BRIGGLE, District Judge.
Appellee sued appellant in the District Court for damages for malicious prosecution, alleging that appellant had wrongfully caused the institution of criminal proceedings against him in the state of Florida. The jury returned a verdict in his favor assessing damages at $45,000, which, upon remittitur of $20,000 the District Court approved and rendered judgment in his favor for $25,000. This appeal is from such judgment.
The Auburn Automobile Company is an Indiana corporation engaged in the manufacture pf automobiles, and will be hereinafter referred to as defendant. Charles W. Habig, hereinafter called plaintiff, was at all pertinent times the president of Habig Motors Company, hereinafter called Habig Company, a Florida corporation, engaged in the business of selling at retail the product of the defendant at Miami, Fla. The capital stock of this corporation, with the exception of one qualifying share, was owned by the plaintiff and his son Robert.
The uncontroverted facts show that pri- or to April 9, 1930, an arrangement existed between the Habig Company and the defendant whereby the Habig Company handled the product of defendant upon a cash basis, the details of which are unimportant. Following April 9, a new arrangement was entered into by which defendant shipped its cars to the Habig Company under a so-called “floor-plan”; an arrangement somewhat common to the motor industry. It is agreed by the parties that among other things this plan was one in which the title to the cars remained in the manufacturer, the distributor to have the cars placed on the floor of his place of business and when sold to immediately account to the manufacturer for the proceeds, at least to the amount of the manufacturer’s sale price. It was concededly a trust arrangement by which the distributor' came into possession of the manufacturer’s ' property, apparently with the privilege, however, of disposing of the same, with the further provision that the funds arising from the sale would likewise be impressed with a trust in favor of the manufacturer until paid. In the instant case, documents were executed by the Habig Company evidencing this arrangement.
In order to properly understand the arrangement between the parties, following April 9, 1930, it is necessary to refer to some of the correspondence between the [56]*56parties and we append in a footnote1 a letter of April 9, 1930, from plaintiff to defendant, two letters of April 14, 1930, one sent by defendant to City National Bank of Miami, Fla., and the pther to the Habig Company, and two letters of June 18, 1930, one sent by defendant to the City National Bank and the other to the Habig Company.
As indicated by the letter of April 9th, the plaintiff had executed and delivered to the defendant on April 2, 1930, a promissory note for $30,000, secured by mortgage deed upon certain real estate in the state of Florida. This mortgage deed recited that it “is given to secure one note for 0,000.00, drawn to Auburn Automobile [57]*57Company, Auburn, Indiana, and signed by Charles W. Habig, which note and mortgage are given to secure an automobile floor-planning arrangement by the said Auburn Automobile Company for the Habig Motors Company of Miami, Florida.” While it is conceded by the parties that they were operating under the “floor-plan” arrangement for a time subsequent to April 9, 1930, yet plaintiff asserts that this arrangement was changed as evidenced by the letters of June 18, 1930, and avers that following that date defendant extended the Habig Company a general line of credit and proceeded from that date forward to sell its cars to the Habig Company without reservation.
The Habig Company became insolvent during the year 1930, and was on the 27th day of December, 1930, placed in the hands of a receiver. Concededly, some of the cars placed with the Habig Company had been sold by them and the proceeds remained unaccounted for to the defendant. [58]*58Upon notice of the receivership proceeding, the defendant employed Miller and McKay, later known as McKay, Dixon & Dejarnette, as its counsel at Miami, Fla. After many consultations with counsel, defendant presented and prosecuted a civil claim in the receivership proceeding which resulted adversely to defendant. Messrs. McKay and Dixon also, as early as February or March, 1931, presented the matter to the prosecuting attorney of Dade county, Fla., which many months later, and in November, 1931, resulted in the filing of an information against the plaintiff, charging •him with embezzlement, based upon the sale and failure to account for the proceeds of some of the cars so placed in the possession of the Habig Company. This information was subsequently nolled by the prosecuting attorney and Habig was dis[59]*59charged, and later brought this suit against the defendant for malicious prosecution.
Defendant tenders twelve assignments of error, the first six dealing with the District. Court’s failure to direct a verdict for defendant and the alleged excessiveness of both the verdict and the judgment. The last six deal with alleged errors in rulings upon evidence.
