George B. Scrambling Co. v. Tennant Drug Co.

158 N.E. 282, 25 Ohio App. 197, 5 Ohio Law. Abs. 325, 1927 Ohio App. LEXIS 536
CourtOhio Court of Appeals
DecidedApril 25, 1927
StatusPublished
Cited by6 cases

This text of 158 N.E. 282 (George B. Scrambling Co. v. Tennant Drug Co.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
George B. Scrambling Co. v. Tennant Drug Co., 158 N.E. 282, 25 Ohio App. 197, 5 Ohio Law. Abs. 325, 1927 Ohio App. LEXIS 536 (Ohio Ct. App. 1927).

Opinion

Levine, J.

The parties in this action appear in the reverse order to that which they occupied in the court of common pleas. We shall refer to them for convenience according to their respective positions in the lower court.

The plaintiff, the Tennant Drug Company, instituted an action against the defendants, the George B. Scrambling Company, the J. B. Moos Company, and the Wallace & Schwarz Company, for malicious prosecution, alleging in the petition that the defendants had, without probable cause, filed a petition in bankruptcy against plaintiff in the United States District Court for the Northern District of Ohio. The answer is in the usual form and alleges particularly that defendants acted under advice of counsel. A trial was had upon the issues, a verdict returned for plaintiff, and a judgment rendered accordingly. Error proceedings are instituted to *200 this court to the judgment of the common pleas.

Various assignments of error are set forth, the substance of which we shall consider.

I. It is claimed by the defendants that the judgment ought to be reversed for the reason that it appears that the defendants acted upon advice of counsel, and that there was probable cause for the filing of the bankruptcy petition against the plaintiff.

It is urged that the following items of information were submitted by the defendants to their attorney, Mr. Weintraub, before filing the bankruptcy petition, namely:

“(1) That the plaintiff was indebted in various sums to a large number of creditors, including the petitioners.
“(2) That many, if not all, of these claims were overdue.
“(3) That the plaintiff had refused to make a statement as to its financial condition to Bradstreet and B. Gr. Dun, commercial agencies.
“(4) That demands had been made upon the plaintiff by various creditors for the payment of their accounts and that the plaintiff had ‘put them off.’
“(5) That the plaintiff had become ‘slow’ in the payment of its accounts and seemingly was not in a prosperous condition.”

During the trial Mr. Weintraub was not called upon to appear as a witness. A certain Mr. Meyers, of the Scrambling Company, testified that the reason he began the bankruptcy proceeding was to more quickly collect the debt owing from the plaintiff to the Scrambling Company. A reading of the record discloses that Mr. Meyers, acting for the Scrambling Company as well as the other *201 defendants, did not secure the statement of the assets of the plaintiff, the Tennant Drug Company, before commencing bankruptcy proceedings. No inquiry was made concerning the credit of the Tennant Drug Company from any of the recognized credit agencies. The evidence indicates that at the time of the commencement of the bankruptcy proceedings the Tennant Drug Company was solvent. On the question whether the defendants submitted. full information concerning the financial standing of the Tennant Drug Company to their attorney, Mr. Weintraub, before commencing bankruptcy proceedings, the jury was within its province, under the evidence submitted upon the record, in finding that no such full information was disclosed to counsel, whose advice was sought with reference to the commencing of the bankruptcy proceedings.

In its general charge the court fully covered the defense of advice of counsel.

Plaintiff’s request to charge No. 2, which was given to the court before argument, is as follows:

“If you find that defendants did consult a reputable lawyer before beginning the bankruptcy proceeding, I say to you this act would not be a complete defense for this action, unless the defendants placed before the lawyer fully, fairly, and impartially all the facts which they knew and all the facts which a reasonably prudent person would have obtained under the circumstances.”

Counsel for the defendants asserts that there was error in giving above request to charge No. 2. It is contended that' the case of Lamprecht v. Crane, 4 W. L. B., 1107, 5 O. D. (N. P.), 753, is applicable. In that case the sixth and seventh paragraphs of the syllabus are as follows:

“6. And for prosecuting such proceeding in *202 such court, maliciously and without probable cause, an action for malicious prosecution will lie.
“7. Where a prosecution is sought to be justified on the ground of advice of counsel, it is incumbent on the prosecutor to show that all the facts material to the prosecution known to him, or which might have been ascertained by reasonable diligence, were communicated to counsel.”

The definition of “reasonable diligence” is well settled. It is understood to mean that degree of diligence which reasonably prudent persons exercise under the same or similar circumstances. The instruction contained in request to charge No. 2, taken together with the language used by the court in its general charge relating to the same subject, in our opinion amply cover the law relative thereto.

II. It is claimed that the court erred in permitting a supplemental petition, or amendment to the petition, to be filed. It appears from the record that, after the court instructed the jury in substance that it should not assess damages beyond the date of the filing of the petition, the plaintiff asked and was granted leave to file an amendment to its petition, by way of a supplemental petition setting forth facts showing damages that had occurred subsequent to the filing of the petition, and to make the pleadings conform to the proof offered at the trial tending to substantiate said allegations. At the trial evidence was adduced that after the filing of the bankruptcy proceedings against the plaintiff, the. Tennant Drug Company, it was damaged by reason of injury to its good name, good will, and credit standing; that it was unable to obtain sufficient supplies to operate its stores and to sell to its customers in the volume which it had sold before the filing of the bankruptcy proceedings; and that *203 it was compelled to pay cash for its merchandise. Likewise there was introduced and admitted evidence of letters, conversations, and acts taking place after the petition was filed in this action, and also evidence that two stores and leases incident thereto were sold at a great sacrifice on account of curtailed credit.

The principle of law applicable to the subject of damages suffered on account of a wrongful act and accruing after the petition was filed up to the date of trial is stated in 1 Sedgwick on Damages (9th Ed.), Section 86a, as follows:

“It is now universally recognized that a loss that happens after action brought, as a direct consequence of the wrong for which the action was brought, may be compensated, though it had not happened or could not be foreseen when the action was brought.”

See, also, Wheeler v. Hanson, 161 Mass., 370, 37 N. E., 382, 42 Am. St. Rep., 408, and Fay

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Bluebook (online)
158 N.E. 282, 25 Ohio App. 197, 5 Ohio Law. Abs. 325, 1927 Ohio App. LEXIS 536, Counsel Stack Legal Research, https://law.counselstack.com/opinion/george-b-scrambling-co-v-tennant-drug-co-ohioctapp-1927.