Petrich v. McDonald

• Decision Date: 15 February 1954
• Docket Number: No. 32429,32429
• Citation: 266 P.2d 1047,44 Wn.2d 211
• Court: Washington Supreme Court
• Parties: PETRICH, v. McDONALD.

Page 211

44 Wn.2d 211

266 P.2d 1047

PETRICH, v. McDONALD.

No. 32429.

Supreme Court of Washington, Department 2.

Feb. 15, 1954.

Bogle, Bogle & Gates, Orlo B. Kellogg, Seattle, for appellant.

Torbenson & Baum, Richard M. Thatcher, George J. Toulouse, Jr., Seattle, for respondent.

DONWORTH, Justice.

Plaintiff instituted this action to recover damages from defendant for malicious prosecution of an earlier civil action for the foreclosure of a preferred ship mortgage. The jury returned a verdict for the plaintiff. Alternative motions for judgment notwithstanding the verdict and for new trial having been made and denied, the court entered judgment for plaintiff. Defendant has appealed.

The events leading up to this litigation are as follows: In February, 1947, respondent, being indebted to appellant for approximately twenty-five thousand dollars, gave appellant a preferred ship mortgage on his vessel, The Aleutian Mail, as security for fifteen thousand dollars of this debt. By the terms of this mortgage appellant was to make monthly payments beginning on October 1, 1947, and running through September 1, 1950. The remainder of the debt was unsecured.

Respondent used The Aleutian Mail to transport United States mail between points in Alaska and with the money so earned made several monthly payments on the mortgage. Early in 1948 the vessel ran aground and suffered considerable damage necessitating its return to Seattle for repairs. As a result respondent lost his mail contract and wanted to work out some arrangement with appellant to relieve respondent of the obligation of making regular monthly payments on his debt. He contacted an attorney who in turn arranged for the parties to meet in his office on April 1, 1948, and discuss the problem. At the conclusion of that discussion the following agreement was reduced to writing by the attorney and signed by the parties:

'Memoranda of Agreement.

'Whereas, Hazil Kirk McDonald has heretofor--advanced the sum of $24,666.70 unto Jesse H. Petrich of Clinton, Washington; $12,666.70 of which sum is evidenced by a note secured by a mortgage on the M. S. Aleutian Mail; the balance of which sum is evidenced by an unsecured personal note,

'and, Whereas, Hazel Kirk McDonald is desirous of having the entire sum of $24,666.70 secured by a mortgage upon the above mentioned vessel:

'and, Whereas, Jesse H. Petrich is desirous of liquidating said sum.

'Now, Therefore, it is hereby agreed as follows:

'1. Jesse H. Petrich agrees to place said vessel in the fishing trade as a cod fisherman and to execute a note payable unto Hazel Kirk McDonald in the sum of $24,666.70 and to secure said note by a mortgage upon said vessel; said note to be paid as follows:

'a. The vessel's share of the above named venture will be 25% of the gross revenue therefrom, from which share the insurance premium upon said vessel shall first be paid and the balance of said 25% shall be apportioned as follows:

'Two thirds thereof to Hazel Kirk McDonald to be applied in the following manner; first to the payment of a bonus in the sum of $1500.00 per annum which Jesse H. Petrich hereby agrees to pay unto Hazel Kirk McDonald in consideration of the covenants herein and secondly to the principal balance of said note until paid.

'2. Hazel Kirk McDonald hereby agrees to cancel, void and nullify the present existing notes and mortgage upon delivery of the note and mortgage herein referred to.

'Signed and Sealed, in triplicate, this 1st day of April, 1948.

'[sgd] Jesse H. Petrich

'[sgd] Hazel Kirk McDonald'

Parenthetically it should be stated that, although the fact was not discovered by appellant until August, 1948, respondent on April 27, 1948, caused his vessel to be registered with the collector of customs for mackered fishing instead of cod fishing.

A new mortgage was prepared by a customs broker to carry out the terms of the April 1st agreement. When appellant called at the broker's office on April 30, 1948, to receive the new mortgage, she noticed that it contained a provision for a twenty-year maturity and therefore refused to accept it or to cancel the existing note and mortgage. It was her contention that it had been agreed that the new mortgage would have the same maturity date as the old one and that her refusal to accept the new mortgage was justified because the written agreement of April 1st was 'too indefinite.'

