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PROGRESSIVE LIFE INSURANCE COMPANY et al. v. DOSTER.
37433.
Malicious prosecution. Baldwin Superior Court. Before Judge Carpenter. August 26, 1958.
TOWNSEND, Judge.
1. An allegation that certain acts were done by named agents of a corporation within the scope of their employment and in the prosecution of the business of such corporation is a sufficient allegation of agency to bind the corporate entity.
2. Matter of inducement which merely goes to show the relationship of the parties and preliminary facts is ordinarily properly pleaded in general terms.
4. In an action for malicious prosecution, a total want of probable cause is a circumstance from which malice may be inferred. Allegations sufficient to show that the president and other officers of a corporation caused the plaintiff to be arrested, indicted and tried for a criminal offense merely as a pretext for the purpose of trying to intimidate him to drop a claim which he had against the company, knowing that the plaintiff was innocent of such offense, support the conclusion alleged that the action was malicious and without probable cause.
5. A special demurrer to an entire paragraph, a part of which is not subject to the objection urged, is insufficient to invoke a ruling by this court.
6. A principal is liable in a proper case; for malicious prosecution where the same is conducted by its president and other managing agents in furtherance of the business of the principal and within the scope of the authority of such officers. Where all of the acts done by the president and other managing agents of the defendant, consisting of threats to prosecute the plaintiff, making out an affidavit of arrest, giving testimony before the grand jury and on the trial of the case, are done maliciously and without probable cause and in the furtherance of the business of the corporation, they must also be deemed to be within the scope of such agents' authority, the corporation having ratified such acts by advancing funds to pay special counsel to assist in the prosecution.
7. In an action for malicious prosecution the plaintiff is not restricted to actual damages but may recover such damages as are authorized under all the circumstances in the case. In such case it is not necessary that the amount of damages be itemized as general, special and punitive.
8. Conspiracy is not in itself the gist of an action for malicious prosecution, but conspiracy may be alleged and proved so as to make the act of each coconspirator the act of all.
9. The general demurrers to the petition were properly overruled.
C. C. Doster filed an action for malicious prosecution in two counts in the Superior Court of Baldwin County against Progressive Life Insurance Company, a corporation having a place of doing business in said county, and joined the nonresident R. A. Craighead, president of the corporation, E. M. Roberts, area manager for middle Georgia, and R. F. Cooper, superintendent of agencies for the State of Georgia, as codefendants. Count 1 of the petition alleges in substance that the plaintiff was discharged without cause and his position filled by a nephew of Roberts; that the corporation owed the plaintiff money which he was claiming; that Craighead, the president, attempted to intimidate him and persuade him to abandon the claim by telling him that unless he did so the corporation would "proceed according to our usual method," by which he meant they would make a false charge against him for a criminal offense; that, upon his still urging his claim, Cooper swore out a warrant against him and gave evidence before the grand jury falsely, maliciously and without probable cause charging him with embezzling company funds, and Cooper and Roberts both gave false testimony to the same effect upon the trial of the case; that the plaintiff was acquitted; that the acts of these corporate officers were done within the scope of their employment and in the prosecution of the corporation's business; that the corporation was financially interested in the result of the case because a conviction would give it a basis for claiming an indebtedness by the plaintiff to it of over one thousand dollars; that it actively participated in and ratified the acts of its agents by employing counsel to assist in the criminal prosecution and paid such counsel with corporate funds, and that all of these acts were wilful, malicious, done without probable cause, and for the purpose of injuring and humiliating the plaintiff. Count 2 sets out the same state of facts but further alleges that the defendants were coconspirators and acted in concert with the joint intention of causing the injuries complained of. General and special demurrers were filed to the petition, and the overruling of these demurrers is assigned as error.
1. Special demurrers 1, 2 and 3 to count 1 attack as conclusions the allegations that the acts of each of the individual defendants were "within the scope of his employment with said defendant corporation and in prosecution of the business of said corporation." Such an allegation is not subject to demurrer. Conney v. Atlantic Greyhound Corp., 81 Ga. App. 324 (3) (58 S. E. 2d 559).
2. The allegation in paragraph 12 of count 1 that "petitioner was discharged for the reason of making a vacancy for the nephew of said defendant Roberts, and after the discharge of petitioner said nephew was placed in petitioner's former position with defendant corporation" constitutes matter of inducement and is accordingly not absolutely irrelevant and subject to be stricken. Rhodes v. Industrial Finance Corp., 64 Ga. App. 549 (13 S. E. 2d 883).
