OLIVER V. CUNNINGHAM
- - , 1880.)
(Oireuit Oourt, W. D. Michigan.
L BANKRUPTOy-MORTG}GE FORECLOSURE-AsSIGNEE NOT A NECESSARY
The assignee in bankruptcy of a bankrupt mortgagor is not a necessary party defendant to foreclosure proceedings instituted prior to the adjudication in bankruptcy.
Such assignee can, however, be made a party upon
if there should be any reason for his interposition.-[ ED. E1J8ter v. Gaff, 91 U. S. 521.
In Equity. Petition to have proceedings stayed.
WITHEY, D. J. Garret B. Hunt, one of the defendants, has filed a petition to have the proceedings in the suit stayed until the assignees in bankruptcy of Cunningham, Haines, and Robinson are made parties defendants. It appears by the petition that the three last-named defendants have been adjudicated bankrupts, and that assignees have been appointed upon proceedings in bankruptcy instituted subsequent to the commencement of this suit. Also, ·that defendant Robinson has received a discharge, and that Cunningham and Haines have applied to be discharged. At the commencement of this suit the title of the lands which are the subject-matter of the hill was in defendant Cunningham, which title has devolved upon his assignees, by virtue of the proceedings in bankruptcy. Counsel for petitioner insists that all persons who may be affected by. the decree should be made parties; that such assignees would be affected by a decree in favor of complainant; and that the case cannot properly be heard, therefore, until they are made parties. Neither they, as assignees, nor the land held by them, will be concluded by the decree. Cases cited appear to sustain such views. Anon. 10 Paige, 20, is a foreclosure sale, where the equity of rerlemption or legal title passed to the defendant's assignees in bankruptcy subsequent to commencement of suit and prior to decree. Chancellor Walworth said the suit had become defective, and could not
OLIVER V. OUNNINGHAH.
be further proceeded in until the assignee in bankruptcy was made a party; that the assignee was not in the situation of a mere purchaser pendente lite, as the equity of redemption was cast upon him by law. It was followed in other cases-l Barb. Ch. 246; 2 Barb. Ch. 596; 3 Barb.Ch. 360; 1 Sandf. Ch. 135; 3 McLean, 487-which were also cited by counsel. If the cases referred to are to govern it, it is manifest that the assignees of the bankrupt defendant, to whom the title to any of the property involved in the suit has come, should be made parties in order to reach the interest held by them. But, as we understand the opinion of the supreme court of the United States,-Eyster v. Gaff et al. 13 N. B. R. 546, 91 U. S. 521,-we are not at liberty to follow the New York cases, or the views expressed in 3 McLean. Thomas and James Gaff in 1868 instituted suit to foreclose a mortgage against McClure. Pending the foreclosure proceedings he was declared a bankrupt upon a petition filed pending the suit, and an assignee was appointed. The decree of foreclosure and sale was rendered nearly two months after the adjudication that McClure was a bankrupt, and about a month afterthe appointment of the assignee. Gaff purchased at the sale, received the master's deed, and the sale was duly confirmed. They then brought a suit in ejectment against the mortgagor's tenant,who defended on the ground that all proceedings in the foreclosure suit since the appointment of the assignee in bankruptcy were absolutely void, because he was not made a defendant. The supreme court says: "But for the banln-uptcy of McClure, by the decree and sale the title would have vested in the purchaser, and this would have related back to the date of the mortgage." The inquiry is then made, is there anything in the bankrupt law which takes the title to the premises acquired by the assignee out of this rule? It was maintained by counsel that, because the assignee in bankruptcy is vested by the assignment under the statute with the legal title, there remains nothing from that time for the decree of foreclosure to operate on. The court, however, says: "If this be true in this case it must be equally true in
other suits in which the title is transferred pendente lite." The court proceeds to state the grounds of its decision, and reaches the conclusion that there is no reason why.the same principle should not apply to the transfer made by a bankruptcy,proceeding as to a sale a1;1d conveyance by the mortgagor pending suit; and that in neither. case-' is tqe court prein the suit without the person in vented whom the title has vested, that the title of the purchaser under the decree would not in such case be affec.ted. It is further said, if there is any reason f9r interposing, the assignee can have himself substituted for the bankrupt, or 'made a defendant on petition. If he chooses t9 let the suit proceed without such defence, he stands as any other person would on whom the title has fallen since the suit commenced. It is said, by petitioner's counsel, Eyster v. Gaff is not in point, for the reason that the claim there was that the foreclosure proceedings, under which Gaff claimed title, were void for want of jurisdiction, because the assignee in bankruptcy was not made a party, and that such want of jurisdiction was sought to be set up in the ejectment suit, not in the foreclosure suit. But the court takes the broad ground, from which there appears to be no escape, that there is nothing in the bankrupt law, or in the nature of proceedings in bankruptcy, which takes the interest ip the mortgaged property acquired by the assignee out of the rule which governs as to voluntary conveyances by a defendant mortgagor pendente lite. This is an assertion by the -supreme court of the doctrine that, in effect, the parties to the suit may wholly disregard the fact that the legal title to the property in controversy has, since the commencement of the suit, become invested in an assignee of a bankrupt defendant. Again, it would seem that defendant Hunt should have brought forward his petition at an earlier stage of the suit, if his interests r.equired other persons to be made parties, and that he should not now be permitted, after the cause is noticed for hearing, to have the delay necessary to bring them in. I do not cOllcede that it is his right to have them made defendants. The assignees were bound to take notice of suits
peIldmg agaInst'the bankrupts at the timeoftheif me,nt, bILd a right to appear 'and defend any interest represent!:ld'by them in the litigation, p.ending here. or !'llsewhere'.' Ifthey should now apply to be let in as defendants, it ought unless to prevent, but on such terms as to proceeding' in. ,the (laUSe and the fi,tta.l hearing as would produce the least delay. If defendant Hunt has a claim for contribution from the estate of the bankrupts, the defendants, or any of them,' in case he :fuay is decreed liable in this suit, no reason is seen why not intervene in the bankruptcy proceedings as to such contingent claim, and have an order that will prevent the assets being distributed until his rights can be ascertained. Petition denied.