Plaintiff concedes in his brief that in order to maintain the action it was necessary for him to prove:
(1) Commencement or continuation of an original criminal or civil prosecution;
(2) Its legal causation by the present defendant against plaintiff, who was defendant in the original proceedings;
(3) Its bona fide termination in favor of the present plaintiff;
(4) The absence of probable cause;
(5) The presence of malice;
(6) Damages therefrom resulting to plaintiff.
The function of this court will be fully performed by a consideration of the question of whether there was any substantial evidence supporting plaintiff’s charge of want of probable cause and the presence of malice, as indicated by paragraphs 4 and 5 of plaintiff’s assumed burden. The lack of probable cause and the presence of malice depend so much for their establishment upon the same facts and circumstances as to defy separation.
Plaintiff relies to a very great extent in support of these two elements of his case upon the alleged change in arrangements between defendant and the Habig Company by which he asserts that the theretofore existing trust arrangement was abrogated and defendant became nothing more than a seller and the Habig Company nothing more than a purchaser of defendant’s products. Indeed, if this be a fact, only the relation of debtor and creditor existed between them, and the plaintiff even though he converted to his own use such property or the proceeds thereof, could in no sense be guilty of the embezzlement of defendant’s property.
The letters of April 9 and 14, 1930, heretofore referred to, as well as the subsequent conduct of the parties, fully justify the conclusion that the arrangement at that time was a trust or “floor-plan”- arrangement, and that the note and mortgage referred to was to be treated as an indemnity for the faithful performance of such arrangement in all its terms by the Habig Company.
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BRIGGLE, District Judge.
Appellee sued appellant in the District Court for damages for malicious prosecution, alleging that appellant had wrongfully caused the institution of criminal proceedings against him in the state of Florida. The jury returned a verdict in his favor assessing damages at $45,000, which, upon remittitur of $20,000 the District Court approved and rendered judgment in his favor for $25,000. This appeal is from such judgment.
The Auburn Automobile Company is an Indiana corporation engaged in the manufacture pf automobiles, and will be hereinafter referred to as defendant. Charles W. Habig, hereinafter called plaintiff, was at all pertinent times the president of Habig Motors Company, hereinafter called Habig Company, a Florida corporation, engaged in the business of selling at retail the product of the defendant at Miami, Fla. The capital stock of this corporation, with the exception of one qualifying share, was owned by the plaintiff and his son Robert.
The uncontroverted facts show that pri- or to April 9, 1930, an arrangement existed between the Habig Company and the defendant whereby the Habig Company handled the product of defendant upon a cash basis, the details of which are unimportant. Following April 9, a new arrangement was entered into by which defendant shipped its cars to the Habig Company under a so-called “floor-plan”; an arrangement somewhat common to the motor industry. It is agreed by the parties that among other things this plan was one in which the title to the cars remained in the manufacturer, the distributor to have the cars placed on the floor of his place of business and when sold to immediately account to the manufacturer for the proceeds, at least to the amount of the manufacturer’s sale price. It was concededly a trust arrangement by which the distributor' came into possession of the manufacturer’s ' property, apparently with the privilege, however, of disposing of the same, with the further provision that the funds arising from the sale would likewise be impressed with a trust in favor of the manufacturer until paid. In the instant case, documents were executed by the Habig Company evidencing this arrangement.
In order to properly understand the arrangement between the parties, following April 9, 1930, it is necessary to refer to some of the correspondence between the [56]*56parties and we append in a footnote1 a letter of April 9, 1930, from plaintiff to defendant, two letters of April 14, 1930, one sent by defendant to City National Bank of Miami, Fla., and the pther to the Habig Company, and two letters of June 18, 1930, one sent by defendant to the City National Bank and the other to the Habig Company.
As indicated by the letter of April 9th, the plaintiff had executed and delivered to the defendant on April 2, 1930, a promissory note for $30,000, secured by mortgage deed upon certain real estate in the state of Florida. This mortgage deed recited that it “is given to secure one note for 0,000.00, drawn to Auburn Automobile [57]*57Company, Auburn, Indiana, and signed by Charles W. Habig, which note and mortgage are given to secure an automobile floor-planning arrangement by the said Auburn Automobile Company for the Habig Motors Company of Miami, Florida.” While it is conceded by the parties that they were operating under the “floor-plan” arrangement for a time subsequent to April 9, 1930, yet plaintiff asserts that this arrangement was changed as evidenced by the letters of June 18, 1930, and avers that following that date defendant extended the Habig Company a general line of credit and proceeded from that date forward to sell its cars to the Habig Company without reservation.
