Bennett v. Eddy
| Decision Date | 05 June 1899 |
| Citation | 79 N.W. 481,120 Mich. 300 |
| Court | Michigan Supreme Court |
| Parties | BENNETT v. EDDY ET AL. |
Error to circuit court, Bay county; Andrew C. Maxwell, Judge.
Action by Edwin T. Bennett against John F. Eddy and others for false imprisonment. Judgment for plaintiff, and defendants bring error. Reversed.
C. L. Collins and Lyon & Pierce, for appellants.
Fales & Kelley, for appellee.
In November, 1896, defendants Carrington and Eddy swore to a complaint charging plaintiff with the embezzlement of money belonging to the Tribune Publishing Company. A warrant was issued, and by virtue thereof plaintiff was arrested. A nolle pros. was afterwards entered in the case. The plaintiff claimed that defendant Cooley acted with the defendants Eddy and Carrington, and sued all of them in an action for false imprisonment, and recovered a large judgment. The case is brought here by writ of error it was the claim of defendant Cooley that he had nothing to do with the arrest and imprisonment of the plaintiff. It is the claim of all the defendants that there was probable cause for the complaint, and that it was made without malice. It is also claimed that, before the complaint was made, a full and fair statement of all the facts possessed by them was submitted to the prosecuting attorney and the assistant prosecuting attorney, who decided it was a proper case for criminal proceedings, and that the prosecuting attorney's office had full charge of the case.
Error is assigned as to the conduct of counsel in his opening statement to the jury; as to the conduct of the judge in the trial of the cause; as to the admission or nonadmission of testimony; as to the charge of the judge, and his refusal to give certain charges offered by defendants, and his refusal to direct a verdict in favor of defendants.
Prior to August, 1891, plaintiff was the owner of the Bay City Tribune. He was considerably in debt, and Mr. Cooley was upon some of his paper as indorser. In August 1891, a corporation was formed, known as the Tribune Publishing Company. Directors were elected. They were authorized by the stockholders to accept from the plaintiff the good will and all the business and assets of the Bay City Tribune in full payment of the capital stock, which was fixed at $50,000. The defendants and others became stockholders in the corporation. In January, 1892, a loan of nearly $10,000 was obtained through the agency of defendants and others, the payment of which was secured by plaintiff assigning stock at 50 cents on the dollar. In February, 1895, an arrangement was made by which preferred stock should be issued for one-half the capital stock, which should be entitled to a fixed dividend of 7 per cent. per annum. Common stock could be surrendered for preferred stock by paying in addition to the common stock one-half the face value of the preferred stock in money. This stock was to be surrendered upon certain conditions, the principal ones of which were that the debts of the company for which defendants and others had become liable were paid. After the company was organized, Mr Bennett was appointed manager, and was to have a salary of $50 a week. The president and vice president were authorized to borrow $5,000, which amount was afterwards increased to $6,000. In February, 1896, a committee made an examination and report of the business of the company, and recommended that the stockholders guaranty a credit of $4,000 upon condition that Mr. Bennett transfer to a trustee certain real estate and a life insurance policy to indemnify the stockholders against loss. This was done, and the credit guarantied. It is claimed that Mr. Bennett at this time represented the indebtedness to be less than $4,500, when it was in fact nearly $10,000 more than that amount. The business demanded more money, and in May, 1896, three chattel mortgages were given to a trustee to secure various debts,-among others, those due to employ�s of the paper,-and one chattel mortgage given to the First National Bank to secure $8,000. Shortly afterwards one of these mortgages was foreclosed, and the connection of the plaintiff with the paper ended. The defendants examined, or caused to be examined, the books of the company, and say they came to the conclusion that between February, 1895, and May, 1896, plaintiff, as shown by the books and other evidence, had collected large sums of money belonging to the publishing company, and appropriated it to his own use.
Upon the trial of this cause the plaintiff was allowed to show the transactions relating to the first organization of the company, his relations to the shareholders and the subsequent transactions of the company, and the relations of defendants to it and the plaintiff, until his connection with the company ceased. It is the claim of defendants that this testimony should have been confined to what occurred between February, 1895, and May, 1896, the period of time during which it is alleged the embezzlement occurred. It is admitted by plaintiff that the books show, and the fact was, that he drew out of the company between February, 1895, and May, 1896, more than the amount of his salary,-$50 a week. His claim is that, though the business was nominally that of the publishing company, it was actually his, and was so understood, not only by himself and his office force, but by defendants. His claim is they were anxious to have a paper maintained which should reflect their political convictions, and were willing to aid him in maintaining such a paper; that the organization of a company was a convenient form through which to carry out their purpose; and that what occurred, including the writings in the nature of defeasances, and the conveyance of the real estate and the life insurance policy by him, shows that the business was his, and that the stock was held as security, and was to be returned to him when the debts were paid. It is his claim that it was expected he would draw out of the business more than his weekly wages, to make payments upon the debts which had been guarantied or indorsed by the defendants, or some of them, and that all the amounts so drawn out by him had been so applied, and some of the money paid to the defendants, and that they understood what was done, and the method of doing it, in many of the transactions, and that he did not embezzle any of the funds belonging to the company. We think this testimony was admissible, as bearing upon the question of whether the defendants Carrington and Eddy had probable cause to believe the plaintiff guilty of embezzlement, and for making the complaint, and whether it was made by them in good faith. Probable cause involves a consideration of what the facts are, and what are the reasonable deductions from the facts. It is therefore what is denominated a "mixed question of law and fact." If the facts are not in dispute, the question is for the court. Upon the disputed facts the jury must be left to pass, but the court must determine, on the facts found, whether or not probable cause exists. Cooley, Torts (2d Ed.) 209. In this case there was a dispute between the plaintiff and defendants as to the manner in which the business was conducted, the knowledge the defendants had of the condition of the accounts, and the disposition made of the proceeds of the business, which made it necessary for the court to submit these facts to the jury.
The court allowed, over the objection of defendants, testimony to be given as to what was done with the property...
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