Stewart v. Sonneborn/Dissent Bradley

MR. JUSTICE BRADLEY dissenting.

I am obliged to dissent from the judgment of the court in this case. It hardly needs any reference to authorities to establish the familiar doctrines laid down in the opinion. As applied to ordinary cases of actions for malicious prosecution and arrest, they are elementary law. It cannot be gravely supposed that when the court below instructed the jury that the question of malice and probable cause was not before them except on the question of vindictive damages, it meant to ignore or to dispute the law as laid down by the court.

The question, as viewed by the court below, was not as to what is incumbent on the plaintiff to prove in an ordinary action for malicious prosecution, but whether the defendant in this particular case stood in the category that entitled him to require such proof.

No one doubts that in an ordinary action of this kind malice must be proved, and that probable cause for the prosecution is a defence. The sole question was whether this was such an ordinary action, or not; and this question has not been met by the counsel at the bar, and I do not think it is met in the opinion of the court.

What are the grounds and reasons for the stringent rules imposed upon a plaintiff in an action for malicious prosecution? Why is he obliged to prove actual malice, and why is it that the defendant may justify by probable cause? The reason undoubtedly is, that every man in the community, if he has probable cause for prosecuting another, has a perfect right, by law, to institute such prosecution, subject only, in the case of private prosecutions, to the penalty of paying the costs if he fails in his suit. If this were not so, it would deter men from approaching the courts of justice for relief. Prosecutions may fail from many causes independent of the justice of the case; and it would be very hard to visit a man with heavy damages for making a complaint, or bringing a suit, when he had probable cause for it. Hence the law gives to every man a right to complain of or sue another, if he has probable cause to believe he has ground for such complaint or suit. For the exercise of this right he cannot be made accountable in damages, except so far as the law, for the discouragement of private suits, imposes upon him the costs of the litigation. In the case of criminal charges, this right of making complaint is given to every man, for all are interested in the preservation of public order. It is not necessary that the complainant or prosecutor should show any private interest in himself. But in the case of a civil suit, the prosecutor must base his demand upon some claim due, or supposed to be due, to himself. Without any claim, or pretence of claim, a suit brought in his own name, or in the name of another, would be of itself unlawful, malicious, and without probable cause.

In short, upon probable cause, every man has a right to bring a charge against another for a public offence; and every man supposing himself to be wronged by another, may bring suit for the redress of that wrong. The law gives this right, and protects it in an action brought for malicious prosecution or malicious arrest.

But suppose that, in any class of cases, the law did not give this right; could the party then stand, for his defence, upon the question of malice and probable cause? Most assuredly not. He could not bring himself within the proper category. He would then be liable, at all events, for the actual damage caused by an unjust prosecution; just as much so as the man who should assault and wound another, or take and carry away his goods. And if an action should be brought against him for such unjust prosecution, a charge of malice, or want of probable cause, introduced in the declaration, would, at most, be regarded as surplusage; or the prosecution would, per se, be regarded as malicious. The allegation of malice would no more prejudice the right of recovery than did similar allegations of fraud and intent to deceive and injure, in the old action of assumpsit. If a man does not bring himself within the category of right to sue given by the law, then it is clear that he cannot avail himself of the indulgence allowed by the law of showing probable cause for the suit.

That was precisely the question in this case. The court below did not pretend to say that if Stewart & Co. had a right to institute proceedings in bankruptcy against Sonneborn, they could not, if unsuccessful, have availed themselves of all the defences applicable in ordinary cases of actions for malicious prosecution. But, whether right or wrong in its views, it held that Stewart & Co. did not come within the category of persons having such right. It held that the bankrupt law gave such right to creditors only, not to those who only believed themselves to be creditors, but were not such. It held that the fact of their being creditors was a condition precedent to their right to institute bankrupt proceedings. The words of the law as found in sect. 39 of the Bankrupt Act are, that a person owing debts, and doing certain things enumerated in the section, 'shall be deemed to have committed an act of bankruptcy, and subject to the conditions hereinafter prescribed, shall be adjudged a bankrupt, on the petition of one or more of his creditors, the aggregate of whose debts provable under this act amount to at least $250.' In construing this section the court held that, whilst the law did not require that a man should establish his debt by a judgment before instituting proceedings in bankruptcy, it nevertheless required that he should be, in fact, a creditor; and that, if his debt was disputed by the debtor, the responsibility was on him (the creditor) to establish it. If this were not so, then, a man prosecuting an old disputed claim against another, which the latter had always repudiated, and which was still contested in the courts, could effectually ruin his antagonist by simply swearing to his claim and throwing him into bankruptcy; and the latter, though finally successful in demonstrating to the courts the invalidity of the claim, would be without any redress except the petty satisfaction of recovering the costs of the suit. The court below held that this was not the law; and that a man who assumes the responsibility of throwing another into bankruptcy, and drawing down upon him all the consequences of breaking up his business and ruining his prospects for life, must be prepared to show that at least he is in fact a creditor of his victim, and therefore in the category of those who have a right to institute such proceedings.

