Henderson v. Cape Trading Co.

• Decision Date: 31 December 1926
• Docket Number: 25843
• Citation: 289 S.W. 332,316 Mo. 384
• Parties: W. Douglas Henderson, Appellant, v. Cape Trading Company, Lee Grant and Barton N. Grant
• Court: Missouri Supreme Court

289 S.W. 332

316 Mo. 384

W. Douglas Henderson, Appellant, v. Cape Trading Company, Lee Grant and Barton N. Grant

No. 25843

Supreme Court of Missouri

December 31, 1926

Appeal from Circuit Court of City of St. Louis; Hon. George A Mix, Judge.

Order Granting New Trial Affirmed and Cause Remanded.

Sanders Forgey & Verdier and Earl M. Pirkey for appellant.

(1) The amount of damages in a case of malicious prosecution attended with publicity in the nature of libel is almost exclusively left to the jury to determine. In cases of libel, slander or malicious prosecution the jury are almost unrestrained on the question of the amount of damages. Brown v. Knapp Co., 213 Mo. 696; Bowers v. Walker & Sawyer, 192 Mo.App. 243; Minter v. Bradstreet, 174 Mo. 447 syllabus 21. (2) Where a verdict is so large that it indicates that the jury were not governed by the facts and instructions but were swayed by passion and prejudice, then the entire verdict should be set aside. In this case, the court did not find that situation but attempted to substitute his idea of what the verdict should be for the finding of the jury. This he erred in doing.

Robert T. Burch and Watts & Gentry for respondents Lee W. Grant and Barton N. Grant.

(1) The order granting a new trial was right because, in fact, the verdict was very excessive, there being no evidence of any actual damages beyond a fee of $ 250 incurred for filing an answer in the bankruptcy case, while the jury awarded actual damages in the sum of $ 4,250. (a) There was nothing from which malice could be inferred, for there was no proof of want of probable cause, yet the jury assessed punitive damages in the sum of $ 4,000. Therefore, plaintiff having refused to remit any part of the verdict as directed by the court, the only proper thing to do was to order a new trial. Even if this court had any doubt as to the excessiveness of the verdict, it would defer to the action of the trial court since it actually granted a new trial on that ground. Kelly v. Box Co., 248 S.W. 589; Morrell v. Lawrence, 203 Mo. 363, 381. (b) The constitutional provision regarding libel suits has no application to a suit for malicious prosecution. Even in libel suits this court has held that the right of trial courts and appellate courts to grant a new trial or order a remittitur exists in spite of such constitutional provision. Cook v. Globe Ptg. Co., 227 Mo. 542. (c) The right to order a remittitur in suits for malicious prosecution is universally recognized. Fire Assn. v. Fleming, 78 Ga. 333; Calef v. Thomas, 81 Ill. 478; Greenwell v. Ry. Co., 224 S.W. 410; Lowenthal v. Strong, 90 Ill. 74; McConnel v. Hampton, 12 Johns. 234; Walker v. Martin, 43 Ill. 508; Ruth v. St. Louis Transit Co., 98 Mo.App. 1; Farell v. Transit Co., 103 Mo.App. 458. (2) This court will uphold the action of the trial court if other reasons, aside from the amount of the verdict, why the new trial should have been granted, exist, no matter what this court finds as to the amount of the verdict. Benjamin v. Ry. Co., 245 Mo. 598. (3) The following reasons justify upholding the trial court's order granting a new trial: (a) The demurrer to the evidence should have been sustained, because plaintiff's petition did not state a cause of action against Grant & Grant, as attorneys at law. A statement in the alternative that they knew, or might have known, the allegations in the petition in the bankruptcy case to be false if they had exercised reasonable diligence to ascertain the facts, is not sufficient as against them when they were attorneys for the petitioning creditors. Attorneys do not stand on the same footing as their clients in such matters. Peck v. Chouteau, 91 Mo. 138; Shull v. Boyd, 251 Mo. 479; Campbell v. Brown, 2 Woods, 349; Bocknell v. Dorian, 16 Pick. (Mass.) 478; Waugh v. Dibbens, 61 Okla. 221; Roth v. Shupp, 94 Md. 56; Ross v. Griffin, 53 Mich. 9; Wigg v. Simonton, 12 Rich. Law (S. C.) 583; Farmer v. Crosby, 43 Minn. 459; Stockley v. Harnidge, 34 Eng. C. L. R. 272; Burnap v. Marsh, 13 Ill. 535; Davies v. Jenkins, 11 Meeson & Welsby, 745. (b) The demurrer to the evidence should have been sustained because the evidence showed that the defendants, Grant & Grant, were attorneys at law, representing the Cape Company in the bankruptcy proceedings, and acting in good faith, and wholly failed to show actual knowledge on their part of the incorrectness of any allegation of the petition in the bankruptcy proceeding. See cases just cited. (c) The evidence wholly failed to show that the bankruptcy proceeding was instituted by these respondents as attorneys for the Cape Trading Company, without probable cause. Such proof was a necessary part of plaintiff's case, and the burden was upon him to make proof even as to clients, and doubly so as to attorneys in the case. Sappington v. Watson, 50 Mo. 83; Sharpe v. Johnston, 59 Mo. 557; Lindsay v. Bates, 223 Mo. 294; Hanna v. Life Ins. Co., 241 Mo. 402; Christian v. Hanna, 58 Mo.App. 37. Plaintiff showed by his own evidence that there was probable cause.