(Oirc'UiHJoU'T'e, S. D. NeJIJJ York. January 26,1881.)
A contempt of court is a specific criminal offence, and the imposition of a line for sllch contempt is a judgment in a criminal case. 2.
The court has no power to vary such judgment after the expiration of the term at which the fine was imposed.
The order adjudging the contempt need not recite the offence, where the latter is set forth with sufficient partiCUlarity in the affidavits and reports filed in the proceedings, and the order is connected therewith by suffiCient reference.
An order adjUdging contempt for the violatIon ot an injunction need not reoite that such injunction was lawful.
5. SAME-ORDER )lADE IN ORIGINAL SUIT"
In proceedings in equity between parties to the suit, fol' contempt in not obeying an order in the cause, the fine for such contempt can be imposed by an order made in the original suit. '
8.8.ulE-POWER 'OF COWtT TO MAKE
An order adjudging ;th,e contempt, and settingon foot a proceeding for the purpose of asce'rtaining what amount of fine should be imposed therefor,and directing on what principle and by what means it should be,fixed, does not exhaust, the power of the court to make a subsequent order fixing the amount of the fine, and directing commitment until the same should be paid.
8AME-ORDER TO STAND COMMITTED·
. Where a statute authorizes or prescribes the infliction of a fine, all a punishment for a contempt of court, it IS lawful for the court inflict, lng the fine to direct that the party stand committed until the fine is paid, 'although there be no specific affirmative grant of power in tlie statute to make such direction.-[En. '
In Equity. Proceedingsi for Contempt. Gha,rles F. Blake, for plaintiff. James H. Whitelegge, for defendant. BLATCHFORD, C. J. This suit is brought for the infringe. ment of letters patent No. 74,068, granted to the plaintiff February 4, 1868, for an "improvement in machine for forming sheet-metal mouldings." The patent was before this court in Fischer v. Wilson, 16 BIatchf. 220, and was sustained in April, 1879. This suit was brought in May, 1879. On a motion made, on due notice to the defendant, this court, on the fourteenth of June, 1879, issued a preliminary injunction, restraining, the defendant from making, using, 'Or selling any machine embodying the inventions descri8edand claimed in the second and fourth claims of the patent. This injunction was served on the defendant on the same day. Afterwards a motion founded on affidavits sworn to July 18, 1879, was made before the court for an attachment against the defendant for contempt for violating aaid injunction. The affidavits were those ofErickson, Conolly, and Abbott, and went to show a violation of the injunction by the defendant after its service on him in the use, in making sky-light bars, of improvements covered by the second and fourth claims of the patent. The sky-light bars were made of sheet metal, and were formed and bent on a machine. The affidavits set forth the particulars of the alleged contempt charged, and were :filed in court, and copies of them were served on the defend-
ll'ISCHER V. HAYES.
ant on the twenty-eighth of July, 1879. The defendant opposed the motion on affidavits, and the court made an order on the first of August, 1879, requiring the defendant to permit an inspection on the part of the plaintiff of his machinery for bending sheet metal, and of the method of bending such sheet metal used by him. The order said: "It being the object and intention of this court to enable the complainant herein to present such evidence to the court herein as will enable the complainant to make out, if the fact be so, the infringement of the patent here in suit, and a contempt of the inj unction heretofore issued and served herein;" and referred it to Mr. Shields to ascertain the fact of said infringement, "if the same be so," and report his finding to the court, and ordered "that the complainant may examine before the said referee, George Hayes and all his employes and assistants, and that both parties may examine such other witnesses as they may elect to examine." The reference before Mr. Shields commenced on the twenty-ninth of August, 1879. Witnesses for both parties were examined before the referee. The defendant was examined on the part of the plaintiff, and took no objection to the propriety or lawfulness of his being examined. He was also examined as a witness on his own behalf. The report of Mr. Shields was filed January 8, 1880. This court had, on the thirtieth of June, 1879, on motion and due notice, made an order adjudging the defendant guilty of contempt by using a machine for bending sheet metal in violation of said injunction. The proceedings covered by the motion which resulted in the order of August 1, related to a violation after June 30, 1879, and the testimony before Mr. Shields and his report related to such a violation. Mr. Hhields, in his report, found that the defendant had, since the order of June 30, 1879, infringed the fourth claim 'of the patent, and stated in detail wherein such infringement consisted. The defendant filed exceptions to the findings in the report. On all the proceedings in the case, and the testi. mony taken before Mr. Shields and his report, the plaintiff moved before this conrt, on due notice, "for an order for attachment for contempt and punishment herein, notice of v.6.no.1-5