
    Willard v. Holmes, Booth & Haydens.
    (New York Common Pleas
    General Term,
    February, 1893.)
    Plaintiff, for many years defendant’s treasurer and manager, authorized to use its name for the indorsement of commercial paper, and having the general conduct of its business affairs, in accordance with defendant’s constant practice and with the knowledge of its board of directors, indorsed defendant’s name upon the note of a corporation customer of defendants. While such note was outstanding and unpaid, plaintiff resigned as treasurer and manager. His successor, W., ascertaining the fact of defendant’s liability as indorser of said note, instructed counsel to prosecute plaintiff for damages for the alleged unauthorized use of defendant’s name. Thereafter, in an interview, plaintiff fully explained to W., in detail, all the circumstances attending his indorsement of said note and also repeated the explanation in W.’s presence at a subsequent meeting of defendant’s board of directors which he attended at W.’s request. Plaintiff declining to secure defendant against its contingent liability on the note, by a conveyance of his property, the board of directors authorized W. to proceed with the action against plaintiff and to attach his property, he being a nonresident of the state, which was done. Plaintiff in that suit had judgment on the ground that he was authorized to indorse the note and the Court of Appeals affirmed the same. In an action for malicious prosecution, held, that the action against plaintiff, and the attachment of his property was without probable cause and malicious.
    Advice of counsel is no defense to an action for malicious prosecution where it does not appear-that the advice was obtained after a full, fair and honest statement of all the facts.
    Plaintiff had a verdict for §31,700. Held, that as the record did not show that the jury were actuated other than from conscientious motives and a proper discharge of duty, or that their deliberation was warped by undue sympathy for plaintiff, passion or prejudice against defendant, their estimate of plaintiff’s damages was conclusive.
    Appeal by defendant from a judgment for plaintiff which was entered upon the verdict of a jury, and from an order denying- defendant’s motion for a new trial on the several grounds specified in section 999 of the Code of Civil Procedure.
    Action by Samuel II. Willard against defendants to recover damages for the malicious institution and prosecution of an action charging plaintiff with having, while treasurer and manager of the defendant corporation, wrongfully used its .name for the indorsement of the promissory note of another corporation, and for causing liis property to be attached in that action.
    
      Marshall P. Stafford for plaintiff (respondent).
    
      William JET. Harris, Edwa/rd M. Shepard and John E. Parsons for defendant (appellant).
   Bischoff, J.

Whatever the doubt in which the question was at one time involved, it is now well settled that a private corporation is liable civilter for malicious prosecution (Morton v. Met. L. Ins. Co., 34 Hun, 366; 103 N. Y. 645 ; Nat. Bank v. Graham, 100 U. S. 699; Denver, etc., R. R. Co. v. Harris, 122 id. 597; Williams v. Planter, etc., Co., 34 Am. Rep. 494; Carter v. Howe Machine Co., id. 311; Wheless v. Second Natl. Bank, 25 id. 783; Reed v. Home Savings Bank, 39 id. 468; Gulf, etc., R. R. Co. v. James, 15 Am. St. Rep. 743; Hussey v. Norfolk, etc., R. R. Co., 2 id. 312 ; Jordan v. Alabama, etc., R. R. Co., 49 Am. Rep. 800), and the malice of its officers and employees, or other agents, accompanying the performance of acts within, or incidental to the discharge of their duties, is imputable to the corporation (Gulf, etc., R. R. Co. v. James, 15 Am. St. Rep. 743 ; Evansville, etc.,R. R. Co. v. McKee, 50 Am. Rep. 103), unless those acts were intended as a mere cover for the accomplishment of some independent and wrongful purpose. Hoffman v. New York Central, etc., R. Co., 87 N. Y. 25 ; Kolzem v. Broadway & Seventh Ave. R. R. Co., 20 N. Y. Supp. 700 ; 1 Misc. Rep. 148; Donivan v. Manhattan Railway Co., Id. 368.

Liability, it seems, is predicable of the malicious prosecution, without probable cause of an ordinary civil action (Pangburn v. Bull, 1 Wend. 345 ; Eastin v. Bank of Stockton, 56 Am. Rep. 77; Closson v. Staples, 1 id. 316; Whipple v. Fuller, 11 Conn. 582; Lockenour v. Sides, 26 Am. Rep. 58 ; McCardle v. McGinley, 44 id. 343), and unquestionably so if the prosecution of the action be accompanied by the arrest of the person prosecuted, or the seizure and detention of his property. Cooley on Torts (2d ed.), 217: Newell on Malicious Prosecution, etc., chap. 1, § 26, p. 35, and cases cited.

