Case Name: Morris H. Cohen, Respondent, v. Nathaniel Fisher & Company, Appellant, Impleaded with Louis M. Taylor and Others, Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1909-12-30
Citations: 135 A.D. 238
Docket Number: 
Parties: Morris H. Cohen, Respondent, v. Nathaniel Fisher & Company, Appellant, Impleaded with Louis M. Taylor and Others, Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 135
Pages: 238–243

Head Matter:
Morris H. Cohen, Respondent, v. Nathaniel Fisher & Company, Appellant, Impleaded with Louis M. Taylor and Others, Defendants.
First Department,
December 30, 1909.
Conspiracy — combination to do lawful acts — pleading — complaint not stating cause of action for conspiracy—malicious prosecution — bankruptcy proceedings;
No action for conspiracy lies where two or more persons conspire to do a lawful act in a lawful manner and cause damage thereby, even though they acted with malicious motive. ■ . .
The gist of an action for conspiracy is the damages occasioned by the wrongful acts of one or more persons and the only materiality of the allegations with respect to the conspiracy or combination with those who are.not the direct actors is to connect them with or make them responsible for the acts of the • others.
Although the statute makes it a misdemeanor for two or more persons to conspire “falsely to institute or maintain an action or special proceeding” a complaint which in substance alleges that the plaintiff was put to' trouble and. expense in defending a bankruptcy proceeding and was deprived of the use of his property for a certain time and that his credit was injured by reason of the fact that one of the defendants in conspiracy with others for the purpose of injuring" the plaintiff filed a petition in bankruptcy against him and petitioned for the appointment of a receiver on the ground that the plaintiff was removing his property whereby the plaintiff was put to the expense of a. successful defense, does not state a cause of action where it is not alleged "that the defendants conspired falsely to institute the' proceeding, or that they agreed to misstate the facts or resort to perjury or misrepresentation.
No proof of special damages could-be made under such complaint.
As such complaint does not charge malice or want of probable cause in instituting the bankruptcy proceeding, it cannot be sustained as one for malicious prosecution. >
An allegation that the proceeding was instituted withoutTcause is not equivalent to an allegation that it was instituted without probable cause, for the appearances upon which the defendants acted might have warranted a man of reasonable prudence in instituting the proceeding although it turned out to-be groundless in fact.
If a defendant has probable cause to institute a prosecution his motive -is immaterial, but where the proceeding has terminated in plaintiff’s favor, the defendant may be liable for malicious prosecution- if he acted without probable cause and with malice.
Appeal by the defendant, Nathaniel Fisher & Company, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 1st day of October, 19G9, upon the decision of ■ the court, rendered after a trial at the New York, Special Term, overruling the said "defendant’s demurrer to-the complaint.
Edgar N. Dollin, for the appellant.
I. N. Jacobson, for the respondent.

Opinion:
Laughlin, J.:
The demurrer was interposed upon the ground that the complaint fails to state facts sufficient to constitute a cause of action. The only theory upon which the learned counsel for. the plaintiff attempts to sustain the complaint is that it states a cause of action for conspiracy and that an action will lie against two or more per sons to recover damages for acts done by one of them pursuant to a conspiracy with the other or others, where an action could not be maintained against any of them for the same acts committed without a conspiracy with others. Ho statute conferring a cause of action or prohibiting the acts is cited in support of the action, and the learned counsel for the plaintiff evidently relied upon the comr mon law, and' cites Place v. Minster (65 N. Y. 89); Verplanck v. Van Buren (76 id. 247); Bufflalo Lubricating Oil Co. v. Everest (30 Hun, 588); Park & Sons Co. v. Nat. Druggists' Assn. (30 App. Div. 508), and Green v. Davies (100 id. 359; revd., 182 N. Y. 499) as authority to support his contention. In Green v. Davies (supra), Chief Judge Cullen, writing for the court, said : " There may be cases where acts committed in pursuance of a combination of a number of persons to injure a third person are actionable, while the same acts, if done by a single individual, acting without such concert, would not be actionable. Such cases may be termed, actions for conspiracy, but where the conspiracy results in the commission of that which would be an actionable tort, whether committed by one or by many, then the cause of action is the tort, not the conspiracy."' It has long been the settled law tliat the basis and gist of an action for conspiracy are the damages occasioned by the 'wrongful act of one or more persons, and that the only materiality of the allegations with respect to the conspiracy or combination with those who were not the direct actors, is to connect them with and make them responsible for the acts of the others. (Hutchins v. Hutchins, 7 Hill, 104; Cooley Torts [2d ed.], 143, 144; Brackett v. Griswold, 112 N. Y. 454.) The acts, which it is alleged resulted in the damages in the case at bar, were committed by the defendant Taylor, and they consisted, first, in filing' a petition in bankruptcy against the plaintiff - in the District Court of the United States for the eastern district of Hew York, and' filing, on the same day with the same court, a' petition for the appointment of a receiver of the plaintiff's property on the ground that he was " removing " his property, and that unless a receiver was appointed the balance of his property would be " removed and that the creditors would receive nothing on account of their respective claims," and that pursuant thereto a receiver was appointed and that the plaintiff was thereby obliged to employ .an attorney and interposean answer and defend the "bankruptcy proceeding, and did so with the result that upon the trial the petition was dismissed on the merits. The allegations with respect to the damages are that plaintiff was put to great trouble, inconvenience.and expense in procuring witnesses and employing counsel to defend the bankruptcy proceedings, and ivas deprived of the use of his property for a period of thirty-four