98 U.S. 187 (1879), Stewart v. Sonneborn

Citation:98 U.S. 187, 25 L.Ed. 116
Party Name:STEWART v. SONNEBORN.
Case Date:January 06, 1879
Court:United States Supreme Court
 
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Page 187

98 U.S. 187 (1879)

25 L.Ed. 116

STEWART

v.

SONNEBORN.

United States Supreme Court.

January 06, 1879

OPINION

ERROR to the Circuit Court of the United States for the Middle District of Alabama.

This was an action brought by Meyer Sonneborn, the plaintiff below, against A. T. Stewart & Co., to recover damages for an alleged wrongful and malicious institution of proceedings in bankruptcy against him. The record shows that in the years 1865 and 1866 Sonneborn was a member of the firm of

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E. Leipzeiger & Co., in New York, and that while he was thus a member the firm bought goods on credit from A. T. Stewart & Co. Some time in 1866 he withdrew from the firm; but no notice of his withdrawal was published, and the firm continued business in its old name without any apparent change. In the spring of 1867 the defendants sold other goods on credit to E. Leipzeiger & Co., as they allege, without any notice that Sonneborn had previously withdrawn from the firm. On the other hand, he alleges that he did give personal notice of his withdrawal to one of the clerks in the defendants' store before the purchases of 1867 were made. No payment for these latter purchases having been made, the defendants in 1869 sued the plaintiff to recover the debt in the Circuit Court for Barbour County, Alabama, and after trial a verdict and judgment were given against them. This was at the August Term, 1871. From the verdict and judgment the defendants prosecuted an appeal to the Supreme Court of the State, where the judgment was reversed and a new trial was ordered. On the 12th of May, 1873, before the case came on for a second trial, one Jonas Sonneborn, a brother of the plaintiff, brought suit against him in the Eufaula city court, and one month afterwards recovered a judgment by default for $6,944.43 (the present plaintiff having made no resistance), and thereupon an execution was issued and levied. This proceeding having come to the notice of A. T. Stewart & Co. (and they having been advised by legal counsel that an act of bankruptcy had thereby been committed by Sonneborn), on the 15th of August, 1873, they filed their petition in the District Court, praying that he might be declared a bankrupt, and that a warrant might issue to take possession of his estate. They represented themselves to be creditors for the sales made to E. Leipzeiger & Co. in 1867, of which firm they averred Sonneborn was a member; and the act of bankruptcy alleged was that on the 12th of June, 1873, he suffered and permitted a judgment to be recovered against him by default in favor of Jonas Sonneborn, in the city court of Eufaula, upon which an execution had issued, whereon a levy had been made. Upon this petition a rule to show cause, &c., was awarded, an injunction issued, and a warrant for provisional seizure granted, which on the 19th

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of August, 1873, was executed. Such was the situation when the case of the defendants against the plaintiff came on for the second trial in the Barbour County Circuit Court. The result of that trial in November, 1873, was a judgment for Sonneborn, which was subsequently affirmed by the Supreme Court of the State at its June Term, 1874. It thus having been determined that the defendants were not creditors of Sonneborn, the proceedings in bankruptcy were dismissed and the present suit was brought, alleging that they had been prosecuted maliciously and without probable cause.

There was a verdict for the plaintiff for $21,000 and costs; and judgment having been entered thereon, Stewart & Co. sued out this writ of error. So much of the charge of the court below as was excepted to by the defendants, and also the instructions requested by them and refused, are set forth in the opinion of the court.

COUNSEL

Mr. Roscoe Conkling for the plaintiffs in error.

This action cannot be maintained without averring and proving malice. Benson & Co. v. McCoy, 36 Ala. 710; McKellar v. Couch, 34 id. 336;McLaren, Ragan, & Co. v. Bradford, 26 id. 616; Lindsay v. Larned, 17 Mass. 191; McCullough v. Grishobber, 4 Watts & Serg. (Pa.) 201; Stone v.Swift, 4 Pick. (Mass.) 389; Garrard v. Willett, 4 J. J. Marsh. (Ky.) 630; White v. Dingley, 4 Mass. 433; Turner v. Walker, 3 Gill & Johns. (Md.) 377; Morris v. Corson, 7 Cow. (N. Y.) 281; Ives v. Bartholomew, 9 Conn. 309; Marshall v. Betner, 17 Ala. 832; Tatum v. Morris, 19 id. 302; Vandryen v. Linderman, 10 Johns. (N. Y.) 106; De Medina v. Grove, 10 Ad. & Ell. N. S. 152; Churchill v. Liggers, 3 Ell. & Bl. 937; Olinger v. McChesney, 9 Leigh (Va.), 660.

