Maechtlen v. Clapp

• Decision Date: 06 November 1926
• Docket Number: 26,764. 26,765. 26,766
• Citation: 250 P. 303,121 Kan. 777
• Parties: E. H. MAECHTLEN, Appellant, v. (R. C. CLAPP et al.) A. V. ROBERTS, Appellee. HERMAN L. TJADEN, Appellant, v. (R. C. CLAPP et al.) A. V. ROBERTS, Appellee. CHRIST PFLUGSHAUPT, Appellant, v. (R. C. CLAPP et al.) A. V. ROBERTS, Appellee
• Court: Kansas Supreme Court

250 P. 303

121 Kan. 777

E. H. MAECHTLEN, Appellant, v. (R. C. CLAPP et al.) A. V. ROBERTS, Appellee.

HERMAN L. TJADEN, Appellant, v. (R. C. CLAPP et al.) A. V. ROBERTS, Appellee.

CHRIST PFLUGSHAUPT, Appellant, v. (R. C. CLAPP et al.) A. V. ROBERTS, Appellee

No. 26,764. No. 26,765. No. 26,766

Supreme Court of Kansas

November 6, 1926

Decided July, 1926.

Appeal from Sedgwick district court, division No. 2; THORNTON W SARGENT, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. MALICIOUS PROSECUTION--Liability of Attorney. An attorney who knowingly permits a client to make him an instrument in prosecuting a groundless action against another to accomplish some evil purpose of the client, may be held accountable to the injured person in an action for malicious prosecution, but he is not responsible if he commences and prosecutes the action in good faith without knowledge of the fraudulent purpose of his client or that the claim sued upon is groundless.

2. SAME--Liability of Attorney--Good Faith--Reliance on Statement of Client. Unless the groundless character of the cause and the malicious motive of his client is brought to his attention, an attorney may advise and act on the assumption that the facts related by his client are honestly given and are substantially correct; and further, that it is not his duty to go elsewhere for information respecting the honesty of the claim or the good faith of his client.

3. SAME--Liability of Attorney--Good Faith--Evidence. It appearing that the evidence produced by plaintiff showed nothing inconsistent with the good faith of the attorney in bringing and prosecuting the action, nor to prove the elements necessary to make the attorney liable for malicious prosecution, it was the province and duty of the court to sustain a demurrer to plaintiff's evidence and give judgment in favor of the attorney.

William Keith, of Wichita, for the appellants.

Benjamin F. Hegler, of Wichita, for the appellee.

OPINION

JOHNSTON, C. J.:

E. H. Maechtlen, Herman L. Tjaden and Christ Pflugshaupt, each brought a separate action against R. C. Clapp, Elizabeth Clapp and A. V. Roberts, alleging that the defendants had maliciously brought a groundless civil action against the plaintiffs which had pended in the courts for about three years, and then was abandoned and dismissed. As all of the cases arose out of the same transactions and were based on the single original action alleged to have been maliciously instituted they were tried together upon the same evidence. At the end of plaintiffs' evidence the court upon the separate demurrers of the defendants sustained that filed by Elizabeth Clapp and A. V. Roberts upon the ground that plaintiff had failed to establish a cause of action against either of them, but overruled the demurrer as to R. C. Clapp. The trial proceeded against the latter and a judgment against him in each of the cases was entered. Each of the plaintiffs has appealed from the order sustaining the demurrer of Roberts, who was the attorney of the parties who brought the original action, but no appeal was taken by plaintiffs from the ruling sustaining the demurrer filed by Elizabeth Clapp. As all of the appeals rest upon the same evidence and one record, all were briefed and submitted together.

There appears to have been a number of controversies and considerable litigation between the plaintiffs and some of the defendants. In 1919 the Cumberland Refinery Corporation brought an action against The Quaker 777 Oil Company, a company in which the plaintiffs were stockholders, to recover from the oil company assets and leases, and the cancellation of deeds for the transfer of the Cumberland Refinery Corporation property to the oil company. It was charged that the transfer of the property had been accomplished by false representations and fraud. The action was brought on behalf of the corporation by the law firm of which Roberts was a member and the trial of the case resulted in favor of this client, The Cumberland Refinery Corporation. On December 28 1920, the plaintiffs herein filed an action against the Blue Ridge Refining Company, the Cumberland Petroleum and Refining Company, and the Cumberland Refinery Corporation, R. C. Clapp, and other members of his family. The purpose of this action was to cancel a mortgage held by the Clapp family on the refinery of the Cumberland Refinery Corporation, and for an accounting. There were charges of fraud as against the Clapps, but the validity of the mortgage was upheld. In December, 1921, J. A. Feister brought another action, in which he named the parties to the present actions as well as a number of others as defendants, the purpose of which was to foreclose certain mechanic- and mortgage-lien claims upon the refinery. Afterwards the original action which is alleged to have been maliciously instituted was begun. It was brought in the name of the Cumberland Refinery Corporation as plaintiff against the plaintiffs and others, and the petition was prepared and signed by the firm of which the defendant, Roberts, was a member. The corporation alleged that the plaintiffs in this action with others called a meeting of the directors of the corporation in Kansas City, where they removed R. C. Clapp from the presidency and elected in his place C. C. Wadley, and that thereafter a meeting of the stockholders of the corporation was held at which the property of the corporation was sold to the Quaker 777 Oil Company; that the plaintiffs here who were directors at that time represented that the Quaker Oil Company was a going concern, owning many valuable oil and gas leases amounting to 203,000 acres; that the Quaker Oil Company had a seven-eighths interest in those leases and that the same company had a large amount of cash on hand, to wit, $ 75,000; and further had a contract to furnish gas to Kansas City, Kan., and Kansas City, Mo., and had the wells with which to supply gas to those cities; that they induced the stockholders to transfer to the Quaker Oil Company all the oil and gas leases held by the refinery corporation, together with its refinery near Wichita, which had almost been completed; that they represented that the Quaker company had cash on hand to complete the refinery and develop the leases, and would issue in exchange for the property of the refinery corporation stock in the Quaker company to the extent of $ 429,000 in that company, and further that the stock in the Quaker company was of the par value of $ 429,610. It was further alleged that, based on these representations and offers, the Cumberland Refinery Corporation was induced to transfer its leases, and afterwards learned that the representations made as to the Quaker Oil Company were false and fraudulent, and through the transfer the Cumberland Refinery Corporation had lost practically all of its oil and gas leases and the use of its refinery. It was alleged that the Quaker Oil Company had no cash on hand of any consequence; that its stock was worthless, that it had no contract with Kansas City, Kan., or Kansas City, Mo., and had no wells furnishing gas sufficient to supply those cities, and that in fact its stock was worthless. It was charged in that action that the plaintiffs herein, by their fraud and negligence, had dissipated the assets of the plaintiff company, had jointly and severally wrecked the plaintiff company and made its stock of little value, and the corporation therefore asked to recover damages against them in...