Luby v. Bennett, 111 Wis. 613

111 Wis. 613 | Wis. | 1901

Maeshall, J.

Aright of action for damages for malicious prosecution does not accrue till the wrongful proceeding has been brought to final determination in favor of the defendant or person accused. Pratt v. Page, 18 Wis. 337; Winn v. Peckham, 42 Wis. 493, 499; Woodworth v. Mills, 61 Wis. 44; Lawrence v. Cleary, 88 Wis. 473; Lowe v. Wartman, 47 N. J. Law, 413; Comm. v. McClusky, 151 Mass. 488. Hence, as indicated in the authorities cited, in an action to recover compensation for such a wrong, such final determination must be distinctly alleged in the complaint and proved upon the trial, the same as any other fact essential to the cause of action, or the pleading will be open to successful challenge for insufficiency. Appellant now invokes that rule, but as we read the complaint it seems that it is very clearly alleged that the wrongful prosecution was ended by a judgment in favor of the defendant therein before this action was commenced. ■ The meaning of the language of the pleading, “ It was finally decided and adjudged in said action on the 25th day of September, 1900, that said action was without foundation and was maliciously and unjustly begun, and that this plaintiff was and had not been.' guilty of any wrong, and awarded this plaintiff judgment therein against the plaintiff therein (the defendant in this action),” leaves no room for reasonable controversy but that the alleged wrongful prosecution was closed by a judgment in favor of respondent prior to the commencement of this suit. It is said that the receiver appointed had not made his report when this action was commenced, and that it indicates that the alleged wrongful prosecution was not ended.. The rule invoked does not require that all proceedings that may be had or are required in an action to finally work out or enforce the rights of the parties shall occur before a cause of action will accrue to the defendant therein to prosecute the plaintiff for maliciously commencing and carrying on such action. It requires only that the issues material to the question of the bona fieles of such action shall be tried and closed by final judgment. That was done in the case in question, notwithstanding the provisional remedy or ancillary proceeding therein, to control, administer, and preserve the property involved, to await the final determination ;of the rights of the parties, was not fully closed up.

It is suggested that the action cannot be said to have been finally closed when this action was commenced, because the right of appeal from the judgment to this court existed. There is authority to the effect that a judgment in favor of the defendant in the alleged wrongful action, appealed from to a higher court, does not satisfy the element of want of probable cause, and is insufficient to sustain a suit for malicious prosecution of such action. Reynolds v. De Geer, 13 Ill. App. 113; Nebenzahl v. Townsend, 61 How. Pr. 353. In the first of such cases the decision went upon the ground that the alleged wrongful prosecution was in a justice’s court and that the appeal from the judgment opened up the whole matter, giving the plaintiff therein a right to a trial de novo; and in neither case was the question under discussion raised by an objection to the sufficiency of the complaint, but the status of the alleged wrongful prosecution was treated as matter of defense. Nebenzahl v. Townsend is supported by numerous citations from English authorities to the effect that the plea of a pending appeal from the judgment in the first action is a good defense. In Ingram v. Root, 51 Hun, 238, it is said that it is essential to allege in the complaint that the judgment in plaintiff’s favor in the first action has not been appealed from or that it has been appehled from and affirmed. Ho authority is cited to support that view, and none which we may safely follow exists. The 'decision is out of harmony with all others in the Hew York courts,'and contrary to the settled law as declared by its highest court, as is clearly evidenced by Marks v. Townsend, 97 N. Y. 590, where it was held that a final judgment, in an action alleged to have been maliciously brought, satisfies the essential element of a final determination of the wrongful prosecution in an action to recover damages for such a- wrong, notwithstanding the right of appeal therefrom exists; and that, if an appeal has been taken from the judgment and is actually pending, the judgment, till set aside or reversed, will stand for want of probable cause as much as any judgment can; that a pending appeal is effectual only to sustain an application for an order staying proceedings till the appeal shall have been determined. - It is not necessary here to go that far. It is sufficient to hold that, on the question of the status of the alleged wrongful prosecution, it is sufficient to allege, in the action for damages on account of it, that judgment was rendered in favor of the defendant therein; and that if the defendant in the action for damages desires to defeat the plaintiff on that question, he must lay the foundation therefor by answer instead of by relying on an objection to the complaint by a demurrer for insufficiency (Carter v. Paige, 80 Cal. 390); that, while the pendency of an appeal may constitute a defense, in the absence of anything to show that there is a pending appeal from the judgment the ■ presumptions are in favor-of the validity and justice thereof; that no allegation on that subject,is necessary on the part of the person relying thereon; and that the mere right of appeal from a judgment in an alleged malicious prosecution does not affect the right of the defendant therein, if he is the prevailing party, to pursue his prosecutor in an action for damages.

