Donner v. Calvert Distillers Corp.

Marbury, C. J., delivered the opinion of the Court. On December 11, 1947, the appellee filed its bill of complaint in the Circuit Court for Anne Arundel County against The Mills Cut Rate Liquor Mart, Inc. and Hillard Donner, asking for an injunction enjoining and restraining the defendants, their agents, servants and employees from advertising for sale, offering for sale, or selling distilled spirits and other alcoholic beverages known as “Calvert” or “Carstairs” products at prices lower than the prices heretofore or hereafter established by the complainant for such products, pursuant to agreements or contracts made by complainant with its retail dealers in the State, the schedule of minimum resale retail prices forming a part thereof. The bill also prayed that the complainant recover from the defendant all damages, costs and expenses suffered by them due to the unlawful acts of the defendants. These unlawful acts are recited as being the sale of a fifth gallon bottle of “Lord Calvert” whisky for less than the minimum price fixed by the Maryland Fair Trade Act, Chapter 239 of the Acts of 1937, codified as Sections 102 to 110 of Article 83 of the Code.

With the bill of complaint was filed as an exhibit, an agreement made by the appellee with James C. Corkran, a retailer in the State, which was stated to be one of ⁴⁸¹ approximately 300 such contracts in force. There was also filed as an exhibit the appellee’s list of minimum resale prices. At the top of this list is stated: “Bottle Cost To Consumer (Includes All Federal and State Taxes Except as Otherwise Noted).” “Calvert Reserve” is listed at $3.95 a fifth, and it is also stated on the list that the prices are in effect as of May 19, 1947, and will be effective until further notice. There is another notation that prices do not include the Baltimore City sales tax.

The defendants admitted the allegations of the bill and consented to the passage of a decree, and thereupon the decree of January 28, 1948 was filed. That decree permanently and perpetually enjoined and restrained the two defendants, “their agents, servants and employees, and all persons acting under their authority or control” from selling in the State, inter alia, Calvert distilled spirits sold under or bearing the trade marks of “Lord Calvert”, “Calvert Reserve”, etc., “at prices lower than the prices heretofore or hereafter established by the plaintiff for such products pursuant to the agreements or contracts made by the plaintiff with retail dealers in the State of Maryland under the authority of the Maryland Fair Trade Act of which the defendants shall have had due notice.” On January 3, 1949, the appellee filed in the case its petition alleging that the defendants had violated the decree by a sale of a pint bottle of “Calvert Reserve”, on December 18, 1948, below the minimum resale retail price established. Defendants answered saying that they did not wilfully violate the order, and, after testimony, the corporate defendant was, on March 3, 1949, adjudged in contempt for violating the terms of the decree and directed to pay a fine of $250 and costs. On December 10, 1949, a second contempt petition was filed by the appellee.

It showed that on May 1, 1949, the liquor license heretofore issued to Hillard Donner, trading as Mills Cut Rate, was re-issued to Hillard Donner and Joseph Donner. It also stated that in June, 1949, appellee revised its minimum resale retail prices, effective ⁴⁸² July 1, 1949. In that revised price list, as shown by the schedule, “Calvert Reserve” was still listed at $3.95 a fifth, and the same notation about Federal and State taxes and the Baltimore City sales tax was contained in this schedule. It was alleged in the petition that, with full knowledge of these prices and of the injunction, the defendants and Joseph Donner on October 29, 1949, sold a fifth of “Calvert Reserve” for $3.95, whereas the minimum resale retail price was $3.95 plus 8c sales tax, arid, on November 1, 1949, sold a fifth of “Calvert Reserve” for $3.75, and again on November 5, 1949, sold a fifth of “Calvert Reserve” for $3.95.

The prayer of the petition was that the two original defendants and Joseph Donner show cause why they should not be punished for contempt, and an order to that effect was passed. The three parties named answered, the two original defendants together, and Joseph Donner separately, and testimony was taken before the court on March 3, 1950. On April 6, 1950, the court filed a memorandum and order finding that Hillard and Joseph Donner had notice of the decree, had notice of the minimum prices established by the plaintiff, and that they both sold liquor at prices less than the established minimum prices, and they were held in contempt of court. The corporate defendant was not held as it appeared that it was no longer conducting the business.