Sanders, Forgey & Verdier and Earl M. Pirkey for appellant in reply.

(1) The demurrer to the evidence should not be sustained either on the petition or on the facts. (2) The filing of a bankruptcy petition against a solvent man is a grievous wrong. McDonald v. Grocery Company, 184 Mo.App. 443. The petition charges that this was done and that the defendants did it and did it wrongfully and maliciously and not only filed it but wrongfully and maliciously prosecuted it. This states a cause of action against all defendants. (3) Respondents acted of their own motion and suggested the bankruptcy petition and proposed to file it without making a due investigation. Instead of the Cape Trading Company directing them to file the petition, the respondents wrote to Jules Chopak, the attorney for the Cape Trading Company and persuaded them to join in the bankruptcy proceedings, and the Cape Trading Company consented in reliance on respondents Grant. The Cape Trading Company is, of course, responsible for the acts of its agents and it is especially responsible because after being advised of the situation by Henderson in November it permitted the prosecution to continue in its name until in January. Grant & Grant are liable and cannot shift the burden to their client for the reason that they were not depending on their client for directions and information; the situation was reversed and the Cape Trading Company depended entirely on them, and on them was the duty of hunting the facts and of acting in a lawful and proper manner.

Atwood, J. All concur, except Graves, J., absent.

OPINION

ATWOOD

Cape Trading Company and two other petitioners, by their attorneys, Grant & Grant, a firm composed of Lee W. Grant and Barton N. Grant, on November 6, 1920, instituted a proceeding to have W. Douglas Henderson, alleged to be doing business as Redding-Henderson Manufacturing Company, declared a bankrupt. On November 18, 1920, W. Douglas Henderson filed answer therein, denying the charge of bankruptcy and denying that he had any connection with Redding-Henderson Manufacturing Company. On January 14, 1921, the proceeding was dismissed by Grant & Grant as attorneys for the petitioners. Thereafter, on June 15, 1922, W. Douglas Henderson commenced the present action against respondents herein. In addition to formal allegations and a statement of the foregoing facts plaintiff's petition further charged:

"That the allegations and charges set forth in said petition in bankruptcy, hereinabove mentioned and set out, were false and known to be so by said petitioners and by defendants at the time, or might have been known to them to be false if they had exercised reasonable diligence to ascertain the facts with regard thereto, and that no ground existed for the filing of said petition and institution of said proceeding in bankruptcy; and that said petitioners, and the defendants herein, had no probable cause to believe that any of said allegations and charges were true; and said petition in bankruptcy was by defendants wilfully, intentionally wrongfully and maliciously filed and presented, and said proceeding in bankruptcy was wilfully, intentionally, wrongfully and maliciously instituted and prosecuted by them, all in reckless disregard of plaintiff's lawful rights in the premises:

"That by reason of the acts of defendants in as aforesaid filing said petition and instituting and prosecuting said proceedings in bankruptcy against plaintiff, it became generally and publicly reported in the city of St. Louis, Missouri, where plaintiff resided and engaged in business, and in the vicinity of said city, as well as elsewhere, that plaintiff was insolvent and had committed an act of bankruptcy and that legal proceedings had been instituted to have him adjudged a bankrupt, that said report being widespread through the medium of newspapers and other means of propagation, and as the result thereof plaintiff lost and will lose part of his business and his credit was greatly injured and impaired, and the transaction of his business greatly hampered and obstructed, and plaintiff sustained great mental suffering, embarrassment, humiliation and mortification, and became an object of common talk and condemnation, and plaintiff has been and will continue to be injured in his reputation as a business man, and plaintiff was compelled to defend against the said proceeding in bankruptcy and laid out and expended and became liable for counsel fees in the employment of counsel and other expenses attending said defense and he lost much time in which he was compelled to give to said proceedings and by reason of all the foregoing plaintiff has been damaged in the total sum of $ 10,000:

"That defendants knew or by the...