Brown v. Bailey

• Decision Date: 02 August 1949
• Docket Number: 16245.
• Citation: 54 S.E.2d 769,215 S.C. 175
• Parties: BROWN v. BAILEY et al.
• Court: South Carolina Supreme Court

54 S.E.2d 769

215 S.C. 175

BROWN v. BAILEY et al.

No. 16245.

Supreme Court of South Carolina

August 2, 1949

[Copyrighted Material Omitted]

O. L. Long, Laurens, C. T. Graydon, Columbia, for appellant.

Blackwell Sullivan & Wilson, Laurens, Price & Poag, Greenville for respondents.

OXNER, Justice.

This is an action for malicious prosecution. The appeal is by the plaintiff from an order of nonsuit granted at the close of her testimony. The prosecution complained of was upon a charge of forgery. The primary question for determination is whether want of probable cause may be reasonably inferred from the testimony.

For a long period of years certain heirs of the late M. S. Bailey as partners under the firm name and style of M. S. Bailey & Son, Bankers, conducted a banking business in the town of Clinton. It was managed by W. J. Bailey who owned the controlling interest and was designated as president. He was also a large stockholder in and president of two cotton mills at Clinton and had other large business interests.

H. W. Simmons occupied an office and had a used car lot across the street from the bank. In addition to buying and selling used cars, he conducted a small loan business and was also engaged in various other activities. The record does not definitely show when he commenced doing business. During 1943 and 1944, he was extensively engaged in buying from the public U. S. Savings Bonds at a considerable discount, paying $15.00 for bonds in the denomination of $18.75; in purchasing 'looneys' from employees of the two mills of which Bailey was president at a 20% discount; and in selling cloth manufactured at these mills at above ceiling prices. It appears that 'looneys' are tokens issued to mill employees in advance of the regular payday, which are later redeemed by the mill at face value. Credit for the operation of Simmons' business was obtained at the bank which discounted practically all notes and chattel mortgages taken by Simmons. His financial transactions with the bank were at times handled very irregularly. Frequently cash was obtained by sending mere informal written orders or notes to the bank, some of which were never entered upon the books but carried as cash items. Usually the account of Simmons was heavily overdrawn. According to appellant's testimony, W. J. Bailey either visited Simmons' office or called over the telephone almost daily and the business, while in the name of Simmons, was actually operated for the personal benefit of W. J. Bailey.

Mrs. Elsie Bryson, a sister of the appellant, commenced working for Simmons in a clerical capacity in 1941. She was a high school graduate and had previous office experience. Appellant, Mrs. Virginia Brown, was employed by Simmons sometime later. She was also a high school graduate and then in her early twenties. Prior to being employed by Simmons, she worked in a hosiery mill for about three years but had never worked in an office.

Over a period of about a year, beginning in November, 1943, appellant and her sister, under instructions from and on data furnished by Simmons, falsely made up approximately one hundred and fifty notes and mortgages on automobiles, aggregating in amount more than $100,000.00, which purported to represent cars sold by Simmons. All data inserted therein, including the amount and the description of the automobile contained in each paper, was fabricated. The bank was named as payee. The names used as makers were either fictitious or those of deceased persons who had resided in that locality. The signatures were varied so as to create the appearance that each mortgage was signed by a different person. On some of these papers appellant acted as a witness and signed the probating affidavit and on others this was done by her sister. From time to time when the bank called for collateral or security to take up cash orders issued by Simmons or to cover his overdraft, fictitious mortgages would be delivered to the bank, usually along with others which were genuine and represented bona fide transactions, for which credit was duly given by the bank. Each week appellant and her sister prepared a list of all payments due on both the genuine and fictitious mortgages and forwarded same, together with the amount due, to the bank, which credited each paper with the amount paid. Finally, during the fall of 1944, according to the records of the bank, there was a default in a number of these fictitious papers. Notices were thereupon sent by the bank to the purported makers. These letters were returned by the Post Office Department with a notation that the addressees were unknown. Shortly thereafter a number of these fictitious mortgages were turned over to the bank's attorney for collection and claim and delivery proceedings were instituted for eight or ten of the cars therein described.