Respondent testified that he and appellant had a telephone conversation in which he suggested that a new mortgage be prepared with a five-year maturity date. He testified that appellant agreed to accept this provision. She denied any such agreement. Respondent testified that she came to see him at the shipyard where his vessel was being repaired and stated that she wanted her money. He replied that under the April 1st agreement he was not obligated to pay anything until he went fishing and returned with his catch. He further testified that she made derogatory remarks concerning the April 1st agreement, said that she did not consider it 'legal' and when he still refused to pay stated, 'Well, By Golly, I'll break you, then.'

Appellant denied having spoken with respondent after April 1, 1948 and especially denied ever having threatened to break respondent if he did not pay the balance due on the mortgage.

Early in August, 1948, appellant consulted Mr. Chester Lesh, an attorney, regarding her difficulties with respondent. As a result of this consultation Mr. Lesh twice visited respondent in an attempt to collect overdue payments on the original mortgage but respondent again refused to pay, saying that he had agreed to make payments only out of the proceeds of the sale of any fish which he might catch.

Mr. Lesh associated with him as counsel for appellant an experienced admiralty attorney. Appellant held several more discussions with her attorneys. On the basis of the facts which she related to the attorneys she was advised to file a libel in rem against the vessel in the United States District Court at Seattle for the purpose of foreclosing the mortgage. On August 28, 1948, such an action was instituted by appellant and a writ of monition and attachment was sued out directing the United States marshal to seize the vessel. Thereafter other creditors intervened asserting maritime liens against the vessel and likewise causing it to be arrested by subsequent writs of monition and attachment.

The foreclosure action came on for trial promptly and on November 19, 1948, the United States District Court held that the April 1st agreement stated 'the objectives of both parties as of that time [April 1, 1948] with respect to the entire unfinished loan transaction between the parties, * * * and in the accompanying note fixes a definite five-year maturity date for final payment.' The court then entered findings of fact and a final decree dismissing appellant's libel and ordering her to pay certain costs.

Thereafter this suit was instituted by respondent in the superior court for Island county. The complaint alleged, in substance, that the libel action was based upon such facts that appellant, even under the advice of counsel, could not reasonably have expected to prevail and that the writ of monition and attachment was wrongfully and maliciously sued out for the purpose of preventing respondent from using his vessel in a gainful employment.

The first of appellant's eighteen assignments of error is that the trial court erred in denying her motion for judgment n. o. v., which was based on the rule of law that there can be no liability for the malicious prosecution of a civil suit without probable cause 'when there has been no arrest of the person or attachment of the property of the defendant, and no special injury sustained, or injury which is not the necessary result in such suits.' Abbott v. Thorne, 34 Wash. 692, 76 P. 302, 303, 65 L.R.A. 826.

In support of her first assignment appellant cites the Abbott case supra, and Manhattan Quality Clothes v. Cable, 154 Wash. 654, 283 P. 460.

Grammatically, the above quoted rule, first enunciated in this state in the Abbott case, supra, is subject to two interpretations. One meaning, apparently accepted by the trial court, is that a cause of action for malicious prosecution of a civil suit cannot be maintained when there is neither (1) an arrest of the defendant, or (in the alternative) attachment of his property, nor (2) special injury sustained, or (in the alternative) injury which would not necessarily result in such suits.

The other meaning, adopted by the Supreme Court Reporter in 1904 when the case was decided, is that a cause of action for malicious prosecution will not lie when there is neither (1) an arrest, nor (in the alternative) attachment of property, nor (2) special injury sustained (meaning an injury which would not necessarily result in similar suits).

The second headnote to the Abbott case, supra, summarizes the holding as follows:

'An action for the malicious prosecution of a civil suit without probable cause will not lie when there was no arrest of the person or seizure of property therein, and no special injury sustained which would not necessarily result in all like prosecutions.' (Italics ours.)

While this court has never had occasion to decide which is the correct interpretation of the rule, a re-examination of the opinion and the cases cited therein makes it clear that the interpretation placed upon the rule by the reporter's headnote is correct.

As authority for the rule, this court cited with approval two Iowa cases. In Wetmore v. Mellinger, 64 Iowa 741, 18 N.W. 870, 871, 52 Am.Rep. 465, it was said:

'We think the doctrine is well established by the great preponderance of authority that no action will lie for the institution and prosecution of a civil action with malice, and without probable cause when there has been no arrest of the person or seizure of the property of defendant, and no special injury sustained,...