Willard v. Holmes

• Citation: 142 N.Y. 492,37 N.E. 480
• Parties: WILLARD v. HOLMES, BOOTH & HAYDENS.
• Decision Date: 05 June 1894
• Court: New York Court of Appeals Court of Appeals

142 N.Y. 492

37 N.E. 480

WILLARD

v.HOLMES, BOOTH & HAYDENS.

Court of Appeals of New York.

June 5, 1894.

Appeal from common pleas of New York city and county, general term.

Action by Samuel H. Willard against Holmes, Booth & Haydens, a corporation, for damages for malicious prosecution. From a judgment of the general term (21 N. Y. Supp. 998) affirming a judgment for plaintiff, defendant appeals. Reversed.

John E. Parsons, for appellant.

Marshall P. Stafford, for respondent.

GRAY, J.

This action was brought to recover damages for the malicious prosecution of a civil action. Whether such an action may be maintained, regardless of whether the plaintiff in the former action had interfered with either the person or property of the defendant therein, is a question we are not called upon to determine. The general rule at common law that an ordinary action, maliciously brought and without probable cause, which had terminated in favor of the defendant, gave rise to a right of action, certainly seems to have disappeared in England with the enactment of statutes giving costs to successful defendants. 3 Bl. Comm. 126, Chitty's notes; Mining Co. v. Eyre, 11 Q. B. Div. 674, 683. In this country the authorities are not agreed upon the doctrine governing such actions, as may be seen by reference to the cases collated in the American & English Encyclopedia of Law (volume 14, p. 32). But I am prepared to assume that there may be satisfactory authority for holding that where a party has been subjected to some special or added grievance, as by an interference with his person or property, in a civil action, brought without probable cause, he may maintain a subsequent action to recover any legal damage which he avers, and is able to show, to have been occasioned to him. See Bump v. Betts, 19 Wend. 421;Whipple v. Fuller, 11 Conn. 582; Potts v. Imlay, 4 N. J. Law, 330; Mayer v. Walter, 64 Pa. St. 283; and Cooley, Torts, p. 187. The action generally is not to be viewed with any favor; for, in theory of law, the costs awarded by the statute to the successful defendant are an adequate compensation to him for all damages. There is no reason, of course, why the action, in a proper case, should not be maintained against a corporation. The motive for the corporate suit is imputable to the corporation, and not to the individual directors. In this case it appears that plaintiff's property was attached in the former action against him, and if it has been shown that it was instituted without probable cause, and that there was an abuse of the processes of the law in the procuring of the attachment, furnishing the ground for an inference of malicious interference, the action may be said to have been attended with a special grievance, which, by adding to the expenses some injury to property, differentiated it from an ordinary action. The attachment issued upon the affidavit of the plaintiff's (this defendant's) president, alleging the nonresidence of the defendant in the action. It was a process which the statute authorized, and which is usual in such cases, and its use subjects this defendant to no unfavorable criticism, if it accompanied the institution of an honest suit. The complaint and the affidavit in the former action contain no charges of fraud, or of a defamatory character, and they, as well as an examination of the facts connected with its bringing and maintenance, seem to disclose only an effort to recover a sum of money which the plaintiff's directors supposed to have been lost to the company through the unauthorized act of the defendant, while its treasurer and managing officer. Under such circumstances, every intendment should and will be against this plaintiff upon reviewing the case presented. Such an action as the present one comes very near to being, if it is not actually, a retrial of the former case, and, for its justification, requires the plaintiff to make out a very glaring case of the commencement of an action against him without any reasonable ground, at the time, for a belief that he had rendered himself liable thereto. The circumstances, to sustain this right of action, must appear to have been such that no reasonable man could have been influenced thereby to the belief that the plaintiff had unauthorizedly committed the company, whose officer he had been, to a liability which it should not have incurred, and which was foreign to its chartered purposes. It is our judgment that the facts did not justify the trial court in submitting the case to the jury, and that, upon all the evidence, it was error to deny the defendant's motion to dismiss the complaint. The material facts were not in dispute, and whether there was probable cause for the prosecution of the former action became a question of law, solely for the court. Besson v. Southard, 10 N. Y. 236. A review of the facts will make this clear, and seems justified by the magnitude of the recovery at the circuit and the subsequent affirmance of the judgment by the general term.

In 1886 the plaintiff, Willard, was the treasurer and the general manager of the defendant, a Connecticut corporation, styled Holmes, Booth & Haydens, which was chartered for the purpose of manufacturing and dealing in brass, copper, and German-silver goods, etc. Willard had been intrusted by the directors with the management of the company's business, which was practically uncontrolled. He had executed a contract between the company and the Forest City Carbon Company, a corporation in Ohio, engaged in manufacturing carbons for electric lighting purposes, under which the latter company was to sell all of its manufactures to the Holmes, etc., Company. The carbon company desired to increase its facilities and to extend its plant, and, in July, 1886, made an arrangement with Willard, who undertook to procure the means by lending his company's credit. It made its promissory note to the order of the Holmes Company for $10,000, which Willard indorsed in the name of the payee, and procured to be discounted, remitting the proceeds to the carbon company. Before the maturity of this note, Willard resigned from the Holmes Company. In November, 1886, the carbon company, being unable to meet its maturing note, sent on another note for $10,000, made to the order of the Holmes Company, to Adams, then the agent of the latter company. Adams indorsed the note with the payee's name, and procured its discount. The company's check for $10,000 was then sent to the carbon company, which that company used in taking up its July note. During and prior to these transactions, Willard and Adams were also interested, as stockholders, in the carbon company. After Willard left the service of the Holmes Company, Wayland, its president, succeeded him as treasurer and general manager, in the latter part of January, or early in February. Being made aware of the outstanding liability of the company as indorser upon the note, and being informed that the maker was unable to provide for its payment, he procured the discount of another note of the carbon company, for the same amount, at the bank, and, the proceeds being credited to the Holmes Company, the November note, when due, was charged to its account. At the time, Wayland was ignorant of the facts attending the making of the note, and supposed it related to the renewal of some customer's note. Upon investigation, he discovered the history of the matter, and that, at the time when Willard, in July, 1886, had agreed to lend the credit of the company in aid of the carbon company in the manner mentioned, that company, with a capital of only $25,000, was already indebted to the Holmes Company in the sum of $22,338.47, and that a first note had been paid with funds furnished by his company. He at once consulted with the company's attorney, and was advised that the company could recover damages against Willard, measured by the amount which the company had had to pay upon the note. A complaint was prepared and sworn to, which charged Willard with having indorsed the company's name upon the carbon company's note, without consideration received by the former company, and without authority; with having remitted the proceeds of the discount thereof to the sole benefit and use of the carbon company, and that the Holmes Company had been obliged to pay the same at maturity. Judgment was demanded against Willard for damages to the amount of the note. An affidavit was also prepared and sworn to, which set forth the defendant's (Willard's) nonresidence, the cause of action, and that the source of the information of Wayland, the deponent, was in an inspection of the books and records of the plaintiff company. Prior to the actual commencement of the action, however, Wayland had an interview with Willard, in consequence of which Willard consented to attend at a meeting of the directors of the Holmes Company, and he then explained to them the purpose of the note transaction in ...