The Habig Company became insolvent during the year 1930, and was on the 27th day of December, 1930, placed in the hands of a receiver. Concededly, some of the cars placed with the Habig Company had been sold by them and the proceeds remained unaccounted for to the defendant. [58]*58Upon notice of the receivership proceeding, the defendant employed Miller and McKay, later known as McKay, Dixon & Dejarnette, as its counsel at Miami, Fla. After many consultations with counsel, defendant presented and prosecuted a civil claim in the receivership proceeding which resulted adversely to defendant. Messrs. McKay and Dixon also, as early as February or March, 1931, presented the matter to the prosecuting attorney of Dade county, Fla., which many months later, and in November, 1931, resulted in the filing of an information against the plaintiff, charging •him with embezzlement, based upon the sale and failure to account for the proceeds of some of the cars so placed in the possession of the Habig Company. This information was subsequently nolled by the prosecuting attorney and Habig was dis[59]*59charged, and later brought this suit against the defendant for malicious prosecution.
Defendant tenders twelve assignments of error, the first six dealing with the District. Court’s failure to direct a verdict for defendant and the alleged excessiveness of both the verdict and the judgment. The last six deal with alleged errors in rulings upon evidence.
Plaintiff concedes in his brief that in order to maintain the action it was necessary for him to prove:
(1) Commencement or continuation of an original criminal or civil prosecution;
(2) Its legal causation by the present defendant against plaintiff, who was defendant in the original proceedings;
(3) Its bona fide termination in favor of the present plaintiff;
(4) The absence of probable cause;
(5) The presence of malice;
(6) Damages therefrom resulting to plaintiff.
The function of this court will be fully performed by a consideration of the question of whether there was any substantial evidence supporting plaintiff’s charge of want of probable cause and the presence of malice, as indicated by paragraphs 4 and 5 of plaintiff’s assumed burden. The lack of probable cause and the presence of malice depend so much for their establishment upon the same facts and circumstances as to defy separation.
Plaintiff relies to a very great extent in support of these two elements of his case upon the alleged change in arrangements between defendant and the Habig Company by which he asserts that the theretofore existing trust arrangement was abrogated and defendant became nothing more than a seller and the Habig Company nothing more than a purchaser of defendant’s products. Indeed, if this be a fact, only the relation of debtor and creditor existed between them, and the plaintiff even though he converted to his own use such property or the proceeds thereof, could in no sense be guilty of the embezzlement of defendant’s property.
The letters of April 9 and 14, 1930, heretofore referred to, as well as the subsequent conduct of the parties, fully justify the conclusion that the arrangement at that time was a trust or “floor-plan”- arrangement, and that the note and mortgage referred to was to be treated as an indemnity for the faithful performance of such arrangement in all its terms by the Habig Company. The mortgage itself provides that it is given to secure a “floor-plan” arrangement, and on the trial counsel for both sides joined in requesting the court to instruct the jury as a matter of law that such note and mortgage was an indemnifying agreement and not a contract for a line of credit to Habig Company, and that the acceptance of the same by defendant did not change or alter the arrangements theretofore existing. This being conceded by plaintiff, his position with reference to a change in arrangement must therefore stand or fall by virtue of the letters of June 18, 1930. These letters refer to a visit made to defendant’s factory by Robert Habig at which time he testified that he requested of defendant a loan of $15,-000. It is uncontradicted that he failed to obtain such loan, but the June 18th letters would indicate a concession on the part of defendant in that they had concluded to extend “an additional line of credit on floor-plan” so that the Habig Company would be permitted to have on their - floor at one time 7 Cord and 18 Auburn automobiles of the value of $36,000, instead of the former allotment of 7 Cords and 11 Auburns of the value of $30,000.