The further claim is made that the complaint is insufficient because it shows that in the alleged wrongful prosecution the defendant was brought into court by the mere service of a summons, neither his personal liberty nor his property being interfered with. If the nature of the suit were such as appellant’s counsel claim, there would be much authority to sustain their position. The rule in England, when this country was within its jurisdiction, was and still is, that since costs are allowed to the successful defendant in a civil suit, they are* presumed to compensate him for all damages suffered, if neither his person nor property is interfered with, regardless of whether the prosecution is maliciously wrongful or not. Ordinarily we would say that such rule should be regarded as part of the com7 mon law and binding upon courts here till changed by statute, the same as any other common-law principle. But it does not seem to have been so regarded to any great degree. Courts have treated the subject of whether the right to compensation for malicious prosecution of a mere civil case, without interference with person or property, exists, as matter of judicial policy, to be determined according to varying opinions of judges of supreme judicial tribunals; though the decisions in regard thereto, found in the books, are not based on that ground to any great degree, but on what was supposed to be the weight of authority. ' The result is that on an important branch of the law, that has been settled in England since costs were allowed to the successful defendant by the statute of Marlbridge (52 Hen. Ill, 1261) the courts of the states of this Union, and the text-writers as well, are in as much confusion as in respect to any other branch of the law that could be suggested.

What we say as to the law of England is supported by the following quotation from the opinion of Lord Bowen in Quartz Hill C. G. M. Co. v. Eyre, L. R. 11 Q. B. Div. 674, 690:

“ The broad canon is true that in the present day, and according to our present law, the bringing, of an ordinary action, however maliciously and however great the want of reasonable and probable cause, will not support a subsequent action for malicious prosecution. . . . The counsel for the plaintiff company have argued this case with great ability; but they cannot point to a single instance since Westminster Hall began to be the seat of justice in which an ordinary action, similar to the actions of the present day, has been considered to justify a subsequent action on the ground that it was brought maliciously and without reasonable and probable cause.”

To support what we have said as to the confusion of authority in this country, we refer to the following: In 3 Lawson, Rights, Rem. & Pr. § 1082, we are informed that “most of the earlier cases in the United States, and a few of the recent ones, follow the English rule; but others, and it would se$m on better grounds, sustain the action,” where neither person nor property is interfered with in the alleged wrongful action. The note to the text indicates that the authorities in favor of the English rule are much more numerous and are as recent as those to the contrary, and that the latter are based almost wholly on Pangburn v. Bull, 1 Wend. 345; Whipple v. Fuller, 11 Conn. 582; and Closson v. Staples, 42 Vt. 209. An examination of those cases indicates that the rule, at its inception in this country, was founded in error.

