Odell v. Bausch & Lomb Optical Co.

• Decision Date: 06 August 1937
• Docket Number: No. 6112.,6112.
• Citation: 91 F.2d 359
• Parties: ODELL v. BAUSCH & LOMB OPTICAL CO. et al.
• Court: U.S. Court of Appeals — Seventh Circuit

91 F.2d 359 (1937)

ODELL v. BAUSCH & LOMB OPTICAL CO. et al.

No. 6112.

Circuit Court of Appeals, Seventh Circuit.

July 7, 1937.

Rehearing Denied August 6, 1937.

Benjamin F. J. Odell, of Chicago, Ill., in pro. per.

John D. Black and George B. Christensen, both of Chicago, Ill., for appellees.

Before SPARKS and MAJOR, Circuit Judges, and LINDLEY, District Judge.

SPARKS, Circuit Judge.

This appeal is from a decree in contempt proceedings ordering appellant to pay for the benefit of appellees, fines aggregating $15,000, for violations of three injunctional orders theretofore entered. The decree also ordered that the costs of the contempt proceedings be taxed against appellant and two other defendants against whom additional fines were assessed. Appellant secured an order of severance upon a showing that the other two were not taking any appeal, and therefore prosecutes this appeal alone.

Appellant is an attorney who was named a party defendant in a bill of contempt against one Roy Wahlgren and others. The gravamen of the action lay in Wahlgren's breach of certain restrictive covenants in a contract which provided that upon termination of his employment by appellees he should refrain from engaging in a certain business for a certain period within a certain territory. The others, including appellant, were named in the bill of complaint because of the assistance rendered by them to Wahlgren in the violation of the restrictive covenants. Appellees are an optical goods manufacturing company and its subsidiary by whom Wahlgren had been employed for a number of years under a series of contracts. The particular clause of the contract, the breach of which gave rise to the litigation here involved, is set out in the margin.¹ He contended that the restrictive covenants of the contract were unenforcible, hence upon termination of his employment he immediately started in, with the assistance of appellant, to organize a series of corporations to engage in the business he had covenanted not to enter for five years, and persuaded persons in appellees' employ to leave them and enter into the employ of his corporations. Appellees thereupon prayed an injunction to prevent his continuation of these activities, and named all those parties who were thought to be participating in them. A temporary restraining order was issued April 3, 1931, followed by a preliminary injunction May 22, 1931, and a permanent injunction March 22, 1933, the latter being the final decree in the main cause. This court, on January 23, 1934, affirmed this final decree which permanently enjoined Wahlgren from engaging in the business involved, for the time and in the territory covered by the contract, and from receiving any payment in any form from any of the Wahlgren corporations. The decree also enjoined the other defendants from inducing or attempting to induce appellees' employees to leave their employment; from conspiring to injure appellees' business by circulating false statements among their customers; and from entering or remaining after May 1, 1933, in the employ of any business organization with which Wahlgren was in any way connected, for the limited time and area. See Wahlgren et al. v. Bausch & Lomb Optical Co. et al. (C.C.A.) 68 F.(2d) 660, certiorari denied 292 U.S. 639, 54 S.Ct. 774, 78 L.Ed. 1491.

Throughout the proceedings, appellant, as attorney, represented Wahlgren and certain of the other defendants. Upon recommendation of the master to whom the matter was referred for hearing, the bill was dismissed as to him for the reason stated by the master in his report in the main case, that there was no evidence that he conspired with the other defendants or took any part in the enticement of appellees' employees or solicitation of their customers, and that as attorney for Wahlgren, he had advised that the restrictive covenants of the contract were unenforcible, and had acted accordingly. Although the final decree ordering the permanent injunction did dismiss appellant by name from the proceedings, it granted relief to appellees, "against said defendants, their agents, servants, attorneys and counsellors, and anyone acting by, or through, or for them, or any of them, and all to whom notice of this injunction shall come. * * *" Also incorporated in the final decree was a provision reserving jurisdiction of the cause and of all the parties thereto, for the purpose of entering any further orders which might be necessary with respect to the original bill of complaint or any amended or supplemental bills that might be entered, or with respect to any proceedings for contempt or accounting, or for reference to a master for any purpose that might be desirable. On the day this final decree was entered, March 23, 1933, appellees filed a supplemental bill again naming appellant, and during the course of proceedings in court on that day, the court ordered that the record show that his appearance and that of another defendant not here involved, were entered in open court. There was no objection to this procedure.

Following the entry of the order of this court affirming the decree of the District Court, the case was again referred to a master for hearing as to alleged violations of the three injunctional orders, and leave was given appellees to file an additional petition or charges of contempts to which defendants were ruled to file answers. Such additional petition was filed February 7, 1934, naming Odell along with the other defendants, and charging them with remaining in the employ of the Wahlgren companies after May 1, 1933, and helping continue the business of those companies, and charging appellant and another attorney with having willfully and knowingly aided the various defendants in evading and violating the orders of the court, and knowingly obstructed the courts of justice and presented defenses on the facts of the case known by them or which should have been known to be false and fraudulent. For such violations appellees prayed that all defendants be punished by fine or imprisonment. To this petition appellant filed answer denying all the charges.

In accordance with the order of reference, the master heard testimony on the violations by all defendants, including appellant, of the three injunctional orders. He then reported, recommending the imposition of...