Western Fruit Growers v. Gotfried

• Decision Date: 27 May 1943
• Docket Number: No. 10181.,10181.
• Parties: WESTERN FRUIT GROWERS, Inc., et al. v. GOTFRIED et al.
• Court: U.S. Court of Appeals — Ninth Circuit

136 F.2d 98 (1943)

WESTERN FRUIT GROWERS, Inc., et al. v. GOTFRIED et al.

No. 10181.

Circuit Court of Appeals, Ninth Circuit.

May 27, 1943.

G. V. Weikert, of Los Angeles, Cal., for appellants.

Leo V. Silverstein, U. S. Atty., and James L. Crawford and Wm. W. Worthington, Asst. U. S. Attys., all of Los Angeles, Cal., for the United States.

Before WILBUR, MATHEWS, and STEPHENS, Circuit Judges.

STEPHENS, Circuit Judge.

Appellees filed a debtor's petition in accordance with § 75 of the Bankruptcy Act, 11 U.S.C.A. § 203. During the course of the proceedings the District Court adjudged appellants guilty of contempt for violating an order of the Conciliation Commissioner to whom the matter had been referred. They appeal from the judgment of contempt.

Alleging that they were co-partners operating as general farmers, appellees Gotfreid and Cruce filed a debtor's petition under § 75 of the Bankruptcy Act on March 9, 1942. An unsecured claim owed to appellant Western Fruit Growers, Inc. (hereinafter called Western), for equipment, supplies and machinery, was listed as the only debt of the partnership. Four pieces of land on which appellees were tenant farmers, equipment, supplies, machinery, trade-marks and a credit from Western were scheduled as assets. All the assets were claimed to be exempt. The matter was referred to a Conciliation Commissioner, who, on the day the petition was filed, entered an order restraining Western from interfering with the debtors' property until further order of the court. Western filed a petition to dismiss the farmer-debtor proceeding on the ground that the District Court had no jurisdiction thereof.

Appellees filed an amended petition pursuant to which the District Court adjudged them bankrupts under § 75, sub. s, of the Bankruptcy Act, and enjoined creditors from interfering by any judicial or official proceedings.

The record and briefs of the parties indicate the following facts. Several years ago, in 1940, Gotfried and Western entered into an oral agreement by the terms of which the former was to farm lands on which Western held leases, and the latter to finance the undertaking, furnish the necessary equipment, sell the crops, and make advances to Gotfried of $200.00 per month. After deducting all payments and expenses, any profits or losses remaining were to be divided equally between the two parties. If a sufficient profit resulted to Gotfried, Western agreed to sell the equipment to Gotfried at cost. Western invested over $30,000.00 in equipment, leased two packing houses in its own name, and also paid rents, bills and monthly advances to Gotfried.

About February 20, 1942, and less than a month before debtor's petition was filed, Gotfried and Cruce formed the co-partnership, which is the debtor in the proceedings under § 75. The equipment and machinery listed as assets in the debtor's petition were the same as that furnished to Gotfried by Western under the oral agreement. Some of it was in a packing house in Colton leased by Western and not listed in the debtor's schedule of assets. Some of it was moved to Vista in San Diego County.

After filing their petition, appellees continued to use the packing house in Colton and to harvest crops. Unable to obtain any relief from the Conciliation Commissioner, Woodall and Wright, appellants herein and employees of Western, about March 29, 1942, took possession of the Colton packing house and of all the equipment therein. Cruce promptly prayed for, and the Conciliation Commissioner issued, an order, directed to Western and others, including its employees Woodall and Wright, directing them to surrender possession of the warehouse in Colton, and the properties therein, to appellees or to show cause why they should not be certified to the District Court in contempt proceedings, and enjoining them from removing any personal property from the warehouse or interfering with any properties of Gotfried and Cruce. About April 9, 1942, Woodall and other Western employees took possession of the equipment in Vista. Thereafter, the Conciliation Commissioner adjudged Western and the six individuals guilty of contempt and ordered them to appear before the District Court to be punished. The order was based on conclusions of law to the effect that the debtor was entitled to the possession of and the court had exclusive jurisdiction of the property at Colton and at Vista. Except for four of the individuals, the District Court found in accord with the Commissioner; it adjudged Western and the two employees Woodall and Wright, guilty of contempt and fined them $1.000.00, $500.00 and $250.00 respectively. The contemners appeal.

The argument has been advanced that the District Court could make no valid order the disobedience of which would constitute contempt because it had no jurisdiction over the property to which its order referred.

That it is not contempt to disobey a void mandate, order, judgment, or decree, or one issued by a court without jurisdiction of the parties involved and of the subject matter has been frequently decided. Ex parte Fisk, 113 U.S. 713, 5 S.Ct. 724, 28 L. Ed. 1117; Ex parte Rowland, 104 U.S. 604, 26 L.Ed. 861; Beauchamp v. United States, 9 Cir., 76 F.2d 663. However, if a court has jurisdiction over both the parties and the subject matter, an order must be obeyed so long as it remains the order of the court. Howat v. Kansas, 258 U.S. 181, 42 S.Ct. 277, 66 L.Ed. 550; United States v. Shipp, 203 U.S. 563, 27 S.Ct. 165, 51 L.Ed. 319, 8 Ann.Cas. 265; Brougham v. Oceanic Steam Navigation Co., 2 Cir., 205 F. 857. The court below sitting in bankruptcy had jurisdiction over the subject matter, that is, it had the power to act in the bankruptcy proceedings as § 75, sub. n, provides that the filing of a debtor's petition subjects "the farmer and all his property" to the "exclusive jurisdiction" of the court. Similarly, the court had jurisdiction of the appellants as Western voluntarily appeared and questioned the debtor's petition in the bankruptcy proceeding, and as Western acted through its employees Woodall and Wright. Therefore, they were obligated to conform to the court's orders.

Appellants contend that the dismissal of the bankruptcy case in the District Court, in Re Gotfried, 45 F.Supp. 939, necessitates the dismissal of the ancillary contempt proceedings. Such a result occurs only in cases of civil contempt where the disposal of the original cause settles the rights of the parties, and the complainant is entitled to no further relief through punishment for contempt. In a proceeding for criminal contempt to vindicate the authority of the court, the outcome of the main case does not affect the conviction for contempt. Gompers v. Bucks Stove & Range Co., 221 U.S. 418, 31 S.Ct. 492, 55 L.Ed. 797, 34 L.R.A.,N.S., 874; Worden v. Searls, 121 U.S. 14, 7 S.Ct. 814, 30 L.Ed. 853; Salvage Process Corp. v. Acme Tank Cleaning Process Corp., 2 Cir., 86 F.2d 727; Eustace v. Lynch, 9 Cir., 80 F.2d 652.

Despite the fact that disobedience of the order would constitute contempt, the procedure below will not support a criminal judgment. § 41 of the Bankruptcy Act, 11 U.S.C.A. § 69, provides that in proceedings before a referee a person shall not disobey any lawful order, that if he does, the referee shall certify the facts to the judge and shall serve upon the person an order to show cause, and that the judge shall, "in a summary...