Hulcher v. Archer Daniels Midland Co.

• Decision Date: 20 August 1980
• Docket Number: No. 15696,15696
• Citation: 88 Ill.App.3d 1,42 Ill.Dec. 797,409 N.E.2d 412
• Parties: , 42 Ill.Dec. 797 Norman E. HULCHER, Plaintiff-Appellee, v. ARCHER DANIELS MIDLAND COMPANY, a corporation, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 412

409 N.E.2d 412

88 Ill.App.3d 1, 42 Ill.Dec. 797

Norman E. HULCHER, Plaintiff-Appellee, v. ARCHER DANIELS MIDLAND COMPANY, a corporation, Defendant-Appellant.

No. 15696.

Appellate Court of Illinois, Fourth District.

Aug. 20, 1980.

Davis & Morgan, Peoria, for defendant-appellant; Stephen D. Gay, Peoria, of counsel.

Denby, Dobbs, Meno & Bloomer, P. C., Carlinville, for plaintiff-appellee.

BARRY, Justice:

The plaintiff Norman E. Hulcher sued the defendant Archer Daniels Midland Company (ADM) for malicious prosecution and wrongful attachment in the circuit court of Macoupin County. After a bench trial a judgment was entered in favor of Hulcher and against ADM in the amount of $50,000 plus costs. The defendant has appealed from the adverse judgment and also claims that the amount of damages awarded were excessive. The plaintiff, with leave of this court, has filed a late cross-appeal claiming that the amount of damages awarded were inadequate.

A history of the dealings between plaintiff and defendant, which commenced in the 1950's, is necessary to fully understand the issues raised in this appeal. Specifically we will set forth the background which resulted in ADM filing suit against Hulcher who was then doing business as Hulcher Soya Products Company, Incorporated. That lawsuit formed the basis of this action against ADM for malicious prosecution and wrongful attachment.

Hulcher Soya Products Company, Incorporated, was incorporated in 1946. Hulcher, himself, was president of the corporation and owner of 999 of 1000 shares of the corporation. Although Hulcher's corporation was initially engaged in other businesses, it ultimately became active as a trader in the soy bean futures market. In the course of this dealing, Hulcher's corporation purchased and sold soy bean futures contracts from and to many companies, and one of whom was the defendant ADM. In December of 1955 ADM requested a financial statement from Hulcher's corporation. Hulcher personally prepared a financial statement as of the close of business on December 1, 1955, showing a net worth for Hulcher's corporate business of $862,777.00. When the futures market took a sharp downturn in 1956, Hulcher's corporation was unable to pay its debts as they came due. Ultimately the Hulcher Soya Products Company, Incorporated, was forced into bankruptcy. During the bankruptcy proceeding it became apparent that a substantial discrepancy existed between the financial statement Hulcher had given to ADM and an audited financial statement of Hulcher's corporation. During the pending bankruptcy, several sales of Hulcher's corporation were proposed. The first attempted sale of all the bankrupt corporation's assets was to Wallace Huegely. This sale was rejected by the bankruptcy court. A subsequent sale of just the common stock of the corporation was approved and accomplished to Frank Young. ADM and several other creditors of the corporation, with Hulcher's agreement, reserved the remaining amounts of their claims for debts of the bankrupt corporation, against Hulcher personally. On August 10, 1959, ADM instituted a lawsuit against Hulcher personally by filing an affidavit for attachment and obtaining a writ of attachment. ADM's complaint alleged in count I that Hulcher had prepared and submitted a financial statement to ADM which was false and fraudulent in that it materially misrepresented the net worth and assets of Hulcher Soya Products Company, Incorporated. The second count of ADM's complaint alleged that Hulcher had failed to give ADM notice of a material change in his corporation's financial condition contrary to the express representation in the financial statement that no material change had occurred and that Hulcher would give ADM notice if such a change in the financial condition did in fact occur. Following a bench trial a verdict was rendered in favor of Hulcher and against ADM on July 26, 1960. ADM appealed from the adverse verdict, but it was affirmed by the Appellate Court on September 6, 1961. (Archer-Daniels-Midland Company v. Hulcher (3rd Dist. 1961), 32 Ill.App.2d 111, 176 N.E.2d 816 (abstract only).) Thereafter, the petition of ADM for leave to appeal to the Illinois Supreme Court was denied.

Hulcher then instituted the lawsuit from which this appeal is taken against ADM. Following a verdict in Hulcher's favor in the amount of $50,000, ADM filed this appeal. ADM has phrased the issues presented for review as follows:

1. Did ADM have probable cause to begin its action against HULCHER?

2. Did ADM act with malice in bringing its action against HULCHER?

3. May an attachment be founded on a claim or must it be based on an actual debt?

4. Did the trial court erroneously admit certain testimony into evidence?

5. Were the damages awarded by the trial court excessive?

Hulcher, on his cross-appeal has phrased as an additional issue: Whether the damages awarded were inadequate as a matter of law.

