                                 No. 82-377
                                  &  82-378
                IN THE SUPREME COURT OF THE STATE OF MONTANA




M. E. WALTERS ,
               Plaintiff,


PAUL CAMPEAU,

                Defendant and Appellant,
FRED G. CARL AND JOAN A. CARL,
                Defendants and Respondents,
    and
WILLIAM P. CHILCOTE,
                Petitioner and Ap2ellant.



ORIGINAL PROCEEDING : &
APPEAL FROM: District Court of the Fourth Judicial District,
              In and for the County of Missoula,
              The Honorable Jack L. Green

COUNSEL OF FGCORD:
      For Petitioner/Appellant:

                James J. Benn; Boone, Karlberg       &   Haddon, Missoula,
                Montana (argued)
      For Respondents:
                Moses Law Firm; Charles Moses (argued), Billings,
                Montana
                McChesney and Borg, Missoula, Montana
                William R. Baldassin, Missoula, Montana


                                                             -      ---
                                                                     --

                                 Submitted:      MaY 311 1983
                                  Decided:       September 2 , 1983



Filed:    SEP 2 - 1983



                                              ----
                         Clerk
Mr. Justice Fred J. Weber delivered the Opinion of the Court.

      William P.    Chilcote     (Chilcote), not a party         to   the
original action, seeks a Writ of Review and appeals from the
determination by the District Court of the Fourth Judicial
District, Missoula County, that Chilcote was in contempt of
court, and that Fred G. Carl and Joan A. Carl (Carls) should
therefore have judgment against him for $40,350.              We reverse
the judgment of the District Court.
      While   a   number   of    issues   have   been     stated by   the
parties, we restate the controlling issue:           Does the evidence
support the findings of the District Court, its conclusion of
contempt by Chilcote, and its judgment of $40,350 against
Chilcote?
      The Carls entered into a contract for the construction
by   Paul Campeau     (Campeau) of       four duplexes in Missoula,
Montana.    During construction, a mechanic's lien was filed by
plaintiff Walters.     Walters obtained summary judgment against
Campeau and is no longer a party to the controversies between
Campeau and Carls.
      After trial of the claims for relief by Carls against
contractor    Campeau,     the   Carls    obtained   judgment    against
Campeau    on April    27,   1981   for    breach    of   contract.   The
District Court ordered that the necessary repairs be made to
correct substantial defects in the four duplexes, Campeau was
ordered to pay to Carls the cost of the correction, repairs
and related expenses, the total of which was not to exceed
$30,000 per unit, i.e. $120,000.          Campeau failed to complete
the improvements or payments.
      Carls recorded their $120,000 judgment against Campeau
in Richland County, Montana.              Campeau and Chilcote were
engaged in a joint venture in Richland County where they were
constructing and selling residences.                        The Campeau-Chilcote
joint venture had nothing to do with the Missoula County
construction         contract,     and     Chilcote         d.id not    in    any    way
participate in the construction of the Carls' Missoula County
duplexes.
          In order to obtain title insurance required for the sale
of the Richland County houses, Chilcote personally borrowed
$120,000 from First National Bank in Missoula and deposited
that $120,000 in Richland National Bank of Sidney, pursuant
to    a    written     agreement     between          the    title     and   abstract
companies and the bank whereby the $120,000 would protect the
title to the Richland County properties against the Carls'
judgment.          That agreement provided that Chilcote was to be
treated as the sole owner of the fund and that all funds were
to be returned to Chilcote upon termination of the trust
account.
      Next     the     Carls   moved       the    District       Court       to   force
Campeau's compliance with the April 27, 1981 court order.                             A
hearing was held.             The District Court issued an order on
November 4, 1981, allowing Campeau to complete the repairs to
the       duplex    under    supervision         of    designated       architects.
Security for payment of materialmen and subcontractors was
ordered       in     the    form    of      an    interest-bearing            account
established in the amount of $60,000.                        Campeau's attorney,
William Baldassin, was to maintain the account in the name of
William Baldassin, Trustee, to be used to pay materialmen and
subcontractors.             That   order    also       required      the     Carls   to
release the property in Richland County from the lien of the
April 27, 1981 judgment, so that "the defendant Campeau's
funds can be released from the sale of the residences and be
transmitted to Mr. Baldassin as Trustee."                      The order did not
name Chilcote in any manner and did not require or prohibit
any conduct on his part.
       Pursuant to the November, 1981 order, Carls executed
partial       releases       of     judgment       on   the      Richland     County
properties. The releases were forwarded by Carls' counsel to
Mr.    Baldassin,         Campeau's        counsel.           Campeau's      counsel
forwarded the releases to the abstract company in Sidney.                          In
his    letter       forwarding      the releases, Baldassin asked                 the
abstract company to "notify the bank that the judgments have
been released and that they [the bank] can release all monies
held in the Chilcote account to me for deposit in my trust
account. I'
       At     this    point       the    testimony      and      understanding    of
Campeau's attorney, the abstract company and the bank is at
variance.       The attorney's letter to the abstract company did
not condition recording of the releases upon the receipt by
the    attorney        of     the       $60,000,     but      instead      requested
notification of the bank that it "can release" all monies
held in the Chilcote account for deposit in the attorney's
trust account.            The attorney testified that he understood
that    he    was    to     receive      the   $60,000      in    return    for   the
releases, and that he was not aware of any misunderstanding
on this point between the officers of the abstract company or
the bank       and    himself.          In contrast, the officer of the
abstract company testified that he did not understand this to
be a conditional delivery of the releases, and he therefore
recorded the releases, advised the bank of that recording,
and furnished them a copy of the attorney's letter.                         In turn,
the    bank    officer      testified       that he        contacted    his    legal
counsel, who advised him to return the $120,000 to Chilcote,
which he did.
        The sales of the Richland County houses were completed
and Chilcote received the net sales proceeds, as well as the
balance     of   the        $120,000   deposit      in    the   Richland   Bank.
Chilcote repaid his $120,000 personal loan to the Missoula
bank.
        On November         23, 1981 he paid         $60,000 to Campeau as
Campeau's share of their joint venture profits in Richland
County.     This is the action which the District Court found to
be contemptuous in that it frustrated the November 4, 1981
order of the court requiring that $60,000 be held in a trust
account with Mr. Baldassin as trustee.                     While Chilcote was
not     involved   in        the   Missoula    County       construction,    the
contract problems or the court action between the Carls and
Campeau, Chilcote was aware of the plan for a $60,000 trust
account with Mr. Baldassin as trustee.                    Chilcote's testimony
with regard to his $60,000 payment to Campeau is as follows:

