct ; and the other is to grant an attachment, to arrest the accused and bring him before the court, to answer for such misconduct. (2 R. S. 535, § 5.) In either mode of proceeding, however, the party complaining of the alleged misconduct must produce proof thereof, by affidavits, or a sworn petition, or other legal evidence, as the founds tion of the proceedings. (Idem, § 3.) Where the party proceeds by an order to show cause, copies of the order, and of the affidavits and other papers on which it is founded, and of such other documentary evidence as the prosecutor wishes to use in the case, or so much thereof as is not already in the possession of the accused, must be served on him, or on his solicitor, such length of time, previous to the day appointed for showing cause, as the court shall in such order direct. And then if the party accused does not appear at the day appointed, or at such other day as may be afterwards designated for that purpose, or if he appears and does not deny the alleged misconduct, the court may at once proceed to make a final decision, that the accused has been guilty of the contempt charged, and to award the proper punishment, as directed by the statute. (2 R. S. 538, § 19 to 24.) If the alleged misconduct is denied, the court may discharge the order to show cause ; or may allow interrogatories to be filed and refer it to a master to take the answers of the accused to such interrogatories, and to take such proof as either party may wish to offer, and report the same to the court. But the proofs themselves should be reported to the court, and not merely the master’s opinion thereon. For the statute directs the court to determine upon the original affidavits, the answers of the defendant, and such subsequent proof, whether the accused has been guilty of the alleged misconduct. (Idem, § 19.)

Where the prosecutor proceeds by attachment, if the defendant is brought into court or voluntarily appears thereon, the court is required by the statute to cause interrogatories to be filed, specifying the facts and circumstances of misconduct alleged against the defendant, and requiring his answer thereto. This appears to be absolutely necessary, in a proceeding by attachment, unless the defendant admits the alleged contempt. Upon suchinterrogatories being filed and answered, the court may proceed in a summary manner to decide the question as to the guilt of the accused ; or may refer it to a master to take the answers of the defendants to the interrogatories, and to take and report such other evidence as either party may wish to produce before him relative to the contempt.

In this case the receiver proceeded against the appellants by attachment; and not by an order to show cause why they should not be punished for their alleged misconduct in disturbing him in his right to the property, over which he had been appointed receiver, as the officer of the vice chancellor’s court. He had previously obtained an order for the appellants to show cause why an attachment should not issue, instead of giving them the ordinary notice of a motion for an attachment. The alleged contempt for which that attachment issued, however, was not the neglect of the appellants to restore the property and pay the costs, under the order of the 16th of September, 1840. For that was not an absolute order to restore the property. But it was a conditional order merely ; a compliance with which would have stayed all further proceedings against the defendants for their alleged misconduct in disturbing the possession of the receiver. The interrogatories, therefore, instead of being directed to the question whether the defendants had complied with the conditions of this alternative order, should have been directed to the facts of the contempt as stated in the petition upon which that order was founded: to wit; the time of the commencement of these suits ; the fact of the making of the order for the appointment of a receiver therein; the nature and substance of that order, by a reference to a certified copy thereof or otherwise ; the due appointment of the relator as receiver, under that order ; the seizure of the property, over which he had been appointed receiver, by execution issued subsequent to his appointment; the actual or constructive possession of the property by the receiver, by an attornment of the tenants or otherwise, at the time it was seized by the sheriffs, &c. And these interrogatories should have been answered by the defendants personally, and not by deputy. Where the facts of the alleged contempt are not known to the defendants personally, or are not admitted by them, the prosecutor may use his petition and original papers, upon which the order for attachment was granted to prove the facts; or he may introduce other evidence before the master for that purpose. But the defendants are entitled to the benefit of their answers to interrogatories, to disprove the alleged contempt, so far as they will go; subject to be contradicted by the affidavits or other evidence of the prosecutor.

So far as I can understand this case from the master’s report, there is no question as to the equitable right of the receiver to all the personal property of Schermerhorn, in which he had any interest at the time of the commencement of these suits, and to the rents, profits and income of the real estate which accrued after that time; provided such property or rents and income had not been reached by the executions of other creditors before this court made an equitable sequestration thereof by its order for the appointment of a receiver. (Tanfield v. Weston, 2 Sim. & Stu. Rep. 96.) And if Schermerhorn neglected to comply with the order to make an assignment so as to give the receiver the legal title to the property, or if the tenants refused to at-torn to the receiver and to deliver over to him the shares of the crops to which he was entitled as such receiver, this court upon a proper bill filed will protect his rights against the sheriffs or others who have seized upon such crops.

