Hiram L. Sparrow, Admr. v. Vermont Savings Bank

• Citation: 112 A. 205,95 Vt. 29
• Parties: HIRAM L. SPARROW, ADMR. v. VERMONT SAVINGS BANK
• Decision Date: 08 January 1921
• Court: Vermont Supreme Court

112 A. 205

95 Vt. 29

HIRAM L. SPARROW, ADMR. v. VERMONT SAVINGS BANK

Supreme Court of Vermont

January 8, 1921

October Term, 1920.

ACTION OF TORT for the malicious prosecution of a civil suit. Plea the general issue. Trial by jury at the March Term, 1919 Washington County, Fish, J., presiding. Verdict and judgment for the plaintiff. Both parties excepted. The opinion states the case.

Judgment affirmed, without costs in this Court.

H C. Shurtleff and Frank Plumley for the plaintiff.

Present: WATSON, C. J., POWERS, TAYLOR, MILES, and SLACK, JJ.

OPINION

POWERS

In 1903, Harriet A. Bailey, late of Montpelier, brought suit against the defendant to recover certain funds deposited by and for her in the defendant's bank. This action was returnable to the Washington county court, wherein it was continued from term to term until 1906, when Mrs. Bailey, in order to secure information regarding the deposits, started proceedings for taking the depositions of the officers and trustees of the Bank. Thereupon, the Bank brought a bill in chancery in Windham County against Mrs. Bailey, and therein secured a temporary injunction restraining her from taking the depositions or from prosecuting her suit. Mrs. Bailey answered this bill and filed a motion for the dissolution of this injunction. On hearing, this motion was overruled by the chancellor. In the fall of 1909, Mrs. Bailey died, and this plaintiff was duly appointed her administrator. He did nothing in the chancery case until March, 1911, when he sought and had leave to enter therein as defendant, filed a supplemental answer demurring to the bill, and a motion to dissolve the injunction. This motion was heard by the chancellor and denied, and progress was ordered. A year later, another motion to dissolve was filed, which was duly heard and granted on the ground that the order for progress had not been complied with. This was on March 9, 1912. From the order dissolving the injunction, the Bank appealed, and at the October Term, 1913, this Court dismissed the appeal on the ground that the order appealed from was not a final decree and that the case remained in the court of chancery. Vermont Savings Bank v. Bailey, 87 Vt. 220, 88 A. 561. No further progress was made in the chancery proceedings until July 8, 1915, when the costs of the defendant therein were paid by the Bank, and the suit was discontinued. On September 12, 1917, this action for malicious prosecution of the chancery suit was brought. The defendant filed a motion to dismiss, which was overruled and an exception saved. Then the defendant pleaded the general issue with notice of special defences. A jury trial was had, a verdict for the plaintiff was returned, and the case was heard in this Court on exceptions filed by both parties. At the hearing, however, the defendant announced that if no error was found in the plaintiff's bill, it would waive its exceptions and allow the judgment to be affirmed, and this has since been confirmed by a writing filed in the case. So we first take up the plaintiff's exceptions. In the consideration of these, we must assume that the action is well brought. The court below ruled that the plaintiff could not recover any damages that Mrs. Bailey suffered on account of the chancery case, but that, on a proper showing, he could recover such damages as had resulted to her estate from the defendant's conduct of that case since her decease. To the last part of this ruling the defendant excepted; but in the consideration of the plaintiff's exceptions, it must be taken to be without error.

In passing upon the plaintiff's exceptions, then, we are only concerned with what the defendant Bank did in connection with the chancery case since the death of Mrs. Bailey in 1909. What the Bank did before that time is of no interest to us except so far as it may tend to characterize its subsequent conduct.

1. The court excluded evidence offered by the plaintiff bearing upon the question of exemplary damages, and ruled that, as matter of law, exemplary damages were not recoverable in this suit; to which the plaintiff excepted. The fact that the defendant in the action is a corporation is not conclusive on this question. Our rule in that regard is the rule of the Federal Supreme Court, and is to be found in Bishop v. Readsboro Chair Co., 85 Vt. 141, 81 A. 454, 36 L.R.A. (N.S.) 1171, Ann. Cas. 1914B, 1163. It amounts to this: Where the malicious and unlawful purpose relied upon is that of one who was acting as the mere servant or agent of the corporation, it does not affect the principal unless it be shown that the latter directed the act complained of, or participated in it, or subsequently ratified it. But where the malicious and unlawful purpose is that of the governing officers of the corporation, or one lawfully exercising their authority, the corporation is held liable therefor. Willett v. St. Albans, 69 Vt. 330, 38 A. 72; Wells v. Boston & Maine R. R., 82 Vt. 108, 71 A. 1103, 137 Am. St. Rep. 987. For the purposes of this discussion we will assume that the acts relied upon as a predicate for exemplary damages were, in the eye of the law, the acts of the governing officers of the defendant. We will also assume that the question under consideration is unaffected by the fact that the suit is brought by an administrator.

That exemplary damages may, upon proper showing, be awarded in this class of cases is generally admitted, though the rule seems to be otherwise in Massachusetts. See Malone v. Belcher, 216 Mass. 209, 103 N.E. 637, 49 L.R.A. (N.S.) 753, Ann. Cas. 1915A, 830. But to justify such an award in such actions, it is not enough that the defendant's acts have been wrong or unlawful; they must be tainted by the manner in which or the purpose for which they were done; and inasmuch as this action is predicated, in a large measure, upon the defendant's malice, and such malice must always be established before a recovery can be had therein, it becomes necessary to consider the character of the malice involved in the cause of action, as well as that involved in the lawful award of exemplary damages; and to compare the one with the other. For if they are of the same quality and degree, there is little or no logic in their allowance at all, unless they are allowed in all cases. The "malice" that lies at the basis of the action does not necessarily involve spite, hatred, malevolence, or a corrupt design; it is sufficiently established by showing that the baseless suit was instituted from any improper and wrongful motive. The want of a sincere belief in the legality of the proceedings is malice enough to support the action. Barron v. Mason, 31 Vt. 189. Under this rule, the institution in bad faith of an unfounded suit would be sufficiently malicious to support an action of this kind. This kind of malice has been here established by the verdict. This kind of malice may be inferred from the want of probable cause. Barron v. Mason, supra; Closson v. Staples, 42 Vt. 209, 1 A. R. 316. Or, to state it otherwise, evidence of the want of probable cause may be, and often is, strong evidence of this kind of malice. Driggs v. Burton, 44 Vt. 124; Carleton v. Taylor, 50 Vt. 220.

But the malice essential to an award of exemplary damages is of a different quality and cannot be inferred in this way. It is actual, not implied malice, and must be shown by evidence addressed especially to that question. It may be established by conduct manifesting personal ill will, or carried out under circumstances of insult or oppression, or even by conduct manifesting nothing worse than a reckless and wanton disregard of the plaintiff's rights; nevertheless,...