Sudlow v. Knox — 7 Abb. Pr. 411

Majority

p. 411

SUDLOW against KNOX.

Court of Appeals; June Term,

1869.

Headnote

Appellate Obdeb. — Contempt, and Peooeedings to Punish as fob.

An order punishing a party to an action as for contempt, by imposing a fine for the indemnity of the adverse party injured by his refusal to obey the order of the court, and by imprisonment to compel obedience, is appealable to the court of appeals.

Such an order is not a proceeding in the action, within the meaning of subdivision 2 of section 11 of the Code of Procedure,—which allows appeals from “ an order affecting a substantial right made in an action, when such order in effect determines the action, and prevents a judgment from which an appeal might be taken,” &c.,—but is “ a final order affecting a substantial right, made in a special proceeding,” within the meaning of subdivision 3.

Upon appeal to the court of appeals from such an order, it will not be reversed merely because it does not affirmatively appear from the appeal

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papers that proof of the misconduct was made by affidavit, and due notice given.

It is not a contempt for a party, required to produce his books before a referee, to refuse to leave the books with the referee, if the order under which the referee acts only requires the production of the books.

Whether it is" competent for the court to order the books of a party to be left with the referee for the purposes of an accounting,—query ? .

It is a contempt for such party to refuse to obey the referee’s order that he allow a witness, while testifying, to examine the books, to enable the adverse party to question him therepn.'

In proceedings as for contempts to enforce civil remedies, under 2 Rev. Stat., 534-538,—section 21 of which authorizes the court to impose a fine to indemnify a party for actual loss and injury, and to satisfy his costs and expenses,—the costs and expenses must be ascertained by the rate of compensation fixed by statute for the services performed.

The amount of the fine to indemnify for the other loss and injury, must be fixed upon proof of the damages sustained, according to the rules of law which would apply in an action for such damages.

The court cannot for either purpose summarily fix a gross sum in its discretion.

Appeal from an order.

These proceedings were entitled in the action of Sudlow against Knox. Thomas R. Sudlow, a receiver, sued George and James Knox, in the supreme "court, alleging that in supplementary proceedings upon a judgment recovered by one Day id Ogden against Henry Knox and another, he, Sudlow, had been appointed receiver of the property of Henry Knox ; that Henry Knox had been a partner in the firm of George and James Knox, and had an interest in the property of that firm, which the present action was brought to reach and apply to the satisfaction of the judgment.

The court ordered, after a trial of the cause, that it be referred to a referee to take and state an account of the partnership affairs; and for this purpose required the defendants “to produce before said referee under oath, all papers, deeds, and writings in their custody respectively, or under their control, relating thereto, and to be examined, together with any witnesses produced by any of said parties under oath, or upon interrogatories, as said referee shall direct,” &c.

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The referee certified to the court that the attorney of George Knox appeared before him, after defendants were ordered to produce their books, and produced certain books of the firm, alleged to be all their books ; that he directed the attorney to leave the books with him, he not then having time or opportunity to examine them ; but the attorney refused to do so, and that a similar refusal was made by G--orge Knox on subsequent days, when, pursuant to adjournment, the examination was continued:

That, on examination of the books, it appeared that some leaves had been removed :

That Ogden, the plaintiff in the supplementary proceedings, was called as a witness, and the referee directed the defendant, George Knox, to produce the ledger for him to examine, that he might answer questions as to the transactions appearing there. This defendant refused to do, resisting the demand by force ; but he offered to place the book in the hands of the referee for his own examination, but not for that of - the witness and creditor. Defendants offered to produce the books from time to time before the referee, as he might direct, or to allow him to examine them and make extracts at the defendants’ place of business, but absolutely refused to leave them with him in his office.

The referee certified that it was impossible for him to make any intelligible examination of the books during an ordinary hearing, or without the aid of a bookkeeper, and without their being left with him at his leisure.

An attachment having been issued against George Knox, interrogatories were filed and answered, and thereafter the supreme court, at special term, made an order reciting the issue of the attachment for contempt for not producing the books, papers and documents of the firm of G. & S. Knox & Co. before the referee, as required by order of court, and not leaving the books, papers, and documents with said referee, pursuant to such order, and for not allowing the same to be exam ■

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ined by said referee, and by a witness sworn by him for that purpose, and resisting such examination by force, and for removing the same from the office of said referee contrary to and in defiance of the decisions of the referee, and for producing only portions of the books, and those in a mutilated condition ; and reciting the filing of answers to the interrogatories ; and thereupon adjudging George Knox guilty of the contempt and misconduct charged, and that it prejudiced the plaintiff’s rights, and imposing a fine of two hundred dollars for the misconduct, and one- thousand dollars, to be paid to plaintiff for the costs and expenses of the proceedings for such misconduct, and ordering defendant to be committed until he produce such books, &c., and leave them with the referee.

On defendants’ appeal to the general term, the amount of the fine for expenses was reduced from one thousand dollars to two hundred and fifty dollars, and the order in other respects affirmed.

The defendants now appealed to the court of appeals.