Hillard Donner was fined $1,500 and Joseph Donner $500. From this order this appeal comes here. The Maryland Fair Trade Act has been before this court in several cases, Goldsmith v. Mead, Johnson & Co., 176 Md. 682 , 7 A. 2d 176 , 125 A. L. R. 1339; Schill v. Remington Putnam Book Co., 179 Md. 83 , 17 A. 2d 175 , 22 A. 2d 128 ; Schill v. Remington Putnam Book Co., 182 Md. 153 , 31 A. 2d 467 , 32 A. 2d 296 ; and Hutzler Bros. Co. v. Remington Putnam Book Co., 186 Md. 210 , 46 A. 2d 101 , 163 A. L. R. 884.

These cases had to do with the validity and construction of the act, and the questions involved were raised on injunction suits. The case before us is the first case in which we have had ⁴⁸³ before us an adjudication and fine for contempt for the. violation of such an injunction. Actions for contempt of court can be either civil or criminal, and the same act may be the subject of both kinds of proceedings. The distinction was made in the case of Bessette v. W. B. Conkey Co., 194 U. S. 324 , 24 S. Ct. 665 , 48 L. Ed. 997 , where the Supreme Court quoted a statement of Judge Sanborn in Re Nevitt, 8 Cir., 117 F. 448 , 54 C. C. A. 622 .

This quotation was re-quoted by this court in the leading case of Kelly v. Montebello Park Co., 141 Md. 194 , 118 A. 600, 601 , 28 A. L. R. 33, and is in part as follows: “Proceedings for contempts are of two classes, those prosecuted to preserve the power and vindicate the dignity of the courts and to punish for disobedience of their orders, and those instituted to preserve and enforce the rights of private parties to suits, and to compel obedience to orders and decrees made to enforce the rights and administer the remedies to which the court has found them to be entitled. The former are criminal and punitive in their nature, and the government, the courts and the people are interested in their prosecution. The latter are civil, remedial and coercive in their nature, and the parties chiefly in interest in their conduct and prosecution are the individuals whose private rights and remedies they were instituted to protect and enforce.” In the Kelly case, the question was whether an order imposing fines upon three people who had violated an injunction was appealable. At the time the case was decided, there was no statutory appeal in contempt cases such as is now provided.

See In re Lee, 170 Md. 43, 46 , 183 A. 560 . Kelly and his wife had been preliminarily enjoined from erecting a garage. They disobeyed the order, and, with the third party fined, who was not a party to the original proceeding, but who had knowledge of the injunction, they constructed the garage. If the order holding them in contempt was civil in its nature, then it was interlocutory, and could only be considered on appeal from a final decree after the latter ⁴⁸⁴ had been entered.

On the other hand, if the order was criminal, it constituted an independent and distinct proceeding, even though it was filed in the equity case, and there was no appeal provided in such a proceeding. The case was brought to prevent the garage from being erected within 75 feet from the front street line of a lot, but the court held that notwithstanding the interest of the Montebello Park Co. in the enforcement of the building line, the order passed was for a criminal contempt. It said that the offense consisted in the doing of an act forbidden by the writ, and the sentence was not remedial but distinctly punitive. It added that there was nothing in the contempt proceeding indicating that the parties treated it as a proceeding for civil contempt, there was no petition praying for remedial relief, the fines were not made payable to the parties injured, and the only purpose of the order imposing them was to vindicate the authority of the court.

The court, in considering the case, discussed the leading case of Gompers v. Bucks Stove & Range Co., 221 U. S. 418 , 31 S. Ct. 492 , 55 L. Ed. 797 , and quoted at length from Mr. Justice Lamar who delivered the opinion in that case. The quotation in part is as follows: "It is not the fact of punishment but rather its character and purpose that often serve to distinguish between the two classes of cases. If it is for civil contempt the punishment is remedial, and for the benefit of the complainant. But if it is for criminal contempt the sentence is punitive, to vindicate the authority of the court.