The right to proceed against the appellants as for a contempt, however, depends upon the question whether the receiver, either by himself or his agents or tenants, was in possession of the property at the time it was seized by the appellants, and not upon the mere right of the complainants to reach such property by a creditor’s bill. The court will not let the possession of the receiver, which is that of the court itself, be disturbed by any one without its permission. (Noe v. Gibson, 7 Paige's Rep. 513.) Nor will this court, where it has made an order for the appointment of a receiver of real estate, and the tenants have attorned to such receiver under the order of the court, permit the tenants or any other persons to question the right of the court to grant such receivership, by disturbing the possession, of its officer. It is not a question, therefore, for consideration, upon these proceedings, whether the court is authorized upon a creditor’s bill to reach the rents and profits of real estate during the fifteen months allowed for the redemption of such estate when sold on execution. If the tenants had attorned to the receiver, or had agreed to account to him for the share of the crops, &c. belonging to the landlord, before the sheriffs levied their executions thereon, the appellants were not authorized to disturb such constructive possession of the receiver. And they may be compelled to restore the property, or the value of it, in this summary way. On the other hand, if the receiver was not in possession, either by himself or his tenants by attornment, or by his agents, he cannot enforce a delivery of this property to him by proceedings as for a contempt against the sheriffs who have levied thereon ; although he may have an equitable right to recover the same by a bill in this court, founded upon the previous order to appoint a receiver.

The facts are not sufficiently ascertained in the papers upon which the final order in this case was made, to enable me to decide whether the appellants were actually in contempt, or if so, to what extent. Certainly it was no contempt to levy upon the real estate of Schermerhorn, under a judgment against him, and to sell the same to the highest bidder; as that could not disturb the possession of the receiver, even if the tenants had all attorned to him. For the purchaser at such sale, after the expiration of the time allowed for redemption, would of course have the right to ask this court to give him the possession of the land, if the judgment under which he purchased was prior in point of time to the filing of the complainants’ bills. And if such purchaser attempted to divest the possession of the receiver without permission of the court, he alone would be guilty of the contempt; and not the sheriffs, who had merely sold the interest of the judgment debtor in the real estate, subject to all just claims of the receiver or of any other persons thereon.

Even if there was no other difficulty in this case, the form of the order is not such as the statute authorized, upon a conviction for a contempt. The order is also one which it will probably be impossible for the appellants to comply with. And therefore if it is permitted to stand in its present form, they may be subjected to perpetual imprisonment. The property levied upon, in the summer of 1840, consisted principally of grass, and of winter and summer crops then on the ground, or of the portions thereof which by the conditions of the leases would belong to the landlord. And from the very nature of the property it is hardly possible that the appellants should have been able to return it to the receiver, in the form in which they received it, at the time when the order appealed from was made in the fall of 1841. The master should therefore have ascertained the value of the property improperly taken, and the present situation of such property; to the end that if it could not be restored to the receiver, a fine might be imposed sufficient to indemnify the receiver for the loss, in addition to the costs of the proceedings. (2 R. S. 538, § 21.)

The order, upon a conviction for a contempt of this description, should be drawn up in proper form ; reciting the substance of the alleged misconduct, the adjudication of the court that the accused had been guilty of the contempt, and that such misconduct was calculated to and did impair, defeat, impede and prejudice the rights or remedies of the prosecutor, or of the parties in the cause; and imposing a fine sufficient to indemnify them and to satisfy the costs and expenses. Where any thing further remains to be done by the party guilty of the contempt, the order should also specify particularly v/hat he is to do, and the manner in which it is to be done, to entitle him to his discharge upon the payment of the fine imposed. And where the fine embraces several particulars, as where a part is for the loss or injury sustained by the contempt, and a part to satisfy the costs and expenses of the proceedings, the amount of each should be specified. The order should also direct to whom the fine is to be paid, or what is to be done with such fine when paid, &c.; so that the order, and the process of commitment founded thereon, may show the nature of the conviction, and what the defendant is to do to entie } tie himself to a discharge from his imprisonment. And instead of directing, in the order, the payment of the costs of the proceedings, to be taxed, the costs should be ascertained, and included in the order, as the fine or as a part of the fine to be imposed upon the defendant. (See The People v. Rogers, 2 Paige's Rep. 104.)

The decretal order appealed from must therefore be reversed, without costs to either party on this appeal. And the proceedings must be remitted to the vice chancellor, with directions that the respondent file new interrogatories, to be answered by the appellants respectively, specifying therein the facts and circumstances of misconduct, See. alleged against them and to refer it back to the master to take the answers to such interrogatories, and to take such proof as may be offered by either party in relation to the alleged contempt, specified in the petition and papers upon which the alternative order of the 16th of September, 1840, was founded ; also to ascertain what damages or injury the receiver, or the complainants in these suits, have sustained by reason of the interference with the property which was in the possession of the receiver or of his agents or tenants j and whether any such property is still in the possession or under the control of the appellants respectively, so as to enable them to restore it to the receiver, and if so, to state what such property is, and the present situation thereof j and that the master report the answers to such interrogatories, the amount of such damage or injury, and the proofs and other papers produced before him, to the vice chancellor y that the vice chancellor, upon such answers and the proofs, &c. and on the petition and other papers upon which the alternative order for an attachment was founded, proceed and decide the question whether the appellants, or either of them, have been guilty of the alleged misconduct, &c. or of any part thereof, as specified in the said petition ; and that he give the necessary consequential directions rounded upon such adjudication, pursuant to the directions of the statute, on the subject of such contempts, and the course and practice of this court.