The first invasion of the common-law rule seems to have been made in Pangburn v. Bull in 1828; the next in Whipple v. Fuller, 1836. In the first case it seems that the change in the ancient English rule, founded on the statute of Marlbridge, was overlooked. All the supporting American authorities cited by the court were cases of arrest and bail. In the Connecticut case the change in the English rule was recognized, but the court declined to follow it, preferring, for reasons stated, to follow the doctrine established prior to the statutory right of successful defendants to costs. The Yermont court followed Connecticut and adopted its reasoning. The cases referred to were followed in Eastin v. Bank of Stockton, 66 Cal. 123, though it was said that the weight of authority, American as well as English, and the text-writers, is the other way. In Kolka v. Jones, 6 N. D. 461, it seemed to the court that the weight of American authority was against the English rule. In 14 Am. & Eng. Ency. of Law, 34, it is said the authorities on the question are evenly balanced. The author, for support, refers to an article by Mr. John D. Lawson, published in 1882. 21 Am. Law Reg. 281, 353. Other writers, including some judges, have cited Mr. Lawson’s article as if it accorded with the idea that the English rule is condemned by the weight of authority in this country. A careful reading of such article shows that the writer’s conclusion was to the contrary, and that courts and text-writers who have referred, to it to support the departure from the English rule have adopted the author’s idea as to what is the better rule instead of the one that has the greater support in American decisions. Here is his conclusion:

“We have now reviewed all the American cases, pro and con, and the weight of authority appears to be against the right of action for the unfounded and malicious prosecution of an ordinary civil action. With the majority are all but one of the text-writers we have cited, — Swift, Townsend, Addison, and the authors of the American leading cases, who follow the English adjudications; Mr. Weeks, who limits the right to ‘ exceedingly vexatious suits where special damage has been actually suffered;’ and Judge Cooley, who discourages the remedy without positively denying the right. On the other side is lír. Hilliard, who evidently favors the action, but unfortunately relies upon cases which do not sustain it at all. Of.the thirteen cases we have just examined, three . . . hold that the action is not sustainable became it is not, three that it will npt lie because the defendant has his costs, which, in England, is considered a sufficient remedy. ... In but five cases: Pangburn v. Bull, 1 Wend. 345, in New York; Whipple v. Fuller, 11 Conn. 582, in Connecticut; Closson v. Staples, 42 Vt. 209, in Vermont; Marbourg v. Smith, 11 Kan. 554; and Woods v. Finnell, 13 Bush, 629,— do the courts recognize that there is a wrong for which there should be a remedy. But while the weight of authority denies the action, the weight of reason allows it. We have set out at length the arguments of the courts pro and eon, and no one can read them without being struck with the weakness of the position assumed by the majority of the American courts that have been called upon to deal with this question, and of the writers who have stated the law. as they understood the decisions.” 21 Am. Law Beg. 368, 369.

In Smith v. Mich. B. Co. 175 Ill. 619, the court said that the great weight of American authority and the better reasoning are in accord with the English rule; that it was preferable to follow what Mr. Lawson said as to which way the greater weight of authority points, since the court’s examination of judicial and ^elementary authority on the subject confirmed him, than to follow his judgment as to what the law ought to be. In Stephen, Mal. Pros. (Am. ed.), 21, it is said in the note,-that the rule is well settled in the United States contrary to the rule of the English courts. How valueless the writer’s work is to a correct understanding of the subject is seen from the fact that Whipple v. Fuller, Pangburn v. Bull, Closson v. Staples, and other cases following their lead, are cited as holding the same as Eberly v. Rupp, 90 Pa. St. 259; Muldoon v. Rickey, 103 Pa. St. 111; Wetmore v. Mellinger, 64 Iowa, 141, and other cases which in fact distinctly follow the,English rule. The writer of the note says, apparently intending to use language in accord with the opinion of Beck, J.: “And in such cases the plaintiff is entitled to recover the damages sustained by him; ” while in fact Justice Beck used this language:

“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, where there has been no arrest of the person or seizure of the property of defendant and no ¡special injury sustained which would not necessarily result in all suits prosecuted to recover for like causes of action.”

