Case Name: RAWSON v. LEGGETT et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1904-10-14
Citations: 90 N.Y.S. 5
Docket Number: 
Parties: RAWSON v. LEGGETT et al.
Judges: 
Reporter: West's New York Supplement
Volume: 90
Pages: 5–14

Head Matter:
(97 App. Div. 416.)
RAWSON v. LEGGETT et al.
(Supreme Court, Appellate Division, Second Department.
October 14, 1904.)
1. Malicious Prosecution—Probable Cause—Question fob Juey.
In an action for malicious prosecution, the question of want of probable cause held, under the evidence, to be for the jury.
2. Appeal—Refusal to Direct Verdict—Ground Not Stated in Motion.
A ground not stated in motions for nonsuit and for a direction of a verdict at the close of the evidence, to be one of the grounds on which the motions were made, may not be urged on appeal, for the purpose of reversal, as a reason why the motions should have been granted.
8. Malicious Prosecution—Excessive Vebdict.
A verdict of $25,000 for malicious prosecution for embezzlement of a man 55 years old, who was receiving a salary of $4,500 a year as defendants’ creditman, and the reasonable charges of whose counsel for procuring dismissal of the indictments was $5,000, will not be disturbed on appeal as excessive.
Woodward, J., dissenting.
Appeal from Trial Term, Westchester County.
Action by Byron Rawson against Francis H. Leggett and others. From a judgment for plaintiff and from an order denying a motion for new trial, defendants appeal.
Affirmed.
Argued before HIRSCHBERG, P. J., and BARTLETT, WOODWARD, JENICS, and HOOKER, JJ. '
Edward S. Hosmer (William N. Cohen, on the brief), for appellants.
Morris J. Hirsch (Isaac N. Mills and Benjamin N. Cardoza, on the brief), for respondent.

Opinion:
HOOKER, J.
Plaintiff had a verdict for he claims to have sustained on account of the malicious prosecution of the defendants. For many years they had conducted a large wholesale business with over 18,000 customers. The plaintiff, prior to his arrest, was for many years employed by the firm as head creditman, with complete charge of the credit department, and was such during all the time that Borchardt, one of the firm's salesmen, was connected with them. In November, 1901, it was discovered that Borchardt had embezzled over $24,000 of the firm's money. Up to that time the latter had been in defendants' employ for several years, and the embezzlement had been going on for a period of at least three years, and the manner in which it was accomplished was somewhat as follows: Borchardt, unlike any of the other salesmen, guarantied the accounts of his customers, and he was permitted by the defendants to collect money from them from time to time, and turn over to the defendants the cash he had collected, or his individual checks upon his own banking account, for corresponding amounts. From these collections, from time to time, he retained part of the moneys, continued to sell other goods, and collected the money therefor. To conceal the exact status of the accounts of his customers, he handed to the cashier some of his later collections to apply on the accounts of such customers. He concealed from his employers all of his peculations, in spite of the fact that the firm sent out monthly statements for comparison, which contained averments that they were not requests for money, but merely memoranda for comparison, and requests that the customers report any discrepancies in the accounts to the firm direct, and not to the agents through whom they dealt. The conclusion is irresistible that during the whole period of Borchardt's embezzlement practically all of these monthly statements to the customers whose accounts he had tampered with must have been suppressed, so that they were not in fact received by them, although the plaintiff testified that several of Borchardt's customers had reported discrepancies to one of the defendants • during that period of time. Borchardt's resources to prevent detection became, however, exhausted, and the defendants discovered the theft. All of his customers were called upon personally by others in the employ of the defendants, and it was ascertained that Borchardt had obtained and failed to account for something like $24,000 of the defendants' money. About the time the embezzlement was discovered, one of the defendants told the plaintiff that the latter was the proper person connected with the firm to interview Borchardt with relation to it. The plaintiff sought to be relieved of that duty, and stated that he would rather not have anything to do with it, and there is some evidence that the plaintiff actually advised against investigation, and suggested, in any event, that the defendants proceed slowly.
The monthly statements to which reference has been made were always drawn off by the bookkeeper, and by him placed upon the desk of the plaintiff. After examination by him, he handed them to the addressing clerk, to be thereafter passed to the mailing clerks. The plaintiff admits that he received all the monthly statements of Borchardt's customers from the bookkeeper, but says that he passed them all on to the addressing clerk. It appears that the addressing clerk was changed frequently, and that the four or five boys at the mailing department were also .constantly being changed. The inference is sought to be drawn by the defendants that the suppression of these monthly' statements must have been accomplished after they left the hands of the bookkeeper, arid that, inasmuch as the plaintiff was the "only constant link in the chain," it was highly probable that no one else except himself effected the suppression.