To maintain an action for malicious prosecution, plaintiff must establish that the prosecution has terminated in Ms favor, that it was unfounded and without probable cause, and that the prosecutor was actuated by malice. Wheeler v. Nesbit, 24 How. (U. S.) 544; Besson v. Southard, 10 N. Y. 236 ; Heyne v. Blair, 62 id. 19; Thaule v. Krekeler, 81 id. 428; Anderson v. How, 116 id. 336: Foshan v. Ferquson, 2 Denio, 617.

The termmation of the alleged malicious prosecution is sufficiently shown if it appears that no further proceeding can be taken therein (Robbins v. Robbins, 133 N. Y. 597); “probable cause ” is defined to be a reasonable ground for suspicion supported by circumstances sufficiently strong in themselves to warrant a cautious man in Ms belief that a person accused is guilty of the offense with which he is charged ” (Anderson v. How, 116 N. Y. 336; Carl v. Ayers, 53 id. 14; Foshay v. Ferguson, 2 Denio, 617), a concurrence of real belief and reasonable grounds for it (Farnam v. Feeley, 56 N. Y. 451; Shaul v. Brown, 4 Am. Rep. 151), and “ malice ” in law comprehends not only, as in the ordinary meanmg of the term, a malevolent intention to injure another in Ms person, property or good repute, but also any wanton or reckless disregard of another’s inviolable enjoyment of his civil rights. Newell on Malicious Prosecutions, etc., chap. 14, § 34, p. 524; Kolzem v. Broadway & Seventh Ave. R. R. Co., 1 Misc. Rep. 148; Voltz v. Blackmar, 64 N. Y. 440.

Applying the consideration of “ probable cause ” as above defined it stands to reason that if the prosecutor knew, or ought to have known, or could with reasonable diligence and caution have ascertained facts exculpating and exonerating the person accused or suspected, he cannot successfully urge that there was “ probable cause for prosecution.” Fagnan v. Knox, 66 N. Y. 595; Wass v. Stephens, 128 id. 123. Whether there was, or was not probable cause ” is, if the evidence is not conflicting, or conflicting inference cannot be reasonably drawn therefrom, a question of law to be detérmined by the court, otherwise it is for the jury (Bulkeley v. Keteltas, 6 N. Y. 384; Besson v. Southard, 10 id. 236; Burns v. Erben, 40 id. 463; Heyne v. Blair, 62 id. 19; Thaule v. Krekeler, 81 id. 428; Anderson v. How, 116 id. 336; Hazzard v. Flury, 120 id. 223); and while “malice” is not predicable wholly of the want of “ probable cause ” it may nevertheless be inferable from the same facts which establish the latter. Wheeler v. Nesbitt, 24 How. (U. S.) 544; Thompson v. Lumley, 50 How. Pr. 105 ; 3 Lawson’s Rights, Remedies & Practice, 1890, § 1098.

