Osmar v. Crosland-Osmar, Inc.

259 S.E.2d 771 (1979) 43 N.C. App. 721

John J. OSMAR
v.
CROSLAND-OSMAR, INC., a corporation.

No. 7926SC91.

Court of Appeals of North Carolina.

November 20, 1979.

Reginald L. Yates, Charlotte, for defendant-appellant.

No brief for plaintiff-appellee.

HILL, Judge.

Two questions were raised by J. Miller Crosland on appeal:

1. Did the trial judge err in finding that J. Miller Crosland wilfully and without legal justification violated the order of Judge Fred Hasty entered 19 December 1977?

2. Did the acts of J. Miller Crosland constitute indirect criminal contempt?

The evidence is undisputed that the second sales contract for the sale of the PTL property was entered into prior to 19 December 1977, the date of the appointment of the receiver. Although Mr. Crosland contended that he resigned as an officer and director effective 9 December 1977, there was no notice before the court prior to 25 April 1978, the date on which Mr. Crosland gave formal notice to both the corporation and Mr. Samuel A. Wilson III as receiver. Mr. Crosland had retained the records concerning the South Carolina property in his personal files and had refused to divulge the contents thereof until ordered by the court to do so several weeks after the appointment of the receiver. By doing so, he failed to fully cooperate with the receiver in the performance of his duties to determine what were the assets of the corporation.

Although the order entered 19 December 1977 prohibited any person, firm or corporation from interfering in any manner with the property or assets of the corporation or with the receiver in the exercise of his duties and further restrained and enjoined persons, firms and corporations from suing the receiver or foreclosing upon any property of the defendant corporation except by permission first obtained from this court, Mr. Crosland attempted to do indirectly that which he could not do directly. In spite of the direct order of the North Carolina superior court denying Mr. Crosland's motion that the receiver be required to notify the closing attorney in South Carolina that Mr. Crosland was the owner of the commissions, he immediately went outside the jurisdiction of the North Carolina courts and brought a suit to accomplish the same result.

No longer was the dispute over the commission one between interested parties on equal footing. The order of 19 April 1978 denying Mr. Crosland's motion made it clear that the receiver had some claim to the proceeds. No determination on the merits had been made. Mr. Crosland certainly had the right to claim property that he alleged was his, but Mr. Crosland also had a duty to cooperate with the receiver. Mr. Crosland had signed the consent order of 19 December 1977, and by its terms it applied to him. Once the North Carolina court determined that the receiver had a claim to the proceeds, Mr. Crosland was bound to comply with the order. Admittedly, Mr. Crosland did not make the receiver a party to the South Carolina action, but the very act of instituting the action constituted interference and a failure to fully cooperate with the receiver in the performance of his duties. At this point, it is evident that Mr. Crosland was in violation of G.S. 5A-11(a)(3).

The question before this Court is not whether Mr. Crosland is entitled to the commissions but rather whether there was a wilful disobedience, resistance to, or interference with the court's lawful process, order, direction or instructions or its execution. We hold that there was.

Had Mr. Crosland paid the commissions so received into court and then sought permission of the court to sue the receiver to determine ownership thereof, perhaps the judgment of this court would have been different. Rather, he chose to bypass the North Carolina court by going to South Carolina and doing indirectly what he had been ordered not to do directly.

For the reasons set out above, the order entered by the Honorable Frank W. Snepp is in all respects

Affirmed.

VAUGHN and ERWIN, JJ., concur in the result.