        "Q. You had some awareness of the supplementary
        hearing in October, did you not? A. Yes.
        "Q. And you know               that   Mr.    Baldassin     wanted
        $60,000? A. Yes.

        "Q. But did you have any knowledge that anyone had
        required you to provide that $60,000 to any of
        them? A. No.
      "Q. What did you do with the money that Mr.
      Campeau had coming out of the proceeds of the sale?
      A. In November, you mean?
        "Q. Yes.       A.     I paid it to him.          He's got all the
        money.
        "Q. At the time you paid it to him because you
        knew generally what was going on, did you tell him?
        A.   - - - - him he better get that money - -
             I told                                down and
        Live - - - Baldassin, right, Bill?
             it to Bill
        "Q. Did he acknowledge to you that he would do
        that?   A. He said he wasn't going to get me in
        trouble.
        "Q. That didn't prove to be accurate, did                      it?
        A. No."  (emphasis added)
      Campeau    paid     $2,650     to    the     Carls     and    $17,000   to

Baldassin, which was deposited in the trust account.                    Campeau
then disappeared and none of the parties were able to bring
him before the court during the balance of the proceedings.

At   oral argument counsel advised                 the   court that Campeau
apparently was in Australia.
      On December 30, 1981, Carls petitioned the District
Court to      find Baldassin, Campeau and                Chilcote guilty      of
contempt for failure to obey the supplemental order.                          By
order filed August 2, 1982, the District Court concluded that
Chilcote "frustrated the order of this Court and prevented
its execution and should be held in contempt of this Court
and required to comply with the order               . . . dated November      4,
1981. "     Judgment in favor of Carls was entered on August 10,
1982 against Chilcote in the amount of $40,350, together with
costs of suit.
      Chilcote then petitioned for a Writ of Review and also
appealed.      This consolidates challenges to the finding of
contempt and        to   the money       judgment.        Does the evidence
support the holding of contempt by the District Court?
      The    rule    with   regard        to   our       review    of   contempt
proceedings     is well     stated in our opinion in Matter of
Graveley (1980),              Mont   .         ,   614 P.2d 1033, 1039, 37
St.Rep. 1261, 1267, as follows:
      "It is the rule that on review of contempt
      proceedings, the Supreme Court determines only
      whether    the   District   Court  acted   within
      jurisdiction, and whether or not the evidence
      supports the finding and order. State - District
                                            v.
      Court of Twelfth Judicial Dist. (1968), 151 Mont.
      41, 4 3 7 438 P.2d 563; State v. Second Judicial
      Dist. Court (1935), 99 Mont. 209, 41 P.2d 1113."
      Chilcote does not contend that the court does not have
jurisdiction because he is not a party to the proceeding
between the Carls and Campeau.            Graveley establishes there is
no such limitation in Montana.      In that case, the sheriff who
was neither a party nor otherwise present in the courtroom
was nonetheless found guilty of contempt for his disobedience
of the order of the court.
     The specific statute which applies is section 3-1-501,
MCA, which in pertinent part states:
     "(1) The following acts or omissions in respect to
     a court of justice or proceedings therein are
     contempts of the authority of the court:


     " (e) disobedience of any lawful judgment, order,
     or process of the court;


     "(i) any other unlawful interference with                the
     process or proceedings of a court;"
     The pertinent portions of the District Court's August 2,
1982 findings of fact are as follows:
                             XIV.

     "However the court finds that Mr. William Chilcote
     knew of the order of this Court and the
     requirements thereof through his attorney, through
     conversations and agreements with Mr. Campeau and
     through conversations with Mr. William Baldassin;          .
       .
     . The Court further finds that Mr. Chilcote paid