The Sheriff testified that when the claim and delivery papers were turned over to him, he was instructed by the bank's attorney not 'to enter them on the writ book', but to see whether the automobiles could be found, although he doubted if they were in existence; that after interviewing Simmons and Watson, one of the tellers at the bank, he sought information about these cars from appellant and her sister, who told him that he need not look for the cars as the chattel mortgages involved were fictitious papers prepared by them under the direction of Simmons; that after a further conference with the bank's attorney, he went again to see appellant and her sister, taking with him about one hundred and fifty notes and mortgages; that on this visit appellant and her sister went through all of these mortgages and separated those that were fictitious from those that were genuine; and that after the result of this second visit was reported to the bank's attorney, the claim and delivery proceedings were abandoned.

In April, 1945, about four or five months after the claim and delivery proceedings were discontinued, warrants were signed by the cashier of the bank charging Simmons, appellant and her sister with forgery. Appellant and her sister were detained in the county jail for several hours while arranging bond. Several weeks later, additional warrants charging forgery were issued against the parties but no formal arrest was necessary as bonds were promptly furnished. A preliminary hearing was demanded and held, at which the magistrate refused to dismiss the charges. At the September, 1945, term of the Court of General Sessions of Laurens County, indictments based on the warrants above mentioned were handed to the grand jury and true bills returned on all of them. A trial was had at that term of court on several of the indictments. The jury returned a verdict of guilty as to Simmons and a verdict of not guilty as to appellant and her sister. On appeal to this Court, the conviction of Simmons was reversed and a new trial ordered upon the grounds that the Court erred in the exclusion of certain testimony and made improper comments in the presence of the jury. State v. Simmons, 209 S.C. 531, 41 S.E.2d 217. As shown in that opinion, the defense of Simmons was that he directed the fabrication of these mortgages under instructions from W. J. Bailey for whose benefit, he contended, the business was conducted. The opinion further shows that Bailey specifically denied giving such instructions and disclaimed any knowledge of the fictitious character of the papers until that fact was discovered by the bank after the papers were in default.

At the September, 1947, term of court, Simmons, appellant and her sister were again tried on other indictments growing out of the fabrication of these papers. Upon the conclusion of the testimony, the presiding Judge directed a verdict of not guilty as to appellant and her sister and the jury returned a verdict of acquittal as to Simmons. At both the trials and on appeal to this Court, counsel employed by the bank assisted in the prosecution.

Shortly thereafter this action was commenced against W. J. Bailey, individually, and the partnership of M. S. Bailey & Son, Bankers. While it was pending, both W. J. Bailey and H. W. Simmons died. Appellant made a motion to make the personal representatives of W. J. Bailey parties defendant. This motion was refused and the action was continued against the surviving partners of the banking institution.

On the trial of the case now before us, appellant's sister, who also has a suit pending for malicious prosecution against respondents, assumed full responsibility for preparing most of the fictitious papers and signing the names purporting to be those of the makers. Appellant claimed that her part in these transactions consisted solely in witnessing the false signatures and signing the probating affidavits. Both admitted knowing that these alleged mortgages were pure fabrications. They asserted, however, that they did not become aware of the illegal or wrongful character of their acts until called upon by the Sheriff after the claim and delivery proceedings were instituted, and sought to excuse their conduct by saying their part in these spurious transactions was done at the direction of Simmons without any benefit whatsoever accruing to them. Appellant's counsel also sought to elicit from them an alleged statement by Simmons to the effect that these papers were being made up at the request of W. J. Bailey, but the Court excluded this testimony as hearsay. Both appellant and her sister admitted that the question of fabricating these papers was never discussed with either W. J. Bailey or any other member of the banking partnership.

Having stated somewhat at length the facts and circumstances leading up to the prosecution complained of, we shall now seek to determine whether they tend to show a want...