The mere wrongful resort to legal process affords no ground of action. It isdamnum absque injuria, the costs being cast upon the unsuccessful party, 'as a satisfaction to the defendant for the inconvenience of being held to defend a groundless suit.' McKellar v. Couch, supra.

The misuse of legal process must have been both wrongful and malicious; but the whole charge of the court ignores the essential requisite of proof of malice, while those particular portions of it to which exception was taken assert Sonneborn's

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right to recover actual damages, although the misuse of legal process against him was not malicious.

Costs are the only damages allowed to the successful defendant in a civil suit, when there is no malice on the part of the plaintiff; except where other damages are expressly allowed by special statute,--such as in suits on attachment, injunction, detinue, and other bonds.

Counsel fees expended by the plaintiff in prosecuting or defending his cause cannot be allowed as part of the damages. Arcambel v. Wiseman, 3 Dall. 306; Day v. Woodworth et al., 13 How. 363; Teese et al. v. Huntingdon et al., 23 id. 2; Whittemore v. Cutter, 1 Gall. 429; Blanchard Gun-stock Turning Factory v. Warner, 1 Blatchf. 258; Pacific Insurance Co. v. Conard, Baldw. 138; Simpson v. Leiper, 2 Whart. Dig. 414; Stimpson v. The Railroads, 1 Wall. Jr. 164; Oelrichs v. Spain, 15 Wall. 211.

Mr. Philip Phillips, contra.

The judgment of the State court in favor of Sonneborn is conclusive that Stewart & Co. were not his creditors. They had, therefore, no probable cause for instituting proceedings in bankruptcy against him. What constitutes probable cause is a question of law, and the want of it implies legal malice.

Malice in fact differs from malice in law in this: the former denotes ill-will to an individual; the latter, a wrongful act, intentionally done, without just cause. Bronage v. Prosser, 4 Barn. & Cress. 321; Watson v. Moore, 2 Cush. (Mass.) 140.

The law implies malice when there is not proof to extenuate an act which has been rashly and indiscreetly done. Long v. Rodgers, 19 Ala. 321.

It results from this distinction: that when the malice is only such as in inferred from a groundless act, and there is no proof of actual malice, none but compensatory damages are allowed; and they include actual injury to property, loss of time, pecuniary expenses, counsel fees, and any other loss suffered. Burnett v. Reed, 51 Pa. St. 190.

In all cases, unless the trespass was caused by inevitable accident, the party in default must respond in damages, the intent being only material in aggravation or mitigation of them.

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Sedgwick, Damages, 660; Tracy v.Swartwout, 10 Pet. 80; Bates v. Clark, 95 U.S. 204.

The court, having limited the counsel fees to those incurred in resisting the proceeding in bankruptcy, was not required to instruct that they should not be allowed in another and different proceeding.

The court thus disposed of that question fairly and distinctly, and was not bound to charge the jury in the manner that counsel might suggest. Indianapolis, &c. Railroad Co. v. Horst, 93 U.S. 291; Railroad Company v. McCarthy, 96 id. 258.

MR. JUSTICE STRONG, after stating the case, delivered the opinion of the court.

The errors now assigned are exclusively to the charge given by the court to the jury. The instruction given was (inter alia) as follows: 'But if they (the defendants) had no legal claim or demand against the complainant (Sonneborn), then, whether they had probable cause or not, they had no right to institute the proceedings (in bankruptcy). They cannot go back and allege that, though they had no legal claim against him, they thought they had; in other words, that they had probable cause to believe that they had such a demand. Unless they had a debt, they cannot allege probable cause for proceeding in bankruptcy at all. Their defence cannot stand on two probable causes, one on top of the other. . . . As it has been adjudicated by the Circuit Court of Barbour County, and affirmed by the State Supreme Court, that the defendants never had a legal claim against the plaintiff, and therefore had no right to institute proceedings in bankruptcy against him, the plaintiff is entitled to recover in this action the damages he has sustained by those unlawful proceedings. The court therefore rules that the defence in this case cannot be sustained by proving that the defendants had probable cause to believe that the plaintiff had committed an act of bankruptcy; but it being shown by judicial determination that they had no legal claim or debt against the plaintiff, and had, therefore, no right to institute bankruptcy proceedings, they are liable for the damages sustained by the plaintiff thereby, and the only

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question for the jury will be the amount of the damages, under the circumstances of the case. . . . We charge you, therefore, that the plaintiff is entitled to recover his actual damage, or the loss he has actually sustained at all events.' . . . And again: 'The actual damages sustained by the complainant, that you will give him a verdict for at all events.'

This construction,...

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