How, what are the facts in the case at the bar ? Defendant is a corporation chartered for the purpose of manufacturing and dealing in all kinds of brass, copper and German silver goods, plated ware and metals, composed wholly or in part of copper, brass or German silver, and all articles composed, in whole or in part, of metal which it shall deem expedient, and to do such other things as are incident to the prosecution of said business, and to exercise such.mercantile powers as may be convenient and necessary for the successful prosecution of said business.” One of the articles of defendant’s manufacture was a metal lamp, in connection with the use of which carbon was required, and for the supply of carbon it had contracted with the Forest City Carbon Manufacturing Company. Plaintiff had been for many years defendant’s treasurer and manager, was authorized to use its name for the indorsement of commercial paper, and to him had been intrusted the general conduct of its business affairs. It had been defendant’s constant practice, to the knowledge of its board of directors and stockholders, through its treasurer and manager and at his discretion, to extend financial assistance to such persons or corporations as had established business affiliations with it, when required. In July, 1886, the Forest City Carbon Manui factoring Company, which for more than a year had supplied defendant with carbon, desiring to extend its works and to comply with defendant’s request for increased supplies, requested defendant, through its treasurer manager, plaintiff, for a loan of §10,000, which the latter granted by indorsing the carbon company’s note with defendant’s name, causing it thus to be discounted, and remitted the proceeds to the maker. In the latter part of the year 1886, and while the carbon company’s note, indorsed as mentioned, was still outstanding and unpaid, plaintiff resigned as defendant’s treasurer and manager. Chandler FT. "Wayland, who had been previously elected president, was thereupon also elected treasurer and appointed manager in plaintiff’s stead, and assumed the management and control of defendant’s business. The newly-elected president, treasurer and manager ascertained the fact of defendant’s outstanding liability as indorser of the carbon company’s note, at once applied to counsel and instructed him to commence suit against plaintiff to recover damages for the alleged unauthorized use of defendant’s name. Acting upon these instructions, counsel prepared the required summons and complaint for an action in the Supreme Court as well as the papers necessary to obtain an attachment against plaintiff’s property, he being a nonresident of the state, but, at Way-land’s request, withheld service thereof to await his further direction in the premises. Thereafter Wayland had an interview with plaintiff, at which the latter fully explained to the former in detail all the circumstances attending his indorsement of the carbon company’s note. This explanation was repeated by plaintiff in Wayland’s presence at a subsequent meeting of defendant’s board of directors, which he attended at Wayland’s request, and at which there was also present a director, George W. McGill, himself a stockholder o'f the carbon company, and who had advised the making of and prepared the contract under which the carbon company was supplying defendant with carbon. McGill, on the trial of this action, confessed that at the time of this meeting he was cognizant of the purposes for which plaintiff had indorsed the carbon company’s note, and of the fact that plaintiff had indorsed it in the utmost good faith and without wrongful motive or intent, but that he refrained from protesting against plaintiff’s prosecution lest his motives for so doing might be impugned. Heedless of plaintiff’s explanation, regardless of the fact that he had indorsed, the carbon company’s note in the furtherance of defendant’s business, pursuant to authority given him, and seemingly solicitous only that he should secure defendant against its contingent liability by a conveyance of his property, which he, protesting his innocence, declined to do, defendant’s board of directors authorized Wayland to proceed with plaintiff’s contemplated prosecution, and Wayland thereupon, and without further submission to counsel of the facts transpiring at the directors’ meeting, advised counsel by telegraph to proceed with the Supreme Comt action and to attach plaintiff’s property upon the complaint and papers previously prepared, which was accordingly done. Plaintiff defended and the trial resulted in a judgment in his favor, establishing his claim of authority to indorse the carbon company’s note and the truth of his assertions at the directors’ meeting. This judgment was affirmed at General Term (Holmes, Booth & Haydens v. Willard, 24 N. Y. St. Repr. 260) and by the Court of Appeals (125 N. Y. 75).

True, the Supreme Court and the Court of Appeals differed concerning the legal deductions authorized by the facts, the former maintaining that the loan of money to its customers was not ultra vires on the part of defendant, and the latter tribunal determining that it was so in the instance of the loan to the carbon company, because it did not appear that the sale of carbon was within defendant’s corporate authority. The facts established on the trial, however, remained undisturbed, and the result reached by each of the appellate tribunals was the same-—-that plaintiff had authority to indorse the carbon company’s note, from defendant’s directors expressly, and from its stockholders by acquiescence and acceptance of the benefits accruing from the sale, of carbon, which precluded them from asserting the want of authority, and that plaintiff was not answerable to defendant.

The facts determined in the Supreme Court action and proved on the trial of this action, thus conclusively established that plaintiff was prosecuted not only without cause, but also without “ probable cause,” since it would imply stultification by defendant to urge that it did not know what authority it had given plaintiff. Defendant’s president, treasurer, manager and board of directors had, by plaintiff, been fully informed, prior to the institution vf the action against him, why and for what purposes he had indorsed the carbon company’s note, and defendant became thereupon chargeable with knowledge of the fact of plaintiff’s authority in the premises. Wass v. Stephens, 128 N. Y. 123.

Was the prosecution malicious ? The affirmative solution of this query must inevitably follow if we are correct in the proposition that defendant was chargeable Avith knoAvledge of plaintiff’s authority to indorse the carbon’s company’s note. It is incomprehensible Iioav defendant, after having authorized plaintiff to indorse the note, could yet successfully contend that its knoAvn and persistent prosecution of the plaintiff for a series of years upon an accusation of having wrongfully incurred liability as indorser on its behalf AAras aught but a wanton and reckless disregard of his right to the enjoyment of property and good repute and in that sense, at least, “ malicious.”