4. Special demurrers 9 through 13 and 17 through 20 are directed to allegations of count 1 that, when the plaintiff refused to withdraw his claim, the defendant Roberts maliciously and without probable cause had a warrant sworn out charging the plaintiff with embezzlement of corporation funds; that the defendant Cooper then falsely, maliciously and without probable cause testified to accusations against the plaintiff which resulted in a bill of indictment being returned, and that at the trial both Roberts and Cooper falsely, maliciously and without probable cause testified regarding "facts accusing petitioner of embezzlement and fraudulent conversion" of corporate funds, and that these acts were wilful, wanton, malicious, and caused him great damage, humiliation and embarrassment, public ridicule, scandal and infamy. The demurrers raise the question as to whether sufficient facts are pleaded to support a charge of malice and lack of probable cause, for, if not, these allegations are mere conclusions and should be stricken. Wilcoxan v. Equitable Loan Co., 48 Ga. App. 250 (172 S. E. 682). However, other allegations of the petition show the following facts: that the plaintiff was not indebted to the defendant corporation; that it was a usual practice of the defendants to intimidate employees by threats of criminal prosecution into not making claims; that these defendants did not bona fide claim the defendant had stolen corporate funds but used this as a pretext to arrive at their true objective -- silencing this plaintiff; that the sworn statements made by them in the affidavit of arrest, before the grand jury, and on the trial were untrue and in pursuance of an illegal objective; and that the plaintiff was acquitted on the trial of the case. Under these circumstances the characterization of the acts as wilful, wanton, malicious, without probable cause, and so forth are sufficiently supported by statements of fact so as not to render them demurrable as mere conclusions. Interstate Life & Accident Co. v. Brewer, 56 Ga. App. 599 (193 S. E. 458). A total want of probable cause is a circumstance from which malice may be inferred. Code 105-804. These demurrers are without merit.
5. Special demurrer 16 challenges as argumentative and a conclusion the statement in count 1 that the defendant corporation "was financially interested in the outcome of said criminal charge, as aforesaid, for upon a verdict of guilty, such corporation would have a complete defense to the money demand of petitioner against it, and would have a basis for claiming petitioner obligated to such corporation in the sum of $1,096, or other large sum, as falsely and maliciously set forth in said indictment." The statement in this paragraph is in part inaccurate since the conviction of the plaintiff on a criminal trial would not ipso facto provide the corporation with a complete defense to the plaintiff's claim that the corporation owed him money. Such a conviction would, however, further its financial interest to the extent that on such a trial proof of a felony conviction would be admissible to impeach the plaintiff as a witness in his own behalf, and it is also true that if the plaintiff were convicted of stealing the corporate funds, the corporation would naturally "have a basis for claiming petitioner obligated" to it as a matter of fact. Since a special demurrer must itself be perfect, and since a part of the paragraph demurred to was not subject to the objection urged, there was no error in overruling the demurrer to the whole of paragraph 25.
6. The demurrers to paragraph 23 of count 1 which alleges that "the acts and doings of said individual defendants were the acts and doings of said defendant corporation" and paragraph 24 which alleges that "the defendant corporation ratified and confirmed the acts of said individual defendants for and on its behalf" are considered in connection with the general demurrer to count 1. In Auld v. Colonial Stores, 76 Ga. App. 329 (4) (45 S. E. 2d 827) it was held: "Where the president and general manager of a corporation, whose business it is to collect bad checks for clients, is in charge of the business of the company and is vested with discretion as to the ways and means by which he shall proceed to make such collection, and frequently employs the method of swearing out criminal warrants against the makers of such checks as a part of the regular course of the business of his company in making collections and not in furtherance of his own business, the same is for the sole benefit of his company, and where such president and general manager makes affidavit in connection with such a check held for collection by said company and carries on a criminal prosecution by signing the accusation, the corporation is bound by this conduct, because the corporation can act only through its agent, and will be held to have approved this general course of conduct on the part of its president and general manager." In the Auld case, Colonial Stores, Inc., the codefendant, turned the debt over for collection to a collecting agency, and it was held that the acts of the president and manager of the agency bound it but not the defendant Colonial Stores because "the authority conferred upon the agent to collect a debt does not imply authority to cause an arrest so as to render the principal liable in an action for malicious prosecution, in the absence of ratification or adoption of the agent's act" (headnote 5), and that "should we hold that Colonial Stores was responsible for the act of Merchants' Protective Association, it would be to hold that, when an authority to collect a debt is shown, the law will imply the authority to institute criminal prosecution against the debtor in case the debtor fails or refuses to pay." P. 339. The writer and another judge dissented from that part of the ruling on the ground that the facts of the case showed both agency and ratification as to the acts complained of. In Huff v. Nat. Accident .