days, and that "his credit and business were mined, that he suffered injury to his good name, fame and standing, and otherwise, in all to his damage in the sum of $15,000." Under the well-settled rule these allegations are insufficient to admit proof of special damages, and would only authorize a recovery of general damages. It is not alleged that Taylor knowingly made any false allegations in éitlier petition to the Federal court, nor is it even expressly alleged that any of the allegations contained in either petition were false. It does not appear Upon what ground the bankruptcy proceeding was dismissed. It may have been for the insufficiency of the allegations of the petition, and it may have been for want of satisfactory proof of some material allegations. The complaint, however, fails to charge or show either malice or want of probable cause on the part of Taylor in instituting the bankruptcy proceeding or in applying for the appointment of the receiver, and, therefore, it cannot be sustained as sufficient if the action is to be regarded as one for malicious prosecution. It is true, it is alleged that the application. to have him adjudicated .a bankrupt and for the appointment of a receiver was made without cause, but those allegations would be true if he had probable cause; but upon a full hearing it developed that the appearances upon which lie acted, and which would have warranted a man of reasonable prudence in proceeding thereon, turned out to be groundless in fact. (Burt v. Smith, 181 N. Y. 1.) The complaint alleges malice in assigning claims to Taylor, but that caused no damage. If he had probable cause, his motive was immaterial, but, of course, the proceeding having terminated, if he acted without probable cause and his course of conduct was instigated by malice, then the case might be regarded as one for malicious prosecution, and he would be liable for the damages which were the proximate cause of his acts. (Wass v. Stephens, 128 N. Y. 128; Stewart v. Sonne born, 98 U. S. 187.) It is quite clear, therefore, that if. the allegations with respect to .the conspiracy be eliminated, no canse of action, even against.the defendant who committed the acts which resulted in the damages to the plaintiff, is alleged; and, as already observed, the learned counsel for -the plaintiff evidently appreciated this, and bases Ms right to recover upon the allegations' with respect to a conspiracy. It is alleged in the complaint that the acts of Taylor in presenting the petitions were instigated by thp other defendants, and were committed pursuant to an1 understanding and agreement which is characterized as a conspiracy between them to injure the plaintiff'in his business. If the complaint stated a good cause of action against.Taylor,-these allegations would be suffh cient to show a cause of action against the other defendants, for they would admit of -proof connecting them with the .acts which, resulted in the damages. If it were a crime for two or more individuals to combine, dr conspire to do an act which one of them might lawfully do, and this fell within such prohibited acts, it is quite probable that the filing of the petitions would sufficiently constitute overt acts, and it may be that the case then would be one of the class to which Chief Judge Cullen alluded in the opinion quoted. It may well be that where a statute makes an act by two or more individuals unlawful, which, if committed by one, would not be unlawful, this would give rise to a cause of action for the damages resulting from tíre execution of the conspiracy, even though there would be no cause of action for the same acts committed by one of the parties to the conspiracy, but, as already observed, no statute is cited, and we have found none which prohibits the acts which it is charged were done by the defendants or by the defendant, Taylor.. The allegations of the complaint are insufficient — it is not even claimed that they are sufficient — to show the com- , mission of the crime of conspiracy as defined in sections 168 and 169 of the Penal Oode (now sections 580 and 581 of Penal Law), and section 170 of the Penal Oode (now section 582 of Penal Law) provides that no conspiracy is punishable criminally unless it x is one of those enumerated in sections 168 or 169 thereof. The only subdivision of. section 168 -of the Penal Code which bears at all on the question is subdivision 3, which makes it a misdemeanor for two or more persons to conspire falsely-to institute or main tain an action or special proceeding." Assuming, without deciding, that this would apply to a proceeding in bankruptcy, it is not alleged that defendants conspired or agreed to falsely institute a proceeding, for it does not appear but that, from their standpoint, the facts warranted .the institution of the proceeding in bankruptcy, and it is not alleged that they agreed to misstate the facts, or resort to perjury, or to misrepresent anything to the court (People v. Flack, 125 N. Y. 324; 1 Abb. L. Dict. 478, definition of " false "), and, therefore, even if the action could be maintained, if the facts alleged showed the commission of a crime or were prohibited by law, it does not appear by the allegations of the complaint that the defendants committed the crime of con- . spiracy, or that the acts which they did or caused to be done were prohibited by law. The cases herein ci'ted—particularly Verplanck v. Van Buren and Buffalo Lubricating Oil Go. v. Everest, as being those relied upon by counsel for the plaintiff — might sustain the action, without proof of want of probable Cause, if it were alleged that the defendants agreed to resort to perjury, or to mislead the court or misrepresent'any'material facts, and that one of them at the instigation of all' did so and that the damages were caused thereby ; but without some such allegation we have merely the case of two or more persons conspiring to do a lawful act in a lawful manner from which damages flow, and we are of opinion that in such case malicious motives and conspiracy do not give rise to a cause of action which would not otherwise exist. (See Oakes v. Oakes, 55 App. Div. 576; affd., 167 N. Y. 625.)
It follows, therefore, that the interlocutory judgment should be reversed, with- costs, and the demurrer sustained, with costs, but With leave' to plaintiff to amend on payment of costs of the appeal and of the demurrer.
Ingraham, McLaughlin, Houghton and Scott, JJ., concurred.
Judgment reversed, with costs, and demurrer sustained, with costs, with leave to plaintiff to amend on payment of costs. .