Defendant sought to shield itself in this action by the “advice of counsel.” “Advice of counsel” is, however, only a defense in so far as it may tend to prove “ probable cause” and disprove “malice” (Gulf, etc., Railway Co. v. James, 15 Am. St. Rep. 743), and to have this effect it should appear that the “ advice of counsel ” was obtained after a “ full, fair and honest ” statement of all the facts concerning the guilt of the person suspected or accused Avliich haAre come to the proscutor’s knowledge. Newell on JVIalicious Prosecution, §tc., chap. 8, § 2 et seq., p. 310, and cases cited in the text and notes; Ames v. Rathburn, 37 How. Pr. 289. This does not appear to have been done in the case now under consideration, for though we assume Wayland’s belief of plaintiff’s guilt to be attributable only to the want of sufficient information of the facts when he first sought counsel and directed the preparation, of papers for the purposes of the Supreme Court action and the attachment of plaintiff’s property therein, the facts transpiring at the subsequent interview between plaintiff and Wayland, and at the directors’ meeting were not so sub' mitted and non constat but that if they had been, counsel’s advice would have been in accord with the subsequent decisions of the Supreme Court and Court of Appeals. But had Wayland and other officers of the defendant, who were instrumental in the prosecution of the Supreme Court action, testified to the “ advice of counsel ” on such subsequently ascertained facts, their credibility as interested witnesses, chargeable with the consequences of that prosecution, would have been a matter for the jury’s determination. Canajoharie Nat. Bank v. Diefendorf, 123 N. Y. 191.

We have refrained from specially noticing the denial of defendant’s motion for dismissal of the complaint when plaintiff rested because any defect in the proof at that time existing was cured by evidence subsequently adduced by the parties (Schenectady & Saratoga Plank Road Co. v. Thatcher, 11 N. Y. 102, 113 ; Tiffany v. St. John, 65 id. 315, 317 ; Painton v. Northern Cent. R. R. Co., 83 id. 7), and upon the whole case our conclusion is that the trial judge properly refused to dismiss the complaint and to direct a verdict for defendant.

The verdict awarded plaintiff $31,700 for damages which had resulted to him from the malicious prosecution complained of in this action, and though but $2,500, the expenses incurred for counsel fees in his defense, was shown to have been plaintiff’s actual pecuniary loss, we cannot upon mature consideration reach the conclusion that interference on our part with the verdict, only because it is of a large amount, would be justifiable. The evidence shows, and ' this fact was conceded by some of defendant’s witnesses, that up to the time of defendant’s unwarranted accusation plaintiff's integrity was unimpeached. It also appeared that he rated high in financial and mercantile circles, and had been solicited to assume the presidency of a banking institution, besides holding equally important and fiduciary positions in several manufacturing corporations. The loss of these offices was directly attributable to defendant’s prosecution of what has proved to be an unwarranted impungment of plaintiff’s integrity. In arriving at the amount awarded, the jury justly considered the loss of the offices mentioned, the actual expense incurred by plaintiff in his vindication, any general impairment of his integrity in social and mercantile aspect, and the shame and humiliation endured as a direct result of the publicity of his arraignment upon a charge injuriously affecting his trustworthiness, which emanating as it did from a corporation of defendant’s importance carried with it almost the imprint of truth. We know not how the extent of plaintiff’s loss may be even approximately ascertained and stated in a pecuniary sense, and since the record does not show that the jury were actuated other than from conscientious motives and a proper discharge of duty, or that their deliberation was warped by undue sympathy for the plaintiff, passion or prejudice against the defendant, we are forced to regard their estimate as conclusive. “I should be sorry,” said Lord FLyusfield in Gilbert v. Burtenshaw, 1 Cowp. 230, “ to say that in cases of personal torts no new trial should ever be granted for damages which manifestly show the jury to have been actuated by passion, partiality or prejudice. But it is not to be done without very strong grounds, indeed, and such as carry internal evidence of intemperance in the minds of the jury. It is by no means to be done where the court may feel that, if they had been on the jury, they would have given less damages, or where they might think the jury themselves would have completely discharged their- duty in giving a less sum. Of all the cases left to a jury, none is more emphatically left to then- sound discretion than such a case as this, and unless it appears that the damages are flagrantly outrageous and extravagant, it is difficult for the court to draw the line; ” so in Whipple v. Cumberland Manufacturing Co., 2 Story, 661, it is said by Fir. Justice Stoby that a verdict should not be set aside as excessive in cases of tort unless the court can clearly see that the jury have committed some very gross and palpable error, or have acted under some improper bias, influence or prejudice, or have totally mistaken the rales of law by which the damages are to be regulated; ” and by Mr. Justice Matthews in Barry v. Edmunds, 116 U. S. 550; — S. C. Rep. 550, that in no case is it permissible for the court to substitute itself for the jury and compel a compliance on the part of the latter with its own view of the facts in evidence, as the standard and measure of that justice which the jury is the appointed constitutional tribunal to award.”

We perceive no error in the rulings of the learned trial judge, and the judgment and order appealed from should be affirmed with costs.

Daly, Oh. J., and Pryob, J., concur.

Judgment and order affirmed.  