Plaintiff says that it may be conceded “that prior to this change in the financing plans, automobiles were handled between the parties on a strict title reservation floor-plan,” but contends that the June 18 letters extended a general line of credit of $36,000, and that cars thereafter sent to the Habig Company were sent on open account. Plaintiff further asserts that while he concedes that the $30,000 note and mortgage previously given were nothing more than an indemnity to the “floor-plan” arrangement, yet by virtue of the change of June 18. they became security, for the general line of credit thus extended as he thinks.
We think the letters of June 18 susceptible of no such construction. Coupled with the conceded status of the parties pri- or to that date, they very clearly exhibited a purpose to increase the number of cars to be “floor-planned,” but in all other respects are an affirmation of the pre-existing status. Plaintiff also refers to the testimony of Robert Habig as to what transpired on his visit to defendant’s factory as supporting his position in this respect. We have carefully examined all the evidence [60]*60in the record relating to this visit, and find nothing to indicate any recession by defendant from the previously existing trust arrangement.
Our attention is directed by plaintiff to a number of circumstances which he contends show that the parties placed a construction on the June 18 letters in harmony with his interpretation of the same. We have examined these circumstances and find nothing in them justifying any interpretation of the letters different from what we deem to be their plain import. We do find, however, many things in the subsequent conduct of the parties such as the continued shipment of cars by defendant to its own order, the continued execution by the Habig Company of the trust papers with the Miami bank, the repeated checking by defendant of cars on the floor of the Habig Company, in some instances insisting upon a “sight” check of all cars unpaid for, that unmistakably point to the opposite interpretation.
Whether the letters of June 18, together with the note and mortgage referred to, in any manner changed the pre-existing relations of the parties becomes important because the evidence is controverted as to whether such letters and mortgage were submitted to defendant’s counsel and by its counsel submitted to the prosecuting attorney before the criminal prosecution was instituted. In our view the legal effect to be given them in no way changed the trust relation of the parties, and it would, therefore, be unimportant whether they were submitted or not. True, had the prosecuting attorney known that defendant possessed security for any defalcation on the part of the Habig Company it may have influenced him in the exercise of what prosecutors sometimes think is a discretion lodged with them whether they will or will not institute criminal proceedings, yet this could not have in any way changed the status of the plaintiff as a law violator if he had otherwise by his conduct assumed such status. Moreover, it could not affect the question of probable cause for belief of guilt on the part of defendant or its agents.
There are many circumstances that stand out in the voluminous record before us, notably, the withdrawal by plaintiff from the assets of Habig Company of seemingly unjustifiable amounts of property and cash immediately preceding the receivership of the Habig Company; the alleged sale of several cars to various members of his family without adequate consideration and at a time when the company was failing; the practice indulged in by him of borrowing cars from his customers and placing them on his showroom floor for the purpose of deceiving defendant, when making a check of cars supposedly unsold, all pointing to a course of conduct inconsistent with fair dealing. We are not unmindful that some of these latter circumstances are disputed by plaintiff and would, therefore, if controlling, present a jury question. We do not, however, deem them controlling; but, if true, they only add an additional reason for defendant’s belief that prosecution was justified.
It appearing, as we think, by the undisputed evidence that no substantial change was made in the relationship of the parties from that conceded to be" a trust relationship, plaintiff had no legal right to withdraw property of the defendant from the Habig Company and fail to account for the proceeds thereof. His doing so under the circumstances here pointed out constituted probable cause for a criminal complaint.
It cannot be said that the adverse ruling that defendant received in the receivership proceeding was in any sense a motivating factor in the criminal prosecution as neither defendant or its counsel, ever conferred with the prosecuting officer after that time, and the facts that they had previously laid before that' official had all been given him many months before. It is undisputed that they were unaware .what action, if any, was to be taken by the prosecutor until it became publicly known by the filing of the complaint.
Moreover, probable cause being present, it matters not whether defendant was actiiated by malice. Lack of probable cause and malice must concur. Stewart v. Sonneborn, 98 U.S. 187, 25 L.Ed. 116; National Surety Company v. Page (C.C.A.) 58 F.(2d) 145; Rouse v. Burnham (C.C.A.) 51 F.(2d) 709.
We believe that under these circumstances no jury question was presented, and defendant was entitled to a directed verdict.
Judgment reversed.