The papers on appeal contained an order of court made January 18, 1866, reciting the “reading and filing affidavit and report of referee, and notice of motion,” but without indicating their contents, and ordering the defendant George Knox to produce before the referee, to be used and examined on the accounting, and from time to time as the referee might require, all the books, &c., referred to in the order of reference; and- that in case he should fail to produce them that an attachment issue; together with proof of personal service thereof on Knox.

Also, a certificate of the referee, dated March 10, the contents of which are above stated.

Also, notice of motion, founded thereon and on the other papers, that an attachment issue.

Also, an order made on such motion March 24,1866, reciting that it had appeared to the court that Knox

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was in contempt, &c. (but not indicating what evidence was produced), and that a writ of attachment had been issued, and that Knox was now personally before the court on such attachment,—and ordering interrogatories to be filed and answered.

Also, the interrogatories and answers thereupon filed.

Also, an order of the court, dated April 9, 1866, reciting the issue of the attachment, its return, and the personal appearance of Knox, and filing of interrogatories and answers, and declaring that upon the testimony of Knox, and from his answers, it appeared that he had committed the contempt, and adjudging him guilty and imposing the punishment above stated.

These constituted all the papers presented on the appeal, containing any proof of the facts or notice of the proceedings.

George M. Stevens, for the defendant and appellant;

—Cited : As to necessity of proof by affidavit, of misconduct before the referee, in order to sustain an attachment: 2 Rev. Stat., 535, § 3; Albany City Bank v. Schermerhorn, 9 Paige, 374; Matter of Smethurst, 2 Sandf., 724 ; Pitt v. Davison, 37 N. Y., 235 ; Omerod v. Chadwick, 16 Law J. N. S., pt. 3, 143, 148, m. c.

As to the amount of the fine: 2 Rev. Stat., 533, § 22 ; Matter of Pester, 2 Code R., 98; Matter of Smethurst, supra ; Downing v. Marshall, 37 N. Y., 380 .

H. R. Hatch, for the plaintiff and respondent;—

Cited : As to the point that the affidavit was unnecessary, or might be presumed : Broadhead v. McConnell, 3 Barb., 184 ; 2 Rev. Stat., 534, § 2; Livingston v. Swift, 23 How. Pr., 1 .

As to the amount of the fine: Livingston v. Swift, supra; and Holstein v. Rice, 24 How. Pr., 135 .

As to the point that the order was discretionary, and not appealable : Mitchell’s Case, 12 Abb. Pr., 249 .

The counsel for the respondent insists that the order is not appealable to this court, and that the appeal should for this reason be dismissed.

If the proceedings are to be regarded as taken in the action of Su'llow v. Knox, t!’e counsel is right in the position. The order would then belong to the class specified in Code, section 11, subdivision 2, and clearly not be appealable, as it does not determine that action, or prevent a judgment from which an appeal might be taken. If the order is one not made in the action, but in a special proceeding instituted to redress an injury sustained by the plaintiff, caused by the violation of the order made in the action, requiring the appellant to produce his books, &c., before the referee, it comes with in subdivision 3, and is appealable to this court, as a final order made in a special proceeding affecting a-substantial right.

I think the order belongs to the latter class. It in no way involves the merits, or affects the judgment to be rendered in the action. It could not, therefore, be reviewed upon an appeal from the judgment to be rendered therein (section 12, subdivision 1). Unless regarded as made in a special proceeding, it is in no way reviewable by this court. This is not conclusive, for the statute does not make all final orders made by the supreme court appealable to this court. It is necessary to examine the nature of the proceedings resulting in the order appealed from.

These were instituted and conducted under the provisions of the statute entitled of proceedings as for contempt, to enforce civil remedies and to protect the rights of parties in civil actions. 2 Rev. Stat., 534, § 1, specifies the cases in which the power given may be exercised by the court. An examination of these will show that the larger portion, if not all, can in no sense be regarded as proceedings in the action. Many are cases in which those proceeded against are not parties to the action.

Another class may be taken after the action is ter

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minated, either by settlement or.final judgment, and in none of the cases can the proceedings have any effect in the action or upon the judgment, other than a tendency to protect the party from injury from the future misconduct of the person proceeded against. By section 2 it is provided that if the misconduct oc urs in the presence of the court, it may be punished summatily, as prescribed in the act. Seel ion 3, and subsequent sections, provide for the proceedings to be taken in cases where the misconduct charged does not occur in the presence of the court. None of these proceedings, whether against parties or others, in any way affect the action or judgment.

The precedents prior to the Code show that the proceedings subsequent to the attachment were not entitled in the action, but were entitled The People against the person charged.

Section 21 provides that in case the fine imposed for the indemnity of the party injured shall be paid to and accepted by him, it shall constitute a bar to any action brought to recover damages for such injury or loss. This shows clearly that the legislature did not regard the proceedings as had in the action, because, if so regarded, the imposition of the fine would itself constitute a bar to any other proceeding to obtain satisfaction for-the injury, and the institution and pendency of the proceedings would abate any other proceedings commenced, for the same cause.

It follows that the order is appealable.

The counsel for the appellant insists that the order is erroneous, for the reason that the misconduct alleged was not proved by affidavit, as required, and that the-requisite notice was not served.

