City National Bank v. Jeffries

73 Ala. 183

• Court: Supreme Court of Alabama
• Decided: December 15, 1882
• Status: Published

Opinion

STONE, J.

— Our statutes, and the rulings upon them recognize two elements and measures of damages, when the party, whose property has been attached, complains. The first is, when it is claimed that this extraordinary process has been wrongfully sued out. The meaning of this is, not that the attachment proceedings are faulty, and liable to be abated or quashed. Such defect furnishes no ground for the recovery of damages. To be “wrongful” within the statute, none of the statutory grounds for attachment must exist. — Sharpe v. Hunter, 16 Ala. 765; Drake on Att. 170; Durr v. Jackson, 59 Ala. 203. To justify an attachment, there must be a debt, due or to become due, and one of the enumerated statutory grounds for attachment must exist. — Lockhart v. Woods, 38 Ala. 631; Durr v. Jackson, supra. If either of these be wanting in fact, no matter how sincerely the attaching creditor may believe it to exist, then the attachment is wrongful, but, without more, it is only wrongful. In such case, the measure of recovery in a suit on the bond is the actual injury sustained. — McCullough v. Walton, 11 Ala. 492; Floyd v. Hamilton, 33 Ala. 235; Durr v. Jackson, supra. See on the 'subject of damages in such cases Higgins v. Mansfield, 62 Ala. 267. And in such action, the onus rests with the plaintiff to prove the falsity of the affidavit, or, what is the same thing, the non-existénce of the ground on which the attachment was sued out.— O'Grady v. Julian, 34 Ala. 88, and authorities.

The second element of damages consists in the “vexation” with which this process is resorted to. If there be no- reasonable foundation for believing that a statutory ground for attachment exists, or if the process be sued out wantonly or recklessly without probable cause, or if it be resorted to in a mere race of diligence to obtain a first lien, when no statutory ground exists in fact, or is reasonably believed to exist, then it is vexatious as well as wrongful, and exemplary or vindictive damages may be recovered. • But the malice, wantonness, or recklessness of the agent or attorney suing out the attachment can not be visited on his principal, unless the latter authorized or sanctioned the manner, or malevolence of the act. — Kirksey v. Jones, 7 Ala. 622; McCullough v. Walton, 11 Ala. 492; quoted approvingly in Drake on Att. § 182.

In declaring for wrongfully and vexatiously suing out an attachment, it was ruled, in Tiller v. Shearer, 20 Ala. 527, that a failure to negative in the complaint the truth of the ground on which the attachment was sued out, was fatal on demurrer. That was an action on the case. In Dickson v. Bachelder, 21 Ala. 699, there was no express negative of the sworn ground for the attachment. The breach assigned was, that the attachment was wrongfully sued out, and, on demurrer, the complaint was held sufficient. In the last case the suit was on the bond. It is contended for appellee that the difference in ruling is justified by the different forms of action employed; and that when suit is on the bond, no express denial of the ground of attachment- is necessary. We think this alleged distinction does not exist. The bond, as we understand it, does not change the nature of the liability a suitor incurs by suing out an attachment wrongfully and vexatiously. It simply makes secure the damage inflicted by the abuse of this extraordinary process. The principles governing the two actions, as to the relevancy of evidence, and the measure of recovery, are the same, with the exception that, in a suit on the bond, the recovery can not exceed the penalty expressed in the face of it. But this question was settled in a later ruling of'this court. In Durr v. Jackson, 59 Ala. 203, the suit was on the bond, and the court, referring to Tiller v. Shearer, 20 Ala. 527, said: “It is necessary for the plaintiff to aver in his complaint the falsity of the particular fact, or facts, which may be stated in the affidavit as the ground of attachment.” We adhere to this last ruling. But- there is another, and, as we think, conclusive reason, why in suits for wrongfully and vexatiously suing out attachments, the complaint should negative the truth of the sworn ground on which the process issued. We have shown above that in suits like the present, the on-us is on the plaintiff to prove the untruth of the ground of attachment. . To hold that the plaintiff must make proof of this negative fact, yet need not aver it, would be an anomaly. We have more than once held, that actions like the present one “bear a closer resemblance to an action for a malicious prosecution, than to any other action at common law.” — O'Grady v. Julian, 34 Ala. 88; Durr v. Jackson, supra. Would a complaint for a malicious prosecution be good, which did not aver plaintiff’s innocence of the offense for which he had been prosecuted ?

