Grorud v. Lossl

Citation136 P. 1069,48 Mont. 274
Decision Date02 December 1913
CourtUnited States State Supreme Court of Montana

Appeal from District Court, Silver Bow County; Jeremiah J. Lynch Judge.

Action by A. A. Grorud against J. P. Lossl and others. From a judgment for plaintiff and an order denying a new trial defendants appeal. Affirmed in part, and reversed in part.

Jos. C Smith, of Dillon, and Breen & Jones, of Butte, for appellants.

B. K. Wheeler, M. F. Canning, and P. E. Geagan, all of Butte, for respondent.


Action for damages for malicious prosecution. The plaintiff had verdict and judgment. The defendants have appealed from the judgment and an order denying their motion for a new trial.

On behalf of the defendants the contention is made that the court erred in denying their separate motions for nonsuit, because it was not shown that either of the corporations authorized or had any connection with the prosecution on account of which this action was brought, and because the evidence failed to disclose that Lossl acted without probable cause. The contention is also made that the evidence is insufficient to justify the verdict, and that the court committed prejudicial error in charging the jury.

The prosecution of plaintiff arose out of the following circumstances: For the 22 months prior to June 12, 1911, the plaintiff had been employed at Divide, in Silver Bow county, as the agent of the Oregon Short Line Railway Company and also of the American Express Company. The defendant J. P. Lossl Company was, during the same time, engaged in a general merchandise business at Wisdom and Dewey, some distance to the west of the line of railway, in Beaverhead county. The Divide & Gibbonsville Stage Company was engaged in the transportation of freight and passengers from Divide to Wisdom and other points to the west. J. P. Lossl was the president and manager of both corporations, and controlled their business. Goods purchased by the merchandise corporation was received at Divide and conveyed by the other corporation to Wisdom and Dewey. To provide for the payment of freight and express charges, the defendant Lossl would, from time to time, send to the plaintiff checks drawn in favor of the railway or express company--oftener in favor of the former--upon the bank at which the deposits of the defendant corporations were kept, usually amounting to $150 at a time. In some instances a single check for this amount was sent, in others two or three checks aggregating this amount, and in others the amount would be larger, according to the amount of the charges to be met at the particular time. The sums thus sent covered also the compensation of plaintiff for the accommodation extended to the defendant corporations. This was fixed at $15 per month. The plaintiff kept an account of the transactions between himself and the defendant corporations. In making his monthly remittances to the accounting officers of the railway and express companies, he would send the checks, which were accepted by these companies as cash, and collected in due course from defendant's bank. At the end of each month plaintiff remitted to Lossl a statement, which was supposed to contain a list of all the checks received by him on account of either of the defendant corporations, as well as of the items of charges in favor of the railway and express companies. Usually this statement showed a balance in favor of the defendant corporations. This course of business was pursued for the 22 months during which the plaintiff was employed. During the early months of 1911 defendant Lossl, upon an examination of the accounts of the defendant corporations, discovered that, out of the whole number of checks received by the plaintiff, the latter had failed to account for several, the aggregate amount of which he did not then know exactly. The amount was then thought by him to be more than $1,000. Thereupon, after consultation with the county attorney of Silver Bow county, he caused the arrest of the plaintiff on a charge of larceny as bailee of moneys belonging to the J. P. Lossl Company to the amount of $1,000. The arrest was made on June 12, 1911, on a warrant issued upon a complaint filed with a justice of the peace. Plaintiff was held until he was admitted to bail. At a preliminary hearing thereafter had by the justice, the plaintiff was discharged.

At the trial plaintiff testified that during the time he was acting as agent for the defendant corporations, the defendant Lossl frequently had need of various sums in cash to be used by him personally, or in connection with the business of the corporation, that it was inconvenient for him to obtain it from the bank, which was at Deer Lodge in Powell county, and that he would on such an occasion draw a check against the account of one or the other of the defendant corporations in favor of the railway or express company, and have plaintiff advance the amount of it in cash out of the funds in his hands belonging to the company to which it was made payable. These checks he said were not included in his monthly statements because they had no connection with the payment of freight and express charges, and hence were properly omitted. There were in all 26 of such checks not accounted for. The aggregate amount of them was $2,000. Most of them had been drawn against the account of the J. P. Lossl Company. There was some testimony which corroborated these statements. The claim of Lossl was that all of the checks sent by him were intended to meet freight and express charges, that he never asked for nor received any accommodation from plaintiff in the way of cash advanced upon checks, and that plaintiff appropriated to his own use the amount of the checks omitted from the statement, trusting that Lossl or the accountants of the corporations would not discover his thefts. The evidence introduced by the defendants tended to show that there was substantial foundation for this claim, but the jury refused to accept it.