Borchardt was arrested, but procured bail. Within a few weeks after this the plaintiff resigned his position, addressing one of the defendants by letter in these words: "Dear Sir: Having decided to make a change, my resignation is herewith. Kindly inform me what date it will suit your convenience for it to go into effect." The resignation was accepted to take effect the last day of January, 1902, five weeks after it was tendered. After the plaintiff left defendants' employ, he gave to one of the defendants' witnesses as his office address that of Borchardt's new place of business, and made the witness a proposition to sell bakers' supplies, which had been and was then Borchardt's specialty. After Borchardt's arrest, he was a frequent visitor at his home, and his association with him seemed to be more intimate than it had been before the discovery of the embezzlement. Soon after plaintiff ceased to be connected with defendants' firm, Mr. Leggett, one of the defendants, testified that he interviewed Borchardt, and that the latter confessed to him that the plaintiff' had been his accomplice, and had received six or eight thousand dollars out of the money that he had stolen. Although Borchardt was in the courtroom at the time of the trial, he was not called as a witness. Thereupon the defendants took counsel with their attorney, and the latter testified that Borchardt made to him a similar confession implicating the plaintiff. It appeared that during the 18 months prior to the discovery of the embezzlement the plaintiff had actually received from Borchardt the sum of about $2,400 in cash and checks, which had been deposited in his private bank account. After a continuance of the investigation by the defendants' counsel, he advised them to lay the matter before the district attorney, and this was done, with the result that an indictment was found against Rawson, and he was arrested on the 18th day of April, 1902. When about to be arraigned under this indictment on the 25th day of April, the indictment was, as the disr trict attorney chose to designate his procedure, superseded by five others. An inspection of the minutes of the grand jury which found these five indictments was permitted, and upon these minutes a motion was made by the plaintiff to quash them. This motion was granted, with leave to the district attorney to present the case to a subsequent grand jury, but, nothing having been done, this action for malicious prosecution was commenced.
The defendants urge that the plaintiff has not met the rule which requires him, to sustain the burden of proof, to show want of probable cause for the prosecution and malice on the part of the defendants. The doctrine is well stated in Hazzard v. Flury, 120 N. Y. 223, 227, 24 N. E. 194, 195, as follows r
"The rule is that whether a person have probable cause to make a criminal accusation against another is not necessarily dependent 'upon the guilt or innocence of the accused, or upon the fact whether a crime has been committed. If the apparent facts are such that a discreet and prudent person would be led to the belief that a crime has been committed by the person charged, he will be justified, though it turns out that he was deceived, and that the party accused was innocent.' "
And the defendants urge that the facts in the case are such that, as matter of law, it must be said that a discreet and prudent person would have been led to the belief that the crime was committed by this plaintiff. It is also said in Anderson v. How, 116 N. Y. 336, 338, 22 N. E. 695, 696:
" 'What constitutes probable cause does not depend upon whether the offense has been committed in fact, nor whether the accused is guilty or innocent, but the prosecutor's belief based upon reasonable grounds.' "
Probable cause, unlike malice, is not determined by the standard of the particular defendant, but of the ordinarily prudent and cautious man, exercising conscience, impartiality, and reason, without prejudice upon the facts (Heyne v. Blair, 62 N. Y. 19); and an honest belief, unfounded upon reasonable grounds, is not sufficient (Farnam v. Feeley, 56 N. Y. 451, 454; Fagnan v. Knox, 66 N. Y. 525, 527). It is settled in this state that if, in an action of this kind, the facts are undisputed, and admit of but one inference, probable cause is a question of law; but if the facts are in dispute, or admit of opposing inferences, the question is for the jury. Fagnan v. Knox, supra; "Wass v. Stephens, 128 N. Y. 123, 28 N. F. 21. Under this last doctrine I am impelled to believe that the question of probable cause was for the jury's determination, and not a question of law for the court, and that no error was committed by the learned court in denying the defendants' motions for a nonsuit, and for the direction of a verdict upon the ground that on the undisputed facts the defendants had not been shown to have acted in the prosecution without probable cause. The salient circumstances revealed by the evidence permitted of contrary inferences. The jury might well enough have found that the plaintiff's opportunity to suppress the monthly comparison statements, his more intimate association with Borchardt after the latter's arrest, coupled with the stater ment made by Borchardt that the plaintiff had