National Life & Accident Ins. Co. v. Gibson

• Decision Date: 26 April 1907
• Citation: 101 S.W. 895
• Parties: NATIONAL LIFE & ACCIDENT INS. CO. v. GIBSON.
• Court: Kentucky Court of Appeals

101 S.W. 895

NATIONAL LIFE & ACCIDENT INS. CO. v. GIBSON.

Court of Appeals of Kentucky.

April 26, 1907

Appeal from Circuit Court, Henderson County.

"Not to be officially reported."

Action by S.W. Gibson against the National Life & Accident Insurance Company. From a judgment for plaintiff, defendant appeals. Reversed and remanded.

McQuown & Brown, N. P. Taylor, Lewis McQuown, and Eli H. Brown, Jr. for appellant.

Dorsey & Stanley, Sweeney, Ellis & Sweeney, and Greene & Van Winkle for appellee.

LASSING J.

This is a suit for malicious prosecution in which the appellee, S.W Gibson, recovered a judgment against the appellant, the National Life & Accident Insurance Company, and N. N. Nicholson. Nicholson was the agent of appellant company, and in his capacity as such employed appellee to work for the company, solicit business, and make collections from the policy holders in a limited territory. After appellee had been in the employ of appellant company for a week or 10 days he and Nicholson met in Owensboro for the purpose of making a settlement and adjustment of the accounts of appellee as agent. In their efforts to settle and adjust the accounts a matter of dispute arose between them as to the amount of money which Gibson as agent owed to the company; he claiming that he owed the company $4.30 and the agent Nicholson claiming that he owed more. Being unable to adjust the matter between themselves, by agreement, they went before a justice of the peace, Squire Rodman, and requested him to settle their accounts. The squire received their books and statement, and, according to his calculation, appellee owed the company a balance of $9.98. This he refused to pay, and refused to pay any part of it. Thereupon the agent, Nicholson, sought the advice of the county attorney, Hon. La Vega Clements, and stated the facts to him, and on his advice swore out a warrant against appellee, charging him with embezzlement. On this warrant appellee was arrested and committed to jail on Saturday afternoon, and remained there until the afternoon of Monday following, when, on motion of his counsel, Capt. W. T. Ellis, he was released on his own recognizance and his trial fixed for the Friday following. Some time during the week, and before Friday, appellee sent a money order to the justice of the peace before whom he was to appear for a sufficient sum to pay the alleged shortage and the costs. Upon receipt of this sum the justice of the peace paid to Nicholson the amount of the shortage, $9.98, and the suit was dismissed, the order showing that Gibson having paid into court "the amount of the shortage, claims, and costs, this action is dismissed." Thereafter appellee filed his suit for damages, seeking to recover of the defendant and its agent, Nicholson, for malicious prosecution. The company and Nicholson filed separate answers. The company denied all knowledge of the prosecution of appellee Gibson until long after it was finally ended and appellee discharged. The company denied that it made an affidavit or caused the warrant to be issued, or that its agent, Nicholson, had any right or authority as agent to do so, or that it ratified, confirmed, or adopted any act of its said agent in so doing; denied that there was anything in the contract of employment of said agent which authorized him to cause the arrest of appellee; and alleged that in so acting he was acting entirely beyond the scope of his authority and without right so far as the company was concerned. The company pleaded further that the defendant Nicholson, before taking steps to cause the arrest of appellee Gibson, sought the advice of Hon. La Vega Clements, a lawyer of good standing, with large experience, and the county attorney of Daviess county, that he laid all the facts before him, and sought his advice as to what steps to take in order to secure the payment of the money which was due his company, and that only after he had so sought advice did he make the affidavit upon which the warrant was based upon which appellee was arrested. The defendant company pleaded further that the appellee, after his arrest and before trial, paid off the amount which he owed to the company under an agreement and understanding that, if this was done, the prosecution would be dropped. In this way the suit was settled and adjusted. By reason of such settlement and adjustment and compromise of the matter appellee was estopped from prosecuting a claim for damages. The answer of the defendant Nicholson admitted the making of the affidavit upon which the warrant for Gibson's arrest was based, but denied that he acted maliciously and without probable cause, and alleged affirmatively that before taking steps he did all that he could to induce the appellee, Gibson, to pay over to the company the money which he had collected and which belonged to it, and that, failing to induce appellee to settle or to pay over the money which he had and which belonged to the company, he sought the advice of a lawyer, Hon. La Vega Clements, county attorney, and laid all of the facts before him, and that only after he had been advised by said attorney that appellee was guilty of embezzlement did he procure a warrant for his arrest. A reply made up the issues, and upon a trial before a jury appellee was given a verdict and judgment for $5,000. The company and Nicholson appeal. Several grounds for reversal are relied upon, but two of which it will be necessary to notice. First. Did the trial court err in overruling the defendants' motion for a peremptory instruction at the close of plaintiff's testimony? Second. Did the defendant act without probable cause in procuring plaintiff's arrest?

The ground upon which appellants insist they were entitled to a peremptory instruction at the close of appellee's testimony is that appellee admitted he owed the company money, and his witness, Owen, testified that he not only admitted this, but positively refused to pay any part of it to the company or its agent, Nicholson. This brings us to a consideration of the question as to whether or not appellee was guilty of embezzlement under the facts stated. He admitted that he was indebted to the company over and above all claims which he held against the...