1. We think the court erred in denying the motion of the Divide & Gibbonsville Stage Company. Though the defendant Lossl was its president and manager, it was not suggested by anything in the evidence that it had any connection with the prosecution of the plaintiff, or that Lossl instituted the prosecution in its behalf. It is settled law that an action for malicious prosecution will lie against a corporation as well as against a natural person. Weaver v. Montana C. Ry. Co., 20 Mont. 163, 50 P. 414; Pennsylvania Co. v. Weddle, 100 Ind. 139; Boogher v. Life Ass'n of America, 75 Mo. 319, 42 Am. Rep. 413; Reed v. Home Savings Bank, 130 Mass. 443, 39 Am. Rep. 468; Williams v. Planters' Ins. Co., 57 Miss. 759, 34 Am. Rep. 494; Carter v. Howe Machine Co., 51 Md. 290, 34 Am. Rep. 311; Goodspeed v. East Haddam Bank, 22 Conn. 530, 58 Am. Dec. 439. By the great weight of authority it is also the rule that when an agent of a corporation in the course of the discharge of duties intrusted to him by it, and within the apparent scope of his authority, does an act from which a third person suffers injury, the corporation also is liable for the damages flowing therefrom, even though the agent may have failed in his duty to the principal, or may have disobeyed his instructions. Rand v. Butte El. Ry. Co., 40 Mont. 398, 107 P. 87; Golden v. Northern P. Ry. Co., 39 Mont. 435, 104 Pac, 549, 34 L. R. A. (N. S.) 1154, 18 Ann. Cas. 886; Callahan v. Chicago, etc., Ry. Co., 47 Mont. 401, 133 P. 687; Weaver v. Montana C. Ry. Co., supra. If the act is prompted by fraudulent or malicious motives, the fraud or malice of the agent is imputable to the corporation. Reed v. Home Savings Bank, supra; Vance v. Erie Ry. Co., 32 N. J. Law, 334, 90 Am. Dec. 665; Wheless v. Second Nat. Bank, 1 Baxt. (Tenn.) 409, 25 Am. Rep. 783; Carter v. Howe Machine Co., supra; Williams v. Planters' Ins. Co., supra; P. W. & B. Ry. Co. v. Quigley, 21 How. 202, 16 L.Ed. 73. The prosecution having been instituted by Lossl on behalf of the mercantile corporation--that is, to bring the plaintiff to justice for the alleged larceny of its funds--the presumption does not attach that he was acting for the stage company also, although he was its president, and although it appeared incidentally in the evidence that a few of the checks not accounted for were drawn upon its account. It was no more responsible for the prosecution than would have been any other corporation of which Lossl happened to be president and manager. The situation with reference to the other corporation is entirely different. Upon the face of the proceedings the presumption arises that Lossl was acting for it, for the subject of the larceny was its property, and as its president and manager, he was the proper person to institute the prosecution in its behalf.

The motion of Lossl was properly denied. At the close of plaintiff's case the evidence tended to support the claim of plaintiff that he had cashed the checks, not accounted for in his monthly settlements, solely for the accommodation of the defendant. If this was the fact--and for the purposes of the motion it was to be accepted as a fact--the prosecution was wholly without probable cause. This condition of the evidence warranted an inference of malice, for all the authorities agree that, while the plaintiff must prove both the want of probable cause and malice in order to make a prima facie case, they also agree that when the absence of the former has been established, the presence of the latter may be inferred. Martin v. Corscadden, 34 Mont. 308, 86 P. 33. It being the office of the jury to draw this inference under proper instructions, the motion was properly denied.

2. Counsel for defendants have devoted most of their printed argument to a discussion of the evidence, insisting...

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