Sullivan v. O'Brien, 9544.

• Decision Date: 14 August 1935
• Docket Number: No. 9544.,9544.
• Citation: 85 S.W.2d 1106
• Parties: SULLIVAN et al. v. O'BRIEN.
• Court: Texas Court of Appeals

85 S.W.2d 1106

SULLIVAN et al. v. O'BRIEN.

No. 9544.

Court of Civil Appeals of Texas. San Antonio.

August 14, 1935.

Rehearing Denied September 18, 1935.

Appeal from District Court, Bexar County; F. Stevens, Judge.

Action by Paul O'Brien against Dan J. Sullivan and John C. Sullivan. From an adverse judgment, the defendants appeal.

Reversed and rendered.

Templeton, Brooks, Napier & Brown, VanderHoeven & Greathouse, and T. J. Newton, all of San Antonio, for appellants.

Dave Watson and Boyle, Wheeler, Gresham & Terrell, all of San Antonio, for appellee.

SMITH, Chief Justice.

This action, for $200,000 actual and $200,000 exemplary damages, was brought by Paul O'Brien against John C. Sullivan and Dan J. Sullivan, who are alleged to have conspired with their father, D. Sullivan, and their brother W. C. Sullivan (both deceased), to wrongfully and maliciously prosecute Paul O'Brien, without probable cause, for the offenses of theft, theft by bailee, embezzlement, and forgery. The complaint is based upon a series of acts alleged to have been committed by one or more of the Sullivans over a period of years beginning in 1921, and terminating, in 1932, with the dismissal of the last of a series of indictments which had been returned against O'Brien. The record and the briefs of the parties are quite too voluminous to be encompassed in any concise summary, and none will be attempted here.

The private banking house of D. Sullivan & Co., while purportedly operated as a partnership composed of Dan Sullivan, Sr., and his son, W. C. Sullivan, was in fact owned solely by the former, who established the business in 1882 or 1883, and successfully operated it up to the time of his death, 50 years later, at the age of 88. The record at large shows that he completely dominated and controlled the business and its operations, and ruled its personnel with an iron, no less than cunning, hand. The said Dan Sullivan, Sr., will be hereinafter referred to as D. Sullivan, or Sullivan, to avoid confusion with his son, Dan J. Sullivan, who will be referred to as D. J. Sullivan.

The record at large further shows that for more than 30 years, from the time they were mere boys, and until July 16, 1921, when they left that service, the twin brothers, Peter and Paul O'Brien, were trusted employees in the bank. They began work as messengers, at a salary of $40 per month, which was gradually increased, as they were promoted in rank and responsibility, until in 1916, when it had reached $190 and in 1921, when it was $250, per month, each. For many years prior to their discharge in 1921, the two brothers were in charge of the books of the bank, and themselves actually kept the "control books"; that is, the general ledger, loans, and discounts ledger, and cashbook. The record forcefully shows that throughout their service in the bank (as well as in all the affairs of their lives), and in all the details of the transactions involved in this litigation, Peter and Paul O'Brien acted in complete union and harmony, as twin brothers in deed as well as in fact, so that the acts of each were the acts of the other, even to the bringing of identical suits, Paul's being now under consideration here, and Peter's, apparently, still in the trial court.

Some time in June, 1921, D. Sullivan became suspicious of the conduct and motives of the O'Briens, and on July 16th summarily discharged them from the bank's service.

Shortly afterwards, on August 6, Sullivan instituted two actions, in trespass to try title, against the O'Briens and their wives, and certain corporations owned by them, to recover title and possession of valuable business and other properties situated in and out of the city of San Antonio, in Bexar county, titles to most of which properties were in corporations owned by the O'Briens, or in their wives.

Six days later, on August 12, Sullivan and the O'Briens entered into a tentative compromise of those two suits, whereby the O'Briens agreed to pay Sullivan a million dollars in satisfaction of the latter's claim. On August 21 this agreement was restated, whereby the O'Briens agreed to pay Sullivan $250,000 in cash and convey to him real property of an appraised value of $750,000. This agreement was consummated, and covered into a final judgment, on September 9, 1921.

