Bartholomay Brewery Co. v. O'Brien , 159 N.Y.S. 126 ( 1916 )

Merrell, J.:

This action was to establish a hen and foreclose the same upon a liquor tax certificate issued to the defendant Dennis O’Brien. The premises where traffic was to he carried on were situated at 10% Bronson avenue in the city of Rochester, and were owned by the defendant Carroll. Carroll leased to the plaintiff for a five-year term, and the plaintiff sublet to the defendant Dennis O’Brien, and placed the latter in charge of the traffic in liquors on said premises. The usual agreement taken by brewery companies with a power of attorney back was entered into in this case. It is unnecessary to mention here the force and effect of such an agreement according to the decisions of this and other appellate courts. The status of the parties under existing decisions is too well understood to be discussed at this time. Suffice it to say that the principal value of the liquor tax certificate sought to be obtained and foreclosed in this case was the right to surrender the same and to transfer the sale of liquor to other premises. Under the “ratio” provisions of the Liquor Tax Law now upon'the statute books (Consol. Laws, chap. 34 [Laws of 1909, chap. 39], § 8, subd. 9j added by Laws of 1910, .chap. 494, as amd. by Laws of 1911, chap. 298^*), such transfer right is of considerable value, and thereby the plaintiff was enabled to control the sale of liquor on the premises in question^ or at least to transfer the sale to such other premises as it might desire. Such value, beyond the rebate value of the certificate itself, was concededly in this case worth from $2,500 to $3,000. The right to the possession of such certificate and the incident power to transfer the sale of liquors thereunder was practically the only security which the plaintiff had for the indebtedness of the liquor vendor O’Brien to it. The issues involving the right to the possession of this certificate were fought out in court, and it was only when the trial justice announced a forthcoming decision in favor of the plaintiff, awarding it the relief sought, that any move was made to defeat the purpose of such foreclosure. Having been informed of the impending judgment of the court, the appellant, Hugh J. O’Brien, as attorney for the defendants Dennis O’Brien and Thomas E. Carroll, concededly with a view of stripping the decree of the court of any substantial benefit to the plaintiff, advised a subletting of the saloonkeeper O’Brien’s lease to Carroll, and the application by Carroll to the liquor tax authorities for a new certificate to carry on the traffic in liquors upon said premises. For such conduct the court has adjudged the defendants and their counsel, O’Brien, to be in contempt of • court. In obedience of the order adjudging the defendants in contempt, the fine imposed thereby has been paid, and the parties placed in their original position before the contemptuous action was taken, and the contempt of which the defendants were guilty was entirely purged.

■The defendant Hugh J. O’Brien, however, has appealed, and now insists that the order adjudging him in contempt to have been without authority.

It seems to me that the defendants were guilty of contemptuous conduct by the course which they pursued. Had this lease been sublet and Carroll applied for a new certificate before the action was commenced or before the outcome was announced, it is perhaps true that such action being lawful; would not have been contemptuous. But here nothing of the sort was done until the parties, who were regularly in court, were apprised of the impending judgment. Then, with a'view of eyading and nullifying the action of the court, and rendering its judgment practically valueless, the sharp practice advised by the appellant was resorted to.

Section 753 of the Judiciary Law (Consol. Laws, chap. 30; Laws of 1909, chap. 35), relative to civil contempts, provides that a court of record has power to punish by fine and imprisonment, or either, a neglect or violation of duty or other misconduct by which a right or remedy of a party to a civil action or special proceeding pending in the court may be defeated, impaired, impeded or prejudiced, where a party to such action, or an attorney or counselor or other person is guilty of any disobedience of a lawful mandate of the court, or for any other unlawful interference with the proceedings therein.

The effect of the trick which was attempted in this casé, while ordinarily the procedure advised and which was taken would be lawful, was to render practically nugatory the judgment which the court announced. The surrender value of the certificate sought to be foreclosed was negligible. The real advantage, which was well understood and appreciated by the defendants, was to control the sale of liquor at said premises, and under the certificate, the possession of which was sought. The skillful argument of the appellant to the effect that contempt of court cannot be based upon lawful action on the part of the defendants, seems to me to be entirely aside from the question before us. It is true the courts have held that there may be more than one certificate issued to the same premises, but that is not the question here. The question is, whether these defendants, and particularly the appellant, have been guilty of contemptuous conduct in defeating and prejudicing the rights of the plaintiff. It matters not that the judgment establishing the lien and directing the foreclosure had not been formally entered, but merely announced by the court from the bench. As was well stated by Lord Eldon in Hearn v. Tennant (14 Ves. 136): “If these parties by their attendance in court were apprised, that there was an order, that is sufficient, and I cannot attend to a distinction so thin as that persons, standing here until the moment the Lord .Chancellor is about to pronounce the order, which from all' that passed they must know will be pronounced, can, by going out of the Hall at this instant, avoid all the consequences.”

In King v. Barnes (113 N. Y. 476) Judge Finch, in his opinion (at p. 479), says, with reference to the effect of subdivision 4 of section 14 of the Code (re-enacted, Judiciary Law, § 753) : “ That subdivision specifies, in constituting a contempt, the act of a person * * * who is guilty of any * * * unlawful interference with the proceedings therein. * * * So that any person who interferes with the process or control or action of the court in a pending htigation unlawfully and without authority, is guilty of a civil contempt, if his act defeats, impairs, impedes or prejudices the right or remedy of a party to such action or proceeding.”

It was held in the case of Greite v. Henricks (71 Hun, 11) that one is guilty of contempt of court if he actively interferes to make a judgment of the court nugatory.

I do not think it can be successfully asserted but that the con • duct of the defendants here was such as tó render the j udgment of the court in this case nugatory.

In the comprehensive opinion in Clay v. Waters (178 Fed. Rep. 385, 391) it is said: “A party to a suit who knowingly and intentionally disposes of its subject-matter with intent to withdraw it from the jurisdiction of the court and to render futile any future decree concerning it, unavoidably defies the power and affronts the dignity of the court and thereby renders himself liable to punishment for contempt.”

As before stated, while the subleasing of the premises to Carroll and his subsequent application for a new certificate were acts in themselves lawful, yet the effect of such action taken at a time when the decree of the court awarding the possession of the certificate to the plaintiff was about to be made and had been announced, was such as to render the effect of such decree valueless. And in advising such course the appellant manifested his contempt for the proceedings of the court, and was guilty of misconduct which defeated, impaired, impeded and prejudiced the rights and remedies of the plaintiff with reference to the subject-matter of that action.

The remedy invoked in this proceeding was the only one left to the respondent. The sharp practice of the defendants and appellant was resorted to at a time so near the expiration of the lease that the plaintiff was remediless to obtain any relief through an equitable action in court to restrain the acts of the defendants.

The order appealed from should be affirmed.

All concurred, except Lambert and De Angelis, JJ., who dissented in an opinion by Lambert, J.

* Since amd. by Laws of 1915, chap. 654.^ [Rep.