Balsiger v. American Steel & Supply Co.
| Decision Date | 17 September 1969 |
| Citation | 254 Or. 204,458 P.2d 932 |
| Parties | George E. BALSIGER, Jr., Appellant, v. AMERICAN STEEL & SUPPLY CO., a corporation, Timber Tractor Co., a corporation, Arthur Myrmo and Emil A. Myrmo, individually and as co-partners dba George Myrmo & Sons, and Stanley R. Darling, Otto F. Vonderheit, James L. Hershner and Garland D. Hunter, Jr., individually and as co-partners dba Darling, Vonderheit, Hershner and Hunter, Respondents. |
| Court | Oregon Supreme Court |
Richard Bryson, Windsor Calkins and Johnson, Johnson & Harrang, Eugene, for the petition.
Before PERRY, C.J., and McALLISTER SLOAN, O'CONNELL, * GOODWIN, * DENECKE and HOLMAN, JJ.
Defendants Darling, Vonderheit, Hershner and Hunter have filed a petition for rehearing. They contend that we have confused the remedies of malicious prosecution and libel and that we erroneously relied on § 678 of the Restatement of Torts which is but an extention of the general rule of § 674 which, in turn, is contrary to the rule of Carnation Lbr. Co. v. McKenney et al, 224 Or. 541, 356 P.2d 932 (1960).
We intended to hold that the filing of a bankruptcy petition necessarily caused such interference with the property of the debtor as to give rise to an action for malicious prosecution. Though there is no actual seizure of property or appointment of a trustee, the alleged bankrupt's property is in limbo, because the trustee's title, if and when appointed, reverts back to the date of the filing of the petition in bankruptcy. 11 U.S.C.A. § 110 (Bankruptcy Act § 70). Our holding merely extended the Carnation rule to the initiation of bankruptcy proceedings because of the interference with property inherent therein. As pointed out in our original opinion, recovery has been allowed in such instances by other courts that follow the Carnation rule, but their rationale has not been uniform.
Though the analogy of libel was used and though part of the damage to the alleged bankrupt is damage to business reputation, if was not our intention to suggest that the basis for plaintiff's cause of action was libel.
Petitioning defendants are correct that § 678 is but an extension of the rule of § 674, which is inconsistent with the rule of Carnation. However, § 678 is a recognition by the Restatement that insolvency proceedings fall in a special category. Our holding would be the same in the absence of § 678.
Petitioning defendants also contend that the result of our ruling is to permit plaintiffs to recover for...
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