The elements of the tort of malicious prosecution are as follows:

"(1) institution and prosecution of judicial proceedings by the defendant; (2) lack of probable cause for those proceedings; (3) malice in instituting the proceedings; (4) termination of the prior cause in plaintiff's favor, and (5) suffering by plaintiff of some special injury, beyond the anxiety, loss of time, attorney fees, and necessity for defending one's reputation, * * *." Lyddon v. Shaw (2d Dist. 1978), 56 Ill.App.3d 815, 818, 14 Ill.Dec. 489, 491, 372 N.E.2d 685, 687.

It is not disputed that the original judicial proceedings against Hulcher were instituted and prosecuted by ADM. Those judicial proceedings were also terminated in Hulcher's favor. The amount and existence of damages is a separate issue raised by both parties and will be dealt with subsequently in this opinion.

ADM claims that Hulcher failed to establish both lack of probable cause to bring the action against him and malice.

In support of ADM's assertion that it had probable cause to bring the lawsuit against Hulcher, it is argued by ADM that they relied upon the advice of counsel in bringing the action. Alternatively ADM claims this established the existence of probable cause as a matter of law or that the finding of the lack of probable cause by the trier of fact is against the manifest weight of the evidence. ADM allegedly relied upon the advice of two of its attorneys, Mr. Stiles and Mr. Boland, in bringing suit against Hulcher personally after the bankruptcy. It is argued that relying on the advice of counsel is a complete defense, as a matter of law, to a charge of malicious prosecution. (Pratt v. Kilborn Motors, Inc. (4th Dist. 1977), 48 Ill.App.3d 932, 6 Ill.Dec. 770, 363 N.E.2d 452; Carbaugh v. Peat, (2d Dist. 1963), 40 Ill.App.2d 37, 189 N.E.2d 14.) Probable cause which would prevent liability for malicious prosecution is such a state of facts as would lead a man of ordinary caution and prudence to believe that he has a justiciable claim to prosecute against the defendant. The reliance on the advice of an attorney before initiating the lawsuit is a valid defense.

"While advice of counsel is a defense to a suit for malicious prosecution, its validity depends upon the facts and circumstances communicated by the defendant to his attorney, whose advice must be sought, given and acted upon in good faith. Whether these elements are present is a jury question." (Freides v. Sani-Mode Manufacturing Co. (1965), 33 Ill.2d 291, 296, 211 N.E.2d 286, 289.)

We agree with the court in Freides that the issue of whether the defendant had probable cause to bring the initial lawsuit is preeminently a question of fact. The facts surrounding the existence of probable cause and ADM's good faith in relying upon its two attorneys' advice to pursue Hulcher personally after the bankruptcy are facts disputed in the record. We cannot agree with ADM that it possessed probable cause as a matter of law. We also believe that defendant has failed to establish that a finding of lack of probable cause is against the manifest weight of the evidence. The trial court specifically found that the financial statement claimed by ADM to be the foundation of its claim against Hulcher personally was a statement of the assets of Hulcher's corporation and not those of Hulcher personally. The trial court also found that all of ADM's dealings were with Hulcher's corporation and not Hulcher personally, including the extension of credit by ADM. Based upon this the trial court correctly concluded that ADM did not rely on a statement of the assets owned by Hulcher personally. We defer weighing the evidence as to the existence of probable cause on the part of ADM to the trial court. "We are loath to overturn the findings of the trier of facts. He is in a position to see and hear the witnesses and to judge their credibility, and is in a position to weigh the evidence." (Vassel v. Underwood (1st Dist. 1967), 85 Ill.App.2d 222, 226, 229 N.E.2d 354, 356.) The manifest weight of the evidence supports the finding that ADM lacked probable cause to bring the initial lawsuit against the plaintiff, Hulcher.

The next issue is whether the plaintiff, Hulcher, established the requisite malice on the part of ADM to recover under a theory of malicious prosecution. Malice has been defined as being actuated by improper and indirect motives. (Robinson v. Econ-O-Corporation, Inc. (4th Dist. 1978), 62 Ill.App.3d 958, 20 Ill.Dec. 90, 379 N.E.2d 923.) Hulcher's burden was to establish some ulterior motive in ADM other than just recovering the money actually owed. (Franklin v. Grossinger Motor Sales, Inc. (1st Dist. 1970), 122 Ill.App.2d 391, 259 N.E.2d 307.) Hulcher attempted to do this by introducing into evidence statements made by ADM's attorneys, Glen Stiles, who was in effect ADM's in-house counsel from Minneapolis, Minnesota, and Lee Boland, who was the local co-counsel in Illinois, both of whom represented ADM in these matters. Hulcher...