In the present case, Stewart & Co. claimed to be creditors of Sonneborn; but the claim was disputed and in litigation when the proceedings in bankruptcy were commenced. It seems to me that the court was right in holding that the issue of the litigation of the claim was at Stewart & Co.'s risk, so far as the question of their right to institute proceedings in bankruptcy was concerned; and that, if they failed to establish their claim against him, they could not excuse themselves for the outrageous wrong of breaking up his business, and blighting his life, by showing that they had probable cause to believe that their claim was valid.

This position does not in the least disaffirm the right of a creditor-one who is really such-to plead, or show, probable cause for instituting bankruptcy proceedings against his debtor, where those proceedings are dismissed for want of sufficient ground, or for any other cause. A creditor has the right, by the law, to institute such proceedings upon probable cause. But, in my judgment, one who is not a creditor in fact has no such right. The law does not give him any such right.

The power to throw a man into bankruptcy and thus destroy his business, and all hope for the future, is one of great magnitude to be given to one man over another. A wealthy man or firm, with extensive business connections, having this means of destruction in his hands, wields a tremendous power. The indiscriminate exercise of the power by many heavy capitalists throughout the country, as a means of collecting their debts, or holding it in terrorem over their debtors for that purpose, was one of the causes which made the late law odious to the community, and produced its repeal. In my judgment, the construction given to it by the court below, on the point in question, was a wise and proper one; calculated to prevent, or at least to moderate, that reckless resort to the law which made it so odious and tyrannical in its effects. It did not trench upon any of the acknowledge principles of the law of malicious prosecution: it distinguished the case from those which came under that head of law, and simply held that one who is not, in fact, a creditor cannot lawfully institute proceedings in bankruptcy; and if he does so to the prejudice of the alleged bankrupt, he is responsible for the damages caused to him thereby.

In the rightful prosecution of their alleged claim, whatever injury they may have caused to Sonneborn, Stewart & Co. could well have pleaded probable cause of believing their claim to be just; and Sonneborn could not have recovered damages without showing malice as well as want of probable cause. But in instituting proceedings in bankruptcy, they must at least be in fact creditors, as a condition precedent of their right to do so. If they had been in fact creditors, then they would have been entitled to all the privileges awarded to a defendant in an ordinary action for malicious prosecution, whatever the result of the proceedings might have been.

Putting the matter into a summary form, the result of my views is briefly this:--

1st, That in criminal matters every person, being interested in the public order, has a right by law, upon probable cause, to make complaint against a supposed offender.

2d, That any person believing himself to have a claim against another, having probable cause for such belief, has a right, by law, to sue therefor, subject only, if his claim be adjudged false, to pay the costs of suit.

3d, That any creditor of another may institute proceedings in bankruptcy against his debtor, if he have probable cause to believe that his debtor has committed an act of bankruptcy; but a condition precedent to such right is, that he be, in fact, a creditor.

Counsel, on argument, and it seems to me the court, in its opinion, takes for granted in this case the contrary of the last proposition, without considering the question itself. Assuming that a petitioning creditor is not under any condition precedent to be, in fact, a creditor, then I would agree to all that is laid down in the opinion. But that is the very question, and the only important question, in the case.

The exception in regard to allowing counsel fees in the suit by way of damages was not founded in truth. The court below expressly confined the jury to three specific grounds of damage, and this was not one of them. Hence the request to charge on the subject was not relevant, and the court did no wrong to the defendants in refusing to so charge.

I think the judgment should be affirmed.