&c. Ins. Co., 58 Ga. App. 355 (198 S. E. 296), one judge dissenting, this court held that, where it was shown that an agent of a corporation maliciously prosecuted the plaintiff, the prosecution resulting from a disagreement connected with the business of the corporation and not personal to the agent, the wilful tort was committed in the scope of the agent's employment so as to bind his principal. The present case is stronger than either of those cited in that two of the three agents of the corporation involved are alleged to be the president and area manager of the company, presumptively acting as its alter ego and in charge of its general policies, with much greater authority and power to bind it by their acts than an ordinary employee. Secondly, it is shown that this corporation, with full knowledge through these officers of the situation, ratified their acts by employing counsel to help prosecute the case. If the entire prosecution was false and without probable cause, this fact was necessarily known to the corporate entity in that it was
instigated by the president and area manager of such entity, and the fact that money was not spent for counsel fees until after a true bill was returned must be deemed a ratification of the entire proceeding, not just of the jury trial. The plaintiff in error also relies on King v. Citizens Bank of DeKalb, 88 Ga. App. 40, 47 (76 S. E. 2d 86), which case, citing Davison-Paxon Co. v. Norton, 69 Ga. App. 77, 80 (24 S. E. 2d 723), states that, "The principal is liable in a proper case for malicious prosecution where the same is conducted by the agent in furtherance of the business of the principal and within the scope of the agent's authority," but holds that a bank joined as codefendant in an action for malicious prosecution is not liable merely because its vice-president wrote to the prosecutor a letter from which the prosecutor inferred that the plaintiff was defrauding him (the letter not making such accusation) or because the vice-president gave false testimony on the criminal trial as to the facts of a rebate, and the apparent reason for the conclusion is that "there was no benefit or profit to be gained by the bank from the act of Sams, its executive vice-president." The allegations here, which substantially show that a conviction of the plaintiff would have aided the corporation's financial position in regard to the plaintiff's claim; that it actively assisted in the prosecution by employing counsel, and that all the acts in connection with the prosecution were performed by its president, area manager and superintendent of agencies for the State, are sufficient to make a jury question in count 1 of the petition as to the liability of the defendant corporation, and, of course, the individual defendants also.
7. What has been said in regard to the special demurrers directed to paragraphs of count 1 of the petition is equally applicable to count 2. The remaining special demurrer to the prayer, which complains of the language "that petitioner have and recover of said defendants, jointly and severally, the sum of $64,500" because it is not alleged how the sum was arrived at or what portions thereof are allocated to general, special and punitive damages, is without merit. Code 105-808 provides, as to actions for malicious prosecution: "The recovery shall not be confined to the actual damage sustained by the accused, but shall be regulated by the circumstances of each case.
8. Count 2 differs from count 1 only in that it is alleged that all the defendants were coconspirators, that they combined and conspired to fire and discharge the plaintiff and to defraud him of moneys due him by the corporation and, if the plaintiff was not thereby intimidated, to falsely charge and prosecute him for embezzling company funds. As stated in King v. Citizens Bank of DeKalb, 88 Ga. App. 40, 44, supra, "The gist of the action is not the conspiracy, but the tortious act perpetrated, and the damage flowing therefrom." If no cause of action were otherwise alleged, the addition of allegations concerning conspiracy would not make one, but, there being a cause of action alleged, the fact of conspiracy, if proved, serves to make the act of each coconspirator the act of all. That conspiracy was properly pleaded, see Young v. Wilson, 183 Ga. 59 (187 S. E. 44); Horton v. Johnson, 187 Ga. 9 (5) (199 S. E. 226); Floyd v. Morgan, 62 Ga. App. 711 (3) (9 S. E. 2d 717).
9. In view of what has been said, the petition states a cause of action as to both counts, and the general demurrers are accordingly without merit.
The trial court did not err in overruling the demurrers both general and special to the petition.
Judgment affirmed. Gardner, P. J., and Carlisle, J. concur.
Bird & Howell, Trammell E. Vickery, Frank W. Bell, for plaintiffs in error.
DECIDED NOVEMBER 13, 1958.
Saturday May 23 01:25 EDT


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