Another question. Can a suit be maintained for vewatiously suing out an attachment, without showing it was also wrongful? In other words, if one of the statutory grounds for attachment exists, can there be a recovery for the mere vexation, which. may enter into the motive of its issue? Invoking the anology. of the suit for malicious prosecution, only a negative answer can be given to this question. The prosecution must be groundless, before the question of malice, wantonness, or vexatious motive can become a material inquiry.— Chandler v. McPherson, 11 Ala. 916; Ewing v. Sanford, 21 Ala. 157; 2 Brick. Dig. 236, § 1. There might be abuse in the execution of an attachment, which had been sued out on the actual existence of one of the statutory grounds, but this would be a wrong for which no redress could be obtained by suit on the bond.

The principles declared above enter largely into the solution of the questions raised by the demurrers to the several counts of the complaint. The first, second and fourth counts of the complaint are faulty. The first fails to negative the truth of the ground, on which the attachment was prayed and obtained. The second has the same imperfection, and both it and the fourth are wanting in the averment, that the attachment was wrongfully sued out; and, as claims for exemplary damages, they are further faulty in not averring that the attachment was sued out without probable cause for believing the alleged ground to be true. The third and fifth counts are sufficient.

Pollock v. Gantt, 69 Ala. 373, like the present case, was a suit by a merchant, to recover damages for an attachment sued out and levied, alleged to be wrongful and vexatious. The suit was on the bond. In that case we laid down the general rules to be observed in the proof and assessment of damages. We will not repeat them. In the present case, the plaintiff was permitted to testify, against the objection and exception of defendants, that by the issue and levy of the attachment he “ was much distressed and harassed in body and mind ; ” that he “ was almost crazy.” lie was also permitted to prove by other witnesses the apparent distress he suffered in consequence of the attachments. Such testimony as this can be legal, only on the theory that for wrongs, identical in nature and degree, the man of delicate organism and acute sensibilities is entitled to greater damages than one of a more stoical nature. ¥e can not agree to this. That one who has been wrongfully and vexatiously attached may recover for liis wounded feelings, can not be denied. But such suffering is not the subject of direct proof. It is an inference to be drawn by the jury from the manner and causelessness- of the wrong. The nervous organization of the sufferer can' not enter into the account. Furthermore, such test might operate very unjustly. The loss of available means, •and of commercial credit might. greatly distress one, while wounded pride, or impaired social standing would equally oppress another. The court erred in admitting this proof. — Herring v. Skaggs, 62 Ala. 180; Sledge v. Scott, 56 Ala. 202.

Kahn, Wolf & Sons, merchants doing business in Louisville, Kentucky, were the attaching creditors in this cause. Their attorney, wrho made the affidavit and sued out the attachment, resided in Greensboro, Alabama, where Jeffries, the debtor, also resided, and conducted his mercantile business. The proof shows that it was on the attorney’s judgment and information, that his clients authorized him to attach. He had informed his clients that a ground for attachment existed, and, at his instance, they procured for him resident security to make the attachment bond. The circumstances tend strongly to show that Kahn, Wolf & Sons had no personal knowledge of Jeffries’ means or purposes, other than what was communicated to them by their attorney, and by Jeffries himself, as hereafter shown. Jeffries had become embarrassed, and had submitted a circular to his creditors, offering them one-third of their several demands in full discharge of his liabilities. That proposition was referred by Kahn, Wolf & Sons to their said resident attorney, and he advised them to accept it. Before Jeffries submitted to his creditors his proposition of compromise at one-third of their claims, he had negotiated with two of his creditors — Woodruff & North and Bamberger, Bloom & Co. — for a loan of sixteen hundred dollars, wdth which and certain moneys he himself could furnish, he proposed to effect said compromise. The sum to be thus raised, and fifteen or sixteen hundred dollars which Jeffries himself proposed to supply, it was estimated, would pay thirty-three and one-third per cent, to all the creditors except Woodruff & North, and Bamberger, Bloom & Go. These were to receive no part of the cash composition ; but in consideration that they furnished the money aforesaid, they were to have the amount of their several claims, and the money thus to be advanced by them, secm’ed to be paid to them in full. Tlie security for this payment was to consist of a mortgage by Jeffries of his stock of merchandise, and the debts to be paid in monthly installments. Jeffries had previously sent a circular letter to his creditors, stating what he said were his assets and liabilities; and on that circular his offer of compromise was based. The creditors, except Woodruff & North and Bamberger, Bloom & Co., were not informed that Jeffries was to secure the last named creditors to be paid in full. These were two of the largest creditors. The same attorney who made the affidavit and sued out the attachment in favor of Kalin, Wolf & Sons, was counsel for Woodruff & North and Bamberger, Bloom & Co. in the matter of their claims against Jeffries ; and was fully informed of the source and terms of the loan Jeffries proposed to effect. He was selected to act as trustee in the mortgage Jeffries was to make on his merchandise, and, at the instance of Jeffries, drew the mortgage. All this took place before Kahn, Wolf & Sons agreed to accept the terms of compromise, and before they were telegraphed by their said attorney that a. ground for attachment existed. Kahn, Wolf & Sons had no actual notice of the moneyed, arrangement and terms of security, agreed on between Jeffries on the one side, and Woodruff & North and Bamberger, Bloom & Co. on the other. Was notice to their said attorney notice to them ?