So careful a writer as Judge Cooley does not venture to •say definitely which way the weight of authority preponderates in this country, though his language leads one to believe that, in his judgment, it is in favor of the English rule. He confines the civil actions that may support one for damages for malicious prosecution by the settled law, to maliciously instituting and prosecuting proceedings' in bankruptcy, suits in which the defendant is arrested, suits in which the property of the defendant is attached, and proceedings to have a party declared insane and placed under guardianship. He says, as to other civil actions:

“ In some cases it has been held that an action may be maintained for the malicious institution without probable ■cause of any civil suit which has terminated in favor of the defendant; but the English authorities do not justify this •statement, and there is much good reason in what has been said in a Pennsylvania case (Mayer v. Walter, 64 Pa. St. 283), that ‘if the person be not arrested or his property .seized, it is unimportant how futile and unfounded the action might be; as the plaintiff, in consideration of law, is punished by the payment of costs.’ If every suit may be retried on an ■allegation of malice, the evils would be intolerable, and the malice in each subsequent suit would be likely to be greater than in the first.” Cooley, Torts (2d ed.), 219.

The first significant case found in the American decisions is Ray v. Law, Pet. C. C. 207, decided in 1816, where the English rule was followed to the letter, it being said that, ■“ If bail be not'demanded, it is unimportant how futile and unfounded the action may be, as the plaintiff is punished by the payment of costs and the defendant is not materially injured.” The following authorities, in addition to those already referred to, support Judge Cooley’s observation: McNamee v. Minke, 49 Md. 122; Supreme Lodge A. P. L. v. Unverzagt, 76 Md. 104; Bitz v. Meyer, 40 N. J. Law, 252; Potts v. Imlay, 4 N. J. Law, 330, 7 Am. Dec. 603; Woodmansie v. Logan, 2 N. J. Law, 93; Mitchell v. S. W. R. Co. 75 Ga. 398; Kramer v. Stock, 10 Watts, 115; Gorton v. Brown, 27 Ill. 489; Ely v. Davis, 111 N. C. 24; Cade v. Yocum, 8 La. Ann. 477; Thomas v. Rouse, 2 Brev. 75. The doctrine of those cases and the mischief it is aimed at are well indicated by the following language from the opinion in Ely v. Davis, supra:

“We may as well say that the law seems to be settled by the weight of authority, although there are some decisions to the contrary, that an action will not lie for malicious prosecution in a civil suit, unless there was an arrest of the person or seizure of property, as .in attachment proceedings at law or their equivalent in equity, or in the proceedings in bankruptcy, or like cases, where there was some special damage resulting from the action, and which would not necessarily result in all cases of the like kind.”

“ The policy of the law, while encouraging arbitrations and settlements without suit, has ever been to afford fair opportunity to all to have their claims determined in the courts. To hold it now to be that in every case of failure by the plaintiff to establish his allegation of fraud, there being no special damage resulting therefrom, upon a suggestion of malice and want of probable cause an action for malicious • prosecution would lie against him, would open the floodgate to a species of litigation hitherto unknown in North Carolina, the absence of which, up to the present time, indicates that it has not heretofore been recognized.”

The Iowa court, in Wetmore v. Mellinger, 64 Iowa, 741, mentioned, as considerations for the doctrine that the malicious prosecution of a mere civil suit, without interference with the person or property of the defendant, will not sustain an action for damages, the following:

“ The courts are open and. free to all who have grievances and seek remedies therefor, and there should be no restraint upon a suitor, through fear of liability resulting from failure in his action, which would keep him from the courts. . . . If an action may be maintained against a plaintiff for the malicious prosecution of a suit without probable cause, why should not a right of action accrue against a defendant who defends without probable cause and with malice ? ”

