Geller v. Flamount Realty Corp.

Hubbs, J. This is an action against Flamount Realty Corporation and others to foreclose a real property mortgage. During the pendency of the action, a receiver of the property was appointed by an order of the Supreme Court. The order as resettled directed: “ That the defendant, Flamount Realty Corporation, and/or the officers thereof, forthwith deliver and turn over to the receiver any and all sums deposited by tenants as security under leases on the mortgaged premises herein.” Appellants Charles W. Gerstenberg and Ernest Rolph were president and treasurer respectively of the defendant-appellant Flamount Realty Corporation. Certified copies of the receivership order were duly personally served upon the appellants. They refused to comply with the terms of the order. Thereafter an order to show cause entitled in the action was granted in which the appellants were directed to show cause why they should not be punished for contempt of court for failing to obey the receivership order to turn over to the receiver the securities deposited by tenants. Upon the return of the order to show cause, they appeared by attorney in opposition to the motion, but did not file any affidavits in opposition. Thereupon, the order appealed from was granted, adjudging the appellants in contempt and imposing a fine upon each of $250. The defendant corporation was a party defendant in the action. The motion in the action to punish it for contempt resulted in an order made in the action, and not a final order in a special proceeding appealable to this *350 court. (Klasko Finance Corp. v. Belleaire Hotel Corp., 257 N. Y. 1.) The appeal by it must be dismissed, with costs. The order adjudging the individuals who were not parties to the action in contempt is a final order in a special proceeding and appealable to this court. (Rosenberg v. Rosenberg, 259 N. Y. 338.) The individual appellants contend that the order adjudging them in contempt was improperly granted, as they could not be in contempt for failure to obey the order appointing the receiver, as notice of the application for that order was not served upon them and the order itself was void as the court had no power to require them to turn over securities deposited by tenants. This appeal does not bring up for review the order appointing the receiver. The papers and proceedings upon which that order was based are not contained in the record. We have no- way of determining whether the court, in granting the order appointing the receiver, acted without jurisdiction. The order was granted in an action pending in the Supreme Court, a court of general jurisdiction, and is presumptively valid and regular. In fact, the appellants, upon the motion for the order appealed from, failed to file any papers questioning the validity or regularity of that order. In the absence of evidence to the contrary the presumption of jurisdiction and of regularity is conclusive and cannot be attacked collaterally. It is urged that the record does not disclose any proof that the securities were in the possession and control of the individual officers of the corporation who are appellants. That is true because the papers upon which the receivership order was based and which order directed them to turn over the securities are not before us. For all we know, the affidavits used upon the motion for the receivership order may have disclosed that the individual *351 appellants were personally in possession and control of such securities. In the absence of any contention to the contrary, we must presume that the court, when it granted the receivership order, had before it affidavits alleging facts which justified it in including in the order the provision which directed the individual appellant officers of the corporation to turn over to the receiver the securities in question. If the individual appellants had the securities in their possession as officers of the corporation and refused to turn them over, they were assisting the corporation defendant in violating the order and are liable for civil contempt. (Fletcher, Cyclopedia Corporations, vol. 5, p. 5569, and cases cited.) If appellants did not desire to obey the order, they should have moved to vacate or modify it. (Civ. Prac. Act, §§ 897, 898.) They could not legally determine for themselves that it was void and refuse to obey it. Having done so, they cannot now urge facts or arguments which might have led to a modification of the order if presented to the court for that purpose. The order, so far as we are able to determine from the record before us, was not void and it cannot be reviewed upon this appeal in order to relieve appellants from punishment for disobeying it. (Koehler v. Farmers & Drovers Nat. Bank, 6 N. Y. Supp. 470; affd., 117 N. Y. 661; Daly v. Amberg, 126 N. Y. 490, 495; People ex rel. Day v. Bergen, 53 N. Y. 404; Ketchum v. Edwards, 153 N. Y. 534; Lawson v. Tyler, 98 App. Div. 10.) As the contempt with which the individuals are charged is a civil contempt and no proof of damage was offered, the court was without jurisdiction to impose a fine of over $250 against them, jointly and severally. (Judiciary Law [Cons. Laws, ch. 30], § 773; Socialistic Co-op. Pub. Assn. v. Kuhn, 164 N. Y. 473.) The orders should be modified by reducing the fine imposed to $250 against the corporation and individuals, *352 jointly and severally, and as so modified affirmed, without costs. The appeal of the corporate defendant should be dismissed, with costs.