Graham v. Fidelity Mut. Life Ass'n.

• Decision Date: 17 March 1896
• Citation: 37 S.W. 995
• Parties: GRAHAM v. FIDELITY MUT. LIFE ASS'N et al.
• Court: Tennessee Supreme Court

Page 995

37 S.W. 995

GRAHAM v.FIDELITY MUT. LIFE ASS'N et al.

Supreme Court of Tennessee.

March 17, 1896.

Appeal from circuit court, Davidson county; J. W. Bonner, Judge.

Action by James Graham against the Fidelity Mutual Life Association and James M. Head.Judgment for defendants.Plaintiff appeals.Affirmed.

E. L. McNeilly, Nolen & Slemons, and Barthell & Keeble, for appellant.Champion, Head & Brown, Pitts & Meeks, and Stokes & Stokes, for appellees.

McALISTER, J.

The plaintiff commenced this suit in the circuit court of Davidson county against the Fidelity Mutual Life Association and James M. Head to recover damages for an alleged malicious prosecution.There were verdict and judgment in favor of the defendants.Plaintiff appealed, and has assigned errors.The record discloses that from May 8, 1893, to September 12, 1893, the firm of Selden & Graham, composed of A. A. Selden and the plaintiff, James Graham, were the general agents in the state of Tennessee for the defendant insurance company, with authority to solicit life insurance, deliver policies, collect premiums, and remit the same to the association at Philadelphia.About the 10th of October, 1893, the defendant company caused the arrest, indictment, and prosecution of said agents on a charge of embezzlement.The defendants were both acquitted of said charge, and thereupon plaintiff, Graham, instituted this suit against the company and James M. Head, its attorney, to recover damages for the criminal prosecution.

The fundamental inquiry underlying the present action is whether, at the time the prosecution was set on foot, there were such facts and circumstances of an incriminating character presented to the company as would have generated in the mind of a reasonable man the belief that the crime of embezzlement had been committed.In all such cases the real inquiry is not whether, in point of fact, the crime has been committed, but whether there existed reasonable grounds to believe the charge was true, and was the belief honestly entertained.It is a case, then, of apparent guilt, as contradistinguished from real guilt, and an honest belief of it at the time upon the part of the party prosecuting, and upon sufficient grounds to warrant that belief.In all such cases it is well settled that the want of probable cause must be expressly and substantially proved, and cannot be implied.There must also be a concurrence of malice with want of probable cause.From the want of probable cause, malice may be inferred by the jury; but, from the most express malice, there can be no inference or deduction drawn of want of probable cause.The malice necessary to support this form of action is not spite or malevolence towards the plaintiff, but it means the evil mind that is regardless of social duty and the rights of others.These principles are axiomatic, and need no citation of authorities.

It appears from the record that the Fidelity Mutual Life Association of Philadelphia had been represented in Tennessee by the said A. A. Selden prior to the formation of his partnership with the plaintiff, Graham.At the date of the appointment of the firm of Selden & Graham as general agents of said company for the state of Tennessee, the said Selden was delinquent in his accounts with the company for a considerable amount, and had represented to the company that his new partner, the plaintiff, Graham, was to pay for the latter's interest in the firm the sum of $500 in cash, and execute three notes for the sum of $500 each, and Selden promised out of this money to settle his indebtedness to the company.It turned out that Graham, under his private contract with Selden, was to pay $500 in cash, and $1,500 out of the prospective profits of the business.Selden, having failed to settle with the company, finally went to the home office at Philadelphia, in July, 1893, and, after a thorough examination of his accounts, admitted an indebtedness to the association amounting to $1,738, and proposed to pay it by sight draft on Selden & Graham, of Nashville, for $388.28, and a remittance of $1,350 the following week.The draft by him for $388.28 was protested for nonpayment, and the only remittance made was the sum of $75, which was not sent until September.We cannot doubt from the facts disclosed in the record that Graham had knowledge of Selden's indebtedness to the company.It further appears that on the 8th September, 1893, the general agent of the company, one Bolling, came to Nashville, for the purpose of obtaining a settlement of Selden's individual indebtedness to the company.While here, he discovered a deficiency also in the accounts of the new agency of Selden & Graham.Bolling thereupon demanded a settlement of the firm's business.Graham admitted that he had in his possession money belonging to the association, but refused to turn it over, claiming in an indefinite way, and without specifying them, that he had counterclaims against the association.Bolling, having failed to get a settlement either of Selden's individual shortage or of the firm's indebtedness, revoked the authority given Selden & Graham as general agents of the company, and took possession of the office.Bolling thereupon laid the matter before Messrs. Champion, Head & Brown, general counsel for the company, and asked their advice.Counsel advised that, under the facts stated, the funds collected were trust funds, and that Selden & Graham were amenable to an indictment for embezzlement, and that a civil action would also lie for the recovery of the money.Counsel were instructed to do whatever might be necessary, and thereupon Bolling left the state.Thereafter, on October 6th, a bill was filed in the chancery court for the collection of said deficiency; and on October 10th an indictment was returned by the grand jury of Davidson county against Selden & Graham, charging them with embezzlement.As already stated, the plaintiff was acquitted of the criminal charge, and brings this suit to recover damages for the wrongful prosecution.

In this brief statement we have not undertaken to narrate all the facts, or to point out all the contraverted issues.The verdict of the jury has settled all the disputed questions of fact, and, by every intendment, they have been resolved in favor of the defendants.This mere outline of the controversy is made for a better understanding of the assignments of error, which will now be noticed.

The first assignment of error is that the court erred in permitting the witness George C. Mitchell, over objection of plaintiff's counsel, to read to the jury a statement purporting to be the account between the plaintiff and the defendant company when said statement was taken from the original books and cards by others than the witness himself.Counsel for plaintiff states in this assignment of error that notice had been served on defendant to produce the original books and cards.We find upon an examination of this notice that, while it does embrace letters, reports, and accounts, there is no demand for the production of the original books and cards.But conceding, for the purposes of this assignment, that no notice was necessary, we are yet of opinion that this assignment is based upon an erroneous predicate in respect of what transpired in the trial court.It assumes that the circuit judge permitted to be read to the jury, as original evidence, disconnected with the personal knowledge of the witness, a statement of what is shown by certain books and cards, without the production of the originals.This is alleged to be erroneous for three reasons: First, because the original cards referred to by the witness are the best evidence, and were demanded of the defendant; second, because the said witness...