     to Mr. Campeau two checks in the amounts of $45,000
     and $15,000, making a total of $60,000, from the
     sale of said residences;


    "That William Chilcote not only knew of the order
    of this Court and the requirements of said order,
    but contrary to such order did the things and
    performed the acts as herein described, frustrating
    the Court's order and enabling Mr. Campeau to not
    perform the improvements upon the premises, and
    prevented the delivery of $60,000 to be placed in
    trust as required by the order."
     Section   3-1-501,   MCA    requires      that   there     be   a
disobedience of   a   judgment, order     or   process, or      other
unlawful interference with process or proceedings.       There was
no judgment, order or process in any manner directed to
Chilcote individually, and in the absence of any finding by
the court that there was a disobedience of a judgment, order
or process, it is clear that the facts do not substantiate a
finding of contempt under section 3-1-501(l)(e), MCA.
      Therefore,      we   must    conclude    that    the   court   found
Chilcote guilty of contempt under subparagraph (i), by some
unlawful interference with the process or proceedings of the
court.     There is nothing in the findings or in the evidence
which shows any unlawful interference on the part of Chilcote
with the process or proceedings, unless the facts can be
stated in such a manner as to show that Chilcote in some
manner interfered with the deposit of the $60,000 in Mr.
Baldassin's trust account.           We here make reference to the
above-quoted testimony on the part of Chilcote.              There is no
evidence to contradict his testimony that he told Campeau
that "he better get that money down and give it to Bill
Baldassin."       Campeau advised Chilcote he would not get him in
trouble, which is of course exactly what he did.
      In analyzing the evidence and the findings, we do find
evidence to sustain the conclusion of the District Court that
Chilcote knew of the requirement for the $60,000 deposit with
Mr.   Baldassin.       The    facts also      show that there was no
requirement by order, instruction or otherwise, that Chilcote
deliver the $60,000 to Campeau's attorney, rather than to
Campeau    himself.        There   are   no    facts   to    support   the
conclusion of the District Court that Chilcote frustrated the
court's order and prevented the $60,000 from being placed in
trust.     The facts only show that Chilcote delivered the
$60,000 to Campeau with instructions to deliver the same to
his own counsel, Mr.          Baldassin.       Unfortunately, Chilcote
trusted Campeau when Campeau was not worthy of that trust and
"left the country."          In a similar manner, the Carls, their
attorney    and    the District Court also extended             trust to
Campeau, believing that he would complete the construction
according to his obligations and make payments as required.
Unfortunately he proved unworthy of that trust.
    We    can understand and sympathize with      the sense of
frustration on the part of the District Court, which devoted
so much time and effort to work out a just solution of the
controversies between the Carls and Campeau, and concluded
with the unfortunate result that by court order the liens on
the Richland County property had been released and yet the
$60,000 had not been deposited in trust for the protection of
the Carls.   It is clear that there was a frustration of that
order of the District Court.   The facts show that it was Mr.
Campeau (and not Mr. Chilcote) who frustrated the court's
order and failed to deliver the entire $60,000 as he was
required to do.     Clearly Campeau was in contempt of the
court.    Clearly Chilcote did not prevent the payment by
Campeau of the $60,000 into trust by his delivery of the
funds to Campeau with     instructions they be delivered to
Campeau's own attorney.
    We therefore hold that there is not sufficient evidence
to support the finding and order of contempt.     As a result,
the judgment for $40,350, together with costs of suit, must
fall.    Having reached this conclusion, there is no need to
address the other issues raised by the parties.
    We reverse the finding and order of contempt on the part
of Chilcote, reverse the judgment entered       for the Carls
against Chilcote, and remand for appropriate action by the
District Court.
We concur:


au.@ad
Chief Justice




Justices
Mr. Justice John C. Sheehy dissenting:


     I dissent.


     In this case, Chilcote, knowing of the existence and
provisions of the District Court order, is guilty of an
unlawful interference with the proceedings of the District
                             , .



Court.
                             k)
          Section 3-1-50 (i), MCA.          For such contempt, he is
liable to the power of the District Court, even though he is
not a party to the underlying action.                The power of the
District Court reaches to any person or officer who is in
contempt of the authority of the court by misbehavior in
office or by any other unlawful interference with the process
of proceedings of       the court.         See McPartlin v.     Fransen
(1978), 178 Mont. 178, 582 P.2d 1255.
    This Court is failing to recognize that a district court
has the power to enforce its order by contempt proceedings.
Our statutes recognize this, when they include:
     "Section 3-1-520. Imprisonment to compel perform-
     ance.   When the contempt consists in [sic] the
     omission to perform an act which is yet in the
     power of the person to perform, he may be
     imprisoned until he shall have performed it.     In
     that case, the act must be specified in the warrant
     of commitment."
    What the District Court was doing in this case was
attempting to follow the provisions of our statutes with
respect to its power.              We should modify the order of the
District Court in this case so that a fine is levied against
Chilcote for his past contempt in frustrating the lawful
order    of   the   court,    and     imprisonment   ordered   until   he
performs the act which the District Court had decreed in its
order, unless it is now beyond his power to do so.
      In a civil contempt proceeding, a fine is imposed as
punishment for past contemptuous conduct and imprisonment is
ordered where the defendant refuses to do an affirmative act
required by an order mandatory in its nature.          See U. S. v.
Montgomery      (D. Mont.   1957), 155 F.Supp.     633.     One who
refuses to perform a judicial order which he is able to
perform may be imprisoned until he complies with such order.
State ex rel. Lay v. District Court, Fourth Judicial District
in and for Ravalli County (1948), 122 Mont. 61, 198 P.2d 761.
      The only question before this Court is the propriety of
the District Court order holding Chilcote in contempt.        He is
in contempt as long as he does not deposit with the trustee
named in the order the sum of $60,000.        Whether eventually he
may be liable for the full amount of $60,000 to the remaining
parties is a matter of a future determination after trial by
a court.      But, at this juncture, the question before this
Court and before the District Court, is, should Chilcote have
been required to place in deposit with the trustee the sum of
$60,000?    The majority opinion goes afield from this question
and   raises    complications   which   are   unnecessary   to   its
decision.     All we have to decide here is whether Chilcote, a
nonparty, is subject to the contempt jurisdiction of the
District Court. In this case, all of us seem to recognize
that he is.    Since he is subject to the contempt power of the
court, the lawful order of the court, which otherwise appears
proper, ought to be permitted.     Otherwise, the District Court
is powerless to enforce its orders.
      I would, therefore, modify the judgment of the District
Court to require that Chilcote follow the order by depositing
$60,000 with the trustee; and, unless it is beyond his power
to do so, I would enforce the order through the permitted
fine, and to such jail time as is necessary to bring about
compliance with the court's   order.   Section 3-1-520,   MCA.
Once the money is on deposit with the trustee, the remaining
questions as to the extent of Chilcote's liability could be

litigated.