At the ensuing October term of the Forty-Fifth district court of Bexar county, the grand jury returned 161 felony indictments against Paul, and 163 against Peter, O'Brien, charging them with the offenses of theft, theft by bailee, and embezzlement, of sums aggregating nearly three million dollars, alleged to have been the property of D. Sullivan & Co., described in the indictment as a partnership composed of D. and W. C. Sullivan. Appellee, Paul O'Brien, was tried upon one of those indictments in January, 1922, and was acquitted by a jury in response to a peremptory instruction from the trial judge, not upon the merits, but upon the ground that D. Sullivan & Co. had not been shown to be a partnership, as alleged in the indictment. Later in the year the remaining indictments against both O'Briens, embracing the same faulty allegation, were transferred to the Thirty-Seventh district court, and there, on September 28, 1922, finally dismissed, upon motion of the district attorney.

Several succeeding grand juries considered the transactions, without returning any indictments thereon, but 8 months later, at the May, 1923, term of the Thirty-Seventh district court, the grand jury returned 33 new indictments against each of the O'Briens, charging them with the offenses of theft, theft by bailee, embezzlement, and forgery. These indictments were based upon an equal number of transactions identical with a like number covered by the previous indictments, which had been dismissed. The new indictments embraced omnibus allegations of ownership of the funds alleged to have been taken, to meet the defect upon which the prior indictments had been dismissed, and upon which Paul O'Brien had been acquitted in January, 1922. In 1925 Peter O'Brien was tried and acquitted upon one of the 33 indictments against him, but the 33 indictments against Paul O'Brien lay dormant until in June, 1926, when he was tried upon one of them and acquitted by a jury upon the merits.

Then, in October following, the remaining indictments against both O'Briens were dismissed by a special judge, upon motion of the defendants therein, but, in a mandamus proceeding prosecuted by the acting district attorney and private counsel assisting him, the Supreme Court of Texas ordered the regular judge to reinstate the cases upon the docket; they having been illegally dismissed upon the procurement of the accused. State v. Anderson et al., 119 Tex. 110, 26 S.W.(2d) 174, 69 A. L. R. 233.

Finally, however, on November 28, 1932, after the death of D. and W. C. Sullivan, and upon motion of the district attorney, the remaining indictments, previously reinstated upon mandate of the Supreme Court, were dismissed, and the prosecution thereon ended.

Thereafter, in July, 1933, Paul O'Brien instituted this suit, and Peter filed a like action. Paul's suit was tried, and the judgment therein is the subject of this appeal. Upon the trial in this suit the jury found, in response to special issues submitted to them, that the alleged conspiracy was entered into by the four Sullivans to maliciously prosecute O'Brien, without probable cause; that John C. and D. J. Sullivan, "either at the beginning or at" some "time during its existence, entered into said conspiracy," and "aided in carrying out its purpose by acts, deeds, counsel or advice"; that the criminal charges embraced in all the indictments against O'Brien were false; that, as a direct result of the criminal prosecutions against him, O'Brien sustained actual damages in the sum of $100,000, and exemplary damages in the sum of $80,000. From an adverse judgment, based upon those findings, John C. and D. J. Sullivan have brought this appeal.

At the outset it is deemed appropriate to state that the record at large shows that over a period of 5 or 6 years prior to their discharge the O'Briens took large sums of money, almost daily, from the bank; some of it in sums of as much as $10,000 in currency, some of it in sums of as much as $6,000, by slips crediting their individual accounts carried under fictitious names; some of it in certified checks purchased for the O'Briens, by friends selected by them, with funds of the bank. Sullivan charged that these withdrawals aggregated nearly $3,000,000, while appellee contends that the amount did not exceed $800,000, but admits it aggregated that sum. Sullivan contended, and appellee denies, that the O'Briens embezzled those funds. Appellee contends, and Sullivan denied, that the withdrawals were made by the O'Briens with Sullivan's knowledge and active connivance. These underlying facts and contentions call for findings of fact in regrettable detail as a basis for this opinion and decision.

In the earlier operations of the institution, D. Sullivan resorted to the practice of "scattering" cash assets of the bank among numerous accounts carried under fictitious names. About 1910 he combined the larger of those accounts into one, which was thenceforth carried under the name of "E. S. Clem," a fictitious person, so far as the bank was concerned. In that account collections of both principal and interest were deposited from the larger loans made by the bank, and from it new loans were made. Outgoing and incoming transactions were evidenced, not by the usual method of checks, or drafts, and deposit slips, but by simple charge and credit slips. By these devices the funds in the account were made to appear as individual deposits of the fictional Clem, and therefore liabilities of the bank; whereas they should have been allocated as surplus, or undivided profits, and therefore assets of the bank. The object of the subterfuges, according to appellee, was to...