Brown v. Keyes
| Decision Date | 02 March 1929 |
| Docket Number | 6007 |
| Parties | HENRY BROWN, Respondent, v. PAUL C. KEYES, Receiver of the Corn Belt National Bank of Scotland, Appellant. |
| Court | South Dakota Supreme Court |
Appeal from Circuit Court, Brown County, SD
#6007—Reversed
McNulty, Williamson & Smith, Aberdeen, SD
Wicks & Quinn, Scotland, SD
Attorneys for Appellant.
Van Slyke & Agor, Aberdeen, SD
H. A. Doyle, Yankton, SD
Attorneys for Respondent.
Opinion Filed Mar 2, 1929
Appellant Keyes is receiver of the Corn Belt National Bank of Scotland, under the Comptroller of the Currency of the United States. Among the listed assets of said bank, at the time it was turned over to him as receiver, were three notes purporting to be signed by respondent Brown. Keyes, as receiver, brought suit in federal court against Brown upon one of these notes, which was in the sum of $1,000. Brown defended on the ground that said note was a forgery; and, upon trial, verdict and judgment were in his favor. Brown then brought this suit in state court against Keyes for damages for malicious prosecution. This appeal is from a judgment upon a verdict in Brown’s favor.
The elements of “malicious prosecution” have been declared by this court to be: “(1) the commencement or continuance of an original criminal or civil judicial proceeding; (2) its legal causation by the present defendant against plaintiff, who was defendant in the original proceeding; (3) its bona fide termination in favor of the present plaintiff; (4) the absence of probable cause for such proceeding; (5) the presence of malice therein; (6) damage conforming to legal standards resulting to plaintiff.” Just v. Martin Bros. Co., 476, 46; Larsen v. Johnson, 204, 197 N.W. 230; 38 C. J. 386; Chapman v. Anderson, 55 App. D.C. 165, 3 F.2d 336; Wheeler v. Nesbitt et al, 24 HOW 544, 16 LEd 765. That elements 1, 2, 3, and 6 exist in this case is undisputed. Appellant contends, however, that elements 4 and 5 are entirely lacking. That the absence of either of these two elements is fatal to such an action has heretofore been pointed out by this court. Richardson v. Dybedahl, 132, 487; Richardson v. Dybedahl, 634, 98 N.W. 164.
In Wadlington v. Coyne, this court quoted with approval from Newell on Malicious Prosecution, par. 8, as follows:
“Probable cause” has been variously defined as follows: “Probable cause, as applicable to the prosecution of a civil action, is such reason, supported by facts and circumstances, as will warrant a cautious man in the belief that his action, and the means taken in prosecuting it, are legally just and proper.” Eickhoff v. Fidelity & Casualty Co., 74 Minn. 139, 76 N.W. 1030; 18 RCL 35, citing 93 AmStRep 458. “The standard of conduct for beginning or continuing any proceeding, whether civil or criminal, is that of a reasonable or ordinarily prudent man placed in the same situation as the defendant.” 18 RCL 36. There seems to be no dispute as to where the burden of proof lies in a malicious prosecution suit. In Richardson v. Dybedahl, supra, this court said: “The burden is upon the plaintiff to show, by a fair preponderance of the evidence, both want of probable cause and that the prosecution was malicious.”
As to the amount of proof of want of probable cause which is necessary to support a judgment for maliciously prosecuting a civil action, the Supreme Court of Minnesota, in Kasal v. Picha, 156 Minn. 446, says:
In Cooley on Torts (3d Ed.) p. 351, speaking of malicious civil suits when there has been no interference with person or property, the author says:
“It is held that the want of probable cause must be very palpable and that greater latitude in the doctrine of reasonable cause must be exercised in such cases than would be permissible in an action for maliciously prosecuting a criminal case.”
Kolka v. Jones, 66 AmStRep 615, is a leading case on the extension of the law of malicious prosecution to civil actions wherein the defendant was not deprived of his liberty or property, and was not injured in his business. It was followed in so holding by this court in Teesdale v. Liebschwager, 174 N.W. 620. A careful reading of Kolka v. Jones leaves no doubt that it was the purpose of that decision to declare that legal redress might be had against “the malignant persecutor and harasser of a citizen, who, by his abuse of legal forms, causes heavy damage to such citizen, in property, reputation, and business prospects, by the unfounded suit, which he who institutes it knows full well he cannot maintain”; but “that the honest claimant should not be frightened from invoking the aid of the law by the statutory threat of a heavy bill of costs against him in case of defeat.” Although some courts have criticized the rule which requires the absence of probable cause to be very palpable, as stated in Kasal v. Picha, supra, we find no case where the allowance of damages in such cases has received judicial approval where absence of probable cause has not been very clearly proven. The rule is well stated in Eickhoff v. Fidelity & Casualty Co., supra, where, after using the language hereinbefore quoted from Cooley on Torts (3d Ed), the court proceeds:
.
The province of the court and jury as to the question of probable cause in actions for malicious prosecution has recently been succinctly stated by the Minnesota court as follows: “What facts constitute probable cause is for the court; but what the facts are, if there is a dispute about them, is for the jury.” Reiherzer v. Bresky, 170 Minn. 266, 212 N.W. 456. In Cox v. Lauritsen, supra, it is said: “Whether the undisputed facts are sufficient to constitute probable cause ... is a question exclusively for the courts, and, upon appeal, will be weighed in this court as if the case had been heard here.” See, also, 18 RCL 58; 38 C. J. 509.
It therefore becomes the duty of this court to determine from the evidence adduced whether appellant Keyes, at the time he instituted the civil suit in federal court, had probable cause for so doing; for “the existence of probable cause depends upon the facts within the knowledge of the defendant at the time the prosecution was instituted and not upon subsequent events nor upon matters then unknown to him.” Lewis v. Goldman, 241 Mass. 577, 578, 68 (24 ALR 260). If the judgment of the lower court is to be affirmed, the evidence must show that respondent has established, by positive and express proof, the want of probable cause for instituting the action in federal court at the time it was instituted. Stone v. Crocker, 41 Mass. 81, 24 Pick. 81, 84. The evidence before us is conflicting; but, resolving every disputed question of fact in favor of respondent, the evidence discloses the following facts to be clearly established:
For 17 years prior to taking charge of the Cornbelt National Bank of Scotland, appellant had been with the Comptroller of the Currency as a bank receiver. This bank was closed by one Smiley, who took charge of it on January 21, 1921, for the Comptroller and turned it over to appellant as receiver in May, 1921. At the time of the trial, appellant was receiver for the Scotland bank and three other national banks, and Smiley, who had been a bank examiner for three years, was president of a Minneapolis bank. When Smiley took charge of the Scotland bank, he found, among several other notes of respondent Brown, the note on which appellant later sued Brown. Smiley listed this note as an asset, handled it in the same manner as any other note, and turned it over to appellant as one of the bank’s assets. Smiley found other paper in the bank that was claimed to be forged, but as to whether such paper or the note sued on was forged or not he did not know. While he had charge of the bank, Brown made no such claim to him. Brown testified that, on the day when Smiley turned the Scotland bank over to appellant Keyes, Smiley introduced Brown to Keyes in the bank; Keyes showed to Brown, and they discussed, two other notes; and when the note in question was shown to him, he said, “That ain’t mine.” In this he is contradicted by Smiley and Keyes, both of whom testify that, on that occasion, he said that he did not owe it; that he had paid it. There is no...
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