Powell v. Woodbury

• Decision Date: 13 May 1912
• Citation: 83 A. 541,85 Vt. 504
• Parties: POWELL v. WOODBURY et al.
• Court: Vermont Supreme Court

83 A. 541

85 Vt. 504

POWELL

v. WOODBURY et al.

Supreme Court of Vermont. Chittenden.

May 13, 1912.

Exceptions from Chittenden County Court; Fred 51. Butler, Judge.

Action by Max L. Powell against Charles L. Woodbury and another. There was a verdict and judgment for plaintiff, and defendants bring exceptions. Affirmed.

Argued before ROWELL, C. J., and MUNSON, WATSON, and HASELTON, JJ.

V. A. Bullard, Max L. Powell, and J. W. Redmond, for plaintiff.

Rufus E. Brown and Edmund C. Mower, for defendants.

ROWELL, C. J. This is an action for malicious prosecution. The essential facts are these in substance: Before and on May 8, 1909, George M. Delaney owned the Hotel Burlington property in Burlington where he had carried on the hotel business for many years, but it had come to pass that he was financially embarrassed, and so on that day he conveyed to the plaintiff, his largest creditor, by his quitclaim deed of that date, all of said property in trust for the benefit of his creditors in pro rata share, except the secured creditors, who were the plaintiff and Payette, Meldenshon & Co.; the purpose of said deed being, as declared therein, to enable the trustee so to manage the estate of the grantor that all of his creditors might receive in full the amount of their claims as the assets, at a fair market value, were in excess of all his liabilities. Said deed further declared that the trustee was to handle the estate, both real and personal, for the benefit of the creditors, and to render accurate account of all receipts and disbursements, and to account to the grantor for any excess above the trustee's legal liabilities. The trustee thereupon took possession of said property and managed and conducted the same as a hotel till the 8th of January, 1910, when the hotel proper was practically destroyed by fire and rendered unfit for further use unless rebuilt, but the part of the building in which intoxicating liquor was being sold under a license was not destroyed, and that business continued therein. But before the fire and on September 17, 1909, Delaney executed to the trustee another paper writing, whereby, in consideration of the trustee's raising upwards of $6,000 with which to pay off the unsecured creditors in full, he agreed to allow the trustee to carry on the hotel as proprietor in any manner he saw fit, giving him full power to look after his interests, and agreed that he might decide whether to sell the property, to rent it, or to carry it on himself, leaving the whole management of it to the trustee for his and the grantor's benefit.

On March 7, 1910, Delaney agreed in writing under seal to sell the property to Rufus E. Brown or his assigns within 60 days from that date at and for the sum of $24,000, and on the same day that agreement was assigned to the defendants. Afterwards on the 14th day of said March, Delaney, by his deed of that date, quitclaimed to the defendants all his right and title to the real estate aforesaid on the west side of St. Paul street, reserving the use of the barroom till the first day of the then next May.

The plaintiff, trustee as aforesaid, having advertised the property to be sold at public auction on the 26th of said March, the defendants and Delaney jointly brought a bill in chancery against him the 24th of said March and procured an injunction against his selling the property until further order, and the injunction was served the 25th, the day before the sale was to be made.

Said bill alleged the substance of the foregoing facts which were not then and are not now in dispute, and further alleged, among other things, that the defendant therein, the plaintiff here, had failed to account for the insurance money received for the loss by fire; that he threatened to close the bar and stop the sale of intoxicating liquor thereat, and to sell all the personal property held in trust; that soon after Delaney deeded to these defendants as aforesaid, and before bill brought the orators demanded of the plaintiff, trustee as aforesaid, a full and true account of his trusteeship and management of the hotel business and of the sale of intoxicating liquor, and then and there offered to pay him all and every of Delaney's debts, secured and unsecured, to redeem all of his property from all mortgages and said trust deed, and demanded that he convey the hotel property on the west side of St. Paul street to these defendants, but that the plaintiff neglected and refused to account at all to the orators and to tell them the amount required to redeem and to release the property from any of the incumbrances. The bill further alleged that the orators were then willing and able, and ever since have been and still were willing and able, and had offered, to pay the plaintiff, trustee as aforesaid, the full amount of all the incumbrances and indebtedness on said property, and all claims and demands against Delaney that they ought to pay to the plaintiff, trustee as aforesaid, or to Henderson as mortgagee, who was also a defendant in the bill, together with all just charges, expenses, and allowances in order fully to redeem said property from all mortgages and said trust deed, but that the plaintiff then refused and still refused to receive and accept the same, but claimed the sole and absolute right to control and dispose of said property, and was advertising the same for sale at public auction. And the bill offered to redeem by paying the full amount of the incumbrances and indebtedness found due on accounting for which it prayed, and also to pay all just charges and expenses of the trusteeship.

This bill is the suit complained of as malicious, made so, it is claimed, by the injunction, which, it is said, caused the damage sought to be recovered, as the property shrank in value by delaying the sale until the 7th of May, when the suit was voluntarily discontinued by the orators.

That the defendants and Delaney had a right to redeem the property from the trust is not denied. The court told the jury that. But what the plaintiff complained of below and complains of here is the injunction. He says that it was obtained by reason of material allegations of the bill that were false to the knowledge of the defendants, without which the bill did not contain enough to warrant the injunction, and consequently that it would not have been granted.

The court told the jury that the material allegations of the bill were that the plaintiff failed to account to the orators; that he ought to have accounted for the management and control of the property, and to have informed the orators of the amount of money required to pay all obligations of the trust, and to have released the property to them; that they demanded of him an accounting and offered to pay him sufficient money to satisfy all the obligations of the trust; that the plaintiff claimed and his evidence tended to show that the defendants never made any offer in good faith to pay those debts and obligations, and failed to make a sufficient offer and tender in that behalf, and did not act in good faith in respect thereto. In this connection the court told the jury to inquire whether said allegations were true or false, and, if false, whether knowingly so or not, and to inquire as to the good faith of the defendants in bringing the suit.

It appeared that the principal interviews between the parties took place at the Van Ness house before the bill was brought. As to those interviews the court told the jury that, if thereat the defendants, having obtained an option and a deed from Delaney, offered in good faith to pay the plaintiff, and gave him fairly to understand that they were ready and wanted to pay him sufficient money to satisfy all the obligations and expenses of the trust—that is, all the creditors of Delaney and his obligations to the plaintiff— and were prepared to do so as soon as the plaintiff gave them a full statement thereof, and requested a deed from him, and the plaintiff understood it, or ought to have understood it if he had exercised the care and prudence of a prudent man, and would have understood it but for his own fault, or if the defendants in those interviews honestly believed and had a right to believe that they had made such an offer and that the plaintiff understood it or ought to have understood it, and the plaintiff refused the offer, or by his own conduct prevented it from being fairly made, and gave the defendants to understand that he refused it, or refused to comply with their requests, then there was probable cause for bringing the injunction suit, and the plaintiff could not recover. But if, on the other hand, the defendants failed through their own fault to offer to pay the plaintiff sufficient money for the purposes aforesaid, and without the fault of the plaintiff they could not maintain that suit, but that they might, nevertheless, have honestly believed they had made a sufficient offer, and unless they did thus believe, and were fairly justified in that belief, there was no probable cause unless found in the advice of counsel as to which the court charged that the defendants had a right to act under the advice of competent counsel, and if they went to such counsel and stated the case fairly to them, just as they understood and believed it to be as far as the facts were not already known to the counsel, and all the material facts were understood by counsel, then the defendants would have a right to rely on their advice, and if, acting honestly and in good faith, they did rely upon the advice of counsel that the allegations of the bill were sufficient to...