Edwards v. Container Kraft Carton & Paper Supply Co.

Appeal from judgment for damages for malicious prosecution of an injunction action.

Appellants challenge the sufficiency of the evidence to support the findings of want of probable cause and malice; also argue that this action was prematurely brought and that the award of damages is not supported by proof of certainty of loss to plaintiff.

Plaintiff Edwards was employed as salesman for defendant Container Kraft Carton and Paper Supply Company (hereinafter designated as Container) for about five years before he opened his own competitive business. Container is a jobber engaged in selling corrugated containers and paper supplies to the general trade. Edwards had been bringing in about $30,000 per month in business; dissatisfied about his earnings and failure of Mr. Garson, who controlled Container, to perform a promise to give him certain stock in the company, Edwards quit on June 3, 1955 and opened his own business. Garson had threatened to kill him if he did so and had made other threats.

On June 8th Container filed an injunction action against Edwards. A restraining order was sought upon the original complaint but was refused, whereupon an amended complaint

In the case now on appeal the trial judge found with respect to the injunction action that the complaint therein alleged that Edwards had been a director of Container, had submitted false and fraudulent purchase orders to it for the purchase of merchandise for certain of its customers, had assigned Container accounts receivable for factoring and had received moneys for said assignment and converted same to his own use, had ordered on behalf of Container certain merchandise and then taken personal possession of same and appropriated' it to his own use, and also appropriated money and property belonging to Container to his own use and benefit. Also: “That it is true that the defendant knew that the allegations in the Complaint filed in said action . . . were and are false and untrue and were made with the intent to injure Hal Edwards, plaintiff herein, and were made maliciously and without probable cause; that defendant Container Kraft Carton and Paper Supply Company maliciously and without

An examination of the testimony and other evidence in the instant case discloses that these findings have the support of persuasive evidence. We recognize no obligation to set it forth herein, for an appellate court is not charged with the duty of reviewing the evidence in an effort to convince appellant of its sufficiency or to otherwise demonstrate the fact. (See Sonkin v. Hershon, 130 Cal.App.2d 491 , 492 [ 279 P.2d 156 ]; Clewett v. Clewett, 136 Cal.App.2d 913 , 915 [ 289 P.2d 512 ].)

The claim of prematurity of this action for malicious prosecution possesses more of substance. The complaint was filed before the time to appeal from the judgment in the injunction action had expired. But that judgment had become final before the trial of the instant action. California is now definitely committed to the doctrine that prematurity of action is merely ground for abatement and if the ground has ceased to exist before time of trial it cannot then or thereafter prevail. This is the result of Radar v. Rogers, 49 Cal.2d 243 [ 317 P.2d 17 ]. That case involved a contention that an action against an administratrix was premature because it was filed before presentation of plaintiff’s claim to the said personal representative. At page 250 the court said: “The defense that suit was commenced before the presentation and rejection of claim ‘is simply matter of abatement—a defense which is not favored, and must be made by plea, and in proper time, or it is waived.’ [Citations.] Here there is no occasion to consider whether the unfavored defense was waived, for it had ceased to exist at the time defendant sought to raise it. ‘A consequence of the disfavor with which such pleas are viewed is that matter in abatement must exist at the time of filing of the pleading urging it’ (1 Cal.Jur.2d 29-30, § 3) and if the stated ground does not exist at the time of trial it may be disregarded. (Archibald v. Iacopi (1953), 120 Cal.App. 2d 666 , 669 [5] [ 262 P.2d 40 ].) ” Though not mentioned in the opinion, the ease of Kelley v. Upshaw, 39 Cal.2d 179 ,

In Archibald v. Iacopi, 120 Cal.App.2d 666 , 669 [ 262 P.2d 40 ], the court said: “Appellant’s contention that with respect to the one-third payable by a promissory note 12 months after completion of the work the action was prematurely instituted on March 17, 1950, cannot be sustained. The record does not show the date on which the original complaint was filed. The defense that an action is premature is a dilatory plea not favored in law, and it is considered waived if, as is the case here, it is not specially pleaded and urged in the trial court. (Kelley v. Upshaw, 39 Cal.2d 179 [ 246 P.2d 23 ].) Moreover at the time of the trial (November, 1951) the stated ground of abatement did not exist any more and then it may be disregarded. (1 Cal.Jur.2d 32.)” See also Rudneck v. Southern Calif. Metal & Rubber Co., 184 Cal. 274 , 282 [ 193 P. 775 ]; Watkins v. McCartney, 70 Cal.App. 137 , 140 [ 232 P. 982 ]; Moore v. Fellner, 50 Cal.2d 330 , 342-343 [ 325 P.2d 857 ] ; 1 C.J.S. § 71b, p. 111; § 85, p. 126.

The facts before us argue strongly for the application of the Radar v. Rogers rule. This action for malicious prosecution was filed on November 15, 1955, 20 days after entry of judgment in the injunction action. Thereupon an appeal was taken from that judgment on November 21, 1955. Request for clerk’s and reporter’s transcripts was filed on the same day. Defendants’ answer herein was their first appearance and was filed on December 12, 1955. It alleged by way of separate defense the taking and pendency of said appeal and prayed for dismissal of the action. It did not sound in abatement and no motion to that end was made. Nor was any request made pursuant to section 597, Code of Civil Procedure, for trial of that issue in advance of the merits. No motion for new trial was made and nothing further was done toward prosecution of the appeal though notice of estimated cost of each transcript was given; no payment and no arrangement for payment for either transcript was made. Upon motion of respondent the appeal was dismissed by this court on March 27, 1956, no opposing affidavit being filed, and no appearance made in opposition to the motion.

