Court Opinion

ID: 9629120
Source: CourtListenerOpinion
Date Created: 2023-08-22 09:37:28.07772+00
Date Added: 2024-06-11T18:07:15.527947
License: Public Domain

ON PETITION FOR REHEARING
*211Richard Bryson, Windsor Gallons, and Johnson, Johnson & Harrang, Eugene, for the petition.
Before Perry, Chief Justice, and McAllister, *212Sloan; O’Connell,* Goodwin,* Denecke and Holman, Justices;
PER CURIAM.
Defendants Darling, Vonderlieit, Hershner and Hunter have filed a petition for rehearing. They contend that we have confused the remedies of malicious prosecution and libel and that we erroneously relied on § 678 of the Restatement of Torts which is but an extension of the general rule of § 674 which, in turn, is contrary to the rule of Carnation Lbr. Co. v. McKenney et al, 224 Or 541, 356 P2d 932 (1960).
We intended to hold that the filing of a bankruptcy petition necessarily caused such interference with the property of the debtor as to give rise to an action for malicious prosecution. Though there is no actual seizure of property or appointment of a trustee, the alleged bankrupt’s property is in limbo, because the trustee’s title, if and when appointed, reverts back to the date of the filing of the petition in bankruptcy. 11 USCA § 110 (Bankruptcy Act § 70). Our holding merely extended the Carnation rule to the initiation of bankruptcy proceedings because of the interference with property inherent therein. As pointed out in our original opinion, recovery has been allowed in such instances by other courts that follow the Carnation rule, but their rationale has not been uniform. . ;
Though the analogy of libel was used and though part of the damage to.the. alleged bankrupt is damage to business reputation, it was not our intention to sug*213gest that the basis for plaintiff’s cause of action was libel.
Petitioning defendants are correct that § 678 is but an extension of the rule of § 674, which is inconsistent with the rule of Carnation. However, § 678 is a recognition by the Restatement that insolvency proceedings fall in a special category. Our holding would be the same in the absence of § 678.
Petitioning defendants also contend that the result of our ruling is to permit plaintiffs to recover for defamation of business reputation in a malicious prosecution action which, if attempted in a libel case, would be prevented by the absolute immunity afforded attorneys by the judicial proceedings privilege of which § 586 of the Bestatement is representative. The authorities are uniform that damages recoverable in malicious prosecution cases include damage to reputation. Newell on Malicious Prosecution 494, ch XIV, § 8; 1 Harper & James, Law of Torts 324, § 4.7. However, before recovery can be secured for damage to reputation in a malicious prosecution action, the ingredients of such an action must appear as differentiated from those of libel.
The petition for rehearing is denied.