Caito v. Indianapolis Produce Terminal, Inc., 2--573A125

• Decision Date: 26 December 1974
• Docket Number: No. 2--573A125,2--573A125
• Citation: 162 Ind.App. 590,320 N.E.2d 821
• Parties: Philip J. CAITO, IV., and Joseph Caito, d/b/a Caito Foods, Appellants (Defendants Below), v. INDIANAPOLIS PRODUCE TERMINAL, INC., Appellee (Plaintiff Below).
• Court: Indiana Appellate Court

Page 821

320 N.E.2d 821

162 Ind.App. 590

Philip J. CAITO, IV., and Joseph Caito, d/b/a Caito Foods Appellants (Defendants Below), v. INDIANAPOLIS PRODUCE TERMINAL, INC., Appellee (Plaintiff Below).

No. 2--573A125.

Court of Appeals of Indiana, Second District.

Dec. 26, 1974.

Charles E. Barker, E. C. Ulen, Jr., Indianapolis, for appellants

John P. Price, Grace Curry, Donald L. Jackson and Paul J. Corsaro, Bingham, Summers, Welsh & Spilman, Indianapolis, for appellee.

BUCHANAN, Judge.

CASE SUMMARY

Defendant-Appellants Philip J. Caito, IV (Philip IV) and Joseph Caito (Joseph), d/b/a Caito Foods (Caito Foods) appeal a contempt judgment issued by the trial court in favor of Plaintiff-Appellee Indianapolis Produce Terminal, Ind. (Terminal) and against Caito Foods for violating a permanent injunction. Caito Foods claim the judgment is not supported by sufficient evidence, and that the judgment wrongfully anticipated a future violation by ordering incarceration without first requiring a hearing to show cause for such violation.

We affirm in part and reverse in part.

FACTS

The evidence most favorable to Terminal is that Caito Foods (Philip J. Caito, IV and Joseph Caito d/b/a Caito Foods) leased Units #318--320 from Terminal at its warehouse located at 4101 Massachusetts Avenue, Indianapolis, Indiana. Caito Foods is in the business of wholesaling fruits and vegetables. Phil Caito, Jr., father of Philip IV and Joseph Caito, is a tenant in the same warehouse and is also engaged in the produce business, operating under the name of Phil Caito & Sons.

Prior to November 17, 1971, Phil Caito, Jr., apparently acting on behalf of Caito Foods, requested permission from Terminal for the making of certain alterations to units #318--320, including complete enclosure of the dock area immediately adjacent to these units. Some of the proposed alterations were approved, but enclosure of the dock area was specifically rejected by Terminal.

Thereafter, enclosure of An Agreed Entry permanently enjoining Caito Foods from making any improvements other than those authorized by Terminal was entered on November 24, 1971:

the dock area was commenced without Terminal's permission. Terminal then (November 17, 1971) sought an injunction against Philip Caito, Jr. and Caito Foods enjoining the unauthorized construction--and a Temporary Restraining Order was issued.

'Come now the parties, by counsel, and stipulate and agree that the following Entry be approved by the Court in the above entitled cause of action as follows:

'1. The Plaintiff hereby dismisses, with prejudice, this cause of action as to Philip Caito, Jr.

'2. The Restraining Order and Supplemental Restraining Order, without notice, heretofore issued are hereby dissolved; however, Plaintiff, as principal, and American Surety Company, as surety, are hereby released and discharged from any and all liability on said Restraining Order Bond issued heretofore.

'3. Philip J. Caito, IV and Joseph Caito, d/b/a Caito Foods, the defendants herein, are permanently enjoined and restrained from constructing or causing to be constructed improvements on the premises leased to the defendants at 4101 Massachusetts Avenue, Units 318--320, Indianapolis, Indiana, except such improvements as authorized in writing by plaintiff on September 24, 1971, to-wit:

'(a) covering the dock at said leased premises;

'(b) installation of a 15-foot addition to the back dock of said premises; and

'(c) a covering for the said 15-foot addition to the back dock;

and defendants can resume and complete such authorized improvements begun by Morehouse Construction Company which plaintiff agrees to pay for upon presentation of a statement of the costs of the same.'

Thereafter, on December 14, 1972, Terminal filed a Motion For Contempt of Court alleging that Caito Foods wilfully and flagrantly violated the Court's permanent injunction of November 24, 1971, by constructing a complete enclosure of 'the dock at said leased premises'. The next day the trial court incorporated Terminal's Motion in an Order To Appear And Show Cause of why Caito Foods should not be found in contempt of the permanent injunction.