The trial of the instant action for malicious prosecution occurred on June 25 and 26, 1956, about three months after the former judgment had become final. At the opening of the hearing plaintiff offered in evidence the judgment roll in the former action; defendants’ counsel requested that the entire

Appellants have had a full trial upon the merits in the present action, the findings and judgment are abundantly supported by the evidence, and it seems clear beyond peradventure that the appeal from the judgment in the injunction case was conceived and used merely as a device to defeat upon a highly technical ground the collection of a righteous judgment. In our opinion Radar v. Rogers, supra, commands that the prematurity argument shall not now prevail and we so hold.

It is urged that plaintiff Edwards was in business only a few days before he was enjoined—June 3 to June 15—and that the new venture rule applies to the subject of damages, establishing that the fact of damage is too uncertain to sustain any award. The court found that plaintiff Edwards was damaged in the sum of $6,500 by the malicious prosecution of the injunction case; that is a compensatory award, no exemplary damage being allowed. The $6,500 includes an attorney fee of $2,500 for defense of the action and the reasonableness of that amount is not questioned.

While it is true that Edwards was in business on his own account only 12 days before he was enjoined, it also appears that he continued during the injunction period to solicit and serve customers who had not been with Container and after the injunction was dissolved he successfully resumed and carried on his business until his place burned down at the end of April, 1956. When employed by Container Edwards’ position was unique. He built his own clientele and brought into the company gross business of $30,000 a month. The court found, “that Hal Edwards had solicited his own customers during that five-year period and had established his own business clientele. That the gross volume of business accounted for by Hal Edwards while employed with Container Kraft Carton and Paper Supply Company was approximately $30,000.00 per month, of which the net profit whs between ten (10%) per cent and twelve' (12%) per cent.”

Appellants rely upon the rule stated in Grupe v. Glick, 26 Cal.2d 680 , 692 [ 160 P.2d 832 ]: “On the other hand, where the operation of an unestablished business is prevented or interrupted, damages for prospective profits that might otherwise have been made from its operation are not recoverable for the reason that their occurrence is uncertain, contingent and speculative.” But this rule is not an end in itself, merely an aid to determination of whether the fact of damage, as distinguished from the amount of damage, has been established with reasonable certainty. The court added in the Grupe opinion, supra, at page 693: “But although generally objectionable for the reason that their estimation is conjectural and speculative, anticipated profits dependent upon future events are allowed where their nature and occurrence can be shown by evidence of reasonable reliability. [Citations.] All of these cases recognize and apply the general principle that damages for the loss of prospective profits are recoverable where the evidence makes reasonably certain their occurrence and extent.”

Natural Soda Prod. Co. v. City of Los Angeles, 23 Cal.2d 193 , 199 [ 143 P.2d 12 ], dealt with damages growing out of defendants’ wrongfully preventing the operation of

The proof of plaintiff’s capacity to produce and hold business while working for Container for five years, coupled with his demonstration of ability to do so on his own account for seven months after he was relieved of restraint of a court order, furnish substantial basis at bar for a finding that it was reasonably probable that plaintiff would have made like profits during the said three-month injunction period. That .proof leaves no substantial doubt of the fact of loss or of the

The foregoing discussion proceeds as if this were solely an action for malicious prosecution, for that is the tenor of the briefs. In fact, the amended complaint is in two counts, the first of which runs against appellants Fidelity and Deposit Company of Maryland and Pacific Employers Insurance Company, as well as Container. It seeks recovery from Fidelity upon a $2,500 undertaking given by it upon issuance of the temporary restraining order in the former action, and against Pacific upon a $5,000 bond given upon the issuance of the preliminary injunction. The Fidelity bond “promises to the effect, that in case said restraining order shall issue, the said Plaintiff_will pay to the said party restrained, such damages, not exceeding the sum of Twenty-Five Hundred and no/100 Dollars ($2,500.00), as such party may sustain by reason of the said restraining order, if the Court finally decides that the said Plaintiff__ was not entitled thereto.” That of Pacific “undertakes in the sum of Five Thousand and no/100 ($5,000.00) Dollars, and promises to the effect, that in case said injunction shall issue, the said Plaintiff___ will pay to ¡laid party enjoined, such damages, not exceeding the sum of Five Thousand and no/100 ($5,000.00) Dollars, as such party may sustain by reason of the said injunction, if the said Superior Court finally decides that the said Plaintiff is not entitled thereto.” The court found that plaintiff had been damaged to the extent of $500 by the issuance of the restraining order, and $3,500 by the preliminary injunction, and awarded judgments against the respective sureties for those amounts. After fixing plaintiff’s total damage at $6,500, the court offset a municipal court judgment previously obtained by Container against Edwards in the sum of $2,592.04, plus $60.21 interest, thus reducing the total recovery to $3,847.75. The judgment provides that any sums received by plaintiff Edwards from either of the defendants Fidelity and Pacific shall operate pro tanto in satisfaction of the judgment against container in the sum of $3,847.75.

Malicious prosecution is not of the essence of recovery upon the injunction bonds. All that is necessary thereto is a final judgment dissolving the injunction plus proof of damage therefrom. The dissolution of the injunction fulfills the condition of the bond. (Rice v. Cook, 92 Cal. 144 , 147 [ 28 P. 219 ]; Asevado v. Orr, 100 Cal. 293 , 299 [ 34 P. 777 ] ; 1 Witkin, California Procedure, p. 886, § 44.)

Appellants’ criticisms of the findings are found to be without merit. Other argument have been considered but require no specific discussion.

Judgment affirmed.

Fox, P. J., and Herndon, J., concurred.

Appellants’ petition for a hearing by the Supreme Court was denied August 28, 1958.