The answer to this is, that it does not appear from, the case that such proof was not given and notice served. From the case, I am unable to discover any such failure to comply with the statute as to show that the court had not jurisdiction, or as to deprive the ap

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pel-lant ot a iree opportunity to answer the charge, and interpose his defense, if any he had, thereto.

Th's brings us to the merits.

The order, in specifying the misconduct of which the accused' was convicted, recites, among other things, that he refused to leave his books with the referee. This he was not required to do by the previous order, and his refusal was, therefore, no contempt. Whether an order requiring him to leave them would be valid, it is not now necessary to determine.

The order further recites that he produced the books in a muiilated condition. The uncontradicted testimony of the accused exonerated him from this portion of the charge, and, for aught I can see, he was entitled to an acquittal thereon.

But the order further recites that the accused refused ¡to obey the order of the referee, requiring him to permit ;a witness, while giving his testimony, to examine the books, to enable the opposite party to examine such witness in relation thereto. The evidence proved this portion of the charge. This constituted misconduct and a contempt within the meaning of the statute. The accused was, therefore, properly convicted of this part of the charge.

The order of the special term requires the accused to pay to the respondent his costs and expenses of the proceedings against the accused, and fixes the amount of :such costs and expenses at the sum of one thousand •dollars. This was modified by the general term, by reducing the amount to be paid to the respondent for his costs and expenses, to two hundred and fifty dollars.

This provision of the order is based upon section 21 •of the statute. That section provides that if an actual loss or injury shall have been produced to any party by the misconduct alleged, a fine shall be imposed sufficient to indemnify such party-, and to satisfy his costs •and expenses, which shall be paid over to him upon the •order of the court. The question is, whether the .amount of the costs and expenses is to be ascertained

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by the rates of compensation prescribed by statute for the services performed, or whether the court is summarily to fix the amount in its discretion.

The present case shows that this is a very important question. The judge at special term, acting upon the latter principle, fixed the amount at one thousand dollars ; while the judges at general term, acting upon the same principle, were of opinion that twenty-five per cent, of that amount was an adequate compensation. This wide difference between learned judg's shows that their diseretioii, exercised in the absence of any testimony or fixed rule, is not infallible, and that it is not quite safe to invest them with an unlimited power to transfer the money of one to another in such amounts as they deem proper.

Nevertheless, if this power has been clearly given by statute, it must be upheld, as there is no constitutional restriction upon the power of the legislature to provide for the punishment of contempts in this way. But such an intention ought not to be imputed to the legislature, unless plainly expressed in the statute. No such language is found in section 21. Nor can any such design be fairly deduced' therefrom. The costs and expenses specified therein were the costs and expenses allowed by the fee bill for the services performed. This construction was uniformly adopted in respect to all statutes giving costs to a party, prior to the Code. This construction was put upon the statute in question in People v. Nevins ( 1 Hill, 154 ), and by the chancellor in Albany City Bank v. Schermerhorn (9 Paige, 372). There was no intimation in these cases of any power in the court to award any discretionary sum for costs and expenses, or any sum except what was provided in the fee bill.

It follows that there is no power conferred upon the court by this section to make discretionary allowances for costs and expenses in these proceedings. If such power exists, it must be found in some other statute. The learned counsel for" the respondent has not cited

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any such statute, nor have I been able to find any. It follows that the special term erred in determining the amount to be paid to the respondent for his costs and expenses of the proceedings, without any reference to the statute fixing the compensation for the services performed, and that this error was not remedied by the general term, for, although the amount was largely reduced by the latter, yet, in arriving at it, the general term proceeded upon the same principle as the special term, determining the amount in the exercise of discretion, without any reference to any amount prescribed by statute for the services rendered.

I shall not examine or determine whether the compensation is to be governed by the allowances provided by the Revised Statutes or the Code, as that question was not considered by the supreme court, or discussed by counsel in this court. However this may be, no allowance can be made for costs and expenses, except such as the statute authorizes.

The order does not expressly state that the fine imposed upon the appellant, in addition to that for costs and expenses, was to be paid to the respondent in satisfaction for the injury sustained by him from the misconduct of the appellant. That it was designed for that purpose, and, if sustained, will be so disposed of I think apparent from the papers. Assuming this to be the fact, the special term erred in arriving at the amount. This was fixed by the judge, without any proof whatever tending to show the amount of damages sustained. The judge adopted and fixed such amount as he deemed proper, in like manner as in the imposition of a fine upon conviction for an offense,. where the punishment prescribed by statute is a fine, the amount of which is to be fixed by the judge within the limits prescribed by statute. In this class of cases the discretion of the judge, in view of the circumstances, fixes the amount of the fine. Not so in proceedings under the statutes in question. In the latter, the accused is to be_ fined such a sum as will compensate for the

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damages sustained "by the party from the misconduct. These damages must "be ascertained "by the like evidence, to which are to "be applied the same rules of law as upon the trial of an action "brought for the injury. The amount is no more discretionary in proceedings under the statute as for contempt, to procure redress, than in an action brought for that purpose.

The order appealed from must be reversed, and the proceedings remitted to the supreme court for further proceedings in that court.

Order reversed.