been the accomplice, and the physical evidence of money having been paid the plaintiff by Borchardt recently before the disclosure of the thefts, were circumstances which, in the view of a discreet and prudent person, would lead to the belief that Rawson was guilty with Borchardt; but none of the salient facts disclosed leads to a conclusion of the plaintiff's guilt exclusively. For plaintiff was not the only person through whose hands the monthly comparison statements passed. Although it might have been more difficult for Borchardt to have perfected his arrangements for the suppression with the constantly changing addressing and mailing clerks, yet such a condition was not at all unlikely, nor sufficient, alone and unsupported by other circumstances, to convict. So, too, the payment of moneys by Borchardt to the plaintiff is not a circumstance which has but one inference. It is but necessary to refer to the evidence of the plaintiff himself in this regard to suggest innocent circumstances which might be inferred, namely, that these were borrowed moneys, part of which were secured by collateral, and which have all been repaid. What has been said is equally true of the circumstance of the plaintiff's later more intimate association with Borchardt. The confession which Borchardt actually made to the defendants, and later to their attorney, implicating the plaintiff, might resolve itself into a more difficult question; but it has been recently held by an undivided court in this department that the question of how far information received from another is a justification for the act of defendant in causing the arrest of the plaintiff, is not one of law for the court, but one of fact for the jury. Owens v. New Rochelle Coal & Lumber Co., 38 App. Div. 53, 55 N. Y. Supp. 913. In that case the credibility of the person who supplied the information upon which the defendant was induced to prosecute had not been attacked. This record presents, it seems to me, a more cogent reason why the question of probable cause, as far as Borchardt's confession is concerned, at least, is a question for the jury; for Borchardt was a self-confessed thief of many thousands of dollars, and might easily have had some ulterior motive for implicating another in his crime. The learned court did not err in presenting the question of probable cause to the jury, and the facts and circum stances are not such as require us to interfere with the verdict in that particular.
In their brief defendants urge that, inasmuch as the district attorney advised them to lay the matter before the grand jury, and inasmuch as they testified that they relied upon his advice, and that he made an independent examination of the witnesses in his office, they were entitled to a direction of a verdict at the close of the evidence. Their learned counsel evidently did not take that view, however, at the time of the trial, for neither in the motion for a nonsuit nor in the motion for the direction of a verdict at the close of all the evidence was that stated to be one of the grounds upon which the motions were made. By implication they conceded that such reasons were not sufficient to take the case from the jury, and they should not be permitted now, for the purpose of reversing this judgment, to urge this point, where, had it been made in time, it is not impossible that opportunity would have been given to supply additional and important proofs upon that subject. The Court of Appeals has held many times that motions for a nonsuit or to dismiss the complaint, to be effectual, must specify the defects supposed to exist. Binsse v. Wood, 37 N. Y. 526, 532; Thayer v. Marsh, 75 N. Y. 340; Sterrett v. Third National Bank of Buffalo, 122 N. Y. 659, 25 N. E. 913; Quinlan v. Welch, 141 N. Y. 158, 36 N. E. 12.
The verdict of $25,000 we cannot say was induced by mistake, passion, or prejudice on the part of the jury. The reasonable charges of plaintiff's counsel for his services rendered in procuring the dismissal of the indictments and in collateral matters was $5,000. The plaintiff had been in the employ of the defendants for between 20 and 25 years, and for several years prior to arrest had received a salary of $4,500. He was a man 55 years of age, and had evidently attained an honorable position in the community. The law concedes a wide latitude of discretion in actions of this class, and, except the limitation that the verdict should not seem to be actuated by prejudice, passion, or malice, places no general limit upon the amount of the recovery. Voltz v. Blackmar, 64 N. Y. 440. Cases in which other large verdicts have been sustained, where there has appeared no greater actual damage than in this, are Crane v. Bennett, 77 App. Div. 102, 79 N. Y. Supp. 66; Young v. Fox, 26 App. Div. 261, 49 N. Y. Supp. 634; Jacquelin v. Morning Journal Ass'n, 39 App. Div. 515, 57 N. Y. Supp. 299; Palmer v. N. Y. News Publishing Co., 31 App. Div. 210, 52 N. Y. Supp. 539; Scott v. Sun Printing & Publishing Ass'n, 74 Hun, 284, 26 N. Y. Supp. 690; Willard v. Holmes, 2 Misc. Rep. 303, 21 N. Y. Supp. 998, reversed on another point, 142 N. Y. 492, 37 N. E. 480.
The judgment and order should be affirmed, with costs.
HIRSCHBERG, P. J., concurs. BARTLETT and JENKS, JJ., concur in result.