On January 8, 1973, a hearing was held on Terminal's Motion For Contempt and the following facts were revealed:

Philip Caito, Jr. first mentioned to Philip IV in late summer, 1972, the possibility of enclosing the dock area. Philip IV told his father that he did not want nor did he need the dock enclosed. At this time the father did have knowledge of the Court Order permanently enjoining Caito Foods from constructing any improvements on the leased premises. Nevertheless, in October the father requested a contractor to submit a bid for the enclosure of the dock with overhead doors, and thereafter in December, 1972, construction again began.

Philip IV became aware of the enclosure of the doors after construction began, but did not report this fact to Terminal, nor did he make inquires or request the construction be stopped. Caito Foods used the enclosed dock daily both during construction and thereafter.

The trial court, attempting to summarize the position of Caito Foods, prompted this exchange:

'THE COURT: And your story is, as I understand it now, is that somebody came along and put those doors up there and made that enclosure

and you don't know anything about it, other than it was done?

'PHILLIP CAITO, IV:

Other than that it was done, right.'

At the close of the hearing the trial court entered its judgment:

'Defendants are found in Contempt of Court for permitting the erection and construction of overhead doors and framework thereof enclosing a part of the dock area adjoining the space leased by Defendants from Plaintiff. Defendants ordered to remove overhead doors and framework thereof by February 15, 1973, without damages to Plaintiff's premises, and failing to so remove, Defendants are ordered committed to jail on showing the Court that Defendants have not complied with this Court Order.' (Contempt Judgment herein)

ISSUES

ISSUE ONE

Was there sufficient evidence of violation of the permanent injunction to justify issuance of the Contempt Judgment?

ISSUE TWO

Is the Contempt Judgment defective because it wrongfully anticipated a future violation by providing incarceration without first requiring a hearing to show cause for any such violation?

As to ISSUE ONE, Caito Foods argues that there is insufficient evidence to support any agency relationship which would impute to them the unauthorized actions of their father of enclosing the dock. And even if bound by any agency relationship, the enclosure did not violate the permanent injunctive order because such enclosed dock cannot be considered to be 'on the premises leased' to which the permanent injunction was directed.

In reply, Terminal asserts that the action of Caito Foods was such as to ratify the actions of their father, thereby establishing an agency relationship. Further, the permanent injunction was contemplated by both parties and the trial court to include the dock as being part of the leased premises.

As to ISSUE TWO, Caito Foods claims it was erroneous for the trial court to anticipate a future breach of the contempt order by providing for incarceration without first requiring a prima facie showing of cause for the breach.

Terminal points out that the Conetmpt Judgment specifically provides for a 'showing' that a further violation has occurred.

DECISION

ISSUE ONE

CONCLUSION--It is our opinion there was sufficient evidence of violation of the injunction in that Caito Foods ratified construction of the dock enclosure specifically prohibited by the Agreed Entry of November 24, 1971, (Permanent Injunction).

A father in the same business in the same warehouse as his two sons, and who had previously acted in their behalf, causes a dock to be enclosed with knowledge of an injunction prohibiting such action. The sons (Caito Foods) use the forbidden improvement daily . . . and do nothing.

Having heard the evidence pointing up these facts, the Trial Judge at the contempt hearing asked this question of trial counsel:

'Well, as I understand the law now, I can draw reasonable inferences and conclusions on the circumstances and evidence as presented. Now, are you suggesting that I conclude here that the Good Fairy came along and enclosed the dock area around your clients and just left it there and they're using it and I'm not to do any more about it?'

The trial court properly concluded from the direct and circumstantial evidence before him that whether the Good Fairy encosed the dock area or not there was sufficient evidence indicating that Caito foods acquiesced in the dock enclosure.

Acquiescing in the doing of a prohibited act while at the same time reaping the benefits is tantamount to ratification. Public Savings Insurance Co. v. Greenwald (1918), 68 Ind.App. 609, 118 N.E. 556; National Life Insurance Co. v. Headrick (1916), 63 Ind.App. 54, 112 N.E. 559.

Caito Foods cannot silently munch on the fruit forbidden by the court's injunction and expect the court to believe their 'eyes were closed'. Hale v. Hale (1920), 74 Ind.App. 405, 423, 126 N.E. 692; Public Savings, supra, 68 Ind.App. 609, 617, 118 N.E. 556; National Life, supra, 63 Ind.App. 54, 58, 112 N.E. 559; Seavey, Agency (1964), § 37B, p. 67.

As aptly stated in Seavey:

'(Ratification) . . . does not require a manifestation of contempt to the agent, to the other party, or anyone. However, the proof of this may consist merely of inaction. This is sufficient to indicate affirmance if, after learning that an unauthorized act was done on his account, the purported principal gave no indication of protest or disagreement, as a normal person in his position would have done. This failure to take action is evidence of a willingness to become a party to the transaction.' § 37B, p. 67.

An equitable principle also comes into play. Good faith imposed a duty on Caito Foods to speak up and inform...