It is true that punishment by imprisonment may be remedial, as well as punitive, and many civil contempt proceedings have resulted not only in the imposition of a fine, payable to the complainant, but also in committing the defendant to prison. But imprisonment for civil contempt is ordered where the defendant has refused to do an affirmative act required by the provisions of an order which, either in form or substance, was mandatory in its character. Imprisonment in such cases is inflicted not as punishment, but is intended to be remedial by coercing the defendant ⁴⁸⁵ to do what he had refused to do. The decree in such cases is that the defendant stand committed unless and until he performs the affirmative act required by the court’s order.” In the Gompers case, the respondents were ordered imprisoned for a fixed period, and on appeal, the Court of Appeals of the District of Columbia affirmed, after holding that the proceeding was one for criminal contempt.

The Supreme Court reversed, holding that the contempt proceedings were instituted and titled, tried, and, up to the moment of sentence, treated as part of the original case in equity, that the Bucks Stove and Range Co. was the actual and not the nominal party. These were not controlling facts, but were to be considered along with others, but the court held that the prayer of the petition was significant and determinative. That prayer was that the petitioner (that is, Bucks) might have such other and further relief as the nature of its case might require. The court held that was practically the equivalent of asking for a fine payable to itself, the case was one of civil contempt rather than criminal contempt, and the sentences were erroneously entered as if it were the latter type of proceeding.

It may be noted that in the case before us, the prayer in the petition contains no suggestion of relief to the complainant (appellee here), nor any suggestion that there should be any fine or other payment coming to it. In a recent case, United States v. United Mine Workers of America, 330 U. S. 258 , 67 S. Ct. 677, 695 , 91 L. Ed. 884 , the defendant, a body corporate, and John L. Lewis, its president, were restrained from encouraging mine workers to interfere with the operation of the bituminous coal mines by strike or cessation of work. At the time of this injunction, the United States was operating the mines. The injunction was temporary, pending the hearing, but before it was heard, the miners commenced to walk out and a full-blown strike was in progress.

Thereupon, the United States filed a petition in the District Court for the District of Columbia, asking that the ⁴⁸⁶ United Mine Workers and Lewis be punished for contempt. One defense of Lewis and the union was that the Norris-LaGuardia Act, 29 U. S. C. A. § 101 et seq., prohibited the granting of the temporary injunction. This was overruled by the court, and, after a trial, the defendants were found guilty of both criminal and civil contempt. Lewis was fined $10,000 and the union $3,500,-000.

When the case reached the Supreme Court, the majority of the court sustained the conviction and fine against Lewis, but reduced the fine against the union to $700,000 which was for criminal contempt, and made the other $2,800,000 a coercive fine for civil contempt by providing that it should be conditional on the union’s failure to purge itself of contempt within a specified time. The court held that the Norris-LaGuardia Act did not prevent the granting of the preliminary injunction, but it also held that even had its conclusion on this point been the other way, the District Court had power to preserve existing conditions while it was determining its own authority to grant injunctive relief, and said: “The defendants in making their private determination of the law, acted at their peril. Their disobedience is punishable as criminal contempt.” In discussing this subject, the court quoted at length from the opinion of Justice Holmes in U. S. v. Shipp, 203 U. S. 563 , 27 S. Ct. 165 , 51 L. Ed. 319 , and mentioned a number of other Supreme Court cases, finally stating: “We insist upon the same duty of obedience where, as here, the subject matter of the suit, as well as the parties, was properly before the courtwhere the elements of federal jurisdiction were clearly shown; and where the authority of the court of first instance to issue an order ancillary to the main suit depended upon a statute, the scope and applicability of which were subject to substantial doubt.” The court also clearly distinguished the difference between civil and criminal contempt, although it held that both might be included in the same case, and said: “It does not follow,' of course, that simply because a defendant may be punished for criminal contempt for ⁴⁸⁷ disobedience of an order later set aside on appeal, that the plaintiff in the action may profit by way of a fine imposed in a simultaneous proceeding for civil contempt based upon a violation of the same order. The right to remedial relief falls with an injunction