It is clearly the law that if a debtor, assuming to compound his debts on equal terms, secretly secure a preference and larger payment to one or more of his creditors without the knowledge of the others, this is a fraud alike by such debtor, and by the creditor attempted to be preferred. Such fraud, secretly perpetrated, would be a fraudulent disposition of property, and if the property thus conveyed was subject to the grantor’s debts, it would be a fraudulent disposition of property, and authorize an attachment at the suit of a creditor, attempted to be defrauded thereby. If the non-preferred creditor, however, knew of the source from which the money came, and the terms on which it was obtained, then he would not be heard to complain that he was defrauded. Volenti non fit injuria. — Clark v. White, 12 Pet. 178.

As we understand this record, there is no testimony tending to show Kahn, Wolf & Sons had any notice that other creditors were to share more largely than themselves. The ground on which they are sought to be charged with notice, is that their attorney had full knowledge, and that was constructive knowledge to them. The fact, as we have shown, is, that the same attorney was counsel for three firms, Woodruff & North, Bamberger, Bloom & Co. and Kahn, Wolf & Sons. He was, at one and the same time, endeavoring to collect the several claims of his several clients. Jeffries was in failing circumstances, and the attorney knew it. The source from which Jeffries proposed to raise money with which to compromise his debts, and the terms on which he was to raise the money, were known to their common attorney, before the terms were accepted by Kahn, Wolf & Sons, and before the attachment was issued or authorized. It was on information of the attorney that a ground for attachment existed, that the plaintiffs ordered its issue, and the attorney who gave the information sued it out. There can be no question that this knowledge or information was brought home to the agent and attorney, while he was in the very act of employing or devising means for the collection of each of the claims, and under the severest limitation of the rule anywhere asserted, notice to the agent or attorney is notice to the principal. Many cases carry the doctrine much further.— White v. King, 53 Ala. 162; Sheldon v. Cox, Ambler, 624; LeNeve v. LeNeve, 3 Atk. 646; Myers v. Ross, 3 Head, 60; Clark v. Fuller, 39 Conn. 238; Bank of Milford v. Town of Milford, 36 Conn. 93 ; Miller v. Fraley, 21 Ark. 22; Duke v. Balme, 16 Minn. 306; Wade on Notice, § 679; Leading Cases in Eq., Yol. 2, Part 1, pp. 109 (35), 144 (77), 168; The Distilled Spirits, 11 Wall. 356.

We find no error in the rulings of the circuit court, either in the admission of evidence, or in the charge given, bearing on. the question last above considered. This applies also to the explanations the court gave of the charges given at the request of defendants.

Several charges asked by defendants were refused. It is certainly true, as a general rule, that the malice or vexatious conduct of the agent suing out the attachment can not be visited on the principal; but it is equally true, if the principal authorize, procure, or sanction such vexatious conduct, then vindictive damages may be recovered of him. If a claim in a distant locality be entrusted to a reputable attorney for collection, and that attorney informs his client that there- is a ground for suing out an attachment, and the creditor thereupon, at the attorney’s request, furnishes sureties to make the bond, in the absence of other knowledge or information, vexatiousness or malice can not be imputed to the creditor, and he is not responsible for exemplary or vindictive damages. In the ab-, sence of an actual ground for the issue of the attachment, the creditor would be liable for the actual damage done; but he would not be without probable cause for believing he had grounds for suing out the attachment, and, therefore, would not be liable for vindictive damages. This rule, however, would not apply, if the creditor or client had actual knowledge of the facts relied on as ground for attachment, if such facts were insufficient, and there was, in truth, no ground for attachment. The first of the charges refused ought to have been given. The second charge asked was properly refused. If- it be shown that the property attached has yielded its full value, this may be considered in mitigation of damages. It can go no further. The third charge asked should have been given. The fourth charge asked is somewhat confused, and calculated to mislead. Moreover, some of its utterances are not shown to have been sustained by any testimony.

The charge last noted, given at the instance of plaintiff, is subject to criticism, in two respects. “Corruptly and. fraudulently withholding,” goes beyond the statute, and to a nonprofessional mind expresses a stronger degree of fault than the statutory words, “ fraudulently withholds.” Moreover, it is a full defense to this action, if any one of the statutory grounds for suing out the attachment exists.

The judgment of the-circuit court is reversed, and the cause remanded.