From what has been said it will be seen that the proposition submitted and contended for by appellant’s counsel ought not to receive approval as the law of this state without the most careful consideration of the subject in a case necessarily depending upon a correct solution of it. As at present advised, we are not prepared to say that such a case has been heretofore decided by this court. Noonan v. Orton, 30 Wis. 356, was not such a case. There the plaintiff’s property was seriously interfered with by successive, unnecessary, and vexatious equitable levies thereon in garnishee proceedings, and the ground of the action was abuse of the process of the court. In our judgment the present case does not necessarily turn on the broad proposition contended for. The alleged wrongful action was not an ordinary suit, where neither person nor property was interfered with, and where there was no damage other than such as generally results from ordinary civil actions in such circumstances. The action was brought ostensibly for the purpose of winding up a partnership. Before it was commenced, respondent was in possession of the partnership property as much as appellant. The purpose of the action was to as effectually deprive him of that possession and subject it, in invitum, to the claim of appellant, as if it were levied upon by writ of attachment. Under such circumstances damages other than taxable costs necessarily follow. Moreover, special damages are expressly alleged in the complaint. The pleader says, in effect, that the purpose of the plaintiff was, by means of the winding-up proceedings, to obtain possession of the partnership property, in form as an officer of the court for the benefit of the person legally entitled thereto, but in fact for the benefit of the plaintiff; and, through the forms of law, to administer the property ostensibly for the legitimate purpose of a winding-up suit, but in fact to enable the plaintiff to control the property, and, in an indirect way, to obtain the full title thereto; and that such purpose was fully consummated, whereby respondent’s interest in the firm assets was wholly lost to him. The same reasoning that supports an action for damages for maliciously and without probable eause instituting and prosecuting proceedings to have a person declared a bankrupt applies to an action maliciously brought to wind up a partnership, founded on alleged misconduct of the defendant.

In quite a recent English' case to which we have already referred (Quartz Hill C. G. M. Co. v. Eyre, L. R. 11 Q. B. Div. 674), wherein the rule that an ordinary civil action, neither the property nor the person of the defendant being interfered with, causing special damage, though maliciously brought and prosecuted, will not sustain an action for damages, was maintained with as much clearness and firmness as in any previous case, it was held that an action maliciously brought and prosecuted to wind up a partnership should not be classed with those where the damages to the defendant are deemed to be danmmn absque injuria; but under the third head of actionable wrongs growing out of malicious prosecutions, laid down by Holt, C. J., in Savile v. Roberts, 1 Ld. Raym. 374, 378, namely, actions where a man’s fair fame and credit are injured. It was said that such an action-is not like an ordinary action for fraud, where the wrong done by merely bringing the action is supposed to be remedied by the vindication of the defendant at the trial;1 but its effect is like that in wrongful proceedings in bankruptcy — the good name, fame, and credit of the person accused is necessarily seriously injured. That seems plain, and it is equally plain that such actions fall within tbe class beld to constitute a good foundation for an action for damages for malicious prosecution on account of the interference with property rights. Any particular method of interfering with property rights, as by writ of attachment, is not material. Ah equitable levy upon property, as in garnishee proceedings, or the deprivation of the defendant of his property by means of The appointment of a receiver, or any other means whereby his property is taken into the custody of the court or taken out of the custody of the owner and out of his free control, as in Noonan v. Orton, 30 Wis. 356, which, in the ordinary course of things, causes damage not reached by a mere judgment of vindication or for costs, is sufficient. This action was not commenced by service of a ■summons and prosecuted without the person or property of the defendant being interfered with directly to his damage; but, as before indicated, the defendant was deprived of the possession of his property, and a growing business, of which he was part owner, was abruptly stopped and closed out, necessarily causing loss to him, not only by depreciation in the value of the firm assets, but by destruction of the business in which the property was used, and by injuring respondent’s good name and fair fame as a merchant and member of the community.

The further point is made that the complaint is insufficient because it does not contain an allegation that the plaintiff was damaged by the wrongs complained of to some specific amount. That must be ruled against appellant on the well-settled principle that, where damages are necessarily infer-able from the facts alleged, a statement of such facts sufficiently states the damages. Luessen v. Oshkosh E. L. & P. Co. 109 Wis. 94; 4 Ency. of Pl. & Pr. 618.

By the Court.— The order appealed from is affirmed.